Overview

Key Factors Affecting Our Performance

Components of Results of Operations

Results of Operations

New Patient Adoption and iLet Sales

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

Continued Investment In Growth and Innovation

Regulatory Approvals and Actions

Seasonality

Macroeconomic Factors, Global Supply Chain Challenges and Inventory

Net Sales

Cost of Sales

Gross Profit and Gross Margin

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.

Comparison of the Threethree Monthsand Endedsix Marchmonths 31ended June 30, 2025 and 2024

* Not meaningful

Net Sales

Cost of Sales

Gross Profit and Margin

Research and Development Expenses

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-42491

BETA BIONICS, INC.

(Exact name of Registrant as specified in its charter)


Delaware	47-5386878
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11 Hughes Irvine, California	92618
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (949) 427-7785

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common Stock, $0.0001 par value per share

     BBNX

     Nasdaq Global Market

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the Registrant’s Common Stock outstanding as of ~~April~~July 3025, 2025 was 43,~~356~~470,~~281~~125.

Table of Contents

		Page
PART I	Financial Information	6
Item 1.	Financial Statements	6
	Condensed Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024	6
	Condensed Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024	6
	Condensed Statements of Operations and Comprehensive Loss for the Three Months ended March 31, 2025 and 2024 (Unaudited)	7
	Condensed Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2025 and 2024 (Unaudited)	7
	Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three Months ended March 31, 2025 and 2024 (Unaudited)	8
	Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2025 and 2024 (Unaudited)	8
	Condensed Statements of Cash Flows for the Three Months ended March 31, 2025 and 2024 (Unaudited)	9
	Condensed Statements of Cash Flows for the Six Months ended June 30, 2025 and 2024 (Unaudited)	10
	Notes to Financial Statements (Unaudited)	1011
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3031
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5254
Item 4.	Controls and Procedures	5254
PART II	Other Information	5355
Item 1.	Legal Proceedings	5355
Item 1A.	Risk Factors	5355
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~107~~110
Item 3.	Defaults upon Senior Securities	~~107~~111
Item 4.	Mine Safety Disclosures	~~107~~111
Item 5.	Other Information	~~107~~111
Item 6.	Exhibits	~~108~~112
	Signatures	113

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this Quarterly Report) contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations, financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” or “would,” or the negative of these words or other similar terms or expressions.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, factors and assumptions described under Part II. Item 1A. “Risk Factors” and elsewhere in this Quarterly Report, regarding, among other things:

•

our expected future growth;

•

the size and growth potential of the markets for our products, and our ability to serve those markets;

•

our ability to accurately forecast demand for our products;

•

the rate and degree of market acceptance of our products;

•

the expected future growth of our sales and marketing organization;

•

our ability to implement our multi-channel coverage and reimbursement strategy;

•

the performance of, and our reliance on, third parties in connection with the commercialization of our products, including single source suppliers;

•

our ability to accurately forecast and manufacture appropriate quantities of our products to meet commercial demand;

•

regulatory developments in the United States;

•

our ability to maintain regulatory approval for our products or obtain regulatory approval for new products in the United States;

•

our research and development for existing products and any future products;

•

the development, regulatory approval and commercialization of competing products;

•

our ability to retain and hire senior management and key personnel;

•

our expectations regarding the period during which we qualify as an emerging growth company under the Jumpstart Our Business Startups Act (JOBS Act);

•

our expectations regarding the impact of geopolitical and macroeconomic factors;

•

our financial performance and capital requirements;

•

our expectations regarding our ability to obtain and maintain intellectual property protection for our products, as well as our ability to operate our business without infringing the intellectual property rights of others;

•

our expected use of our existing cash, cash equivalents and short-term and long-term investments, including expected use of net proceeds from our initial public offering and other financing transactions; and

•

other risks and uncertainties, including those described under Part II. Item 1A. “Risk Factors” in this Quarterly Report.

These risks are not exhaustive. Other sections of this Quarterly Report may include additional factors that could harm our business and financial performance. We operate in a very competitive and rapidly changing environment where new risk factors may emerge from time to time, and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. These forward-looking statements speak only as of the date of this Quarterly Report. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments. We intend the forward-looking statements contained in this Quarterly Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed as exhibits with the understanding that our actual future results, levels of activity, performance and achievements may be different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Summary of Risks Related to Our Business

Our business is subject to a number of risks of which you should be aware before making a decision to invest in our common stock. These risks are more fully described in Part II. Item 1A. “Risk Factors” in this Quarterly Report, including the following:

•

We have a limited commercial history and limited experience marketing and selling our products. We only recently launched our commercial product, which may make it difficult to evaluate the prospects for our future viability and predict our future performance.

•

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

•

We currently rely on sales of our iLet Bionic Pancreas (iLet) and related single-use products to generate all of our revenue, and any factors that negatively impact sales of these products may adversely affect our business, financial condition and operating results.

•

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

•

The failure of our iLet and related products to achieve and maintain market acceptance could result in us achieving sales below our expectations, which would cause our business, financial condition and operating results to be materially and adversely affected.

•

We face competition from numerous competitors, most of whom have far greater resources than we have, which may make it more difficult for us to achieve significant market penetration and which may allow them to develop additional products for the treatment of diabetes that compete with our iLet.

•

We currently have a limited marketing and sales organization and have limited experience as a commercial-stage company marketing devices. If we are unable to successfully expand our marketing and sales capabilities or enter into additional agreements with third parties to market and sell devices, we may not be able to generate product revenue, and our business may be adversely affected.

•

Our future success depends on our ability to retain our key personnel and to attract, retain and motivate qualified personnel.

•

International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.

•

We are highly dependent on the success of our iLet for the treatment of type 1 diabetes (T1D), which is cleared by the U.S. Food and Drug Administration (FDA) for commercial sale in the United States for the treatment of T1D, and we do not have any other commercial products. If we are unable to obtain and maintain regulatory clearance or approval for planned modifications to the iLet or for new indications, or for any future development-stage products, or if we are unsuccessful in our efforts to continue to commercialize our cleared version of the iLet, our business will be materially harmed.

•

We are subject to a post-market surveillance order issued by the FDA for our iLet. If the FDA determines that our iLet does not perform as anticipated, or if the FDA identifies new concerns related to the safety and effectiveness of the device, we may need to make changes to or recall or withdraw the iLet from the field, which could harm our business.

•

The regulatory authorization process of the FDA, or any comparable foreign regulatory authorities, is lengthy, time-consuming and inherently unpredictable. Even if we complete the necessary clinical trials, we cannot predict when, or if, we will obtain marketing authorization or clearance for any of our product candidates. Modifications to our currently commercialized version of the iLet may require new marketing authorizations or clearance.

•

Use of our commercial or development-stage products may cause adverse events or undesirable side effects or present other safety concerns which may cause us to suspend or discontinue clinical trials, delay or prevent marketing authorization, limit the commercial profile of labeling for any product that has received marketing authorization, or result in significant negative consequences following marketing authorization.

•

We are developing our iLet in combination with other therapies and devices, which requires additional development time and exposes us to additional risks.

•

We are substantially dependent on various third parties for the development and potential commercialization of our iLet and product candidates. Certain of our current and future collaborators may control aspects of our clinical trials, which could result in delays or other obstacles in the development of the investigational devices or other development-stage candidates, such as glucagon, we develop. If our collaborations are terminated or are not successful, our ability to successfully develop and commercialize our iLet and product candidates may be adversely affected.

•

We have limited experience manufacturing our products and, if we are unable to manufacture our products in high-quality commercial quantities successfully and consistently to meet demand, our growth will be limited.

•

We obtain some of the components and subassemblies included in our iLet from single source suppliers, and the partial or complete loss of one or more of these suppliers could cause significant production delays, an inability to meet customer demand and a substantial loss in revenue.

•

Our iLet is complex in design and may contain defects that are not detected until use, which could increase our costs, including warranty costs, and reduce our revenue. If our iLet does not perform as expected or the reliability of the technology on which our products is based is questioned, our operating results, reputation and business will suffer.

•

We rely and will continue to rely on third parties to conduct clinical trials of our iLet, which means we do not have full control over the conduct of such trials.

•

Our iLet is currently cleared only for the treatment of T1D in adults and children six years of age and older. If our iLet is authorized for marketing or cleared in a bihormonal configuration for the treatment of T1D or for any other indications, such marketing authorization or clearance will be limited by the FDA to the specific indication for which granted. We are prohibited from marketing the iLet for other indications, such as type 2 diabetes (T2D).

•

If we are unable to obtain or protect intellectual property rights related to the iLet, we may not be able to compete effectively in our market.

•

If we fail to comply with our obligations in our current and future intellectual property licenses with third parties, we could lose rights, which may be important to our business.

PART I. Financial Information

Item 1. Financial Statements.

BETA BIONICS, INC.

CONDENSED BALANCE SHEETS

(In thousands, except number of shares)

	March 31,			December 31,
	June 30,2025			December 31,2024
	2025			2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4235,~~454~~075		$	30,432
Short-term investments		~~189~~214,~~019~~645			73,143
Accounts receivable, net		911,~~060~~395			11,996
Inventories, net		1517,~~730~~323			13,320
Prepaid expenses and other current assets		57,~~652~~637			4,032
Total current assets		~~261~~286,~~915~~075			132,923
Property and equipment, net		56,~~515~~465			4,776
Operating lease right-of-use asset		6,~~344~~038			6,645
Restricted cash		100			100
Deferred offering costs		—			5,051
Long-term investments		6431,~~004~~149			—
Other long-term assets		~~146~~144			150
Total assets	$	~~338~~329,~~024~~971		$	149,645
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	3,~~454~~424		$	2,852
Accrued expenses and other current liabilities		1013,~~565~~405			15,828
Operating lease liabilities		1,~~524~~519			1,529
Deferred revenue		~~949~~1,141			939
Total current liabilities		1619,~~492~~489			21,148
Operating lease liabilities, net of current portion		5,~~450~~168			5,726
Deferred revenue, net of current portion		2,~~330~~670			1,860
Warrant liabilities		—			44,898
Total liabilities		24,272			73,632
Other long-term liabilities		1,011			—
Total liabilities		28,338			73,632
Commitments and contingencies (Note 17)
Convertible preferred stock (Series A, A-2, B, B-2, C, D and E), par value of $0.0001 per share; no and 34,966,547 shares authorized at March 31, 2025 and December 31, 2024, respectively; no and 17,228,954 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively; liquidation preference of no and $355,162 at March 31, 2025 and December 31, 2024, respectively		—			321,373
Convertible preferred stock (Series A, A-2, B, B-2, C, D and E), par value of $0.0001 per share; no and 34,966,547 shares authorized at June 30, 2025 and December 31, 2024, respectively; no and 17,228,954 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively; liquidation preference of $0 and $355,162 at June 30, 2025 and December 31, 2024, respectively		—			321,373
Stockholders’ equity (deficit):
Class A common stock, par value of $0.0001 per share; no and 5,790,000 shares authorized at March 31, 2025 and December 31, 2024, respectively; no and 2,939,085 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively		—			1
Class A common stock, par value of $0.0001 per share; no and 5,790,000 shares authorized at June 30, 2025 and December 31, 2024, respectively; no and 2,939,085 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		—			1
Class B common stock, par value of $0.0001 per share; no and 70,000,000 shares authorized at March 31, 2025 and December 31, 2024, respectively; no and 3,679,790 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively		—			—
Class B common stock, par value of $0.0001 per share; no and 70,000,000 shares authorized at June 30, 2025 and December 31, 2024, respectively; no and 3,679,790 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		—			—
Class C common stock, par value of $0.0001 per share; no and 96,910 shares authorized at March 31, 2025 and December 31, 2024, respectively; no and 48,918 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively		—			—
Class C common stock, par value of $0.0001 per share; no and 96,910 shares authorized at June 30, 2025 and December 31, 2024, respectively; no and 48,918 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		—			—
Preferred stock, par value of $0.0001 per share; 10,000,000 and no shares authorized at March 31, 2025 and December 31, 2024, respectively; no shares issued or outstanding at March 31, 2025 and December 31, 2024		—			—
Preferred stock, par value of $0.0001 per share; 10,000,000 and no shares authorized at June 30, 2025 and December 31, 2024, respectively; no shares issued or outstanding at June 30, 2025 and December 31, 2024		—			—
Common stock, par value of $0.0001 per share; 700,000,000 and no shares authorized at March 31, 2025 and December 31, 2024, respectively; 43,353,890 and no shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively		4			—
Common stock, par value of $0.0001 per share; 700,000,000 and no shares authorized at June 30, 2025 and December 31, 2024, respectively; 43,465,136 and no shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		4			—
Additional paid-in capital		~~638~~643,~~901~~742			51,311
Accumulated other comprehensive income		~~240~~149			65
Accumulated deficit		(~~325~~342,~~393~~262	)		(296,737	)
Total stockholders’ equity (deficit)		~~313~~301,~~752~~633			(245,360	)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	~~338~~329,~~024~~971		$	149,645

The accompanying notes are an integral part of these unaudited condensed financial statements.

BETA BIONICS, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except number of shares and per share data)

	Three Months Ended						Six Months Ended
	March 31,
	June 30,						June 30,
	2025			2024			2025			2024
Net sales	$	1723,~~639~~238		$	1215,~~933~~046		$	40,877		$	27,979
Cost of sales		810,~~668~~735			56,~~732~~962			19,403			12,694
Gross profit		812,~~971~~503			78,~~201~~084			21,474			15,285
Operating expenses:
Research and development		78,~~590~~873			56,~~479~~350			16,463			11,829
Sales and marketing		1315,~~402~~623			78,~~663~~974			29,025			16,637
General and administrative		67,~~621~~879			34,~~512~~544			14,500			8,056
Total operating expenses		2732,~~613~~375			1619,~~654~~868			59,988			36,522
Loss from operations		(1819,~~642~~872	)		(911,~~453~~784	)		(38,514	)		(21,237	)
Other income (expense):
Interest income		23,~~436~~005			~~1,139~~993			5,441			2,132
Other income		—			4
Other income (expense), net		(2	)		(2	)		(2	)		2
Change in fair value of warrant liabilities		~~(12,450~~—	)		(43,~~139~~670	)		(12,450	)		(7,809	)
Total other expense, net		(10,014	)		(2,996	)
Total other income (expense), net		3,003			(2,679	)		(7,011	)		(5,675	)
Net loss	$	(2816,~~656~~869	)	$	(1214,~~449~~463	)	$	(45,525	)	$	(26,912	)
Other comprehensive income (loss):
Unrealized gain (loss) on short-term and long-term investments		~~175~~(91	)		(~~132~~26	)		84			(158	)
Comprehensive loss	$	(2816,~~481~~960	)	$	(1214,~~581~~489	)	$	(45,441	)	$	(27,070	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.9339	)	$	(2.0737	)	$	(1.23	)	$	(4.44	)
Weighted-average common shares outstanding, basic and diluted		3043,~~714~~390,~~769~~652			6,~~021~~105,~~882~~813			37,087,726			6,063,848

The accompanying notes are an integral part of these unaudited condensed financial statements.

BETA BIONICS, INC.

CONDENSED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(In thousands, except number of shares)

													Accumulated
	Convertible										Additional		Other					Total
	Preferred Stock						Common Stock				Paid-in		Comprehensive		Accumulated			Stockholders'
	Shares			Amount			Shares		Amount		Capital		Income		Deficit			Equity (Deficit)
Balance at December 31, 2024		17,228,954		$	321,373			6,667,793	$	1	$	51,311	$	65	$	(296,737	)	$	(245,360	)
Conversion of convertible preferred stock into common stock on initial public offering		(17,228,954	)		(321,373	)		19,827,003		2		321,371		—		—			321,373
Issuance of common stock in initial public offering, net of underwriting discounts and commissions and offering costs of $21.7 million		—			—			12,475,000		1		190,378		—		—			190,379
Issuance of common stock under private placement offering, net of offering costs of $1.4 million								1,000,000		—		15,591		—		—			15,591
Reclassification of convertible preferred stock and common stock warrants into common stock on initial public offering		—			—			3,369,473		—		57,348		—		—			57,348
Stock option exercises		—			—			14,621		—		98		—		—			98
Stock-based compensation expense		—			—			—		—		2,804		—		—			2,804
Unrealized gain on short-term investments		—			—			—		—		—		175		—			175
Net loss		—			—			—		—		—		—		(28,656	)		(28,656	)
Balance at March 31, 2025		—		$	—			43,353,890	$	4	$	638,901	$	240	$	(325,393	)	$	313,752

Six months ended June 30, 2025

													Accumulated						Total
	Convertible										Additional		Other						~~Total~~Stockholders'
	Preferred Stock						Common Stock				Paid-in		Comprehensive			Accumulated			~~Stockholders'~~Equity
	Shares			Amount			Shares		Amount		Capital		Income (Loss)			Deficit			(Deficit)
Balance at December 31, 2023		12,876,561		$	261,713			6,021,327	$	1	$	26,421	$	137		$	(229,664	)	$	(203,105	)
Balance at December 31, 2024		17,228,954		$	321,373			6,667,793	$	1	$	51,311	$	65		$	(296,737	)	$	(245,360	)
Adoption of ASU 2020-06		—			—			—		—		12,317		—			(12,317	)		—
Conversion of convertible preferred stock into common stock on initial public offering		(17,228,954	)		(321,373	)		19,827,003		2		321,371		—			—			321,373
Stock option exercises		—			—			794		—		6		—			—			6
Issuance of common stock in initial public offering, net of underwriting discounts and commissions and offering costs of $21.7 million		—			—			12,475,000		1		190,378		—			—			190,379
Stock-based compensation expense		—			—			—		—		1,357		—			—			1,357
Issuance of common stock under private placement offering, net of offering costs of $1.4 million		—			—			1,000,000		—		15,591		—			—			15,591
Unrealized loss on short-term investments		—			—			—		—		—		(132	)		—			(132	)
Reclassification of convertible preferred stock and common stock warrants into common stock on initial public offering		—			—			3,369,473		—		57,348		—			—			57,348
Net loss		—			—			—		—		—		—			(12,449	)		(12,449	)
Vesting of restricted stock units								104,490		—		—		—			—			—
Balance at March 31, 2024		12,876,561		$	261,713			6,022,121	$	1	$	40,101	$	5		$	(254,430	)	$	(214,323	)
Stock option exercises		—			—			21,377		—		140		—			—			140
Stock-based compensation expense		—			—			—		—		7,603		—			—			7,603
Unrealized gain (loss) on short-term investments		—			—			—		—		—		84			—			84
Net loss		—			—			—		—		—		—			(45,525	)		(45,525	)
Balance at June 30, 2025		—		$	—			43,465,136	$	4	$	643,742	$	149		$	(342,262	)	$	301,633

Three months ended June 30, 2025


											Accumulated						Total
	Convertible								Additional		Other						Stockholders'
	Preferred Stock				Common Stock				Paid-in		Comprehensive			Accumulated			Equity
	Shares		Amount		Shares		Amount		Capital		Income (Loss)			Deficit			(Deficit)
Balance at March 31, 2025		—	$	—		43,353,890	$	4	$	638,901	$	240		$	(325,393	)	$	313,752
Conversion of convertible preferred stock into common stock on initial public offering		—		—		—		—		—		—			—			—
Issuance of common stock in initial public offering, net of underwriting discounts and commissions and offering costs of $21.7 million		—		—		—		—		—		—			—			—
Issuance of common stock under private placement offering, net of offering costs of $1.4 million		—		—		—		—		—		—			—			—
Reclassification of convertible preferred stock and common stock warrants into common stock on initial public offering		—		—		—		—		—		—			—			—
Vesting of restricted stock units						104,490		—		—		—			—			—
Stock option exercises		—		—		6,756		—		42		—			—			42
Stock-based compensation expense		—		—		—		—		4,799		—			—			4,799
Unrealized gain (loss) on short-term investments		—		—		—		—		—		(91	)		—			(91	)
Net loss		—		—		—		—		—		—			(16,869	)		(16,869	)
Balance at June 30, 2025		—	$	—		43,465,136	$	4	$	643,742	$	149		$	(342,262	)	$	301,633

The accompanying notes are an integral part of these unaudited condensed financial statements.

Six months ended June 30, 2024


											Accumulated						Total
	Convertible								Additional		Other						Stockholders'
	Preferred Stock				Common Stock				Paid-in		Comprehensive			Accumulated			Equity
	Shares		Amount		Shares		Amount		Capital		Income (Loss)			Deficit			(Deficit)
Balance at December 31, 2023		12,876,561	$	261,713		6,021,327	$	1	$	26,421	$	137		$	(229,664	)	$	(203,105	)
Adoption of ASU 2020-06		—		—		—		—		12,317		—			(12,317	)		—
Common B warrant exercises		—		—		634,517		—		6,100		—			—			6,100
Stock option exercises		—		—		837		—		6		—			—			6
Stock-based compensation expense		—		—		—		—		2,856		—			—			2,856
Unrealized gain (loss) on short-term investments		—		—		—		—		—		(158	)		—			(158	)
Net loss		—		—		—		—		—		—			(26,912	)		(26,912	)
Balance at June 30, 2024		12,876,561	$	261,713		6,656,681	$	1	$	47,700	$	(21	)	$	(268,893	)	$	(221,213	)

Three months ended June 30, 2024


											Accumulated						Total
	Convertible								Additional		Other						Stockholders'
	Preferred Stock				Common Stock				Paid-in		Comprehensive			Accumulated			Equity
	Shares		Amount		Shares		Amount		Capital		Income (Loss)			Deficit			(Deficit)
Balance at March 31, 2024		12,876,561	$	261,713		6,022,121	$	1	$	40,101	$	5		$	(254,430	)	$	(214,323	)
Adoption of ASU 2020-06		—		—		—		—		—		—			—			—
Common B warrant exercises		—		—		634,517		—		6,100		—			—			6,100
Stock option exercises		—		—		43		—		—		—			—			—
Stock-based compensation expense		—		—		—		—		1,499		—			—			1,499
Unrealized gain (loss) on short-term investments		—		—		—		—		—		(26	)		—			(26	)
Net loss		—		—		—		—		—		—			(14,463	)		(14,463	)
Balance at June 30, 2024		12,876,561	$	261,713		6,656,681	$	1	$	47,700	$	(21	)	$	(268,893	)	$	(221,213	)

The accompanying notes are an integral part of these unaudited condensed financial statements.

BETA BIONICS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	Six Months Ended June 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(2845,~~656~~525	)	$	(1226,~~449~~912	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		~~303~~650			~~287~~586
Provision for expected credit losses		—			1744
Stock-based compensation expense		27,~~804~~603			12,~~357~~856
Provision for excess and obsolete inventory		82189			(2391	)
Provision for net realizable value of inventory		~~129~~158			—
Change in fair value of warrant liabilities		12,450			47,~~139~~809
Accretion of discount on short-term investments		(~~916~~1,709	)		(~~875~~1,667	)
Amortization of operating lease right-of-use asset		301			276
Accretion of discount on long-term investments		(21	)		—
Amortization of operating lease right-of-use asset		607			553
Loss on disposal of property and equipment		—			8
Changes in operating assets and liabilities:
Accounts receivable		~~2,936~~601			(14,~~918~~556	)
Inventories		(24,~~621~~350	)		(26,~~407~~301	)
Prepaid expenses and other current assets		(13,~~620~~605	)		(~~1,061~~937	)
Other long-term assets		46			15
Accounts payable		~~(97~~471	)		~~410~~1,470
Accrued expenses and other current liabilities		(52,~~273~~550	)		~~(231~~2,069	)
Operating lease liability		(281	)		(224	)
Other long-term liabilities		1,011			—
Deferred revenue		480			549
Operating lease liability		(567	)		(454	)
Net cash used in operating activities		(19,975	)		(12,144	)
Deferred revenue		1,012			1,137
Net cash used in operating activities		(33,569	)		(24,381	)
Cash flows from investing activities:
Purchases of short-term investments		(~~142~~190,~~935~~768	)		—(20,193	)
Purchases of long-term investments		(6331,~~854~~069	)		—
Proceeds from maturities and redemptions of short-term investments		2851,000			832,000
Proceeds on disposal of property and equipment		—			50
Purchases of property and equipment		(~~333~~2,112	)		(~~406~~913	)
Net cash (used in) provided by investing activities		(~~179~~172,~~122~~949	)		710,~~644~~944
Cash flows from financing activities:
Payments of deferred offering costs		—			(119	)
Proceeds from the issuance of common stock, net of underwriting discounts, commissions and issuance costs		195,430			—
Proceeds from the issuance of common stock from private placement, net of issuance costs		15,591			—
Proceeds from stock option exercises		98140			6
Net cash provided by financing activities		211,119			6
Proceeds from common stock warrants exercise		—			12
Net increase (decrease) in cash, cash equivalents and restricted cash		12,022			(4,494	)
Net cash provided by financing activities		211,161			(101	)
Cash, cash equivalents and restricted cash at beginning of period		30,532			26,666
Net increase (decrease) in cash, cash equivalents and restricted cash		4,643			(13,538	)
Cash, cash equivalents and restricted cash at end of period	$	42,554		$	22,172
Cash, cash equivalents and restricted cash at beginning of period		30,532			26,667
Cash, cash equivalents and restricted cash at end of period	$	35,175		$	13,129
Supplemental disclosure of non-cash investing and financing information:
Purchases of property and equipment included in accounts payable	$	~~699~~101		$	5956
Purchases of property and equipment in accrued expenses and other current liabilities	$	10127		$	—
Unrealized gain (loss) on short-term investments	$	25		$	(132	)
Deferred offering costs included in accrued expenses	$	—		$	40
Unrealized gain on long-term investments	$	150		$	—
Unrealized gain (loss) on short-term investments	$	(25	)	$	(158	)
Unrealized gain (loss) on long-term investments	$	(59	)	$	—
Reclassification of long-term investments to short-term investments	$	79,838		$	—
Conversion of convertible preferred stock upon IPO	$	321,373		$	—
Conversion of warrants net exercise upon IPO	$	57,348		$	—
Reclassification of deferred offering costs to equity upon IPO	$	5,051		$	—
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	4235,~~454~~075		$	2213,~~072~~029
Restricted cash		100			100
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	4235,~~554~~175		$	2213,~~172~~129

The accompanying notes are an integral part of these unaudited condensed financial statements.

910

BETA BIONICS, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Organization and Basis of Presentation

The Company

Beta Bionics, Inc. (the “Company”) is 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. The Company was incorporated as a Massachusetts benefit corporation in October 2015, and converted to a Delaware corporation in August 2024.

The Company’s product, the iLet, was cleared by the FDA for the treatment of T1D in adults and children six years of age and older in May 2023, and it began commercializing the iLet in the United States in May 2023. The iLet is the first adaptive closed-loop algorithm insulin dosing system that does not require T1D users to keep a daily tabulation of their carbohydrate intake or perform calculations to determine the correct dose of insulin to take.

From its inception to ~~March~~June 3130, 2025, the Company has devoted substantially all of its resources to organizing and staffing the Company, business planning, capital raising, establishing and engaging in collaborations, performing research and development, advancing and scaling up manufacturing capabilities, commercializing its products, establishing a sales infrastructure and providing general and administrative support for these activities. The Company’s operations to date have been funded primarily through the issuance and sale of convertible preferred stock and common stock and sales of the iLet and single-use products.

Reverse Stock Split

On January 21, 2025, the Company effectuated a 1-for-1.970 reverse stock split of the Company’s issued and outstanding shares of Class A, Class B and Class C common stock, Series A convertible preferred stock (the “Series A Preferred Stock”), Series A-2 convertible preferred stock (the “Series A-2 Preferred Stock”), Series B convertible preferred stock (the “Series B Preferred Stock”), Series B-2 convertible preferred stock (the “Series B-2 Preferred Stock”), Series C convertible preferred stock (the “Series C Preferred Stock”), Series D convertible preferred stock (the “Series D Preferred Stock”), and Series E convertible preferred stock (the “Series E Preferred Stock”) , as well as stock option awards to purchase shares of Class B common stock and warrants to purchase shares of Class B common stock and Series C Preferred Stock. Consequently, all issued and outstanding shares of stock, stock option awards, warrants, and per share data have been retroactively adjusted in these financial statements to reflect the reverse stock split for all periods presented. The authorized shares and par value of the common stock and preferred stock remain unchanged. As the number and issuance price of all outstanding preferred stock were adjusted, the conversion ratios for each series of the Company’s preferred stock were unchanged. Stockholders entitled to fractional shares as a result of the reverse stock split received cash payment in lieu of receiving fractional shares. Accordingly, all share and per share data included in these financial statements and the accompanying notes have been adjusted retroactively to reflect the impact of the reverse stock split.

Initial Public Offering

On January 31, 2025, the Company completed its initial public offering (“IPO”) pursuant to which the Company issued 13,800,000 shares of its common stock, including 1,800,000 additional shares pursuant to the exercise in full of the underwriters of their option to purchase shares of common stock from the Company and other selling stockholders (consisting of 475,000 shares from the Company and 1,325,000 shares from the selling stockholders), at a public offering price of $17.00 per share (the “IPO Price”). The aggregate net proceeds from the offering, after deducting underwriting discounts, commissions, and other offering expenses, were approximately $190.4 million. In addition, upon the closing of the IPO, all 6,671,174 shares of Class A, Class B, and Class C Common Stock were converted into an equal number of shares of common stock, all 17,228,954 outstanding shares of convertible preferred stock were converted into 19,827,003 shares of common stock, and all 3,196,025 outstanding warrants to purchase shares of Series C Preferred Stock and Class B Common Stock were converted into 3,373,409 shares of common stock.

Private Placement Offering

On January 21, 2025, the Company entered into a Common Stock Purchase Agreement (the “Private Placement Offering”) with an existing accredited investor pursuant to which the Company sold 1,000,000 shares of its common stock at a per share price equal to the IPO Price. The Private Placement Offering closed concurrently with the IPO on January 31, 2025. The aggregate net proceeds from the Private Placement Offering, after deducting underwriting discounts, commissions, and other offering expenses, were approximately $15.6 million.

1011

Basis of Presentation

The Company’s unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission applicable to interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”).

Interim financial results are not necessarily indicative of results anticipated for the full year or any other period(s). These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“2024 Annual Report”).

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the JOBS Act, enacted in 2012. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Significant Accounting Policies

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 ~~three~~six months ended ~~March~~June 3130, 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.

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		~~Accounts~~Net ~~Receivable, net~~Sales		Accounts Receivable, net
	Three Months Ended March 31,		March 31,	December 31,
	Three Months Ended June 30,		Six Months Ended June 30,		June 30,	December 31,
	2025	2024	2025	2024	2025	2024
Distributor A	1415.46%	1011.24%	2014.12%	1312.75%	21.7%	13.7%
Distributor B	1213.24%	1420.02%	1613.84%	1319.35%	*	13.3%
Distributor C	*15.0%	*12.1%	~~16.0%~~*	1011.62%	19.8%	10.6%
Distributor D	*10.0%	*16.6%	1410.6%	1317.03%	*	13.0%
Distributor E	~~11.6%~~*	~~18.3%~~*	*	~~14.8%~~*	14.7%	14.8%
Distributor F	~~13.3%~~*	~~17.5%~~*	*	*	14.1%	*
Distributor G	1013.58%	*	*12.4%	*	*	*
Distributor H	10.3%	*	*	*

* 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 ~~March~~June 3130, 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 of 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

The Company’s convertible preferred stock is classified outside of stockholders’ equity (deficit) on the balance sheets because the holders of such shares have liquidation rights in the event of a deemed liquidation that, in certain situations, is not solely within the control of the Company and would require 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 are not redeemable, except in the event of a deemed liquidation (see Note 11). Since convertible preferred stock is neither currently redeemable, nor probable of becoming redeemable, the carrying values of the convertible preferred stock are not being accreted to their redemption values. Subsequent adjustments to the carrying values of the convertible preferred stock would be made only when and if it either becomes currently redeemable or probable of becoming redeemable.

values of the convertible preferred stock are not being accreted to their redemption values. Subsequent adjustments to the carrying values of the convertible preferred stock would be made only when and if it either becomes currently redeemable or probable of becoming redeemable.

The issuance costs from equity financings are 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 ~~three~~six months ended ~~March~~June 3130, 2025 and 2024, the Company did not generate any international revenues and as of ~~March~~June 3130, 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.

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 ~~utilizing~~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 June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	(in thousands)						(in thousands)
Product warranty liability at beginning of period	$	871		$	111		$	657		$	22
Warranty expense		1,754			361			2,360			527
Warranty fulfillment		(563	)		(224	)		(955	)		(301	)
Product warranty liability at end of period	$	2,062		$	248		$	2,062		$	248

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.

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.

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 ~~three~~six months ended ~~March~~June 3130, 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.

16The 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 six months ended June 30, 2025 and 2024, the majority of the Company’s sales were through the DME channel.

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 months ended March 31, 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 March 31,
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
DME channel
iLet(1)	$	913,~~628~~414	$	1011,~~373~~690	$	23,042	$	22,063
Single-use products		45,~~199~~230		12,~~732~~588		9,429		4,320
Total DME channel		1318,~~827~~644		1214,~~105~~278		32,471		26,383
PBP channel
iLet(1)		~~506~~205		~~291~~229		711		520
Single-use products		34,~~306~~389		~~537~~539		7,695		1,076
Total PBP channel		34,~~812~~594		~~828~~768		8,406		1,596
Total net sales	$	1723,~~639~~238	$	1215,~~933~~046	$	40,877	$	27,979

(1)

iLet includes the over-time recognition 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 ~~three~~six months ended ~~March~~June 3130, 2025 that was included in the deferred revenue balance as of December 31, 2024 was approximately $0.2 million.

At ~~March~~June 3130, 2025 and December 31, 2024 , $3.38 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 ~~March~~June 3130, 2025 and December 31, 2024, of the performance obligations not yet satisfied, $1.1 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 thereafter. At ~~March~~June 3130, 2025 and December 31, 2024, the $3.38 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.

1718

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 March 31, 2025
	Fair Value Measurements at
Assets	Level 1		Level 2		Level 3		Total
	June 30, 2025
	(in thousands)
	Level 1		Level 2		Level 3		Total
Assets	(in thousands)
Cash equivalents:
Money market fund	$	3432,~~930~~135	$	—	$	—	$	3432,~~930~~135
Restricted cash:
Money market fund		100		—		—		100
Short-term investments
U.S. Treasury bills		~~189~~214,~~019~~645		—		—		~~189~~214,~~019~~645
Long-term investments
U.S. Treasury notes		6431,~~004~~149		—		—		6431,~~004~~149
Total assets	$	~~288~~278,~~053~~029	$	—	$	—	$	~~288~~278,~~053~~029
Liabilities
Series C warrant liabilities	$	—	$	—	$	—	$	—
Common B warrant liabilities		—		—		—		—
Total liabilities	$	—	$	—	$	—	$	—

	Fair Value Measurements at December 31, 2024
	Fair Value Measurements at
Assets	Level 1		Level 2		Level 3		Total
	December 31, 2024
	(in thousands)
	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 ~~three~~six months ended ~~March~~June 3130, 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 ~~three~~six months ended ~~March~~June 3130, 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 19

18In 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.

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,
	December 31,2024
	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,
	December 31,2024
	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).

1920

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 CWarrantLiability
	(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 March 31, 2025	$	—
Balance at June 30, 2025	$	—

	Common BWarrantLiability
	(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 March 31, 2025	$	—
Balance at June 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 ~~March~~June 3130, 2025 and December 31, 2024:

At March 31, 2025

At June 30, 2025

Amortized

Unrealized

Estimated

Cost

Gains

Losses

Fair Value

(in thousands)

Short-term investments

U.S. Treasury bills

~~188~~214,~~929~~555

—

~~189~~214,~~019~~645

Long-term investments

U.S. Treasury notes

6331,~~854~~090

~~150~~59

—

6431,~~004~~149

Total

~~252~~245,~~783~~645

~~240~~149

—

~~253~~245,~~023~~794


	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

Accounts Receivable, Net

Accounts receivable, net consisted of the following:

	March 31,			December 31,
	June 30,2025			December 31,2024
	2025			2024
	(in thousands)
Accounts receivable	$	911,~~176~~511		$	12,112
Less: allowance for credit losses		(116	)		(116	)
Accounts receivable, net	$	911,~~060~~395		$	11,996

~~The following table provides a reconciliation of the changes in the allowance for estimated credit losses for the three months ended March 31, 2025 and 2024:~~21

	Three Months Ended March 31,
	2025		2024
	(in thousands)
Balance at beginning of period	$	116	$	46
Provision for expected credit losses		—		17
Balance at end of period	$	116	$	63

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Balance at beginning of period	$	116	$	63	$	116	$	46
Provision for expected credit losses		—		27		—		44
Balance at end of period	$	116	$	90	$	116	$	90

Inventories, Net

Inventories consisted of the following:

	March 31,			December 31,
	June 30,2025			December 31,2024
	2025			2024
	(in thousands)
Raw materials	$	68,~~804~~164		$	7,087
Work in process		1,~~595~~293			637
Finished goods		78,~~763~~195			5,946
Less: Obsolete and expired inventories		(~~432~~329	)		(350	)
Inventories, net	$	1517,~~730~~323		$	13,320

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

	March 31,		December 31,
	June 30,2025		December 31,2024
	2025		2024
	(in thousands)
Prepaid expenses	$	35,~~439~~340	$	2,982
Interest receivable		12,~~953~~037		233
Other current assets		260		817
Prepaid expenses and other current assets	$	57,~~652~~637	$	4,032

Property and Equipment, Net

Property and equipment, net consisted of the following:

	March 31,			December 31,
	June 30,2025			December 31,2024
	2025			2024
	(in thousands)
Manufacturing equipment	$	67,~~695~~144		$	6,252
Leasehold improvements		830			810
Furniture		939			924
Computer equipment		308			308
Construction in progress		23,~~299~~145			1,735
Total cost		1112,~~071~~366			10,029
Less: Accumulated depreciation and amortization		(5,~~556~~901	)		(5,253	)
Property and equipment, net	$	56,~~515~~465		$	4,776

Depreciation expense for the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024 was $0.36 million for each period, respectively.

10.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	March 31,		December 31,
	June 30,2025		December 31,2024
	2025		2024
	(in thousands)
Accrued employee compensation and benefits	$	6,002	$	9,942
Employee compensation and benefits	$	7,621	$	9,942
Accrued professional fees		1,240		2,119
Professional fees		1,522		2,119
Accrued sales returns, rebates and patient assistance		941		1,502
Sales returns, rebates and patient assistance		1,268		1,502
Product warranty liability		871		657
Warranty		1,052		657
Accrued inventory in transit		652		530
Inventory in transit		352		530
Accrued royalties		415		741
Clinical trial-related expenses		86		—
Other current liabilities		444		337
Royalties		807		741
Accrued expenses and other current liabilities	$	10,565	$	15,828
Other		697		337
Accrued expenses and other current liabilities	$	13,405	$	15,828

11.

Reconciliations of the changes in the Company’s product warranty liability, which is included in other current liabilities, were as follows:

	Three Months Ended March 31,
	2025			2024
	(in thousands)
Product warranty liability at beginning of period	$	657		$	22
Warranty expense		606			166
Warranty fulfillment		(392	)		(77	)
Product warranty liability at end of period	$	871		$	111

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.

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,~~590~~547,~~955~~079 shares as of ~~March~~June 3130, 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.

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:

	Three Months Ended March 31,
	2025			2024
Fair value of common stock	$	13.99		$	9.59
Risk-free interest rate		4.26	%		4.18	%
Expected term (in years)		5.97			6.03
Expected volatility		96.84	%		85.47	%
Expected dividend yield		0	%		0	%

The following table summarizes stock option activity for the three months ended March 31, 2025:

						Weighted-
				Weighted- Average		AverageRemaining		Aggregate
	Number ofOptions			ExercisePrice		ContractualTerm		IntrinsicValue
						(in years)		(in thousands)
Outstanding at December 31, 2024		5,667,555		$	6.98		7.6	$	22,929
Granted		2,622,298		$	11.40
Exercised		(14,621	)	$	6.73
Forfeited or cancelled		(52,259	)	$	8.39
Expired		(6,421	)	$	7.26
Outstanding at March 31, 2025		8,216,552		$	8.38		8.2	$	46,213
Vested and expected to vest at March 31, 2025		8,216,552		$	8.38		8.2	$	46,213
Options exercisable at March 31, 2025		3,238,059		$	7.03		6.6	$	19,792

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 three months ended March 31, 2025 and 2024 were $0.2 million and not significant, respectively.

The weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2025 and 2024 was $9.46 per share and $12.43 per share, respectively. The total fair value of shares vested during the three months ended March 31, 2025 and 2024 was $1.8 million and $1.2 million, respectively.

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

			Weighted- Average
	Number ofOptions		ExercisePrice
Non-vested options, March 31, 2025		4,978,493	$	9.26
Non-vested options, December 31, 2024		2,797,887	$	6.86

Stock Options

The following table ~~summarizes~~presents, ~~RSU~~on ~~activity~~a ~~under~~weighted-average basis, the ~~Company's~~assumptions ~~incentive~~used ~~plans~~in the Black-Scholes option pricing model to determine the grant-date fair value of stock options granted:

				Weighted- Average
	Six Months Ended June 30,
	Number of Shares			Grant Date Fair Value
	2025			2024
RSUs outstanding, December 31, 2024		—		$	—
Fair value of common stock	$	13.99		$	10.74
Granted		943,306		$	14.65
Risk-free interest rate		4.26	%		4.18	%
Cancelled		(6,243	)	$	14.67
Expected term (in years)		5.97			6.02
RSUs outstanding, March 31, 2025		937,063		$	14.65
Expected volatility		96.84	%		85.82	%
Expected dividend yield		0	%		0	%

The following table summarizes stock option activity for the six months ended June 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		1,691,539		$	17.67
Exercised		(21,377	)	$	6.56
Forfeited or cancelled		(89,794	)	$	9.74
Expired		(15,396	)	$	7.09
Outstanding at June 30, 2025		7,232,527		$	9.45		7.7	$	43,840
Vested and expected to vest at June 30, 2025		7,232,527		$	9.45		7.7	$	43,840
Options exercisable at June 30, 2025		3,613,971		$	7.32		6.6	$	27,623

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 six months ended June 30, 2025 and 2024 were $0.2 million and not significant, respectively.

The weighted-average grant-date fair value of stock options granted during the six months ended June 30, 2025 and 2024 was $6.60 per share and $6.57 per share, respectively. The total fair value of shares vested during the six months ended June 30, 2025 and 2024 was $4.0 million and $2.3 million, respectively.

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


			Weighted- Average
	Number of Options		Exercise Price

Non-vested options, June 30, 2025		3,618,556	$	11.57
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 six months ended June 30, 2025:


				Weighted- Average
	Number of Shares			Grant Date Fair Value

RSUs outstanding, December 31, 2024		—		$	—
Granted		1,009,259		$	14.56
Vested		(104,490	)	$	14.58
Cancelled		(16,806	)	$	14.57
RSUs outstanding, June 30, 2025		887,963		$	14.56

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 March 31,
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Options	$	23,~~483~~122	$	1,~~357~~499	$	5,605	$	2,856
RSUs		~~321~~1,677		—		1,998		—
Total stock-based compensation expense	$	24,~~804~~799	$	1,~~357~~499	$	7,603	$	2,856

	Three Months Ended March 31,
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Cost of sales	$	~~106~~153	$	7161	$	259	$	132
Research and development		~~502~~924		~~263~~287		1,426		550
Sales and marketing		~~801~~1,314		~~288~~390		2,115		678
General and administrative		12,~~395~~408		~~735~~761		3,803		1,496
Total stock-based compensation expense	$	24,~~804~~799	$	1,~~357~~499	$	7,603	$	2,856

As of ~~March~~June 3130, 2025, total unrecognized stock-based compensation expense related to the unvested options was $31.3 million, which is expected to be recognized over a weighted-average period of 2.9 years. As of June 30, 2025, total unrecognized stock-based ~~awards~~compensation expense related to the unvested RSUs was $4712.95 million, which is expected to be recognized over a weighted-average period of 9.2.6 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. Generally, offerings under the ESPP consist of a two-year offering period with four six-month purchase periods which begin in May and November of each year. The Company has not conducted any offerings under the ESPP.

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 six months ended June 30, 2025 and 2024, the Company contributed $1.4 million and $1.0 million, respectively, to the 401(k) Plan.

2526

14.

limitations. Under the terms of the Plan, the Company matches 100% of the first 6% of employee contributions. During the three months ended March 31, 2025 and 2024, the Company contributed $0.7 million and $0.5 million, respectively, to the 401(k) Plan.

Income Taxes

During the ~~three~~six months ended ~~March~~June 3130, 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 ~~March~~June 3130, 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):

	Three Months Ended March 31,
	Six Months Ended June 30,
	2025		2024
Convertible preferred stock (as converted into shares of common stock)		—		915,~~328~~474,~~870~~610
Stock options to purchase common stock		7,~~282~~232,~~494~~527		5,~~656~~877,~~789~~578
Warrants to purchase Series C convertible preferred stock		—		697,885
Warrants to purchase Class B common stock		—		32,~~310~~675,~~052~~539
RSUs		~~937~~887,~~063~~963		—
Total	$	8,~~219~~120,~~557~~490	$	1824,~~993~~725,~~596~~612

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


	Three Months Ended June 30,						Six Months Ended June 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	$	(16,869	)	$	(14,463	)	$	(45,525	)	$	(26,912	)
Denominator:
Weighted-average Class A common stock outstanding, diluted		—			2,940,759			—			2,965,303
Weighted-average Class B common stock outstanding, diluted		—			3,116,136			—			3,049,627
Weighted-average Class C common stock outstanding, diluted		—			48,918			—			48,918
Weighted-average common stock outstanding, basic and diluted		43,390,652			-			37,087,726			-

Net loss per share attributable to common stockholders, basic and diluted	$	(0.39	)	$	(2.37	)	$	(1.23	)	$	(4.44	)

	Three Months Ended March 31,
	2025			2024
	(in thousands, except share and per share data)
Numerator:
Net loss attributable to common stockholders, basic and diluted	$	(28,656	)	$	(12,449	)
Denominator:
Weighted-average Class A common stock outstanding, diluted		—			2,989,847
Weighted-average Class B common stock outstanding, diluted		—			2,983,117
Weighted-average Class C common stock outstanding, diluted		—			48,918
Weighted-average common stock outstanding, basic and diluted		30,714,769			—
Net loss per share attributable to common stockholders, basic and diluted	$	(0.93	)	$	(2.07	)

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 ~~July~~January ~~2025~~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.

The components of lease expense were as follows:

	Three Months Ended March 31,
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Operating lease cost–fixed	$	~~415~~418	$	~~324~~321	$	833	$	645
Operating lease cost–variable		4440		4625		84		71
Short-term lease expense		4		54		8		9
Total lease expense	$	~~463~~462	$	~~375~~350	$	925	$	725

Cash paid for amounts included in the measurement of operating lease liabilities was $0.48 million and $0.35 million, respectively, for the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024.

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

	March 31, 2025
	June 30, 2025
Weighted-average remaining lease term	~~6.15 years~~	6.02
Weighted-average discount rate		6.7773	%

27Future lease payments under non-cancellable leases as of June 30, 2025 were as follows:

Future lease payments under non-cancellable leases as of March 31, 2025 were as follows:


(in thousands)
Year Ending December 31,
2025	$	783
2026		1,532
2027		929
2028		1,050
2029		1,092
Thereafter		2,918
Total future lease payments	$	8,304
Less: imputed interest		(1,617	)
Total lease liabilities	$	6,687

(in thousands)
Year Ending December 31,
2025	$	1,183
2026		1,532
2027		929
2028		1,050
2029 and thereafter		4,010
Total future lease payments		8,704
Less: imputed interest		(1,730	)
Total lease liabilities	$	6,974

17.

~~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.

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 ~~31,~~ 2025, the clinical ~~material~~materials ~~has~~had been delivered to the Company and the remaining payment of $0.6 million was made ~~in March 2025~~.

28In 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 June 30, 2025, the Company has completed the first payment of $1.5M. The payment was 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.

~~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 $1.3 million and $0.59 million of royalties expense under the Control Algorithm Agreement during each of the ~~three~~six months ended ~~March~~June 3130, 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 three months ended March 31, 2025 and 2024, the Company did not owe BU any amounts and paid an immaterial amount to BU for legal costs in connection with the agreements.

As of March 31, 2025 and December 31, 2024, $0.4 million and $0.7 million, respectively, were due to BU from the Company.

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 six months ended June 30, 2025 and 2024, the Company did not owe BU any amounts and paid an immaterial amount to BU for legal costs in connection with the agreements.

As of June 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 June 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.

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~~

3031

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 71% and 66% of the iLet’s adoption through ~~March~~six 31months ended June 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 machine 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 32

31The durable machine 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.

~~typically~~By incontrast, PBP reimbursement requires the ~~thousands~~user and insurance carrier to make a small upfront payment and reimbursement, respectively, for the iLet, allowing for a potentially higher rate of ~~dollars~~adoption by PWD. InThe ~~order~~insurance tocarrier ~~use~~then makes larger reimbursement payments for the ~~iLet~~purchase of single-use products, with the user’s ~~must~~payments ~~purchase~~for ~~our~~the single-use products being generally consistent with what the user would likely pay for single-use products in DME reimbursement. As a result, ~~which~~we ~~are~~recognize ~~generally~~a small amount of revenue at or around the date the iLet is sold in athe 30PBP 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-~~day~~use ~~supply~~products. For the six months ended June 30, 2025 and 2024, PBP channel sales represented 21% and 6% of net sales, respectively.

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 three months ended March 31, 2025 and 2024, PBP channel sales represented 22% and 6% 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 configuration 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, we are conducting a clinical trial to assess the pharmacokinetics (PK) and pharmacodynamics (PD) of our glucagon product candidate (the PK-PD Trial). The PK-PD Trial is intended to enable 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. In March 2025, we began enrolling patients into the PK-PD Trial in Canada. The clinical trial is currently ongoing. Preliminary PD data are supportive of continued development of the glucagon candidate. We expect to have full results from the PK-PD Trial in the second half of 2025, which will inform the go-forward development strategy for our glucagon product candidate. 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.~~

32date, 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.

3334

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. ~~In addition~~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 June 30, 2025, we have completed the first payment of $1.5 million. The payment was 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).~~

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.

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.

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.”

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.

As a medical device company, our revenue and results of operations may be impacted by the failure to obtain adequate coverage or reimbursement for our current and future products from third-party payors, as well as changes in reimbursement structures in line with our 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 three months ended March 31, 2025 and 2024, PBP channel sales represented 22% and 6%, 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.

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 six months ended June 30, 2025 and 2024, PBP channel sales represented 21% and 6%, 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.

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 configuration 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.

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 configuration 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.

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.

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 ~~Israel-~~conflict in the Middle East which has recently included actions by Iran, Hamas, ~~war~~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.

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.

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 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, 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. In the first quarter of 2025, we began to 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 configuration 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.

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.

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.~~

3839

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

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

	Three Months Ended March 31,						Change
	Three Months Ended June 30,						Change
	2025			2024			$			%
	(in thousands, except percentages)
Net sales	$	1723,~~639~~238		$	1215,~~933~~046		$	48,~~706~~192			3654	%
Cost of sales		810,~~668~~735			56,~~732~~962			23,~~936~~773			5154	%
Gross profit		812,~~971~~503			78,~~201~~084			14,~~770~~419			2555	%
Operating expenses:
Research and development(1)		78,~~590~~873			56,~~479~~350			2,~~111~~523			3940	%
Sales and marketing(1)		1315,~~402~~623			78,~~663~~974			56,~~739~~649			7574	%
General and administrative(1)		67,~~621~~879			34,~~512~~544			3,~~109~~335			8973	%
Total operating expenses		2732,~~613~~375			1619,~~654~~868			1012,~~959~~507			6663	%
Loss from operations		(1819,~~642~~872	)		(911,~~453~~784	)		(98,~~189~~088	)		9769	%
Other income (expense):
Interest income		23,~~436~~005			~~1,139~~993			12,~~297~~012				*
Other Income		-			4			(4	)			*
Other Income (expense)		(2	)		(2	)		—				*
Change in fair value of warrant liabilities		~~(12,450~~—	)		(43,~~139~~670	)		(83,~~311~~670	)			*
Total other expense, net		(10,014	)		(2,996	)		(7,018	)			*
Total other income (expense), net		3,003			(2,679	)		5,682				*
Net loss	$	(2816,~~656~~869	)	$	(1214,~~449~~463	)	$	(162,~~207~~406	)		~~100~~17	%


	Six Months Ended June 30,						Change
	2025			2024			$			%
	(in thousands, except percentages)
Net sales	$	40,877		$	27,979		$	12,898			46	%
Cost of sales		19,403			12,694			6,709			53	%
Gross profit		21,474			15,285			6,189			40	%
Operating expenses:
Research and development(1)		16,463			11,829			4,634			39	%
Sales and marketing(1)		29,025			16,637			12,388			74	%
General and administrative(1)		14,500			8,056			6,444			80	%
Total operating expenses		59,988			36,522			23,466			64	%
Loss from operations		(38,514	)		(21,237	)		(17,277	)		81	%
Other income (expense):
Interest income		5,441			2,132			3,309				*
Other Income (expense)		(2	)		2			(4	)			*
Change in fair value of warrant liabilities		(12,450	)		(7,809	)		(4,641	)			*
Total other income (expense), net		(7,011	)		(5,675	)		(1,336	)			*
Net loss	$	(45,525	)	$	(26,912	)	$	(18,613	)		69	%

(1)

Includes stock-based compensation expense as follows:

	Three Months Ended March 31,
	2025		2024
	(in thousands)
Cost of sales	$	106	$	71
Research and development		502		263
Sales and marketing		801		288
General and administrative		1,395		735
Total stock-based compensation expense	$	2,804	$	1,357


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Cost of sales	$	153	$	61	$	259	$	132
Research and development		924		287		1,426		550
Sales and marketing		1,314		390		2,115		678
General and administrative		2,408		761		3,803		1,496
Total stock-based compensation expense	$	4,799	$	1,499	$	7,603	$	2,856

Net sales for the three months ended ~~March~~June 3130, 2025 was $1723.62 million, compared to $1215.90 million for the three months ended ~~March~~June 3130, 2024. ~~This~~The ~~$4.7 million~~ increase in net sales of $8.2 million was primarily driven by an increase in the number of single-use products sold., ~~With~~which ~~the~~increased ~~increase~~proportionally inwith the ~~installed~~expansion ~~customer base, iLet users' consumption~~ of ~~associated~~our ~~single-use~~installed ~~products,~~customer ~~which are disposed of and replaced every 2-3 days, also increased proportionally~~base. For the three months ended ~~March~~June 3130, 2025, single-use products ~~sales~~ accounted for 4341% of net sales, up from 1821% ~~of net sales~~ as of the three months ended ~~March~~June 3130, 2024.

~~Our~~For ~~net sales for~~ the three months ended ~~March~~June 3130, 2025, ~~were generated from customers within our DME and PBP channels, which represented 78~~80% ~~and 22%~~ of net sales, ~~respectively.~~were ~~Our~~generated ~~net~~through ~~sales for~~ the ~~three~~DME ~~months~~channel ~~ended~~and ~~March~~20% ~~31,~~through ~~2024,~~the ~~were generated from customers within our DME and~~ PBP ~~channels~~channel, ~~which~~compared ~~represented~~to 9495% and 65%, ofrespectively, ~~net~~in ~~sales,~~the ~~respectively~~prior-year period. The increase in ~~sales within the~~ PBP channel sales was ~~primarily~~ driven by expanded pharmacy benefit coverage ~~for the iLet,~~ enabled bythrough ~~the execution of~~ contracts with ~~pharmacy~~PBMs ~~benefit~~and ~~managers~~their ~~(PBMs)~~affiliated ~~and~~health ~~resulted~~plans, resulting in a higher proportion of new patient starts being reimbursed through ~~the~~this ~~PBP~~ channel.

Net sales for the six months ended June 30, 2025 was $40.9 million, compared to $28.0 million for the six months ended June 30, 2024. This increase in net sales of $12.9 million was primarily driven by an increase in the number of single-use products sold, correlated to the growth in our installed base. For the six months ended June 30, 2025, single-use products accounted for 42% of net sales, up from 19% of net sales as of the six months ended June 30, 2024.

For the six months ended June 30, 2025, 79% of net sales were generated through the DME channel and 21% through the PBP channel, compared to 94% and 6%, respectively, for the six months ended June 30, 2024. The shift toward the PBP channel was driven by expanded pharmacy benefit coverage, resulting in a larger percentage of new patient starts reimbursed through this channel.

Cost of sales ~~was $8.6 million~~ for the three months ended ~~March~~June 3130, 2025 was $10.7 million, compared to $5.7.0 million for the three months ended ~~March~~June 3130, 2024. ~~This~~The $23.98 million increase ~~in cost of sales~~ was primarily driven by higher ~~sales~~volumes ~~volume~~of in single-use products ~~than~~and ~~the~~pharmacy ~~same period in 2024~~iLets. ~~This increase in the cost of sales also includes a $0.4 million increase in our product warranty expenses due to a higher installed customer base in the first quarter of 2025 as compared to 2024.~~

39Cost of sales for the six months ended June 30, 2025 was $19.4 million, compared to $12.7 million for the six months ended June 30, 2024. This increase of $6.7 million was primarily attributable to increased volumes of single-use products and pharmacy iLets.

Gross profit ~~was $9.0 million~~ for the three months ended ~~March~~June 3130, 2025 was $12.5 million, compared to $78.21 million for the three months ended ~~March~~June 3130, 2024. Gross margin was 5154% for the three months ended ~~March~~June 3130, 2025, compared to 5654% in the three months ended ~~March~~June 3130, 2024. The $4.4 million increase in gross profit was ~~predominantly~~ driven by higher sales volume~~, however, the decrease in gross margin percentage was primarily driven by the shift in the sales channels in which revenue was generated from customers~~. In the first quarter of 2025, a higher percentage of the new patients starts were through the PBP channel when compared to the same period in 2024. PBP reimbursement involves a smaller upfront payment by the user and insurance carrier for the iLet than in the DME channel, which negatively impacts gross margin when the percentage of new patient starts is higher in the PBP channel.

Gross profit for the six months ended June 30, 2025 was $21.5 million, compared to $15.3 million for the six months ended June 30, 2024. Gross margin was 53% for the six months ended June 30, 2025, compared to 55% in the six months ended June 30, 2024. Gross profit increased by $6.2 million, but gross margin declined primarily due to a shift in revenue mix, with a higher proportion of new patient starts reimbursed through the PBP channel in the first quarter of 2025. Under the PBP model, less revenue is recognized upfront compared to the DME channel, which generates a short term negative impact on gross margin when PBP penetration increases.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Research and development expenses ~~were $7.6 million~~ for the three months ended ~~March~~June 3130, 2025 was $8.9 million, compared to $56.54 million for the three months ended ~~March~~June 3130, 2024. ~~This~~The increase of $2.15 million was primarily attributable to a $1.10 million increase in engineering, materials, and clinical trial related expenses incurred for the development of our patch pump, bihormonal configuration of the iLet and incremental software and product updates. The remaining increase is attributable to a net increase of $01.94 million in payroll-related expenses, including stock-based compensation related to RSUs granted on March 15, 2025 to eligible employees under the 2025 Plan, driven by an increase in headcount primarily with our tech transfer team focused on supporting our innovation activities, and $0.1 million in allocated facilities-related expenses driven by an increase in headcount.

Research and development expenses for the six months ended June 30, 2025 was $16.5 million, compared to $11.8 million for the six months ended June 30, 2024. The increase of $4.6 million was primarily attributable to a $2.1 million increase in engineering, materials, and clinical trial related expenses incurred for the development of our patch pump, bihormonal configuration of the iLet and incremental software and product updates. The remaining increase is attributable to a net increase of $2.2 million in payroll-related expenses, including stock-based compensation related to RSUs granted on March 15, 2025 to eligible employees under the 2025 Plan, driven by an increase in headcount primarily with our tech transfer team focused on supporting our innovation activities, and $0.3 million in allocated facilities-related expenses driven by an increase in headcount.

The table below summarizes the nature of research and development expense by major expense category:

	Three Months Ended March 31,				Change
	Three Months Ended June 30,				Change
	2025		2024		$		%
	(in thousands, except percentages)
External research and development(1)	$	1,~~772~~349	$	~~862~~1,176	$	~~910~~173		~~106~~15	%
Internal research and development(2)		56,~~316~~600		4,~~354~~387		~~962~~2,213		2250	%
Stock-based compensation

Filing Compare · Beta Bionics, Inc.