You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited financial information and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and the audited financial information and the notes thereto included in our Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of our Annual Report and this Quarterly Report on Form 10-Q, as updated and/or supplemented in subsequent filings with the SEC, 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. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “Standard BioTools” the “Company,” “we,” “us,” and “our” refer to Standard BioTools Inc. and its subsidiaries. Overview At Standard BioTools Inc., we are committed to setting the new standard in the life science tools industry through strategic consolidation, best-in-class operations and a world-class management team. Our established portfolio includes essential, standardized next-generation solutions designed to help biomedical researchers develop better therapeutics faster. We offer a diverse range of instrumentation, consumables, and services that generate high-quality data across early discovery, translational and clinical research. With advanced technologies in proteomics and genomics, we empower scientists to gain deeper biological insights, accelerate discoveries, and drive improved health outcomes across diverse therapeutic areas including immunology, oncology, neuroscience, cardiometabolic diseases and more. We have built a solid foundation supporting a differentiated portfolio of life science tools, offering broad multi-omic capabilities that drive innovation and accelerate the pace of drug development. Our solutions are designed to unlock complex biological information across plasma, single-cell and spatial proteomics, as well as genomic analyses, enabling researchers to explore disease mechanisms with unprecedented depth and precision. By integrating our advanced platforms – CyTOF™, Hyperion™, and Biomark™ – we empower scientists to generate high-content data across therapeutic areas, from immuno-oncology to neurology and infectious diseases. Each system is engineered to extract meaningful molecular signatures, providing researchers with the tools they need to decode intricate biological networks. Together, these technologies accelerate discovery, offering a comprehensive approach to understanding the complexities of health and disease. Recent Developments Merger Agreement On June 6, 2026, we entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement") with Treeline Biosciences, Inc. ("Treeline") and Siri Merger Sub, Inc., our wholly owned subsidiary ("Merger Sub"), pursuant to which we and Treeline will combine in an all-stock merger. Pursuant to the Merger Agreement, Merger Sub will merge with and into Treeline, with Treeline surviving as our wholly owned subsidiary (the "Merger") and, together with the other transactions contemplated by the Merger Agreement, the “Transactions”). At the effective time of the Merger (the “Effective Time”), we will be renamed Treeline Biosciences Holdings, Inc. and will effect a reverse stock split of our outstanding common stock, if not effected prior to the Effective Timeas permitted by the Merger Agreement. At the Effective Time, each outstanding share of Treeline capital stock will be converted into the right to receive shares of our common stock based on an exchange ratio calculated in accordance with the Merger Agreement (the “Exchange Ratio”). The Exchange Ratio is based on the relative capitalization of Treeline and Standard BioTools and assumes an equity value for Treeline of $2.5 billion and an equity value for Standard BioTools of $460 million. Following the closing (the “Closing”), our existing stockholders are expected to hold approximately 16% of the combined company on a fully diluted basis, and former Treeline stockholders are expected to hold approximately 84%, subject to adjustment in accordance with the Merger Agreement. Prior to the Effective Time, we expect to declare a dividend to our stockholders of one contingent value right (“CVR”) for each outstanding share of our common stock. Each CVR will entitle the holder to receive, for each 12-month payment period during the five-year term of the CVR agreement (the “CVR Agreement”, a pro rata portion of the net proceeds received by the combined company from specified sources, less certain permitted deductions, including proceeds from the sale, disposition, or other monetization of our mass cytometry and microfluidics businesses (the “Legacy Business”); proceeds from convertible notes or other investments held by us as of the closing date (the “Closing Date”); contingent payments due to us under contracts in effect as of the 19 Closing Date, including the contingent consideration from Illumina described in Note 3 to our accompanying financial statements appearing elsewhere in this Quarterly Report on Form 10-Q; and certain other amounts specified in the CVR agreement. Payments in respect of the CVRs will be settled in shares of the combined company's common stock, subject to a maximum of 76.0 million shares issuable under the CVR Agreement. Under the Merger Agreement, we must use commercially reasonable efforts to effect the sale, license, transfer, disposition, divestiture or other monetization of our mass Legacy Business. If we have not entered into a definitive agreement for the disposition of any portion of these businesses on or before the date the registration statement on Form S-4 filed in connection with the Merger is declared effective, we are required to commence mutually agreed wind-down activities with respect to that portion of the business. Completion of the Merger is subject to customary closing conditions, including approval by our stockholders of the share issuance and an amendment to our certificate of incorporation, effectiveness of the registration statement on Form S-4, continued listing of our common stock on Nasdaq and approval for listing of the shares issuable in the Merger, and expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The Merger is expected to close in the second half of 2026. If the Merger is not consummated by March 31, 2027, either party may terminate the Merger Agreement. Upon termination under specified circumstances, we may be required to pay Treeline a termination fee of $16.1 million or to reimburse Treeline's transaction expenses up to $5.0 million. Divestiture On June 22, 2025, we entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Illumina, Inc. (“Illumina”) pursuant to which Illumina acquired all of the equity interests of SomaLogic, Inc. (“SomaLogic”), Sengenics Corporation LLC and Sengenics Corporation Pte Ltd (collectively, the “Disposed Entities”), each a wholly owned subsidiary that operated our aptamer-based and functional proteomics business, including KREX, Single SOMAmer, translational and diagnostic assays (collectively, the “SomaScan Business”) (such transaction, the “Transaction”). The Transaction did not include our Legacy Business, which we retained. The Transaction closed on January 30, 2026. At closing, we received net cash consideration of $388.2 million, which includes $25.0 million of contingent consideration received, that was based on the achievement of specified revenue thresholds during fiscal year 2025. In addition, we are eligible to receive additional contingent earnout payments of up to $50.0 million based on the achievement of specified revenue thresholds for SomaScan assay services and related products during fiscal year 2026. We will recognize the contingent earnout consideration as it is realized. In addition, at the closing of the Transaction, as additional consideration, we and Illumina entered into (i) a royalty agreement, pursuant to which we are entitled to a specified royalty stream on net revenues generated from sales of SOMAmer-based next-generation sequencing library preparation kits, (ii) a license agreement, pursuant to which Illumina provided a specified license to us for the intellectual property relating to Single SOMAmers for potential development and commercialization of Single SOMAmer reagents for use in single plex affinity assays, and (iii) a royalty agreement, pursuant to which we are entitled to a specified royalty stream on net revenues generated from sales of Single SOMAmers. The royalty rates are low- to mid-single digit percentages. Restructuring Activities On August 28, 2025, we initiated a plan to consolidate our South San Francisco-based R&D capabilities into our Singapore facility to co-locate with our manufacturing operations and implemented a reduction in force of certain U.S. employees in our R&D function, including members of our management team. As part of this consolidation, we transferred our headquarters to Boston, Massachusetts and vacated our South San Francisco office on December 31, 2025. On September 13, 2025, we commenced an additional restructuring plan, including an additional reduction in force to align operating costs with revenue projections for our continuing operations. Both restructuring actions were designed to improve operational efficiency while supporting the execution of our long-term strategic plan. When combined, the reductions-in-force impacted approximately 20% of our total global workforce. Factors Affecting Our Performance Instrument Sales Instrument sales serve as a key indicator of current business performance and provide visibility into future consumables demand. We anticipate continued growth in our installed base as we deepen market penetration and introduce enhanced capabilities that address evolving customer needs. 20 Our strategy to grow instrument sales includes expanding our global commercial reach, optimizing pricing strategies, and advancing the technological capabilities and applications of our platforms. We actively engage with customers to understand their research priorities and direct our development efforts toward platform enhancements and new applications, which we believe drives adoption of both our instruments and consumables. Consumables Revenue Consumables represent a critical component of our revenue model and reflect ongoing customer engagement with our platforms. We monitor consumables trends across our product portfolio and customer segments to inform commercial and development decisions. We expect consumables revenue to grow over time through increased utilization by existing customers, expansion of our installed base, and the introduction of new consumables offerings. Consumables are expected to remain a substantial portion of our total revenue. Financial Operations Overview Revenue We generate our revenue from the sale of products and services. We also derive revenue from collaborative arrangements, license agreements, grants, and royalties. Customers include top biopharmaceutical companies and leading academic research universities. We expect the average selling prices of our products and services to fluctuate over time based on market conditions, product mix and currency fluctuations. Product revenue We generate product revenue from the sale of instruments and consumables. Consumables revenue is largely driven by the size of our active installed base of instruments and the level of usage per instrument. Service revenue Service revenue primarily consists of post-warranty service contracts, preventive maintenance plans, installation and training for our instruments. Cost of Revenue Cost of product revenue Cost of product revenue consists primarily of raw materials, equipment and production costs, salaries and other personnel costs, overhead and other direct costs related to product revenue. In addition, cost of product revenue includes amortization of developed technology, royalty costs for licensed technologies included in our products, warranty costs, provisions for excess and obsolete inventory, and stock-based compensation expense, and shipping and handling costs. Cost of product revenue is recognized in the period the related revenue is recognized. Shipping and handling costs incurred for product shipments are included in cost of product revenue in the consolidated statements of operations. Our cost of product revenue and related product margin may fluctuate depending on the capacity utilization of our manufacturing facilities in response to market conditions and the demand for our products. Cost of service revenue Cost of service revenue consists of raw materials and production costs, personnel-related costs, overhead and other direct costs. Cost of service revenue is recognized in the period the related revenue is recognized. Our cost of service revenue and related service margin may fluctuate depending on the variability in material and labor costs of servicing. Research and Development (“R&D”) R&D expenses consist primarily of personnel-related costs related to enhancing our technologies and supporting development and commercialization of new and existing products and services. R&D expenses also consist of laboratory supply costs, clinical study costs, consulting fees, and other allocated overhead expenses. Selling, General, and Administrative (“SG&A”) SG&A expenses consist primarily of personnel costs for our sales and marketing, business development, finance, legal, human resources, information technology and general management teams, as well as professional services, including legal and accounting services. 21 Restructuring and Related Charges Restructuring and related charges primarily consist of severance costs related to our recent reduction-in-force and facilities costs for floors we have subleased or have the intent to sublease (net of sublease income) under our South San Francisco facility lease. These costs, including a reduction in force, are incurred to improve operational efficiency, achieve cost savings and align our workforce to the future needs of the business. Transaction and Integration Expenses Transaction and integration expenses consist of costs incurred in connection with acquisition- and divestiture-related activities, including legal, advisory, accounting and other transaction-related costs including integration costs. Loss from Discontinued Operations Loss from discontinued operations represents the results of operations for business components that are classified as held-for-sale and meet the criteria for discontinued operations accounting under ASC 205, Presentation of Financial Statements. This includes the operating results of the discontinued components during the periods presented. The loss from discontinued operations is presented net of applicable income taxes and includes direct incremental costs associated with the disposal activities, such as legal, advisory, and other transaction-related costs. Any intercompany transactions between continuing and discontinued operations have been eliminated, and certain allocations of corporate overhead and shared costs previously allocated to the discontinued operations have been adjusted to reflect the costs that will be eliminated upon disposal. Prior period amounts have been reclassified to conform to the current period presentation. Results of Operations The following table presents our unaudited condensed consolidated statements of operations and as a percentage of total revenue for the three and six months ended June 30, 2026 and 2025 ($ in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ 20,104 100 % $ 21,762 100 % $ 41,250 100 % $ 41,984 100 % Cost of revenue 9,569 48 % 11,134 51 % 19,407 47 % 20,307 48 % Gross profit 10,535 52 % 10,628 49 % 21,843 53 % 21,677 52 % Operating expenses: Research and development 1,976 10 % 6,222 29 % 4,093 10 % 11,662 28 % Selling, general and administrative 16,388 82 % 28,105 129 % 34,995 85 % 57,929 138 % Restructuring and related charges 2,812 14 % 1,727 8 % 5,892 14 % 3,279 8 % Transaction and integration expenses 14,747 73 % 271 1 % 14,747 36 % 1,474 4 % Total operating expenses 35,923 179 % 36,325 167 % 59,727 145 % 74,344 177 % Loss from continuing operations (25,388 ) (126 )% (25,697 ) (118 )% (37,884 ) (92 )% (52,667 ) (125 )% Interest income, net 4,611 23 % 2,452 11 % 8,122 20 % 5,366 13 % Other (expense) income, net (658 ) (3 )% 4,963 23 % (6,288 ) (15 )% 5,530 13 % Loss from continuing operations before income taxes (21,435 ) (107 )% (18,282 ) (84 )% (36,050 ) (87 )% (41,771 ) (99 )% Income tax (expense) benefit (90 ) (0 )% 609 3 % (101 ) (0 )% 728 2 % Net loss from continuing operations (21,525 ) (107 )% (17,673 ) (81 )% (36,151 ) (88 )% (41,043 ) (98 )% Discontinued operations: (Loss) income from discontinued operations, net of tax (5,233 ) (26 )% (15,786 ) (73 )% 136,461 331 % (18,449 ) (44 )% Net (loss) income $ (26,758 ) (133 )% $ (33,459 ) (154 )% $ 100,310 243 % $ (59,492 ) (142 )% Revenue The following table sets forth revenue by product type, presented in dollars and as a percentage of total revenue ($ in thousands): 22 Three Months Ended June 30, Year-over-Year Change Six Months Ended June 30, Year-over-Year Change 2026 2025 $ % 2026 2025 $ % Product revenue: Instruments $ 5,130 $ 5,215 $ (85 ) (2 )% $ 9,600 $ 11,861 $ (2,261 ) (19 )% Consumables 9,385 10,458 (1,073 ) (10 )% 20,369 18,593 1,776 10 % Total product revenue 14,515 15,673 (1,158 ) (7 )% 29,969 30,454 (485 ) (2 )% Services and other revenue 5,589 6,089 (500 ) (8 )% 11,281 11,530 (249 ) (2 )% Total revenue $ 20,104 $ 21,762 $ (1,658 ) (8 )% $ 41,250 $ 41,984 $ (734 ) (2 )% For the three months ended June 30, 2026, total revenue decreased $1.7 million, or 8%, compared to the prior year period. The decrease was driven primarily by a $1.1 million, or 10%, decline in consumables revenue and a $0.5 million, or 8%, decline in services and other revenue. Instrument revenue was substantially unchanged compared to the prior year period. For the six months ended June 30, 2026, total revenue decreased $0.7 million, or 2%, compared to the prior year period. In the first quarter of 2026, total revenue increased $0.9 million, or 5%, compared to the prior year quarter, driven primarily by higher consumables revenue and partially offset by a decline in instrument revenue. In the second quarter of 2026, total revenue decreased $1.7 million, or 8%. First quarter growth therefore offset the majority of the second quarter decline in the year-to-date results. Cost of Revenue and Gross Profit Cost of revenue, gross profit, and gross margin were as follows ($ in thousands): Three Months Ended June 30, Year-over-Year Change Six Months Ended June 30, Year-over-Year Change 2026 2025 $ % 2026 2025 $ % Cost of product revenue $ 6,797 $ 7,608 $ (811 ) (11 )% $ 14,503 $ 14,039 $ 464 3 % Cost of service revenue 2,772 3,526 (754 ) (21 )% 4,904 6,268 (1,364 ) (22 )% Total cost of revenue $ 9,569 $ 11,134 $ (1,565 ) (14 )% $ 19,407 $ 20,307 $ (900 ) (4 )% Gross profit $ 10,535 $ 10,628 $ (93 ) (1 )% $ 21,843 $ 21,677 $ 166 1 % Gross margin 52.4 % 48.8 % N/A 3.6 % 53.0 % 51.6 % N/A 1.4 % For the three months ended June 30, 2026, gross profit decreased $0.1 million, or 1%, compared to the prior year period, primarily due to the decline in our revenue. For the six months ended June 30, 2026, gross profit increased $0.2 million, or 1%, compared to the prior year period, as lower cost of revenue more than offset the decline in our revenue. Operating Expenses Operating expenses were as follows ($ in thousands): Three Months Ended June 30, Year-over-Year Change Six Months Ended June 30, Year-over-Year Change 2026 2025 $ % 2026 2025 $ % Research and development $ 1,976 $ 6,222 $ (4,246 ) (68 )% $ 4,093 $ 11,662 $ (7,569 ) (65 )% Selling, general and administrative 16,388 28,105 (11,717 ) (42 )% 34,995 57,929 (22,934 ) (40 )% Restructuring and related charges 2,812 1,727 1,085 63 % 5,892 3,279 2,613 80 % Transaction and integration expenses 14,747 271 14,476 5342 % 14,747 1,474 13,273 900 % Total operating expenses $ 35,923 $ 36,325 $ (402 ) (1 )% $ 59,727 $ 74,344 $ (14,617 ) (20 )% 23 Research and Development For the three months ended June 30, 2026, R&D expense decreased by $4.2 million, or 68%, compared to the prior year period. The reduction in R&D expense was primarily driven by a decrease in personnel-related costs due to restructuring activities undertaken during 2025. For the six months ended June 30, 2026, R&D expense decreased $7.6 million, or 65%, compared to the prior year period. The reduction reflects the deferral of long-horizon R&D projects, which reduced material and supply costs as well as consulting fees. Additionally, the current period benefited from restructuring activities completed in 2025, which reduced corporate overhead costs and personnel-related costs. Selling, General and Administrative For the three months ended June 30, 2026, SG&A expense decreased by $11.7 million, or 42%, compared to the prior year period. The reduction in SG&A expense was primarily driven by a decrease in personnel-related costs due to restructuring activities undertaken during 2025. For the six months ended June 30, 2026, SG&A expense decreased by $22.9 million, or 40%, compared to the prior year period. The decrease primarily reflects a $10.3 million reduction in personnel-related costs and a $4.3 million reduction in stock-based compensation expense due to restructuring activities undertaken in 2025. Additionally, marketing and advertising expense declined by $2.4 million, and consulting fees declined by $1.8 million due to an increased focus by management on expense reduction during 2026. Restructuring and Related Charges Restructuring and related charges for the three and six months ended June 30, 2026 increased by $1.1 million and $2.6 million, or 63% and 80%, respectively, compared to the prior year periods. The increase was primarily driven by an increase in facilities-related charges associated with our former South San Francisco office, which was vacated in connection with the consolidation of our R&D function into our Singapore facility in 2025. Transaction and Integration Expenses Transaction and integration expenses for the three and six months ended June 30, 2026 increased by $14.5 million and $13.3 million, respectively, compared to the prior year periods. The costs incurred were primarily incurred in connection with the Merger Agreement with Treeline. Interest Income, net Interest income, net increased by $2.2 million and $2.8 million, or 88% and 51%, during the three and six months ended June 30, 2026 compared to the prior year periods. The increase was primarily attributable to higher money market fund and investment balances resulting from cash proceeds received in connection with the sale of the SomaScan Business. Other (Expense) Income, net For the three months ended June 30, 2026, other (expense) income, net decreased by $5.6 million compared to the prior year period. The decrease was primarily driven by $1.5 million of foreign currency exchange losses in the current period compared to $5.0 million of foreign currency exchange gains in the prior year period, partially offset by $1.0 million of unrealized gains on our equity investments. For the six months ended June 30, 2026, other (expense) income, net decreased by $11.8 million compared to the prior year period. The decrease primarily reflects $4.8 million of foreign currency exchange losses and $1.4 million of net losses on our equity investments, consisting of $2.5 million of unrealized losses partially offset by $1.2 million of realized gains. The prior year period included $1.9 million of foreign currency exchange gains, a $3.4 million gain from the remeasurement of a contingent consideration liability, and a $0.2 million gain from the remeasurement of warrants, with no comparable remeasurement activity during the six months ended June 30, 2026. 24 Income (loss) from discontinued operations Loss from discontinued operations decreased by $10.6 million for the three months ended June 30, 2026, compared to the corresponding period in 2025. The decrease occurred because the SomaScan Business was sold in January 2026, and therefore the only discontinued operations activity during the second quarter of 2026 related to $4.2 million of indemnification expense recorded during the period. Income from discontinued operations increased by $154.9 million for the six months ended June 30, 2026, compared to the corresponding period in 2025. The increase was driven by the gain on sale recorded for the SomaScan Business during 2026. Liquidity and Capital Resources We have experienced operating losses since inception and have an accumulated deficit of $1,160.2 million as of June 30, 2026. To date, we have funded our operating losses primarily through acquisitions, divestitures, equity offerings, term loans, convertible notes and redeemable preferred stock. Our ability to fund future operations and meet debt covenant requirements will depend upon our level of future revenue and operating cash flow and our ability to access additional funding through acquisitions, divestitures, equity offerings, or issuances of debt instruments. Our liquidity and capital requirements depend upon many factors, including market acceptance of our products and services; effectiveness of our business improvement initiatives and restructuring programs; costs of supporting sales growth, product quality, R&D and capital expenditures, including our enterprise resource planning upgrade; and costs and timing of acquiring other businesses, assets or technologies or disposing of our businesses, assets or technologies. We continually evaluate our liquidity requirements considering our operating needs, growth initiatives and capital resources. We expect that our existing liquidity and sources of capital will be sufficient to support our operations for at least the next 12 months from the filing date of this Quarterly Report on Form 10-Q. Sources of Liquidity Our principal sources of liquidity are cash, cash equivalents and investments. Our collective balances of cash, cash equivalents and investments were $544.0 million and $213.3 million at June 30, 2026 and December 31, 2025, respectively. Capital Resources and Commitments We have entered into arrangements that serve as sources of capital and the associated contractual agreements may result in firm or contingent obligations of us. In addition to our common stockholders’ equity, our sources of capital have historically included debt and operating leases. Our operating lease arrangements require cash repayment, and our convertible debt contains rights that may result in their conversion to our common stock prior to maturity. However, as of June 30, 2026, we have repaid the majority of our traditional debt obligations and no longer maintain access to credit facilities. Accordingly, our ongoing sources of capital are primarily limited to equity and cash generated from operations. We also enter into contractual and legally binding commitments to purchase goods. Most of these contracts are cancellable with little or no notice or penalty. However, once a vendor has incurred costs to fulfill a contract with us, and which costs cannot be otherwise deployed, we are liable for those costs upon cancellation. Cash Flow Activity Our cash flow summary was as follows ($ in thousands): Six Months Ended June 30, 2026 2025 Cash flow summary: Net cash used in operating activities $ (56,908 ) $ (50,951 ) Net cash provided by investing activities 205,498 42,130 Net cash used in financing activities (178 ) 62 Effect of foreign exchange rate fluctuations on cash and cash equivalents 409 1,145 Net (decrease) increase in cash, cash equivalents and restricted cash $ 148,821 $ (7,614 ) 25 We derive cash flows from operations primarily by collecting amounts due from sales of our products and services, and fees earned under our product development and license agreements. Our cash flows from operating activities are also significantly influenced by our use of cash for operating expenses and working capital to support the business. We have historically experienced negative cash flows from operating activities as we have expanded our business and built our infrastructure, domestically and internationally. In the six months ended June 30, 2026, we used $56.0 million of proceeds from the sale of the SomaScan Business to help fund $56.9 million of net cash used in operating activities. In the six months ended June 30, 2025, we used $49.1 million of net proceeds from the sales and maturities of investments to help fund $51.0 million of net cash used in operating activities. Operating Activities Net cash used in operating activities increased by $6.0 million for the six months ended June 30, 2026 compared to the same period in 2025. The increase was attributable to the first quarter of 2026, during which net cash used in operating activities increased $16.3 million compared to the prior year quarter, primarily reflecting $12.1 million of higher transaction and restructuring cost payments and a $10.1 million increase in bonus payments. In the second quarter of 2026, net cash used in operating activities decreased approximately $10.3 million compared to the prior year quarter, reflecting lower cash payments for ongoing operating expenses as a result of our cost reduction initiatives. Investing Activities Net cash provided by investing activities was $205.5 million for the six months ended June 30, 2026, compared to $42.1 million for the same period in 2025. The increase was primarily attributable to $388.2 million of cash consideration received in connection with the sale of the SomaScan Business, partially offset by $181.8 million of net purchases of investments funded with a portion of the sale proceeds. Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements and related notes, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the use of estimates and assumptions to determine the value of the assets, liabilities, revenues and expenses reported on the condensed consolidated balance sheets and statements of operations. We develop these estimates after considering historical transactions, the current economic environment and various other assumptions considered reasonable under the circumstances. Actual results may differ materially from these estimates and judgments. Accounts that rely heavily on estimated information to determine their values include revenue, trade receivables, inventories, right-of-use assets, lease liabilities and income tax liabilities (assets). Refer to Item 7 in our Annual Report for additional information regarding our critical accounting policies and estimates to which there have been no changes from those described in the Annual Report. Recent Accounting Pronouncements From time to time, new accounting standards are issued by the Financial Accounting Standards Board or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.