Palomino Laboratories Inc. IPO - Investor Overview

Considering an investment in Palomino Laboratories Inc. as it prepares for its Initial Public Offering (IPO)? This overview distills key information from the company's S-1 filing with the Securities and Exchange Commission, submitted on January 22, 2026. We aim to provide a clear understanding of Palomino's business, financial health, and potential risks, free from complex industry jargon.

1. Business Description: What Palomino Laboratories Does

Palomino Laboratories is a medical technology company that develops advanced, AI-powered diagnostic platforms for early disease detection. The company's mission is to transform how medical professionals identify critical illnesses, allowing for earlier treatment and better patient outcomes.

Palomino creates sophisticated tests and devices using its unique machine learning software and new ways to analyze biological markers. Its main product, the 'Palomino Dx-100' system, detects lung cancer early and non-invasively. This technology offers doctors faster, more accurate insights than current methods, potentially finding diseases when treatment is most effective. The Dx-100 system is currently in Phase 3 clinical trials, and Palomino expects to apply for FDA approval in late 2026.

Palomino earns revenue mainly by selling its diagnostic devices and specialized test kits to hospitals, clinics, and research institutions. It also expects to generate ongoing revenue from software subscriptions and maintenance contracts for its equipment.

2. Financial Highlights: Performance and Growth Strategy

Understanding Palomino's financial performance and growth plans is crucial for investors.

Financial Snapshot (as of December 31, 2025):

• Revenue: Palomino generated approximately $12.5 million, mainly from early-access programs and research collaborations. This represents a 75% increase from 2024.
• Net Loss: The company reported a net loss of $35 million. This reflects significant investment in research and development (R&D) and clinical trials. Palomino anticipates continued substantial operating losses as it seeks regulatory approvals and commercializes its products.
• Cash Position: The filing does not disclose the cash position.

Palomino's growth strategy focuses on obtaining regulatory approvals for its Dx-100 system, growing its clinical partnerships, and establishing a strong direct sales and marketing infrastructure. The company is also actively developing two more diagnostic platforms for infectious diseases and neurological disorders. It aims to secure a portion of the global diagnostics market, which experts project will exceed $100 billion by 2030.

3. Use of Proceeds: How IPO Proceeds Will Be Used

Palomino plans to use the capital raised from this IPO to advance its strategic goals:

• Research & Development (45%): To complete Phase 3 clinical trials for the Dx-100, fund the development of its next-generation diagnostic platforms, and expand its efforts in discovering new biological markers.
• Sales & Marketing and Manufacturing (30%): To expand manufacturing capacity, build a commercial sales team, and launch extensive marketing campaigns in anticipation of regulatory approvals.
• General Corporate Purposes (25%): For working capital, hiring essential staff, and other operational costs.

4. Risk Factors: Key Risks for Investors

Investing in Palomino Laboratories, like any early-stage medical technology company, involves significant risks:

• Regulatory Approval Risk: The Dx-100 and other products need strict FDA approval. Delays or failure to obtain timely approvals could severely impact commercialization and financial performance.
• Clinical Trial Risk: Palomino's products succeed only with positive results from ongoing and future clinical trials. Unfavorable trial outcomes could lead to product abandonment.
• Intense Competition: Palomino operates in a highly competitive market against established diagnostic companies and other innovative startups. Its ability to stand out and gain market share is critical.
• Intellectual Property Risk: The company's success relies on protecting its unique technology through patents and trade secrets. Challenges to its intellectual property could weaken its competitive advantage.
• Product Adoption Risk: Even with regulatory approval, doctors and hospitals might slowly adopt new technologies. This would require substantial investment in education and market penetration.
• Continued Operating Losses: Palomino has a history of losses and expects them to continue as it invests heavily in R&D and commercialization. There is no guarantee the company will achieve profitability in the future.
• "Emerging Growth Company" (EGC) and "Smaller Reporting Company" (SRC) Status: Because Palomino qualifies as an EGC and SRC, it has fewer public reporting requirements. This means investors might access less detailed financial and operational information than from larger, more established companies, making a full investment assessment potentially harder. These statuses also allow an extended period to adopt new accounting rules, which can affect how easily investors can compare financial statements.
• Potential for Future Share Sales (Shelf Registration): Palomino has stated it might offer additional securities on a "delayed or continuous basis" after the IPO. While this offers flexibility for future capital raises, it could create uncertainty about potential dilution and affect the stock price if new shares are issued.

5. Competitive Landscape

Palomino operates in a highly competitive market, competing with established diagnostic leaders like Siemens Healthineers, Abbott Laboratories, and Roche Diagnostics, alongside many other innovative startups.

Palomino believes its competitive advantage comes from its unique AI platform. This platform can detect diseases earlier and non-invasively, potentially with greater accuracy (specificity) and ability to correctly identify positive cases (sensitivity) than current methods. This could reduce the need for more invasive and expensive diagnostic procedures, providing significant value to healthcare providers and patients.

6. Management Team

An experienced team with deep expertise in medical technology and commercialization leads Palomino. Jeffrey Shealy, CEO, brings over 20 years of experience in medical device development and commercialization, having held leadership roles at other medical technology companies. A strong executive team supports him, including Dr. Anya Sharma, Chief Scientific Officer, a renowned expert in discovering biological markers and applying AI in diagnostics.

7. Offering Details

Palomino Laboratories Inc. plans to list its shares on the Nasdaq Global Market using the ticker symbol 'PLAB'.

The company will offer 10 million shares of common stock at an estimated price range of $16.00 to $19.00 per share. At the midpoint of this range, the offering expects to raise approximately $175 million. This suggests a total company value, including all potential shares, of about $700 million.

This summary offers a fundamental understanding of Palomino Laboratories Inc. We encourage you to conduct your own thorough research and consult with a financial advisor to determine if this investment aligns with your personal financial goals and risk tolerance.