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What changed in 908 Devices Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of 908 Devices Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+392 added−414 removedSource: 10-K (2025-03-07) vs 10-K (2024-03-08)

Top changes in 908 Devices Inc.'s 2024 10-K

392 paragraphs added · 414 removed · 318 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

104 edited+24 added−53 removed121 unchanged
Biggest changeCompetition We have a range of competitors extending from small, privately held companies with single-point solutions to large, publicly-held corporations, including those with a portfolio of Mass Spec products, such as Agilent, Bruker, Danaher, Inficon, Teledyne, Endress & Hauser, PerkinElmer, Shimadzu, Thermo Fisher Scientific, and Waters Corp. Many of these companies have greater resources and market presence than we do.
Biggest changeWe also conduct additional research and development operations out of our facility in Morrisville to support assay development for Rebel, Maverick and ZipChip, and out of our facility in Braunschweig, Germany to support assay development of our Maven and related products and aseptic sampling development. 21 Table of Contents Competition We have a range of competitors extending from small, privately held companies with single-point solutions to large, publicly-held corporations, including those with a portfolio of Mass Spec products, such as Agilent, Bruker, Danaher, Inficon, Teledyne, Endress & Hauser, PerkinElmer, Shimadzu, Thermo Fisher Scientific, and Waters Corp.
Item 1. Business. Analysis at the Speed of Life We are making revolutionizing chemical and biochemical analysis simple, smart and speedy with our purpose-built handheld and desktop devices that empower people to take swift action in life-altering applications. Company Overview We have developed an innovative suite of purpose-built handheld and desktop devices for the point-of-need chemical and biochemical analysis.
Item 1. Business. Analysis at the Speed of Life We are making revolutionizing chemical and biochemical analysis simple, smart and speedy with our purpose-built handheld and desktop devices that empower people to take swift action in life-altering applications. Company Overview We have developed an innovative suite of purpose-built handheld and desktop devices for point-of-need chemical analysis.
This HPMS approach results in devices with dramatically smaller size and lower cost-of-goods through a reduction of vacuum pump requirements and power consumption, and an overall simplification of the hardware topology. 9 Table of Contents Conventional laboratory Mass Spec Our Mass Spec ​ HPMS allows us to build ultracompact, high-fidelity measurement devices that are purpose-built for specific applications and deployable at the point-of-need.
This HPMS approach results in devices with dramatically smaller size and lower cost-of-goods through a reduction of vacuum pump requirements and power consumption, and an overall simplification of the hardware topology. ​ ​ Conventional laboratory Mass Spec Our Mass Spec 9 Table of Contents ​ HPMS allows us to build ultracompact, high-fidelity measurement devices that are purpose-built for specific applications and deployable at the point-of-need.
Introduced in 2023, Maverick offers bioprocess scientists easy-to-integrate in-line analysis and control without the need for substantial expert configuration or setup. We fundamentally believe that the technology platform we have built and the investments we are making will allow people to answer chemical and biochemical questions in times and places that were previously inconceivable.
Introduced in 2023, Maverick offers bioprocess scientists easy-to-integrate in-line analysis and control without the need for substantial expert configuration or setup. We fundamentally believe that the technology platform we have built and the investments we are making will allow people to answer chemical questions in times and places that were previously inconceivable.
Sales and Marketing We distribute our devices and consumables via direct field sales and support organizations located in North America and through a combination of our own sales force and more than 42 third party channel partners in domestic and international markets which include Australia, Canada, China, Czech Republic, Germany, Japan, Saudi Arabia, Singapore, Turkey, and the United Kingdom, or UK.
Sales and Marketing We distribute our devices and consumables via direct field sales and support organizations located in North America and through a combination of our own sales force and more than 60 third party channel partners in domestic and international markets which include Australia, Canada, China, Czech Republic, Germany, Japan, Saudi Arabia, Singapore, Turkey, and the United Kingdom, or UK.
Accordingly, our research and development team possesses functional expertise in critical areas such as: ● chemistry, biochemistry, physics of Mass Spec and separations and sample processing; ● embedded, desktop and mobile software engineering; ● machine learning, high-speed digital signal processing, multivariate statistical learning, algorithms and decision theory; ● user experience design and user interface design; ● mechanical engineering and industrial design; ● analog, digital and mixed signal electronics engineering; 23 Table of Contents ● ultra-efficient pumping and pneumatics engineering; and ● microfluidic design, and volume fabrication at the micro- and meso-scale.
Accordingly, our research and development team possesses functional expertise in critical areas such as: ● chemistry, biochemistry, physics of Mass Spec and separations and sample processing; ● embedded, desktop and mobile software engineering; ● machine learning, high-speed digital signal processing, multivariate statistical learning, algorithms and decision theory; ● user experience design and user interface design; ● mechanical engineering and industrial design; ● analog, digital and mixed signal electronics engineering; ● ultra-efficient pumping and pneumatics engineering; and ● microfluidic design, and volume fabrication at the micro- and meso-scale.
We expect our research and development expense to be maintained at this level as we balance resources to enhance our existing products, develop new products for our current markets and introduce new products in new markets. We consider the holistic nature of our internal product development teams critical to our products’ success.
We expect our research and development expense to be maintained at this level as we balance resources to expand our existing products, develop new products for our current markets and introduce new products in new markets. We consider the holistic nature of our internal product development teams critical to our products’ success.
Our devices are used at the point-of-need to interrogate unknown and invisible materials and provide quick, actionable answers to directly address some of the most critical problems in life sciences research, bioprocessing, pharma/biopharma, forensics and adjacent markets.
Our devices are used at the point-of-need to interrogate unknown and invisible materials and provide quick, actionable answers to directly address some of the most critical problems in forensics, bioprocessing, pharma/biopharma, life science research and adjacent markets.
Excluding any patent term extension, the currently issued 908 Devices-owned patents are expected to expire between 2032 to 2038. The currently issued in-licensed patents are expected to expire from 2023 to 2039. We also seek to protect our brand through procurement of trademark rights.
Excluding any patent term extension, the currently issued 908 Devices-owned patents are expected to expire between 2032 to 2038. The currently issued in-licensed patents are expected to expire from 2024 to 2039. We also seek to protect our brand through procurement of trademark rights.
Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. Available Information Our Internet address is www.908devices.com.
Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. 25 Table of Contents Available Information Our Internet address is www.908devices.com.
As of December 31, 2023, a substantial majority of our employees were located in the United States. None of our employees is represented by a labor union or is subject to a collective bargaining agreement. We consider our relationship with our employees to be good.
As of December 31, 2024, a substantial majority of our employees were located in the United States. None of our employees is represented by a labor union or is subject to a collective bargaining agreement. We consider our relationship with our employees to be good.
The term “products” or “devices” used in this “Business” section each refer to the MX908, Rebel, ZipChip Interface, Maverick, and Maven and related sampling devices. We create simplified measurement devices that our customers can use as accurate tools where-and-when their work needs to be done, rather than overly complex and centralized analytical instrumentation.
The term “products” or “devices” used in this “Business” section each refer to the MX908, ThreatID, ProtectIR, XplorIR, Rebel, ZipChip Interface, Maverick, and Maven and related sampling devices. We create simplified measurement devices that our customers can use as accurate tools where-and-when their work needs to be done, rather than overly complex and centralized analytical instrumentation.
We have over 700 customers, including all 20 of the top 20 pharmaceutical companies by revenue, academic and major government institutions, including the Department of Homeland Security, the U.S. Army and the U.S. Air Force and other international, federal and state agencies.
We have over 900 customers, including all 20 of the top 20 pharmaceutical companies by revenue, academic and major government institutions, including the Department of Homeland Security, the U.S. Army and the U.S. Air Force and other international, federal and state agencies.
Our Technology Our Technology Platform We have developed a core technology platform designed to bring Mass Spec out of the confines of central laboratories and to the point-of-need with high-fidelity handheld and desktop devices.
Our Technology Our Technology Platform We have developed a core technology platform designed to bring Mass Spec and optical spectroscopy out of the confines of central laboratories and to the point-of-need with high-fidelity handheld and desktop devices.
We believe there are numerous domestic and international contract manufacturers that could be qualified to produce the MX908, Rebel, Maverick and/or ZipChip Interface when third party demand for our products outpace our current manufacturing capacity. The autosampler subassembly of the Rebel and ZipChip are supplied by a single supplier.
We believe there are numerous domestic and international contract manufacturers that could be qualified to produce the MX908, ThreatID, ProtectIR, XplorIR, Rebel, Maverick and/or ZipChip Interface when third party demand for our products outpace our current manufacturing capacity. The autosampler subassembly of the Rebel and ZipChip are supplied by a single supplier.
Our MX908 devices often are sold to governmental institutions and other customers that require participation in a tender process that involves preparation of extensive documentation and a lengthy review process. As a result of these factors, and the budget cycles of our customers, our sales cycle can often be six to twelve months, or longer.
Our MX908, ThreatID, ProtectIR and XplorIR devices often are sold to governmental institutions and other customers that require participation in a tender process that involves preparation of extensive documentation and a lengthy review process. As a result of these factors, and the budget cycles of our customers, our sales cycle can often be six to twelve months, or longer.
We provide our products to customers pursuant to terms and conditions that impose restrictions on use and disclosure. We also seek to avoid disclosure of our intellectual property using contractual obligations, by requiring employees, consultants and contractors with access to our proprietary information to execute nondisclosure, non-competition and 24 Table of Contents assignment of intellectual property agreements.
We provide our products to customers pursuant to terms and conditions that impose restrictions on use and disclosure. We also seek to avoid disclosure of our intellectual property using contractual obligations, by requiring employees, consultants and contractors with access to our proprietary information to execute nondisclosure, non-competition and assignment of intellectual property agreements.
The majority of our research and development operations are conducted in our Boston facility.
The majority of our research and development operations are conducted in our Boston facility and our Danbury facility.
Our ability to compete successfully will depend on a number of factors including our ability to: ● offer differentiated point-of-need Mass Spec devices; ● translate market requirements into an engineering roadmap of new software and hardware features to remain competitive; ● demonstrate the value of employing our products at the point-of-need through accelerated workflows; and ● provide pro-active support and service that delights our customers.
Our ability to compete successfully will depend on a number of factors including our ability to: ● offer differentiated point-of-need chemical analysis devices; ● translate market requirements into an engineering roadmap of new software and hardware features to remain competitive; ● demonstrate the value of employing our products at the point-of-need through accelerated workflows; and ● provide pro-active support and service that delights our customers.
We use our annual demand planning to assess initial device needs for 21 Table of Contents each year, and we update and reassess those estimates as needed, including with respect to the levels of inventory that we believe will be required to support anticipated customer demand.
We use our annual demand planning to assess initial device needs for each year, and we update and reassess those estimates as needed, including with respect to the levels of inventory that we believe will be required to support anticipated customer demand.
As a 27 Table of Contents result, our financial statements and the reported results of operations contained therein may not be directly comparable to those of other public companies. We are also a “smaller reporting company,” as defined in Regulation S-K.
As a result, our financial statements and the reported results of operations contained therein may not be directly comparable to those of other public companies. We are also a “smaller reporting company,” as defined in Regulation S-K.
We believe that providing simple, smart, and speedy devices that provide robust answers when and where people need them gives rise to: ● an expanded and more diverse set of users; ● more frequent measurements; and ● new use cases that were previously untenable.
We believe that providing simple, smart, and speedy devices that provide robust answers when and where people need them gives rise to: ● an expanded and more diverse set of users; ● more frequent measurements; and 8 Table of Contents ● new use cases that were previously untenable.
Currently, customers of Rebel who are actively utilizing the device are consuming on average approximately half of a 200-sample kit per month. With continuous operation, the Rebel is capable of consuming approximately one 200-sample kit a day. 17 Table of Contents We also offer an annual certification kit for the Rebel.
Currently, customers of Rebel who are actively utilizing the device are consuming on average approximately half of a 200-sample kit per month. With continuous operation, the Rebel is capable of consuming approximately one 200-sample kit per day. We also offer an annual certification kit for the Rebel.
Our proprietary High-Pressure Mass Spec, or HPMS, technology enables us to produce significantly smaller, purpose-built Mass Spec devices that are better suited for use in point-of-need settings, in contrast to conventional mainframe Mass Spec solutions.
Our proprietary High-Pressure Mass Spec, or HPMS, technology enables us to produce 6 Table of Contents significantly smaller, purpose-built Mass Spec devices that are better suited for use in point-of-need settings, in contrast to conventional mainframe Mass Spec solutions.
Several examples of these elements are highlighted below in the “Our Products” section. Our Products We were founded on a vision to deliver high quality Mass Spec to a broad set of users at the point-of-need. We offer handheld and desktop devices, each of which are capable of providing quick, high-fidelity and actionable results.
Several examples of these elements are highlighted below in the “Our Products” section. Our Products We were founded on a vision to deliver high quality chemical analysis to a broad set of users at the point-of-need. We offer handheld and desktop devices, each of which are capable of providing quick, high-fidelity and actionable results.
As of December 31, 2023, our owned patent assets included approximately 19 U.S. patents, no pending U.S. patent applications, 45 foreign patents and four pending foreign patent applications in various foreign jurisdictions, including Australia, Austria, Canada, China, France, Germany, the European Union, or EU, Hong Kong, Israel, Japan, South Korea, Singapore, Switzerland and Taiwan.
As of December 31, 2024, our owned patent assets included approximately 19 U.S. patents, no pending U.S. patent applications, 43 foreign patents and four pending foreign patent applications in various foreign jurisdictions, including Australia, Austria, Canada, China, France, Germany, the European Union, or EU, Hong Kong, Israel, Japan, South Korea, Singapore, Switzerland and Taiwan.
A trial generally results in budgeting for a pilot that can range in size from ten to more than 50 units. During the pilot, we support our customers closely to ensure their success. Data is compiled throughout to assist our customer in making a larger enterprise-wide justification, purchase and deployment.
A trial generally results in budgeting for 7 Table of Contents a pilot that can range in size from ten to more than 50 units. During the pilot, we support our customers closely to ensure their success. Data is compiled throughout to assist our customer in making a larger enterprise-wide justification, purchase and deployment.
As our primary point of contact in the marketplace, our sales force focuses on delivering a consistent marketing message and high level of customer service, while also attempting to help us better understand the evolving market and customer needs. As of December 31, 2023, we had 70 people employed in sales, sales support and marketing.
As our primary point of contact in the marketplace, our sales force focuses on delivering a consistent marketing message and high level of customer service, while also attempting to help us better understand the evolving market and customer needs. As of December 31, 2024, we had 59 people employed in sales, sales support and marketing.
We recently added the MX908 Beacon accessory, which is a remote area monitoring system secured in a rugged case that can detect and identify aerosolized and vapor threats. The MX908 Beacon accessory leverages the MX908 and Aerosol Module combined with a cloud-based solution to enable remote identification of toxic chemical hazards.
We also offer the MX908 Beacon accessory, which is a remote area monitoring system secured in a rugged case that can detect and identify aerosolized and vapor threats. The MX908 Beacon accessory leverages the MX908 and Aerosol Module combined with a cloud-based solution to enable remote identification of toxic chemical hazards.
More than 10,000 operators, including in numerous domestic and foreign government agencies, have been trained to use the MX908.
More than 12,000 operators, including in numerous domestic and foreign government agencies, have been trained to use the MX908.
Mass Spec is already ubiquitous in the laboratory. Users do not need to take a risk on a completely unknown technology. We bring laboratory-grade capability to handhelds and desktops. We have developed a proprietary Mass Spec platform and approach that allow us to move the capabilities of conventional Mass Spec beyond the central laboratory.
Users do not need to take a risk on a completely unknown technology. We bring laboratory-grade capability to handhelds and desktops. We have developed a proprietary Mass Spec platform and approach that allow us to move the capabilities of conventional Mass Spec beyond the central laboratory.
We refer to this support as our Reachback program. ● Software updates and library updates. We periodically release updates to the embedded software in our products. These updates will ensure the ongoing functionality of our products and repair defects in the software.
We refer to this support as our Reachback program. 20 Table of Contents ● Software updates and library updates. We periodically release updates to the embedded software in our products. These updates will ensure the ongoing functionality of our products and repair defects in the software.
As of December 31, 2023, we had 71 full-time employees dedicated to research and development. Of these, approximately 40% have advanced degrees in engineering or the sciences. We have made substantial investments in product and technology development since our inception.
As of December 31, 2024, we had 71 full-time employees dedicated to research and development. Of these, approximately 49% have advanced degrees in engineering or the sciences. We have made substantial investments in product and technology development since our inception.
In addition, we continue to 8 Table of Contents make advancements in our core technologies to drive the evolution of our product portfolio beyond current applications and needs to enter new markets.
In addition, we continue to make advancements in our core technologies to drive the evolution of our product portfolio beyond current applications and needs to enter new markets.
HPMS Approach Enables Mass Spec at the Point-of-Need Mass Spec is the gold-standard analytical technique for molecular analysis. This technology is highly regarded for its ability to provide an extraordinarily detailed analysis of a wide variety of molecular samples -- from small molecule chemicals to large complex proteins.
Analytical Technology Platform for Chemical Analysis at the Point-of-Need Mass Spec is the gold-standard analytical technique for molecular analysis. This technology is highly regarded for its ability to provide an extraordinarily detailed analysis of a wide variety of molecular samples -- from small molecule chemicals to large complex proteins.
Our technical support, also known as our Reachback program, allows any participating MX908 user to email, text, or call a 908 Devices Scientific Support Team member to receive support 24 hours per day, 365 days per year to ensure the MX908 is working as intended.
Our technical support, also known as our Reachback program, allows any participating MX908 and FTIR device user to email, text, or call a 908 Devices Scientific Support Team member to receive support 24 hours per day, 365 days per year to ensure their device is working as intended.
These customers have validated our platform through the collective purchase of more than 2,800 devices, with more than 14,000 users trained on our devices. As we continue to grow our installed base, we expect to increase our recurring revenue derived from the sale of consumables and support services. ● Talented team with significant domain expertise.
These customers have validated our platform through the collective purchase of more than 3,500 devices, with more than 20,000 users trained on our devices. As we continue to grow our installed base, we expect to increase our recurring revenue derived from the sale of consumables and support services. ● Talented team with significant domain expertise.
Products such as ours that are marketed for RUO are not intended for use in a clinical investigation or for clinical diagnostic use outside an investigation and must be labeled “For 26 Table of Contents Research Use Only.
Products such as ours that are marketed for RUO are not intended for use in a clinical investigation or for clinical diagnostic use outside an investigation and must be labeled “For Research Use Only.
Leveraging our proprietary mass spectrometry, or Mass Spec, microfluidics, and analytics and machine learning technologies, we make devices that are significantly smaller and more accessible than conventional laboratory instruments.
Leveraging mass spectrometry, or Mass Spec, and optical spectroscopy, microfluidics, and analytics and machine learning technologies, we make devices that are significantly smaller and more accessible than conventional laboratory instruments.
Since the launch of our first device, we have sold more than 2,800 handheld and desktop devices to over 700 customers in 56 countries, including all 20 of the top 20 pharmaceutical companies by revenue, as well as numerous domestic and foreign government agencies and leading academic institutions. Our current products are available for both battery-powered handheld and desktop applications.
Since the launch of our first device, we have sold more than 3,500 handheld and desktop devices to over 900 customers in 63 countries, including all 20 of the top 20 pharmaceutical companies by revenue, as well as numerous domestic and foreign government agencies and leading academic institutions. Our current products are available for both battery-powered handheld and desktop applications.
Our customers also can purchase extended warranty service plans, which include hardware repair and replacement coverage, technical support, and software updates. We designed the MX908 to be intuitive and easy-to-use, as it is critical to our customers to know that the MX908 is operating as intended.
Our customers also can purchase extended warranty service plans, which include hardware repair and replacement coverage, technical support, and software updates. We designed our handheld devices to be intuitive and easy-to-use, as it is critical to our customers to know that their device is operating as intended.
In North America, we use channel partners to provide our products to end customers where a contract vehicle is required. Since the commercial launch of our first handheld, the installed base of our devices has grown to more than 2,800 devices across more than 56 countries.
In North America, we use channel partners to provide our products to end customers where a contract vehicle is required. Since the commercial launch of our first handheld, the installed base of our devices has grown to more than 3,500 devices across more than 63 countries.
Our products are small, purpose-built devices that avoid the typical size and complexity issues related to conventional Mass Spec while also offering real-time, actionable answers to new classes of users.
Our products are small, purpose-built devices that avoid the typical size and complexity issues related to conventional analytical laboratory instruments while also offering real-time, actionable answers to new classes of users.
The Scientific Support Team is staffed by M.Sc. and Ph.D. chemists and forensic scientists expert in the operation of the MX908 and other field analytical technologies.
The Scientific Support Team is staffed by M.Sc. and Ph.D. chemists and forensic scientists expert in the operation of our handheld devices and other field analytical technologies.
It is an agile, multi-purpose device utilized by a wide spectrum of user segments for a variety of forensic field applications such as chemical, explosive, priority drug and HazMat operations, detecting materials at the trace level. We have sold 2,422 MX908s into every U.S. state, in 56 countries and across five continents.
It is an agile, multi-purpose device utilized by a wide spectrum of user segments for a variety of forensic field applications such as chemical, explosive, priority drug and HazMat operations, detecting materials at the trace level. 13 Table of Contents We have sold more than 2,800 MX908s into every U.S. state, in 63 countries and across five continents.
We have already incorporated a number of the customer-driven assays in our MX908 and Rebel devices, and we are investigating several more for our future product pipeline. Consumables and Services Handheld Device Our MX908 comes with a standard warranty for up to one year from purchase.
We have already incorporated a number of the customer-driven assays in our MX908 and Rebel devices, and we are investigating several more for our future product pipeline. 17 Table of Contents Consumables and Services Handheld Devices Our MX908 and FTIR devices come with a standard warranty for up to one year from purchase.
While we believe that alternative suppliers would be available, it would take time to identify and qualify alternate suppliers and transfer design requirements to them, which could negatively affect our ability to supply these chips to our Rebel and ZipChip customers on a timely basis.
The substrate is supplied by a single supplier. While we believe that alternative suppliers would be available, it would take time to identify and qualify alternate suppliers and transfer design requirements to them, which could negatively affect our ability to supply these chips to our Rebel and ZipChip customers on a timely basis.
The team possesses deep expertise in Mass Spec, system design and engineering, usability and ergonomics, thermal and mechanical engineering, software development, artificial intelligence, and optical spectroscopy, as well as microfluidics and separations science. We had 71 full-time employees dedicated to research and development as of December 31, 2023.
The team possesses deep expertise in Mass Spec, system design and engineering, usability and ergonomics, thermal and mechanical engineering, software development, artificial intelligence, and optical spectroscopy, as well as microfluidics and separations science. We had 71 full-time employees dedicated to research and development as of December 31, 2024. Of these, approximately 49% have advanced degrees in science and engineering.
Food and Drug Administration, or FDA, and other regulatory guidelines regarding biological and pharmaceutical product quality, or GxP environments, to evaluate fresh media for conformity to standards, track the extracellular environment and metabolic flux during growth cycles, monitor performance during stress experiments, and characterize spent media.
Customers are using Rebel in environments subject to U.S. Food and Drug Administration, or FDA, and other regulatory guidelines regarding biological and pharmaceutical product quality, or GxP environments, to evaluate fresh media for conformity to standards, track the extracellular environment and metabolic flux during growth cycles, monitor performance during stress experiments, and characterize spent media.
As an open-access discovery platform that can interface with more than 10,000 conventional Mass Spec instruments, ZipChip provides us the ability to leverage the growing list of newly established applications and publications from customers who have incorporated the device into their projects.
Our ZipChip platform is compatible with market-leading conventional Mass Spec instruments found in laboratories worldwide. As an open-access discovery platform that can interface with more than 10,000 conventional Mass Spec instruments, ZipChip provides us the ability to leverage the growing list of newly established applications and publications from customers who have incorporated the device into their projects.
Desktop Devices Annual and extended warranty and service plans are available for the Rebel, Maven, Maverick, ZipChip Interface, and Trace C2 devices. Rebel’s operation requires a consumable kit that includes a microfluidic and separation chip, electrolytes, and performance qualification and calibration standards.
Our customers value the low-logistics tail of our MX908. Desktop Devices Annual and extended warranty and service plans are available for the Rebel, Maven, Maverick, ZipChip Interface, and Trace C2 devices. Rebel’s operation requires a consumable kit that includes a microfluidic and separation chip, electrolytes, and performance qualification and calibration standards.
Our devices are designed to provide fast, statistically rigorous answers by providing autonomous control systems and applying rigorous machine learning methods. 12 Table of Contents Control/optimization: Conventional Mass Spec configuration and tuning is highly complex. Our devices need to manage themselves autonomously for maximum value to the customer.
Our devices are designed to provide fast, statistically rigorous answers by providing autonomous control systems and applying rigorous machine learning methods. 12 Table of Contents Control/optimization: Our devices need to manage themselves autonomously for maximum value to the customer.
Support under warranty and extended service contracts include the following: ● Technical support. Customers can call a hot-line number 24 hours per day, 365 days per year for support on issues ranging from questions on proper usage of the device, to assistance in interpretation of chemical spectra to ensure the device is working as intended.
Customers can call a hot-line number 24 hours per day, 365 days per year for support on issues ranging from questions on proper usage of the device, to assistance in interpretation of chemical spectra to ensure the device is working as intended.
The device also provides rich process fingerprint data to support large-scale efforts in predictive bioprocess modeling. The Maverick utilizes Raman spectroscopy, a largely non-invasive and non-destructive technology that provides rich, chemical data. The use of Raman spectroscopy for characterizing critical process parameters, or CPPs, and critical quality attributes, or CQAs, in bioprocessing has grown considerably during the last 10 years.
The Maverick utilizes Raman spectroscopy, a largely non-invasive and non-destructive technology that provides rich, chemical data. The use of Raman spectroscopy for characterizing critical process parameters, or CPPs, and critical quality attributes, or CQAs, in bioprocessing has grown considerably during the last 10 years.
As of December 31, 2023, we owned six registered trademarks in the United States, 17 registered foreign trademarks, three U.S. pending trademark applications, and two pending foreign trademark applications. Our registered trademarks and pending trademark applications include trademarks for 908 Devices, Rebel, MX908, ZipChip, Maven, Maverick, and our logo.
As of December 31, 2024, we owned nine registered trademarks in the United States, 17 registered foreign trademarks, four U.S. pending trademark applications, and one pending foreign trademark application. Our registered trademarks and pending trademark applications include trademarks for 908 Devices, Rebel, MX908, ZipChip, Maven, Maverick, and our logo.
The combination of HPMS, our proprietary microfluidic sampling and separation technology, and our data analytics, and machine-learning technology provides the foundations of an adaptable platform that can serve a growing number of new and adjacent applications and markets. ● Point-of-need technologies disrupting Mass Spec and creating new product categories .
The combination of HPMS, our proprietary microfluidic sampling and separation technology, and our data analytics, and machine-learning technology provides the foundations of an adaptable platform that can serve a growing number of new and adjacent applications and markets. ● Point-of-need technologies disrupting conventional lab-based chemical analysis .
Since the commercial launch of our first handheld, the installed base of our handheld and desktop devices has grown to more than 2,800 devices in 56 countries.
Since the commercial launch of our first handheld, the installed base of our handheld and desktop devices has grown to more than 3,500 devices in 63 countries.
Since the launch of the Rebel in November 2019, we have sold 165 units and 52 of those units have been placed with the top-20 pharmaceutical companies by revenue and 25 organizations have purchased multiple units.
Since the launch of the Rebel in November 2019, we have sold more than 170 units and 55 of those units have been placed with the top-20 pharmaceutical companies by revenue and 27 organizations have purchased multiple units.
To date, we have not issued any sublicenses under the UNC Agreements. We are obligated to use commercially reasonable efforts to develop, manufacture and commercialize the Licensed Products and achieve defined milestones within the UNC Agreements.
To date, we have not issued any sublicenses under the UNC Agreements. We are obligated to use commercially reasonable efforts to develop, manufacture and commercialize the Licensed Products and achieve defined milestones within the UNC Agreements. There are no future milestone payments to be made by the Company under the UNC Agreements.
Human Capital As of December 31, 2023, we had 230 full-time employees, of which 70 work in sales, sales support and marketing, 71 work in engineering and research and development, 56 work in manufacturing, operations and service and 33 work in general and administrative.
Human Capital As of December 31, 2024, we had 246 full-time employees, of which 59 work in sales, sales support and marketing, 71 work in engineering and research and development, 78 work in manufacturing, operations and service and 38 work in general and administrative.
The markets for cellular-derived products include therapeutics, including cell therapy and personalized medicine, new and sustainable foods and beverages, and industrial materials. Many of these products, such as protein-based therapeutics, can only be economically produced by cells in a bioreactor. Making these products in an efficient and reproducible way remains a challenge to our customers in bioprocessing.
The markets for cellular-derived products include therapeutics, including cell therapy and personalized medicine, new and sustainable foods and beverages, and industrial materials. Many of these products, such as protein-based 15 Table of Contents therapeutics, can only be economically produced by cells in a bioreactor.
The Trace C2 and related sampling products were developed by Trace Analytics GmbH, which we acquired in August of 2022. 16 Table of Contents ZipChip Our ZipChip solution is a plug-and-play, high-resolution separation platform that optimizes Mass Spec sample analysis.
The Trace C2 and related sampling products were developed by Trace Analytics GmbH, which we acquired in August of 2022. ZipChip Our ZipChip solution is a plug-and-play, high-resolution separation platform that optimizes Mass Spec sample analysis. Our ZipChip platform consists of a ZipChip Interface, which is installed into a conventional Mass Spec instrument, and consumable microfluidic chips, or ZipChips.
As runs are completed, users can access the report either as a PDF print out or a laboratory information system compatible file exported to the network.
As runs are completed, users can access the report either as a PDF print out or a laboratory information system compatible file exported to the network. The Rebel software is compliant for operation in GxP environments.
Of these, approximately 40% have advanced degrees in science and engineering. 7 Table of Contents Our Growth Strategy We are making chemical and biochemical analysis simple, smart and speedy by incorporating our microscale Mass Spec, microfluidics, and analytics and machine learning technology platform into handheld and desktop devices that provide users with robust answers at the point of need.
Our Growth Strategy We are making chemical analysis simple, smart and speedy by incorporating our microscale Mass Spec, optical spectroscopy, microfluidics, and analytics and machine learning technology platform into handheld and desktop devices that provide users with robust answers at the point of need.
The subject matter covered by our owned patent assets includes core aspects of compact Mass Spec technology, a design for a handheld Mass Spec device, a design for a modular Mass Spec chamber, patents for multiple ionization modes and adaptive pressure operation within survey period, the determination of preferred ionization mode, adaptive resolution control, adaptive operation to reduce power consumption, and the detection of positive and negative ions.
The subject matter covered by our owned patent assets includes core aspects of compact Mass Spec technology, a design for a handheld Mass Spec device, a design for a modular Mass Spec chamber, patents for multiple ionization modes and adaptive pressure operation within survey period, the determination of preferred ionization mode, adaptive resolution control, adaptive operation to reduce power consumption, and the detection of positive and negative ions. 22 Table of Contents As of December 31, 2024, our in-licensed patent assets included approximately 30 U.S. patents, no pending U.S. patent applications, 22 foreign patents, and two pending foreign patent applications.
There are no future milestone payments to be made by the Company under the UNC Agreements. 25 Table of Contents We are responsible for all reasonable, documented patent expenses incurred during the life of the UNC Agreements and associated costs associated with the preparation, filing, prosecuting, issuance and maintenance of all patent applications and patents included within the patent rights covered by the UNC Agreements.
We are responsible for all reasonable, documented patent expenses incurred during the life of the UNC Agreements and associated costs associated with the preparation, filing, prosecuting, issuance and maintenance of all patent applications and patents included within the patent rights covered by the UNC Agreements.
These swab samplers are most heavily used today by customers who are evaluating drug substances. However, we designed the MX908 so that it does not require swab samplers or any other consumables for a number of other applications. Our customers value the low-logistics tail of our MX908.
For simplicity and convenience, we also sell single-use swab samplers for our MX908 device or the analysis of liquid and solid materials. These swab samplers are most heavily used today by customers who are evaluating drug substances. However, we designed the MX908 so that it does not require swab samplers or any other consumables for a number of other applications.
These landmark proprietary advances have enabled the first truly handheld Mass Spec devices and compact desktops. Sample preparation and separation can be a painfully slow hours-long process, and we have invested heavily in the development of microfluidic sample preparation and microscale separation technologies to reduce preparation and separation time from hours to minutes.
Sample preparation and separation can be a painfully slow hours-long process, and we have invested heavily in the development of microfluidic sample preparation and microscale separation technologies to reduce preparation and separation time from hours to minutes.
As we continue to expand the capabilities of our Mass Spec platform, we believe our devices will continue to penetrate new and adjacent opportunities in life sciences, quality assurance and control, diagnostics and applied markets. ● Highly attractive business model validated by rapidly growing installed base of devices.
As we continue to expand the capabilities of our technology platform, we believe our devices will continue to penetrate new and adjacent applications and markets. ● Highly attractive business model validated by rapidly growing installed base of devices.
Cell culture media forms the critical growth environment for the cell. Our customers’ measurement of this extracellular environment in bioprocesses is critical to their development and operational efficiency.
Making these products in an efficient and reproducible way remains a challenge to our customers in bioprocessing. Cell culture media forms the critical growth environment for the cell. Our customers’ measurement of this extracellular environment in bioprocesses is critical to their development and operational efficiency.
Our extended warranty service plans are sold with multiyear commitments, which allows us to deepen our relationship with customers and provides us with an upfront payment, a predictable recurring revenue stream, and an opportunity to offer additional future services. For simplicity and convenience, we also sell single-use swab samplers for the analysis of liquid and solid materials.
Our extended warranty service plans are sold with multiyear commitments, which allows us to deepen our relationship with customers and provides us with an upfront payment, a predictable recurring revenue stream, and an opportunity to offer additional future services.
We expect the markets for our products to remain highly competitive and dynamic and to reflect rapid technological evolution and continually evolving customer requirements.
Many of these companies have greater resources and market presence than we do. We expect the markets for our products to remain highly competitive and dynamic and to reflect rapid technological evolution and continually evolving customer requirements.
The core elements of our technology platform include: ● Our High-Pressure Mass Spec, or HPMS, approach, which enables Mass Spec at the point-of-need; ● microfluidics enable convenient sample preparations, fast separations, and aseptic sampling; and ● analytics and machine learning technology, which provides actionable answers versus raw data.
The core elements of our technology platform include: ● Complementary analytical technologies, including Mass Spec and optical spectroscopy, purpose built for point-of-need applications; ● Microfluidics, which enable convenient sample preparations, fast separations, and aseptic sampling; and ● Analytics and machine learning technology, which provides actionable answers versus raw data.
Currently, our Boston manufacturing facility is capable of supporting the production of approximately 2,000 MX908, Rebel, Maverick and ZipChip Interface units combined per year. When our annual sales exceed 2,000 units, we expect that we would need to either expand our in-house production operations, or transfer some or all aspects of assembly to contract manufacturers, to accommodate larger run-rates.
When our annual sales exceed 2,000 units, we expect that we would need to either expand our in-house production operations, or transfer some or all aspects of assembly to contract manufacturers, to accommodate larger run-rates.
The 908 Devices suite of devices includes (from left to right): MX908, ZipChip, Rebel, Maven and Maverick. 13 Table of Contents MX908 Launched in June 2017, MX908 is a handheld, battery-powered, Mass Spec device designed for rapid analysis of solid, liquid, vapor and aerosol materials of unknown identity.
Handheld Devices MX908 Launched in June 2017, MX908 is a handheld, battery-powered, Mass Spec device designed for rapid analysis of solid, liquid, vapor and aerosol materials of unknown identity.
These results are possible as our handheld and desktop devices are designed for extreme convenience and speed, requiring minimal training and maintenance. Our platform is centered around using proprietary microscale Mass Spec and microfluidic technologies to prepare, separate, and characterize species at the molecular level, with integrated machine learning and analytics to automatically provide answers regarding identity, purity, and quantity.
Our platform is centered around using proprietary microscale Mass Spec, optical spectroscopy, and microfluidic technologies to prepare, separate, and characterize species at the molecular level, with integrated machine learning and analytics to automatically provide answers regarding identity, purity, and quantity.
Our business model is focused on driving the adoption of our products and maximizing use across our customers’ value chains. This is enabled through customer trials and partnerships that allows us to further understand the critical applications for our technology and inform our future developments and market expansion.
This is enabled through customer trials and partnerships that allows us to further understand the critical applications for our technology and inform our future developments and market expansion.
We also utilize estimated penetration and placement rates for our platform with potential customers in our target markets and historical patterns for consumables usage. 6 Table of Contents Our Strengths We believe the following competitive strengths provide us the ability to address point-of-need applications in forensics, life sciences research, bioprocessing, quality assurance/quality control, and synthetic biology: ● Our proprietary microscale Mass Spec platform leverages well established, gold-standard technology.
Our Strengths We believe the following competitive strengths provide us the ability to address point-of-need applications in forensics, life sciences research, bioprocessing, quality assurance/quality control, and synthetic biology: ● Our proprietary microscale Mass Spec platform leverages well established, gold-standard technology. Mass Spec is already ubiquitous in the laboratory.
Leveraging our Mass Spec platform, we have developed a portfolio of desktop and handheld devices that are reinventing the Mass Spec industry by accessing a variety of point-of-need market segments that were historically considered impossible for conventional Mass Spec manufacturers.
Leveraging our technology platform, we have developed a portfolio of desktop and handheld devices that are reinventing how and where lab-grade chemical analysis is conducted by accessing a variety of point-of-need market segments that were historically considered impossible.
The Rebel software is compliant for operation in GxP environments. 15 Table of Contents Maverick The Maverick, launched in September 2023 to complement our Mass Spec technology, is an optical in-line analyzer that provides real-time monitoring and control of multiple bioprocess parameters, including glucose, lactate and total biomass, in mammalian cell cultures.
Maverick The Maverick, launched in September 2023 to complement our Mass Spec technology, is an optical in-line analyzer that provides real-time monitoring and control of multiple bioprocess parameters, including glucose, lactate and total biomass, in mammalian cell cultures. The device also provides rich process fingerprint data to support large-scale efforts in predictive bioprocess modeling.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeMoreover, disputes may arise with respect to our licensing or other upstream agreements, including: • the scope of rights granted under the agreements and other interpretation-related issues; • the extent to which our systems and consumables, technology and processes infringe on intellectual property rights of the licensor that are not licensed under the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreements and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
Biggest changeMoreover, disputes may arise with respect to our licensing or other upstream agreements, including: • the scope of rights granted under the agreements and other interpretation-related issues; • the extent to which our systems and consumables, technology and processes infringe on intellectual property rights of the licensor that are not licensed under the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreements and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology. 43 Table of Contents In spite of our efforts to comply with our obligations under our in-bound license agreements, our licensors might conclude that we have materially breached our obligations under our license agreements and might therefore, including in connection with any aforementioned disputes, terminate the relevant license agreement, thereby removing or limiting our ability to develop and commercialize products and technology covered by these license agreements.
If we experience a significant disruption in our information technology systems and infrastructure, or breaches or compromises of data security, our business could be adversely affected.
If we experience a significant disruption in our information technology systems and infrastructure, or security breaches or compromises of data security, our business could be adversely affected.
Our international operations are subject to a variety of risks that we do not face in the United States, including: • adverse or uncertain macroeconomic conditions, including a global economic downturn or recession; • global impacts of inflation and actions taken by central banks to counter inflation; • the rising cost of labor in the foreign countries in which we and our suppliers operate, resulting in increases in our costs of doing business internationally; • geopolitical conditions, including changes in a specific country's or region's political or economic conditions, including the ongoing military conflict between Russia and Ukraine, and the ongoing hostilities in Israel and the Gaza Strip, and the threat that such conflicts could spread to other parts of Europe and the Middle East; • the difficulty of increased travel, infrastructure and legal compliance costs associated with developing international revenue; • difficulties in enforcing contracts, collecting accounts receivable and longer payment cycles, especially in emerging markets; • many, if not most, foreign governments are investing less in safety and security and in technology to detect dangerous chemicals than the U.S. government; • additional withholding taxes or other taxes on our foreign income, and tariffs or other restrictions on foreign trade or investment; • compliance with privacy and data security requirements in foreign jurisdictions in which we operate; • imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, many of which differ from those in the United States; • costs and delays associated with developing products or technology in multiple languages, such as the software embedded in our products and the products’ built-in library of chemical substances; 40 Table of Contents • compliance with foreign technical standards; • increased length of time for shipping and acceptance of our products; • increased exposure to foreign currency exchange rate risk; • reduced protection for intellectual property rights in some countries; and • political unrest, war, incidents of terrorism , natural disasters, and public health concerns or epidemics, or responses to such events.
Our international operations are subject to a variety of risks that we do not face in the United States, including: • adverse or uncertain macroeconomic conditions, including a global economic downturn or recession; • global impacts of inflation and actions taken by central banks to counter inflation; • the rising cost of labor in the foreign countries in which we and our suppliers operate, resulting in increases in our costs of doing business internationally; • geopolitical conditions, including changes in a specific country's or region's political or economic conditions, including the ongoing military conflict between Russia and Ukraine, and the ongoing hostilities in Israel and the Gaza Strip, and the threat that such conflicts could spread to other parts of Europe and the Middle East; • the difficulty of increased travel, infrastructure and legal compliance costs associated with developing international revenue; • difficulties in enforcing contracts, collecting accounts receivable and longer payment cycles, especially in emerging markets; • many, if not most, foreign governments are investing less in safety and security and in technology to detect dangerous chemicals than the U.S. government; • additional withholding taxes or other taxes on our foreign income, and tariffs or other restrictions on foreign trade or investment; • compliance with privacy and data security requirements in foreign jurisdictions in which we operate; • imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, many of which differ from those in the United States; • costs and delays associated with developing products or technology in multiple languages, such as the software embedded in our products and the products’ built-in library of chemical substances; • compliance with foreign technical standards; • increased length of time for shipping and acceptance of our products; • increased exposure to foreign currency exchange rate risk; • reduced protection for intellectual property rights in some countries; and • political unrest, war, incidents of terrorism , natural disasters, and public health concerns or epidemics, or responses to such events.
Any prior acquisitions we have made or future acquisitions we make could subject us to a number of risks, including: • the purchase price we pay could significantly deplete our cash reserves, impair our future operating flexibility or result in dilution to our existing stockholders; • we may find that the acquired company, assets or technology does not further improve our financial and strategic position as planned; • we may find that we overpaid for the company, asset or technology, or that the economic conditions underlying our acquisition have changed; • we may have difficulty integrating the operations and personnel of the acquired company; • we may have difficulty retaining the employees with the technical skills needed to enhance and provide services with respect to the acquired assets or technologies; • the acquisition may be viewed negatively by customers, financial markets, or investors; • we may have difficulty incorporating the acquired technologies or products with our existing products; • we may encounter difficulty entering and competing in new product or geographic markets; • we may encounter a competitive response, including price competition or intellectual property litigation; • we may have product liability, customer liability or intellectual property liability associated with the sale of the acquired company’s products; • we may be subject to litigation by terminated employees or third parties; • we may be subject to additional liabilities that are not possible to be known at the time of the acquisition; • we may incur debt and restructuring charges; • we may acquire goodwill and other intangible assets that are subject to impairment tests, which could result in future impairment charges; • our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises; and • our due diligence process may fail to identify significant existing issues with the target company’s product quality, product architecture, financial disclosures, accounting practices, internal controls, legal contingencies, intellectual property and other matters.
Any prior acquisitions we have made or future acquisitions we make could subject us to a number of risks, including: • the purchase price we pay could significantly deplete our cash reserves, impair our future operating flexibility or result in dilution to our existing stockholders; • we may find that the acquired company, assets or technology does not further improve our financial and strategic position as planned; • we may find that we overpaid for the company, asset or technology, or that the economic conditions underlying our acquisition have changed; • we may have difficulty integrating the operations and personnel of the acquired company; • we may have difficulty retaining the employees with the technical skills needed to enhance and provide services with respect to the acquired assets or technologies; • the acquisition may be viewed negatively by customers, financial markets, or investors; • we may have difficulty incorporating the acquired technologies or products with our existing products; • we may encounter difficulty entering and competing in new product or geographic markets; • we may encounter a competitive response, including price competition or intellectual property litigation; 59 Table of Contents • we may have product liability, customer liability or intellectual property liability associated with the sale of the acquired company’s products; • we may be subject to litigation by terminated employees or third parties; • we may be subject to additional liabilities that are not possible to be known at the time of the acquisition; • we may incur debt and restructuring charges; • we may acquire goodwill and other intangible assets that are subject to impairment tests, which could result in future impairment charges; • our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises; and • our due diligence process may fail to identify significant existing issues with the target company’s product quality, product architecture, financial disclosures, accounting practices, internal controls, legal contingencies, intellectual property and other matters.
Some of the factors that may cause the market price of our common stock to fluctuate, many of which may be beyond our control, include: • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; • fluctuations in our revenue as a result of our revenue recognition policy, even during periods of significant sales activity; • the financial guidance that we may provide to the public, any changes in such guidance, or our failure to meet such guidance; • changes in financial estimates by securities analysts, our failure to meet such estimates, or failure of analysts to initiate or maintain coverage of our stock; • the public’s response to our press releases or other public announcements by us, including our filings with the SEC; • announcements by us or our competitors of significant technical innovations, products, contracts, acquisitions, strategic partnerships, joint ventures, or capital commitments; • failure of any of our products to achieve or maintain market acceptance; • introduction of technologies or product enhancements that reduce the need for our products; • changes in our capital structure, such as future issuances of securities or the incurrence of debt; • regulatory developments in the United States, foreign countries or both; • litigation involving our company, our general industry or both; • additions or departures of senior management or key personnel; • changes in market valuations of similar companies in reaction to industry events, even if these events do not directly affect us; • investors’ general perception of us; • market volatility or downturns caused by outbreaks, epidemics, pandemics, geopolitical tensions or conflicts, or other macroeconomic dynamics ; • the sustainability of an active trading market for our common stock; and • future sales of our common stock by our officers, directors or affiliates.
Some of the factors that may cause the market price of our common stock to fluctuate, many of which may be beyond our control, include: • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; • fluctuations in our revenue as a result of our revenue recognition policy, even during periods of significant sales activity; • the financial guidance that we may provide to the public, any changes in such guidance, or our failure to meet such guidance; • changes in financial estimates by securities analysts, our failure to meet such estimates, or failure of analysts to initiate or maintain coverage of our stock; • the public’s response to our press releases or other public announcements by us, including our filings with the SEC; • announcements by us or our competitors of significant technical innovations, products, contracts, acquisitions, strategic partnerships, joint ventures, or capital commitments; • failure of any of our products to achieve or maintain market acceptance; • introduction of technologies or product enhancements that reduce the need for our products; • changes in our capital structure, such as future issuances of securities or the incurrence of debt; • regulatory developments in the United States, foreign countries or both; • litigation involving our company, our general industry or both; • additions or departures of senior management or key personnel; • changes in market valuations of similar companies in reaction to industry events, even if these events do not directly affect us; 50 Table of Contents • investors’ general perception of us; • market volatility or downturns caused by outbreaks, epidemics, pandemics, geopolitical tensions or conflicts, or other macroeconomic dynamics ; • the sustainability of an active trading market for our common stock; and • future sales of our common stock by our officers, directors or affiliates.
This lack of clarity on future UK laws and regulations and their interaction with EU laws and regulations could add legal risk, complexity and cost to our handling of European personal data and our privacy and data security compliance programs, and could require us to implement different compliance measures for the UK and the EEA. 39 Table of Contents All of these evolving compliance and operational requirements impose significant costs, such as costs related to organizational changes, implementing additional protection technologies, training employees and engaging consultants and legal advisors, which are likely to increase over time.
This lack of clarity on future UK laws and regulations and their interaction with EU laws and regulations could add legal risk, complexity and cost to our handling of European personal data and our privacy and data security compliance programs, and could require us to implement different compliance measures for the UK and the EEA. 37 Table of Contents All of these evolving compliance and operational requirements impose significant costs, such as costs related to organizational changes, implementing additional protection technologies, training employees and engaging consultants and legal advisors, which are likely to increase over time.
Any such claims or litigation could: • be time-consuming and expensive to defend, whether meritorious or not; • require us to stop selling, incorporating or using our products that use the other party’s intellectual property; • divert the attention of our technical and managerial resources; • require us to enter into royalty or licensing agreements with third parties, which may not be available on terms that we deem acceptable, if at all; • prevent us from operating all or a portion of our business or force us to redesign our products, which could be difficult and expensive and may degrade performance of our products, or withdraw one or more of our products altogether; 49 Table of Contents • subject us to significant liability for damages or result in significant settlement payments; • require us to indemnify our customers, channel partners or suppliers; and • refund deposits and other amounts received for allegedly infringing technology or products.
Any such claims or litigation could: • be time-consuming and expensive to defend, whether meritorious or not; • require us to stop selling, incorporating or using our products that use the other party’s intellectual property; • divert the attention of our technical and managerial resources; • require us to enter into royalty or licensing agreements with third parties, which may not be available on terms that we deem acceptable, if at all; • prevent us from operating all or a portion of our business or force us to redesign our products, which could be difficult and expensive and may degrade performance of our products, or withdraw one or more of our products altogether; • subject us to significant liability for damages or result in significant settlement payments; • require us to indemnify our customers, channel partners or suppliers; and • refund deposits and other amounts received for allegedly infringing technology or products.
These provisions: • establish a classified board of directors so that not all members of our board are elected at one time; • place limitations on the removal of directors; • eliminate the ability of our stockholders to call special meetings of stockholders; 54 Table of Contents • prohibit stockholder action by written consent, which has the effect of requiring all stockholder actions to be taken at a meeting of stockholders; • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and • enable our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used to institute a rights plan, or a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our board of directors.
These provisions: • establish a classified board of directors so that not all members of our board are elected at one time; • place limitations on the removal of directors; • eliminate the ability of our stockholders to call special meetings of stockholders; • prohibit stockholder action by written consent, which has the effect of requiring all stockholder actions to be taken at a meeting of stockholders; • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and • enable our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used to institute a rights plan, or a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our board of directors.
The Amended 2022 Revolver subjects us to various customary covenants, including requirements as to financial reporting and financial covenants (including a requirement that the amount of unrestricted and unencumbered cash minus advances under the Amended 2022 Revolver, is not less than the amount equal to the greater of (i) $10.0 million or (ii) nine (9) months of cash burn), and restrictions on our ability to change the principal nature of our business, dispose of our business or property, engage in any change of control transaction, merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, incur additional indebtedness or liens, pay dividends or make other distributions on capital stock, redeem our capital stock, engage in transactions with affiliates or otherwise encumber our intellectual property, in each case, subject to customary exceptions.
The Amended 2022 Revolver subjects us to various customary 39 Table of Contents covenants, including requirements as to financial reporting and financial covenants (including a requirement that the amount of unrestricted and unencumbered cash minus advances under the Amended 2022 Revolver, is not less than the amount equal to the greater of (i) $10.0 million or (ii) nine (9) months of cash burn), and restrictions on our ability to change the principal nature of our business, dispose of our business or property, engage in any change of control transaction, merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, incur additional indebtedness or liens, pay dividends or make other distributions on capital stock, redeem our capital stock, engage in transactions with affiliates or otherwise encumber our intellectual property, in each case, subject to customary exceptions.
The GDPR places strict obligations on companies relating to their processing of personal data (for example, informing individuals of how their personal data is handled and how they can exercise their rights, ensuring a valid lawful basis for processing, mandatory data breach notification requirements, maintaining internal records, entering into data processing agreements with third parties, implementing appropriate security and data retention requirements).
The GDPR places strict obligations on companies relating to their processing of personal data (for example, informing individuals of how their personal data is handled and how they can exercise their rights, ensuring a valid lawful basis or condition for processing, mandatory data breach notification requirements, maintaining internal records, entering into data processing agreements with third parties, implementing appropriate security and data retention requirements).
Pursuant to our fourth amended and restated bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for state law claims for (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders; (3) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or our sixth amended and restated certificate 55 Table of Contents of incorporation or fourth amended and restated bylaws; (4) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or bylaws; or (5) any action asserting a claim governed by the internal affairs doctrine, or the Delaware Forum Provision.
Pursuant to our fourth amended and restated bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for state law claims for (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders; (3) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or our sixth amended and restated certificate of incorporation or fourth amended and restated bylaws; (4) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or bylaws; or (5) any action asserting a claim governed by the internal affairs doctrine, or the Delaware Forum Provision.
Managing our growth effectively will involve, among other things: • continuing to retain, motivate, and manage our existing employees and attract and integrate new employees, particularly qualified sales personnel; • continuing to provide a high level of service to an increasing number of customers; • maintaining the quality of product and services offerings while controlling our expenses; • meeting end-user requirements for functional performance and product robustness; • growing our direct sales force and channel partners; and • developing, implementing, and improving our operational, financial, accounting, and other internal systems and controls on a timely basis.
Managing our growth effectively will involve, among other things: • continuing to retain, motivate, and manage our existing employees and attract and integrate new employees, particularly qualified sales personnel; • continuing to provide a high level of service to an increasing number of customers; • maintaining the quality of product and services offerings while controlling our expenses; • meeting end-user requirements for functional performance and product robustness; 28 Table of Contents • growing our direct sales force and channel partners; and • developing, implementing, and improving our operational, financial, accounting, and other internal systems and controls on a timely basis.
Our vendors may incorporate generative artificial intelligence tools into their offerings without disclosing this use to us, and the providers of these generative artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection and may inhibit our or our vendors’ ability to maintain an adequate level of service and experience.
Our vendors may in turn incorporate generative artificial intelligence tools into their offerings without disclosing this use to us, and the providers of these generative artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection and may inhibit our or our vendors’ ability to maintain an adequate level of service and experience.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a cumulative change of more than 50 percentage points (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited.
In addition, under Sections 382 and 383 of the Internal 60 Table of Contents Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a cumulative change of more than 50 percentage points (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited.
With or without insurance, damage to our manufacturing facility or our other property, or to any of our suppliers, due to fire, flood or other natural disaster or casualty event may have a material adverse effect on our business, financial condition and results of operations. Risks related to sales of products to the U.S.
With or without insurance, damage to our manufacturing facilities or our other property, or to any of our suppliers, due to fire, flood or other natural disaster or casualty event may have a material adverse effect on our business, financial condition and results of operations. Risks related to sales of products to the U.S.
Any infringement claim, regardless of its validity, could harm our business by, among other things, resulting in time-consuming and costly litigation, diverting management’s time and attention from the development of the business, requiring the payment of monetary damages (including treble damages, attorneys’ fees, costs and expenses) or royalty payments, or result in potential or existing customers delaying purchases of our products or entering into engagements with us pending resolution of the dispute.
Any infringement claim, regardless of its validity, could harm our business by, among other things, resulting in time-consuming and costly litigation, diverting management’s time and attention from the development of the business, requiring the payment of monetary damages (including treble damages, attorneys’ fees, costs and expenses) or royalty 48 Table of Contents payments, or result in potential or existing customers delaying purchases of our products or entering into engagements with us pending resolution of the dispute.
Our amended and restated certificate of incorporation specifies that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for most legal actions involving actions brought against us by stockholders; provided that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware.
Our amended and restated certificate of incorporation specifies that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for most legal 53 Table of Contents actions involving actions brought against us by stockholders; provided that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware.
Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this “Risk Factors” section could result in actual operating results being different from our guidance, and the differences may be adverse and material.
Actual results may vary from our guidance and the variations may be material. Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this “Risk Factors” section could result in actual operating results being different from our guidance, and the differences may be adverse and material.
These various privacy and security laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products. State laws are changing rapidly and there is discussion in the U.S. Congress of a new comprehensive federal data privacy law to which we may likely become subject, if enacted.
These various privacy and security laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products. State laws are changing rapidly and there is discussion in the U.S. Congress of a new comprehensive federal data privacy laws to which we could become subject, if enacted.
As a contractor and subcontractor to the U.S. government, we are subject to various laws and regulations that are more restrictive than those applicable to non-government contractors, including the Federal Acquisition Regulations and its supplements, which comprehensively regulate the formation, administration and performance of U.S. government contracts, and the Truth in Negotiations Act and various other laws, which require certain certifications and disclosures.
As a contractor and subcontractor to the U.S. government, we are subject to various laws and regulations that are more restrictive than those applicable to non-government contractors, including the Federal Acquisition Regulations and 42 Table of Contents its supplements, which comprehensively regulate the formation, administration and performance of U.S. government contracts, and the Truth in Negotiations Act and various other laws, which require certain certifications and disclosures.
Third parties making claims against us may be able to obtain injunctive or other relief, which could block our ability to develop, commercialize and sell products or services, and could result in the 50 Table of Contents award of substantial damages against us, including treble damages, attorneys’ fees, costs and expenses if we are found to have willfully infringed.
Third parties making claims against us may be able to obtain injunctive or other relief, which could block our ability to develop, commercialize and sell products or services, and could result in the award of substantial damages against us, including treble damages, attorneys’ fees, costs and expenses if we are found to have willfully infringed.
The cost of investigating, mitigating and responding to potential data security breaches or compromises and complying with applicable breach notification obligations to individuals, regulators, partners and others can be significant. Our insurance policies may not be adequate to compensate us for the potential costs and other losses arising from such disruptions, failures or security breaches.
The cost of investigating, mitigating and responding to potential data security breaches or compromises and complying with applicable breach notification obligations to individuals, regulators, partners and others can be significant. Our insurance policies, including our cybersecurity coverage, may not be adequate to compensate us for the potential costs and other losses arising from such disruptions, failures or security breaches.
As a result, the market price of our common stock could be materially adversely affected. 59 Table of Contents We may need additional capital in the future, which may not be available to us, and if it is available, may dilute your ownership of our common stock and have a material adverse effect on our business, operating results and financial condition.
As a result, the market price of our common stock could be materially adversely affected. We may need additional capital in the future, which may not be available to us, and if it is available, may dilute your ownership of our common stock and have a material adverse effect on our business, operating results and financial condition.
In such an event, our competitors may be able to enter the market without infringing our patents and this circumstance may have a material adverse effect on our business. Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
In such an event, our competitors may be able to enter the market without infringing our patents and this circumstance may have a material adverse effect on our business. 44 Table of Contents Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to 46 Table of Contents invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid, even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid, even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Under these escrow agreements, the know-how and source code to the applicable product may be released to the customer, typically for its use to further develop, maintain, modify and enhance the product, upon the occurrence of specified events, such as our filing for bankruptcy and breaching our representations, warranties or 48 Table of Contents covenants of our agreements with our customers.
Under these escrow agreements, the know-how and source code to the applicable product may be released to the customer, typically for its use to further develop, maintain, modify and enhance the product, upon the occurrence of specified events, such as our filing for bankruptcy and breaching our representations, warranties or covenants of our agreements with our customers.
The Court of Chancery of the State of Delaware and the United States District Court for the District of Massachusetts may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than to our stockholders.
The Court of Chancery of the 54 Table of Contents State of Delaware and the United States District Court for the District of Massachusetts may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than to our stockholders.
While we believe that historical experience provides a reliable basis for estimating such warranty costs, unforeseen quality issues or component failure rates could result in future costs in excess of such estimates, or alternatively, improved quality and reliability in our products and consumables could result in actual expenses that are below those currently estimated.
While we believe that historical experience provides a reliable basis for estimating such warranty costs, unforeseen quality issues or component failure rates could result in future costs in excess 55 Table of Contents of such estimates, or alternatively, improved quality and reliability in our products and consumables could result in actual expenses that are below those currently estimated.
Further, bad actors around the world use increasingly sophisticated methods, including the use of artificial intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property. Any of these outcomes could damage our reputation, result in the loss of valuable property and information, and adversely impact our business.
Further, bad actors around the world use increasingly 38 Table of Contents sophisticated methods, including the use of artificial intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property. Any of these outcomes could damage our reputation, result in the loss of valuable property and information, and adversely impact our business.
We recently introduced our Maverick and Maven 33 Table of Contents product lines and our future success will partially depend on our ability to successfully commercialize these product lines. The life sciences scientific community is comprised of a small number of early adopters and key opinion leaders who significantly influence the rest of the community.
We recently introduced our Maverick and Maven product lines and our future success will partially depend on our ability to successfully commercialize these product lines. The life sciences scientific community is comprised of a small number of early adopters and key opinion leaders who significantly influence the rest of the community.
For example, we have historically derived, and expect to continue to derive, a significant portion of our revenue from sales to agencies of the U.S. federal government, either directly by us or through other channel partners. Sales to such government agencies are subject to a number of challenges and risks.
For 40 Table of Contents example, we have historically derived, and expect to continue to derive, a significant portion of our revenue from sales to agencies of the U.S. federal government, either directly by us or through other channel partners. Sales to such government agencies are subject to a number of challenges and risks.
Any of the current plans we have for future developments or enhancements are strategic in nature and not commitments to 31 Table of Contents develop such capabilities for our customers. If we fail to develop products that satisfy customer requirements, our ability to create or increase demand for our products will be harmed.
Any of the current plans we have for future developments or enhancements are strategic in nature and not commitments to develop such capabilities for our customers. If we fail to develop products that satisfy customer requirements, our ability to create or increase demand for our products will be harmed.
While we believe our assumptions and the data underlying our estimates of the total annual addressable market for our solutions are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates, or those underlying the third party data we have used, may change at any time, thereby reducing the accuracy of our estimates.
While we 31 Table of Contents believe our assumptions and the data underlying our estimates of the total annual addressable market for our solutions are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates, or those underlying the third party data we have used, may change at any time, thereby reducing the accuracy of our estimates.
We make our platform and devices, including our Maven, Maverick, MX908, Rebel and ZipChip Interface, available to customers as research-use-only, or RUO, products. Products that are labeled as RUO are exempt from compliance with most FDA requirements, including premarket clearance or approval, manufacturing requirements, and others.
We make our platform and devices, including our Maven, Maverick, MX908, ProtectIR, Rebel, ThreatID, XplorIR and ZipChip Interface, available to customers as research-use-only, or RUO, products. Products that are labeled as RUO are exempt from compliance with most FDA requirements, including premarket clearance or approval, manufacturing requirements, and others.
If we, our vendors, or our third-party partners experience an actual or perceived breach or privacy or security incident because of the use of generative artificial intelligence, we may lose valuable intellectual property and confidential information and our reputation and the public perception of the effectiveness of our security measures could be harmed.
If we, our vendors, or our third-party partners experience an actual or perceived data breach or cyber security incident because of the use of generative artificial intelligence, we may lose valuable intellectual property and confidential information and our reputation and the public perception of the effectiveness of our security measures could be harmed.
Our industry has experienced component shortages and delivery delays in the past, and we may experience shortages or delays of critical components in the future as a result of strong demand in the industry or other factors. Many of the other components required to build our systems are also occasionally in short supply.
Our industry has experienced component shortages and delivery delays in the past, and we may experience shortages or delays of critical components in the future 34 Table of Contents as a result of strong demand in the industry or other factors. Many of the other components required to build our systems are also occasionally in short supply.
These rights and remedies have the potential to limit our sales to, and increase our costs of, doing business with both government and commercial customers, which could materially adversely affect our growth prospects and operating results. 43 Table of Contents We are subject to audits by the U.S. government which could adversely affect our business.
These rights and remedies have the potential to limit our sales to, and increase our costs of, doing business with both government and commercial customers, which could materially adversely affect our growth prospects and operating results. We are subject to audits by the U.S. government which could adversely affect our business.
Our reliance on independent channel partners to sell our products internationally demands a high degree of vigilance in maintaining our policy against participation in corrupt activity, because these channel partners could be deemed to be our agents and we could be held responsible for their actions.
Our reliance on independent channel 56 Table of Contents partners to sell our products internationally demands a high degree of vigilance in maintaining our policy against participation in corrupt activity, because these channel partners could be deemed to be our agents and we could be held responsible for their actions.
Any change in export regulations or related legislation, shift in approach to the enforcement or scope of existing regulations or change in the countries, persons or technologies targeted by these regulations could result in 57 Table of Contents decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential customers with international operations.
Any change in export regulations or related legislation, shift in approach to the enforcement or scope of existing regulations or change in the countries, persons or technologies targeted by these regulations could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential customers with international operations.
Holders of debt would also have rights, preferences or privileges senior to those of holders of our common stock. We may engage in future acquisitions that could disrupt our business, cause dilution to our stockholders and harm our financial condition and operating results.
Holders of debt would also have rights, preferences or privileges senior to those of holders of our common stock. We have in the past, and may again in the future, engage in future acquisitions that could disrupt our business, cause dilution to our stockholders and harm our financial condition and operating results.
For example, we have entered into agreements regarding a specific government program opportunity to develop an aerosol vapor detector, and several engagements 34 Table of Contents related to the evaluation of our products within the cell therapy and gene therapy markets.
For example, we have entered into agreements regarding a specific government program opportunity to develop an aerosol vapor detector, and several engagements related to the evaluation of our products within the cell therapy and gene therapy markets.
Our information technology systems and infrastructure are potentially vulnerable to breakdown or damage or interruption or otherwise may sustain damage from malicious intrusion and computer viruses, data breaches, phishing attacks, cybercriminals, system 37 Table of Contents malfunction, natural disasters and catastrophes (including hurricanes and earthquakes), terrorism, war and telecommunication and electrical failures, or other disruptive events.
Our information technology systems and infrastructure are potentially vulnerable to breakdown or damage or interruption or otherwise may sustain damage from malicious intrusion and computer viruses, data breaches, phishing attacks, cybercriminals, system malfunction, natural disasters and catastrophes (including hurricanes and earthquakes), terrorism, war and telecommunication and electrical failures, or other disruptive events.
In addition to an adverse impact on demand for our products, uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on our suppliers, manufacturers, logistics providers, channel partners, and other partners. Potential effects include financial instability; inability to obtain credit to finance operations; and insolvency.
In addition to an adverse impact on demand for our products, uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on our suppliers, 26 Table of Contents manufacturers, logistics providers, channel partners, and other partners. Potential effects include financial instability; inability to obtain credit to finance operations; and insolvency.
Our continued growth will depend, in part, on attracting, retaining and motivating highly-trained sales personnel with the necessary scientific background and technical ability to understand 35 Table of Contents our systems and effectively identify and sell to potential new customers. Identifying, recruiting and training additional qualified personnel will require significant time, expense and attention.
Our continued growth will depend, in part, on attracting, retaining and motivating highly-trained sales personnel with the necessary scientific background and technical ability to understand our systems and effectively identify and sell to potential new customers. Identifying, recruiting and training additional qualified personnel will require significant time, expense and attention.
The government may also change its procurement practices or adopt new contracting rules and regulations that could be costly to satisfy or that could impair our ability to obtain new contracts. 44 Table of Contents Risks related to litigation and our intellectual property We rely on in-bound licenses granted to us from third parties.
The government may also change its procurement practices or adopt new contracting rules and regulations that could be costly to satisfy or that could impair our ability to obtain new contracts. Risks related to litigation and our intellectual property We rely on in-bound licenses granted to us from third parties.
As a result, any shortfall in product revenue in relation to our expectations could cause significant changes in our operating 30 Table of Contents results from period-to-period and could result in negative cash flow from operations and a decrease in the price of our common stock.
As a result, any shortfall in product revenue in relation to our expectations could cause significant changes in our operating results from period-to-period and could result in negative cash flow from operations and a decrease in the price of our common stock.
The ultimate determination 47 Table of Contents by the USPTO or by a court or other trier of fact in the U.S., or corresponding foreign national patent offices or courts, on whether a claim meets all requirements of patentability cannot be assured.
The ultimate determination by the USPTO or by a court or other trier of fact in the U.S., or corresponding foreign national patent offices or courts, on whether a claim meets all requirements of patentability cannot be assured.
Federal Reserve, along with other central banks around the world, may further negatively affect our short-term ability or desire to incur debt. A failure to obtain additional funding could prevent us from making expenditures that may be required to grow or maintain our operations.
Federal Reserve, along with other central banks around the world, may further negatively affect our short-term ability or desire to incur debt. A failure to 58 Table of Contents obtain additional funding could prevent us from making expenditures that may be required to grow or maintain our operations.
As a result, we could be subject to lawsuits and other allegations by parties claiming ownership of what we believe to be open source software or claiming noncompliance with open source licensing terms.
As a result, we could be subject to lawsuits and other allegations by parties claiming ownership of what we believe to be open source software or claiming noncompliance with open source 49 Table of Contents licensing terms.
If these third party channel partners do not provide a high quality customer experience, our business operations and reputation may suffer. 56 Table of Contents If we were to be sued for product liability, we could face substantial liabilities that exceed our resources.
If these third party channel partners do not provide a high quality customer experience, our business operations and reputation may suffer. If we were to be sued for product liability, we could face substantial liabilities that exceed our resources.
We generally recognize revenue from our extended warranty and service plans ratably over the contract terms, which typically range from one additional year to four additional years and could in 61 Table of Contents some cases be subject to an early termination right.
We generally recognize revenue from our extended warranty and service plans ratably over the contract terms, which typically range from one additional year to four additional years and could in some cases be subject to an early termination right.
Although we believe our tax estimates are reasonable, if the United States 62 Table of Contents Internal Revenue Service or other taxing authority disagrees with the positions taken on our tax returns, we could have additional tax liability, including interest and penalties.
Although we believe our tax estimates are reasonable, if the United States Internal Revenue Service or other taxing authority disagrees with the positions taken on our tax returns, we could have additional tax liability, including interest and penalties.
Government A significant percentage of our product and service revenues are generated from agencies and departments of the U.S. government. In addition, substantially all of our revenue from license and contracts revenue are derived from contracts or sub-contracts related to the U.S. government. We expect significant revenue from U.S. government contracts for the foreseeable future.
Government A significant percentage of our revenue is generated from agencies and departments of the U.S. government. In addition, substantially all of our revenue from license and contracts revenue are derived from contracts or sub-contracts related to the U.S. government. We expect significant revenue from U.S. government contracts for the foreseeable future.
For Europe, we are subject to the EU General Data Protection Regulation, or EU GDPR, and the UK equivalent of the same, the UK GDPR (collectively referred to as the GDPR), as well as other national data protection legislation in force in relevant European Economic Area, or EEA, Member States and the UK (including the UK Data Protection Act 2018) with respect to any collecting or processing of personal data (i) regarding individuals in the EEA and UK , and/or (ii) carried out in the context of the activities of an establishment in the EEA and UK.
For Europe, we are subject to the EU General Data Protection Regulation, or EU GDPR, and the EU GDPR in such form as incorporated into the laws of the UK, the UK GDPR (collectively referred to as the GDPR), as well as other national data protection legislation in force in relevant European Economic Area, or EEA, Member States and the UK (including the UK Data Protection Act 2018) with respect to any collecting or processing of personal data (i) regarding individuals in the EEA and UK , and/or (ii) carried out in the context of the activities of an establishment in the EEA and UK.
As such, our channel partners may not commit the necessary resources to market our products to 32 Table of Contents the level of our expectations or may choose to favor marketing the products of our competitors.
As such, our channel partners may not commit the necessary resources to market our products to the level of our expectations or may choose to favor marketing the products of our competitors.
Our compliance with Section 404 requires that we incur substantial accounting expense and expend significant management efforts, including hiring additional accounting and financial staff with appropriate public company experience and technical accounting 53 Table of Contents knowledge.
Our compliance with Section 404 requires that we incur substantial accounting expense and expend significant management efforts, including hiring additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.
Although we enter into confidentiality, assignments of proprietary rights and license agreements, as appropriate, with our employees and third parties, including our contract manufacturers, contract engineering firms, and generally control access to and distribution of our technologies, documentation and other proprietary information, we cannot be certain that the steps we take to prevent unauthorized use of our intellectual property rights are sufficient to prevent their misappropriation, particularly in foreign countries where laws or law enforcement practices may not protect our intellectual property rights as fully as in the United States.
Other parties may not comply with the terms of their agreements with us, and we may not be able to enforce our rights adequately against these parties. 45 Table of Contents Although we enter into confidentiality, assignments of proprietary rights and license agreements, as appropriate, with our employees and third parties, including our contract manufacturers, contract engineering firms, and generally control access to and distribution of our technologies, documentation and other proprietary information, we cannot be certain that the steps we take to prevent unauthorized use of our intellectual property rights are sufficient to prevent their misappropriation, particularly in foreign countries where laws or law enforcement practices may not protect our intellectual property rights as fully as in the United States.
If we fail to maintain significant market acceptance in existing markets or fail to successfully increase our penetration in new and expanding markets, we will not generate expected revenue and our prospects may be harmed. In 2023, a majority of our product and service revenue was derived from sales of our handheld products, mainly the MX908.
If we fail to maintain significant market acceptance in existing markets or fail to successfully increase our penetration in new and expanding markets, we will not generate expected revenue and our prospects may be harmed. In 2024, a majority of our revenue was derived from sales of our handheld products.
We also expect additional competition in the future from new and existing companies with whom we do not currently compete directly.
We also expect 30 Table of Contents additional competition in the future from new and existing companies with whom we do not currently compete directly.
Therefore, despite significant efforts to create security barriers to such threats, it is virtually impossible for us to entirely mitigate these risks.
Therefore, despite significant efforts to create 35 Table of Contents security barriers to such threats, it is virtually impossible for us to entirely mitigate these risks.
We may not be able to find additional suitable acquisition candidates and we may not be able to complete 60 Table of Contents additional acquisitions on favorable terms, if at all.
We may not be able to find additional suitable acquisition candidates and we may not be able to complete additional acquisitions on favorable terms, if at all.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company,” we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; we will be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and we will not be required to hold nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments not previously approved.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company,” we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; we will be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and we will not be required to hold nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments not previously approved. 52 Table of Contents In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards.
Accordingly, our business, financial condition, results of operations, and prospects may be adversely affected by certain events or activities, including, but not limited to: • changes in fiscal or contracting policies or decrease in available government funding; • changes in government programs or applicable requirements; • changes in the political environment, including before or after a change to the leadership within the government administration, and any resulting uncertainty or changes in policy or priorities and resultant funding; • appeals, disputes or litigation relating to government procurement, including but not limited to bid protests by unsuccessful bidders on potential or actual awards of contracts to us or our partners by the government; • the adoption of new laws or regulations or changes to existing laws or regulations; • budgetary constraints, including automatic reductions as a result of “sequestration” or similar measures and constraints imposed by lapses in appropriations for the federal government or certain of its departments and agencies; • influence by, or competition from, third parties with respect to pending, new or existing contracts with government customers; • potential delays or changes in the government appropriations or procurement processes, including as a result of events such as war, incidents of terrorism, natural disasters, and public health concerns or epidemics; and • increased or unexpected costs or unanticipated delays caused by other factors outside of our control, such as performance failures of our partners and subcontractors. 42 Table of Contents Any such event or activity, among others, could cause governments and governmental agencies to delay or refrain from purchasing our products and services in the future, reduce the size or payment amounts of purchases from existing or new government customers, or otherwise have an adverse effect on our business, results of operations, financial condition and prospects.
Accordingly, our business, financial condition, results of operations, and prospects may be adversely affected by certain events or activities, including, but not limited to: • changes in fiscal or contracting policies or decrease in available government funding; • changes in government programs or applicable requirements; • changes in the political environment, including before or after a change to the leadership within the government administration, and any resulting uncertainty or changes in policy or priorities and resultant funding; • appeals, disputes or litigation relating to government procurement, including but not limited to bid protests by unsuccessful bidders on potential or actual awards of contracts to us or our partners by the government; • the adoption of new laws or regulations or changes to existing laws or regulations; • budgetary constraints, including automatic reductions as a result of “sequestration” or similar measures and constraints imposed by lapses in appropriations for the federal government or certain of its departments and agencies; • influence by, or competition from, third parties with respect to pending, new or existing contracts with government customers; • potential delays or changes in the government appropriations or procurement processes, including as a result of events such as war, incidents of terrorism, natural disasters, and public health concerns or epidemics; and • increased or unexpected costs or unanticipated delays caused by other factors outside of our control, such as performance failures of our partners and subcontractors.
In addition, numerous other federal and state laws, including state security breach notification laws, state health information privacy laws and federal and state consumer protection and privacy laws, govern the collection, use, disclosure and security of personal information. 38 Table of Contents For example, in California, the California Consumer Protection Act, or CCPA, which went into effect on January 1, 2020, established a comprehensive privacy framework for covered businesses by creating an expanded definition of personal information, establishing new data privacy rights for consumers in the State of California, imposing special rules on the collection of consumer data from minors, and creating a new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches.
For example, in California, the California Consumer Protection Act, or CCPA, which went into effect on January 1, 2020, established a comprehensive 36 Table of Contents privacy framework for covered businesses by creating an expanded definition of personal information, establishing new data privacy rights for consumers in the State of California, imposing special rules on the collection of consumer data from minors, and creating a new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches.
A change in these principles or interpretations could have a significant effect on our reported financial results, and they could affect the reporting of transactions completed before the announcement of a change. ​ Item 1B. Unresolved Staff Comments. None. ​
A change in these principles or interpretations could have a significant effect on our reported financial results, and they could affect the reporting of transactions completed before the announcement of a change. ​
Any violation or liability under environmental laws or health and safety regulations could harm our business. We are subject to environmental and safety laws and regulations governing the use, storage and disposal of hazardous substances or wastes and imposing liability for the cleanup of contamination from these substances.
We are subject to environmental and safety laws and regulations governing the use, storage and disposal of hazardous substances or wastes and imposing liability for the cleanup of contamination from these substances.
In addition, certain of our agreements with third parties may provide that intellectual property arising under these agreements, such as data that could be valuable to our business, will be owned by the counterparty, in which case, we may not have adequate rights to use such data or have exclusivity with respect to the use of such data, which could result in third parties, including our competitors, being able to use such data to compete with us. 45 Table of Contents Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time.
In addition, certain of our agreements with third parties may provide that intellectual property arising under these agreements, such as data that could be valuable to our business, will be owned by the counterparty, in which case, we may not have adequate rights to use such data or have exclusivity with respect to the use of such data, which could result in third parties, including our competitors, being able to use such data to compete with us.
In particular, if we are unable to develop additional relevant products and applications for markets such as antibody therapeutics, cell therapy or the synthetic biology market, it could slow or stop our business growth and negatively impact our business, financial condition, results of operations, and prospects.
In particular, if we are unable to develop additional relevant products and applications for markets such as antibody therapeutics, cell therapy or the synthetic biology market, it could slow or stop our business growth and negatively impact our business, financial condition, results of operations, and prospects. 32 Table of Contents If we market our products for clinical or diagnostic purposes, our products could become subject to onerous regulation by the U.S.
Our business, financial condition, results of operations, and prospects could be materially adversely affected as a result of any of these events. 41 Table of Contents The majority of our operations are currently conducted at a single location and any disruption at our facility could negatively impact our operations and increase our expenses.
Our business, financial condition, results of operations, and prospects could be materially adversely affected as a result of any of these events. The majority of our operations are currently conducted at two locations and any disruption at either of these facilities could negatively impact our operations and increase our expenses.
In these countries, the patent owner may have limited remedies, which could materially diminish the value of any patents. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
Furthermore, many countries limit the enforceability of patents against other parties, including government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of any patents. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
Since the shares were sold in our initial public offering in December 2020, the price per share of our common stock has experienced significant fluctuations.
The market price of our common stock has been volatile and could continue to be volatile. Since the shares were sold in our initial public offering in December 2020, the price per share of our common stock has experienced significant fluctuations.
Our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. In addition, certain countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to other parties. Furthermore, many countries limit the enforceability of patents against other parties, including government agencies or government contractors.
Our patents or other intellectual property rights may not be effective or sufficient to 46 Table of Contents prevent them from competing. In addition, certain countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to other parties.
As such, a quality defect in a single component can compromise the performance of the entire solution. As we continue to grow and introduce new products, and as our products incorporate increasingly sophisticated technology, it will be increasingly difficult to ensure our products are produced in the necessary quantities without sacrificing quality.
As we continue to grow and introduce new products, and as our products incorporate increasingly sophisticated technology, it will be increasingly difficult to ensure our products are produced in the necessary quantities without sacrificing quality.
However, following the UK’s exit from the EU, or Brexit, there will be increasing scope for divergence in application, interpretation and enforcement of the data protection laws between these territories.
However, following the UK’s exit from the EU, or Brexit, there will be increasing scope for divergence in application, interpretation and enforcement of the data protection laws between these territories. For example, the UK Government introduced the Data Protection and Digital Information Bill, which failed in the UK legislative process.
The U.S. government can typically terminate, reduce orders under or otherwise modify any of its contracts with us for its convenience (i.e., without cause) whether or not we have failed to perform under the terms of the applicable contract. In such case, the government would not be required to pay us for the lost profits for the unperformed work.
There are inherent risks in contracting with the U.S. government. The U.S. government can typically terminate, reduce orders under or otherwise modify any of its contracts with us for its convenience (i.e., without cause) whether or not we have failed to perform under the terms of the applicable contract.
In the future, if we fail to maintain good relationships with, or fail to successfully motivate any of our large channel partners, our revenue may decline.
We are in the process of broadening and diversifying our sales channels across all markets. In the future, if we fail to maintain good relationships with, or fail to successfully motivate any of our large channel partners, our revenue may decline.
The challenge of identifying market trends and customer needs is even more demanding for markets that we have recently entered, such as the bioprocessing market, or that we intend to enter in the future, such as the GxP quality assurance market. There is no certainty that we will effectively identify these trends and needs or introduce products that are successful.
The challenge of identifying market trends and customer needs is even more demanding for markets that we have recently entered, such as the bioprocessing market, or that we intend to 29 Table of Contents enter in the future, such as the GxP quality assurance market.
To determine the priority of these inventions, we may have to participate in interference proceedings, derivation proceedings or other post-grant proceedings declared by the USPTO that could result in substantial cost to us. The outcome of such proceedings is uncertain. No assurance can be given that other patent applications will not have priority over our patent applications.
To determine the priority of these 47 Table of Contents inventions, we may have to participate in interference proceedings, derivation proceedings or other post-grant proceedings declared by the USPTO that could result in substantial cost to us. The outcome of such proceedings is uncertain.
Accordingly, if we are not able to achieve or maintain profitability and we incur significant losses in the future, the market price of our common stock may decline, and you could lose part or all of your investment.
Accordingly, if we are not able to achieve or maintain profitability and we incur significant losses in the future, the market price of our common stock may decline, and you could lose part or all of your investment. 27 Table of Contents Our operating results may fluctuate significantly from period-to-period and may fall below expectations in any particular period, which could adversely affect the market price of our common stock.
We will have to generate and sustain increased revenue to achieve profitability and positive cash flow as a result of these increased expenditures.
Additionally, we may encounter unforeseen issues that require us to incur additional costs. We will have to generate and sustain increased revenue to achieve profitability and positive cash flow as a result of these increased expenditures.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also conduct specific training and tabletop exercises for key personnel involved in cybersecurity risk management. 63 Table of Contents Our Director of Information Technology and his team are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity risks through various means, including by leveraging a managed security service provider and other third-party security software and technology services.
Biggest changeOur Director of Information Technology and his team are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity risks through various means, including by leveraging a managed security service provider and other third-party security software and technology services.
We have not identified any cybersecurity incidents or threats that have materially affected us or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition; however, like other companies in our industry, we and our third-party vendors may, from time to time, experience threats and security incidents relating to our and our third-party vendors’ information systems.
We have not identified any cybersecurity incidents or threats that have materially affected us or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition ; however, like other companies in our industry, we and our third-party vendors may, from time to time, experience threats and security 62 Table of Contents incidents relating to our and our third-party vendors’ information systems.
Our Director of Information Technology is responsible for the day-to-day administration and management of our cybersecurity program, under the direct supervision of our Chief Product Officer (formerly our Chief Technology Officer). Currently, the Director of Information Technology role is held by an individual who has approximately 19 years of information technology experience and 10 years of cybersecurity experience.
Our Director of Information Technology is responsible for the day-to-day administration and management of our cybersecurity program, under the direct supervision of our Chief Product Officer (formerly our Chief Technology Officer). Currently, the Director of Information Technology role is held by an individual who has approximately 20 years of information technology experience and 11 years of cybersecurity experience.
We have implemented a process to periodically conduct security awareness training for employees and simulated phishing campaigns.
We have implemented a process to periodically conduct security awareness training for employees and simulated phishing campaigns. We also conduct specific training and tabletop exercises for key personnel involved in cybersecurity risk management.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties. Our corporate headquarter is located in Boston, Massachusetts, where we lease and occupy approximately 37,500 square feet of space for office, research and development laboratories, assembly, high tech manufacturing and light manufacturing uses. The lease for this facility expires on October 7, 2025.
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Item 2. Properties. Our corporate headquarters are currently located in Boston, Massachusetts.
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Our Europe headquarter is located in Braunschweig, Germany, where we lease and occupy approximately 7,500 square feet of space for office, research and development laboratories, assembly, high tech manufacturing and light manufacturing uses. The lease for this facility expires on January 5, 2028.
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We maintained the following principal facilities as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ Location ​ Functions ​ Square Footage (Approx.) ​ Lease Expiration Boston, Massachusetts ​ Corporate headquarters, R&D, assembly, manufacturing ​ 37,500 ​ October 2025 Morrisville, North Carolina ​ R&D, assembly, manufacturing ​ 13,300 ​ July 2030 Danbury, Connecticut ​ R&D, assembly, manufacturing ​ 38,200 ​ July 2034 Braunschweig, Germany ​ Office, R&D, assembly, manufacturing ​ 7,500 ​ January 2028 ​ We believe that our current facilities meet our anticipated needs for the foreseeable future. ​ ​ ​
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We have an approximately 13,300 square foot facility in Morrisville, North Carolina to expand the Company’s research and development activities focused on its desktop offerings, and to serve as an additional manufacturing site for the Company as needed. The lease for this facility expires in July 2030.
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We believe that our current facilities meet our anticipated needs for the foreseeable future. ​ ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNot applicable. ​ 64 Table of Contents PART II
Biggest changeNot applicable. ​ 63 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePayment of future cash dividends, if any, will be at the discretion of the board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of current or then-existing debt instruments and other factors the board of directors deems relevant. ​ ​ Item 6. Reserved.
Biggest changePayment of future cash dividends, if any, will be at the discretion of the board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of current or then-existing debt instruments and other factors the board of directors deems relevant. ​ ​
Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans will be included in our definitive proxy statement to be filed with the SEC with respect to our 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans will be included in our definitive proxy statement to be filed with the SEC with respect to our 2025 Annual Meeting of Stockholders and is incorporated herein by reference.
Prior to that time, there was no established public market for our common stock. Holders of Our Common Stock As of March 5, 2024, there were approximately 22 holders of record of our common stock.
Prior to that time, there was no established public market for our common stock. Holders of Our Common Stock As of March 3, 2025, there were approximately 33 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following tables set forth our results of operations for the periods presented: 73 Table of Contents Comparison of the Years ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2023 2022 Change ​ ​ (in thousands) Revenue: ​ ​ ​ ​ ​ ​ Product revenue ​ $ 40,214 ​ $ 37,499 ​ $ 2,715 Service revenue ​ ​ 9,645 ​ ​ 6,976 ​ ​ 2,669 Contract revenue ​ 370 ​ 2,377 ​ (2,007) Total revenue ​ 50,229 ​ 46,852 ​ 3,377 Cost of revenue: ​ ​ ​ Product cost of revenue ​ 18,428 ​ 16,010 ​ 2,418 Service cost of revenue ​ ​ 6,380 ​ ​ 4,420 ​ ​ 1,960 Contract cost of revenue ​ 99 ​ 399 ​ (300) Total cost of revenue ​ 24,907 ​ 20,829 ​ 4,078 Gross profit ​ 25,322 ​ 26,023 ​ (701) Operating expenses: ​ ​ ​ Research and development ​ 21,904 ​ 17,526 ​ 4,378 Selling, general and administrative ​ 46,176 ​ 43,879 ​ 2,297 Total operating expenses ​ 68,080 ​ 61,405 ​ 6,675 Loss from operations ​ (42,758) ​ (35,382) ​ (7,376) Other income, net: ​ ​ ​ Interest income ​ ​ 6,480 ​ ​ 2,031 ​ ​ 4,449 Interest expense ​ (201) ​ (129) ​ (72) Other expense, net ​ ​ (131) ​ (83) ​ (48) Total other income, net ​ 6,148 ​ 1,819 ​ 4,329 Loss from operations before income taxes ​ ​ (36,610) ​ ​ (33,563) ​ ​ (3,047) Benefit for income taxes ​ ​ 211 ​ ​ — ​ ​ 211 Net loss ​ $ (36,399) ​ $ (33,563) ​ $ (2,836) ​ Revenue, Cost of revenue and Gross profit Product Our product revenue is comprised of revenue from sales of devices and related accessories and consumables and service as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ 2023 2022 Amount % ​ ​ (dollars in thousands) Product revenue ​ $ 40,214 ​ $ 37,499 ​ $ 2,715 7 % Product cost of revenue ​ 18,428 ​ 16,010 ​ 2,418 15 % Gross profit ​ $ 21,786 ​ $ 21,489 ​ $ 297 1 % Gross profit margin ​ 54 % 57 % (3) % ​ ​ Product revenue increased by $2.7 million, or 7%, for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Biggest changeThe following tables set forth our results of operations for the periods presented: Comparison of the Years ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2024 2023 Change ​ ​ (in thousands) Revenue: ​ ​ ​ ​ ​ ​ Product revenue ​ $ 43,922 ​ $ 40,214 ​ $ 3,708 Service and contract revenue ​ ​ 15,709 ​ ​ 10,015 ​ ​ 5,694 Total revenue ​ 59,631 ​ 50,229 ​ 9,402 Cost of revenue: ​ ​ ​ Product cost of revenue ​ 21,645 ​ 18,428 ​ 3,217 Service and contract cost of revenue ​ ​ 8,130 ​ ​ 6,479 ​ ​ 1,651 Total cost of revenue ​ 29,775 ​ 24,907 ​ 4,868 Gross profit ​ 29,856 ​ 25,322 ​ 4,534 Operating expenses: ​ ​ ​ Research and development ​ 25,495 ​ 21,904 ​ 3,591 Selling, general and administrative ​ 53,636 ​ 46,069 ​ 7,567 Change in fair value of contingent consideration ​ (13,216) ​ 107 ​ (13,323) Goodwill impairment ​ 40,659 ​ — ​ 40,659 Total operating expenses ​ 106,574 ​ 68,080 ​ 38,494 Loss from operations ​ (76,718) ​ (42,758) ​ (33,960) Other income, net: ​ ​ ​ Interest income ​ ​ 4,494 ​ ​ 6,480 ​ ​ (1,986) Interest expense ​ — ​ (201) ​ 201 Other expense, net ​ ​ (264) ​ (131) ​ (133) Total other income, net ​ 4,230 ​ 6,148 ​ (1,918) Loss from operations before income taxes ​ ​ (72,488) ​ ​ (36,610) ​ ​ (35,878) Benefit for income taxes ​ ​ 282 ​ ​ 211 ​ ​ 71 Net loss ​ $ (72,206) ​ $ (36,399) ​ $ (35,807) ​ 73 Table of Contents Revenue, Cost of revenue and Gross profit Product Our product revenue is comprised of revenue from sales of devices and related accessories and consumables and service as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ 2024 2023 Amount % ​ ​ (dollars in thousands) Product revenue ​ $ 43,922 ​ $ 40,214 ​ $ 3,708 9 % Product cost of revenue ​ 21,645 ​ 18,428 ​ 3,217 17 % Gross profit ​ $ 22,277 ​ $ 21,786 ​ $ 491 2 % Gross profit margin ​ 51 % 54 % (3) % ​ ​ Product revenue increased by $3.7 million, or 9%, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Investing Activities During the year ended December 31, 2023, net cash used in investing activities was $26.4 million, due to $48.9 million in purchases of marketable securities, partially offset by $24.5 million in proceeds from maturities of marketable securities and $2.0 million in purchases of property and equipment.
During the year ended December 31, 2023, net cash used in investing activities was $26.4 million, due to $48.9 million in purchases of marketable securities, partially offset by $24.5 million in proceeds from maturities of marketable securities and $2.0 million in purchases of property and equipment.
If as a result of the quantitative assessment, it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test will be required. The quantitative goodwill impairment test requires the management to estimate and compare the fair value of the reporting unit with its carrying value.
If as a result of the quantitative assessment, it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test will be required. The quantitative goodwill impairment test requires management to estimate and compare the fair value of the reporting unit with its carrying value.
The Company recorded a loss on extinguishment of $0.5 million in the three months ended March 31, 2023, which was included in interest expense in the condensed consolidated statements of operations. ​ On August 4, 2023, we entered into a Default Waiver and First Amendment to Loan and Security Agreement with the Lender, or the Amended 2022 Revolver, in which the Lender waived its rights and remedies against the Company and amended the 2022 Revolver.
The Company recorded a loss on extinguishment of $0.5 million in the three months ended March 31, 2023, which was included in interest expense in the consolidated statements of operations. ​ On August 4, 2023, we entered into a Default Waiver and First Amendment to Loan and Security Agreement with the Lender, or the Amended 2022 Revolver, in which the Lender waived its rights and remedies against the Company and amended the 2022 Revolver.
Although we do not directly source any material products or supplies from Russia, Ukraine, Israel or the Gaza Strip, our customers in Europe and the Middle East could be impacted by extended conflicts or an escalation of these conflicts into neighboring countries.
Although we do not directly source any material products or supplies from Russia, Ukraine, Israel, Lebanon or the Gaza Strip, our customers in Europe and the Middle East could be impacted by extended conflicts or an escalation of these conflicts into neighboring countries.
We plan to grow our device sales in the coming years through multiple strategies including expanding our sales efforts domestically and globally and continuing to enhance the underlying technology and applications for life sciences research related to our Maverick, Rebel, ZipChip Interface, and Maven and related sampling devices.
We plan to grow our device sales in the coming years through multiple strategies including expanding our sales efforts domestically and globally and continuing to enhance the underlying technology and applications for bioprocessing and life sciences research related to our Maverick, Rebel, ZipChip Interface, and Maven and related sampling devices.
Our future funding requirements will depend on many factors, including: ● market uptake of our products and growth into new and existing markets: 77 Table of Contents ● the cost of our research and development efforts to expand the applications of our current devices and to create enhanced products with our platform of technologies; ● the cost of expanding our commercial operations, including distribution capabilities, and accelerating planned investments, such as hiring additional support, service, and sales management in Europe, Asia Pacific, and Latin America, bolstering our infrastructure in these regions; ● the cost of acquiring complementary businesses, products, services, or technologies, when and if required; ● the success of our existing collaborations and our ability to enter additional collaborations in the future; ● the effect of competing technological and market developments; and ● the level of our selling, general and administrative expenses.
Our future funding requirements will depend on many factors, including: ● market uptake of our products and growth into new and existing markets: ● the cost of our research and development efforts to expand the applications of our current devices and to create enhanced products with our platform of technologies; ● the cost of expanding our commercial operations, including distribution capabilities, and accelerating planned investments, such as hiring additional support, service, and sales management in Europe, Asia Pacific, and Latin America, bolstering our infrastructure in these regions; ● the cost of acquiring complementary businesses, products, services, or technologies, when and if required; ● the success of our existing collaborations and our ability to enter additional collaborations in the future; ● the effect of competing technological and market developments; and ● the level of our selling, general and administrative expenses.
Our gross profit in future periods will vary based upon our channel mix and may decrease based upon our distribution channels and the potential to establish original equipment manufacturing channels for certain components of our technology platform which would have a lower gross margin. ​ We expect that our gross profit margin for product and service will increase over the long term as our sales and production volumes increase and our cost per unit decreases due to efficiencies of scale.
Our gross profit in future periods will vary based upon our channel mix and may decrease based upon our distribution channels and the potential to establish original equipment manufacturing channels for certain components of our technology platform which would have a lower gross margin. ​ We expect that our gross profit margin will increase over the long term as our sales and production volumes increase and our cost per unit decreases due to efficiencies of scale.
The 2022 Revolver contained customary representations and warranties, as well as certain non-financial covenants, including limitations on, among other things, our ability to change the principal nature of our business, dispose of our business or property, engage in any change of control transaction, merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, incur additional indebtedness or liens, pay dividends or make other distributions on capital stock, redeem our capital stock, engage in transactions with affiliates or otherwise encumber our intellectual property, in each case, subject to customary exceptions. ​ As of December 31, 2023, there were no balances outstanding under the 2022 Revolver.
The 2022 Revolver contained customary representations and warranties, as well as certain non-financial covenants, including limitations on, among other things, our ability to change the principal nature of our business, dispose of our business or property, engage in any change of control transaction, merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, incur additional indebtedness or liens, pay dividends or make other distributions on capital stock, redeem our capital stock, engage in transactions with affiliates or otherwise encumber our intellectual property, in each case, subject to customary exceptions. ​ 77 Table of Contents As of December 31, 2023, there were no balances outstanding under the 2022 Revolver.
The Company’s obligations under the Amended 2022 Revolver are secured by substantially all of the Company’s assets, excluding its intellectual property, which is subject to a negative pledge. The revolving line of credit under the Amended 2022 Revolver terminates on November 3, 2025. As of December 31, 2023, there were no balances outstanding under the Amended 2022 Revolver.
The Company’s obligations under the Amended 2022 Revolver are secured by substantially all of the Company’s assets, excluding its intellectual property, which is subject to a negative pledge. The revolving line of credit under the Amended 2022 Revolver terminates on November 3, 2025. As of December 31, 2024 and 2023, there were no balances outstanding under the Amended 2022 Revolver.
Revenue for extended warranty and support is recognized based upon the period of time elapsed under the arrangement as this period represents the transfer of benefits or services under the agreement. Contract Revenue We generate revenue from short and long-term contracts associated with the design and development and delivery of detection devices or related design and support services.
Revenue for extended warranty and support is recognized based upon the period of time elapsed under the arrangement as this period represents the transfer of benefits or services under the agreement. From time to time, we generate revenue from short and long-term contracts associated with the design and development and delivery of detection devices or related design and support services.
Allocation of the transaction price is determined at the contract’s inception and is not updated to reflect changes between contract inception and when the performance obligations are satisfied. Product and Service Revenue We derive revenue primarily from the sale of handheld and desktop products and related consumables and services.
Allocation of the transaction price is determined at the contract’s inception and is not updated to reflect changes between contract inception and when the performance obligations are satisfied. We derive revenue primarily from the sale of handheld and desktop products and related consumables and services.
Our devices are used at the point-of-need to interrogate unknown and invisible materials and provide quick, actionable answers to directly address some of the most critical problems in life sciences research, bioprocessing, pharma/biopharma, forensics and adjacent markets.
Our devices are used at the point-of-need to interrogate unknown and invisible materials and provide quick, actionable answers to directly address some of the most critical problems in forensics, bioprocessing, pharma/biopharma, life science research and adjacent markets.
The revolving line of credit under the 2022 Revolver was scheduled to terminate on November 2, 2025. ​ The 2022 Revolver also contained certain financial covenants, including a requirement that the amount of unrestricted and unencumbered cash minus advances under the 2022 Revolver was not less than the amount equal to the 78 Table of Contents greater of (i) $10.0 million or (ii) nine (9) months of cash burn.
The revolving line of credit under the 2022 Revolver was scheduled to terminate on November 2, 2025. ​ The 2022 Revolver also contained certain financial covenants, including a requirement that the amount of unrestricted and unencumbered cash minus advances under the 2022 Revolver was not less than the amount equal to the greater of (i) $10.0 million or (ii) nine (9) months of cash burn.
Our contract agreements are with the U.S. government and commercial entities (who may be contracting with the government). Contracts typically include compensation for labor effort and materials incurred related to the deliverables under the contract. Our license and contract revenue was primarily related to one customer during the years ended December 31, 2023 and 2022.
Our contract agreements are with the U.S. government and commercial entities (who may be contracting with the government). Contracts typically include compensation for labor effort and materials incurred related to the deliverables under the contract. Our contract revenue was primarily related to one customer during the years ended December 31, 2024 and 2023.
To the extent that these estimates change in the future regarding the likelihood of achieving these targets, we may need to record material adjustments to our accrued contingent consideration. Such changes in the fair value of contingent consideration are recorded as contingent consideration expense or income in the consolidated statements of operations.
To the extent that these estimates change in the future regarding the likelihood of achieving these targets, we may need to record material adjustments to 82 Table of Contents our accrued contingent consideration. Such changes in the fair value of contingent consideration are recorded as contingent consideration expense or income in the consolidated statements of operations.
Over time, as our device installed base grows and we see adoption of Rebel, we expect consumables revenue to constitute a larger percentage of product and service revenue. However, the percentage will be subject to fluctuation based upon our handheld sales in a period.
Over time, as our device installed base grows and we see adoption of Rebel, we expect consumables revenue to constitute a larger percentage of total revenue. However, the percentage will be subject to fluctuation based upon our handheld sales in a period.
We test goodwill for impairment at the reporting unit level, which is the operating segment, in the fourth quarter of every year. We have the option of performing a qualitative assessment to determine whether further impairment testing 83 Table of Contents is necessary before performing the quantitative assessment.
We test goodwill for impairment at the reporting unit level, which is the operating segment, in the fourth quarter of every year. We have the option of performing a qualitative assessment to determine whether further impairment testing is necessary before performing the quantitative assessment.
For example, general inflation in the United States, EMEA and other geographies has recently been at levels not experienced in recent decades, which has led to higher prices for our raw materials and other inputs, as well as higher salaries and travel expenses, which could continue to negatively impact our business by increasing our cost of sales and operating expenses.
For example, general inflation in the United States, Europe, the Middle East and other geographies has recently been at levels not experienced in recent decades, which has led to higher prices for our raw materials and other inputs, as well as higher salaries and travel expenses, which could continue to negatively impact our business by increasing our cost of sales and operating expenses.
Overview We have developed an innovative suite of purpose-built handheld and desktop devices for point-of-need chemical and biochemical analysis. Leveraging our proprietary mass spectrometry, or Mass Spec, microfluidics, and analytics and machine learning technologies, we make devices that are significantly smaller and more accessible than conventional laboratory instruments.
Overview We have developed an innovative suite of purpose-built handheld and desktop devices for point-of-need chemical analysis. Leveraging complementary analytical technologies including our proprietary mass spectrometry, or Mass Spec, microfluidics, and analytics and machine learning technologies, we make devices that are significantly smaller and more accessible than conventional laboratory instruments.
We expect that recurring revenue as a percentage of the original device price to be higher for our desktop devices (Rebel, ZipChip Interface, Maverick, Maven and related sampling devices) than for our handheld device (MX908).
We expect that recurring revenue as a percentage of the original device price to be higher for our desktop devices (Rebel, ZipChip Interface, Maverick, Maven and related sampling devices) than for our handheld devices (MX908, ThreatID, ProtectIR, and XplorIR).
Selling, general and administrative expenses Selling, general and administrative expenses consist primarily of salaries and other personnel costs, and stock-based compensation for our sales and marketing, finance, legal, human resources and general management, as well as 72 Table of Contents professional services, such as legal, audit and accounting services.
Selling, general and administrative expenses Selling, general and administrative expenses consist primarily of salaries and other personnel costs, and stock-based compensation for our sales and marketing, finance, legal, human resources and general management, as well as professional services, such as legal, audit and accounting services.
For a contract with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation on a relative standalone selling price basis using our best estimate of the standalone selling price 81 Table of Contents of each distinct product or service in the contract.
For a contract with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation on a relative standalone selling price basis using our best estimate of the standalone selling price of each distinct product or service in the contract.
Revenue is recognized when control of the promised products, consumables or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products, consumables or services (the transaction price).
Revenue is recognized when control of the promised products, consumables or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products, consumables or 80 Table of Contents services (the transaction price).
See “ Liquidity and Capital Resources .” Global Economic Conditions We are continuing to closely monitor macroeconomic factors, including, but not limited to, continued inflationary and interest rate pressures, challenging capital market conditions and the limited availability of financing alternatives, which may have an impact on our business, results of operations and financial results.
Global Economic Conditions We are continuing to closely monitor macroeconomic factors, including, but not limited to, continued inflationary and interest rate pressures, challenging capital market conditions and the limited availability of financing alternatives, which may have an impact on our business, results of operations and financial results.
While we sell single-use swab samplers for MX908 to be used in liquid and solid materials analysis, there are a number of other applications that the MX908 can be used for that do not require consumables. Rebel and ZipChip Interface require consumables kits for all areas of operations.
While we sell single-use swab samplers for MX908 to be used in liquid and solid materials analysis, there are a number of other applications that the MX908 can be used for that do not require consumables. ThreatID, ProtectIR, and XplorIR do not have consumables. Rebel and ZipChip Interface require consumables kits for all areas of operations.
Any write-down of inventory to net realizable value creates a new cost basis. Goodwill Goodwill is not amortized, but is evaluated for impairment on an annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may not be recoverable.
Any write-down of inventory to net realizable value creates a new cost basis. Goodwill and Long-Lived Assets Goodwill is not amortized, but is evaluated for impairment on an annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may not be recoverable.
However, we evaluate the proper revenue recognition on a contract by contract basis, as each contract generally contains terms 82 Table of Contents specific to the underlying agreement which result in differing performance obligations and payment terms (cost plus, fixed price agreements among others).
However, we evaluate the proper revenue recognition on a contract by contract basis, as each contract generally contains terms specific to the underlying agreement which result in differing performance obligations and payment terms (cost plus, fixed price agreements among others).
We cannot accurately predict the full impact of current macroeconomic factors on the budgets and capital expenditures of our customers, or the timing of the normalization of customer purchasing patterns. We are closely monitoring the ongoing military conflict between Russia and Ukraine, and the ongoing hostilities in Israel and the Gaza Strip.
We cannot accurately predict the full impact of current macroeconomic factors on the budgets and capital expenditures of our customers, or the timing of the normalization of customer purchasing patterns. We are closely monitoring the ongoing military conflict between Russia and Ukraine, and the ongoing hostilities in Israel, Lebanon, and the Gaza Strip and other locations in the Middle East.
Further, we expect to incur additional costs associated with operating as a public company. As a 66 Table of Contents result, we may need additional funding for expenses related to our operating activities, including selling, general and administrative expenses and research and development expenses.
Further, we expect to incur additional costs associated with operating as a public company. As a result, we may need additional funding for expenses related to our operating activities, including selling, general and administrative expenses and research and development expenses.
Recurring revenue We regularly assess trends relating to recurring revenue which includes consumables and services based on our product offerings, our customer base and our understanding of how our customers use our products. Recurring revenue was 33% and 35% of total product and service revenue for the years ended December 31, 2023 and 2022, respectively.
Recurring revenue We regularly assess trends relating to recurring revenue which includes consumables and services based on our product offerings, our customer base and our understanding of how our customers use our products. Recurring revenue was 39% and 33% of total revenue for the years ended December 31, 2024 and 2023, respectively.
Gross profit margin is gross profit expressed as a percentage of revenue. Our gross profit in future periods will depend on a variety of factors, including: market conditions that may impact our pricing, sales mix among devices, sales mix changes among consumables, excess and obsolete inventories, our cost structure for manufacturing operations relative to volume, and product warranty obligations.
Our gross profit in future periods will depend on a variety of factors, including: market conditions that may impact our pricing, sales mix among devices, sales mix changes among consumables, excess and obsolete inventories, our cost structure for manufacturing operations relative to volume, and product warranty obligations.
During the years ended December 31, 2023 and 2022, our product placements (units recognized as revenue) were as follows: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 2022 Product s: ​ ​ Handheld 402 370 Desktop 66 80 ​ The number of product placements vary considerably from period-to-period due to the type and size of our customers and concentrations among larger government customers as described above.
During the years ended December 31, 2024 and 2023, our product placements (units recognized as revenue) were as follows: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 Product Placements: ​ ​ Handheld 593 402 Desktop 58 66 ​ The number of product placements vary considerably from period-to-period due to the type and size of our customers and concentrations among larger government customers as described above.
Benefit for Income Taxes Benefit for income taxes increased by $0.2 million for the year ended December 31, 2023, from $0.0 million for the year ended December 31, 2022.
Benefit for Income Taxes Benefit for income taxes increased by $0.1 million for the year ended December 31, 2024 from $0.2 million from the year ended December 31, 2023.
As of December 31, 2023, we had cash and cash equivalents of $121.0 million and marketable securities of $24.6 million, which were held for working capital purposes and for investment in growth opportunities. Our marketable securities consist of U.S. treasury securities.
As of December 31, 2024, we had cash and cash equivalents of $44.0 million and marketable securities of $25.6 million, which were held for working capital purposes and for investment in growth opportunities. Our marketable securities consist of U.S. treasury securities.
We may seek additional funding through private or public equity financings, debt financings, collaborations, strategic alliances and marketing, channel partner or licensing arrangements. We cannot assure you that we will be able to obtain additional funds on acceptable terms, or at all.
We may seek additional funding through private or public equity financings, debt financings, collaborations, strategic alliances and marketing, channel partner or licensing arrangements. We cannot assure you that we will be able to obtain additional funds on acceptable terms, or at all. If we raise additional funds by issuing equity or equity-linked securities, our stockholders may experience dilution.
The majority of our international sales are through channel partners and to a lesser extent, starting in 2023, through our 908 Devices GmbH subsidiary for our desktop sales in Europe and the United Kingdom. 71 Table of Contents Cost of Revenue, Gross Profit and Gross Margin Product cost of revenue primarily consists of costs for raw material parts and associated freight, shipping and handling costs, royalties, contract manufacturer costs, salaries and other personnel costs, overhead, amortization of intangibles and other direct costs related to those sales recognized as product revenue in the period. ​ Cost of revenue for services primarily consists of salaries and other personnel costs, travel related to services provided, facility costs associated with training, warranties and other costs of servicing equipment on a return-to-factory basis and at customer sites.
The majority of our international sales are through contractual arrangements with channel partners. ​ Cost of Revenue, Gross Profit and Gross Margin Cost of product revenue primarily consists of costs for raw material parts and associated freight, shipping and handling costs, royalties, contract manufacturer costs, salaries and other personnel costs, overhead, amortization of intangibles and other direct costs related to those sales recognized as product revenue in the period. ​ Cost of service and contract revenue primarily consists of salaries and other personnel costs, travel related to services provided, facility costs associated with training, warranties and other costs of servicing equipment on a return-to-factory basis and at customer sites.
General inflation could also negatively impact our business if it leads to spending pressure and decreased available capital for our customers to deploy to purchase our products and services. In addition, the United States Federal Reserve has raised, and may again raise, interest rates in response to concerns about inflation.
General inflation could also negatively impact our business if it leads to spending pressure and decreased available capital for our customers to deploy to purchase our products and services. 66 Table of Contents In addition, while the United States Federal Reserve has recently begun to lower interest rates, it has over the past couple of years raised, and may again raise, interest rates in response to concerns about inflation.
Provision for Income Taxes We have not recorded any U.S. federal or state income tax benefits for the net operating losses we have incurred in each year or for the research and development tax credits we generated in the United States and have recorded a full valuation allowance against our net deferred assets, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards and tax credits will not be realized.
Provision for Income Taxes We have not recorded any U.S. federal or state income tax benefits for the net operating losses we have incurred in each year or for the research and development tax credits we generated in the United States and have recorded a full valuation allowance against our net deferred assets, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards and tax credits will not be realized. 72 Table of Contents We recognized an income tax benefit of $0.3 million and $0.2 million during the years ended December 31, 2024 and 2023, respectively.
As of December 31, 2023, we also had U.S. federal and state research and development tax credit carryforwards of $7.2 million and $3.4 million, respectively, which may be available to offset future tax liabilities and begin to expire in 2032 and 2030, respectively.
As of December 31, 2024, the Company also had U.S. federal and state research and development tax credit carryforwards of $8.6 million and $4.8 million, respectively, which may be available to offset future tax liabilities and begin to expire in 2032 and 2030, respectively.
The Black-Scholes option-pricing model uses as inputs the fair value of our common stock and assumptions we make for the volatility of our common stock, the expected term of our common stock options, the risk-free interest rate for a period that approximates the expected term of our common stock options, and our expected dividend yield.
Forfeitures are recorded as they occur instead of estimating forfeitures that are expected to occur. 81 Table of Contents The Black-Scholes option-pricing model uses as inputs the fair value of our common stock and assumptions we make for the volatility of our common stock, the expected term of our common stock options, the risk-free interest rate for a period that approximates the expected term of our common stock options, and our expected dividend yield.
We expect to integrate acquired sampling technology within future product offerings. Since our inception, we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve profitability will depend on the successful further development and commercialization of our products.
Since our inception, we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve profitability will depend on the successful further development and commercialization of our products.
We believe that our continued investment in research and development is essential to our long-term competitive position and expect these expenses to increase in future periods.
We believe that our continued investment in research and development is essential to our long-term competitive position.
The income tax benefit recognized during the year ended December 31, 2023 primarily resulted from a reduction in the deferred tax liabilities recorded as part of our acquisition of 908 Devices GmbH. ​ Liquidity and Capital Resources Since our inception, we have incurred significant operating losses.
The income tax benefit recognized during the periods was primarily resulting from a reduction in the deferred tax liabilities recorded as part of our acquisition of 908 Devices GmbH. 76 Table of Contents Liquidity and Capital Resources Since our inception, we have incurred significant operating losses.
As our device installed base expands, recurring revenue on an absolute basis is expected to increase and over time should be an increasingly important contributor to our revenue. 68 Table of Contents Revenue from the sales of consumables will vary by type of device.
Our recurring revenue as a percentage of total revenue will vary based upon new device placements in the period. As our device installed base expands, recurring revenue on an absolute basis is expected to increase and over time should be an increasingly important contributor to our revenue. Revenue from the sales of consumables will vary by type of device.
Our consumables consist of: ● MX908—accessories and swabs; ● Rebel—consumables kit with a microfluidic chip and standards; ● ZipChip Interface—microfluidic chip, reagent and assay kits; ● Maverick—calibration kits and accessories; and ● Maven and related sampling devices—probes, tubing sets and accessories. ​ 70 Table of Contents Rebel and ZipChip Interface consumables can only be used with our devices and there are no alternative after-market options that can be used as a substitute.
Each of our device sales drives various streams of recurring revenue comprised of consumable and accessory product sales and service revenue. ​ Our consumables consist of: ​ ● MX908—accessories and swabs; ● Rebel—consumables kit with a microfluidic chip and standards; ● ZipChip Interface—microfluidic chip, reagent and assay kits; ● Maverick—calibration kits and accessories; and ● Maven and related sampling devices—probes, tubing sets and accessories. ​ Rebel and ZipChip Interface consumables can only be used with our devices and there are no alternative after-market options that can be used as a substitute.
This may include an onsite or virtual demonstration with a salesperson, a customer submitting samples for testing in one of our facilities or testing by a third party. ● Trials—a customer has committed to a trial of one of our products, which may include a defined period to assess functionality of the device in their operational environment (in the field or onsite within the customer’s facility). ● Pilot—a customer commits to the purchase of an initial quantity of devices to deploy in their operational environment to assess a broader opportunity that may grow to tens or hundreds of devices. ● Deployment—a customer has completed testing, a trial, and/or a pilot and intends to roll out the technology across their enterprise (either at a site or throughout the entire organization). 69 Table of Contents Key Business Metrics We regularly review the number of product placements and cumulative product placement as key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make strategic decisions.
This may include an onsite or virtual demonstration with a salesperson, a customer submitting samples for testing in one of our facilities or testing by a third party. ● Trials—a customer has committed to a trial of one of our products, which may include a defined period to assess functionality of the device in their operational environment (in the field or onsite within the customer’s facility). ● Pilot—a customer commits to the purchase of an initial quantity of devices to deploy in their operational environment to assess a broader opportunity that may grow to tens or hundreds of devices. ● Deployment—a customer has completed testing, a trial, and/or a pilot and intends to roll out the technology across their enterprise (either at a site or throughout the entire organization).
During the year ended December 31, 2022, net cash used in operating activities was $21.0 million, primarily resulting from our net loss of $33.6 million, partially offset by net cash provided by changes in our operating assets and liabilities of $3.3 million and noncash charges of $9.3 million.
During the year ended December 31, 2023, net cash used in operating activities was $25.1 million, primarily resulting from our net loss of $36.4 million and net cash used in changes in our operating assets and liabilities of $1.6 million, partially offset by noncash charges of $12.9 million.
Financing Activities Cash used in financing activities during the year ended December 31, 2023, was $15.9 million, consisting primarily of the repayment of $15.0 million outstanding under the 2022 Revolver and $1.1 million in payments for contingent 80 Table of Contents consideration related to the release of the $0.9 million assignment of the pension liability in connection with our acquisition of Trace Analytics GmbH and the $0.2 million initial fair value of contingent consideration, related to the $0.5 million initial milestone achievement in August 2023, that was paid in 2023.
Cash used in financing activities during the year ended December 31, 2023, was $15.9 million, consisting primarily of the repayment of $15.0 million outstanding under the 2022 Revolver and $1.1 million in payments for contingent consideration related to the release of the $0.9 million assignment of the pension liability in connection with our acquisition of Trace Analytics GmbH and the $0.2 million initial fair value of contingent consideration, related to the $0.5 million initial milestone achievement in August 2023, that was paid in 2023. 79 Table of Contents Contractual Obligations We have operating lease obligations for office space and certain equipment, which have remaining lease terms ranging from less than one year to nine years.
Our cumulative product placements consist of the following number of devices: ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2023 2022 Cumulative Product Placements: ​ ​ Handheld 2,422 2,020 Desktop 431 365 ​ Components of Our Results of Operations Revenue Product and Service Revenue We generate product and service revenue from the sale of our devices and recurring revenue from the sale of consumables and services.
Our cumulative product placements consist of the following number of devices: ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 Cumulative Product Placements: ​ ​ Handheld 3,015 2,422 Desktop 489 431 ​ 69 Table of Contents Components of Our Results of Operations Revenue We generate product and service revenue from the sale of our devices and recurring revenue from the sale of consumables and contract revenue.
We expect that our gross profit margin for contract will remain consistent for our contracts that are cost reimbursement contracts. ​ Operating Expenses Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, product development, hardware and software engineering and consultant services and other costs associated with our technology platform and products, which include: ● employee-related expenses, including salaries, related benefits and stock-based compensation expense for employees engaged in research and hardware and software development functions; ● the cost of maintaining and improving our product designs, including third party development costs for new products and materials for prototypes; ● research materials and supplies; and ● facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and insurance.
We intend to use our design, engineering and manufacturing capabilities to further advance and improve the efficiency of our manufacturing, which we believe will reduce costs and increase our gross margin. ​ Operating Expenses Research and development expenses Research and development expenses consist primarily of costs incurred for our research activities, product development, hardware and software engineering and consultant services and other costs associated with our technology platform and products, which include: ● employee-related expenses, including salaries, related benefits and stock-based compensation expense for employees engaged in research and hardware and software development functions; ● the cost of maintaining and improving our product designs, including third party development costs for new products and materials for prototypes; ● research materials and supplies; and 71 Table of Contents ● facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and insurance.
We recognized an income tax benefit of $0.2 million and $0 during the years ended December 31, 2023 and 2022, respectively. The income tax benefit recognized during the year ended December 31, 2023 primarily resulted from a reduction in the deferred tax liabilities recorded as part of our acquisition of 908 Devices GmbH.
The income tax benefit recognized during the year ended December 31, 2024 primarily resulted from a reduction in the deferred tax liabilities recorded as part of our acquisition of 908 Devices GmbH.
Our sales process varies considerably depending upon the type of customer to whom we are selling. Our handheld device orders relate to our MX908 as well as components for the Aerosol and Vapor Chemical Agent Detectors (“AVCAD”) sold to our channel partner. Historically, our handheld devices have been used by state, federal and foreign governments and governmental agencies.
Our sales process varies considerably depending upon the type of customer to whom we are selling. Our handheld device orders relate to our MX908, ThreatID, ProtectIR, and XplorIR, as well as components for the Aerosol and Vapor Chemical Agent Detectors (“AVCAD”) sold to our channel partner.
The straight-line method of expense recognition is applied to all awards with service-only conditions, while the graded vesting method is applied to all grants with both service and performance conditions. Forfeitures are recorded as they occur instead of estimating forfeitures that are expected to occur.
The straight-line method of expense recognition is applied to all awards with service-only conditions, while the graded vesting method is applied to all grants with both service and performance conditions.
We generated revenue of $50.2 million and $46.9 million for the years ended December 31, 2023 and 2022, respectively, and incurred net losses of $36.4 million and $33.6 million for those same years. As of December 31, 2023, we had an accumulated deficit of $170.6 million.
We generated revenue of $59.6 million and $50.2 million for the years ended December 31, 2024 and 2023, respectively, 65 Table of Contents and incurred net losses of $72.2 million and $36.4 million for those same years. As of December 31, 2024, we had an accumulated deficit of $242.8 million.
While it is difficult to predict all of the impacts these global economic events and continued inflationary and interest rate pressures will have on our business and to predict the effects of these factors on our customers’ spending in the near term, we believe the long-term opportunity that we see for our products and services remain unchanged. 67 Table of Contents Additional information regarding these global impacts on our business is set forth within this Part I, Item 1A, Risk Factors of this Annual Report on Form 10-K.
While it is difficult to predict all of the impacts these global economic events and continued inflationary and interest rate pressures will have on our business and to predict the effects of these factors on our customers’ spending in the near term, we believe the long-term opportunity that we see for our products and services remain unchanged.
Contract cost of revenue primarily consists of salaries and other personnel costs, materials, travel and other direct costs related to the revenue recognized in the period.
Cost of contract revenue primarily consists of salaries and other personnel costs, materials, travel and other direct costs related to the contract revenue recognized in the period. ​ Gross profit is calculated as revenue less cost of revenue. Gross profit margin is gross profit expressed as a percentage of revenue.
The majority of contract revenue, for the years ended December 31, 2023 and 2022, was related to activities under our subcontract agreement with a commercial entity that holds a U.S. government prime contract, which was concluded in the second quarter of 2023 and represented a decrease of $1.3 million in contract revenue for the year ended December 31, 2023.
Contract revenue for the year ended December 31, 74 Table of Contents 2023 was related to activities under our subcontract agreement with a commercial entity that holds a U.S. government prime contract, which was concluded in the second quarter of 2023. ​ Service and contract cost of revenue increased by $1.7 million, or 25%, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Net cash provided by changes in our operating assets and liabilities for the year ended December 31, 2022, consisted primarily of a $5.9 million increase from changes in account receivable, a $1.9 million increase from changes in deferred revenue and a $1.2 million increase in right-of-use operating lease assets, partially offset by a $5.5 million decrease from changes in inventory and a $1.3 million decrease from operating lease liabilities.
Net cash used in changes in our operating assets and liabilities for the year ended December 31, 2024, consisted primarily of a $2.9 million decrease from changes in accounts receivable and a $1.7 million decrease from changes in inventory, partially offset by a $2.3 million increase from changes in accounts payable and accrued expenses.
As of December 31, 2023, we had gross federal and state operating loss carryforwards of $108.2 million and $77.4 million, respectively, which may be available to offset future taxable income and begin to expire in 2032 and 2025, respectively, of which $73.8 million of federal gross operating losses do not expire.
As of December 31, 2024, the Company had gross federal and state operating loss carryforwards of $127.9 million and $92.5 million, respectively, which may be available to offset future taxable income and begin to expire in 2032 and 2025, respectively, of which $93.5 million of federal gross operating losses do not expire.
If we do not have or are not able to obtain sufficient funds, we may have to delay development or commercialization of our products. We also may have to reduce marketing, customer support or other resources devoted to our products or cease operations.
If we do not have or are not able to obtain sufficient funds, we may have to delay development or commercialization of our products.
Factors affecting our performance We believe that our financial performance has been and in the foreseeable future will continue to be primarily driven by the following factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations.
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.
During the years ended December 31, 2023 and 2022, our revenue was comprised of revenue from the following sources (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 2022 Product and service revenue: ​ ​ ​ ​ Device sales revenue ​ $ 33,379 ​ $ 28,757 Consumables and service revenue ​ 16,480 ​ 15,718 Total product and service revenue ​ 49,859 ​ 44,475 Contract revenue ​ 370 ​ 2,377 Total revenue ​ $ 50,229 ​ $ 46,852 ​ Our product and service revenue is comprised of sales of our handheld and desktop devices and related consumables and service contracts to end-users in the government, pharmaceuticals/biotechnology and academia markets as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 2022 Government ​ $ 37,862 ​ $ 29,964 Pharmaceutical/Biotechnology ​ ​ 11,340 ​ 14,241 Academia and other ​ ​ 657 ​ 270 Total product and service revenue ​ $ 49,859 ​ $ 44,475 ​ We sell our products primarily in the United States; however, we are continuing to expand our global sales efforts as we see traction in our products and assess global market needs.
During the years ended December 31, 2024 and 2023, our revenue was comprised of revenue from the following sources (in thousands): ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Revenue: ​ ​ Device sales revenue $ 35,991 ​ $ 33,379 Recurring revenue 23,323 ​ 16,480 Contract revenue 317 ​ 370 Total revenue $ 59,631 ​ $ 50,229 ​ 70 Table of Contents Our revenue is comprised of sales of our handheld and desktop devices and related consumables, service contracts and contract revenue to end-users in the government, pharmaceuticals/biotechnology and academia markets as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 Government ​ $ 46,161 ​ $ 38,232 Pharmaceutical/Biotechnology ​ ​ 13,062 ​ 11,340 Academia and other ​ ​ 408 ​ 657 Total revenue ​ $ 59,631 ​ $ 50,229 ​ We sell our products primarily in the United States; however, we are continuing to expand our global sales efforts as we see traction in our products and assess global market needs.
Product gross profit increased by $0.3 million, or 1%, and gross profit margin decreased by 3% for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase in product gross profit was, primarily due to the increased volume in sales.
Product gross profit increased by $0.5 million, or 2%, and gross profit margin decreased by 3% for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Device sales accounted for 67% and 65% of our product and service revenue for the years ended December 31, 2023 and 2022, respectively. Consumables and service revenue accounted for 33% and 35% of our product and service revenue for the years ended December 31, 2023 and 2022, respectively.
Device sales accounted for 61% and 67% of our total revenue for the years ended December 31, 2024 and 2023, respectively. Consumables and contract revenue accounted for 39% and 33% of our total revenue for the years ended December 31, 2024 and 2023, respectively.
Our current device offerings include: ● Handheld devices—MX908 and AVCAD components; and ● Desktop devices—Rebel, ZipChip Interface, Maverick, and Maven and related sampling devices. ​ We sell our devices directly to customers and through channel partners. Each of our device sales drives various streams of recurring revenue comprised of consumable product sales and service revenue.
Our current device offerings include: ​ ● Handheld devices— MX908 ThreatID, ProtectIR, XplorIR and AVCAD components; and ● Desktop devices—Rebel and ZipChip Interface, Maverick, and Maven and related sampling devices. ​ We sell our devices directly to customers and through channel partners.
As a result, the revenue for our handheld devices can vary significantly from period-to-period and has been and may continue to be concentrated in a small number of customers in any given period. Our desktop devices are typically used by the pharmaceutical, biotechnology and academia markets.
Device orders from a 67 Table of Contents government customer are typically large orders and can be impacted by the timing of their capital budgets. As a result, the revenue for our handheld devices can vary significantly from period-to-period and has been and may continue to be concentrated in a small number of customers in any given period.
We aim to mitigate downward pressure on our average selling prices by increasing the value proposition offered by our devices and consumables, primarily by expanding the applications for our devices and increasing the quantity and quality of data that can be obtained using our consumables.
We aim to mitigate downward pressure on our average selling prices by increasing the value proposition offered by our devices and consumables, primarily by expanding the applications for our devices and increasing the quantity and quality of data that can be obtained using our consumables. 68 Table of Contents Product adoption We monitor our customers’ stage of adoption of our products to provide insight into the timing of future potential sales and to help us formulate financial projections.
Our sales process with other institutions can be longer with most customers submitting purchase orders within six to twelve months. Given the variability of our sales cycle, we have in the past experienced, and likely will in the future experience, fluctuations in our desktop device sales on a period-to-period basis.
Given the variability of our sales cycle, we have in the past experienced, and likely will in the future experience, fluctuations in our desktop device sales on a period-to-period basis.
The increase was primarily due to costs incurred in March 2023 related to the write-off of deferred financing costs on our 2022 Revolver, which was in default and later amended in August 2023.
The decrease was primarily due to costs incurred in March 2023 related to the write-off of deferred financing costs on our 2022 Revolver, which was in default and later amended in August 2023. Other income (expense), net Other expense, net for the year ended December 31, 2024 did not change materially from the year ended December 31, 2023.
During the measurement period, which is up to one year from the acquisition date, adjustments to the assets acquired and liabilities assumed may be recorded, with the corresponding offset to goodwill. 84 Table of Contents Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our audited consolidated financial statements appearing in Part II, Item 8 of this Annual Report on Form 10-K.
Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our audited consolidated financial statements appearing in Part II, Item 8 of this Annual Report on Form 10-K.
Other Income (Expense) Interest income Interest income consists of interest earned on our invested cash balances. ​ Interest expense ​ Interest expense consists of interest expense associated with outstanding borrowings under our loan and security agreements and the amortization of deferred financing costs and debt discounts associated with such arrangements.
The goodwill impairments in 2024 resulted from sustained decreases in our publicly quoted share price and market capitalization and as of December 31, 2024 our goodwill was reduced to zero. ​ Other Income (Expense) Interest income Interest income consists of interest earned on our invested cash balances. ​ Interest expense ​ Interest expense consists of interest expense associated with outstanding borrowings under our loan and security agreements and the amortization of deferred financing costs and debt discounts associated with such arrangements.
The term “products” as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” refers to the Maverick, MX908, Rebel, ZipChip Interface, and Maven and related sampling devices.
We believe the insights and answers our devices provide accelerate workflows, reduce costs, and offer transformational opportunities for our end users. The term “products” as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” refers to the MX908, ThreatID, ProtectIR, XplorIR, Rebel, ZipChip Interface, Maverick, Maven and related sampling devices.
Front-line workers rely upon our handheld devices to combat the opioid crisis and detect counterfeit pharmaceuticals and illicit materials in the air or on surfaces at levels 1,000 times below their lethal dose. Our desktop devices are accelerating development and production of biotherapeutics by identifying and quantifying extracellular species in bioprocessing critical to cell health and productivity.
Front-line workers rely upon our handheld devices to combat the opioid crisis and detect counterfeit pharmaceuticals and illicit materials in the air or on surfaces at levels 1,000 times below their lethal dose. First responders also utilize our handheld devices to detect and identify thousands of hazardous bulk materials.
The plan was transferred and the Company was released from the pension obligation in April 2023. Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
During the year ended December 31, 2023, we made no cash contributions to our foreign pension plan, assumed as a part of Trace Analytics GmbH acquisition. The plan was transferred and the Company was released from the pension obligation in April 2023. Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
During the year ended December 31, 2022, net cash used in investing activities was $15.8 million, due primarily to $13.8 million used with the acquisition of Trace Analytics GmbH that occurred in August 2022 and $2.0 million in purchases of other property and equipment.
Investing Activities During the year ended December 31, 2024, net cash used in investing activities was $46.3 million, due to cash paid with the acquisition of RedWave of $44.8 million and $0.6 million in purchases of property and equipment.
Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 ​ ​ (in thousands) Cash used in operating activities ​ $ (25,059) ​ $ (20,930) Cash used in investing activities ​ (26,400) ​ (15,807) Cash (used in) provided by financing activities ​ (15,935) ​ 1,179 Effect of foreign exchange rate changes on cash and cash equivalents ​ ​ 13 ​ ​ 18 Net decrease in cash, cash equivalents and restricted cash ​ $ (67,381) ​ $ (35,540) ​ Operating Activities During the year ended December 31, 2023, net cash used in operating activities was $25.1 million, primarily resulting from our net loss of $36.4 million and net cash used in changes in our operating assets and liabilities of $1.6 million, partially offset by noncash charges of $12.9 million.
We also may have to reduce marketing, customer support or other resources devoted to our products or cease operations. 78 Table of Contents Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 ​ ​ (in thousands) Cash used in operating activities ​ $ (30,247) ​ $ (25,059) Cash used in investing activities ​ (46,321) ​ (26,400) Cash used in financing activities ​ (376) ​ (15,935) Effect of foreign exchange rate changes on cash and cash equivalents ​ ​ (65) ​ ​ 13 Net decrease in cash, cash equivalents and restricted cash ​ $ (77,009) ​ $ (67,381) ​ Operating Activities During the year ended December 31, 2024, net cash used in operating activities was $30.2 million, primarily resulting from our net loss of $72.2 million and net cash used in changes in our operating assets and liabilities of $2.5 million, partially offset by noncash charges of $44.5 million.
Product adoption We monitor our customers’ stage of adoption of our products to provide insight into the timing of future potential sales and to help us formulate financial projections. Typical stages of adoption include testing, trials, pilot and deployment as follows: ● Testing—a customer is actively engaged with internal or external testing of our products.
Typical stages of adoption include testing, trials, pilot and deployment as follows: ● Testing—a customer is actively engaged with internal or external testing of our products.
These extended warranty and service plans generally have fixed fees and terms ranging from one additional year to four additional years. We recognize revenue from the sale of extended warranty and service plans over the respective coverage period, which approximates the service effort provided by us.
These extended warranty and service plans generally have fixed fees and terms ranging from one additional year to four additional years.
The increase was due primarily to a $2.2 million increase in salaries and related costs from growing our headcount in 2023, a $1.0 million increase in stock-based compensation, and a $1.0 million increase in occupancy related expenses, mainly related to our new facility in North Carolina. ​ Selling, general and administrative expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ 2023 2022 Amount % ​ ​ (dollars in thousands) Selling, general and administrative expenses ​ $ 46,176 ​ $ 43,879 ​ $ 2,297 5 % Percentage of total revenue ​ 93 % 94 % ​ ​ 76 Table of Contents Our selling, general and administrative expenses were $46.2 million for the year ended December 31, 2023, an increase of $2.3 million from selling, general and administrative expenses of $43.9 million for the year ended December 31, 2022.
The increase was mainly due to the increased expenses from the RedWave acquisition and was due primarily to a $2.0 million increase in personnel and related costs, a $0.8 million increase in stock-based compensation, a $0.5 million increase in project spend related to materials and consulting, and a $0.2 million increase in depreciation and occupancy related expenses, mainly related to our facilities in Connecticut and North Carolina. ​ Selling, general and administrative expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ 2024 2023 Amount % ​ ​ (dollars in thousands) Selling, general and administrative expenses ​ $ 53,636 ​ $ 46,069 ​ $ 7,567 16 % Percentage of total revenue ​ 90 % 92 % ​ ​ Our selling, general and administrative expenses were $53.6 million for the year ended December 31, 2024, an increase of $7.6 million from selling, general and administrative expenses of $46.1 million for the year ended December 31, 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, for this reporting period and are not required to provide the information required under this item. ​ ​
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, for this reporting period and are not required to provide the information required under this item. ​ ​ 83 Table of Contents ​

Other MASS 10-K year-over-year comparisons