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What changed in Quanterix Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Quanterix Corp's 2022 and 2023 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 2023 report.

+494 added−832 removedSource: 10-K (2024-02-29) vs 10-K (2023-03-06)

Top changes in Quanterix Corp's 2023 10-K

494 paragraphs added · 832 removed · 327 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

133 edited+53 added−260 removed58 unchanged
Biggest changeLicense Agreement with Tufts University In June 2007, as amended in April 2013, August 2017, and September 2020, we entered into a license agreement with Tufts, pursuant to which we obtained an exclusive, worldwide license to research, develop, commercialize, use, make, or have made, import or have imported, distribute or have distributed, offer or have offered, and sell or have sold products and services covered by patent rights to the Simoa bead-based technology owned by Tufts, as well as a non-exclusive license to related know-how.
Biggest changeFor further discussion of the risks relating to our intellectual property, see the section titled “Risk factors—Risks Related to our Intellectual Property.” 12 Table of Contents License Agreement with Tufts University In June 2007, as amended in April 2013, August 2017, and September 2020, we entered into a license agreement with Tufts, pursuant to which we obtained an exclusive, worldwide license to all patent rights to the Simoa bead-based technology owned by Tufts, as well as a non-exclusive license to related know-how.
In addition to these assays we have developed, both of the Simoa platforms allow ease and flexibility in assay design, enabling our customers to develop their own proprietary in-house assays, called homebrew assays, using our homebrew assay kits. These kits include all components required for customers to run tests using their own antibodies.
In addition to the assays we have developed, both of the Simoa platforms allow ease and flexibility in assay design, enabling our customers to develop their own proprietary in-house assays, called homebrew assays, using our homebrew assay kits. These kits include all components required for customers to run tests using their own antibodies.
The Accelerator Laboratory can also be used to screen reagents to identify the optimal assay format or expand prototype efforts for further assay optimization or validation to ultimately deliver the highest level of performance. ● Custom development.
The Accelerator Laboratory can also be used to screen reagents to identify the optimal assay format or expand prototype efforts for further assay optimization or validation to ultimately deliver the highest level of performance. ● Custom Assay Development.
Occupational Safety and Health Administration (OSHA), has established extensive requirements relating specifically to workplace safety for healthcare employers in the U.S. This includes requirements to develop and implement multi-faceted programs to protect workers from exposure to blood-borne pathogens, including preventing or minimizing any exposure through needle stick injuries. OSHA also regulates the use of hazardous chemicals in the workplace.
Occupational Safety and Health Administration (“OSHA”), has established extensive requirements relating specifically to workplace safety for healthcare employers in the U.S. This includes requirements to develop and implement multi-faceted programs to protect workers from exposure to blood-borne pathogens, including preventing or minimizing any exposure through needle stick injuries. OSHA also regulates the use of hazardous chemicals in the workplace.
Unlike ELISA, which runs the enzyme-substrate reaction on all molecules in one well, Simoa bead-based reactions are run on individual molecules in tiny microwells, 40 trillionths of a milliliter that are 2.5 billion times smaller than traditional ELISA wells. Traditional ELISA analog measurements increase in intensity only as the concentration of a sample increases.
However, unlike ELISA, which runs the enzyme-substrate reaction on all molecules in one well, Simoa bead-based reactions are run on individual molecules in tiny microwells, 40 trillionths of a milliliter that are 2.5 billion times smaller than traditional ELISA wells. Traditional ELISA analog measurements increase in intensity only as the concentration of a sample increases.
Unlike ELISA, which runs the enzyme-substrate reaction on all molecules coating the entire bottom surface in one well, Simoa planar array reactions are run on spatially segregated micro-spots within the bottom of microtiter plate wells that concentrate the signal to a surface area 1,000 times smaller than a traditional ELISA.
However, unlike ELISA, which runs the enzyme-substrate reaction on all molecules coating the entire bottom surface in one well, Simoa planar array reactions are run on spatially segregated micro-spots within the bottom of microtiter plate wells that concentrate the signal to a surface area 1,000 times smaller than a traditional ELISA.
General Data Protection Regulation (GDPR) applies uniformly across the E.U. and includes, among other things, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and significant fines for non-compliance. The GDPR also requires companies processing personal data of individuals residing in the E.U. to comply with E.U. privacy and data protection rules.
General Data Protection Regulation (“GDPR”) applies uniformly across the E.U. and includes, among other things, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and significant fines for non-compliance. The GDPR also requires companies processing personal data of individuals residing in the E.U. to comply with E.U. privacy and data protection rules.
We believe that this agreement provides for a sufficient notification period to allow for supply continuity and the identification and tech transfer to a new supplier in the event either party wishes to terminate the relationship. Our cuvettes for our bead-based platform are single sourced through STRATEC Biomedical, and the disposable tips used in our bead-based platform are commercially available.
We believe that this agreement provides for a sufficient notification period to allow for supply continuity and the identification and tech transfer to a new supplier in the event either party wishes to terminate the relationship. Our cuvettes for our bead-based platform are single sourced through STRATEC, and the disposable tips used in our bead-based platform are commercially available.
Rules under HIPAA and HITECH include specific security standards and breach notification requirements. HHS (through the Office of Civil Rights) has direct civil enforcement authority against Covered Entities and Business Associates with regard to both the Security and Privacy Rules. The U.S. Department of Justice has criminal enforcement authority against Covered Entities, Business Associates, and certain other entities and individuals.
Rules under HIPAA and HITECH include specific security standards and breach notification requirements. HHS (through the Office for Civil Rights) has direct civil enforcement authority against Covered Entities and Business Associates with regard to both the Security and Privacy Rules. The U.S. Department of Justice has criminal enforcement authority against Covered Entities, Business Associates, and certain other entities and individuals.
Although most in vitro diagnostic products intended for RUO are not currently required to obtain premarket clearance or approval by the FDA, products labeled as RUO are subject to the FDA’s premarket review requirements if they are determined to be intended for use for clinical rather than research purposes.
Although most in vitro diagnostic products intended for RUO are not currently required to obtain premarket clearance or approval by the FDA, products labeled as RUO are subject to the FDA’s premarket review requirements if they are determined to be intended for use for clinical rather than non-clinical research purposes.
The rights licensed to us are for all fields of use and are sublicensable for a fee. Under the terms of the agreement, as amended, we paid a one-time, non-refundable upfront fee and issued Tufts shares of our common stock.
The rights licensed to us are for all fields of use and are sublicensable. Under the terms of the agreement, as amended, we paid a one-time, non-refundable upfront fee and issued Tufts shares of our stock.
These tests have been traditionally offered by high-complexity laboratories for the last few decades as LDTs, the validation and performance of which are subject to CMS oversight through its enforcement of CLIA.
These tests have been offered by high-complexity laboratories for the last few decades as LDTs, the validation and performance of which are subject to CMS oversight through its enforcement of CLIA.
We make available free of charge through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act).
We make available free of charge through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”).
Intellectual Property Our core Simoa bead-based technology, directed to general methods and devices for single molecule detection, originated at Tufts University (Tufts), in the laboratory of Professor David Walt, who is the founder of Quanterix and a current member of our Board of Directors. Prof.
Our core Simoa bead-based technology, directed to general methods and devices for single molecule detection, originated at Tufts University (Tufts), in the laboratory of Professor David Walt, who is the founder of Quanterix and a current member of our Board of Directors. Prof.
Sales and Marketing We distribute our Simoa instruments and consumables via direct field sales and support organizations located in North America and Europe and through a combination of our own sales force and third-party distributors in additional major markets, including Australia, Brazil, China, Czech Republic, India, Hong Kong, Israel, Japan, New Zealand, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan, and UAE.
Sales and Marketing We distribute our Simoa instruments and consumables via direct field sales and support organizations located in North America and Europe and through a combination of our own sales force and third-party distributors in additional countries, including Australia, Brazil, China, Czech Republic, India, Hong Kong, Israel, Japan, New Zealand, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan, and UAE.
Instruments The HD-X instrument is manufactured by STRATEC Biomedical AG (STRATEC), based in Birkenfeld, Germany, and is manufactured and shipped from their Birkenfeld and Beringen, Switzerland facilities. The SR-X is manufactured by Paramit Corporation (Paramit), based in Morgan Hill, California, and is shipped to our global customers by Paramit.
Instruments The HD-X instrument is manufactured by STRATEC Biomedical AG (“STRATEC”), based in Birkenfeld, Germany, and is manufactured and shipped from their Birkenfeld and Beringen, Switzerland facilities. The SR-X is manufactured by Paramit Corporation (“Paramit”), based in Morgan Hill, California, and is shipped to our global customers by Paramit.
Furthermore, our technology and products are showing promise for non-invasive early disease detection, and in the future, we could experience competition from companies that develop and market imaging and other molecular detection technologies. In addition, a number of other companies and academic groups are in the process of developing novel technologies for the life science research and diagnostic markets.
Furthermore, our technology and products are showing promise for non-invasive early disease detection, and in the future, we could experience competition from companies that develop and market imaging and other molecular detection technologies. In addition, a number of other companies and academic groups are in the process of developing novel technologies for life science research and diagnostics.
By monitoring biomarkers indicative of response, clinicians may be able to adjust dose to reduce side effects or increase efficacy. Infectious Disease The ability to detect infectious disease biomarkers before the onset of an immune response, where a virus is most contagious and multiplying rapidly, is critical for controlling the spread of disease.
By monitoring biomarkers indicative of response, clinicians may be able to adjust dose to reduce side effects or increase efficacy. 8 Table of Contents Infectious Disease The ability to detect infectious disease biomarkers before the onset of an immune response, where a virus is most contagious and multiplying rapidly, is critical for controlling the spread of disease.
IVD tests intended for clinical diagnostic use are regulated by the FDA as medical devices, however, the FDA has traditionally not regulated certain laboratory tests referred to as laboratory developed tests (LDTs) (as discussed further below).
IVD tests intended for clinical diagnostic use are regulated by the FDA as medical devices, however, the FDA has traditionally not regulated certain laboratory tests referred to as laboratory developed tests (“LDTs”) (as discussed further below).
Privacy and Security Rules under HIPAA, as amended, and the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), govern the use, disclosure, and security of protected health information by “Covered Entities,” (which are health care providers that submit electronic claims, health plans, and health care clearinghouses) and by their “Business Associates” (which is anyone that performs a service on behalf of a Covered Entity involving the use or disclosure of protected health information and is not a member of the Covered Entity’s workforce).
Privacy and Security Rules under HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), govern the use, disclosure, and security of protected health information by “Covered Entities,” (which include health care providers that submit electronic claims, health plans, and health care clearinghouses) and by their “Business Associates” (which is anyone that performs a service on behalf of a Covered Entity involving the use or disclosure of protected health information and is not a member of the Covered Entity’s workforce).
The regulations in other jurisdictions vary from those in the U.S. and may be easier or more difficult to satisfy and are subject to change. For example, in the European Union (the E.U.) new regulations recently entered into force that introduce greater regulation of medical devices and IVDs.
The regulations in other jurisdictions vary from those in the U.S. and may be easier or more difficult to satisfy and are subject to change. For example, in the European Union (the “E.U.”) new regulations recently entered into force that introduce greater regulation of medical devices and IVDs.
The new IVD regulation (the IVD Regulation) is significantly different from the European directive for IVD medical devices (the IVD Directive) that it replaces in that it ensures that the new requirements apply uniformly and on the same schedule across the member states, includes a risk-based classification system and increases the requirements for conformity assessment.
The new IVD regulation (the “IVD Regulation”) is significantly different from the European directive for IVD medical devices (the “IVD Directive”) that it replaces in that it ensures that the new requirements apply uniformly and on the same schedule across the member states, includes a risk-based classification system and increases the requirements for conformity assessment.
Many of the companies with which we compete or will compete have substantially greater resources than we have. The life science instrumentation and lab services industries are highly competitive and expected to grow more competitive with the increasing knowledge gained from ongoing research and development.
Many of the companies with which we compete or will compete have substantially greater resources than we have. 11 Table of Contents The life science instrumentation and lab services industries are highly competitive and expected to grow more competitive with the increasing knowledge gained from ongoing research and development.
The FDA defines a medical device in part as an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article which is intended for the diagnosis of disease or other conditions or in the cure, mitigation, treatment, or prevention of disease in man.
The FDA defines a medical device in part as an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article which is intended for the diagnosis of disease or other 13 Table of Contents conditions or in the cure, mitigation, treatment, or prevention of disease in man.
Because the laws and regulations continue to expand, differ from jurisdiction to jurisdiction, and are subject to evolving (and at times inconsistent) governmental interpretation, compliance with these laws and regulations may require significant additional expenditures or changes in products or business that increase competition or reduce revenue.
Because data privacy laws and regulations continue to expand, differ from jurisdiction to jurisdiction, and are subject to evolving (and at times inconsistent) governmental interpretation, compliance with these laws and regulations may require significant additional expenditures or changes in products or business that increase competition or reduce revenue.
The CE registration for the Nf-L ELISA assay kit of our subsidiary Uman was approved in March 2014 under the IVD Directive . Under the IVD Directive, the assay is classified as a general IVD product and required self-certification with no involvement of a notified body/authority.
The CE registration for the NfL ELISA assay kit of our subsidiary Uman was approved in March 2014 under the IVD Directive . Under the IVD Directive, the assay is classified as a general IVD product and required self-certification with no involvement of a notified body/authority.
Environmental Health and Safety Laws 35 Table of Contents We are subject to federal, state, and local laws and regulations related to the protection of the environment, the health and safety of employees and the handling, transportation, storage and disposal of medical specimens, infectious and hazardous waste and radioactive materials. For example, the U.S.
Environmental Health and Safety Laws We are subject to federal, state, and local laws and regulations related to the protection of the environment, the health and safety of employees and the handling, transportation, storage and disposal of medical specimens, infectious and hazardous waste and radioactive materials. For example, the U.S.
Walt and his students pioneered the single molecule array technology, including technologies that enabled the detection of single enzyme labels in arrays of microwells, thereby facilitating the ultra-sensitive detection of proteins, nucleic acids, and cells. We have exclusively licensed from Tufts the relevant patent filings related to these technologies. (See “—License Agreement with Tufts University” below).
Walt and his students pioneered the single molecule array technology, including technologies that enabled the detection of single enzyme labels in arrays of microwells, thereby facilitating ultra-sensitive detection. We have exclusively licensed from Tufts the relevant patent filings related to these technologies. (See “—License Agreement with Tufts University” below).
A clinical laboratory is defined by CLIA as any facility that performs laboratory testing on specimens obtained from humans for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of health of, human beings.
A clinical laboratory is defined by CLIA as any facility that performs examinations of specimens obtained from humans for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of health of, human beings.
We currently offer the following three Simoa instruments, which we believe are among the most sensitive multiplex protein detection platforms commercially available today: ● HD-X : We commercially launched our HD-X instrument in the second half of 2019.
Our Products and Services Instruments We currently offer the following three Simoa instruments, which we believe are among the most sensitive multiplex protein detection platforms commercially available today: ​ HD-X ​ ​ ​ We commercially launched our HD-X instrument in the second half of 2019.
Through Uman we sell proprietary NfL capture and detection antibodies, as well as two NfL ELISA kits for CSF, one of which is CE-certified in Europe and one RUO NfL ELISA kit for serum. Services Through our Accelerator Laboratory, which includes a CLIA-certified laboratory, we provide customers a contract research option.
Through Uman we sell proprietary NfL capture and detection antibodies, as well as two NfL ELISA kits for CSF, one of which is CE-certified in Europe, and one research use only (“RUO”) NfL ELISA kit for serum. Services Through our Accelerator Laboratory, which includes a CLIA-certified laboratory, we provide customers a contract research option.
Prior to the launch of our pTau-181 LDT for clinical use in July 2022, the brain was the only organ in the body for which there was not a blood-based diagnostic test.
Prior to the launch of our p-Tau 181 LDT for clinical use in July 2022, the brain was the only organ in the body for which there was not a blood-based diagnostic test.
However, in the event it becomes necessary to utilize a different contract manufacturer for the HD-X or the SR-X, we would experience additional costs, delays and difficulties in doing so, and our business could be harmed. The SP-X instruments are manufactured, tested, shipped and supported by us from our Billerica, Massachusetts facility.
However, in the event it becomes necessary to utilize a different contract manufacturer for the HD-X or the SR-X, we could experience additional costs, delays and difficulties in doing so, and our business could be harmed. 9 Table of Contents The SP-X instruments are manufactured, tested, shipped and supported by us from our Billerica, Massachusetts facility.
Additionally, we have developed an ultra-sensitive assay for IL-6, which 15 Table of Contents is one of the cytokines commonly measured for monitoring cytokine release syndrome as an adverse effect in immunotherapies. Several studies have shown that our ultrasensitive assays can be valuable tools for monitoring immuno-oncology drugs and protocols.
Additionally, we have developed an ultra-sensitive assay for IL-6, which is one of the cytokines commonly measured for monitoring cytokine release syndrome as an adverse effect in immunotherapies. Several studies have shown that our ultrasensitive assays can be valuable tools for monitoring health-oncology drugs and protocols.
Consequently, other than our two laboratory developed tests intended for clinical testing, our products are labeled and intended “For Research Use Only. Not for Diagnostic Procedures.” The FDA has issued Final Guidance for Industry and Food and Drug Administration Staff on “Distribution of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only” (the RUO/IUO Guidance).
Consequently, other than our three laboratory developed tests intended for clinical testing, our products are labeled and intended “For Research Use Only. Not for Diagnostic Procedures.” The FDA has issued Final Guidance for Industry and Food and Drug Administration Staff on “Distribution of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only” (the “RUO/IUO Guidance”).
Utilizing proprietary or commercially available reagents in combination with our Homebrew Assay Development Kit, we can rapidly develop a prototype assay exhibiting improved sensitivity compared to traditional ELISA.
Utilizing proprietary or commercially available reagents in combination with our homebrew assay kits, we can rapidly develop a prototype assay exhibiting improved sensitivity compared to traditional ELISA.
Our business relies on the secure electronic transmission, storage and hosting of sensitive information, including personal information, protected health information, financial information, intellectual property and other sensitive information related to our customers and workforce.
Our business relies on various safeguards to secure electronic transmission, storage and hosting of sensitive information, including personal information, protected health information, financial information, intellectual property and other sensitive information related to our customers and workforce.
State consumer protection laws may also establish privacy and security standards for use and management of personally identifiable information, including information related to consumers and care providers. Outside the U.S., we are impacted by the privacy and data security requirements at the international, national and regional level, and on an industry specific basis.
State consumer protection laws and consumer health privacy laws also establish privacy and security standards for use and management of personal information, including information related to consumers and care providers. Outside the U.S., we are impacted by the privacy and data security requirements at the international, national and regional level, and on an industry specific basis.
Government Regulation The majority of our products are currently intended for research use only (RUO) applications, although our customers may use our products to develop their own products that are subject to regulation by the FDA or the Center for Medicare & Medicaid Services (CMS).
Government Regulation The majority of our products are currently intended for RUO applications, although our customers may use our products to develop their own products that are subject to regulation by the FDA or the Center for Medicare & Medicaid Services (“CMS”).
In addition, over the past several years, several bills to impose a new FDA regulatory framework with similarities to the current medical device framework for “in vitro clinical tests,” which would include both in vitro diagnostics and LDTs, have been introduced.
In addition, over the past several years, several bills to establish a new FDA regulatory framework with similarities to the current medical device framework for “in vitro clinical tests,” which would include both in vitro diagnostics and LDTs, have been introduced but have not been enacted.
We were also required to reimburse Tufts for all patent prosecution cost incurred prior to the agreement and for all future patent prosecution costs. The term of the license agreement will continue on a country-by-country basis so long as there is a valid claim of a licensed patent in such country.
We were also required to reimburse Tufts for all patent prosecution costs. The term of the license agreement will continue on a country-by-country basis so long as there is a valid claim of a licensed patent in such country.
Europe/Rest of World Government Regulation Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in non-U.S. countries prior to the commencement of clinical trials or marketing of our product for clinical diagnostic use in those countries.
Europe/Rest of World Government Regulation We must obtain the requisite approvals from regulatory authorities in non-U.S. countries prior to the commencement of clinical trials or marketing of our product for clinical diagnostic use in those countries.
Paramit Manufacturing Services Agreement In November 2016, we entered into a Manufacturing Services Agreement (the Paramit Agreement) with Paramit. Under the terms of the Paramit Agreement, we engaged Paramit to produce and test our SR-X instrument on an as-ordered basis. We also engaged Paramit to supply spare parts for the SR-X instrument.
Paramit Manufacturing Services Agreement In November 2016, we entered into a Manufacturing Services Agreement (the “Paramit Agreement”) with Paramit to produce and test our SR-X instrument on an as-ordered basis. We also engaged Paramit to supply spare parts for the SR-X instrument.
In April 2022, the FDA granted our Simoa NfL plasma test Breakthrough Device designation as a prognostic aid in assessing the risk of disease activity in patients diagnosed with relapsing-remitting multiple sclerosis (RRMS).
In April 2022, the FDA granted our Simoa NfL plasma test Breakthrough Device designation as a prognostic aid in assessing the risk of disease activity in patients diagnosed with 7 Table of Contents relapsing-remitting multiple sclerosis (“RRMS”).
Our electronically filed reports and other information that we file with the SEC can be viewed on the SEC’s website at http://www.sec.gov .
Our electronically filed reports and other information that we file with the SEC can be viewed on the SEC’s website at http://www.sec.gov . ​ 18 Table of Contents
Functional testing and verification of concentration are performed at Uman before the material is approved for use in production activities. The antibodies can be aliquoted and sold as single reagents or used for the production of Uman’s NfL ELISA kits. The antibody reagents are labeled and released to market after testing.
Functional testing and verification of concentration are performed at Uman before the material is approved for use in production activities. The antibodies can be aliquoted and sold as single reagents or used for the production of Uman’s NfL ELISA kits.
Our employee handbook and Corporate Code of Conduct and Ethics set forth policies reflecting these values and also provide direction for registering complaints in the event of any violation of our policies. An “open door” policy is maintained at all levels of the organization, and any form of retaliation against an employee is strictly prohibited.
Our employee handbook and Corporate Code of Conduct and Ethics set forth policies that reflect our values and provide guidance for registering complaints in the event of any violation of our policies. An “open door” policy is maintained at all levels of the organization, and any form of retaliation against an employee is strictly prohibited.
We expect we will expand our sales, support, and marketing efforts in the future by expanding our direct footprint in Europe as well as developing a comprehensive distribution and support network in China where significant new market opportunities exist.
We expect we will expand our sales, support, and marketing efforts in the future by expanding our direct footprint in Europe as well as developing a comprehensive distribution and support network in China and other Asia-Pacific region countries where significant new opportunities exist.
The current menu of assay kits for the planar array instrument includes approximately 115 biomarkers ranging from 1-10 analytes per assay in the areas of immunology and oncology research.
The current menu of assay kits for the 4 Table of Contents planar array instrument includes approximately 95 biomarkers ranging from 1-10 analytes per assay in the areas of immunology and oncology research.
Although the RUO/IUO Guidance was not intended as a compliance requirement, we believe that our labeling and promotion of our products, including the custom assay RUO products developed by the Accelerator Laboratory, is consistent with the RUO/IUO Guidance because we have not promoted our products for clinical use in humans.
We believe that our labeling and promotion of our products, including the custom assay RUO products developed by the Accelerator Laboratory, is consistent with the RUO/IUO Guidance because we have not promoted our products for clinical use in humans.
For example, companies such as Bio-Techne, Luminex, MesoScale Discovery, Gyros, O-Link, SEER, Somalogic, MilliporeSigma, Bio-Rad Laboratories, Thermo Fisher Scientific, and others, have products for protein measurements in biofluids that compete in certain segments of the market in which we sell our products.
For example, companies such as Bio-Techne, DiaSorin, MesoScale Discovery, Gyros, SEER, MilliporeSigma, Bio-Rad Laboratories, Thermo Fisher Scientific, Roche, C2N Diagnostics, and others, have products for protein measurements in biofluids that compete in certain segments of the market in which we sell our products.
We also believe that the ultra-sensitive protein detection provided by our Simoa platforms can enable the development of a new category of non-invasive 11 Table of Contents diagnostic tests and tools based on blood, serum and other fluids that have the potential to replace current more invasive, expensive and inconvenient diagnostic methods, including spinal tap, diagnostic imaging and biopsy.
We also believe that the ultra-sensitive protein detection provided by our Simoa platforms can enable the development of a new category of non-invasive diagnostic tests and tools based on blood, serum and other fluids that have the potential to replace current more invasive, expensive and inconvenient diagnostic methods, including spinal tap, diagnostic imaging and biopsy. 3 Table of Contents Based on industry estimates, we believe the proteomics diagnostics TAM is approximately $55 billion.
Our Accelerator Laboratory competes with other research 25 Table of Contents laboratories such as Covance, Q2 Solutions, Rules Based Medicine, Monogram Biosciences, PPD Laboratories, and others, some of whom are customers of ours.
Our Accelerator Laboratory competes with other research laboratories such as LabCorp, Covance, Q2 Solutions, Rules Based Medicine, Monogram Biosciences, PPD Laboratories, and others, some of which are customers of ours.
We believe that our Simoa technology has the potential to have a significant impact in reducing the spread of infectious diseases by making early stage detection more specific and widely available.
We believe that our Simoa technology has the potential to impact the reduction of the spread of infectious diseases by making early stage detection more specific and widely available.
We believe the principal competitive factors in our target markets include: ● sensitivity; ● cost of instruments and consumables; ● assay menu; ● reputation among customers and key opinion leaders; ● innovation in product offerings; ● accuracy and reproducibility of results; and ● customer support infrastructure.
We believe the principal competitive factors for us include: ● sensitivity; ● cost of instruments and consumables; ● reputation among customers and key opinion leaders; ● innovation in product offerings; ● accuracy and reproducibility of results; and ● customer support infrastructure.
The HD-X is an upgraded version of the Simoa HD-1 (our first Simoa instrument, which was launched in January 2014) that was designed to deliver significant productivity and operational efficiency improvements, as well as greater user flexibility.
The HD-X is an upgraded version of the Simoa HD-1 (our first Simoa instrument, which was launched in January 2014) that was designed to deliver significant productivity and operational efficiency improvements, as well as greater user flexibility. The HD-X is based on our bead-based technology, and assays run on the HD-X are fully automated.
We have an obligation to purchase any material or instruments deemed in excess pursuant to the Paramit Agreement. The price is determined according to a mutually agreed-upon pricing formula. The parties agreed to review the pricing methodology yearly or upon a material change in cost. The Paramit Agreement had an initial three-year term with automatic one year extensions.
The price is determined according to a mutually agreed-upon pricing formula. The parties agreed to review the pricing methodology yearly or upon a material change in cost. The Paramit Agreement had an initial three-year term with automatic one year extensions.
When we perform clinical diagnostic testing, we are subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as well as additional federal and state laws that impose a variety of fraud and abuse prohibitions on healthcare providers, including clinical laboratories.
When we perform clinical diagnostic testing, we may be subject to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), depending on the types of transactions we engage in, as well as additional federal and state laws that impose a variety of fraud and abuse prohibitions on healthcare providers, including clinical laboratories.
Item 1. BUSINESS Overview We are a life sciences company that has developed next-generation, ultra-sensitive digital immunoassay platforms that advance life sciences research and diagnostics. Our platforms are based on our proprietary digital “Simoa” detection technology.
ITEM 1. BUSINESS Overview We are a life sciences company that has developed next-generation, ultra-sensitive digital immunoassay platforms that advance life sciences research and diagnostics.
See “—Key Agreements” for a description of our agreements with STRATEC and Paramit. 23 Table of Contents Installation of, and training on, our instruments is provided by our employees in the markets where we conduct direct sales, and by distributors in those markets where we operate with distributors. We believe this manufacturing strategy is efficient and conserves capital.
See “—Key Agreements” for a description of our agreements with STRATEC and Paramit. Installation of, and training on, our instruments is provided by our employees where we conduct direct sales, and by distributors where sales are conducted through distributors. We believe this manufacturing strategy is efficient and conserves capital.
Consumables We assemble our assay kits for our bead-based platform in our Billerica, Massachusetts facility. Reagents for our bead-based assays include all components required to run an enzyme based immunoassay, such as beads, capture and detector reagents, enzyme reagents and enzyme substrate. These reagents are sourced from a limited number of suppliers, including certain single-source suppliers.
Our bead-based assays include all components required to run an enzyme-based immunoassay, such as beads, capture and detector reagents, enzyme reagents and enzyme substrate. These reagents are sourced from a limited number of suppliers, including certain single-source suppliers.
Diagnostics The diagnostic market represents a significant commercial opportunity for our Simoa technology as well. We believe existing biomarker diagnostics can be improved by Simoa’s sensitivity to enable earlier detection of diseases and injuries, and that new diagnostics may be developed using protein biomarkers that are not detectable using conventional, analog immunoassay technologies but are detectable using Simoa technology.
We believe existing biomarker diagnostics can be improved by Simoa’s sensitivity to enable earlier detection of diseases and injuries, and that new diagnostics may be developed using protein biomarkers that are not detectable using conventional, analog immunoassay technologies but are detectable using Simoa technology.
In addition to the regulation of personal health information, a number of states have also adopted laws and regulations that may affect our privacy and data security practices for other kinds of personally identifiable information, such as state laws that govern the use, disclosure and protection of sensitive personal information, such as Social Security numbers, or that are designed to protect credit card account data.
In addition, a number of states have also adopted laws and regulations that may affect our privacy and data security practices for personal information, such as comprehensive state privacy laws that govern the use, disclosure and protection of personal information, such as certain health information, Social Security numbers, and credit card account data.
Clinical Laboratory Improvement Amendments of 1988, Regulation of LDTs and State Regulation We own and operate a CLIA-certified laboratory. The Clinical Laboratory Improvement Amendments of 1988 (CLIA) are federal regulatory standards that apply to all clinical laboratory testing performed on humans in the United States (with the exception of research testing that does not report patient specific results).
The Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) are federal regulatory standards that apply to all clinical laboratory testing performed on humans in the United States (with the exception of research testing that does not report patient specific results).
We believe Simoa technology has the capability to enable the development of a new category of less-invasive diagnostic tests and tools based on blood, serum, saliva and other fluids that could replace current invasive, expensive and inconvenient diagnostic methods, including spinal tap, diagnostic imaging and biopsy.
We believe Simoa technology has the capability to enable the development of a new category of less-invasive diagnostic tests and tools based on blood, serum, saliva and other fluids that could replace current invasive, expensive, and inconvenient diagnostic methods, including spinal tap, diagnostic imaging and biopsy. 2 Table of Contents ● Leverage the growing importance of neurological biomarkers to advance the development of therapeutics and diagnostics for neurodegenerative conditions.
This means that the FDA will regulate the development, testing, manufacturing, marketing, post-market surveillance, distribution, advertising and labeling of our clinical IVD devices (other than our LDTs) and we will be required to register as a medical device manufacturer and list our marketed products.
The FDA will regulate the development, testing, manufacturing, marketing, post-market surveillance, distribution, advertising, and labeling of our clinical IVD devices (other than our LDTs) and we will be required to register as a medical device manufacturer and list our marketed products. Clinical Laboratory Improvement Amendments of 1988, Regulation of LDTs and State Regulation We own and operate a CLIA-certified laboratory.
Our Simoa bead-based platform is highly flexible, designed to enable practical high-sensitivity protein analysis for academic researchers looking at novel proteins all the way through to high throughput analysis performed by large biopharmaceutical organizations.
Our Simoa bead-based platform is highly flexible, designed to enable practical high-sensitivity protein analysis for academic researchers looking at novel proteins all the way through to high throughput analysis performed by large biopharmaceutical organizations. Simoa Planar Array Technology Simoa planar array immunoassays utilize the basic principles of conventional microplate-based sandwich ELISA.
We also believe that our Simoa technology is uniquely positioned for use by pharmaceutical companies in drug trials as biomarkers are being increasingly used as an adjunct to help increase the potential of regulatory approval.
We believe our Simoa technology has the potential to significantly expand the life science research market and is uniquely positioned for use by pharmaceutical companies in drug trials as biomarkers are being increasingly used as an adjunct to help increase the potential of regulatory approval. ● Expand our presence in diagnostics.
The sensitivity of the Simoa technology has enabled researchers to discover that extremely small amounts of critical neural biomarkers diffuse through the blood-brain barrier and are released into the blood during injury and in connection with many neurodegenerative brain diseases.
Accordingly, diagnosis of brain disease and injury has traditionally required either brain imaging or a spinal tap to collect CSF. The sensitivity of Simoa technology has enabled researchers to discover that extremely small amounts of critical neural biomarkers diffuse through the blood brain barrier and are released into the blood during injury and in connection with many neurodegenerative brain diseases.
Research and Development We continually seek to improve our platform and technology to enable more sensitive detection and measurement of biological molecules. This evaluation includes examining new assay formats and instrumentation improvements and upgrades to increase the performance of our Simoa assays and instruments.
We also generate revenues through extended-warranty and service contracts for our installed base of instruments. Research and Development We continue to seek to improve our platform and technology to enable more sensitive detection and measurement of biological molecules. This evaluation includes examining new assay formats and instrumentation improvements and upgrades to increase the performance of our Simoa assays and instruments.
Paramit has no obligation to manufacture our instrument without a purchase order and no obligation to maintain inventory in excess of any open purchase orders or materials in excess of the amount Paramit reasonably determines will be consumed within 90 days or within the lead time of manufacturing our instrument, whichever is greater.
Paramit has no obligation to maintain inventory in excess of any open purchase orders or materials in excess of the amount Paramit reasonably determines will be consumed within 90 days or within the lead time of manufacturing our instrument, whichever is greater. We have an obligation to purchase any material or instruments deemed in excess pursuant to the Paramit Agreement.
To date, the FDA has not issued such guidance, and has indicated that Congress should enact legislation to address improved oversight of diagnostics, 33 Table of Contents including LDTs, rather than the FDA addressing the issue through administrative proposals.
The FDA never finalized such guidance and later indicated that Congress should enact legislation to address improved oversight of diagnostics, including LDTs, rather than the FDA addressing the issue through administrative proposals.
The instrument price stipulated in the STRATEC Supply Agreement was established based on certain specified assumptions and is subject to certain adjustments. The STRATEC Supply Agreement is terminable by either party on 12 months’ notice to the other party.
We are responsible for obtaining any regulatory approval necessary to sell the instruments. The instrument price stipulated in the STRATEC Supply Agreement was established based on certain specified assumptions and is subject to certain adjustments. The STRATEC Supply Agreement is terminable by either party on 12 months’ notice to the other party.
After identifying the optimal assay and conditions, the Accelerator Laboratory can be used to generate qualified bulk reagents or custom assay kits, providing customer access to validated kits for assays not yet commercially available on the Simoa platform. ● LDT Testing. We have recently begun offering LDT testing through our CLIA-certified laboratory.
After identifying the optimal assay and conditions, the Accelerator Laboratory can be used to generate qualified bulk reagents or custom assay kits, providing customer access to validated kits for assays not yet commercially available on the Simoa platform. ● Lucent Diagnostics.
Uman has entered into supply agreements with critical suppliers. All incoming goods are subject to receipt control and any deviations related to quality deficiencies are registered. The kit components include buffers (sample diluents and wash solutions), ELISA 96-well plates coated with a capture antibody, detector antibodies, streptavidine conjugates, substrates (TMB) and stop reagents.
Uman has entered into supply agreements with critical suppliers. The kit components include buffers (sample diluents and wash solutions), ELISA 96-well plates coated with a capture antibody, detector antibodies, streptavidine conjugates, substrates (TMB) and stop reagents.
Work is on-going to prepare a technical file compliant with the IVD Regulation for this product as well. 34 Table of Contents Other Governmental Regulation Privacy and Data Security Laws and Regulations As a business with a global footprint, compliance with evolving regulations and standards in privacy and data security has resulted, and may continue to result, in increased costs, new compliance challenges, and the threat of increased regulatory enforcement activity.
Other Governmental Regulation Privacy and Data Security Laws and Regulations As a business with a global footprint, compliance with evolving regulations and standards in privacy and data security has resulted, and may continue to result, in increased costs, new compliance challenges, and the threat of 15 Table of Contents increased regulatory enforcement activity.
While a number of techniques have been used to attempt to increase sensitivity of detection, we believe all of these approaches have limitations, including: ● dilution of colored or fluorescent product molecules due to large volume of liquid in traditional-sized wells, limiting sensitivity; ● narrow dynamic range (i.e., the range of concentration of proteins being detected), that may require sample dilution, diluting molecules and increasing sample volume requiring additional enzymes to reach detection limit; ● low detection limit of readers restricts sensitivity and ability to detect low abundance proteins, particularly when proteins are at normal physiological levels; and ● limited success in increasing sensitivity of detection due to procedural complexity and length.
Although ELISA is widely used in medical diagnostics and research, it has very significant limitations, including: ● limited sensitivity due to dilution of colored or fluorescent product molecules in the large volume of liquid in traditional-sized wells; ● narrow dynamic range (i.e., the range of concentration of proteins being detected), that may require sample dilution, diluting molecules and increasing sample volume requiring additional enzymes to reach detection limit; ● low detection limit of readers restricts sensitivity and ability to detect low abundance proteins, particularly when proteins are at normal physiological levels; and ● limited success in increasing sensitivity of detection due to procedural complexity and length.
We also believe, however, that the ability of our Simoa technology to detect and quantify low abundance proteins is a distinct advantage in detecting disease earlier in other indications, including oncology, cardiology, infectious disease and inflammation, and there are nearly 700 scientific publications using our Simoa technologies in these non-neurology indications.
Although we believe that our ultra-sensitive Simoa platforms are particularly well suited for neurology indications, we also believe that the ability of our Simoa technology to detect and quantify low abundance proteins is a distinct advantage in detecting disease earlier in other indications, including oncology, infectious disease, inflammation and cardiology, and there are over 800 scientific publications that reference our Simoa technologies in non-neurology indications.
When all requirements are met, a notified body will be contacted, and the certification initiated. The NF-light Serum ELISA is currently sold only as a RUO product (not intended for diagnostic use).
When all requirements are met, a notified body will be contacted, and the certification initiated. The NF-light Serum ELISA is currently sold only as a RUO product (not intended for diagnostic use). Work is on-going to prepare a technical file compliant with the IVD Regulation for this product as well.
Corporate Information We were incorporated under the laws of the State of Delaware in April 2007 under the name “Digital Genomics, Inc.” In August 2007, we changed our name to “Quanterix Corporation.” Our principal executive offices are located at 900 Middlesex Turnpike, Billerica, Massachusetts 01821, and our telephone number is (617) 301-9400.
We provide our employees with a wide range of policies and practices to ensure an environment of physical and psychological safety and well-being. 17 Table of Contents Corporate Information We were incorporated under the laws of the State of Delaware in April 2007 under the name “Digital Genomics, Inc.” In August 2007, we changed our name to “Quanterix Corporation.” Our principal executive offices are located at 900 Middlesex Turnpike, Billerica, Massachusetts 01821, and our telephone number is (617) 301-9400.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe cannot be certain that we will achieve or sustain profitability. ​ ● Our quarterly and annual operating results and cash flows have fluctuated in the past and might continue to fluctuate, which could cause the value of our common stock to fluctuate or decline significantly. ​ ● If our products fail to achieve and sustain sufficient market acceptance, our revenue will be adversely affected. ​ ● Sales of our assays for neurological indications have become increasingly important to our business, and any significant decrease in sales of such assays could have a material adverse effect on our business. ​ 37 Table of Contents ● We may fail to achieve the intended cost savings, revenue improvement, and related benefits from our Restructuring Plan. ​ ● We may not be able to obtain the anticipated product and quality-related benefits from our assay improvement program . ​ ● Failure to remediate a material weakness in, or inherent limitations associated with, our internal accounting controls could result in material misstatements in our financial statements. ​ ● Because a significant portion of our revenue comes from a few large customers, any significant decrease in sales to these customers, due to industry consolidation or otherwise, could harm our operating results. ​ ● Our long-term results depend upon our ability to improve existing products, develop or acquire new technology, and develop, introduce and market new products successfully. ​ ● If defects are discovered in our products, we may incur additional unforeseen costs, our products may be subject to recalls, customers may not purchase our products, our reputation may suffer, and ultimately our sales and operating earnings could be negatively affected. ​ ● We may seek to enter into strategic collaborations and licensing arrangements with third parties, but we may not be successful in establishing or maintaining such arrangements. ​ ● We generate a substantial portion of our revenue internationally and we expect this will continue in the future; as a result, our business is subject to various risks relating to our international activities, which could adversely affect our business, operating results and financial condition. ​ ● We rely on a single contract manufacturer to manufacture and supply our Simoa HD-X instrument and rely on a different single contract manufacturer to manufacture and supply our Simoa SR-X.
Biggest changeWe cannot be certain that we will achieve or sustain profitability. ● Failure to remediate material weaknesses in, or inherent limitations associated with, our internal control over financial reporting could result in material misstatements in our financial statements. ● If our products fail to achieve and sustain sufficient market acceptance, our revenue will be adversely affected. ● Sales of our assays for neurological indications have become increasingly important to our business, and any significant decrease in sales of such assays could have a material adverse effect on our business. ● We may not be successful in penetrating the diagnostics market . ● Because a significant portion of our revenue comes from a few large customers, any significant decrease in sales to these customers, due to industry consolidation or otherwise, could harm our operating results. ● Our long-term results depend upon our ability to improve existing products, develop or acquire new technology, and develop, introduce and market new products successfully. ● Defects or other quality issues in our products could lead to unforeseen costs, product recalls, adverse regulatory actions, negative publicity, and litigation, including product liability claims, any of which could cause customers to decide not to purchase our products, harm our reputation, and negatively affect our sales, operating results and financial condition . ● We generate a substantial portion of our revenue internationally and we expect this will continue in the future; as a result, our business is subject to various risks relating to our international activities, which could adversely affect our business, operating results and financial condition. ● We rely on a single contract manufacturer to manufacture and supply our Simoa HD-X instrument and rely on a different single contract manufacturer to manufacture and supply our Simoa SR-X.
Our failure to continue to comply with applicable foreign regulatory requirements, including those administered by authorities of the European Economic Area (EEA) countries, could result in enforcement actions against us, including refusal, suspension or withdrawal of our CE Certificates of Conformity by our notified body, which could impair our ability to market products in the EEA in the future.
Our failure to continue to comply with applicable foreign regulatory requirements, including those administered by authorities of the European Economic Area (“EEA”) countries, could result in enforcement actions against us, including refusal, suspension or withdrawal of our CE Certificates of Conformity by our notified body, which could impair our ability to market products in the EEA in the future.
The ability of us, our customers or our collaborators to commercialize diagnostic tests based on our technology, including our recently launched LDTs, will depend in part on the extent to which coverage and reimbursement for these tests will be available from government health programs, private health insurers and other third-party payors.
The ability of us, our customers or our collaborators to commercialize diagnostic tests based on our technology, including our recently launched LDTs, will depend in part on the extent to which coverage and reimbursement for these tests will be available from government health care programs, private health insurers and other third-party payors.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the Code), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income. We have already experienced ownership changes as defined under Section 382 of the Code.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income. We have already experienced ownership changes as defined under Section 382 of the Code.
If the FDA determines that the device is not “substantially equivalent” to a predicate device, or if the device is novel, it is automatically classified into Class III, and the device sponsor must then fulfill the much more rigorous premarketing requirements of the PMA approval process, or seek reclassification of the device through the de novo classification process.
If the FDA determines that the device is not “substantially equivalent” to a predicate device, or if the device is novel, it is automatically classified into Class III, and the device sponsor must then fulfill the much more rigorous premarketing requirements of the PMA approval process, or seek classification of the device through the de novo classification process.
In the case of the FDA, the authority to require a recall must be based on an FDA finding that there is a reasonable probability that the device would cause serious injury or death. Manufacturers may, under their own initiative, recall a product if any material deficiency in a device is found.
In the case of the FDA, the authority to require a recall of a medical device must be based on an FDA finding that there is a reasonable probability that the device would cause serious injury or death. Manufacturers may, under their own initiative, recall a product if any material deficiency in a device is found.
In general, the FDA permits commercial distribution of a new medical device only after the device has received clearance under Section 510(k) of the Federal Food, Drug and Cosmetic Act, or is the subject of an approved PMA, unless the device is specifically exempt from those requirements.
In general, the FDA permits commercial distribution of a new medical device only after the device has received clearance under Section 510(k) of the Federal Food, Drug and Cosmetic Act (“FDCA”), or is the subject of an approved PMA, unless the device is specifically exempt from those requirements.
The new requirements include an ISO 13485 certification of the quality system (which Uman received July 2018) and increased technical evidence and follow-up of performance of the specific product (e.g. clinical evidence and post-market activities). The work to evaluate and to meet the new technical requirements is on-going.
The new requirements include an ISO 13485 certification of the quality system (which Uman received in July 2018) and increased technical evidence and follow-up of performance of the specific product (e.g. clinical evidence and post-market activities). The work to evaluate and to meet the new technical requirements is on-going.
Our Simoa bead-based technology is licensed exclusively to us from Tufts University (Tufts). We do not own the patents that underlie this license. Our rights to use this technology and employ the inventions claimed in the licensed patents are subject to the continuation of and compliance with the terms of the license.
Our Simoa bead-based technology is licensed exclusively to us from Tufts University (“Tufts”). We do not own the patents that underlie this license. Our rights to use this technology and employ the inventions claimed in the licensed patents are subject to the continuation of and compliance with the terms of the license.
Failure to comply with these requirements may subject us or a collaborator to a range of enforcement actions, such as warning letters, injunctions, civil monetary penalties, criminal prosecution, recall and/or seizure of products, and revocation of marketing authorization, as well as significant adverse publicity.
Failure to comply with these requirements may subject us to a range of enforcement actions, such as warning letters, injunctions, civil monetary penalties, criminal prosecution, recall and/or seizure of products, and revocation of marketing authorization, as well as significant adverse publicity.
Any such claims made to date are, we believe, without merit. Even if such claims are without merit, we could incur substantial costs and divert the attention of our management and technical personnel in defending ourselves against claims of infringement made by third parties or settling such claims.
We believe any such claims made to date are without merit. However, even if such claims are without merit, we could incur substantial costs and divert the attention of our management and technical personnel in defending ourselves against claims of infringement made by third parties or settling such claims.
Any provision of our restated certificate of incorporation, restated by-laws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.
Any provision of our restated certificate of incorporation, restated by-laws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock ITEM 1B.
FDORA reauthorized the FDA to collect device user fees and contained substantive amendments to the device provisions of the FDCA, including imposing new cybersecurity and clinical trial requirements for devices. Congress has also considered, but not yet passed, legislation to impose a new FDA regulatory framework for IVD devices and LDTs.
FDORA reauthorized the FDA to collect device user fees and contained substantive amendments to the device provisions of the FDCA, including imposing new cybersecurity and clinical trial requirements for devices. Congress has also considered, but not yet passed, legislation to impose a new FDA regulatory framework for all diagnostics, including IVD devices and LDTs.
From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the regulatory approval, manufacture and marketing of regulated products or the reimbursement thereof. For example, in December 2022, Congress enacted the Food and Drug Omnibus Reform Act of 2022 (FDORA).
From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the regulatory approval, manufacture and marketing of regulated products or the reimbursement thereof. For example, in December 2022, Congress enacted the Food and Drug Omnibus Reform Act of 2022 (“FDORA”).
Our ability to monitor our vendors and service providers’ data security is limited, and, in any event, third parties may be able to circumvent those security measures, resulting in the unauthorized access to, misuse, disclosure, loss or destruction of our data, including sensitive and personal information, and disruption of our or third-party service providers’ systems.
Our ability to monitor our vendors and service providers’ data security is limited, and third parties may be able to circumvent any security measures, resulting in the unauthorized access to, misuse, disclosure, loss or destruction of our data, including sensitive and personal information, and disruption of our or third-party service providers’ systems.
In addition, introducing new products could result in a decrease in revenues from our existing products. Consistent with our strategy of offering new products and product refinements, we have invested substantial capital on research and development, and we expect to continue to use a substantial amount of capital for product research and development.
In addition, introduction of new products could result in a decrease in revenues from existing products. Consistent with our strategy of offering new products and product refinements, we have invested substantial capital on research and development, and we expect to continue to use a substantial amount of capital for product research and development.
Our principal obligations under our license agreement with Tufts are as follows: ● making royalty payments; ● making milestone payments; ● paying annual maintenance fees for the underlying patents; ● using commercially reasonable efforts to develop and sell a product using the licensed technology and developing a market for such product; ● paying and/or reimbursing fees related to prosecution, maintenance and enforcement of patent rights; and ● providing certain reports.
Our principal obligations under our license agreement with Tufts are as follows: ● making royalty payments; 34 Table of Contents ● making milestone payments; ● paying annual maintenance fees for the underlying patents; ● using commercially reasonable efforts to develop and sell a product using the licensed technology and developing a market for such product; ● paying and/or reimbursing fees related to prosecution, maintenance and enforcement of patent rights; and ● providing certain reports.
For the years ended December 31, 2022, 2021, and 2020, approximately 38%, 36% and 31%, respectively, of our total revenue was generated from customers located outside of North America. We believe that a substantial percentage of our future revenue will continue to come from international sources as we expand our overseas operations and develop opportunities in additional areas.
For the years ended December 31, 2023, 2022, and 2021, approximately 37%, 38% and 36%, respectively, of our total revenue was generated from customers located outside of North America. We believe that a substantial percentage of our future revenue will continue to come from international sources as we expand our overseas operations and develop opportunities in additional areas.
If we or our collaborators fail to obtain, or experience significant delays in obtaining, regulatory approvals for IVD products, such products may not be able to be launched or successfully commercialized in a timely manner, or at all.
If we fail to obtain, or experience significant delays in obtaining, regulatory approvals for IVD products, such products may not be able to be launched or successfully commercialized in a timely manner, or at all.
For example, the California Consumer Privacy Act (the CCPA), which increases privacy rights for California residents and imposes obligations on companies that process their personal information, came into effect on January 1, 2020.
For example, the California Consumer Privacy Act (the “CCPA”), which increases privacy rights for California residents and imposes obligations on companies that process their personal information, came into effect on January 1, 2020.
Our customers’ evaluation processes often involve a number of factors, many of which are 42 Table of Contents beyond our control. As a result of these factors, the capital investment required to purchase our systems, and the budget cycles of our customers, the time from initial contact with a customer to our receipt of a purchase order can vary significantly.
Our customers’ evaluation processes often involve a number of factors, many of which are beyond our control. As a result of these factors, the capital investment required to purchase our systems, and the budget cycles of our customers, the time from initial contact with a customer to our receipt of a purchase order can vary significantly.
If we or any of our partners were to initiate legal proceedings against a third party to enforce a patent covering one of our products or services, the defendant in such litigation could counterclaim that our patent is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
In addition, if we or any of our partners were to initiate legal proceedings against a third party to enforce a patent covering one of our products or services, the defendant in such litigation could counterclaim that our patent is invalid and/or unenforceable. In patent litigation, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
The market price of shares of our common stock has been and could continue to be subject to wide fluctuations in response to many factors listed in this section, and others beyond our control, including: ● actual or anticipated fluctuations in our financial condition and operating results; ● announcements by us, our partners or our competitors of new products, significant contracts, restructuring plans, strategic partnerships, joint ventures, collaborations, acquisitions, commercial relationships or capital commitments; ● competition from existing products or new products that may emerge; ● failure to meet or exceed financial estimates and projections of the investment community or that we may provide to the public; ● issuance of new or updated research or reports by securities analysts or recommendations with respect to our stock; ● positive or adverse regulatory announcements; ● disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; 62 Table of Contents ● commencement of, or our involvement in, litigation; ● fluctuations in the valuation of companies perceived by investors to be comparable to us; ● conditions in our markets; ● manufacturing disputes or delays; ● any future sales of our common stock or other securities; ● any change to the composition of our board of directors or key personnel; ● general economic conditions and slow or negative growth of our markets; ● share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; ● announcement or expectation of additional debt or equity financing efforts; and ● other factors described in this Risk Factors section of this Annual Report on Form 10-K.
The market price of shares of our common stock has been and could continue to be subject to wide fluctuations in response to many factors listed in this section, and others beyond our control, including: ● actual or anticipated fluctuations in our financial condition and operating results; ● announcements by us, our partners or our competitors of new products, significant contracts, restructuring plans, strategic partnerships, joint ventures, collaborations, acquisitions, commercial relationships or capital commitments; ● competition from existing products or new products that may emerge; ● failure to meet or exceed financial estimates and projections of the investment community or that we may provide to the public; ● issuance of new or updated research or reports by securities analysts or recommendations with respect to our stock; ● positive or adverse regulatory announcements; ● disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; ● commencement of, or our involvement in, litigation; ● fluctuations in the valuation of companies perceived by investors to be comparable to us; ● conditions in our markets; ● manufacturing disputes or delays, product defects or material product quality control issues; ● any future sales of our common stock or other securities; ● any change to the composition of our board of directors or key personnel; ● general economic conditions and slow or negative growth of our markets; ● a material cybersecurity incident; ● share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; ● announcement or expectation of additional debt or equity financing efforts; and ● other factors described in this Risk Factors section of this Annual Report on Form 10-K.
Loss of data or a material delay in our access to our data due to a security breach or other interruption could also prevent us from operating our business. Any disruption or loss of information technology or telecommunications systems on which critical aspects of our operations depend could have an adverse effect on our business.
Loss of data or a material delay in our access to our data due to a security breach 30 Table of Contents or other interruption could also prevent us from operating our business. Any disruption or loss of information technology or telecommunications systems on which critical aspects of our operations depend could have an adverse effect on our business.
In July 2022, we launched an LDT to quantitatively measure pTau-181 in plasma as an aid in diagnostic evaluation of Alzheimer’s disease, and in January 2023, we launched an LDT to quantitatively measure NfL in serum as an aid in the evaluation of individuals for possible neurodegenerative conditions or other causes of neuronal or central nervous system damage.
In July 2022, we launched an LDT to quantitatively measure p-Tau 181 in plasma as an aid in diagnostic evaluation of Alzheimer’s disease, and in January 2023, we launched an LDT to quantitatively measure NfL in serum as an aid in the evaluation of individuals for possible neurodegenerative conditions or other causes of neuronal or central nervous system damage.
Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. 60 Table of Contents Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.
Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.
Moreover, CLIA inspectors may make unannounced inspections of these laboratories. If we were to lose our CLIA certification or any required state licenses, whether as a result of a revocation, suspension or limitation, it could have a material adverse effect on our business.
Moreover, CLIA inspectors may make unannounced 29 Table of Contents inspections of these laboratories. If we were to lose our CLIA certification or any required state licenses, whether as a result of a revocation, suspension or limitation, it could have a material adverse effect on our business.
For 56 Table of Contents these and other reasons, our intellectual property may not provide us with any competitive advantage. To the extent our intellectual property offers inadequate protection, or is found to be invalid or unenforceable, we would be exposed to a greater risk of direct competition.
For these and other reasons, our intellectual property may not provide us with any competitive advantage. To the extent our intellectual property offers inadequate protection, or is found to be invalid or unenforceable, we would be exposed to a greater risk of direct competition.
Continued market acceptance of our Simoa technology platform and products and other platforms and products we may develop in the future will depend on many factors, including our ability to convince potential customers that our technology is an attractive alternative to other available technologies.
Continued market acceptance of our Simoa 21 Table of Contents technology platform and products and other platforms and products we may develop in the future will depend on many factors, including our ability to convince potential customers that our technology is an attractive alternative to other available technologies.
Our 45 Table of Contents reliance on independent distributors to sell our products internationally demands a high degree of vigilance in maintaining our policy against participation in corrupt activity, because there are circumstances under which we could be held responsible for their actions.
Our reliance on independent distributors to sell our products internationally demands a high degree of vigilance in maintaining our policy against participation in corrupt activity, because there are circumstances under which we could be held responsible for their actions.
If we are unable to maintain effective internal control over financial reporting, or after having remediated such material weaknesses, fail to maintain the effectiveness of our internal control over financial reporting or our disclosure controls and procedures, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline and we could be subject to regulatory scrutiny, civil or criminal penalties or litigation.
If after having remediated the remaining material weaknesses we are unable to maintain the effectiveness of our internal control over financial reporting or our disclosure controls and procedures, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to regulatory scrutiny, civil or criminal penalties or litigation.
LDTs are a subset of IVD tests that are offered as services by high complexity clinical laboratories and designed, manufactured and used within a single laboratory.
LDTs are a subset of IVD tests that are offered as services by CLIA-certified high complexity clinical laboratories and designed, manufactured and used within a single laboratory.
Although we take measures to protect sensitive information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses, breaches, interruptions due to employee error, malfeasance, faulty password management, lapses in compliance with privacy and security mandates, or other 53 Table of Contents disruptions.
Although we take measures to protect sensitive information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses, breaches, interruptions due to employee error, malfeasance, faulty password management, lapses in compliance with privacy and security mandates, or other disruptions.
Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, no security measure is infallible and there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions will not be successful or damaging.
Engaging in international business involves a number of difficulties and risks, including: ● required compliance with existing and changing U.S. or foreign regulatory requirements and laws; ● difficulties and costs of staffing and managing foreign operations; ● a shortage of high-quality salespeople and distributors; ● pricing pressure that we may experience internationally; 44 Table of Contents ● difficulties in maintaining consistency with our internal guidelines; ● difficulties in enforcing our intellectual property rights and in defending against third-party threats and intellectual property enforcement actions against us or any of our distributors, suppliers or collaborators; ● reduced or varied protection for intellectual property rights in some countries; ● required compliance with anti-bribery laws, such as the U.S.
Engaging in international business involves a number of difficulties and risks, including: ● difficulties and costs of staffing and managing foreign operations; ● required compliance with existing and changing U.S. or foreign regulatory requirements and laws; ● a shortage of high-quality salespeople and distributors; ● pricing pressure that we may experience internationally; ● difficulties in enforcing our intellectual property rights and in defending against third-party threats and intellectual property enforcement actions against us or any of our distributors, suppliers or collaborators; ● reduced or varied protection for intellectual property rights in some countries; ● required compliance with anti-bribery laws, such as the U.S.
If we were to lose suppliers or were unable to secure required rights for materials from suppliers, there can be no assurance that we will be able to identify or enter into 46 Table of Contents agreements with alternative suppliers on a timely basis and on acceptable terms, if at all.
If we were to lose suppliers or were unable to secure required rights for materials from suppliers, there can be no assurance that we will be able to identify or enter into agreements with alternative suppliers on a timely basis and on acceptable terms, if at all.
The GDPR, which is wide-ranging in scope, imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification and the use of third-party processors in connection with the processing of the personal data.
The GDPR, which governs the collection and use of personal data in the E.U. and is wide-ranging in scope, imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification and the use of third-party processors in connection with the processing of the personal data.
There can be no assurance that we will not conclude in the future that we have not effectively remediated these material weaknesses and they continue to exist or that we will not identify any significant deficiencies or other material weaknesses that will impair our ability to report our financial condition and results of operations accurately or on a timely basis.
There can be no assurance that we will conclude in the future that we have effectively remediated the remaining material weaknesses or that we will not identify any significant deficiencies or other material weaknesses that will impair our ability to report our financial condition and results of operations accurately or on a timely basis.
We have established exclusive distribution agreements for our Simoa instruments and related consumable products within certain foreign countries, including Australia, Brazil, China, the Czech Republic, India, Hong Kong, Israel, Japan, New Zealand, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan and the UAE.
We have established distribution agreements for our Simoa instruments and related consumable products with distributors in certain foreign countries, including Australia, Brazil, China, the Czech Republic, India, Hong Kong, Israel, Japan, New Zealand, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan and the UAE.
If a third party claims that we or any of our licensors, customers or collaboration partners infringe upon a third party’s intellectual property rights, we may have to: ● seek to obtain licenses that may not be available on commercially reasonable terms, if at all; ● abandon any infringing product or redesign our products or processes to avoid infringement; ● pay substantial damages including, in an exceptional case, treble damages and attorneys’ fees, which we may have to pay if a court decides that the product or proprietary technology at issue infringes upon or violates the third-party’s rights; ● pay substantial royalties or fees or grant cross-licenses to our technology; or ● defend litigation or administrative proceedings that may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources. 59 Table of Contents We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful.
If a third party claims that we or any of our licensors, customers or collaboration partners infringe upon a third party’s intellectual property rights, we may have to: ● seek to obtain licenses that may not be available on commercially reasonable terms, if at all; ● abandon any infringing product or redesign our products or processes to avoid infringement; ● pay substantial damages, including, in exceptional cases, treble damages and attorneys’ fees; ● pay substantial royalties or fees or grant cross-licenses to our technology; or ● defend litigation or administrative proceedings that may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources. 35 Table of Contents We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful.
The CE registration for Uman’s Nf-L ELISA assay kit for cerebral spinal fluid was approved in March 2014 under the IVD Directive . Under the IVD Directive the assay is classified as a general IVD product, class I and required self-certification with no involvement of a notified body/authority.
The CE registration for Uman’s NfL ELISA assay kit for cerebral spinal fluid was approved in March 2014 under the IVD Directive . Under the IVD Directive the assay is classified as a general IVD product, and required self-certification with no involvement of a notified body/authority.
Foreign Corrupt Practices Act, data privacy requirements, such as the GDPR, labor laws and anti-competition regulations; ● export or import restrictions and supply chain disruptions; ● laws and business practices favoring local companies; ● longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; ● the imposition of restrictions on the activities of foreign agents, representatives and distributors; ● foreign currency exchange rate fluctuations; ● the imposition of U.S. or international sanctions against a country, company, person or entity with whom we do business that would restrict or prohibit continued business with the sanctioned country, company, person or entity; ● the impact of political and economic instability and conflict, which could lead to uncertainty and instability in global financial markets; ● scrutiny of foreign tax authorities which could result in significant fines, penalties and additional taxes being imposed on us; ● the imposition of new trade restrictions; and ● potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements and other trade barriers.
Foreign Corrupt Practices Act, data privacy requirements, such as the GDPR, labor laws and anti-competition regulations; ● export or import restrictions and supply chain disruptions; ● laws and business practices favoring local companies; ● longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; ● the imposition of restrictions on the activities of foreign agents, representatives and distributors; ● foreign currency exchange rate fluctuations; ● the imposition of U.S. or international sanctions against a country, company, person or entity with whom we do business that would restrict or prohibit continued business with the sanctioned country, company, person or entity; ● the impact of political and economic instability and conflict, which could lead to uncertainty and instability in global financial markets; ● scrutiny of foreign tax authorities which could result in significant fines, penalties and additional taxes being imposed on us; ● the imposition of new trade restrictions; and ● potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements and other trade barriers. 24 Table of Contents If we are unable to manage these risks effectively, our business, operating results and financial condition will suffer.
Our ability to successfully integrate any business, product or technology we acquire depends on a number of factors, including, but not limited to, our ability to: ● minimize the disruption and distraction of our management and other employees, including our sales force, in connection with the integration of any acquired business, product or technology; ● minimize disruption in relationships with customers, distributors or suppliers as a result of such a transaction; ● avoid acquisition of unanticipated liabilities related to acquired companies; ● maintain and increase sales of our existing products; ● establish or manage the transition of the manufacture and supply of any acquired product; ● identify and add the necessary sales, marketing, manufacturing, regulatory and other related personnel, capabilities and infrastructure that are required to successfully integrate any acquired business, product or technology; ● manage the transition and migration of acquired personnel and all commercial, financial, legal, regulatory and other pertinent information relating to any acquired business, product or technology; ● comply with legal, regulatory and contractual requirements applicable to any acquired business, product or technology; and ● maintain and extend intellectual property protection for any acquired product or technology.
Our ability to successfully integrate any business, product or technology we acquire depends on a number of factors, including, but not limited to, our ability to: ● minimize the disruption and distraction of our management and other employees in connection with the integration of any acquired business, product or technology; ● avoid acquisition of unanticipated liabilities related to acquired companies; ● maintain and increase sales of our existing products; 26 Table of Contents ● establish or manage the transition of the manufacture and supply of any acquired product; ● identify and add the necessary sales, marketing, manufacturing, regulatory and other related personnel, capabilities and infrastructure that are required to successfully integrate any acquired business, product or technology; ● manage the transition and migration of acquired personnel and all commercial, financial, legal, regulatory and other pertinent information relating to any acquired business, product or technology; ● comply with legal, regulatory and contractual requirements applicable to any acquired business, product or technology; and ● maintain and extend intellectual property protection for any acquired product or technology.
Our ability to use net operating losses to offset future income may be subject to certain limitations. As of December 31, 2022, we had federal net operating loss (NOLs) carryforwards to offset future taxable income of approximately $309.7 million, which begin to expire in 2026. A lack of future taxable income would adversely affect our ability to utilize these NOLs.
Our ability to use net operating losses to offset future income may be subject to certain limitations. As of December 31, 2023, we had federal net operating loss (“NOLs”) carryforwards to offset future taxable income of approximately $313.4 million, which begin to expire in 2026. A lack of future taxable income would adversely affect our ability to utilize these NOLs.
Any such regulatory process would be expensive, time-consuming and uncertain both in timing and in outcome. ​ ● Cybersecurity breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation. ​ 38 Table of Contents ● If we do not comply with governmental regulations applicable to our CLIA-certified laboratory, we may not be able to continue our operations or continue offering our LDTs. ​ ● If we are unable to protect our intellectual property, our ability to maintain any technological or competitive advantage over our competitors and potential competitors may be reduced and our business may be harmed. ​ ● If we or any of our partners are sued for infringing intellectual property rights of third parties, the resulting litigation would be costly and time-consuming, and an unfavorable outcome in that litigation could have a material adverse effect on our business. ​ ● We may not be able to protect our intellectual property rights throughout the world, which could have a materially adverse effect on our business . ​ ● Our stock price may fluctuate significantly. ​ Risks Related to Our Financial Condition We have incurred annual losses since we were formed and expect to incur losses in the future.
Any such regulatory process would be expensive, time-consuming and uncertain both in timing and in outcome. ● If we do not comply with governmental regulations applicable to our CLIA-certified laboratory, we may not be able to continue our operations or continue offering our LDTs. ● Cybersecurity breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation. ● If we are unable to protect our intellectual property, our ability to maintain any technological or competitive advantage over our competitors and potential competitors may be reduced and our business may be harmed. ● If we or any of our partners are sued for infringing intellectual property rights of third parties, the resulting litigation would be costly and time-consuming, and an unfavorable outcome in that litigation could have a material adverse effect on our business. ● Our stock price may fluctuate significantly.
One customer accounted for 13% of our total revenue for the year ended December 31, 2022, and several other customers accounted for a significant portion of our total revenue. The loss of a significant amount of business from one or more of our major customers would have a material adverse effect on our business.
One customer accounted for greater than 10% of our total revenue for the year ended December 31, 2023, and several other customers accounted for a significant portion of our total revenue. The loss of a significant amount of business from one or more of our major customers would have a material adverse effect on our business.
The FDA will clear marketing of a lower risk medical device through the 510(k) process if the manufacturer demonstrates that the new product is substantially equivalent to other pre-amendment, 510(k)-exempt, 510(k) cleared products, or PMA-approved products that have subsequently been down-classified.
The FDA will clear marketing of a lower risk medical device through the 510(k) process if the manufacturer demonstrates that the new product is substantially equivalent to a legally marketed predicate device, which can include pre-amendment, 510(k)-exempt, 510(k) cleared products, or PMA-approved products that have subsequently been down-classified.
There can be no assurance that we will continue to derive meaningful revenues from the sale of our neurological products, from services related to neurodegenerative conditions or from sales of instruments driven by customers desiring access to our technology for work relating to neurological conditions.
Sales from neurological-related biomarkers have become an increasingly important part of our business. There can be no assurance that we will continue to derive meaningful revenues from the sale of our neurological products, from services related to neurodegenerative conditions or from sales of instruments driven by customers desiring access to our technology for work relating to neurological conditions.
Since our contract with STRATEC does not commit them to supply quantities beyond the amounts included in our forecasts and our contract with Paramit does not commit them to carry inventory or make available any particular quantities, these contract manufacturers may give other customers’ needs higher priority than ours, and we may not be able to obtain adequate supplies in a timely manner or on commercially reasonable terms.
Since our contract with STRATEC does not commit them to supply quantities beyond the amounts included in our forecasts and our contract with Paramit does not commit them to carry inventory or make available any particular quantities, we may not be able to obtain adequate supplies in a timely manner or on commercially reasonable terms.
We depend on information technology and telecommunications systems to operate our business. Our enterprise software systems affect a broad range of business processes and functional areas, including, for example, systems handling human resources, accounting, manufacturing, inventory control, financial controls and reporting, sales administration, and other infrastructure operations.
Our enterprise software systems affect a broad range of business processes and functional areas, including, for example, systems handling human resources, accounting, manufacturing, inventory control, financial controls and reporting, sales administration, and other infrastructure operations.
Given the length and uncertainty of our sales cycle, we have in the past experienced, and expect in the future to experience, fluctuations in our sales on a period-to-period basis.
In 2023, these factors resulted in softness in sales of our instruments. Given the length and uncertainty of our sales cycle, we have in the past experienced, and expect in the future to experience, fluctuations in our sales on a period-to-period basis.
If we or our collaborators are required to obtain a PMA or 510(k) clearance for products based on our technology, we or they would be subject to a substantial number of additional requirements for medical devices, including establishment registration, device listing, QSRs —which cover the design, testing, production, control, quality assurance, labeling, packaging, servicing, sterilization (if required), and storage and shipping of medical devices (among other activities) —product labeling, advertising, recordkeeping, post-market surveillance, post-approval studies, adverse event reporting, and correction and removal (recall) regulations.
If any of our products are subject to medical device regulation, we would be subject to a substantial number of additional requirements for medical devices, including establishment registration, device listing, QSRs —which cover the design, testing, production, control, quality assurance, labeling, packaging, servicing, sterilization (if required), and storage and shipping of medical devices (among other activities) —product labeling, advertising, recordkeeping, 27 Table of Contents post-market surveillance, post-approval studies, adverse event reporting, and correction and removal (recall) regulations.
One or more of the products we or a collaborator may develop using our technology may also require clinical trials in order to generate the data required for a PMA, de novo classification request or 510(k) premarket notification. Complying with these requirements may be time-consuming and 49 Table of Contents expensive.
One or more of the products we may develop using our technology may also require clinical trials in order to generate the data required for a PMA, de novo classification request or 510(k) premarket notification. Complying with these requirements may be time-consuming and expensive. We may be required to expend significant resources to ensure ongoing compliance with the FDA regulations.
If we are unable to perform the above functions or otherwise effectively integrate any acquired businesses, products or technologies, our business, financial condition and operating results will suffer.
If we are unable to perform the above functions or otherwise effectively integrate any acquired businesses, products or technologies, our business, financial condition and operating results will suffer. Also, the anticipated benefit of any acquisition may not materialize.
The time and effort required to qualify a new supplier and ensure that the new materials provide the same or better quality results could result in significant additional costs. Any such interruption could significantly affect our business, financial condition, results of operations and reputation.
The time and effort required to qualify a new supplier and ensure that the new materials provide the same or better quality results could result in significant additional costs. Any such interruption could significantly affect our business, financial condition, results of operations and reputation. 25 Table of Contents We could be adversely affected by violations of the U.S.
A PMA application must be supported by extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the device for its intended use.
The PMA process is more costly, lengthy and uncertain than the 510(k) clearance process. A PMA application must be supported by extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the device for its intended use.
Such a loss of patent protection would have a material adverse impact on our business. We may not be able to protect our intellectual property rights throughout the world, which could have a material adverse effect on our business.
We may not be able to protect our intellectual property rights throughout the world, which could have a material adverse effect on our business.
Our restated certificate of incorporation, restated by-laws and Delaware law contain provisions which could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors.
Anti-takeover provisions contained in our restated certificate of incorporation and restated by-laws, as well as provisions of Delaware law, could impair a takeover attempt. Our restated certificate of incorporation, restated by-laws and Delaware law contain provisions which could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directors.
The FDA maintains that LDTs are medical devices and has for the most part exercised enforcement discretion for most LDTs, meaning that the FDA has not required LDTs to obtain premarket approval or clearance or comply with post-market medical device requirements.
The FDA maintains that LDTs are medical devices and has, for the most part, exercised enforcement discretion for most LDTs, meaning that the FDA has not required LDTs to obtain premarket approval or clearance or comply with post-market medical device requirements. A significant change in the way that the FDA regulates LDTs could affect our business.
Among other things, the CCPA requires covered companies to provide new disclosures to California consumers and provide such consumers new data protection and privacy rights, including the ability to opt-out of certain sales of personal information.
Among other things, the CCPA requires covered companies to provide disclosures to California consumers regarding the processing of their personal data, as well as data protection and privacy rights, including the ability to opt-out of certain sales or sharing of personal information.
Furthermore, regulations promulgated pursuant to HIPAA establish privacy and security standards that limit the use and disclosure of individually identifiable health information (known as “protected health information”) and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and availability of electronic protected health information.
These and future laws and regulations may increase our compliance costs and potential liability. 32 Table of Contents Furthermore, regulations promulgated pursuant to HIPAA establish privacy and security standards that limit the use and disclosure of individually identifiable health information (known as “protected health information”) and require the implementation of administrative, physical, and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and availability of electronic protected health information.
Failure to comply with federal or state regulations or changes in those regulatory requirements could result in a substantial curtailment or even prohibition of the operations of our laboratory and could have an adverse effect on our business.
Failure to comply with federal or state regulations or changes in those regulatory requirements could result in a substantial curtailment or even prohibition of the operations of our laboratory and could have an adverse effect on our business. To maintain CLIA certification, laboratories are subject to survey and inspection every two years.
Foreign Corrupt Practices Act (the FCPA), which prohibits companies and individuals from corruptly making payments, directly or indirectly through third parties, to non-U.S. government officials for the purpose of obtaining or retaining business or securing any other improper advantage.
Foreign Corrupt Practices Act and other worldwide anti-bribery laws by us or our agents. We are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”), which prohibits companies and individuals from corruptly making payments, directly or indirectly through third parties, to non-U.S. government officials for the purpose of obtaining or retaining business or securing any other improper advantage.
Other than our LDTs, such IVD products, once developed and offered, will be subject to regulation by the FDA, or comparable international agencies, as medical devices including requirements for regulatory clearance or approval of such products before they can be marketed.
IVD products are subject to regulation by the FDA, or comparable international agencies, as medical devices including requirements for regulatory clearance or approval of such products before they can be marketed.
Competitors may infringe our patents or the patents that we license. In the event of infringement or unauthorized use, we may file one or more infringement lawsuits, which can be expensive and time-consuming.
Competitors may infringe our patents or the patents that we license. In the event of infringement or unauthorized use, we may file one or more infringement lawsuits. Patent litigation can be very costly and time-consuming, and the outcome is uncertain.
If either of these manufacturers should fail to perform, or not perform satisfactorily, our ability to supply these instruments would be negatively and adversely affected. ​ ● We rely on a limited number of suppliers or, in some cases, one supplier, for some of our materials and components used in our consumable products and our SP-X instrument, and we may not be able to find replacements or immediately transition to alternative suppliers if any of these suppliers fail to perform, which could have a material adverse effect on our business, financial condition, results of operations and reputation. ​ ● Epidemic diseases, such as COVID-19 and its variants, and other events could negatively affect various aspects of our business, make it more difficult to meet our obligations to our customers and/or result in reduced demand from our customers, each of which could have a material adverse effect on our business, financial condition, results of operations or cash flows. ​ ● If the FDA determines that our products are subject to regulation as medical devices or if we seek to market our products for clinical diagnostic or health screening use, we will be required to obtain regulatory clearance(s) or approval(s) and may be required to cease or limit sales of our then-marketed products, which could materially and adversely affect our business, financial condition and results of operations.
If either of these manufacturers should fail to perform, or not perform satisfactorily, our ability to supply these instruments would be negatively and adversely affected. ● We rely on a limited number of suppliers or, in some cases, one supplier, for some of our materials and components used in our consumable products and our SP-X instrument, and we may not be able to find replacements or immediately transition to alternative suppliers if any of these suppliers fail to perform, which could have a material adverse effect on our business, financial condition, results of operations and reputation. ● We face significant competition in the life sciences research and diagnostic markets. ● If the FDA determines that our products are subject to regulation as medical devices, if the FDA modifies its regulations to require that our LDTs are subject to regulation as devices, or if we seek to market our products for clinical diagnostic or health screening use, we will be required to obtain regulatory clearance(s) or approval(s) and may be required to cease or limit sales of our then-marketed 19 Table of Contents products, which could materially and adversely affect our business, financial condition and results of operations.
Continued or future failure to maintain effective internal control over financial reporting could also result in financial statements that do not accurately reflect our financial condition or results of operations, may result in material misstatements in our financial statements and may also restrict our future access to the capital markets. 40 Table of Contents We are currently implementing a plan intended to remediate the material weaknesses described above.
Continued or future failure to maintain effective internal control over financial reporting could also result in financial statements that do not accurately reflect our financial condition or results of operations, may result in material misstatements in our financial statements and may also restrict our future access to the capital markets.
As a result, capital appreciation, if any, of our common stock will be the sole source of gain for the shareholders in the foreseeable future.
As a result, capital appreciation, if any, of our common stock will be the sole source of gain for the shareholders in the foreseeable future. Consequently, in the foreseeable future, shareholders will likely only experience a gain from an investment in our common stock if the price of our common stock increases.
If we are unable to continue to motivate leading researchers to use Simoa technology or other technologies we may develop, or if such researchers are unable to achieve or unwilling to publish or present significant experimental results using our systems, acceptance and adoption of our systems may be slowed and our ability to retain and grow our customer base and increase our revenue would be adversely affected.
If we are unable to continue to motivate customers to use Simoa technology or other technologies we may develop, adoption of our technology may be slowed and our ability to retain and grow our customer base and increase our revenue would be adversely affected.
If we do not develop new products and product enhancements based on technological innovation on a timely basis, our products may become obsolete over time and our revenues, cash flow, profitability and competitive position will suffer.
Our research and development initiatives can be costly and time-consuming, and they may fail to achieve the intended benefits. If we do not develop new products and product enhancements based on technological innovation on a timely basis, our products may become obsolete over time and our revenues, cash flow, profitability and competitive position will suffer.
Any violations of these laws, or allegations of such violations, could disrupt our operations, involve significant management distraction, involve significant costs and expenses, including legal fees, and could result in a material adverse effect on our business, prospects, financial condition, or results of operations. We could also incur severe penalties, including criminal and civil penalties, disgorgement and other remedial measures.
These laws are complex and far-reaching in nature, and any violations of these laws, or allegations of such violations, could disrupt our operations, involve significant management distraction, involve significant costs and expenses, including legal fees, and could result in a material adverse effect on our business, prospects, financial condition, or results of operations.
In such an event, we could be liable for any damages that result, which could adversely affect our business. Risks Related to Intellectual Property If we are unable to protect our intellectual property, our ability to maintain any technological or competitive advantage over our competitors and potential competitors may be reduced, and our business may be harmed.
Risks Related to Intellectual Property If we are unable to protect our intellectual property, our ability to maintain any technological or competitive advantage over our competitors and potential competitors may be reduced, and our business may be harmed.
In addition, we take steps to protect our intellectual property and proprietary technology by entering into confidentiality agreements and intellectual property assignment agreements with our employees, consultants, corporate partners and, when needed, our advisors.
Despite these measures, any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated. In addition, we take steps to protect our intellectual property and proprietary technology by entering into confidentiality agreements and intellectual property assignment agreements with our employees, consultants, corporate partners and, when needed, our advisors.
A material liability claim, recall or other occurrence that harms our reputation or decreases market acceptance of our products could harm our business and operating results. 43 Table of Contents Use of our products or services by us or a customer for diagnostic purposes could result in a product liability claim alleging that one of our products contained a design or manufacturing defect that resulted in the failure to adequately perform, leading to death or injury.
Use of our products or services by us or a customer for diagnostic purposes could result in a product liability claim alleging that one of our products contained a design or manufacturing defect that resulted in the failure to adequately perform, leading to death or injury.
For example, some of the issued U.S. patents we own and all of the intellectual property rights licensed to us under our license agreement with Tufts have been generated using U.S. government funds.
For example, some of the issued U.S. patents we own and all of the intellectual property rights licensed to us under our license agreement with Tufts have been generated using U.S. government funds. As a result, the U.S. government has certain rights to intellectual property embodied in our current or future products pursuant to the Bayh-Dole Act of 1980.
In November 2020, California also passed the California Privacy Rights Act (the CPRA), which significantly expands the CCPA, including by introducing additional obligations such as data minimization and storage limitations and granting additional rights to consumers. In 2021, Virginia and Colorado both passed comprehensive state data privacy laws.
In November 2020, California also passed the California Privacy Rights Act (the “CPRA”), which became effective on January 1, 2023 and significantly expands the CCPA, including by introducing additional obligations such as data minimization and storage limitations and granting additional rights to consumers.
Our quarterly and annual operating results and cash flows have fluctuated in the past and might continue to fluctuate, which could cause the value of our common stock to fluctuate or decline significantly. Numerous factors, many of which are outside of our control, may cause or contribute to significant fluctuations in our quarterly and annual operating results.
Risks Related to Our Financial Condition Our quarterly and annual operating results and cash flows have fluctuated in the past and might continue to fluctuate, which could cause the value of our common stock to fluctuate or decline significantly.
We use third-party software that may be difficult to replace or may cause errors or failures of our products that could lead to lost customers or harm to our reputation. We use software licensed from third parties in our products. In the future, this software may not be available to us on commercially reasonable terms, or at all.
We use software licensed from third parties in our products. In the future, this software may not be available to us on commercially reasonable terms, or at all.
Our Simoa products are complex and may contain undetected errors or defects, especially when first introduced or as new versions or new products are released. New products or enhancements may contain undetected errors or performance problems that, despite testing, are discovered only after commercial shipment.
Our Simoa products are complex and may contain undetected errors or defects, especially when first introduced or as new versions or new products are released.
Readers should review and carefully consider the risks and uncertainties described in more detail below, which includes a more complete discussion of these risks. ​ ● We have incurred annual losses since we were formed and expect to incur losses in the future.
Readers should review and carefully consider the risks and uncertainties described in more detail below, which includes a more complete discussion of these risks. ● Our quarterly and annual operating results and cash flows have fluctuated in the past and might continue to fluctuate, which could cause the value of our common stock to fluctuate or decline significantly. ● We have incurred annual losses since we were formed and expect to incur losses in the future.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe initial term of the Billerica lease is eleven years and five months beginning on April 1, 2019, and we have the option to extend the lease for two additional five-year periods. In addition, in the first quarter of 2022, we executed a lease for 85,800 square feet of office and laboratory space in Bedford, Massachusetts.
Biggest changeIn the first quarter of 2022, we executed a lease for 85,800 square feet of office and laboratory space in Bedford, Massachusetts. The initial term of the Bedford lease is eight years and nine months beginning on May 1, 2022. We do not currently occupy the Bedford facilities.
Item 2. PROPERTIES We currently lease approximately 91,600 square feet of office, laboratory and manufacturing space at our headquarters in Billerica, Massachusetts. The premises covered by this lease serve as our principal office and laboratory space.
ITEM 2. PROPERTIES Our corporate headquarters are currently located in Billerica, Massachusetts, which consists of an approximately 91,600 square foot facility we lease for office, laboratory, and manufacturing purposes. We also lease office and laboratory space domestically in Bedford, Massachusetts, and internationally in the Netherlands, Sweden, and China.
Removed
The initial term of the Bedford 64 Table of Contents lease is eight years and nine months beginning on May 1, 2022. We do not currently occupy the Bedford facilities. As part of the Restructuring Plan, we decided not to utilize the Bedford facilities as part of our own operations and intend to sublease the vacant space .
Added
We believe our facilities are adequate and suitable for our current operations and that should it be needed, additional or alternative space is available to accommodate our operations.
Removed
We believe that the Billerica office, laboratory and manufacturing space will be sufficient to meet our needs for the foreseeable future. Refer to Note 12 to the consolidated financial statements for further details related to the Bedford facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the outcome of any such actions or proceedings cannot be predicted with certainty, as of December 31, 2022, we were not party to any material legal proceedings . Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeWhile the outcome of any such actions or proceedings cannot be predicted with certainty, as of the date of this Annual Report on Form 10-K, we were not party to any legal proceedings, the outcome of which would be expected to have a material adverse effect on our financial condition or results of operations.
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Regardless of any outcome, litigation can have a material adverse effect on us due to defense and settlement costs, diversion of management resources, and other factors. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 40 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 changeUnregistered Sales of Securities There were no unregistered sales of equity securities during the fourth quarter ended December 31, 2022. Issuer Purchases of Equity Securities Not applicable. ​ Item 6. RESERVED ​ Not applicable. ​ ​
Biggest changeUnregistered Sales of Securities There were no unregistered sales of equity securities during the year ended December 31, 2023.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Global Market under the symbol “QTRX.” Stockholders As of February 28, 2023, there were approximately 27 stockholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF E QUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Global Market under the symbol “QTRX.” Holders of Record As of February 26, 2024, there were approximately 19 stockholders of record of our common stock.
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Dividends Dividends are declared at the discretion of our Board of Directors and depend on actual cash flow from operations, our financial condition, capital requirements, and any other factors our Board of Directors may consider relevant. Since our inception, we have not declared or paid any dividends.
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Securities Authorized for Issuance under Equity Compensation Plans Refer to the section titled “Part III, Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K for information required by Item 201(d) of Regulation S-K.
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Issuer Purchases of Equity Securities Not applicable. 41 Table of Contents Stock Performance Graph The following graph compares the cumulative total shareholder returns over the past five years for our common stock, the NASDAQ Composite Index, and the NASDAQ Biotechnology Index, assuming $100 invested on December 31, 2018, and reinvestment of dividends, if paid: ​

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe table below summarizes the stock-based compensation expense recognized in our statements of operations by classification (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Cost of product revenue $ 608 ​ $ 471 Cost of service and other revenue 819 ​ 403 Research and development 1,639 ​ 1,807 General and administrative 12,376 ​ 13,294 Total stock-based compensation $ 15,442 ​ $ 15,975 As of December 31, 2022, we had $33.9 million of total unrecognized stock-based compensation costs which we expect to recognize over a weighted-average period of 2.9 years. 76 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2022, and December 31, 2021 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 ​ 2021 ​ Increase (Decrease) ​ ​ ​ % of ​ ​ ​ % of ​ ​ ​ ​ ​ ​ ​ revenue ​ ​ ​ revenue ​ Amount ​ % Product revenue $ 69,808 66 % $ 81,062 73 % $ (11,254) (14) % Service and other revenue 34,495 33 % 23,629 21 % 10,866 46 % Collaboration revenue 649 0.5 % 648 1 % 1 0 % Grant revenue ​ 570 ​ 0.5 % ​ ​ 5,217 ​ 5 % ​ ​ (4,647) ​ (89) % Total revenue 105,522 100 % 110,556 100 % (5,034) (5) % Cost of goods sold: ​ ​ ​ Cost of product revenue 40,809 39 % 34,149 31 % 6,660 20 % Cost of service and other revenue 17,907 17 % 14,679 13 % 3,228 22 % Cost of collaboration and license revenue ​ — ​ — % ​ ​ — ​ — % ​ ​ — ​ — % Total costs of goods sold, services, and licenses 58,716 56 % 48,828 44 % 9,888 20 % Gross profit 46,806 44 % 61,728 56 % (14,922) (24) % Operating expenses: ​ ​ ​ ​ Research and Development Expense 25,890 25 % 27,978 25 % (2,088) (7) % Selling, general and administrative 91,995 87 % 92,336 84 % (341) (0) % Other lease costs ​ 1,278 ​ 1 % ​ ​ — ​ — % ​ ​ 1,278 100 % Restructuring ​ 3,755 ​ 4 % ​ ​ — ​ — % ​ ​ 3,755 100 % Goodwill impairment ​ 8,220 ​ 8 % ​ ​ — ​ — % ​ ​ 8,220 100 % Impairment expense ​ 17,372 ​ 16 % ​ ​ — ​ — % ​ ​ 17,372 100 % Total operating expenses 148,510 141 % 120,314 109 % 28,196 23 % Loss from operations (101,704) (96) % (58,586) (53) % (43,118) (74) % Interest income (expense), net 5,131 5 % (403) — % ​ 5,534 1,373 % Other (expense) income, net (62) — % 1,265 1 % (1,327) (105) % Loss before income taxes (96,635) (92) % (57,724) (52) % (38,911) (67) % Income tax (expense) benefit (65) — % 36 — % (101) (281) % Net loss $ (96,700) (92) % $ (57,688) (52) % $ (39,012) (68) % ​ Revenue Revenue decreased by $5.0 million, or 5%, to $105.5 million for the year ended December 31, 2022 as compared to $110.6 million for the year ended December 31, 2021.
Biggest changeComparison of Results of Operations for Years Ended December 31, 2023 and 2022: The following table sets forth select Consolidated Statements of Operations data, and such data as a percentage of total revenues (in thousands, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Increase (Decrease) ​ 2023 ​ % of revenue ​ 2022 ​ % of revenue ​ Amount ​ % Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue $ 79,460 65 % $ 69,808 66 % $ 9,652 14 % Service and other revenue 40,299 33 % 34,495 33 % 5,804 17 % Collaboration and license revenue 1,380 1 % 649 1 % 731 113 % Grant revenue ​ 1,229 ​ 1 % ​ ​ 570 ​ 1 % ​ ​ 659 ​ 116 % Total revenues 122,368 100 % 105,522 100 % 16,846 16 % Costs of goods sold and services: ​ ​ ​ Cost of product revenue 32,636 27 % 40,809 39 % (8,173) (20) % Cost of service and other revenue 19,086 16 % 17,907 17 % 1,179 7 % Total costs of goods sold and services 51,722 42 % 58,716 56 % (6,994) (12) % Gross profit 70,646 58 % 46,806 44 % 23,840 51 % Operating expenses: ​ ​ ​ ​ Research and development 24,857 20 % 25,890 25 % (1,033) (4) % Selling, general and administrative 90,241 74 % 91,995 87 % (1,754) (2) % Other lease costs ​ 3,712 ​ 3 % ​ ​ 1,278 ​ 1 % ​ ​ 2,434 191 % Impairment and restructuring ​ 1,537 ​ 1 % ​ ​ 29,347 ​ 28 % ​ ​ (27,810) (95) % Total operating expenses 120,347 98 % 148,510 141 % (28,163) (19) % Loss from operations (49,701) (41) % (101,704) (96) % 52,003 51 % Interest income 15,839 13 % 5,131 5 % ​ 10,708 209 % Other income (expense), net 2,247 2 % (62) — % 2,309 3,702 % Loss before income taxes (31,615) (26) % (96,635) (92) % 65,020 67 % Income tax expense (719) (1) % (65) — % (654) (1,007) % Net loss $ (32,334) (26) % $ (96,700) (92) % $ 64,366 67 % ​ 47 Table of Contents Revenues Total revenues increased $16.8 million, or 16%, to $122.4 million for the year ended December 31, 2023, compared to $105.5 million for the year ended December 31, 2022.
To the extent the classification of these shipping and handling costs differs from the classification used by other companies, our gross margins may not be comparable with those reported by such other companies.
To the extent our classification of these shipping and handling costs differs from the classification used by other companies, our gross margins may not be comparable with those reported by such other companies.
We cannot guarantee 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. Future debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt.
If needed, we cannot guarantee 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. Future debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt.
Our instruments are designed to be used either with assays fully developed by us, including all antibodies and supplies required to run the tests, or with “homebrew” kits where we supply some of the components required for testing, and the customer supplies the remaining required elements. Accordingly, our installed instruments generate a recurring revenue stream.
Our instruments are designed to be used either with assays fully developed by us, including all antibodies and supplies required to run the assays, or with “homebrew” assay kits where we supply some of the components required for testing, and the customer supplies the remaining required elements. Accordingly, our installed instruments generate a recurring revenue stream.
Our liquidity requirements have historically consisted, and we expect that they will continue to consist, of sales and marketing expenses, research and development expenses, working capital, debt service and general corporate expenses.
Our liquidity requirements have consisted, and we expect that they will continue to consist, of sales and marketing expenses, research and development expenses, working capital, and general corporate expenses.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Quanterix Corporation for the years ended December 31, 2022, and 2021.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND R ESULTS OF OPERATIONS The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Quanterix Corporation for the years ended December 31, 2023 and 2022.
We recognize revenues from sales- or usage-based royalty revenue at the later of when the sales or usage occurs and the satisfaction or partial satisfaction of the performance obligation to which the royalty has been allocated.
Under this exception, we recognize revenues from sales- or usage-based royalty revenue at the later of when the sales or usage occurs or the satisfaction (or partial satisfaction) of the performance obligation to which the royalty has been allocated.
Management uses these non-GAAP measures to evaluate our operating performance in a manner that allows for meaningful period-to-period comparison and analysis of trends in our business and our competitors.
We use these non-GAAP measures to evaluate our operating performance in a manner that allows for meaningful period-to-period comparison and analysis of trends in our business and our competitors.
If we do not have or are not 81 Table of Contents 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, if needed, we may have to delay development or commercialization of our products and services. We also may have to reduce marketing, customer support or other resources devoted to our products, or cease operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2021 . Overview We are a life sciences company that has developed next-generation, ultra-sensitive digital immunoassay platforms that advance life sciences research and diagnostics. Our platforms are based on our proprietary digital “Simoa” detection technology.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022 . Overview We are a life sciences company that has developed next-generation, ultra-sensitive digital immunoassay platforms that advance life sciences research and diagnostics.
We also provide contract research services for customers through our CLIA-certified Accelerator Laboratory. The Accelerator Laboratory provides customers with access to Simoa technology, and supports multiple projects and services, including sample testing, homebrew assay development and custom assay development.
We also provide contract research services for customers and Laboratory Developed Test (“LDT”) services through our CLIA-certified Accelerator Laboratory (the “Accelerator Laboratory”). The Accelerator Laboratory provides customers with access to Simoa technology, and supports multiple projects and services, including sample testing, homebrew assay development, custom assay development, and blood-based biomarker testing.
Management believes that presentation of non-GAAP gross margin provides useful information to investors in assessing our operating performance within our industry and in order to allow 69 Table of Contents comparability to the presentation of other companies in our industry where shipping and handling costs are included in cost of goods sold for products.
We believe that presentation of these non-GAAP measures provides useful information to investors in assessing our operating performance within our industry and to allow comparability to the presentation of other companies in our industry where shipping and handling costs are included in cost of goods sold for products.
Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of personnel costs for our sales and marketing, finance, legal, human resources and general management, costs associated with shipping and handling for product sales, other general and administrative costs, as well as professional services costs, such as marketing, advertising, legal and accounting services in addition to allocated overhead costs that include facility and other overhead costs.
Selling, General and Administrative Expense Selling, general and administrative expense consists of personnel costs for our sales and marketing, finance, legal, human resources, and general management teams, shipping and handling for product sales, other general and administrative costs, as well as professional services costs, such as marketing, advertising, legal and accounting services, and allocated overhead costs that include facility and other related costs.
We sell our instruments, consumables and services to the life science, pharmaceutical and diagnostics industries through a direct sales force and support organizations in North America and Europe, and through distributors or sales agents in select markets, including Australia, Brazil, China, Czech Republic, India, Hong Kong, Israel, Japan, New Zealand, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan, and UAE.
We sell our instruments, consumables, and services through a direct field sales and support organizations in North America and Europe, and through our own sales force and distributors in additional countries, including Australia, Brazil, China, Czech Republic, India, Hong Kong, Israel, Japan, New Zealand, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan, and the United Arab Emirates.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Changes in accounting estimates may occur from period to period.
The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We base our estimates on historical experience, worldwide economic conditions, both general and specific to the life sciences industry, and on various other assumptions we believe to be reasonable under the circumstances.
Included within selling, general and administrative expense are shipping and handling costs for product sales of $7.2 million and $6.9 million for the years ended December 31, 2022 and 2021, respectively. Other Lease Costs During the year ended December 31, 2022, we incurred other lease costs of $1.3 million.
Included within selling, general and administrative expense are $8.1 million and $7.2 million of shipping and handling costs for product sales for the years ended December 31, 2023 and 2022, respectively.
Our wholly owned subsidiary UmanDiagnostics AB (Uman), a Swedish company located in Umeå, Sweden, supplies neurofilament light (Nf-L) antibodies and ELISA kits, which are widely recognized by researchers and biopharmaceutical and diagnostics companies world-wide as the premier solution for the detection of Nf-L to advance the development of therapeutics and diagnostics for neurodegenerative conditions.
Our wholly owned subsidiary UmanDiagnostics AB (“Uman”), a company located in Umeå, Sweden, supplies neurofilament light (“NfL”), antibodies, and enzyme-linked immunoassay (“ELISA”) kits, which are used by researchers and biopharmaceutical and diagnostics companies world-wide in the detection of NfL to advance the development of therapeutics and diagnostics for neurodegenerative conditions.
Other (Expense) Income, Net Other (expense) income, net decreased by $1.4 million to ($0.1) million of expense for the year ended December 31, 2022, as compared to $1.3 million of income for the year ended December 31, 2021.
Other Income (Expense), Net Other income (expense) was $2.2 million of income for the year ended December 31, 2023, compared to $0.1 million of expense for the year ended December 31, 2022.
For a full understanding of our financial condition and results of operations, this discussion should be read in conjunction with our consolidated financial statements and accompanying notes included in Item 8.
For a full understanding of our financial condition and results of operations, this discussion and analysis should be read in conjunction with our Consolidated Financial Statements and accompanying notes included in the section titled “Part II. Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
The decrease was primarily due to the recognition of a one-time employee retention tax credit of $2.2 million established under the Coronavirus Aid, Relief, and Economic Security Act in 2021. ​ Income Tax (Expense) Benefit, Net Income tax (expense) benefit, net was less than ($0.1) million of expense for the year ended December 31, 2022, as compared to benefit of less than $0.1 million for the same period in 2021.
The increase was primarily due to recognizing a $2.4 million receivable under the Employee Retention Credit established by the Coronavirus Aid, Relief, and Economic Security Act in 2021. 49 Table of Contents Income Tax Expense Income tax expense was $0.7 million for the year ended December 31, 2023, as compared to $0.1 million for the year ended December 31, 2022.
There were no impairment charges recorded for the year ended December 31, 2021. ​ Critical Accounting Policies, Significant Judgments and Estimates Our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K are prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP).
Critical Accounting Policies and Estimates Our Consolidated Financial Statements and the related notes included elsewhere in this Annual Report on Form 10-K are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
Cost of goods sold for services consists of raw materials, personnel costs, royalties as well as overhead and other direct costs associated with operating the Accelerator Laboratory on behalf of customers, in addition to costs related to warranties and other costs of servicing equipment at customer sites.
Cost of Service and Other Revenue Cost of services and other revenue consists of direct costs associated with operating our Accelerator Laboratory on behalf of customers, including raw materials, personnel costs, royalties, allocated overhead and other related costs. Additional costs include costs related to warranty services and other costs of servicing equipment at customer sites.
With our acquisition of Aushon in 2018, we acquired a CLIA certified laboratory, as well as their proprietary sensitive planar array detection technology. Leveraging our proprietary sophisticated Simoa image analysis and data analysis algorithms, we further refined the planar array technology to develop the SP-X instrument to provide sensitivity similar to that found in our Simoa bead-based platform.
Leveraging our proprietary 43 Table of Contents sophisticated Simoa image analysis and data analysis algorithms, we further refined the planar array technology to develop the SP-X instrument to provide sensitivity similar to that found in our Simoa bead-based platform. We commercially launched the SP-X instrument in 2019.
Non-GAAP Financial Measures To supplement our financial statements presented on a GAAP basis, we present non-GAAP gross profit and non-GAAP gross margin, which are calculated by including shipping and handling costs for product sales within cost of goods sold instead of within selling, general and administrative expenses.
GAAP basis, we present non-GAAP gross profit, non-GAAP gross margin, non-GAAP total operating expenses, and non-GAAP loss from operations. These non-GAAP measures are calculated by including shipping and handling costs for product sales within cost of product revenue instead of within selling, general and administrative expenses.
Our cash flows from operating activities are also significantly influenced by our use of cash for operating expenses to support the growth of our business. We have historically experienced negative cash flows from operating activities as we have developed our technology, expanded our business and built out our infrastructure and this may continue in the future.
Our cash flows from operating activities are also significantly influenced by our use of cash for operating expenses to develop new products and services, invest in process and product improvements, and increase our sales and marketing efforts. We have historically experienced negative cash flows from operating activities as we have developed our technology, expanded our business, and built our infrastructure.
Management also uses non-GAAP gross margin as a factor in assessing the Company’s progress against the Restructuring Plan. The non-GAAP financial information presented here should be considered in conjunction with, and not as a substitute for, the financial information presented in accordance with GAAP.
The non-GAAP financial information presented here should be considered in conjunction with, and not as a substitute for, the financial information presented in accordance with U.S.
We believe this greater insight will enable the development of novel therapies and diagnostics and facilitate a paradigm shift in healthcare from an emphasis on treatment to a focus on earlier detection, monitoring, prognosis and, ultimately, prevention.
The ability of our Simoa platforms to detect proteins in the femtomolar range is enabling the development of novel therapies and diagnostics and has the potential to facilitate a paradigm shift in healthcare from an emphasis on treatment to a focus on earlier detection, monitoring, prognosis, and, ultimately, prevention.
Financial Statements and Supplementary Data of this Annual Report on Form 10-K. 65 Table of Contents For additional information on our financial condition as of December 31, 2021 and results of operations for the year ended December 31, 2021 as compared to the year ended December 31, 2020, refer to Part II, Item 7.
For additional information on our financial condition as of December 31, 2022 and results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021, refer to the section titled “Part II, Item 7.
The SR-X utilizes the same Simoa bead-based technology and assay kits as the HD-1 in a compact benchtop form with a lower price point, more flexible assay preparation, and a wider range of applications. In July 2019, we launched the Simoa HD-X, an upgraded version of the Simoa HD-1, which replaces the HD-1.
By the end of 2023, approximately 82% of the HD Instrument installed base were HD-X instruments. Further, we launched our SR-X instrument in 2017 as a compact desktop instrument with a lower price point, more flexible assay preparation, and a wider range of applications. The SR-X utilizes the same Simoa bead-based technology and assay kits as the HD-X.
Accordingly, these are the policies we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations. Our significant accounting policies are more fully described in “Significant Accounting Policies” in Note 2 in the notes to our consolidated financial statements.
Our significant accounting policies are described in Note 2 – Significant Accounting Policies in the Notes to Consolidated Financial Statements. We believe that the assumptions and estimates in the following critical accounting policies involve a greater degree of judgment and complexity and accordingly are the most critical to understanding and evaluating the potential impact to our Consolidated Financial Statements.
The sales of instruments are generally accompanied by an initial year of implied service-type warranties and may be bundled with assays and other consumables and may also include other items such as training and installation of the instrument and/or an extended service warranty.
Instrument sales may also be bundled with assays and other consumables, training, installation, and/or an extended service warranty.
We used $48.3 million and $47.9 million of cash for our operating activities for the years ended December 31, 2022 and 2021, respectively.
We expect negative cash flows from operating activities will continue in the future. Net cash used in operating activities was $18.9 million and $48.3 million for the years ended December 31, 2023 and 2022, respectively.
Our Simoa bead-based and planar array platforms enable customers to reliably detect protein biomarkers in extremely low concentrations in blood, serum and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies, and also allow researchers to define and validate the function of novel protein biomarkers that are only present in very low concentrations.
Our platforms are based on our proprietary digital “Simoa” detection technology and enable customers to reliably detect protein biomarkers at ultra-low concentrations in blood, serum, and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
We follow the five-step framework prescribed by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 - Revenue from Contracts with Customers (“ASC 606”) to determine revenue recognition: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) 52 Table of Contents determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Revenue for instruments sold to distributors is generally recognized based upon shipping terms (either upon shipment or delivery). Service and Other Revenue Service revenues are composed of contract research services, initial implied one-year service-type warranties, extended services contracts and other services such as training. Contract research services are provided through our Accelerator Laboratory and generally consist of fixed fee contracts.
Service and Other Revenue Service revenues consist of fixed fee contract research services through our Accelerator Laboratory, initial implied service-type warranties, extended service warranty contracts, repair services, and other services such as training.
As of December 31, 2022, we had cash and cash equivalents of $338.7 million. Since inception, we have incurred annual net losses. Our net loss was $96.7 million and $57.7 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $402.2 million and stockholders' equity of $358.9 million.
Since our inception, we have incurred annual net losses, including net losses of $32.3 million and $96.7 million for the years ended December 31, 2023 and 2022, respectively.
We assess if these options provide a material right to the customer and if so, they are considered performance obligations.
Contracts that include rights to additional products or services that are exercisable at a customer’s discretion are generally considered options. We assess if these options provide a material right to the customer and if so, the material right is considered a performance obligation.
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. Additionally, costs incurred related to grant revenue are recorded as research and development expenses.
Our research and development efforts have focused primarily on supporting development and commercialization of new and existing products and improved product quality. 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.
To date, we have completed over 1,900 projects for more than 400 customers from all over the world using our Simoa platforms.
To date, we have completed over 2,200 projects for more than 480 customers from all over the world using our Simoa platforms. We have an extensive base of customers including pharmaceutical, biotechnology, contract research organizations, academic and governmental research institutions.
Research and Development Expense Research and development expense decreased by $2.1 million, or 7%, to $25.9 million for the year ended December 31, 2022, as compared to $28.0 million for the year ended December 31, 2021. The decrease was mainly due to the reduction in headcount in connection with the implementation of the Restructuring Plan.
Research and Development Research and development expense decreased $1.0 million, or 4%, to $24.9 million for the year ended December 31, 2023, compared to $25.9 million for the year ended December 31, 2022.
To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. 70 Table of Contents We believe that the following critical accounting policies involve a greater degree of judgment and complexity than our other significant accounting policies.
We evaluate our estimates and assumptions on an ongoing basis, and changes in accounting estimates may occur from period to period. Accordingly, actual results could differ significantly from the estimates. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
Cost of Goods Sold, Services, and Licenses Cost of product revenue increased by $6.7 million, or 20%, to $40.8 million for the year ended December 31, 2022, as compared to $34.1 million for the year ended December 31, 2021. The increase was primarily due to increased reserves for excess and discontinued products partially offset by lower volume.
Cost of product revenue decreased $8.2 million, or 20%, to $32.6 million for the year ended December 31, 2023, compared to $40.8 million for the year ended December 31, 2022. The decrease was primarily due to improvement in inventory management and manufacturing processes as well as lower instrument sales, partially offset by higher costs related to increased consumables sales.
Revenue Recognition We recognize revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects consideration that we expect to be entitled to receive in exchange for these goods and services, incentives and taxes collected from customers, that are subsequently remitted to governmental authorities.
For contracts with customers, we recognize revenue when a customer obtains control of promised products or services, for an amount that reflects the consideration expected to be received in exchange for those products or services.
Revenues from the sale of products are recognized at a point in time when we transfer control of the product to the customer, which is upon installation for instruments sold to direct customers, and based upon shipping terms for assay kits and other consumables.
The majority of our products and services are recognized at the point in time we transfer control to the customer. 53 Table of Contents For product revenues, direct instrument sales to customers are recognized upon completion of the instrument’s installation.
Cost of service and other revenue increased by $3.2 million, or 22%, to $17.9 million for the year ended December 31, 2022, as compared to $14.7 million for the year ended December 31, 2021, primarily due to increased personnel costs from the build out of our field service organization as well as the increased efforts related to the Lilly Collaboration Agreement.
Cost of service and other revenue increased $1.2 million, or 7%, to $19.1 million for the year ended December 31, 2023, compared to $17.9 million for the year ended December 31, 2022.
On a net basis, we used $11.2 million of cash during the year ended December 31, 2022, consisting of $11.7 million for the purchase of property and equipment, offset by $0.5 million in grant proceeds related to assets acquired under RADx grant.
Net cash used in investing activities was $11.2 million during the year ended December 31, 2022, which consisted of $11.7 million of purchases of property and equipment which were partially offset by $0.5 million in grant proceeds under the grant received from the National Institutes of Health under its Rapid Acceleration of Diagnostics program.
Judgment is required to determine the standalone selling price for each distinct performance obligation. We determine standalone selling prices based on prices charged to customers in observable transactions, and use a range of amounts to estimate standalone selling prices for each performance obligation.
We determine SSP based on factors including prices charged to customers in observable transactions, internal pricing objectives and list prices, and pricing of similar products, and we use a range of amounts to estimate SSP.
Cash Flows The following table presents our cash flows for each period presented (in thousands): ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Net cash used in operating activities $ (48,272) ​ $ (47,907) Net cash used in investing activities (11,206) ​ (6,338) Net cash provided by financing activities 2,311 ​ 270,795 Net increase in cash and cash equivalents $ (57,167) ​ $ 216,550 Net Cash Used in Operating Activities We derive cash flows from operations primarily from the sale of our products and services.
If the conditions for raising capital are favorable, we may seek to finance future cash needs through public or private equity, debt offerings, or other financings. 50 Table of Contents Cash Flows The following table summarizes our cash flows (in thousands): ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 Net cash used in operating activities $ (18,902) ​ $ (48,272) Net cash used in investing activities (148,401) ​ (11,206) Net cash provided by financing activities 2,691 ​ 2,311 Net decrease in cash, cash equivalents, and restricted cash $ (164,612) ​ $ (57,167) Net Cash Used in Operating Activities We derive cash flows from operations primarily from the sale of our products and services.
Product revenue decreased by $11.3 million, or 14%, to $69.8 million for the year ended December 31, 2022, as compared to $81.1 million for the year ended December 31, 2021. P roduct revenue consisted of sales of instruments totaling $25.0 million and sales of consumables and other products totaling $44.8 million for the year ended December 31, 2022.
Product revenue of $79.5 million for the year ended December 31, 2023 consisted of instrument sales of $15.7 million and sales of consumables and other products of $63.8 million. This represented an increase of $9.7 million, or 14%, compared to product revenue of $69.8 million for the year ended December 31, 2022.
ASC 606 provides for an exception to estimating the variable consideration for sales- and usage-based royalties related to the license of intellectual property, such that the sales- or usage-based royalty will be recognized in the period the underlying transaction occurs.
In some cases, our contracts contain variable consideration which primarily relates to (1) sales- and usage-based royalties related to the license of intellectual property in collaboration and license contracts and (2) contracts with minimum purchase commitments. For sales and usage-based royalties, ASC 606 provides an exception to estimating variable consideration.
The change was primarily due to the decrease in the tax benefit recorded on the operating results of our foreign subsidiaries. Liquidity and Capital Resources Since our inception, we have incurred annual net losses and negative cash flows from operations.
The change was primarily due to the increase in the tax expense recorded on the operating results of our foreign subsidiaries. Liquidity and Capital Resources Our principal sources of liquidity are cash, cash equivalents, marketable securities, and funds generated from sales of our products and services.
The transaction price is then determined and allocated to the identified performance obligations in proportion to their standalone selling prices (SSP) on a relative SSP basis. SSP is determined at contract inception and is not updated to reflect changes between contract inception and when the performance obligations are satisfied. Determining the SSP for performance obligations requires significant judgment.
For contracts that contain multiple performance obligations, the transaction price is allocated among the performance obligations on a relative basis according to their standalone selling prices (“SSP”). Determining the SSP for performance obligations requires judgment.
Net Cash Used in Investing Activities Historically, our primary investing activities have consisted of capital expenditures for the purchase of capital equipment to support our expanding infrastructure and work force. We expect to continue to incur additional costs for capital expenditures related to these efforts in future periods.
Net Cash Used in Investing Activities Our primary investing activities consist of purchases of marketable securities to increase the interest income we would otherwise earn in cash accounts. Additionally, we use funds towards capital expenditures for the purchase of equipment to support our expanding infrastructure and work force.
We believe cash generated from commercial sales along with our current cash and cash equivalents will be sufficient to meet our anticipated operating cash requirements for at least the next 12 months. In the future, we expect our operating and capital expenditures to increase as we increase headcount, expand our sales and marketing activities and grow our customer base.
We believe our cash, cash equivalents, and marketable securities, along with funds generated from sales of our products and services, will be sufficient to meet our anticipated operating cash requirements for at least 12 months from the date of this Annual Report on Form 10-K.
As part of the Restructuring Plan, we are not utilizing the office and laboratory space leased in Bedford, Massachusetts and are evaluating alternatives, including termination of the lease or sub-leasing the facilities.
Other Lease Costs Other lease costs increased $2.4 million, or 190%, to $3.7 million for the year ended December 31, 2023, compared to $1.3 million for the year ended December 31, 2022. As part of the Restructuring Plan, we are not using two leased office and laboratory facilities and are evaluating alternatives, including sub-leasing the facilities.
We have made substantial investments in research and development since our inception, and plan to continue to make substantial investments in the future. Our research and development efforts have focused primarily on the tasks required to support development and commercialization of new and existing products and improved product quality.
Research and Development Expense Research and development expense consists of personnel costs, research supplies, third-party development costs for new products, materials for prototypes, quality assurance, and allocated overhead costs that include facility and other related costs. We have made substantial investments in research and development since our inception and plan to continue to make substantial investments in the future.
As the installed base of the Simoa instruments increases, total consumables revenue overall is expected to increase. We commercially launched our first immunoassay platform, the Simoa HD-1, in January 2014. The HD-1 is based on our bead-based technology, and assays run on the HD-1 are fully automated. We initiated commercial launch of the SR-X instrument in December 2017.
As the installed base of the Simoa instruments increases, we expect total consumables revenue to increase. We commercially launched our HD-X instrument in the second half of 2019.
We may have more than one range of standalone selling price for certain products and services based on the pricing for different customer classes. Variable consideration in our contracts primarily relates to (i) sales- and usage-based royalties related to the license of intellectual property in collaboration and license contracts and (ii) certain non-fixed fee research services contracts.
We have more than one range of standalone selling price for certain products and services based on the geographic location of the customer and sales channel.
Restructuring and Strategic Re-Alignment Following a strategic review and assessment of our operations and cost structure, on August 8, 2022, we announced a plan of restructuring and strategic re-alignment (the Restructuring Plan). As part of this plan, we began an assay redevelopment program with the ultimate objective of improving our ability to manufacture and deliver high-quality assays at scale.
The Restructuring Plan included the elimination of 119 positions across the company in 2022 and other cost-saving measures that were substantially completed in 2022. The Restructuring Plan also included an assay redevelopment program with the objective of improving our ability to manufacture and deliver high-quality assays at scale.
Financing activities provided $2.3 million of cash during the year ended December 31, 2022, consisting of $1.4 million in net proceeds from the exercise of stock options and $0.9 million in net proceeds from purchases under our Employee Stock Purchase Plan.
Net cash used in investing activities was $148.4 million during the year ended December 31, 2023, which consisted of the purchase of $175.6 million of marketable securities, proceeds from the maturities of marketable securities of $31.0 million, and $3.8 million of purchases of property and equipment.
Collaboration and License Revenue We may enter into agreements to license the intellectual property and know-how associated with our instruments in exchange for license fees and future royalties (as described below).
Collaboration and License Revenue Collaboration and license revenues consist of licensing our technology, intellectual property, and know-how associated with our instruments to third parties and for related services. License arrangements consist of sales or usage-based fees and/or future royalties.
We expect our expenses will increase substantially as we: ● expand our sales and marketing efforts to further commercialize our products; ● strategically acquire and integrate companies or technologies that may be complementary to our business; ● expand our research and development efforts to improve our existing products and develop and launch new products, particularly if any of our products are deemed by the FDA to be medical devices or otherwise subject to additional regulation by the FDA; ● seek PMA or 510(k) clearance from the FDA for our existing products or new products if or when we decide to market products for use in the prevention, diagnosis or treatment of a disease or other condition; ● hire additional personnel and grow our employee headcount; ● enter into collaboration arrangements, if any, or in-license other products and technologies; and ● add operational, financial and management information systems. ​ Financial Operations Overview 67 Table of Contents Revenue Under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606 - Revenue from Contracts with Customers (ASC 606), an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services.
Food and Drug Administration (the “FDA”); ● invest in our diagnostics business in support of the launch of Lucent Diagnostics, additional LDTs, and other diagnostics initiatives including entry into translational pharma and clinical diagnostic markets ; ● seek Premarket Approval (“PMA”) or 510(k) clearance from the FDA for our existing products or new products if or when we decide to market products for use in the prevention, diagnosis, or treatment of a disease or other condition; ● hire additional personnel to support our growth and research and development; ● strategically acquire and integrate companies or technologies that may be complementary to our business; ● enter into collaboration arrangements, or in-license other products and technologies; and ● add operational, financial, and management information systems.
Service and other revenue increased by $10.9 million, or 46%, to $34.5 million for the year ended December 31, 2022, as compared to $23.6 million for the year ended December 31, 2021. The increase in service and other revenue was primarily due to the revenue related to Lilly Collaboration Agreement recognized during the year-ended December 31, 2022.
Service revenue was $40.3 million for the year ended December 31, 2023, compared to $34.5 million for the year ended December 31, 2022, an increase of $5.8 million, or 17%.
We perform an impairment assessment annually, or whenever events or circumstances indicate that the carrying amount of the asset (asset group) may not be recoverable, of goodwill, intangibles and long-lived assets under the guidance of US GAAP accounting standards ASC 350 - Intangibles – Goodwill and Other (ASC 350) and ASC 360 - Property, Plant and Equipment (ASC 360).
During the year ended December 31, 2023, we continued to reassess the remaining operating lease right-of-use assets and related property and equipment and recorded an additional impairment charge. Additional impairment expenses consist of assessments of our intangible and long-lived assets annually, or whenever events or circumstances indicate that the carrying amount of the asset(s) may not be recoverable.
Selling, General and Administrative Expense Selling, general and administrative expense decreased by $0.3 million, to $92.0 million for the year ended December 31, 2022 as compared to $92.3 million for the year ended December 31, 2021.
Cost of Goods Sold and Services Total cost of goods sold and services decreased $7.0 million, or 12%, to $51.7 million for the year ended December 31, 2023 compared to $58.7 million for the year ended December 31, 2022.
Other lease costs represent the depreciation expense of the right-of-use asset and the accretion of the lease facility for periods after the impairment and the determination that the facilities would not be utilized. There were no similar charges in the same period in 2021.
Other lease costs include the amortization of the related operating lease right-of-use assets and other leased facility operating expenses from periods after the initiation of the Restructuring Plan and the determination that the facilities would not be used.
This increase was due to the favorable impact of higher interest rates earned on cash and cash equivalents as well as the settlement of our notes payable in the year ended December 31, 2021.
Interest Income Interest income increased by $10.7 million, or 209% to $15.8 million for the year ended December 31, 2023, compared to $5.1 million for the year ended December 31, 2022. This increase was primarily due to higher interest rates earned on cash, cash equivalents, and marketable securities, and the accretion of discounts from the purchase of marketable securities.
Restructuring, Goodwill Impairment, and Impairment Expense During the year ended December 31, 2022, we incurred restructuring expense of $3.8 million, non-cash impairment expenses for long-lived assets of $17.4 million and non-cash impairment expenses for goodwill of $8.2 million.
Costs incurred during the year ended December 31, 2022 include (1) $8.2 million of goodwill impairment charges, (2) $16.3 million of long-lived asset impairment charges associated with the leased facilities that we are not using, (3) $1.1 million of software costs related to projects that were rationalized as part of the Restructuring Plan, and (4) $3.8 million of restructuring expenses primarily for severance and one-time termination benefits in connection with the elimination of 119 positions across the Company.
Reconciliation of Non-GAAP Financial Measures: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 ​ 2021 GAAP gross profit $ 46,806 ​ $ 61,728 Shipping and handling costs ​ (7,206) ​ ​ (6,892) Non-GAAP gross profit $ 39,600 ​ $ 54,836 ​ ​ ​ ​ ​ ​ GAAP Revenue $ 105,522 ​ $ 110,556 GAAP Gross margin (gross profit as % of revenue) ​ 44.4% ​ ​ 55.8% Non-GAAP gross margin (non-GAAP gross profit as % of revenue) ​ 37.5% ​ ​ 49.6% ​ ​ ​ ​ ​ ​ GAAP total operating expenses $ 148,510 ​ $ 120,314 Shipping and handling costs ​ (7,206) ​ ​ (6,892) Non-GAAP total operating expenses $ 141,304 ​ $ 113,422 ​ ​ ​ ​ ​ ​ GAAP loss from operations $ (101,704) ​ $ (58,586) Non-GAAP loss from operations $ (101,704) ​ $ (58,586) ​ Goodwill, Intangibles and Long-Lived Assets Impairment Expenses Goodwill, intangibles and long-lived assets impairment expense consists primarily of impairment charges recorded due to an impairment event.
GAAP. 54 Table of Contents Set forth below is a reconciliation of non-GAAP gross profit, non-GAAP gross margin, non-GAAP total operating expenses, and non-GAAP loss from operations to their most directly comparable GAAP financial measures (in thousands). ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 ​ 2022 GAAP gross profit $ 70,646 ​ $ 46,806 Shipping and handling costs ​ (8,146) ​ ​ (7,211) Non-GAAP gross profit $ 62,500 ​ $ 39,595 ​ ​ ​ ​ ​ ​ GAAP revenue $ 122,368 ​ $ 105,522 GAAP gross margin (gross profit as % of revenue) ​ 57.7% ​ ​ 44.4% Non-GAAP gross margin (non-GAAP gross profit as % of revenue) ​ 51.1% ​ ​ 37.5% ​ ​ ​ ​ ​ ​ GAAP total operating expenses $ 120,347 ​ $ 148,510 Shipping and handling costs ​ (8,146) ​ ​ (7,211) Non-GAAP total operating expenses $ 112,201 ​ $ 141,299 ​ ​ ​ ​ ​ ​ GAAP loss from operations $ (49,701) ​ $ (101,704) Non-GAAP loss from operations $ (49,701) ​ $ (101,704) Recent Accounting Pronouncements Refer to Note 2 − Significant Accounting Policies in the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements, including the expected dates of adoption and effects on our Consolidated Financial Statements.
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These capabilities provide our customers with insight into the role of protein biomarkers in human health that has not been possible with other existing technologies and enable researchers to unlock unique insights into the continuum between health and disease.
Added
In addition to historical information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results, performance, or experience may differ materially from those discussed below due to various important factors, risks, and uncertainties, including, but not limited to, those set forth under the sections titled “Part I, Item 1A.
Removed
The HD-X has been designed to deliver significant productivity and operational efficiency improvements, as well as greater user flexibility. We began shipping and installing HD-X instruments at customer locations in 2019, and by the end of 2022, approximately 79% of the HD instrument installed base were HD-X instruments.
Added
Risk Factors” and “Note Regarding Forward-Looking Statements” included in this Annual Report on Form 10-K. Unless the context otherwise requires, the terms “Quanterix,” the “Company,” “we,” “it,” “us,“ and “our” in this Annual Report on Form 10-K refer to Quanterix Corporation and its consolidated subsidiaries.
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We commercially launched the SP-X instrument in April 2019.
Added
Our Simoa platforms have achieved significant scientific validation and commercial adoption, and our Simoa technology has been cited in more than 2,700 scientific publications in areas of high unmet medical need and research interest such as neurology, oncology, cardiology, infectious disease, and inflammation.
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In addition, Uman sells Nf-L antibodies and Nf-L ELISA kits directly, and in conjunction with us and another distributor worldwide. We have an 66 Table of Contents extensive base of customers in world class academic and governmental research institutions, as well as pharmaceutical, biotechnology and contract research companies.
Added
The HD-X is an upgraded version of the Simoa HD-1 (our first Simoa instrument, launched in January 2014), collectively “HD Instruments”, that is designed to deliver significant productivity and operational efficiency improvements, as well as greater user flexibility. The HD-X uses our bead-based technology and assays run on the HD-X are fully automated.
Removed
Although the COVID-19 pandemic negatively affected revenues in 2020 and the first part of 2021, we have seen less of an impact related to COVID-19 as customers began returning to normal operations beginning in mid-2021. However, we expect COVID-19 related challenges may continue for the foreseeable future and potentially increase if variants result in new shutdowns.
Added
With our acquisition of Aushon BioSystems, Inc. in 2018, we acquired their CLIA certified laboratory and their proprietary sensitive planar array detection technology.
Removed
During the COVID-19 pandemic, we determined that our cytokine assay technology could provide researchers with important and differentiated tools to study disease progression, cytokine release syndrome, and patient-treatment response in the fight against COVID-19 and developed a SARS antibody test and SARS antigen test, each of which was run on our HD-X instrument.

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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 changeThe effect of a 10% adverse change in exchange rates on foreign denominated cash, receivables and payables as of December 31, 2021 would not have been material. To date, we have not entered into any material foreign currency hedging contracts although we may do so in the future.
Biggest changeTo date, we have not entered into any foreign currency hedging contracts although we may do so in the future. Interest Rate Risk We had cash and cash equivalents of $174.4 million and marketable securities of $146.9 million as of December 31, 2023. All cash, cash equivalents, and marketable securities are held at large commercial banks.
Foreign Currency Exchange Risk As we expand internationally our results of operations and cash flows will become increasingly subject to fluctuations due to changes in foreign currency exchange rates. For the years ended December 31, 2022 and 2021, approximately 38% and 36%, respectively, of our total revenue was generated from customers located outside of North America.
Foreign Currency Exchange Risk As we expand internationally, our results of operations and cash flows will become increasingly subject to foreign exchange rate fluctuations. For the years ended December 31, 2023 and 2022, approximately 37% and 38%, respectively, of our total revenue was generated from customers located outside of the United States.
Our expenses are generally denominated in the currencies in which our operations are located, which is primarily in the United States, with a portion of expenses incurred in Canada, Europe, Japan and China. Our results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates.
Our expenses are generally denominated in the currencies in which our operations are located, which is primarily in the United States, with a portion of expenses incurred in Canada, Europe, Japan, and China.
Fluctuations in currency exchange rates could harm our business in the future. The effect of a 10% adverse change in exchange rates on foreign denominated cash, receivables and payables as of December 31, 2022 would not have been material.
As of December 31, 2023, the effect of a hypothetical 10% adverse change in exchange rates on foreign denominated cash and payables would not have been material and a similar adverse change on foreign denominated receivables would decrease potential cash inflows by $0.8 million.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to financial market risk, including foreign currency exchange risk and interest rate risk. Concentration of Revenue and Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables.
ITEM 7A. QUANTITATIVE AND QUALITATIVE D ISCLOSURES ABOUT MARKET RISK We are exposed to a variety of market risks, including fluctuations in foreign currency exchange rates and interest rates affecting the return on our cash, cash equivalents, and marketable securities.
Removed
Cash equivalents consist primarily of cash deposits and short-term, highly liquid investments that are readily convertible into cash, such as government securities with original maturities of less than 90 days at the date of purchase. Deposits of cash held outside the United States totaled approximately $3.6 million and $3.4 million at December 31, 2022 and 2021, respectively.
Added
Our results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign exchange rates in Canadian dollars, Euros, British pounds, Swedish krona, Japanese yen, Chinese yuan, and other foreign currencies. Fluctuations in exchange rates could harm our business in the future.
Removed
We grant credit to customers in the ordinary course of business. Credit evaluations are performed on an ongoing basis to reduce credit risk, and no collateral is required from our customers. An allowance for credit loss is provided for those accounts receivable considered to be uncollectible based upon historical experience and credit evaluation.
Added
Marketable securities consisted entirely of highly rated debt securities including commercial paper, U.S. Treasuries, corporate notes and bonds, U.S. Government agency bonds, certificates of deposit, and similar types of debt securities. Due to the short-term nature and investment grade quality of these investments, we do not believe we have material exposure to changes in interest rates.
Removed
As of December 31, 2022, no customer individually accounted for more than 10% of our gross accounts receivable. As of December 31, 2021, one company represented 18% of our gross accounts receivable.
Added
Additionally, if needed, we have the ability to hold our marketable securities until 55 Table of Contents maturity (without giving effect to any future acquisitions or mergers) and we do not hold or issue financial instruments for trading purposes.
Removed
Due to the nature of our quarterly revenue streams derived from royalty revenue, it is not unusual for our accounts receivable balances to include a few customers with large balances. There were no material losses recorded due to customers’ non-payment for the years ended December 31, 2022, or 2021.
Added
Therefore, we do not expect our operating results or cash flows to be affected materially by a sudden change in market interest rates. Declines in interest rates, however, would reduce future investment income.
Removed
For the year ended December 31, 2022, only one company accounted for more than 10% of our total revenue at 13%. For the year ended December 31, 2021, no customers individually accounted for more than 10% of our total revenue.
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If overall interest rates had decreased by a hypothetical 10% during the year ended December 31, 2023, our interest income would have decreased income by approximately $1.3 million. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY D ATA The financial statements required to be filed pursuant to Item 8 are included in this Annual Report on Form 10-K beginning on page F-1.
Removed
Interest Rate Risk We had cash and cash equivalents of $338.7 million as of December 31, 2022. These amounts were held primarily in cash on deposit with banks.
Added
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON A CCOUNTING AND FINANCIAL DISCLOSURE Not applicable.
Removed
Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates. Declines in interest rates, however, will reduce future investment income.
Removed
If overall interest rates had decreased by 10% during the years ended December 31, 2022 and 2021, our interest income would not have been materially affected. We do not hold or issue financial instruments for trading purposes.

Other QTRX 10-K year-over-year comparisons