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What changed in Quantum-Si Inc's 10-K — 2023 vs 2024

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

+454 added−524 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-29)

Top changes in Quantum-Si Inc's 2024 10-K

454 paragraphs added · 524 removed · 281 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

93 edited+97 added−193 removed58 unchanged
Biggest changeIn a sense, DNA tells us “what could happen” and proteins tell us “what is happening.” Proteomics tools have been broadly used across a wide range of applications, including: • Personalized medicine : tailoring of disease treatment based real-time proteomic data; • Biomarker discovery : identification of protein markers for disease identification; • Drug discovery and development : identification of potential drug candidates and aid in the development of the drug; • Systems biology : system-wide investigations of disease pathways to identify biomarkers, drug action, toxicity, efficacy and resistance; • Industry / agriculture : bioproduction and study of plant-pathogen interaction (e.g. crop engineering for drought resistance); and • Food science : identification of allergies, understanding an improvement of nutritional values and food quality and safety control. 7 Table of Contents Legacy Proteomic Technologies There is higher diversity and level of complexity related to proteins than genes.
Biggest changeIn a sense, DNA tells us “what could happen” and proteins tell us “what is happening.” While our products are limited to RUO applications, we note that proteomics tools have been broadly used across a wide range of applications, including: • Systems biology : system-wide investigations of disease pathways to identify biomarkers, drug action, toxicity, efficacy and resistance; • Drug discovery and development : identification of drug candidates, novel drug delivery systems, and aid in drug development; • Biomarker discovery : identification of protein markers for disease identification and management; • Personalized medicine : tailoring of disease treatment based real-time proteomic data; • Industry / agriculture : bioproduction and study of plant-pathogen interaction (e.g. crop engineering for drought resistance); and • Food science : identification of allergies, understanding an improvement of nutritional values and food quality and safety control.
We are be subject to GDPR as we undertake and expand operations in the EU, offer products or services to individuals in the EU, or monitor the behavior of individuals within the EU. We could also be subject to evolving European Union laws on data export, for transfers of data outside the EU to us, group companies or third parties.
We are subject to GDPR as we undertake and expand operations in the EU, offer products or services to individuals in the EU, or monitor the behavior of individuals within the EU. We could also be subject to evolving European Union laws on data export, for transfers of data outside the EU to us, group companies or third parties.
After removing the terminal amino acid, the recognition process repeats until the full peptide chain is sequenced. While traditional single-molecule platforms rely on single measurement for the detection of an event, the advantage of our approach is that our technology can obtain tens to hundreds of data points for each amino acid.
After removing the terminal amino acid, the recognition process repeats until the full peptide chain is sequenced. While traditional single-molecule platforms rely on a single measurement for the detection of an event, the advantage of our approach is that our technology can obtain tens to hundreds of data points for each amino acid.
We believe this approach will allow us to introduce our platform in a structured manner to demonstrate its use and practicality, while working directly with our key potential customers and industry thought leaders to help ensure a positive experience.
We believe this approach allow us to introduce our platform in a structured manner to demonstrate its use and practicality, while working directly with our key potential customers and industry thought leaders to help ensure a positive experience.
Within the $20 billion current addressable target market, we are focusing on an initial target market of approximately $8 billion that includes protein identification (approximately $3 billion), protein expression and quantification (approximately $3 billion) and proteoforms and post translational modifications (approximately $1.5 billion).
Within the $20 billion current addressable research market, we are focusing on an initial target market of approximately $8 billion that includes protein identification (approximately $3 billion), protein expression and quantification (approximately $3 billion) and proteoforms and post translational modifications (approximately $1.5 billion).
We generally use third-party vendors to dispose of regulated medical waste, hazardous waste and radioactive materials that we may use during our research. 26 Table of Contents International Laws and Regulations for IVD Products Whether or not we obtain FDA marketing authorization for a clinical diagnostic product in the future, we must still obtain the requisite approvals from regulatory authorities in non-U.S. countries prior to the marketing of any product for clinical diagnostic use in those countries.
We generally use third-party vendors to dispose of regulated medical waste, hazardous waste and radioactive materials that we may use during our research. 24 Table of Contents International Laws and Regulations for IVD Products Whether or not we obtain FDA marketing authorization for a clinical diagnostic product in the future, we must still obtain the requisite approvals from regulatory authorities in non-U.S. countries prior to the marketing of any product for clinical diagnostic use in those countries.
However, we do not have long-term supply or manufacturing commitments from our suppliers or manufacturers, as our products and components are currently supplied on a purchase order basis. In addition, we will need to increase the supply and manufacturing of our products as we continue to grow.
However, we do not have long-term supply or manufacturing commitments from all our suppliers or manufacturers, and some of our products and components are currently supplied on a purchase order basis. In addition, we will need to increase the supply and manufacturing of our products as we continue to grow.
Any failure to make such revisions or adapt to the harmonized regulations, once they become effective, may result in observations of non-compliance during facility inspections by the FDA or comparable regulatory authorities. 23 Table of Contents The FDA evaluates compliance with the QSR, as well as other applicable device regulatory requirements, through periodic pre-scheduled or unannounced inspections that may include registered manufacturing facilities.
Any failure to make such revisions or adapt to the harmonized regulations, once they become effective, may result in observations of non-compliance during facility inspections by the FDA or comparable regulatory authorities. The FDA evaluates compliance with the QSR, as well as other applicable device regulatory requirements, through periodic pre-scheduled or unannounced inspections that may include registered manufacturing facilities.
The majority of other components for the instruments are off-the-shelf. We purchase some of our components and materials used in manufacturing, including the underlying wafers for our semiconductor chip as well as other critical manufacturing steps, from single source suppliers.
The majority of other components for our platform are off-the-shelf. We purchase some of our components and materials used in manufacturing, including the underlying wafers for our semiconductor chip as well as other critical manufacturing steps, from single source suppliers.
These types of medical devices may be vulnerable to cybersecurity incidents that could potentially impact the safety and effectiveness of the device, and we, as device manufacturers are responsible for identifying cybersecurity risks and hazards associated with our products.
These types of medical devices may be vulnerable to cybersecurity incidents that could potentially impact the safety and effectiveness of the device, and device manufacturers are responsible for identifying cybersecurity risks and hazards associated with our products.
While our genomes contain approximately 20,000 genes, current estimates are that these genes ultimately code for more than 1,000,000 different protein variants called proteoforms. Thus, the majority of diversity that exists in our cells comes from proteins. Proteins are organic compounds made up of amino acids.
While our genomes contain approximately 20,000 genes, current estimates are that these genes ultimately code for more than 1,000,000 different protein variants called proteoforms. Thus, most of the diversity that exists in our cells comes from proteins, which are organic compounds made up of amino acids.
We understand that our success depends on our highly talented employees, and our human capital management practices focus on attracting and retaining a diverse and engaged workforce. Mission and Core Values . Our mission is to put the groundbreaking power of protein sequencing in the hands of every scientist, every lab, everywhere.
We understand that our success depends on our highly talented employees, and our human capital management practices focus on attracting and retaining an engaged workforce. Mission and Core Values . Our mission is to put the groundbreaking power of protein sequencing in the hands of every scientist, every lab, everywhere.
Amino acid resolution can provide insight into more than just whether a protein is present or absent. The sequence information could also indicate what version of the protein is present and how it has been changed from the normal version. • How much of the protein is present?
Amino acid resolution can provide insight into more than just whether a protein is present or absent. The sequence information could also indicate what version of the protein is present and how it has been changed from the normal version. 10 Table of Contents • How much of the protein is present?
Employees are encouraged to take advantage of our training platform which has a plethora of online learning courses. We conduct monthly seminars to update employees on what is happening throughout our Company. Compensation and Benefits. Healthcare technology companies, both large and small compete for a limited number of qualified applicants to fill specialized positions.
Employees are encouraged to take advantage of our training platform which has a plethora of online learning courses. We conduct monthly seminars to update employees on what is happening throughout our Company. Compensation and Benefits. Life sciences companies, both large and small, compete for a limited number of qualified applicants to fill specialized positions.
FCPA and Other Anti-Bribery and Anti-Corruption Laws. The U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits U.S. corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad.
U.S. Fraud and Abuse Laws and Other Compliance Requirements FCPA and Other Anti-Bribery and Anti-Corruption Laws. The U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits U.S. corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad.
The information contained in our website does not constitute a part of this report or our other filings with the SEC. 27 Table of Contents
The information contained in our website does not constitute a part of this report or our other filings with the SEC. 25 Table of Contents
Patented Technologies The patents owned and in-licensed by us provide comprehensive coverage of our sample preparation, peptide sequencing and nucleic acid sequencing devices and are directed to aspects including sample preparation, instrument and laser light source architecture, pixel design, waveguide architecture, lifetime discrimination methods, machine learning, and surface chemistry.
Patented Technologies The patents owned and in-licensed by us provide comprehensive coverage of our peptide sequencing and nucleic acid sequencing processes and are directed to aspects including instrument and laser light source architecture, pixel design, waveguide architecture, lifetime discrimination methods, machine learning, and surface chemistry.
Manufacturers of all classes of devices must comply with FDA’s Quality System Regulation (“QSR”), establishment registration, medical device listing, labeling requirements, and medical device reporting (“MDR”) regulations, which are collectively referred to as medical device general controls. Class II devices may also be subject to special controls such as performance standards, post-market surveillance, FDA guidelines, or particularized labeling.
Manufacturers of all classes of devices must comply with FDA’s QSR, establishment registration, medical device listing, labeling requirements, and medical device reporting (“MDR”) regulations, which are collectively referred to as medical device general controls. Class II devices may also be subject to special controls such as performance standards, post-market surveillance, FDA guidelines, or particularized labeling.
These general controls that must be met for all device classes include: • establishment registration and device listing; • the QSR, which requires manufacturers, including third-party manufacturers, to follow design, testing, control, storage, supplier/contractor selection, complaint handling, documentation and other quality assurance procedures; • labeling regulations, which govern the mandatory elements of the device labels and packaging (including Unique Device Identifier markings for certain categories of products); • the FDA’s prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses and other requirements related to promotional activities; • the MDR regulations, which require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur; • voluntary and mandatory device recalls addressing problems when a device is defective and/or could be a risk to health; • correction and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; and • post-market surveillance regulations, which apply to certain Class II or III devices when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
Ongoing Post-Market Regulatory Requirements and FDA Enforcement If our products were deemed to be “medical devices” by the FDA, then our company would be subject to general controls which include: • establishment registration and device listing; • the QSR, which requires manufacturers, including third-party manufacturers, to follow design, testing, control, storage, supplier/contractor selection, complaint handling, documentation and other quality assurance procedures; • labeling regulations, which govern the mandatory elements of the device labels and packaging (including Unique Device Identifier markings for certain categories of products); • the FDA’s prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses and other requirements related to promotional activities; • the MDR regulations, which require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur; • voluntary and mandatory device recalls addressing problems when a device is defective and/or could be a risk to health; • correction and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; and • post-market surveillance regulations, which apply to certain Class II or III devices when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
We are committed to pioneering a new generation of technology to democratize protein sequencing so that scientists can generate deeper insights faster. Employees are made aware of our values - Embrace Change, Stand Up, Speak Up, Never Settle, and Succeed Together. These values are the basis of our actions and decisions. Diversity, Equity and Inclusion .
We are committed to pioneering a new generation of technology to democratize protein sequencing so that scientists can generate deeper insights faster. Employees are made aware of our values - Embrace Change, Stand Up, Speak Up, Never Settle, and Succeed Together. These values are the basis of our actions and decisions. Employee Engagement .
Within this, proteomics research represented $20 billion, while proteomic diagnostics and personalized medicine represented the remaining $55 billion.
Within this, proteomics research represented a $20 billion opportunity, while proteomic diagnostics and personalized medicine represented the remaining $55 billion.
The FDA recently issued a final rule that amends its implementing regulations in order to harmonize the QSR with ISO 13485:2016; the rule changes will become effective on February 2, 2026.
The FDA recently issued a final rule that amends its implementing 22 Table of Contents regulations in order to harmonize the QSR with ISO 13485:2016; the rule changes will become effective on February 2, 2026.
The scope of the FCPA would include interactions with certain healthcare professionals or organizations in many countries. Our present and future business has been and will continue to be subject to various other U.S. and foreign laws, rules and/or regulations. Physician Payment Sunshine Act. Manufacturers of U.S.
The scope of the FCPA would include interactions with certain healthcare professionals or organizations in many countries. Our present and future business has been and will continue to be subject to various other U.S. and foreign laws, rules and/or regulations.
Given the potential market opportunity and scientific importance of proteomic analysis, we expect increased competition and competitor technologies to emerge in the future.
Given the potential market opportunity and 18 Table of Contents scientific importance of proteomic analysis, we expect increased competition and competitor technologies to emerge in the future.
If we are unable to begin consistently manufacturing our semiconductor chip surface coating process at this new contract manufacturer in a timely fashion, it will affect our ability to supply semiconductor chips, affecting our ability to complete development activities that allow us to improve the Platinum ® instrument throughput, and ultimately harm our ability to deliver consumable sequencing kits to our customers, both of which would harm our research and development efforts and commercial operations.
If we are unable to begin consistently manufacturing our semiconductor chip surface coating process at this new contract manufacturer in a sustainable fashion, it will affect our ability to supply semiconductor chips, affecting the commercial availability of our sequencing kit and our ability to complete development activities that allow us to improve the throughput of our platforms, which could ultimately harm our ability to deliver consumable sequencing kits to our customers, both of which would harm our research and development efforts and commercial operations.
Many of the companies with which we compete have substantially greater resources than we have. The life science instrumentation industry is 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 have substantially greater financial, operational and sales channel resources than we have. The broader life science instrumentation industry is highly competitive and expected to grow more competitive with the increasing knowledge gained from ongoing research and development.
Our platform aims to address many of the key challenges and bottlenecks with legacy proteomic solutions, such as mass spectrometry (“MS”), which include high instrument costs both in terms of acquisition and ownership, and complexity with data analysis, which together limit broad adoption.
Our current and future platforms aim to address many of the key challenges and bottlenecks with legacy proteomic solutions, such as mass spectrometry (“MS”), which include high instrument costs both in terms of acquisition and ownership, and complexity with data analysis, which together limit broad adoption.
We seek to protect our proprietary information and other intellectual property by generally requiring our employees, consultants, contractors, suppliers, outside scientific collaborators and other advisors to execute non-disclosure and assignment of invention agreements on commencement of their employment or engagement.
We seek to protect our proprietary information and other intellectual property by taking appropriate measures including, for example, generally requiring our employees, consultants, contractors, suppliers, outside scientific collaborators and other advisors to execute non-disclosure and assignment of invention agreements on commencement of their employment or engagement.
To attract qualified applicants and retain employees, we offer a total rewards package consisting of base salary, cash bonus, and equity compensation. Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility. The actual bonus payout is based on performance.
To attract qualified applicants and retain employees, we offer a total rewards package consisting of base salary, cash bonus, and equity compensation. Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility.
Some countries have adopted medical device regulatory regimes, such as the Classification Rules for Medical Devices published by the Hong Kong Department of Health, the Health Sciences Authority of Singapore regulation of medical devices under the Health Products Act, and Health Canada’s risk classification system for invasive devices, among others, that incorporate IVD products like the FDA’s current system.
Some countries have adopted medical device regulatory regimes, such as the Medical Device Administrative Control System (“MDACS”) published by the Hong Kong Department of Health, the Health Sciences Authority of Singapore regulation of medical devices under the Health Products Act and Health Products (Medical Devices) Regulations, and Health Canada’s risk-based classification system for devices, among others, that incorporate IVD products like the FDA’s current system.
For example, our platform could be used for biomarker discovery and disease detection, pathway analysis, immune response, vaccine development, quality assurance and quality control, among other applications. 6 Table of Contents According to SVB Leerink Research, proteomics represented a $75 billion market opportunity spanning from life science research through diagnostics in 2021.
For example, our platform could be used for biomarker discovery and disease detection, pathway analysis, immune response, vaccine development, quality assurance and quality control, among other applications. According to 2021 SVB Leerink research report, proteomics represents a $75 billion market opportunity spanning from life science research through diagnostics.
We believe this experience will allow us to introduce our platform in a structured manner to demonstrate its use, value and practicality, while working directly with our key customers, to help ensure a positive experience. We were founded in 2013 by Dr.
We believe this experience will allow us to introduce our platform in a structured manner to demonstrate its use, value and practicality, while working directly with our customers, to help ensure a positive experience.
We rely on a combination of patents, trademark, copyright, trade secret and other intellectual property rights protection and contractual restrictions to protect our proprietary technologies.
Intellectual Property Protection of our intellectual property is a strategic priority for our business. We rely on a combination of patents, trademark, copyright, trade secret and other intellectual property rights protection and contractual restrictions to protect our proprietary technologies.
Suppliers and Manufacturing Our products are built using both custom-made and off-the-shelf components supplied by outside manufacturers and vendors located in Asia, Europe, and the United States. One key custom-made component is the disposable semiconductor chip. Others include the proprietary mode-locked laser and enzymes, recognizers and buffers used for protein sequencing.
Suppliers and Manufacturing Our products are built using both custom-made and off-the-shelf components supplied by outside manufacturers and vendors located in Asia, Europe, and the United States. These products and product components include our custom-made disposable semiconductor chip, our proprietary mode-locked laser as well as proprietary enzymes, recognizers and buffers used for protein sequencing.
Medical devices, including IVD products, must undergo pre-market review by and receive clearance, authorization, or approval from the FDA prior to commercialization, unless the device is of a type exempted from such review by statute, regulation, or an FDA exercise of enforcement discretion. The FDA classifies medical devices into three classes based on risk.
Medical devices, including IVD products, must undergo pre-market review by, and receive clearance or approval from, the FDA prior to commercialization, unless the device is of a type exempted from such review by statute, regulation, or an FDA exercise of enforcement discretion.
Revenue for the year ended December 31, 2023 was $1.1 million. There was no revenue for years ended December 31, 2022 and 2021. We incurred net losses of $96.0 million, $132.4 million and $95.0 million for the fiscal years ended December 31, 2023, 2022 and 2021, respectively.
Revenue for the years ended December 31, 2024 and 2023 was $3.1 million and $1.1 million , respectively, and there was no revenue for the year ended December 31, 2022 . We incurred net losses of $101.0 million , $96.0 million and $132.4 million for the years ended December 31, 2024 , 2023 and 2022 , respectively.
As of December 31, 2023, we owned 56 trademark registrations and 44 trademark applications, of which 13 are U.S. trademark applications. Four of the U.S. trademark applications have been allowed. Other Intellectual Property In addition to patents, we also rely on trade secrets, technical know-how and continuing innovation to develop and maintain our competitive position.
As of December 31, 2024, we owned 68 trademark registrations and 94 trademark applications, of which 16 are U.S. trademark applications. Twelve of the U.S. trademark applications have been allowed. Other Intellectual Property In addition to patents, we also rely on trade secrets, technical know-how and continuing innovation to develop and maintain our competitive position.
As we continue to commercialize our platform, we plan to build out our commercial operations infrastructure necessary to sell and support our platform, across a growing number of market segments and geographies.
Commercial Strategy As we continue to commercialize our platforms, we plan to build out our commercial infrastructure to sell and support our products, across a growing number of market segments and geographies.
The GDPR applies across the European Union 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 General Data Protection Regulation (“GDPR”) applies across the European Union and includes, among other things, a 23 Table of Contents requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and significant fines for non-compliance.
To ensure compliance with regulatory requirements, medical device manufacturers are subject to market surveillance and periodic, pre-scheduled and unannounced inspections by the FDA and certain state authorities.
Additionally, certain Class II and Class III devices are subject to special controls. To ensure compliance with regulatory requirements, medical device manufacturers are subject to market surveillance and periodic, pre-scheduled and unannounced inspections by the FDA and certain state authorities.
We believe the principal competitive factors in our target markets include: • resolution and sensitivity; • cost of instruments and consumables; • efficiency and speed of workflows; • the scale required to address the complexity and dynamic range of the proteome; • throughput to meet lab testing volume; • reputation among customers and key thought leaders; • innovation in product offerings; • accuracy and reproducibility of results; • strength of intellectual property portfolio; • operational and manufacturing footprint; • customer support infrastructure; and • a leadership and commercial team with extensive execution and scientific background. 17 Table of Contents We believe that there are currently no other commercially available products that provide the same level of analysis at the same scale and sensitivity that we expect our platform will provide.
We believe the principal competitive factors in our target markets include: • the scale required to address the complexity and dynamic range of the proteome; • resolution and sensitivity; • accuracy and reproducibility of results; • cost of instruments and consumables; • efficiency and speed of workflows; • throughput to meet lab testing volume; • reputation among customers and key thought leaders; • innovation in product offerings; • strength of intellectual property portfolio; • operational and manufacturing footprint; • customer support infrastructure; and • a leadership and commercial team with extensive execution and scientific background.
RUO products may therefore be used or distributed for research use without first obtaining FDA clearance, authorization, or approval. Such products must bear the statement: “For Research Use Only. Not for Use in Diagnostic Procedures.” RUO products also cannot make any claims related to safety, effectiveness or diagnostic utility, and they cannot be intended for human clinical diagnostic use.
Such products must bear the statement: “For Research Use Only. Not for Use in Diagnostic Procedures.” RUO products also cannot make any claims related to safety, effectiveness or diagnostic utility, and they cannot be intended for human clinical diagnostic use.
Second is translation, where a cell’s ribosomes read the RNA instructions to assemble the protein. An increase in the complexity of the proteome is facilitated by post translational modifications (“PTMs”) where pieces of the protein are modified to either activate or inactivate the protein as part of a signaling pathway to localize the protein to a certain cellular compartment.
An increase in the complexity of the proteome is facilitated by post translational modifications (“PTMs”) where pieces of the protein are modified to either activate or inactivate the protein as part of a 8 Table of Contents signaling pathway to localize the protein to a certain cellular compartment.
In addition, we owned 212 issued patents in foreign jurisdictions, including Australia, Brazil, China, Europe, Hong Kong, India, Japan, Korea, Mexico, and Taiwan, and 546 pending patent applications in foreign jurisdictions, including Australia, Brazil, Canada, China, Europe, Hong Kong, India, Israel, Japan, Korea, Malaysia, Singapore, Taiwan, and Thailand, 16 of which were allowed.
In addition, we own 298 issued patents in foreign jurisdictions, including Australia, Brazil, China, Europe, Hong Kong, India, Japan, Korea, Mexico, and Taiwan, and 470 pending patent applications in foreign 19 Table of Contents jurisdictions, including Australia, Canada, China, Europe, Hong Kong, India, Israel, Japan, Korea, Malaysia, Mexico, Singapore, Taiwan, and Thailand, 13 of which were allowed.
Each country may have its own processes and requirements for IVD licensing, approval/clearance, and regulation, therefore requiring us to seek any regulatory approvals on a country- by-country basis. Corporate Information HighCape was incorporated in Delaware in June 2020.
Each country may have its own processes and requirements for IVD licensing, approval/clearance, and regulation, therefore requiring us to seek any regulatory approvals on a country- by-country basis. Corporate Information Quantum-Si Incorporated was originally incorporated under the laws of the State of Delaware on June 24, 2013.
In addition, there are a number of privately-held entities working on similar technologies as ours. We believe there are currently no commercially available NGPS platforms beyond our Platinum ® system. The legacy proteomics market today is largely served by companies that offer a variety of analytical instruments, such as MS and microarray instruments and associated reagents and consumables.
We believe there are currently no commercially available NGPS platforms beyond our Platinum and Platinum Pro systems. The legacy proteomics market today is largely served by companies that offer a variety of analytical instruments, such as MS and associated reagents and consumables.
Regulatory control increases from Class I (lowest risk) to Class III (highest risk). The FDA generally must clear or approve the commercial sale of most new medical devices that fall within product categories designated as Class II and III.
The FDA classifies medical devices into three classes based on risk with Class I being the lowest risk and Class III being the highest risk. The FDA generally must clear or approve the commercial sale of most new medical devices that fall within product categories designated as Class II and III.
If we are unable to begin manufacturing at these new contract manufacturers in a timely fashion, it will affect our ability to produce Platinum ® instruments which would harm our research and development efforts and commercial operations.
If we are unable to maintain manufacturing at our contract manufacturing partners, it will affect our ability to produce instruments which would harm our research and development efforts and commercial operations.
We plan to invest in market development activities and partnerships to increase awareness of the importance and utility of proteomics to expand and accelerate demand for our products. • Continued technical innovation to drive product enhancements, new products, and additional applications. Our leadership team has deep expertise in scientific and technological development and commercialization.
We plan to invest in scientific affairs and market development activities and partnerships to generate the scientific evidence of the importance and utility of NGPS and to expand the awareness and demand for our products. • Continued technical innovation to drive product enhancements, new products, and additional applications.
We believe our platform has the capability to enable users to generate significant amounts of proteomic information at speed, scale, and simplicity through a solution that until our launch, was not available.
We believe that our platform has the capability to enable users to generate a depth of proteomic information that until our launch, was not available.
Some Class I and Class II devices may be exempted by regulation from the requirement of compliance with substantially all of the QSR. 19 Table of Contents Moreover, as electronic and digital medical devices have become increasingly connected to the Internet, hospital networks, and other medical devices to provide features that improve health care and patient accessibility, FDA and other regulatory authorities have recognized that those same features also increase the risk of cybersecurity threats.
Moreover, as electronic and digital medical devices have become increasingly connected to the Internet, hospital networks, and other medical devices to provide features that improve health care and patient accessibility, FDA and other regulatory authorities have recognized that those same features also increase the risk of cybersecurity threats.
We believe our platform, which is designed to streamline sequencing and data analysis at a lower instrument cost and with greater automation than legacy proteomic solutions, could allow our product to have wide utility across the study of the proteome.
We believe our platform, which offers single molecule, amino acid level resolution at a lower instrument cost and with greater automation than legacy proteomic solutions, could allow our products to have wide utility across the study of the proteome.
Additionally, all U.S. states have enacted legislation protecting the privacy and security of “personal information” such as identifiable financial or health information, social security numbers, credit card information and other personally identifiable information. These laws overlap and apply simultaneously with federal privacy and security requirements and regulated entities must comply with all of them.
U.S. and European Data Security and Data Privacy Laws All U.S. states have enacted legislation protecting the privacy and security of “personal information” such as identifiable financial or health information, social security numbers, credit card information and other personally identifiable information.
Aside from water, the majority of the molecules in our bodies are comprised of proteins. They are found throughout the body and play a central role in the body’s biological processes, from the immune system response, signalizing pathways to transporting oxygen molecules and providing our cells with structure.
Aside from water, the majority of the molecules in our bodies are comprised of proteins, which play a central role in the body’s biological processes, from the immune system response, signaling pathways to transporting oxygen molecules and providing our cells with structure. Proteins or a group of interacting proteins are responsible for virtually every biological function within a living organism.
Additionally, we must identify and comply with all applicable state laws for the protection of personal information with respect to personal information that we collect. 25 Table of Contents In the European Union, increasingly stringent data protection and privacy rules that have and will continue to have substantial impact on the use of personal and patient data across the healthcare industry became stronger in May 2018.
In the European Union, increasingly stringent data protection and privacy rules that have and will continue to have substantial impact on the use of personal and patient data across the healthcare industry became stronger in May 2018.
In addition, we utilize Professional Employment Organizations to provide labor for certain key activities outside the United States, which we consider part of our workforce. None of our employees are covered by collective bargaining agreements.
As of December 31, 2024 , we employed 143 full-time employees in the United States and six full-time employees internationally. In addition, we utilize Professional Employment Organizations (“PEOs”) to provide labor for certain key activities outside the United States. None of our employees are covered by collective bargaining agreements.
We believe our broad patent portfolio and continued rigorous patent protection strategy will help to allow us to focus on our key priorities of commercializing our platform, continuing to innovate with new technologies, and preventing fast-followers. 13 Table of Contents Commercial Strategy Our proprietary platform has been specifically designed to provide deeper insights into the proteome at various scales.
We believe our broad patent portfolio and continued rigorous patent protection strategy will help to allow us to focus on our key priorities of commercializing our platform, continuing to innovate with new technologies, and preventing fast-followers.
Depending on the combination of genes, specific proteins are built to perform specialized functions in the body. A single gene can encode multiple proteoforms depending on the role the protein will ultimately play in the cell. Protein synthesis happens in two stages. First is transcription, where DNA is converted into messenger RNA.
Limitations of Legacy Proteomic Technologies There is higher diversity and level of complexity related to proteins than genes. Depending on the combination of genes, specific proteins are built to perform specialized functions in the body. A single gene can encode multiple proteoforms depending on the role the protein will ultimately play in the cell. Protein synthesis happens in two stages.
We expect to build out our commercial and operational infrastructure to sell and support our platform as we commercialize our technology and gain traction throughout the world. Our initial focus will be direct sales in the United States, with a combined direct and distributor approach in Europe, and opportunistic sales in the rest of the world.
We are continuing to build our commercial and operational infrastructure to sell and support our platform as we gain traction throughout the world. Presently, we have a direct sales force in the United States, with a combined direct and distributor approach in Europe, and distributor relationships in certain key markets in the rest of the world.
However, any transaction disruptions in these suppliers and potential associated ramp up time of a new supplier would result in a supply disruption that could impact our business. Our Platinum ® instrument is developed and designed by us, but has historically been manufactured by a third party manufacturing partner.
However, any transaction disruptions in these suppliers and potential associated ramp up time of a new supplier would result in a supply disruption that could impact our business.
Proteins or a group of interacting proteins are responsible for virtually every biological function within a living organism. Unlike the genome, the proteome is in constant flux depending on the state of the cell. However, even with the knowledge of the proteome’s influence, the proteome remains largely unexplored relative to the genome.
Unlike the genome, the proteome is in constant flux depending on the state of the cell. However, even with the knowledge of the proteome’s influence, the proteome remains largely unexplored relative to the genome.
We have a broad and deep patent protection strategy, which includes 293 issued patents and over 666 pending applications as of December 31, 2023. Protection of our intellectual property is a strategic priority for the business. We have taken, and will continue to take, steps to protect our current and future intellectual property and proprietary technology.
Protection of our intellectual property is a strategic priority for the business; we have taken, and will continue to take, steps to protect our current and future intellectual property and proprietary technology.
A quantification provides precise protein abundance based on a colorimetric or mass abundance readout. • How has the protein been modified? Single-molecule sensitivity could show how the protein has been post-translationally modified thus providing greater insights to its role in the context of biological processes within the cell. Our semiconductor chip is the core of our technology.
Relative quantification provides information about protein abundance relative to other proteins or protein variants present in the sample. • How has the protein been modified? Single-molecule sensitivity could show how the protein has been post-translationally modified thus providing greater insights to its role in the context of biological processes within the cell.
In addition, as part of the Consolidated Appropriations Act for 2023, signed into law on December 29, 2022 (P.L. 117-328), Congress created new pre-market requirements for developers of “cyber devices,” defined as medical devices that include software, connect to the Internet, and contain any technological features that could be vulnerable to cybersecurity threats. 510(k) Clearance Pathway A 510(k) pre-market notification must contain information sufficient to demonstrate that the new device is substantially equivalent to a device commercially distributed prior to May 28, 1976 or to a device that has been determined by the FDA to be substantially equivalent to such a so-called “pre-amendments” device.
In addition, as part of the Consolidated Appropriations Act for 2023, signed into law on December 29, 2022 (P.L. 117-328), Congress created new pre-market requirements for developers of “cyber devices,” 21 Table of Contents defined as medical devices that include software, connect to the Internet, and contain any technological features that could be vulnerable to cybersecurity threats.
Information Available on the Internet Our internet address is https://www.quantum-si.com, to which we regularly post copies of our press releases as well as additional information about us.
Our principal executive offices are located at 29 Business Park Drive, Branford, Connecticut 06405, and our telephone number is (866) 688-7374. Information Available on the Internet Our internet address is https://www.quantum-si.com, to which we regularly post copies of our press releases as well as additional information about us.
These companies include Agilent Technologies, Bio-Rad Laboratories, Danaher, Luminex, Merck KGaA (and its subsidiary MilliporeSigma) and Thermo Fisher Scientific. We also may compete with a number of emerging growth companies that have developed, or are developing, proteomic products and solutions, such as Nautilus Biotechnology, Olink Proteomics, Quanterix, Seer and Standard BioTools.
We also may compete with a number of emerging growth companies that have developed, or are developing, proteomic products and solutions, such as Nautilus Biotechnology, Olink Proteomics (acquired by Thermo Fisher Scientific), Quanterix, Seer and Standard BioTools. In addition, there are a number of privately-held entities working on similar technologies as ours.
We have a world-class management team, including our executive officers and other senior management, with decades of cumulative experience in the healthcare and life sciences end-markets.
We have a world-class management team and Board of Directors, including our chairman, executive officers, and other senior management, with decades of cumulative experience in the healthcare and life sciences end-markets. We believe this leadership team positions us as a potentially disruptive force in creating a new market of next generation protein sequencing.
Typical workflows rely on a specific reagent for protein detection. ASRs comprise a variety of molecules, such as antibodies or aptamers, which bind to specific regions, rather than individual amino acids, and therefore may not detect the presence of a known protein variants.
Affinity-based methods are effective when specific protein(s) or epitopes of interest are known. Affinity-based methods use a variety of molecules, such as antibodies or aptamers, which bind to specific regions, rather than individual amino acids, and therefore may not detect the presence of a protein variant.
Currently, we are in the process of transitioning these activities to a new partner. Though this partner has produced some completed wafers with surface coatings that are usable, this process is not completed or optimized for long-term production.
Throughout 2024, we were in a process of transitioning a portion of key activities to a new partner, which has resulted in completed wafers with surface coatings that are usable for commercial purposes, but not fully optimized for long-term production or a fully sustainable process.
For instance, the average binding site of an ASR is an epitope with a length of five (5) to eight (8) amino acids, whereas the average length of a human protein is approximately 470 amino acids.
For instance, the average binding site of an affinity reagent is an epitope with a length of 5 to 8 amino acids, whereas the average length of a human protein is approximately 470 amino acids. Changes or modifications to the protein may prevent the affinity reagent from binding, resulting in missed identification or false negative results.
The regulations in other jurisdictions vary from those in the United States and may be easier or more difficult to satisfy and are subject to change. For example, the European Union (“EU”) recently published new regulations that will result in greater regulation of medical devices and IVDs.
The regulations in other jurisdictions vary from those in the United States and may be easier or more difficult to satisfy and are subject to change. For example, the European Commission published Regulation (EU) 2024/1860 in July 2024. This new regulation amended Regulation (EU) 2017/745 on medical devices (MDR) and Regulation (EU) 2017/746 on in vitro diagnostics (IVD Regulation).
If the FDA disagrees with a company’s RUO status for its product, the company may be subject to FDA enforcement activities, including, without limitation, requiring the company to seek clearance, authorization or approval for the product.
If the FDA disagrees with a company’s RUO status for its product, the company may be subject to FDA enforcement activities, including, without limitation, requiring the company to seek clearance, authorization or approval for the product. 20 Table of Contents FDA and FTC Regulation of Medical Devices in the United States In the United States, medical devices are subject to extensive regulation by the FDA under the FDCA and its implementing regulations, and other federal and state statutes and regulations.
Our core leadership team has decades of cumulative experience working directly in the life sciences industry with many of the companies and research centers that have the potential to become key customers and that we will seek to build into our prospective customer pipeline. • Build our commercial infrastructure to help ensure successful initial commercial launch in the U.S., Europe and limited areas in the rest of the world.
Our leadership team has decades of cumulative experience working directly in the life sciences industry with many of the companies and research centers that have the potential to become customers. 13 Table of Contents • Build our commercial infrastructure globally.
Our platform is based on our proprietary semiconductor chip designed to enable measurements at the ultimate level of sensitivity and specificity, single molecules. By enabling single molecule detection, we are not reliant on ensemble measurements, which can often vary from sample to sample and even run to run. • Amino acid resolution and Post-Translational Modification detection.
At the core, our technology provides single molecule, kinetic detection of individual amino acids. By enabling single molecule detection, we are not reliant on ensemble measurements, which can often vary from sample to sample and even run to run.
We began a controlled launch of the Platinum ® instrument and started to take orders in December 2022, and subsequently began limited commercial shipments of Platinum ® in January 2023.
Our Strategies Our strategies include the following: • First to market using a phased approach to broad commercialization and adoption. We began a controlled launch of the Platinum instrument and started to take orders in December 2022, and subsequently began commercial shipments of Platinum in January 2023, moving to a full commercial launch at the beginning of second quarter 2024.
In addition, we also provide a comprehensive benefits package inclusive of medical, dental, and vision healthcare coverage including a paid reimbursement account, life insurance and disability coverage, 401(k) investment plans, tax advantaged savings account, generous paid time off and leaves of absence, employee assistance programs, and wellness programs. Employee Health and Safety.
Additional employee benefits include, life insurance and disability coverage, 401(k) investment plans, tax advantaged savings account, generous paid time off and leave of absence policies, employee assistance programs, and wellness programs. Employee Health and Safety. We have training programs for general, chemical and biological safety.
Patent Portfolio As of December 31, 2023, we owned 293 issued patents and 666 pending patent applications. Of our 293 issued patents, 81 were issued U.S. utility patents. Of our 666 pending patent applications, 120 were pending U.S. utility patent applications, 9 of which were allowed.
As of December 31, 2024, of our 598 pending patent applications, 128 were pending U.S. utility patent applications, 9 of which were allowed.
All our products are labeled “For Research Use Only,” and will be sold to academic and research life sciences institutions that conduct basic and translational research, and biopharmaceutical and biotechnology companies for non-diagnostic and non-clinical purposes. 18 Table of Contents Under a long-standing FDA regulation, products that are intended for RUO and are labeled as RUO are not regulated by the FDA as in vitro diagnostic (“IVD”) devices and are not subject to the regulatory requirements discussed below for clinical diagnostic products.
Food and Drug Administration (“FDA”). All our products are labeled “For Research Use Only,” and will be sold to academic and research life sciences institutions that conduct basic and translational research, and biopharmaceutical and biotechnology companies for non-diagnostic and non-clinical purposes.
In December 2022, we began a controlled launch of Platinum ® for RUO and subsequently began limited commercial shipments of Platinum ® in January 2023. Members of our team have previously utilized a systematic approach designed to drive early adoption to successfully launch other disruptive technologies.
Members of our team have previously utilized a similar phased launch approach to successfully launch and drive long term adoption of other disruptive technologies.
Current sensitivity and dynamic range restrictions make legacy technologies, such as MS, difficult to use with liquid samples and restrict the ability to analyze at single molecule resolution or ability to deeply integrate a protein. • Costly and complex data analysis. We believe the critical unmet needs remaining in proteomic analysis relate to cost, accessibility and simplicity.
In addition, current sensitivity and dynamic range restrictions of MS also make it difficult to use with liquid samples and restrict the ability to analyze at single molecule resolution or the ability to deeply integrate a protein. Taken together, these factors limit the broad scale adoption of MS in the market. • Affinity-Based Methods .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe have in the past experienced material weaknesses in our internal control over financial reporting, and if we experience such material weaknesses in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to report our financial condition, results of operations or cash flows accurately or in a timely manner, which may adversely affect investor confidence in us and, as a result, materially and adversely affect our business and the value of our Class A common stock.
Biggest changeTherefore, as of December 31, 2024 , if we assume that each outstanding whole warrant is exercised and one share of HighCape Class A common stock is issued as a result of such exercise, with payment of the exercise price of $11.50 per share, our fully-diluted share capital would increase by a total of 3,968,319 shares, with approximately $45.6 million paid to us to exercise the warrants. 56 Table of Contents We have in the past experienced material weaknesses in our internal control over financial reporting, and if we experience such material weaknesses in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to report our financial condition, results of operations or cash flows accurately or in a timely manner, which may adversely affect investor confidence in us and, as a result, materially and adversely affect our business and the value of our Class A common stock.
If these pieces of equipment were to stop working and be unable to be repaired in a timely manner or at all, our ability to manufacturer our semiconductor chips would be adversely affected. Our internal manufacturing equipment is specialized with limited vendor options and long lead times.
Our internal manufacturing equipment is specialized with limited vendor options and long lead times. If these pieces of equipment were to stop working and be unable to be repaired in a timely manner or at all, our ability to manufacturer our semiconductor chips would be adversely affected.
We cannot predict how these various efforts will be resolved, how Congress or the FDA will regulate LDTs in the future, or how that modernized regulatory system will impact our business.
We cannot predict how these various efforts will be resolved, how Congress or the FDA will regulate LDTs in the future, or how that modernized regulatory system will impact our business.
If too few researchers describe the use of our products, too many researchers shift to a competing product and publish research outlining their use of that product or too many researchers negatively describe the use of our products in publications, it may drive customers away from our products and it may delay our progression towards the broad commercial release phase of our commercialization plan. 30 Table of Contents Other factors in achieving commercial market acceptance, include: • our ability to market and increase awareness of the capabilities of our products; • the ability of our products to demonstrate comparable performance in intended use applications broadly in the hands of customers consistent with the early access limited release phase of our commercialization plan; • our potential customers’ willingness to adopt new products and workflows; • our product’s ease of use and whether it reliably provides advantages over other alternative technologies; • the rate of adoption of our products by academic institutions, laboratories, biopharmaceutical companies and others; • the prices we charge for our products; • our ability to develop new products and workflows and solutions for customers; • if competitors develop and commercialize products that perform similar functions as our products; and • the impact of our investments in product innovation and commercial growth.
If too few researchers describe the use of our products, too many researchers shift to a competing product and publish research outlining their use of that product or too many researchers negatively describe the use of our products in publications, it may drive customers away from our products and it may delay our progression towards the broad commercial release phase of our commercialization plan. 28 Table of Contents Other factors in achieving commercial market acceptance, include: • our ability to market and increase awareness of the capabilities of our products; • the ability of our products to demonstrate comparable performance in intended use applications broadly in the hands of customers consistent with the early access limited release phase of our commercialization plan; • our potential customers’ willingness to adopt new products and workflows; • our product’s ease of use and whether it reliably provides advantages over other alternative technologies; • the rate of adoption of our products by academic institutions, laboratories, biopharmaceutical companies and others; • the prices we charge for our products; • our ability to develop new products and workflows and solutions for customers; • if competitors develop and commercialize products that perform similar functions as our products; and • the impact of our investments in product innovation and commercial growth.
An inability to manufacture products and components that consistently meet specifications, in necessary quantities, at commercially acceptable costs and without significant delays, may have a material adverse effect on our business, results of operations, financial condition and prospects. We rely on third-party foundries to produce wafers, which when packaged and tested internally, lead to our supply of semiconductor chips.
An inability to manufacture products and components that consistently meet specifications, in necessary quantities, at commercially acceptable costs and without significant delays, may have a material adverse effect on our business, results of operations, financial condition and prospects. We rely on third-party foundries to produce silicon wafers, which when packaged and tested internally, lead to our supply of semiconductor chips.
Private individuals can bring False Claims Act “qui tam” actions, on behalf of the government and such individuals, commonly known as “whistleblowers,” may share in amounts paid by the entity to the government in fines or settlement. • the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; • HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; • the federal Physician Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, to report annually to CMS, information related to payments and other transfers of value to physicians (defined broadly to include doctors, dentists, optometrists, podiatrists and chiropractors), teaching hospitals and certain advanced non-physician healthcare practitioners, as well as ownership interests held by physicians and their immediate family members; and • analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers or patients.
Private individuals can bring False Claims Act “qui tam” actions, on behalf of the government and such individuals, commonly known as “whistleblowers,” may share in amounts paid by the entity to the government in fines or settlement. • the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the 43 Table of Contents beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; • HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; • the federal Physician Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, to report annually to CMS, information related to payments and other transfers of value to physicians (defined broadly to include doctors, dentists, optometrists, podiatrists and chiropractors), teaching hospitals and certain advanced non-physician healthcare practitioners, as well as ownership interests held by physicians and their immediate family members; and • analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers or patients.
In the event it becomes necessary to utilize a different contract manufacturer for our products or components of our products, we would experience additional costs, delays and difficulties in doing so as a result of identifying and entering into an agreement with a new manufacturer as well as preparing such new manufacturer to meet the logistical requirements associated with manufacturing our instruments and consumable offerings, and our business would suffer.
In the event it becomes necessary to utilize different contract manufacturers for our products or components of our products, we would experience additional costs, delays and difficulties in doing so as a result of identifying and entering into an agreement with a new manufacturer as well as preparing such new manufacturer to meet the logistical requirements associated with manufacturing our instruments and consumable offerings, and our business would suffer.
For example: • others may be able to make products that are similar to products and technologies we may develop or utilize similar technology that are not covered by the claims of the patents that we own or license now or in the future; • we, or our licensor(s), might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future; • we, or our licensor(s), might not have been the first to file patent applications covering certain of our or their inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating our owned or licensed intellectual property rights; • it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents; • issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • the patents of others may harm our business; and • we may choose not to file a patent for certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
For example: • others may be able to make products that are similar to products and technologies we may develop or utilize similar technology that are not covered by the claims of the patents that we own or license now or in the future; • we, or our licensor(s), might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future; • we, or our licensor(s), might not have been the first to file patent applications covering certain of our or their inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating our owned or licensed intellectual property rights; • it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents; • issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • the patents of others may harm our business; and 55 Table of Contents • we may choose not to file a patent for certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
If we are unable to establish sales and marketing capabilities, we may not be successful in commercializing our products. We have limited experience as a company in sales and marketing and our ability to achieve revenue growth depends on us being able to attract customers for our products.
If we are unable to establish superior sales and marketing capabilities, we may not be successful in commercializing our products. We have limited experience as a company in sales and marketing and our ability to achieve revenue growth depends on us being able to attract customers for our products.
If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations, and our business, financial condition, results of operations and cash flows could be adversely affected. 28 Table of Contents Our operating results may fluctuate significantly in the future, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we or other third parties may provide.
If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations, and our business, financial condition, results of operations and cash flows could be adversely affected. 26 Table of Contents Our operating results may fluctuate significantly in the future, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we or other third parties may provide.
Since our contracts with these manufacturers do not commit them to carry inventory or make available any particular quantities, these 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 most of our contracts with these manufacturers do not commit them to carry inventory or make available any particular quantities, these 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.
As a result, the demand for our products will depend upon the research and development budgets of these customers, which are impacted by factors beyond our control, such as: • decreases in government funding of research and development; • changes to programs that provide funding to research laboratories and institutions, including changes in the amount of funds allocated to different areas of research or changes that have the effect of increasing the length of the funding process; • macroeconomic conditions and the political climate; • potential changes in the regulatory environment; • differences in budgetary cycles, especially government or grant-funded customers, whose cycles often coincide with government fiscal year ends; • competitor product offerings or pricing; • market-driven pressures to consolidate operations and reduce costs; and • market acceptance of relatively new technologies.
As a result, the demand for our products 32 Table of Contents will depend upon the research and development budgets of these customers, which are impacted by factors beyond our control, such as: • decreases or freezes in government funding of research and development; • changes to programs that provide funding to research laboratories and institutions, including changes in the amount of funds allocated to different areas of research or changes that have the effect of increasing the length of the funding process; • macroeconomic conditions and the political climate; • potential changes in the regulatory environment; • differences in budgetary cycles, especially government or grant-funded customers, whose cycles often coincide with government fiscal year ends; • competitor product offerings or pricing; • market-driven pressures to consolidate operations and reduce costs; and • market acceptance of relatively new technologies.
Our facilities in Branford, San Diego and those of our third-party manufacturers are vulnerable to natural disasters, public health crises and catastrophic events. If any disaster, public health crisis or catastrophic event were to occur, our ability to operate our business would be seriously, or potentially completely, impaired.
Our facilities in Branford, Garnet Valley, San Diego and those of our third-party manufacturers are vulnerable to natural disasters, public health crises and catastrophic events. If any disaster, public health crisis or catastrophic event were to occur, our ability to operate our business would be seriously, or potentially completely, impaired.
As a result, the market price of shares of our Class A common stock could be adversely affected. 57 Table of Contents Delaware law and provisions in our certificate of incorporation and bylaws could make a takeover proposal more difficult. Our organizational documents are governed by Delaware law.
As a result, the market price of shares of our Class A common stock could be adversely affected. 58 Table of Contents Delaware law and provisions in our certificate of incorporation and bylaws could make a takeover proposal more difficult. Our organizational documents are governed by Delaware law.
Underlying each of these expectations are a number of estimates and assumptions that may be incorrect, including the assumptions that government or other sources of funding will continue to be available to life sciences researchers at times and in amounts necessary to allow them to purchase our products and that researchers have sufficient samples and an unmet need for performing proteomics studies at scale across thousands of samples.
Underlying each of these expectations are a number of estimates and assumptions that may be incorrect, including the assumptions that government or other sources of funding will continue to be available to life sciences researchers at times and in amounts necessary to allow them to purchase our products and that researchers have sufficient samples and an unmet need for performing proteomics 29 Table of Contents studies at scale across thousands of samples.
If we sought and received regulatory clearance or approval and are not able to maintain regulatory compliance with applicable laws, we could be prohibited from marketing our products for use as, or in the performance of, clinical diagnostics and/or could be subject to enforcement actions, including Warning Letters and adverse publicity, fines, injunctions, and civil penalties; recall or seizure of products; operating restrictions; and criminal prosecution.
If we sought and received regulatory clearance or approval and are not able to maintain regulatory compliance with applicable laws, we could be prohibited from marketing our products for use as, or in the performance of, clinical diagnostics and/or could be 41 Table of Contents subject to enforcement actions, including Warning Letters and adverse publicity, fines, injunctions, and civil penalties; recall or seizure of products; operating restrictions; and criminal prosecution.
To the extent inflation or other factors increase our business costs, it may not be feasible to pass price increases on to our customers or offset higher costs through manufacturing efficiencies. Inflation could also adversely affect the ability of our customers to purchase our products.
To the extent inflation or other factors increase our business costs, it may not be feasible to pass price increases on to our customers or offset higher costs through manufacturing efficiencies. Inflation or economic policies could also adversely affect the ability of our customers to purchase our products.
Under the Federal Trade Commission Act (“FTC Act”), the FTC is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; and (c) gather and compile information and conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce.
Under the Federal Trade Commission Act (“FTC Act”), the FTC is empowered, among other things, to (a) prevent unfair methods of competition and unfair or 45 Table of Contents deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; and (c) gather and compile information and conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce.
As a result, we are a “controlled company” within the meaning of the Nasdaq corporate governance standards and are not subject to the requirements that would otherwise require us to have: (i) a majority of independent directors; (ii) a compensation committee comprised solely of independent directors; and (iii) director nominees selected, or recommended for our Board’s selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors.
As a result, we are a “controlled company” within the meaning of the Nasdaq corporate governance standards and are not subject to the requirements that would otherwise require us to have: (i) a majority of independent directors; (ii) a compensation committee comprised solely of independent directors; and (iii) director nominees 57 Table of Contents selected, or recommended for our Board’s selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors.
Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent intentionally withheld relevant information from the relevant patent office, or knowingly made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.
Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent intentionally 48 Table of Contents withheld relevant information from the relevant patent office, or knowingly made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.
The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating 27 Table of Contents restrictions that could adversely impact our ability to conduct our business.
The America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. 47 Table of Contents Various courts, including the U.S.
The America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Various courts, including the U.S.
We have entered into Technology and Services Exchange Agreements (the “TSEAs”) by and among us and other participant companies controlled by the Rothberg family, consisting of Butterfly Network, Inc., OrphAI Therapeutics, Inc., Hyperfine, Inc., 4Bionics LLC, identifeye HEALTH Inc. (f/k/a Tesseract Health, Inc.), Liminal Sciences, Inc. and Detect, Inc.
We have entered into Technology and Services Exchange Agreements (the “TSEAs”) by and among us and other participant companies controlled by the Rothberg family, consisting of Butterfly Network, Inc., OrphAI Therapeutics, Inc., 37 Table of Contents Hyperfine, Inc., 4Bionics LLC, identifeye HEALTH Inc. (f/k/a Tesseract Health, Inc.), Liminal Sciences, Inc. and Detect, Inc.
The cost of compliance with these laws and regulations may become significant and could have a material adverse effect on our financial condition, results of operations and cash flows. 34 Table of Contents We rely on certain contract manufacturers to manufacture and supply our instruments, components of our instruments, and certain components of our consumable offerings.
The cost of compliance with these laws and regulations may become significant and could have a material adverse effect on our financial condition, results of operations and cash flows. We rely on certain contract manufacturers to manufacture and supply our instruments, components of our instruments, and certain components of our consumable offerings.
If we fail to compete effectively, our business and results of operations will suffer. We face significant competition in the life sciences technology market. We currently compete with life sciences technology and the diagnostic companies that are supplying components, products and services that serve customers engaged in proteomics analysis.
The life sciences technology market is highly competitive. If we fail to compete effectively, our business and results of operations will suffer. We face significant competition in the life sciences technology market. We currently compete with life sciences technology and the diagnostic companies that are supplying components, products and services that serve customers engaged in proteomics analysis.
Shipment of consumables that effectively expire early or shipment of defective instruments or consumables to customers may result in recalls and warranty replacements, which would increase our costs, and depending upon current inventory levels and the availability and lead time for additional inventory, could lead to availability issues.
Shipment of 35 Table of Contents consumables that effectively expire early or shipment of defective instruments or consumables to customers may result in recalls and warranty replacements, which would increase our costs, and depending upon current inventory levels and the availability and lead time for additional inventory, could lead to availability issues.
Our patent portfolio may be negatively impacted by current uncertainties in the state of the law, new court rulings or changes in guidance or procedures issued by the USPTO or other similar patent offices around the world. From time to time, the U.S. Supreme Court, other federal courts, the U.S.
Our patent portfolio may be negatively impacted by current uncertainties in the state of the law, new court rulings or changes in guidance or procedures issued by the USPTO or other similar patent offices around the world. From time to 47 Table of Contents time, the U.S. Supreme Court, other federal courts, the U.S.
We could also be required to pay damages, which could be significant, including treble damages and attorneys’ fees if we are found to have willfully infringed such patents. We could also be required to obtain a license to such patents in order to continue the development and commercialization of the infringing product or technology.
We could also be required to pay damages, which could be significant, including treble damages and attorneys’ fees if we are found to have willfully infringed such patents. We could also be 51 Table of Contents required to obtain a license to such patents in order to continue the development and commercialization of the infringing product or technology.
If our third-party manufacturers fail to maintain ISO quality management certifications, customers might choose not to purchase products from us. 36 Table of Contents In addition, as we commercialize our Platinum Analysis Software service, we will also need to make corresponding improvements to other operational functions, such as our customer support, service and billing systems, compliance programs and our internal quality assurance programs.
If our third-party manufacturers fail to maintain ISO quality management certifications, customers might choose not to purchase products from us. In addition, as we commercialize our Platinum Analysis Software service, we will also need to make corresponding improvements to other operational functions, such as our customer support, service and billing systems, compliance programs and our internal quality assurance programs.
Our products are manufactured at our third-party manufacturer’s facilities in the United States and internationally, and our consumables are manufactured at various locations in the United States including at our facilities in San Diego, California and Garnet Valley, Pennsylvania, and internationally.
Our instruments are manufactured at our third-party manufacturer’s facilities in the United States and internationally, and our consumables are manufactured at various locations in the United States including at our facilities in San Diego, California and Garnet Valley, Pennsylvania, and internationally.
Changes to the current regulatory framework, including the imposition of additional or new regulations, including regulation of our products, could arise at any time during the development or marketing of our products, which may negatively affect our ability to obtain or maintain FDA or comparable regulatory approval of our products, if required.
Changes to the current regulatory framework, including the imposition of additional or new regulations, including regulation of our 42 Table of Contents products, could arise at any time during the development or marketing of our products, which may negatively affect our ability to obtain or maintain FDA or comparable regulatory approval of our products, if required.
If sales of our instruments fail to materialize, so will the related consumable sales and associated revenue. 33 Table of Contents In our development and commercialization plans for our products, we may forego other opportunities that may provide greater revenue or be more profitable.
If sales of our instruments fail to materialize, so will the related consumable sales and associated revenue. In our development and commercialization plans for our products, we may forego other opportunities that may provide greater revenue or be more profitable.
It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Moreover, we may not develop additional proprietary products, methods and technologies that are patentable.
It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Moreover, we may not develop 46 Table of Contents additional proprietary products, methods and technologies that are patentable.
If our restructuring fails to achieve some or all of the expected benefits therefrom, our cash resources may not last as long as estimated and our business, results of operations and financial condition could be materially and adversely affected.
If our restructuring fails to achieve some or all of the expected benefits 31 Table of Contents therefrom, our cash resources may not last as long as estimated and our business, results of operations and financial condition could be materially and adversely affected.
Rothberg and his affiliates held 79.9% of the voting power of our capital stock, including our Class A common stock and Class B common stock and is able to control matters submitted to our stockholders for approval, including the election of directors, amendments to our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions.
Rothberg and his affiliates held 73.4% of the voting power of our capital stock, including our Class A common stock and Class B common stock and is able to control matters submitted to our stockholders for approval, including the election of directors, amendments to our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions.
We also seek to preserve the integrity and confidentiality of our confidential proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology systems, but it is possible that these security measures could be breached.
We also seek to preserve the integrity and confidentiality of our confidential proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology systems, but it is 49 Table of Contents possible that these security measures could be breached.
Risks Related to Our Financial Condition and Capital Requirements We are an early-stage life sciences technology company with a history of net losses, which we expect to continue, and we may not be able to generate meaningful revenues or achieve and sustain profitability in the future.
Risks Related to Our Financial Condition and Capital Requirements We are an early-stage life sciences technology company with a history of net losses and negative cash flow, which we expect to continue, and we may not be able to generate meaningful revenues or achieve and sustain profitability or positive cash flow in the future.
We are an early-stage life sciences technology company and have incurred significant losses since Quantum-Si was formed in 2013, and expect to continue to incur losses in the future. We incurred net losses of $96.0 million, $132.4 million and $95.0 million in the years ended December 31, 2023, 2022 and 2021, respectively.
We are an early-stage life sciences technology company and have incurred significant losses since Quantum-Si was formed in 2013, and expect to continue to incur losses in the future. We incurred net losses of $101.0 million , $96.0 million and $132.4 million in the years ended December 31, 2024 , 2023 and 2022 , respectively.
We rely, and will continue to rely on, information technology systems to keep financial and employment records, facilitate our research and development initiatives, manage our manufacturing operations, maintain quality control, fulfill customer orders, maintain corporate records, communicate with staff, provide our Platinum Analysis Software services and operate other critical functions.
We rely, and will continue to rely on, information technology systems to keep financial and employment records, facilitate our research and development initiatives, manage our manufacturing operations, maintain quality control, fulfill customer 39 Table of Contents orders, maintain corporate records, communicate with staff, provide our Platinum Analysis Software services and operate other critical functions.
Shares of our Class B common stock have 20 votes per share, while shares of our Class A common stock have one vote per share. Dr. Rothberg and his affiliates hold all of the issued and outstanding shares of our Class B common stock, and as of February 20, 2024, Dr.
Shares of our Class B common stock have 20 votes per share, while shares of our Class A common stock have one vote per share. Dr. Rothberg and his affiliates hold all of the issued and outstanding shares of our Class B common stock, and as of February 26, 2025, Dr.
So long as more than 50% of the voting power for the election of our directors is held by an individual, a group or another company, we will qualify as a “controlled company” within the meaning of the Nasdaq listing rules. As of February 20, 2024, Dr.
So long as more than 50% of the voting power for the election of our directors is held by an individual, a group or another company, we will qualify as a “controlled company” within the meaning of the Nasdaq listing rules. As of February 26, 2025, Dr.
While this regulatory classification is exempt from certain FDA requirements, such as the need to submit a pre-market notification commonly known as a 510(k), and some of the requirements of the FDA’s Quality System Regulations (“QSR”), those device products would be subject to mandatory general controls that apply to all classes of medical devices.
While this regulatory classification is exempt from certain FDA requirements, such as the need to submit a pre-market notification commonly known as a 510(k), and some of the requirements of the FDA’s QSR, those device products would be subject to mandatory general controls that apply to all classes of medical devices.
If our products contain defects, we may experience: • a failure to achieve market acceptance for our products or expansion of our product sales; • loss of customer orders and delay in order fulfillment; • damage to our brand reputation; • loss of revenue; • increased warranty and customer service and support costs due to product repair or replacement; • product recalls or replacements; • inability to attract new customers; • diversion of resources from our manufacturing and research and development team into our service team; and • legal claims against us, including product liability claims, which could be costly and time consuming to defend and result in substantial damages. 37 Table of Contents The life sciences technology market is highly competitive.
If our products contain defects, we may experience: • a failure to achieve market acceptance for our products or expansion of our product sales; • loss of customer orders and delay in order fulfillment; • damage to our brand reputation; 36 Table of Contents • loss of revenue; • increased warranty and customer service and support costs due to product repair or replacement; • product recalls or replacements; • inability to attract new customers; • diversion of resources from our manufacturing and research and development team into our service team; and • legal claims against us, including product liability claims, which could be costly and time consuming to defend and result in substantial damages.
We expect that substantially all of our revenue in the near term will be generated from sales of RUO protein sequencing products to academic institutions and other research institutions. Much of these customers’ funding will be, in turn, provided by various state, federal and international government agencies.
We expect that a large portion of all of our revenue in the near term could be generated from sales of RUO protein sequencing products to academic institutions and other research institutions. Much of these customers’ funding will be, in turn, provided by various state, federal and international government agencies.
In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all, and it is possible that an insurer may deny coverage as to any future claim.
In addition, such insurance may not be available to us in the future on economically 40 Table of Contents reasonable terms, or at all, and it is possible that an insurer may deny coverage as to any future claim.
In addition, if our products are authorized for use by the FDA as medical devices, we will need to contract with FDA-registered device establishments that are able to comply with current Good Manufacturing Practice requirements that are set forth in the QSR, unless explicitly exempted by regulation.
In addition, if our products are authorized for use by the FDA as medical devices, we will need to contract with FDA-registered device establishments that are able to comply with current Good Manufacturing Practice requirements that are set forth in the Quality System Regulations (“QSR”), unless explicitly exempted by regulation.
For example, the California Consumer Privacy Act (“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 (“CCPA”), which increases privacy rights for California residents and imposes obligations on companies that process 44 Table of Contents their personal information, came into effect on January 1, 2020.
In January and August 2023, we committed to organizational restructurings designed to decrease our costs and create a more streamlined organization to support our business. In connection with these activities, we reduced our workforce by approximately 12% and 16% effective in January and August 2023, respectively.
In January and August 2023, and November 2024, we committed to organizational restructurings designed to decrease our costs and create a more streamlined organization to support our business. In connection with these activities, we reduced our workforce by approximately 12%, 16% and 23% effective in Januar y and August 2023, and November 2024, respectively.
Risks Related to Our Securities and to Being a Public Company Our outstanding warrants became exercisable for our Class A common stock in September 2021, which increased the number of shares eligible for future resale in the public market and resulted in dilution to our stockholders.
Risks Related to Our Securities and to Being a Public Company Our outstanding warrants became exercisable for our Class A common stock in September 2021, which increased the number of shares eligible for future resale in the public market and could result in dilution to our stockholders if exercised.
As of December 31, 2023, we had an accumulated deficit of $495.6 million. These losses and accumulated deficit were primarily due to the substantial investments made to develop and improve our technology.
As of December 31, 2024 , we had an accumulated deficit of $596.6 million . These losses and accumulated deficit were primarily due to the substantial investments made to develop and improve our technology.
Our ability to use net operating losses to offset future taxable income may be subject to certain limitations. As of December 31, 2023, we had federal net operating loss carryforwards (“NOLs”) to offset future taxable income of approximately $336.8 million, of which $65.5 million will begin to expire in 2033 if not utilized.
Our ability to use net operating losses to offset future taxable income may be subject to certain limitations. As of December 31, 2024 , we had federal net operating loss carryforwards (“NOLs”) to offset future taxable income of approximately $388.3 million, of which $65.5 million will begin to expire in 2033 if not utilized.
If any such claims or lawsuits are successfully asserted against us, we could be liable for damages and be required to alter or cease certain of our business practices. Any of these outcomes could cause our business, financial performance and cash position to be negatively impacted.
If any such claims or lawsuits are successfully asserted against us, or any other party we have agreed to indemnify, we could be liable for damages or reimbursement of damages and be required to alter or cease certain of our business practices. Any of these outcomes could cause our business, financial performance and cash position to be negatively impacted.
Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants.
Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a de-SPAC process such as our Business Combination, which terms are similar to those contained in the warrant agreement governing our warrants.
Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation and on our business, share price, financial condition, results of operations or cash flows, including the sustainability of our business over time. Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.
Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation and on our business, share price, financial condition, results of operations or cash flows, including the sustainability of our business over time.
We expect to use our funds on hand to further develop and commercialize our products, develop new products, and for working capital and general corporate purposes. As of December 31, 2023, we had cash and cash equivalents and investments in marketable securities totaling $257.7 million.
We expect to use our funds on hand to further develop and commercialize our products, develop new products, and for working capital and general corporate purposes. As of December 31, 2024 , we had cash and cash equivalents and investments in marketable securities totaling $209.6 million .
As a result, our estimates of the total addressable market for our products may be incorrect. 31 Table of Contents Epidemics, pandemics or other public health crises, including COVID-19, could adversely affect our business. Our operations could be significantly adversely affected by the effects of a widespread outbreak of epidemics, pandemics or other health crises, including COVID-19.
As a result, our estimates of the total addressable market for our products may be incorrect. Epidemics, pandemics or other public health crises could adversely affect our business. Our operations could be significantly adversely affected by the effects of a widespread outbreak of epidemics, pandemics or other health crises.
Our reagents may be used by clinical laboratories to create LDTs, which could, in the future, become subject to some form of FDA regulatory requirements, which could materially and adversely affect our business and results of operations.
Our reagents may be used by clinical laboratories to create Laboratory-Developed Tests ( “ LDTs ” ), which could, in the future, become subject to some form of FDA or other regulatory requirements, which could materially and adversely affect our business and results of operations.
A lack of future taxable income would adversely affect our ability to utilize these NOLs.
A lack of future taxable 38 Table of Contents income would adversely affect our ability to utilize these NOLs.
Use and distribution of open-source software may entail greater risks than use of third-party commercial software, as open-source software licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code.
Our products may contain software licensed by third parties under open-source software licenses. Use and distribution of open-source software may entail greater risks than use of third-party commercial software, as open-source software licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code.
Rothberg controlled 79.9% of the voting power of our outstanding capital stock, including our Class A common stock and Class B common stock.
Rothberg controlled 73.4% of the voting power of our outstanding capital stock, including our Class A common stock and Class B common stock.
We implemented a number of security enhancements as the incident unfolded and continue to implement short- and long-term security enhancements to further secure our network. 40 Table of Contents If our security measures, or those of our vendors and partners, are compromised due to any cybersecurity attacks or incidents, including as a result of third-party action, employee or customer error, malfeasance, stolen or fraudulently obtained log-in credentials, power outages, hardware failures, telecommunication or utility failures, catastrophes, other unforeseen events or otherwise, our reputation could be damaged, our business may be harmed, we could become subject to litigation and we could incur significant expense and liability.
If our security measures, or those of our vendors and partners, are compromised due to any cybersecurity attacks or incidents, including as a result of third-party action, employee or customer error, malfeasance, stolen or fraudulently obtained log-in credentials, power outages, hardware failures, telecommunication or utility failures, catastrophes, other unforeseen events or otherwise, our reputation could be damaged, our business may be harmed, we could become subject to litigation and we could incur significant expense and liability.
If the uncertainty surrounding geopolitical conflicts and in the global marketplace continues, or if we, or any of our suppliers, manufacturers or customers encounter any disruptions to our or their respective operations or facilities, then we or they may be prevented or delayed from effectively operating our or their business, respectively, and the marketing and sale of our products and our financial results could be adversely affected. 32 Table of Contents If we do not sustain or successfully manage our anticipated growth, our business and prospects will be harmed.
If the uncertainty surrounding geopolitical conflicts and in the global marketplace continues, or if we, or any of our suppliers, manufacturers or customers encounter any disruptions to our or their respective operations or facilities, then we or they may be prevented or delayed from effectively operating our or their business, respectively, and the marketing and sale of our products and our financial results could be adversely affected.
Unless otherwise agreed to by us and the other participant company, all rights, title and interest in and to any inventions, works-of-authorship, idea, data or know-how invented, made, created or developed by the personnel (employees, contractors or consultants) in the course of conducting services for a participant company (“Created IP”) will be owned by the participant company for which the work was performed, and the recipient participant company grants to the party that had its personnel provide the services that resulted in the creation of the Created IP a royalty-free, perpetual, limited, worldwide, non-exclusive, sub-licensable (and with respect to software, sub-licensable in object code only) license to utilize the Created IP only in the core business field of the originating participant company, including a license to create and use derivative works based on the Created IP in the originating participant’s core business field, subject to any agreed upon restrictions. 38 Table of Contents The technology and personnel-sharing arrangements under the TSEAs may prevent us from fully utilizing our personnel if such personnel are also being used by the other participant companies and may also cause our personnel to enter into agreements with or provide services to other companies that interfere with their obligations to us.
Unless otherwise agreed to by us and the other participant company, all rights, title and interest in and to any inventions, works-of-authorship, idea, data or know-how invented, made, created or developed by the personnel (employees, contractors or consultants) in the course of conducting services for a participant company (“Created IP”) will be owned by the participant company for which the work was performed, and the recipient participant company grants to the party that had its personnel provide the services that resulted in the creation of the Created IP a royalty-free, perpetual, limited, worldwide, non-exclusive, sub-licensable (and with respect to software, sub-licensable in object code only) license to utilize the Created IP only in the core business field of the originating participant company, including a license to create and use derivative works based on the Created IP in the originating participant’s core business field, subject to any agreed upon restrictions.
Such agreements may not be enforceable or may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements, and we may not be able to prevent such unauthorized disclosure, which could adversely impact our ability to establish or maintain a competitive advantage in the market, and our business, financial condition, results of operations and prospects. 49 Table of Contents Monitoring unauthorized disclosure is difficult, and we do not know whether the steps we have taken to prevent such disclosure are, or will be, adequate.
Such agreements may not be enforceable or may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements, and we may not be able to prevent such unauthorized disclosure, which could adversely impact our ability to establish or maintain a competitive advantage in the market, and our business, financial condition, results of operations and prospects.
The issuance of a patent is not conclusive as to our inventorship, scope, validity or enforceability. Some of our patents or patent applications (including licensed patents and patent applications) may be challenged at a future point in time in opposition, derivation, reexamination, inter partes review, post-grant review or interference or other similar proceedings.
Some of our patents or patent applications (including licensed patents and patent applications) may be challenged at a future point in time in opposition, derivation, reexamination, inter partes review, post-grant review or interference or other similar proceedings.
We have recorded a full valuation allowance related to our NOLs and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.
Our NOLs may also be impaired under similar provisions of state law. We have recorded a full valuation allowance related to our NOLs and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including changes in inflation, interest rates and overall economic conditions and uncertainties. We have experienced pricing increases from our suppliers.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including changes in inflation, interest rates, tariffs, retaliatory trade policies including limitations of shipments of products, and overall economic conditions and uncertainties. For instance, we have experienced pricing 30 Table of Contents increases from our suppliers.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations or prospects. 51 Table of Contents We may choose to challenge, including in connection with any allegation of patent infringement by a third party, the patentability, validity, ownership or enforceability of any third-party patent that we believe may have applicability in our field, and any other third-party patent that may at some future time possibly be asserted against us.
We may choose to challenge, including in connection with any allegation of patent infringement by a third party, the patentability, validity, ownership or enforceability of any third-party patent that we believe may have applicability in our field, and any other third-party patent that may at some future time possibly be asserted against us.
A variety of organizations measure the performance of companies on such ESG topics, and the results of these assessments are widely publicized. In addition, investment in funds that specialize in companies that perform well in such assessments are becoming increasingly popular, and major institutional investors have publicly emphasized the importance of such ESG measures to their investment decisions.
In addition, investment in funds that specialize in companies that perform well in such assessments are becoming increasingly popular, and major institutional investors have publicly emphasized the importance of such ESG measures to their investment decisions.
Risks Related to Our Business and Industry We recently commercially launched our first product, but we may not be able to successfully commercially launch other future products. We recently commercially launched our first product, Platinum ® for RUO.
Risks Related to Our Business and Industry We may not gain commercial traction for our current products and we may not be able to successfully commercially launch other future products. We commercially launched our first product, Platinum for RUO in December 2022.
If we elect to label and market our products for use as, or in the performance of, clinical diagnostics in the United States, thereby subjecting them to FDA regulation as medical devices, we would be required to obtain pre-market authorization from the FDA, unless an exception applies. 41 Table of Contents In the future, if we choose to develop and market our products for clinical or diagnostic uses in the United States, we will be required to comply with FDA’s regulations for in vitro diagnostic (“IVD”) medical devices.
If we elect to label and market our products for use as, or in the performance of, clinical diagnostics in the United States, thereby subjecting them to FDA regulation as medical devices, we would be required to obtain pre-market authorization from the FDA, unless an exception applies.
In addition, we may seek to obtain additional licenses from our licensor(s) and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensor(s), including by agreeing to terms that could enable third parties, including our competitors, to receive licenses to a portion of the intellectual property that is subject to our existing licenses and to compete with our products.
In addition, we may seek to obtain additional licenses from our licensor(s) and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensor(s), including by agreeing to terms that could enable third parties, including our competitors, to receive licenses to a portion of the intellectual property that is subject to our existing licenses and to compete with our products. 53 Table of Contents In addition, the agreements under which we currently and in the future license intellectual property or technology from third parties are complex and certain provisions in such agreements may be susceptible to multiple interpretations.
If these pieces of equipment were to stop working and be unable to be repaired in a timely manner or at all, our ability to manufacturer our semiconductor chips could be adversely affected.
Our internal manufacturing equipment is specialized with limited vendor options and long lead times. If these pieces of equipment were to stop working and be unable to be repaired in a timely manner or at all, our ability to manufacturer our semiconductor chips could be adversely affected.
Our suppliers have also been impacted by the COVID-19 pandemic, and in the past, we have experienced supply delays for critical hardware and instrumentation as a result. If any of these events occur, our business, results of operations, financial condition and prospects could be harmed. Our internal manufacturing equipment is specialized with limited vendor options and long lead times.
In the past, our suppliers have been impacted by global pandemics and epidemics, such as the COVID-19 pandemic, and we have experienced supply delays for critical hardware and instrumentation as a result. If any of these events occur, our business, results of operations, financial condition and prospects could be harmed.
As a result of the SEC Statement, HighCape reevaluated the accounting treatment of its Public Warrants and Private Warrants and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. 55 Table of Contents As a result, included on our balance sheets as of December 31, 2023 and December 31, 2022 are derivative liabilities related to our warrants.
As a result of the SEC Statement, HighCape reevaluated the accounting treatment of its Public Warrants and Private Warrants and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.
Such notices could result in financial, legal, operational or reputational harm to us, loss of competitive advantage or loss of consumer confidence. 45 Table of Contents We continue to evaluate our compliance obligations, but do not currently have in place formal policies and procedures related to the storage, collection and processing of information, and have not conducted any internal or external data privacy audits, to ensure our compliance with all applicable data protection laws and regulations.
We continue to evaluate our compliance obligations, but do not currently have in place formal policies and procedures related to the storage, collection and processing of information, and have not conducted any internal or external data privacy audits, to ensure our compliance with all applicable data protection laws and regulations.
If we do not prevail, we may be required to pay damages, including treble damages, attorneys’ fees or costs and expenses and royalties, which could adversely affect our ability to offer products or services, our ability to continue operations and our business, financial condition, results of operations and prospects. 53 Table of Contents If we cannot license rights to use technologies on reasonable terms, we may not be able to commercialize new products in the future.
If we do not prevail, we may be required to pay damages, including treble damages, attorneys’ fees or costs and expenses and royalties, which could adversely affect our ability to offer products or services, our ability to continue operations and our business, financial condition, results of operations and prospects.
We may identify third-party technology that we may need to license or acquire in order to develop or commercialize our products or technologies. However, we may be unable to secure such licenses or acquisitions.
If we cannot license rights to use technologies on reasonable terms, we may not be able to commercialize new products in the future. We may identify third-party technology that we may need to license or acquire in order to develop or commercialize our products or technologies. However, we may be unable to secure such licenses or acquisitions.
Our business will depend significantly on research and development spending by academic institutions and other research institutions, and any reduction in spending could limit demand for our products and adversely affect our business, results of operations, financial condition and prospects.
Our business will depend significantly on research and development spending by academic institutions and other research institutions, and any reduction in spending, driven by these customers or other third party funding sources such as the National Institutes of Health, could limit demand for our products and adversely affect our business, results of operations, financial condition and prospects.
Our management and other personnel will need to devote a substantial amount of time towards maintaining compliance with these requirements and effectively manage these growth activities. We may face challenges integrating, developing and motivating our rapidly growing employee base.
As of December 31, 2024 , we had 143 full-time employees in the United States and six full-time employees internationally . Our management and other personnel will need to devote a substantial amount of time towards maintaining compliance with these requirements and effectively manage these growth activities. We may face challenges integrating, developing and motivating our employee base.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of the above processes, we regularly engage with consultants, auditors and other third parties in assisting in review our cybersecurity program to help identify areas for continued focus, improvement and compliance. 59 Table of Contents We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “ If we experience a significant disruption in our information technology systems, including our Platinum Analysis Software services, or cybersecurity incidents, our business could be adversely affected” , which disclosures are incorporated by reference herein.
Biggest changeWe describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “ If we experience a significant disruption in our information technology systems, including our Platinum Analysis Software services, or cybersecurity incidents, our business could be adversely affected” , which disclosures are incorporated by reference herein.
We plan for our Chief Financial Officer to provide our Audit Committee with quarterly general risk assessment updates, which shall cover cyber risk topics such as data security posture, results from third-party assessments, progress towards pre-determined risk-mitigation-related goals, our incident response plan, and material cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks.
We plan for our Chief Financial Officer to provide our Audit Committee with quarterly general risk assessment updates, which shall cover cyber risk topics such as data security posture, results from third-party assessments, progress towards predetermined risk-mitigation-related goals, our incident response plan, and material cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks.
Our Board of Directors executes its oversight responsibility for risk management both directly and through delegating oversight of certain of these risks to its committees, and o ur Board of Directors has authorized our Audit Committee to oversee risks from cybersecurity threats.
Our Board of Directors executes its oversight responsibility for risk management both directly and through delegating oversight of certain of these risks to its committees, and our Board of Directors has authorized our Audit Committee to oversee risks from cybersecurity threats.
In general, o ur Board of Directors oversees risk management activities designed and implemented by our management, and considers specific risks, including, for example, risks associated with our strategic plan, business operations, and capital structure.
In general, our Board of Directors oversees risk management activities designed and implemented by our management, and considers specific risks, including, for example, risks associated with our strategic plan, business operations, and capital structure.
Our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our business and reputation.
Our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our business and reputation. 61 Table of Contents As part of the above processes, we regularly engage with consultants, auditors and other third parties in assisting in review our cybersecurity program to help identify areas for continued focus, improvement and compliance.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLeases, in the accompanying notes to our Consolidated Financial Statements included elsewhere in the Annual Report on Form 10-K.
Biggest changeLeases , in the accompanying notes to our Consolidated Financial Statements included elsewhere in the Annual Report on Form 10-K. 62 Table of Contents
Our leases expire at various dates through 2032. We believe that our current office, laboratory and assembly and packaging locations are sufficient to meet our needs at existing volume levels for the foreseeable future. For further information, please refer to Note 9.
Our leases expire at various dates through 2032. We believe that our current office, laboratory and assembly and packaging locations are sufficient to meet our needs at existing volume levels for the foreseeable future. For further information, please refer to Note 8.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 3. LEGAL PROCEEDINGS In April 2023, we informed the contract manufacturer that had manufactured our Platinum ® and Carbon TM instruments that we intended to wind down the relationship and transition to a different contract manufacturer.
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ITEM 3. LEGAL PROCEEDINGS We are involved in various legal proceedings, claims, investigations and litigation that arise in the ordinary course of our business. For further information regarding our legal proceedings, please refer to N ote 18.
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In October 2023, we were informed the contract manufacturer had filed a complaint in the state of Texas alleging breach of contract and made claims for economic damage under the contract as well as attorney costs. In January 2024 the suit was withdrawn and refiled in the state of Minnesota alleging similar claims.
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Commitments and Contingencies of the Notes to the Consolidated Financial Statements (Part II, Item 8) included in this report, which is incorporated by reference herein. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 63 Table of Contents PART II
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Although it is not possible to determine the potential financial exposure associated with the alleged claim at this time given its early stage, we believe we have a meritorious defense and intend to vigorously defend against all claims asserted in the complaint.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe payment of cash dividends is subject to the discretion of our board of directors and may be affected by various factors, including our future earnings, financial condition, capital requirements, share repurchase activity, current and future planned strategic growth initiatives, levels of indebtedness, and other considerations our board of directors deem relevant. Unregistered Sales of Equity Securities Not applicable.
Biggest changeThe payment of cash dividends is subject to the discretion of our board of directors and may be affected by various factors, including our future earnings, financial condition, capital requirements, share repurchase activity, current and future planned strategic growth initiatives, levels of indebtedness, and other considerations our board of directors deem relevant.
Stockholders As of February 20, 2024, we had approximately 121,832,417 shares of Class A common stock issued and outstanding held of record by 75 holders, approximately 19,937,500 shares of Class B common stock issued and outstanding held of record by two holders, 3,833,319 public warrants held of record by two holders and 135,000 private placement warrants issued in connection with HighCape’s initial public offering held of record by three holders, each exercisable for one share of Class A Common Stock at a price of $11.50 per share.
Stockholders As of February 26, 2025, we had 163,202,105 shares of Class A common stock issued and outstanding held of record by 303 holders, 19,937,500 shares of Class B common stock issued and outstanding held of record by two holders, and 3,833,319 public warrants held of record by two holders and 135,000 private placement warrants issued in connection with HighCape’s initial public offering held of record by three holders, each exercisable for one share of Class A Common Stock at a price of $11.50 per share.
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Unregistered Sales of Equity Securities During the year ended December 31, 2024, the Company granted (i) an option to purchase 543,271 shares of the Company’s common stock with an exercise price of $0.98 per share and (ii) 899,305 restricted stock units to certain of our employees as an “inducement” grant under our 2023 Inducement Equity Incentive Plan pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules.
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We intend to file a registration statement on a Form S-8 to register the shares of common stock underlying these inducement awards prior to the time at which the awards become exercisable or settleable, as applicable. Issuer Purchases of Equity Securities Not applicable. ITEM 6. [RESERVED] 64 Table of Contents

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe following table presents a summary of our consolidated cash flows for operating, investing, and financing activities for the years ended December 31, 2023 and 2022, as well as the period ending cash and cash equivalents and working capital (in thousands): 2023 2022 Net cash (used in) provided by: Net cash used in operating activities $ (94,036 ) $ (90,560 ) Net cash provided by investing activities 143,428 137,185 Net cash provided by financing activities 149 1,909 Net increase in cash and cash equivalents $ 49,541 $ 48,534 68 Table of Contents Net cash used in operating activities The net cash used in operating activities of $94.0 million for the year ended December 31, 2023 was primarily due to our net loss of $96.0 million, which primarily resulted from continued spend on research and development efforts and commercialization ramp up, stock-based compensation of $8.5 million, net cash outflows from changes in operating assets and liabilities of $6.6 million, realized and unrealized gain (loss) on marketable securities, net, of $5.6 million and depreciation and amortization of $4.2 million.
Biggest changeLiquidity and Capital Resources The following table presents a summary of our consolidated cash flows for operating, investing, and financing activities for the years ended December 31, 2024 and 2023 (in thousands): 2024 2023 Net cash (used in) provided by: Net cash used in operating activities $ (87,795) $ (94,036) Net cash (used in) provided by investing activities (32,675) 143,428 Net cash provided by financing activities 35,876 149 Effect of exchange rate changes on cash and cash equivalents (25) — Net (decrease) increase in cash and cash equivalents $ (84,619) $ 49,541 Net cash used in operating activities For the year ended December 31, 2024, net cash used in operating activities of $87.8 million was primarily due to a net loss of $101.0 million resulting from continued spend on research and development and commercialization efforts, accretion on marketable securities of $8.4 million and a $3.2 million write-down of inventory partially offset by stock-based compensation of $8.9 million, a net increase in cash provided by operating assets and liabilities of $4.6 million due to timing of cash receipts and disbursements, depreciation and amortization of $4.6 million, a change in fair value of warrant liabilities of $3.7 million, and non-cash lease expense of $2.4 million. 72 Table of Contents For the year ended December 31, 2023, the net cash used in operating activities of $94.0 million was primarily due to a net loss of $96.0 million resulting from the continued ramp-up of research and development and commercialization efforts, unrealized net gains on trading securities of $10.7 million, net cash outflows from changes in operating assets and liabilities of $3.2 million due to timing of cash receipts and disbursements and a $3.4 million write-down of inventory, partially offset by stock-based compensation of $8.5 million, realized net losses on trading securities of $5.1 million, depreciation and amortization of $4.2 million and non-cash lease expense of $1.4 million.
Prior to the Business Combination, the fair value of the shares of common stock underlying stock options had historically been determined by the Board, with input from management and contemporaneous third-party valuations, as there was no public market for the common stock.
Prior to the Business Combination, the fair value of the shares of common stock underlying stock options had been determined by the Board, with input from management and contemporaneous third-party valuations, as there was no public market for the common stock.
Treasury yield curve in effect at the time of the grant. • Expected Stock Price Volatility : We determined expected annual equity volatility based on the combination of the historical volatility of our common stock and the historical volatility of the common stock comparable to our common stock. • Dividend Yield : Because we have never paid a dividend and do not expect to begin doing so in the foreseeable future, we assume no dividend yield in valuing the stock-based awards. • Exercise Price : The exercise price is taken directly from the grant notice issued to employees and nonemployees.
Treasury yield curve in effect at the time of the grant. • Expected Stock Price Volatility : We determined expected annual equity volatility based on the combination of the historical volatility of our common stock and the historical volatility of the common stock comparable to our common stock. • Dividend Yield : Because we have never paid a dividend and do not expect to begin doing so in the foreseeable future, we assume no dividend yield in valuing the stock-based awards. • Exercise Price : The exercise price is taken directly from the grant notice issued to employees and non-employees.
We forecast capital expenditures in order to execute on our business plan and maintain growth; however, the actual amount and timing of such capital expenditures will ultimately be determined by the volume of business. We anticipate our future capital expenditures will be at approximately the same level as compared to the year ended December 31, 2023.
We forecast capital expenditures in order to execute on our business plan and maintain growth; however, the actual amount and timing of such capital expenditures will ultimately be determined by the volume of business. We anticipate our future capital expenditures will be at approximately the same level as compared to the year ended December 31, 2024.
In August 2023, we filed a universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which became effective on August 22, 2023, covering the offering of Class A common stock, preferred stock, debt securities, warrants, rights and units.
On August 11, 2023 , we filed a universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which became effective on August 22, 2023 , covering the offering of Class A common stock, preferred stock, debt securities, warrants, rights and units.
Within our initial focus market of proteomics, our workflow is designed to provide users a seamless opportunity to gain key insights into the immediate state of biological pathways and cell state.
Within our initial focus market of proteomics, our platform is designed to provide users a seamless opportunity to gain key insights into the immediate state of biological pathways and cell state.
After the completion of the Business Combination, we measure compensation expense for stock-based awards to employees, non-employees and directors based upon the awards’ initial grant-date fair values. Stock-based compensation expense for stock options, restricted stock units and performance awards is recorded over the requisite service period.
After the completion of the Business Combination, we measure compensation expense for stock-based awards to employees, non-employees and directors based upon the awards’ initial grant-date fair values. Stock-based compensation 67 Table of Contents expense for stock options, restricted stock units and performance awards is recorded over the requisite service period.
Amounts in inventory used for research and development purposes are charged to research and development expense when the product enters the research and development process and can no longer be used for commercial purposes and, therefore, does not have an “alternative future use” as defined in authoritative guidance.
Amounts in inventory used for research and development purposes are charged to research and development e xpense when the product enters the research and development process and can no longer be used for commercial purposes and, therefore, does not have an “alternative future use” as defined in authoritative guidance.
We believe our platform, which is designed to streamline sequencing and data analysis at a lower instrument cost than legacy proteomic solutions, could allow our product to have wide utility across the study of the proteome.
We believe our platform, which is designed to streamline sequencing and data analysis at a lower instrument cost and with greater automation than legacy proteomic solutions, could allow our product to have wide utility across the study of the proteome.
GAAP. The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, as well as expenses incurred during the reporting periods.
GAAP. The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets and 66 Table of Contents liabilities and the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, as well as expenses incurred during the reporting periods.
Stock options granted to non-employees are accounted for based on their fair value on the measurement date using the Black-Scholes option-pricing model. For further information regarding our stock-based compensation and equity incentive plans, please refer to Note 2. Summary of Significant Accounting Policies, and Note 12.
Stock options granted to non-employees are accounted for based on their fair value on the measurement date using the Black-Scholes model. For further information regarding our stock-based compensation and equity incentive plans, please refer to Note 2. Summary of Significant Accounting Policies , and Note 1 1 .
Related Party Transaction For a description of our related party transactions, please refer to Note 17. Related Party Transactions, in the accompanying notes to the Consolidated Financial Statements included elsewhere in the Annual Report on Form 10-K. Capital Expenditures During the year ended December 31, 2023, capital expenditures were $4.5 million.
Related Party Transactions For a description of our related party transactions, please refer to Note 17. Related Party Transactions , in the accompanying notes to the Consolidated Financial Statements included elsewhere in the Annual Report on Form 10-K. Capital Expenditures During the year ended December 31, 2024, capital expenditures were $4.6 million.
The fair values of stock option grants are estimated as of the date of grant by applying the Black-Scholes option valuation model (“Black-Scholes”). The Black-Scholes and Monte Carlo models incorporate assumptions as to stock price volatility, the expected life of options or restricted stock, a risk-free interest rate and dividend yield.
The fair values of stock option grants with only a service condition are estimated as of the date of grant by applying the Black-Scholes option valuation model (“Black-Scholes model”). The Black-Scholes model and Monte Carlo models incorporate assumptions as to stock price volatility, the expected life of options or restricted stock, a risk-free interest rate and dividend yield.
We continue to monitor these supply chain, inflation and interest rate factors, as well as the uncertainty resulting from the overall economic environment.
We continue to monitor these supply chain, inflation and interest rate factors, as well as the uncertainty resulting from the overall economic 65 Table of Contents environment.
An assessment of the recoverability of capitalized inventory is performed during each reporting period and, if needed, we record a reserve for any excess and obsolete inventory to record inventory at its estimated net realizable value in the period it is identified. We also recorded an immaterial inventory excess and obsolescence reserve related to cost of revenue.
An assessment of the recoverability of capitalized inventory is performed during each reporting period and, if needed, we record a reserve for any excess and obsolete inventory to record inventory at its estimated net realizable value in the period it is identified.
For discussion and analysis pertaining to the year ended December 31, 2022 overview and highlights as compared to the year ended December 31, 2021, please refer to the Company’s Annual Report on Form 10-K, as filed with the SEC on March 17, 2023.
For discussion and analysis pertaining to the year ended December 31, 2023 overview and highlights as compared to the year ended December 31, 2022 , please refer to the Company’s Annual Report on Form 10-K, as filed with the SEC on February 29, 2024.
Our platform aims to address many of the key challenges and bottlenecks with legacy proteomic solutions, such as MS, high instrument costs both in terms of acquisition and ownership and complexity with data analysis, which together prevent broad adoption.
Our platform aims to address many of the key challenges and bottlenecks with legacy proteomic solutions, such as mass spectrometry (“MS”), which include high instrument costs both in terms of acquisition and ownership, and complexity with data analysis, which together limit broad adoption.
Research and development expenses are recognized as incurred. Our research and development expenses are primarily related to developing new products and services.
Our research and development expenses are primarily related to developing new products and services.
Overview We are an innovative life sciences company with the mission of transforming single-molecule analysis and democratizing its use by providing researchers and clinicians access to the proteome, the set of proteins expressed within a cell.
We are a life sciences company focused on proteomics research, with the mission of transforming single-molecule analysis and democratizing its use by providing researchers and clinicians access to the proteome, the set of proteins expressed within a cell.
The effect of forfeiture in compensation costs is recognized based on actual forfeitures when they occur. 64 Table of Contents Black-Scholes is affected by the stock price on the date of the grant as well as assumptions regarding a number of highly complex and subjective variables.
The effect of forfeiture in compensation costs is recognized based on actual forfeitures when they occur. The Black-Scholes model is affected by the stock price on the date of the grant as well as assumptions regarding a number of variables.
During the year ended December 31, 2023, we identified $3.4 million of product that no longer had an alternative future use and therefore was included as part of research and development expense.
During the years ended December 31, 2024 and 2023 we identified $3.2 million and $3.4 million, respectively, of product that no longer had an alternative future use and therefore was included as part of research and development expense. There was no such expense identified for the year ended December 31, 2022.
We have funded and plan to continue funding these capital expenditures with cash and financing. Contractual Obligations We lease certain facilities and equipment under noncancelable lease agreements that expire at various dates through 2032. As of December 31, 2023, the future payments, before adjustments for tenant incentives, under leases was $31.1 million.
We have funded and plan to continue funding these capital expenditures with cash and financing. Contractual Obligations We lease certain facilities and equipment under noncancellable lease agreements that expire at various dates through 2032. As of December 31, 2024 , the future lease payments, before adjustments for tenant incentives, were approximately $26.7 million.
We have developed a proprietary universal single-molecule detection platform that we are first applying to proteomics to enable NGPS, the ability to sequence proteins in a massively parallel fashion (rather than sequentially, one at a time), that can be used for the study of nucleic acids.
We have developed a proprietary universal single-molecule detection platform that we are applying to proteomics to enable Next-Generation Protein Sequencing TM (“NGPS”), to sequence proteins in a massively parallel fashion (rather than sequentially, one at a time), which can also be used for the study of nucleic acids.
There were no such reserves recorded against inventory for the years ended December 31, 2022 or 2021. For further information regarding our significant accounting policies and estimates, please refer to Note 2. Summary of Significant Accounting Policies, in the accompanying notes to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
Inventory excess and obsolescence reserves related to cost of revenue were immaterial for the years ended December 31, 2024 and 2023. For further information regarding our significant accounting policies and estimates, please refer to Note 2. Summary of Significant Accounting Policies , in the accompanying notes to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
Although we do not expect to be significantly impacted by the conflicts in Ukraine or Israel and Gaza, we have experienced some constraints in product and material availability and increasing costs required to obtain some materials and supplies as a result of these conflicts on the global economy.
Although we do not expect to be significantly impacted by geopolitical conflicts, we have experienced some constraints in product and material availability and increasing costs required to obtain some materials and supplies as a result of these conflicts on the global economy. As geopolitical conflicts continue or worsen, it may impact our business, financial condition or results of operations.
We began a controlled launch of the Platinum ® instrument and started to take orders in December 2022, and subsequently began limited commercial shipments of Platinum ® in January 2023.
We began a controlled launch of the Platinum instrument and started to take orders in December 2022, and subsequently began a controlled commercial launch of Platinum in January 2023, and then moved to a full commercial launch of Platinum beginning the second quarter of 2024.
Selling, general and administrative expenses for the years ended December 31, 2023 and 2022 are as follows (dollars in thousands): 2023 2022 $ Change % Change Selling, general and administrative $ 44,634 $ 42,296 $ 2,338 5.5 % Selling, general and administrative expenses increased by $2.3 million, or 5.5%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Selling, general and administrative expenses for the years ended December 31, 2024 and 2023 are as follows (dollars in thousands): 2024 2023 $ Change % Change Selling, general and administrative $ 50,535 $ 44,634 $ 5,901 13.2 % Selling, general and administrative expenses increased by $5.9 million, or 13.2%, for the year ended December 31, 2024 as compared to the same period in 2023.
We believe that with the ability to sequence proteins in a massively parallel fashion and offer a simplified workflow with a faster turnaround time, NGPS has the potential to unlock significant biological information through improved resolution and unbiased access to the proteome at a speed and scale that is not available today.
We believe that the ability to sequence proteins in a massively parallel fashion and offer a fast analysis time provides NGPS with the potential to unlock significant biological information through improved resolution and unbiased access to the proteome at a speed and scale that is not available today. Traditionally, proteomic workflows to sequence proteins required days or weeks to complete.
Research and development expenses for the years ended December 31, 2023 and 2022 are as follows (dollars in thousands): 2023 2022 $ Change % Change Research and development $ 67,025 $ 72,062 $ (5,037 ) (7.0 )% Research and development expenses decreased by $5.0 million, or 7.0%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Research and development expenses for the years ended December 31, 2024 and 2023 are as follows (dollars in thousands): 2024 2023 $ Change % Change Research and development $ 59,641 $ 67,025 $ (7,384) (11.0) % Research and development expenses decreased by $7.4 million, or 11.0%, for the year ended December 31, 2024 as compared to the same period in 2023.
In 2021, we introduced our Platinum ® early access program to sites with participation from leading academic centers and key industry partners. The early access program introduced the Platinum ® single-molecule sequencing system to key opinion leaders across the globe, for both expansion and development of applications and workflows.
The early access program introduced the Platinum single-molecule sequencing system to key opinion leaders across the globe for both expansion and development of applications and workflows.
We expect that our cash and cash equivalents and investments in marketable securities as of December 31, 2023, which includes the funds raised in connection with the Business Combination, will be sufficient to meet our liquidity, capital expenditure, and anticipated working capital requirements and fund our operations for at least the next 12 months.
We expect that our existing cash and cash equivalents and investments in marketable securities, together with revenue from the sale of our products and services, will be sufficient to meet our liquidity, capital expenditure, and anticipated working capital requirements and fund our operations for at least the next 12 months.
Selling, General and Administrative Expenses Selling, general and administrative expenses primarily consist of personnel costs and benefits, stock-based compensation, patent and filing fees, consulting and professional services, legal and accounting services, facilities costs, depreciation and amortization expense, insurance and office expenses, product advertising and marketing.
These decreases were partially offset by a $2.9 million increase in laboratory supplies expense. 70 Table of Contents Selling, General and Administrative Expenses Selling, general and administrative expenses primarily consist of personnel costs and benefits, stock-based compensation, patent and filing fees, consulting and professional services, legal and accounting services, facilities costs, depreciation and amortization expense, insurance and office expenses, product advertising and marketing.
Other income, net Other income, net, for the years ended December 31, 2023 and 2022 are as follows (dollars in thousands): 2023 2022 $ Change % Change Other income, net $ 366 $ 458 $ (92 ) (20.1 )% Other income, net, decreased by $0.1 million, or 20.1%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Other income, net Other income, net, for the years ended December 31, 2024 and 2023 is as follows (dollars in thousands): 2024 2023 $ Change % Change Other (expense) income, net $ (19) $ 366 $ (385) (105.2) % Other (expense) income, net, decreased by $0.4 million, or 105.2%, for the year ended December 31, 2024 as compared to the same period in 2023.
Going forward, we anticipate debt or equity offerings will be the primary source of funds to support our operating needs and capital expenditures until we reach scale of our commercial operations.
Going forward, we anticipate debt or equity offerings will be the primary source of funds to support our operating needs and capital expenditures until we reach scale of our commercial operations. We expect to incur negative operating cash flows on an annual basis for the foreseeable future until such time that we can scale our revenue growth.
There was no such revenue or cost of revenue recognized, or gross profit for the year ended December 31, 2022. 66 Table of Contents Research and Development Expenses Research and development expenses primarily consist of personnel costs and benefits, stock-based compensation, lab supplies, consulting and professional services, fabrication services, charges related to product without an alternative future use, facilities costs, software, and other outsourced expenses.
Research and Development Expenses Research and development expenses primarily consist of personnel costs and benefits, stock-based compensation, lab supplies, consulting and professional services, fabrication services, charges related to product without an alternative future use, facilities costs, software, and other outsourced expenses. Research and development expenses are recognized as incurred.
Our business will require an accelerated amount of spending to enhance the sales and marketing teams, continue to drive development, and build inventory.
Our ongoing commercialization of Platinum and Platinum Pro as well as our continuing research and development efforts to enhance our instruments may require an accelerated amount of spending to enhance the sales and marketing teams, continue to drive development, and build inventory.
Change in warrant liabilities for the years ended December 31, 2023 and 2022 is as follows (dollars in thousands): 2023 2022 $ Change % Change Change in fair value of warrant liabilities $ (278 ) $ 6,243 $ (6,521 ) (104.5 )% The fair value of warrant liabilities decreased $6.5 million, or 104.5%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Change in warrant liabilities for the years ended December 31, 2024 and 2023 is as follows (dollars in thousands): 2024 2023 $ Change % Change Change in fair value of warrant liabilities $ (3,722) $ (278) $ (3,444) 1238.8 % The change in fair value of warrant liabilities increased by $3.4 million, or 1238.8% for the year ended December 31, 2024 as compared to the same period in 2023.
Stock-based Compensation, in the accompanying notes to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. Warrant Liability Outstanding warrants include Public Warrants which were issued as one-third of one redeemable warrant per unit during HighCape’s initial public offering on September 9, 2020, and Private Warrants sold to the Sponsor.
Warrant Liability 68 Table of Contents Outstanding warrants include Public Warrants which were issued as one-third of one redeemable warrant per unit during HighCape’s initial public offering on September 9, 2020, and Private Warrants sold to the Sponsor.
Product revenue is generated from the following sources: (i) sales of our Platinum ® instrument, (ii) consumables, which consist of sales of our library, sequencing reagents and semiconductor chips, and (iii) freight revenue, which is recognized upon shipment. Service revenue is generated from service maintenance contracts including Platinum ® Analysis Software access, and advanced training for instrument use.
Revenue, Cost of Revenue and Gross Profit Revenue is derived from sales of products and services. Product revenue is generated from the following sources: (i) sales of our Platinum® instrument, (ii) consumables, which consist of sales of our library preparation kits, sequencing kit (which includes sequencing reagents and semiconductor chips), and (iii) freight revenue, which is recognized upon shipment.
In August 2023, we also entered into an Equity Distribution Agreement (“EDA”) with an outside placement agent (the “Agent”), under which we may, from time to time, sell shares of our Class A common stock having an aggregate offering price of up to $75.0 million in “at-the-market” offerings through the Agent (the “ATM Offering”).
On December 11, 2024, we entered into an Equity Distribution Agreement (the “Sales Agreement”) with Canaccord Genuity LLC (“Canaccord”) to sell shares of our Class A common stock, par value $0.0001, having an aggregate offering price of up to $75.0 million , from time to time through an “at-the-market” offering program under which Canaccord will act as sales agent (the “ATM Offering”).
We expect to use the funds on hand to continue to invest in the commercial launch of our products, to further invest in research and development, for other operating expenses, business acquisitions and for working capital and general corporate purposes. As of December 31, 2023, we had cash and cash equivalents and investments in marketable securities totaling $257.7 million.
We expect to use our cash and cash equivalents and investments in marketable securities and funds from revenue generated to invest in our continued commercialization efforts, to further invest in research and development, for other operating expenses, business acquisitions and for working capital and general corporate purposes.
Net cash provided by financing activities The net cash provided by financing activities of $0.1 million in the year ended December 31, 2023 was due primarily to approximately $0.4 million of proceeds from the exercise of stock options.
Net cash provided by financing activities For the year ended December 31, 2024, net cash provided by financing activities was $35.9 million as compared to $0.1 million for the same period in 2023. This increase in cash provided was due primarily to $34.8 million of net proceeds from the issuance of common stock under the ATM Offering.
Cost of revenue primarily consists of product and service costs including material costs, personnel costs and benefits, inbound and outbound freight, packaging, warranty replacement costs, royalty costs, facilities costs, depreciation and amortization expense, and inventory excess and obsolescence reserves.
Service revenue is generated from service maintenance contracts including Platinum Analysis Software access, and advanced training for instrument use. 69 Table of Contents Cost of revenue primarily consists of product and service costs including material costs, personnel costs and benefits, inbound and outbound freight, packaging, warranty replacement costs, royalty costs, facilities costs, depreciation and amortization expense, and inventory write-offs.
Licenses related to certain intellectual property We license certain intellectual property, some of which may be utilized in our current or future product offerings. To preserve the right to use such intellectual property, there are minimum annual fixed royalty payments of approximately $0.1 million. 70 Table of Contents
Licenses related to certain intellectual property We license certain intellectual property, some of which may be utilized in our current or future product offerings.
For the year ended December 31, 2023, Other income, net, included a $0.4 million gain for the write off of contingent consideration related to the Majelac acquisition. For the year ended December 31, 2022, Other income, net, included a $0.5 million decrease in fair value related to the Majelac acquisition.
For the year ended December 31, 2023, Other income, net, included a $0.4 million gain for the write off of contingent consideration related to the Majelac acquisition. For further details regarding the acquisition of Majelac, please refer to Note 3. Acquisition , in the accompanying notes to the Consolidated Financial Statements included elsewhere in the Annual Report on Form 10-K.
To date, we have not issued or sold any shares of our Class A common stock under the ATM Offering. 63 Table of Contents Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our Consolidated Financial Statements, which have been prepared in accordance with U.S.
We agreed to pay the Placement Agent an aggregate cash fee equal to 6.0% of the gross proceeds received in the Registered Direct Offering. Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our Consolidated Financial Statements, which have been prepared in accordance with U.S.
Inventory Inventory is stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method. Materials that may be utilized for either commercial or, alternatively, for research and development purposes, are classified as inventory.
Materials that may be utilized for either commercial or, alternatively, for research and development purposes, are classified as inventory.
Our future capital requirements may vary from those currently planned and will depend on various factors including the pace and success of product commercialization. We launched the Platinum ® instrument and started to take orders in December 2022 and we began commercial shipments of Platinum ® in January 2023.
As of December 31, 2024 , we had cash and cash equivalents and investments in marketable securities totaling $209.6 million . Our future capital requirements may vary from those currently planned and will depend on various factors including the pace and success of product commercialization.
This decrease was primarily driven by the decrease in the underlying price of our Class A common stock experienced during the year ended December 31, 2023.
Change in fair value of warrant liabilities increased $3.7 million for the year ended December 31, 2024 as compared to an increase of $0.3 million for the same period in 2023. This increase was primarily driven by the change in the underlying trading price of our Class A common stock during the periods reported.
In August 2023, we filed a universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which became effective on August 22, 2023, covering the offering of Class A common stock, preferred stock, debt securities, warrants, rights and units. 69 Table of Contents In August 2023, we also entered into an Equity Distribution Agreement (“EDA”) with an outside placement agent (the “Agent”), under which we may, from time to time, sell shares of our Class A common stock having an aggregate offering price of up to $75.0 million in “at-the-market” offerings through the Agent (the “ATM Offering”).
Equity Transactions On August 11, 2023 , we filed a universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which became effective on August 22, 2023 , covering the offering of Class A common stock, preferred stock, debt securities, warrants, rights and units.
Goodwill Impairment Goodwill impairment for the years ended December 31, 2023 and 2022 is as follows (dollars in thousands): 2023 2022 $ Change % Change Goodwill impairment $ - $ 9,483 $ (9,483 ) (100.0 )% Goodwill impairment decreased for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Unrealized Gain on Trading Securities Unrealized gain on trading securities for the years ended December 31, 2024 and 2023 is as follows (dollars in thousands): 2024 2023 $ Change % Change Unrealized gain on trading securities $ — $ 10,690 $ (10,690) (100.0) % There was no Unrealized gain on trading securities for the year ended December 31, 2024 as compared to a gain of $10.7 million for the same period in 2023.
This decrease was primarily due to a $5.3 million decrease in fabrication and outsourced services, a $2.0 million decrease in payroll and payroll-related costs primarily driven by restructuring activities in 2023, and a $1.9 million decrease in collaboration costs.
This decrease was primarily due to a $7.3 million decrease in payroll and payroll-related costs, which includes a $0.3 million decrease in stock-based compensation, a $2.2 million decrease in fabrication and outsourced services and a $0.8 million net decrease of other research and development expenses.
Summary of Significant Accounting Policies, in the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. 65 Table of Contents Results of Operations for the year ended December 31, 2023 as compared with the year ended December 31, 2022 The following table presents the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2023 (dollars in thousands): 2023 2022 % Change Revenue Product $ 1,031 $ - nm Service 51 - nm Total revenue 1,082 - nm Cost of revenue 594 - nm Gross profit 488 - nm Operating expenses: Research and development 67,025 72,062 (7.0 )% Selling, general and administrative 44,634 42,296 5.5 % Goodwill impairment - 9,483 (100.0 )% Total operating expenses 111,659 123,841 (9.8 )% Loss from operations (111,171 ) (123,841 ) (10.2 )% Dividend income 9,536 5,301 79.9 % Gain (loss) on marketable securities, net 5,587 (20,603 ) (127.1 )% Change in fair value of warrant liabilities (278 ) 6,243 (104.5 )% Other income, net 366 458 (20.1 )% Loss before provision for income taxes (95,960 ) (132,442 ) (27.5 )% Provision for income taxes - - nm Net loss and comprehensive loss $ (95,960 ) $ (132,442 ) (27.5 )% Revenue, Cost of Revenue and Gross Profit Revenue is derived from sales of products and services.
Results of Operations for the Year Ended December 31, 2024 as Compared to the Year Ended December 31, 2023 The following table summarizes the results of our operations for the years ended December 31, 2024 and 2023 (dollars in thousands): 2024 2023 $ Change % Change Revenue Product $ 2,925 $ 1,031 $ 1,894 183.7 % Service 133 51 82 160.8 % Total revenue 3,058 1,082 1,976 182.6 % Cost of revenue 1,458 594 864 145.5 % Gross profit 1,600 488 1,112 227.9 % Operating expenses: Research and development 59,641 67,025 (7,384) (11.0) % Selling, general and administrative 50,535 44,634 5,901 13.2 % Total operating expenses 110,176 111,659 (1,483) (1.3) % Loss from operations (108,576) (111,171) 2,595 (2.3) % Dividend and interest income 11,366 9,536 1,830 19.2 % Unrealized gain on trading securities — 10,690 (10,690) (100.0) % Realized loss on trading securities — (5,103) 5,103 100.0 % Change in fair value of warrant liabilities (3,722) (278) (3,444) 1238.8 % Other (expense) income, net (19) 366 (385) (105.2) % Loss before provision for income taxes (100,951) (95,960) (4,991) 5.2 % Provision for income taxes (56) - (56) nm (1) Net loss $ (101,007) $ (95,960) $ (5,047) 5.3 % (1) “nm” indicates amount is not meaningful.
Dividend income for the years ended December 31, 2023 and 2022 is as follows (dollars in thousands): 2023 2022 $ Change % Change Dividend income $ 9,536 $ 5,301 $ 4,235 79.9 % Dividend income increased by $4.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 as a result of higher dividends earned on invested balances in marketable securities. 67 Table of Contents Gain (Loss) on Marketable Securities, Net Gain (loss) on marketable securities, net, for the years ended December 31, 2023 and 2022 is as follows (dollars in thousands): 2023 2022 $ Change % Change Gain (loss) on marketable securities, net $ 5,587 $ (20,603 ) $ 26,190 (127.1 )% Realized and unrealized gain (loss) on marketable securities, net, was a gain of $5.6 million for the year ended December 31, 2023 as compared to a loss of $20.6 million for the year ended December 31, 2022.
Realized loss on Trading Securities Realized loss on trading securities for the years ended December 31, 2024 and 2023 is as follows (dollars in thousands): 2024 2023 $ Change % Change Realized loss on trading securities $ — $ (5,103) $ 5,103 100.0 % 71 Table of Contents There was no Realized loss on trading securities for the year ended December 31, 2024 as compared to a loss of $5.1 million for the same period in 2023.
Cash flows from operations have been historically negative as we continue to invest in the development of our technology in NGPS. We expect to incur negative operating cash flows on an annual basis for the foreseeable future until such time that we can successfully reach commercial scale of our current products and products under development.
Our primary uses of liquidity have been operating expenses, capital expenditures and our acquisition of certain assets. Cash flows from operations have been historically negative as we continue to invest in the development of our technology in NGPS.
To date, we have not issued or sold any shares of our Class A common stock under the ATM Offering. In the future, we may be unable to obtain any required additional financing on terms favorable to us, if at all.
We agreed to pay the Placement Agent an aggregate cash fee equal to 6.0% of the gross proceeds received in the Registered Direct Offering. In the future, we may be unable to obtain any required additional financing on terms favorable to us, if at all.
Net cash provided by investing activities The net cash provided by investing activities of $143.4 million in the year ended December 31, 2023 was due primarily to sales of marketable securities of $272.5 million, partially offset by purchases of marketable securities of $123.8 million and purchases of property and equipment of $4.5 million.
Net cash (used in) provided by investing activities For the year ended December 31, 2024, net cash used in investing activities was $32.7 million as compared to net cash provided by investing activities in $143.4 million for the same period in 2023.
Revenue, Cost of revenue and Gross profit for the years ended December 31, 2023 and 2022 are as follows (dollars in thousands): 2023 2022 $ Change % Change Total revenue $ 1,082 $ - $ 1,082 nm Cost of revenue 594 - 594 nm Gross profit $ 488 $ - $ 488 nm Gross profit margin 45.1 % - We began a controlled launch of the Platinum ® instrument and started to take orders in December 2022.
Revenue, Cost of revenue and Gross profit for the years ended December 31, 2024 and 2023 are as follows (dollars in thousands): 2024 2023 $ Change % Change Total revenue $ 3,058 $ 1,082 $ 1,976 182.6 % Cost of revenue 1,458 594 864 145.5 % Gross profit $ 1,600 $ 488 $ 1,112 227.9 % Gross profit margin 52.3 % 45.1 % Total revenue for the sale of Platinum instruments, related reagent kits and service maintenance contracts increased $2.0 million, or 182.6% as compared to the same period in 2023.
As a result of the Business Combination, we received proceeds of approximately $511.2 million on the day of the Closing. For further details on the impact of the Business Combination, please refer to Note 3. Business Combination, in the accompanying notes to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
For further information regarding our warrants, please refer to Note 12. Warrant Liabilities . Recently Issued Accounting Pronouncements For a discussion of recently adopted accounting pronouncements and accounting pronouncements pending adoption, please refer to Note 2. Summary of Significant Accounting Policies , in the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
The assumptions for expected term and expected volatility are the two assumptions that significantly affect the grant date fair value. • Expected Term : We calculate the expected term using the “simplified” method, which is the simple average of the vesting period and the contractual term. • Risk-free Interest Rate : The risk-free interest rate for periods within the expected term of the awards is based on the U.S.
The assumptions for expected term of the option and expected volatility of common stock are the two assumptions that significantly affect the grant date fair value. • Expected Term : The expected term is calculated using the weighted-average period that the stock options are expected to be outstanding prior to being exercised.
These increases were partially offset by a $3.4 million decrease in other costs, primarily driven by a $1.6 million decrease in insurance costs from lower market premiums.
The increase in payroll and payroll-related costs are primarily related to on-going investments made in commercial operations. These increases were partially offset by a decrease of $2.8 million in professional services and consulting fees and a $0.7 million decrease in insurance costs from lower market premiums.
These gains were partially offset by an increase in marketable securities sold with associated realized losses during the year ended December 31, 2023 as compared to 2022. Change in Fair Value of Warrant Liabilities The warrant liabilities were recorded at fair value as part of the Business Combination.
The prior year losses were primarily related to market adjustments of investments in trading securities, which consisted of fixed income mutual funds. Change in Fair Value of Warrant Liabilities The warrant liabilities were recorded at fair value as part of the Business Combination.
Now that our Platinum ® and Platinum Analysis Software system has launched, we intend to follow a systematic, phased approach to continue to successfully launch updates to our platform.
Going forward, we intend to follow a systematic, phased approach to continue to successfully launch updates and enhancements to our platform which can include improvements to our hardware, software and chemistry that works together to produce the overall platform. We believe that our platform offers a differentiated solution in a rapidly evolving proteomics tools market.
These proceeds were offset by approximately $0.2 million of deferred offering costs paid for the Shelf Registration Statement and the ATM Offering, both of which are defined and described below. Liquidity Outlook Since our inception, we have generated no revenue and have funded our operations primarily with proceeds from the issuance of equity to private investors.
Further information regarding the ATM Offering can be found below. Liquidity Outlook Since our inception, we have funded our operations primarily with proceeds from the issuance of equity to private investors, as well as with the proceeds received from the closing of the Business Combination. Additionally, we began to generate revenue during 2023 from commercial sales of our Platinum instrument.
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Traditionally, proteomic workflows to sequence proteins required days or weeks to complete.
Added
Overview Quantum-Si Incorporated (including its subsidiaries, the “Company” or “Quantum-Si”) was incorporated in Delaware on June 10, 2020 as HighCape Capital Acquisition Corp. (“HighCape”). The Company’s legal name became Quantum-Si Incorporated following a business combination on June 10, 2021 between the Company and Q-SI Operations Inc. (formerly Quantum-Si Incorporated) (the “Business Combination”), which was founded in 2013.
Removed
Our platform, as originally planned, was designed to offer an end-to-end workflow including both sample preparation and sequencing and was comprised of Carbon TM , our automated sample preparation instrument, our Platinum ® NGPS instrument, the Platinum Analysis Software service, and reagent kits and proprietary semiconductor chips for use with our Platinum ® instrument.
Added
Our platform includes our Platinum NGPS instrument, Platinum Analysis Software, and consumable kits for use with our Platinum instrument. In 2021, we introduced our Platinum early access program to sites with participation from leading academic centers and key industry partners.
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Since our initial launch of the Platinum ® instrument, we have found that, consistent with other proteomics detection technologies, customers select the biological sample type and sample preparation method they use.
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For example, our platform could be used for biomarker discovery and disease detection, pathway analysis, immune response, vaccine development, quality assurance and quality control, among other applications. Global Developments The macroeconomic climate has experienced, and is continuing to experience, pressure from global developments such as high levels of inflation, global supply chain disruptions and international geopolitical conflicts.
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The range of sample types and sample preparation methods utilized in proteomics is extensive and often some level of optimization is required to make them compatible with the downstream detection technology. Our initial platform contemplated Carbon TM as an automated sample preparation instrument.
Added
We have taken and will continue to take actions to help mitigate the impact of these economic challenges, but there can be no assurance as to the effectiveness of our efforts going forward.
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While Carbon TM could help reduce sample preparation variation and streamline the end-to-end workflow in utilizing our Platinum ® protein sequencing instrument, it is not an absolute requirement, and may not be the best solution long-term.
Added
Restructuring On November 21, 2024, we announced that we committed to an organizational restructuring program designed to streamline and focus our overall corporate resources, as well as align required resources to focus on future product development objectives, including its recently announced Proteus™ platform. As a result, we terminated approximately 23% of our 187 employee workforce.
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To this end, in October 2023, we completed an evaluation of Carbon TM as it relates to the workflow and in comparison to other potential liquid handler and sample preparation solutions.
Added
In connection with the restructuring, we recognized one-time cash charges related to severance and other benefits of approximately $2.3 million in 2024 and expect to recognize $0.7 million in the first six months of 2025. In addition, we recognized non-cash expense of approximately $0.1 million in the fourth quarter of 2024 related to stock option modifications.
Removed
This evaluation concluded that pursuing efforts to continue development of Carbon TM was not the most effective use of our research and development efforts and therefore, we paused development related to Carbon TM to focus efforts on Platinum ® , our reagent kits and semiconductor chips for use on Platinum ® , and our Platinum Analysis Software environment as our go forward platform to maximize value.
Added
The severance and other benefits related charge, as well as the expense related to stock option modifications are subject to a number of assumptions, and actual results may differ materially. We may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the restructuring.
Removed
We believe we are the first company to successfully enable NGPS on a semiconductor chip, thus digitizing a massive proteomics opportunity, which allows for a massively parallel solution at the ultimate level of sensitivity -single-molecule detection. We believe that our platform offers a differentiated workflow solution in a rapidly evolving proteomics tools market.
Added
We substantially completed the restructuring in the fourth quarter of 2024. For further information regarding our restructuring activities, please refer to N ote 14. Restructuring .

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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 changeBased on the short-term nature of our holdings, future interest rate changes are not expected to have a material impact on our marketable securities. Foreign currency risk Presently, we operate our business primarily within the United States, with limited sales outside the United States. To date, we have executed the majority of our transactions in U.S. dollars.
Biggest changeWe do not enter into investments for trading or speculative purposes. Based on the short-term nature of our holdings, future interest rate changes are not expected to have a material impact on our marketable securities. Foreign currency risk Presently, we operate our business primarily within the United States, with limited sales outside the United States.
Dollar may grow in the future, at which point it is possible foreign current translation will have a material effect on our operations. To date, we have not entered into any hedging arrangements with respect to foreign currency risk.
Dollar may grow in the future, at which point it is possible foreign currency translation will have a material effect on our operations. To date, we have not entered into any hedging arrangements with respect to foreign currency risk.
As our international operations grow, we will continue to reassess our approach to managing our risk relating to fluctuations in currency rates. 71 Table of Contents
As our international operations grow, we will continue to reassess our approach to managing our risk relating to fluctuations in currency rates. 75 Table of Contents
Interest rate risk As of December 31, 2023, our marketable securities are comprised primarily of investments in money market funds backed by U.S. government issued securities, U.S. treasury bills, and high-quality corporate commercial paper. The primary objective of our investments is the preservation of capital to fulfill liquidity needs. We do not enter into investments for trading or speculative purposes.
Interest rate risk As of December 31, 2024 , our marketable securities are comprised primarily of investments in money market funds backed by U.S. government issued securities, U.S. Treasury bills, and high-quality corporate commercial paper. The primary objective of our investments is the preservation of capital to fulfill liquidity needs.
In the future, we anticipate expanding into Europe and other locations outside the United States. This expansion may include transacting business in currencies other than the U.S. Dollar. Despite this, we anticipate conducting limited activity outside the U.S.
To date, we have executed the majority of our transactions in U.S. dollars. In the future, we anticipate expanding into Europe and other locations outside the United States. This expansion may include transacting business in currencies other than the U.S. Dollar. Despite this, we anticipate conducting limited activity outside the U.S.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Inflation risk Inflation rates in the United States increased significantly during the year ended December 31, 2023. We believe inflation can and has had an impact on the underlying cost of our supplies and manufacturing components related to our business.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Inflation risk We believe inflation can and has had an impact on the underlying cost of our supplies and manufacturing components related to our business.

Other QSIAW 10-K year-over-year comparisons