What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-09 compared with 2025-03-07 · 144 added, 171 removed, 308 unchanged (51% of the section changed)

3 unchanged sentences

As a result of many factors, including those factors set forth in the ‘‘Risk Factors’’ section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.

We have developed an innovative suite of purpose-built handheld and desktop devices for point-of-need chemical analysis.

Leveraging complementary analytical technologies including our proprietary mass spectrometry, or Mass Spec, microfluidics, and analytics and machine learning technologies, we make devices that are significantly smaller and more accessible than conventional laboratory instruments.

Our devices are used at the point-of-need to interrogate unknown and invisible materials and provide quick, actionable answers to directly address some of the most critical problems in forensics, bioprocessing, pharma/biopharma, life science research and adjacent markets.

We have developed an innovative suite of purpose-built handheld devices for point-of-need chemical analysis.

Leveraging complementary analytical technologies including our proprietary mass spectrometry, or Mass Spec, and FTIR, an optical spectroscopy technology and analytics and machine learning technologies, we make devices that are significantly smaller and more accessible than conventional laboratory instruments.

Our devices are used at the point-of-need to interrogate unknown and invisible materials and provide quick, actionable answers to directly address vital health and safety applications, including the fentanyl and illicit drug crisis, toxic carcinogen exposure, and global security threats.

We create simplified measurement devices that our customers can use as accurate tools where and when their work needs to be done, rather than overly complex and centralized analytical instrumentation.

We believe the insights and answers our devices provide will accelerate workflows, reduce costs, and offer transformational opportunities for our end users.

Front-line workers rely upon our handheld devices to combat the opioid crisis and detect counterfeit pharmaceuticals and illicit materials in the air or on surfaces at levels 1,000 times below their lethal dose.

Front-line workers rely upon our Mass Spec handheld devices to combat the opioid crisis and detect counterfeit pharmaceuticals and illicit materials in the air or on surfaces at levels 1,000 times below their lethal dose.

First responders also utilize our handheld devices to detect and identify thousands of hazardous bulk materials.

Our desktop devices are accelerating development and production of biotherapeutics by identifying and quantifying extracellular species in bioprocessing critical to cell health and productivity.

They sit alongside or are directly connected to bioreactors and fermenters producing drug candidates, functional proteins, cell and gene therapies, and synthetic biology derived products.

We believe the insights and answers our devices provide accelerate workflows, reduce costs, and offer transformational opportunities for our end users.

The term “products” as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” refers to the MX908, ThreatID, ProtectIR, XplorIR, Rebel, ZipChip Interface, Maverick, Maven and related sampling devices.

On April 29, 2024, we entered into an Equity Purchase Agreement, or the Purchase Agreement, with RedWave, CAM3 HoldCo, LLC, a Connecticut limited liability company, or Seller Entity, each of the holders of outstanding equity interests of Seller Entity, or the Beneficial Sellers, and the other parties thereto, pursuant to which we purchased all of the outstanding equity interests of RedWave, and the transaction closed on the same day.

The purchase price included an initial payment of $45.0 million in cash and 1,497,171 unregistered shares of the Company’s common stock, which reflects closing adjustments relating to working capital, cash and debt adjustments.

The cash consideration is subject to additional working capital, cash, debt, and transaction expense adjustments.

RedWave is a leading provider of portable Fourier Transform Infrared, or FTIR, spectroscopic analyzers for rapid chemical identification of bulk materials.

1 unchanged sentence

This acquisition provides us with an expanded portfolio of handheld chemical analysis devices for forensic workflows that quickly detect and identify unknown solids, liquids, vapors, and aerosols at the point of need.

In addition, RedWave bolsters our desktop portfolio with a line of accessories for pharma Process Analytical Technology, or PAT, and industrial Quality Control applications.

In addition, RedWave provided a line of accessories for pharma Process Analytical Technology, or PAT, and industrial Quality Control applications.

On March 4, 2025, the Company completed the sale of its Desktop Portfolio to Repligen.

The Company has determined the sale of the Desktop Portfolio represents a strategic shift that will have a major effect on its business and therefore met the criteria for classification as discontinued operations in the first quarter of 2025.

Accordingly, the Desktop Portfolio is reported as discontinued operations in accordance with ASC 205-20, Discontinued Operations .

The related assets and liabilities of the Desktop Portfolio are classified as assets and liabilities of discontinued operations in the consolidated balance sheets and the results of operations from the Desktop Portfolio as discontinued operations in the consolidated statements of operations.

Applicable amounts in prior years have been recast to conform to this discontinued operations presentation.

The Company recognized a gain on the sale of the Desktop Portfolio upon closing.

Since our inception, we have incurred significant operating losses.

Our ability to generate revenue sufficient to achieve profitability will depend on the successful further development and commercialization of our products.

We generated revenue of $59.6 million and $50.2 million for the years ended December 31, 2024 and 2023, respectively,

and incurred net losses of $72.2 million and $36.4 million for those same years.

We generated revenue of $56.2 million and $47.7 million for the years ended December 31, 2025 and 2024, respectively, and incurred net losses from continuing operations of $33.3 million and $53.1 million for those same years.

As of December 31, 2025, we had an accumulated deficit of $223.3 million.

We expect to continue to incur net losses as we focus on growing commercial sales of our products in both the United States and international markets, including growing our sales teams, scaling our manufacturing operations, continuing research and development efforts to develop new products and further enhance our existing products.

We expect to continue to incur net losses as we focus on growing sales of our products in both the United States and international markets, including growing our sales teams, scaling our manufacturing operations, continuing research and development efforts to develop new products and further enhance our existing products.

Further, we expect to incur additional costs associated with operating as a public company.

10 unchanged sentences

As part of the organizational restructuring, and to reduce our annual cash burn, we implemented an approximately 11% workforce reduction to rationalize our bioprocessing and life science instrumentation investments in sales, marketing and research and development during the current slower growth market environment.

In addition, throughout 2025 we are planning to transition manufacturing operations from Massachusetts to North Carolina and Connecticut.

For the year ended December 31, 2024, we incurred approximately $0.7 million of expenses related to this organizational restructuring.

These expenses were substantially for cash payments of severance and employee benefits and were paid as of December 31, 2024.

This organizational restructuring was substantially completed in December 2024 and there were no related accrued liabilities on the consolidated balance sheets as of December 31, 2024.

The Company has not yet incurred any facility or other exit costs for transitioning manufacturing operations from Massachusetts to North Carolina and Connecticut, however we expect to incur costs related to moving our manufacturing operations in 2025.

We incurred approximately $1.5 million and $0.7 million of expenses related to this organizational restructuring for the years ended December 31, 2025 and 2024, respectively.

During the first half of 2025, we transitioned manufacturing operations from Boston, Massachusetts to Danbury, Connecticut.

In June 2025, we abandoned our Boston facility in connection with transitioning the manufacturing operations and moved our corporate headquarters to Burlington, Massachusetts.

We recorded a $1.0 million restructuring charge for the lease abandonment, including our remaining right-of-use asset, utilities and other costs.

We made full payment of such charges in June 2025, including the rents.

The organizational and facility restructurings were substantially completed in June 2025 and there were no amounts outstanding as of December 31, 2025.

Global Economic Conditions

2 unchanged sentences

These developments and the potential worsening of other macro-economic conditions present risks for us, and our suppliers and customers.

For example, general inflation in the United States, Europe, the Middle East and other geographies has recently been at levels not experienced in recent decades, which has led to higher prices for our raw materials and other inputs, as well as higher salaries and travel expenses, which could continue to negatively impact our business by increasing our cost of sales and operating expenses.

operating expenses.

General inflation could also negatively impact our business if it leads to spending pressure and decreased available capital for our customers to deploy to purchase our products and services.

In addition, while the United States Federal Reserve has recently begun to lower interest rates, it has over the past couple of years raised, and may again raise, interest rates in response to concerns about inflation.

Inflation, together with increased interest rates, may cause our customers to reduce or delay orders for our goods and services thereby causing a decrease in or change in timing of sales of our products and services.

The impact of future inflation and interest rate fluctuations on the results of our operations cannot be accurately predicted.

Challenging capital market conditions and the limited availability of financing alternatives, together with inflationary and interest rates pressures, may contribute to more cautious spending by our customers.

Certain of our pharmaceutical and biotechnology customers, including bioprocessing customers, may evaluate their inventory levels, cash on hand and path to profitability, and institute cost controls and take other actions to reduce or delay purchases of our products and services.

We cannot accurately predict the full impact of current macroeconomic factors on the budgets and capital expenditures of our customers, or the timing of the normalization of customer purchasing patterns.

We are closely monitoring the ongoing military conflict between Russia and Ukraine, and the ongoing hostilities in Israel, Lebanon, and the Gaza Strip and other locations in the Middle East.

Although we do not directly source any material products or supplies from Russia, Ukraine, Israel, Lebanon or the Gaza Strip, our customers in Europe and the Middle East could be impacted by extended conflicts or an escalation of these conflicts into neighboring countries.

We are closely monitoring the ongoing military conflict between Russia and Ukraine or the conflicts in the Middle East .

Although we do not directly source any material products or supplies from Russia , Ukraine or the Middle East , our customers in Europe and the Middle East could be impacted by extended conflicts or an escalation of these conflicts into neighboring countries.

We are also closely monitoring increases or changes in tariffs on parts and components imported into the U.S., as well as reciprocal tariffs recently implemented by non-U.S.

countries where we export our finished products.

We do not expect these tariffs to materially impact our business or results of operations in the 2026 fiscal year.

Nonetheless, we will continue to review and assess how any current or future tariffs may affect our business.

While it is difficult to predict all of the impacts these global economic events and continued inflationary and interest rate pressures will have on our business and to predict the effects of these factors on our customers’ spending in the near term, we believe the long-term opportunity that we see for our products and services remain unchanged.

4 unchanged sentences

Our ability to successfully address the factors below is subject to various risks and uncertainties, including those described under the heading “ Risk Factors.

Our financial performance has largely been driven by, and in the future will continue to be impacted by, the rate of sales of our handheld and desktop devices.

Management focuses on device sales as an indicator of current business success and a leading indicator of likely future recurring revenue from consumables and services.

Our financial performance has largely been driven by, and in the future will continue to be impacted by, the rate of sales of our handheld devices.

Management focuses on device sales as an indicator of current business success and a leading indicator of likely future recurring revenue from consumables , accessories, software and services.

We expect our device sales to continue to grow as we increase penetration in our existing markets and expand into, or offer new features and solutions that appeal to, new markets.

We plan to grow our device sales in the coming years through multiple strategies including expanding our sales efforts domestically and globally and continuing to enhance the underlying technology and applications for bioprocessing and life sciences research related to our Maverick, Rebel, ZipChip Interface, and Maven and related sampling devices.

We regularly solicit feedback from our customers and focus our research and development efforts on enhancing our devices and enabling our customers to use additional applications that address their needs, which we believe in turn helps to drive additional sales of our devices and consumables.

Our sales process varies considerably depending upon the type of customer to whom we are selling.

Our handheld device orders relate to our MX908, ThreatID, ProtectIR, and XplorIR, as well as components for the Aerosol and Vapor Chemical Agent Detectors (“AVCAD”) sold to our channel partner.

Our handheld device orders relate to our MX908, ThreatID, ProtectIR, XplorIR and VipIR, as well as components for the Aerosol and Vapor Chemical Agent Detectors, or AVCAD, sold to our channel partner.

Historically, our handheld devices have been used by municipal, state, federal and foreign governments and governmental agencies.

Our sales process with government customers is often long and involves multiple levels of approvals, testing and, in some cases, trials.

Device orders from a

government customer are typically large orders and can be impacted by the timing of their capital budgets.

Device orders from a government customer are typically large orders and can be impacted by the timing of

their capital budgets.

As a result, the revenue for our handheld devices can vary significantly from period-to-period and has been and may continue to be concentrated in a small number of customers in any given period.

Our desktop devices are typically used by the pharmaceutical, biotechnology and academia markets.

Our sales cycles within these markets tend to vary based on the size of the customer and the number of devices they purchase.

Our shortest sales cycles are typically for small laboratories and individual researchers where, in some cases, we receive purchase orders from these customers within three months.

Our sales process with other institutions can be longer with most customers submitting purchase orders within six to twelve months.

Given the variability of our sales cycle, we have in the past experienced, and likely will in the future experience, fluctuations in our desktop device sales on a period-to-period basis.

Recurring revenue

We regularly assess trends relating to recurring revenue which includes consumables and services based on our product offerings, our customer base and our understanding of how our customers use our products.

We regularly assess trends relating to recurring revenue which includes consumables, accessories, software and services based on our product offerings, our customer base and our understanding of how our customers use our products.

Recurring revenue was 35% and 33% of total revenue for the years ended December 31, 2025 and 2024, respectively.

1 unchanged sentence

As our device installed base expands, recurring revenue on an absolute basis is expected to increase and over time should be an increasingly important contributor to our revenue.

Revenue from the sales of consumables will vary by type of device.

We expect that recurring revenue as a percentage of the original device price to be higher for our desktop devices (Rebel, ZipChip Interface, Maverick, Maven and related sampling devices) than for our handheld devices (MX908, ThreatID, ProtectIR, and XplorIR).

While we sell single-use swab samplers for MX908 to be used in liquid and solid materials analysis, there are a number of other applications that the MX908 can be used for that do not require consumables.

ThreatID, ProtectIR, and XplorIR do not have consumables.

Rebel and ZipChip Interface require consumables kits for all areas of operations.

Currently, Rebel customers, who are actively utilizing the device, are consuming on average approximately half a 200-sample kit per month.

With continuous operation, the Rebel is capable of consuming approximately one 200-sample kit per day.

Maverick devices require consumables, probes and standards for all areas of operations.

Maven and related sampling devices require consumable sets of buffers, probes and biosensors for all areas of operations.

Recurring revenue is primarily from service revenue , software and accessories.

Consumable revenue is mainly related to single-use swab samplers for MX908 to be used in liquid and solid materials analysis, but there are a number of other applications that the MX908 can be used for that do not require consumables.

ThreatID, ProtectIR, XplorIR and VipIR do not have consumables.

Revenue mix and gross margin

Our revenue is derived from sales of our devices, consumables and services.

There will be fluctuations in mix between devices and consumables from period-to-period.

Over time, as our device installed base grows and we see adoption of Rebel, we expect consumables revenue to constitute a larger percentage of total revenue.

Our revenue is derived from sales of our devices, consumables, accessories, software and services.

There will be fluctuations in the mix between devices and recurring from period-to-period.

Over time, as our device installed base grows, we expect service revenue to constitute a larger percentage of total revenue.

However, the percentage will be subject to fluctuation based upon our handheld sales in a period.

In addition, our selling price and, consequently, our margins, are higher for those devices and consumables that we sell directly to customers as compared to those that we sell through channel partners.

While we expect the mix of direct sales as compared to sales through channel partners to remain relatively constant in the near term, we are currently evaluating increasing our direct sales capabilities in certain geographies.

Future device and consumable selling prices and gross margins may fluctuate due to a variety of factors, including the introduction by others of competing products and solutions.

We aim to mitigate downward pressure on our average selling prices by increasing the value proposition offered by our devices and consumables, primarily by expanding the applications for our devices and increasing the quantity and quality of data that can be obtained using our consumables.

In addition, our selling price and, consequently, our margins, are higher for those devices and recurring revenue that we sell directly to customers as compared to those that we sell through channel partners.

While we expect the mix of direct sales as compared to sales through channel partners to remain relatively constant in the near term, we may consider increasing our direct sales capabilities in certain geographies based upon identified opportunities.

Future device and recurring selling prices and gross margins may fluctuate due to a variety of factors, including the introduction by others of competing products and solutions.

We aim to mitigate downward pressure on our average selling prices by increasing the value proposition offered by our devices , consumables , accessories and software , primarily by expanding the applications for our devices and increasing the quantity and quality of data that can be obtained using our consumables.

Product adoption

18 unchanged sentences

Components of Our Results of Operations

We generate product and service revenue from the sale of our devices and recurring revenue from the sale of consumables and contract revenue.

Product and Service Revenue

We generate product and service revenue from the sale of our devices and recurring revenue from the sale of consumables, accessories, software and services.

Device sales accounted for 65% and 66% of our total revenue for the years ended December 31, 2025 and 2024, respectively.

Consumables and contract revenue accounted for 39% and 33% of our total revenue for the years ended December 31, 2024 and 2023, respectively.

Our current device offerings include:

● Handheld devices— MX908 ThreatID, ProtectIR, XplorIR and AVCAD components;

● Desktop devices—Rebel and ZipChip Interface, Maverick, and Maven and related sampling devices.

Recurring revenue accounted for 35% and 33% of our total revenue for the years ended December 31, 2025 and 2024, respectively.

Our current device offerings include MX908, ThreatID, ProtectIR, XplorIR, VipIR and AVCAD components.

We sell our devices directly to customers and through channel partners.

Each of our device sales drives various streams of recurring revenue comprised of consumable and accessory product sales and service revenue.

Our consumables consist of:

● MX908—accessories and swabs;

● Rebel—consumables kit with a microfluidic chip and standards;

● ZipChip Interface—microfluidic chip, reagent and assay kits;

● Maverick—calibration kits and accessories;

● Maven and related sampling devices—probes, tubing sets and accessories.

Rebel and ZipChip Interface consumables can only be used with our devices and there are no alternative after-market options that can be used as a substitute.

Each chip is used for a defined number of samples (or runs).

We recognize revenue from the sale of consumables as the consumable products are shipped.

Each of our device sales drives various streams of recurring revenue comprised of consumable, accessory and software product sales and service revenue.

Our consumables consist primarily of accessories and swabs for MX908.

We also offer our customers extended warranty and service plans.

2 unchanged sentences

We recognize revenue from the sale of extended warranty and service plans over the respective coverage period, which approximates the service effort provided by us.

Contract revenue

Contract agreements are arrangements whereby we provide engineering services for the development of our technology platform for specific programs or new and expanding applications of our technologies for future commercial endeavors.

9 unchanged sentences

Total revenue

Our revenue is comprised of sales of our handheld and desktop devices and related consumables, service contracts and contract revenue to end-users in the government, pharmaceuticals/biotechnology and academia markets as follows (in thousands):

Our revenue is comprised of sales of our devices and related consumables, accessories, software and service contracts to end-users in the government, pharmaceutical and industrial markets as follows (in thousands):

Year Ended December 31,

Pharmaceutical/Biotechnology

Academia and other

United States federal and defense

United States state authorities and local municipalities

Rest of world national and provincial organizations

Global pharmaceutical, industrial and other

Total revenue

We sell our products primarily in the United States;

however, we are continuing to expand our global sales efforts as we see traction in our products and assess global market needs.

The majority of our international sales are through contractual arrangements with channel partners.

however, we will continue to expand our global sales efforts as we see traction in our products and assess global market needs.

The majority of our international sales are through a distribution channel.

Cost of Revenue, Gross Profit and Gross Margin

Cost of product revenue primarily consists of costs for raw material parts and associated freight, shipping and handling costs, royalties, contract manufacturer costs, salaries and other personnel costs, overhead, amortization of intangibles and other direct costs related to those sales recognized as product revenue in the period.

Cost of service and contract revenue primarily consists of salaries and other personnel costs, travel related to services provided, facility costs associated with training, warranties and other costs of servicing equipment on a return-to-factory basis and at customer sites.

Cost of contract revenue primarily consists of salaries and other personnel costs, materials, travel and other direct costs related to the contract revenue recognized in the period.

Product cost of revenue primarily consists of costs for raw material parts and associated freight, shipping and handling costs, royalties, contract manufacturer costs, salaries and other personnel costs, overhead, amortization of intangibles and other direct costs related to those sales recognized as product revenue in the period.

Cost of revenue for services primarily consists of salaries and other personnel costs, travel related to services provided, facility costs associated with training, warranties and other costs of servicing equipment on a return-to-factory basis and at customer sites.

Contract cost of revenue primarily consists of salaries and other personnel costs, materials, travel and other direct costs related to the revenue recognized in the period.

The contract cost of revenue will vary based upon the type of contract, including whether it is primarily for development services or for both materials and development services.

We expect that our cost of revenue will increase or decrease to the extent that our revenue increases and decreases and depending on how many contracts we have ongoing at any given point in time and the stage of those contracts.

Gross profit is calculated as revenue less cost of revenue.

1 unchanged sentence

Our gross profit in future periods will depend on a variety of factors, including:

market conditions that may impact our pricing, sales mix among devices, sales mix changes among consumables, excess and obsolete inventories, our cost structure for manufacturing operations relative to volume, and product warranty obligations.

conditions that may impact our pricing, sales mix among devices, sales mix changes among consumables, excess and obsolete inventories, our cost structure for manufacturing operations relative to volume, and product warranty obligations.

Our gross profit in future periods will vary based upon our channel mix and may decrease based upon our distribution channels and the potential to establish original equipment manufacturing channels for certain components of our technology platform which would have a lower gross margin.

We expect that our gross profit margin will increase over the long term as our sales and production volumes increase and our cost per unit decreases due to efficiencies of scale.

We expect that our gross profit margin for product and service will increase over the long term as our sales and production volumes increase and our cost per unit decreases due to efficiencies of scale.

We intend to use our design, engineering and manufacturing capabilities to further advance and improve the efficiency of our manufacturing, which we believe will reduce costs and increase our gross margin.

We expect that our gross profit margin for contract will remain consistent for our contracts that are cost reimbursement contracts.

Operating Expenses

7 unchanged sentences

Selling, general and administrative expenses

We expect, but cannot guarantee, that annual selling, general and administrative expenses will not increase significantly over the next 12 to 14 months.

Selling, general and administrative expenses consist primarily of salaries and other personnel costs, and stock-based compensation for our sales and marketing, finance, legal, human resources and general management, as well as professional services, such as legal, audit and accounting services, and director and officer insurance costs as well as investor and public relations expenses associated with operating as a public company.

We expect selling, general and administrative expenses, and amortization of intangibles to stabilize in future periods as we executed our strategic transformation in the fiscal year 2025.

Beginning in the first quarter of 2025, general and administrative expenses also include rent expenses and passthrough costs, reimbursable by Repligen, incurred in performing duties under the Transition Services Agreement by and between the Company and Repligen, dated as of March 4, 2025, or the TSA.

Change in fair value of contingent consideration

6 unchanged sentences

Interest income

Interest income consists of interest earned on our invested cash balances.

Interest expense

Interest expense consists of interest expense associated with outstanding borrowings under our loan and security agreements and the amortization of deferred financing costs and debt discounts associated with such arrangements.

Interest income consists of interest earned on our invested cash, cash equivalents and marketable securities balances.

Income from Transition Services Agreement, net

Income from transition services agreement, net represents service charges provided to Repligen to facilitate the transition of the Desktop Portfolio, net of directly identifiable personnel related costs, pursuant to the TSA.

The scope of transition services includes the provision of certain manufacturing services, research and development support and certain administrative functions related to the Desktop Portfolio.

The Company is continuing to provide certain general and administrative functions under the TSA.

Other income (expense), net

Other income (expense), net consists of interest income from our cash and cash equivalents, miscellaneous other income and expense unrelated to our core operations.

Other income (expense), net consists of miscellaneous other income and expense unrelated to our core operations, interest expense associated with the amortization of deferred financing costs and debt discounts associated with our loan and security agreements.

Provision for Income Taxes

1 unchanged sentence

federal or state income tax benefits for the net operating losses we have incurred in each year or for the research and development tax credits we generated in the United States and have recorded a full valuation allowance against our net deferred assets, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards and tax credits will not be realized.

We recognized an income tax benefit of $0.3 million and $0.2 million during the years ended December 31, 2024 and 2023, respectively.

The income tax benefit recognized during the year ended December 31, 2024 primarily resulted from a reduction in the deferred tax liabilities recorded as part of our acquisition of 908 Devices GmbH.

As of December 31, 2024, the Company had gross federal and state operating loss carryforwards of $127.9 million and $92.5 million, respectively, which may be available to offset future taxable income and begin to expire in 2032 and 2025, respectively, of which $93.5 million of federal gross operating losses do not expire.

We recognized an income tax benefit of $0.1 million and no income tax benefit during the years ended December 31, 2025 and 2024, respectively.

The income tax benefit recognized during the year ended December 31, 2025 primarily resulted from a foreign tax refunds received as part of our divesture of 908 Devices GmbH.

As of December 31, 2025, the Company had gross federal and state operating loss carryforwards of $147.0 million and $94.5 million, respectively.

The federal operating loss carryforward may be available to offset future taxable income and begin to expire in 2032, of which $112.6 million of federal gross operating losses do not expire.

As of December 31, 2025, the Company also had U.S.

23 unchanged sentences

Interest income

Interest expense

Income from transition services agreement, net

Other expense, net

Total other income, net

Loss from operations before income taxes

Benefit for income taxes

Loss from continuing operations before income taxes

Income tax benefit

Net loss from continuing operations, net of income taxes

Revenue, Cost of revenue and Gross profit

Our product revenue is comprised of revenue from sales of devices and related accessories and consumables and service as follows:

Our product revenue is comprised of revenue from sales of devices and related accessories, software and consumables and service as follows:

Year Ended December 31,

4 unchanged sentences

Product revenue increased by $7.8 million, or 22%, for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The increase was primarily related to $9.8 million in product revenue from our recently acquired FTIR products.

This increase was offset in part by a $3.2 million decrease in MX908 related handheld product revenue, mainly due to fewer device placements, a $1.8 million decrease from component shipments under our subcontract agreement with a commercial entity that holds a U.S.

government prime contract, as well as a $0.9 million decrease in desktop product revenue, mainly due to the mix of devices and three fewer desktop device placements, for the year ended December 31, 2024.

The increase was primarily related to $11.3 million in product revenue from our FTIR products, led by our recently launched VipIR and our XplorIR device, but also partly due to the impact of ownership for the full period in 2025 compared to eight months in 2024.

This increase was offset in part by a $2.1 million decrease in MX908 related handheld product revenue, mainly due to fewer device placements, and a $1.5 million decrease in

program product revenue related to our AVCAD program, pursuant to which we had component shipments under our subcontract agreement with a commercial entity for the year ended December 31, 2025.

Product cost of revenue increased by $4.9 million, or 28%, for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The increase in product cost of revenue was primarily related to a $2.3 million increase in production costs related to the higher product revenues, $1.7 million in higher intangible amortization and $1.1 million in higher personnel related costs, partly related to our RedWave acquisition.

These increases were offset in part by a $1.3 million increase in labor and overhead absorption related to the level of production builds and a $0.9 million decrease in materials and supplies consumed in production related activities.

The increase in product cost of revenue was primarily related to an increase in production costs related to the higher product revenues, $2.3 million in higher personnel related costs, partly related to our RedWave and KAF acquisitions, $0.8 million in higher intangible amortization, and $0.3 million related to severance and retention costs.

Product gross profit increased by $2.8 million, or 16%, and gross profit margin decreased by 3% for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The increase in product gross profit was primarily due to the higher product revenue volume, net of favorable timing of production and lower material costs, offset in part by increases in intangible amortization and other production related costs for the year ended December 31, 2024.

The increase in product gross profit was primarily due to the higher product revenue volume, offset by the impact of lower margin international sales, product mix related to VipIR that is at a lower margin due to initial launch and sale of demonstration units, an increase in intangible amortization and higher personnel related costs for the year ended December 31, 2025, which drove the decrease in gross profit margin.

Service and Contract

Our service and contract revenue is comprised of revenue from sales of extended warranty and service plans and customer training as follows:

Our service and contract revenue is comprised of revenue from sales of extended warranty and service plans, customer training and contract services as follows:

Year Ended December 31,

4 unchanged sentences

Service and contract revenue increased by $0.7 million, or 6%, for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The increase was primarily related to an increase in handheld service revenues related to extended service contracts and training for MX908 devices and to a lesser extent our recently acquired FTIR products, as well as a $0.6 million increase in desktop service revenue.

During the year ended December 31, 2024, we recognized contract revenue with three new commercial entities.

Contract revenue for the year ended December 31,

2023 was related to activities under our subcontract agreement with a commercial entity that holds a U.S.

government prime contract, which was concluded in the second quarter of 2023.

Service and contract cost of revenue increased by $1.7 million, or 25%, for the year ended December 31, 2024, compared to the year ended December 31, 2023.

The increase in service cost of revenue was primarily related to a $0.8 million increase in personnel and other operating costs, partly related to our RedWave acquisition, a $0.4 million increase in material costs and contract trainers, and a $0.1 million increase related to stock-based compensation.

Service and contract gross profit increased by 114%, and gross profit margin increased by thirteen percentage points for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to an increase in service volume related to extended service contracts and training revenue, leveraging our investments in personal and service infrastructure.

The increase was primarily related to a $1.0 million increase in handheld service revenues related to training performed and extended service contracts for our FTIR devices, offset by a decrease in service revenues related to our MX908, primarily from a federal defense customer that had a funding-related pause in their support of their installed base.

Contract revenue was $0.1 million for both the year ended December 31, 2025 and 2024.

Service and contract cost of revenue decreased by $0.4 million, or 7%, for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The decrease in service cost of revenue was primarily related to a $0.7 million decrease in material costs and contract trainers, offset in part by $0.2 million in higher personnel costs.

Service and contract gross profit increased by 17%, and gross profit margin increased by six percentage points for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to an increase in service volume related to training and extended service contracts, leveraging our investments in personal and service infrastructure.

Operating Expenses

5 unchanged sentences

Our research and development expenses were $15.6 million for the year ended December 31, 2025, an increase of $0.6 million from research and development expenses of $15.0 million for the year ended December 31, 2024.

The increase was mainly due to the increased expenses from the RedWave acquisition and was due primarily to a $2.0 million increase in personnel and related costs, a $0.8 million increase in stock-based compensation, a $0.5 million increase in project spend related to materials and consulting, and a $0.2 million increase in depreciation and occupancy related expenses, mainly related to our facilities in Connecticut and North Carolina.

The increase was partly due to the increased expenses from the RedWave acquisition and was due primarily to a $0.5 million increase in project expenditure related to materials and consulting and a $0.4 million increase in severance and retention costs, offset in part by a $0.2 million decrease in facility related costs and a $0.2 million decrease in depreciation.

Selling, general and administrative expenses

3 unchanged sentences

Percentage of total revenue

Our selling, general and administrative expenses were $53.6 million for the year ended December 31, 2024, an increase of $7.6 million from selling, general and administrative expenses of $46.1 million for the year ended December 31, 2023.

The increase was partly due to the increased expenses from the RedWave acquisition and was due primarily to a $2.4 million increase in banker, legal and accounting fees, mainly related to the RedWave acquisition of RedWave, a $2.5 million increase in salaries and related costs, a $1.0 million increase in stock-based compensation, a $0.7 million increase in consulting, legal and related costs not related to the RedWave acquisition, a $0.5 million increase in travel and related costs, a $0.3 million increase in material spend, a $0.2 million increase in trade shows and a $0.4 million increase across all other operating costs.

These increases were partially offset by a $0.3 million decrease in insurance costs and a $0.2 million decrease in provisions for bad debts.

Our selling, general and administrative expenses were $38.5 million for the year ended December 31, 2025, a decrease of $0.9 million from selling, general and administrative expenses of $39.5 million for the year ended December 31, 2024.

The decrease was primarily due to $2.2 million in lower consulting, legal and accounting related costs incurred with the RedWave acquisition during the year ended December 31, 2024, a $0.4 million decrease in travel and related costs, a $0.4 million decrease in consulting, legal and audit fees, a $0.3 million decrease in directors and officers insurance, and a net decrease in all other expenses of $0.4 million.

These cost decreases were offset in part by a $1.1 million increase in non-cash stock-based compensation, a $0.9 million increase related to facility shut down and moving costs, and a $0.8 million increase in payroll and related costs, mainly related to a $0.6 million charge for transaction bonuses earned with the Desktop Portfolio divestiture.

Change in fair value of contingent consideration

3 unchanged sentences

Percentage of total revenue

The key assumptions, such as revenue projections, equity volatility rate of the Company, revenue volatility rate and discount rate are utilized to estimate the fair value of the contingent consideration under Monte Carlo simulation.

The decline in such key assumptions resulted in a decrease to the fair value of the contingent consideration obligation for the year ended December 31, 2024 of a credit of $13.2 million from the RedWave acquisition date fair value.

Specifically, the decrease to the fair value of contingent consideration was primarily due to the change in revenue projections from operating decisions made post-acquisition and sustained decreases in the Company’s publicly quoted share price during the third and fourth quarters of 2024.

For the year ended December 31, 2023, a charge of $0.1 million was recorded to increase the value of the contingent consideration liability related to the Trace acquisition.

Goodwill impairment

Year Ended December 31,

(dollars in thousands)

The key assumptions, such as revenue projection, equity volatility rate of the Company, revenue volatility rate and discount rate are utilized to estimate the fair value of the contingent consideration under Monte Carlo simulation.

The fair value of contingent consideration increased by $13.8 million during the year ended December 31, 2025, due to an increase in the projections for FTIR revenue, including the recent product launch of VipIR, and the increase in the Company’s publicly quoted share price during the year ended December 31, 2025.

The decline in the key assumptions of stock price and forecast from the RedWave acquisition date to December 31 2024, resulted in a reduction, or credit, of $13.2 million for the year ended December 31, 2024, reducing the contingent liability during that period.

Goodwill impairment

Percentage of total revenue

As a result of sustained decreases in our publicly quoted share price and market capitalization, a $40.7 million goodwill impairment was recorded for the year ended December 31, 2024.

2 unchanged sentences

Interest income decreased by $0.4 million for the year ended December 31, 2025 from $4.5 million for the year ended December 31, 2024.

The decrease was due to the lower cash, cash equivalent and marketable securities balance, primarily due to the average balance during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the use of cash with the RedWave acquisition.

Interest expense

Interest expense decreased by $0.2 million for the year ended December 31, 2024 from $0.2 million for the year ended December 31, 2023.

The decrease was primarily due to costs incurred in March 2023 related to the write-off of deferred financing costs on our 2022 Revolver, which was in default and later amended in August 2023.

The decrease was due to the lower cash, cash equivalent and marketable securities balances, primarily due to the average balance during the year ended December 31, 2025, compared to the year ended December 31, 2024 and, to a lesser extent, lower interest rates.

Income from transition services agreement, net

Income from the transition services agreement, net was $2.3 million for the year ended December 31, 2025.

Other income (expense), net

Other expense, net for the year ended December 31, 2024 did not change materially from the year ended December 31, 2023.

Benefit for Income Taxes

Benefit for income taxes increased by $0.1 million for the year ended December 31, 2024 from $0.2 million from the year ended December 31, 2023.

The income tax benefit recognized during the periods was primarily resulting from a reduction in the deferred tax liabilities recorded as part of our acquisition of 908 Devices GmbH.

Other expense, net increased by $0.1 million for the year ended December 31, 2025 from $0.2 million for the year ended December 31, 2024.

The increase was due to the moving cost related to the facility restructurings.

Income tax benefit

Income tax benefit for the year ended December 31, 2025 was $0.1 million and was zero for the year ended December 31, 2024.

Liquidity and Capital Resources

Since our inception, we have incurred significant operating losses.

To date, we have funded our operations primarily with proceeds from sales of redeemable preferred stock, borrowings under loan agreements and revenue from sales of our products and services and license and contract revenue, proceeds from our IPO in December 2020, and our underwritten public offering in November 2021.

To date, we have funded our operations primarily with proceeds from sales of equity, borrowings under loan agreements and revenue from sales of our products and services and license and contract revenue.

As of December 31, 2025, we had cash and cash equivalents of $70.5 million and marketable securities of $42.5 million, which were held for working capital purposes and for investment in growth opportunities.

11 unchanged sentences

● the level of our selling, general and administrative expenses.

On November 2, 2022, we entered into a Loan and Security Agreement, or the 2022 Revolver, with Silicon Valley Bank, or the Lender.

The 2022 Revolver provided for a revolving line of credit of up to $35.0 million.

We were permitted to make interest-only payments on the revolving line of credit through November 2, 2025, at which time all outstanding indebtedness would be immediately due and payable.

The outstanding principal amount of any advance accrued interest at a floating rate per annum equal to the greater of (i) three and one-half percent (3.50%) and (ii) the “prime rate” as published in The Wall Street Journal for the relevant period minus one-half percent (0.50%).

Our obligations under the 2022 Revolver were secured by substantially all of our assets, excluding our intellectual property, which was subject to a negative pledge.

The revolving line of credit under the 2022 Revolver was scheduled to terminate on November 2, 2025.

The 2022 Revolver also contained certain financial covenants, including a requirement that the amount of unrestricted and unencumbered cash minus advances under the 2022 Revolver was not less than the amount equal to the greater of (i) $10.0 million or (ii) nine (9) months of cash burn.

The 2022 Revolver contained customary representations and warranties, as well as certain non-financial covenants, including limitations on, among other things, our ability to change the principal nature of our business, dispose of our business or property, engage in any change of control transaction, merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, incur additional indebtedness or liens, pay dividends or make other distributions on capital stock, redeem our capital stock, engage in transactions with affiliates or otherwise encumber our intellectual property, in each case, subject to customary exceptions.

As of December 31, 2023, there were no balances outstanding under the 2022 Revolver.

As of December 31, 2022, the outstanding principal balance under the 2022 Revolver was $15.0 million, which was repaid in full on January 4, 2023.

The interest rate applicable to borrowing under the 2022 Revolver was 7.0% as of December 31, 2022.

On March 10, 2023, the Lender, also one of our financial institutions, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or FDIC, as receiver.

As of March 31, 2023, the Company had transferred substantially all its cash, cash equivalents and marketable securities away from the Lender and deposited the funds with new financial institutions.

As a result of the transfer of the Company’s cash, cash equivalents and marketable securities, the Company was in default, of its financial covenants under the 2022 Revolver.

The Company recorded a loss on extinguishment of $0.5 million in the three months ended March 31, 2023, which was included in interest expense in the consolidated statements of operations.

On August 4, 2023, we entered into a Default Waiver and First Amendment to Loan and Security Agreement with the Lender, or the Amended 2022 Revolver, in which the Lender waived its rights and remedies against the Company and amended the 2022 Revolver.

On November 2, 2022, the Company entered into a Loan and Security Agreement (the “2022 Revolver”), by and between the Company, as borrower, and SVB, as lender.

On August 4, 2023, the Company entered into the Amended 2022 Revolver, by and between the Company, as borrower, and SVB, as lender.

On September 15, 2025, the Amended 2022 Revolver was extended to February 2, 2026, and on February 5, 2026, the Amended 2022 Revolver was extended to April 2, 2026.

The Amended 2022 Revolver provides for a revolving line of credit of up to $10.0 million.

The Company is permitted to make interest-only payments on the revolving line of credit through November 3, 2025, at which time all outstanding indebtedness shall be immediately due and payable.

The Company is permitted to make interest-only payments on the revolving line of credit through April 2, 2026, at which time all outstanding indebtedness shall be immediately due and payable.

The outstanding principal amount of any advance shall accrue interest at a floating rate per annum equal to the greater of (i) four and one-half percent (4.50%) and (ii) the “prime rate” as published in The Wall Street Journal for the relevant period minus one-half percent (0.50%).

The Company’s obligations under the Amended 2022 Revolver are secured by substantially all of the Company’s assets, excluding its intellectual property, which is subject to a negative pledge.

The revolving line of credit under the Amended 2022 Revolver terminates on November 3, 2025.

As of December 31, 2024 and 2023, there were no balances outstanding under the Amended 2022 Revolver.

Pursuant to the Amended 2022 Revolver, the Lender waived filing any legal action or instituting or enforcing any rights and remedies it may have had against the Company in connection with the Company’s failing to maintain all of its operating accounts, depository accounts and excess cash with the Lender, as previously required under the 2022 Revolver.

The Company recorded a credit of $0.3 million during the three months ended September 30, 2023 related to the previously recorded early termination penalties.

The Amended 2022 Revolver also contains certain financial covenants, including a requirement that the Company maintain $20.0 million on account at or through the Lender and that the amount of unrestricted and unencumbered cash minus advances under the Amended 2022 Revolver, is not less than the amount equal to the greater of (i) $10.0 million or (ii) nine (9) months of cash burn.

Pursuant to the Amended 2022 Revolver, SVB waived filing any legal action or instituting or enforcing any rights and remedies it may have had against the Company in connection with the Company’s failing to maintain all of its operating accounts, depository accounts and excess cash with SVB, as previously required prior to the effectiveness of the Amended 2022 Revolver.

The Amended 2022 Revolver also contains certain financial covenants, including requirements that the Company maintain $20.0 million on account at or through SVB and that the amount of unrestricted and unencumbered cash minus advances under the Amended 2022 Revolver is not less than the amount equal to the greater of (i) $10.0 million or (ii) nine (9) months of cash burn.

The Amended 2022 Revolver contains customary representations and warranties, as well as certain non-financial covenants, including limitations on, among other things, the Company’s ability to change the principal nature of its business, dispose of the Company’s business or property, engage in any change of control transaction, merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, incur additional indebtedness or liens, pay dividends or make other distributions on capital stock, redeem the Company’s capital stock, engage in transactions with affiliates or otherwise encumber the Company’s intellectual property, in each case, subject to customary exceptions.

On March 5, 2026, the Company entered into the Amended 2026 Revolver by and between the Company, as borrower, and SVB, as lender.

The Amended 2026 Revolver provides for a revolving line of credit of up to $20.0 million.

The Amended 2026 Revolver supersedes and replaces the Amended 2022 Revolver and its extension upon the execution of the Amended 2026 Revolver.

The Company is permitted to make interest-only payments on the revolving line of credit through March 5, 2028, at which time all outstanding indebtedness shall be immediately due and payable.

The outstanding principal amount of any advance shall accrue interest at a floating rate per annum equal to the greater of (i) six percent (6.00%) or (ii) the “prime rate” as published in The Wall Street Journal.

The Company’s obligations under the Amended 2026 Revolver are secured by substantially all of the Company’s assets, excluding its intellectual property, which is subject to a negative pledge.

We may seek additional funding through private or public equity financings, debt financings, collaborations, strategic alliances and marketing, channel partner or licensing arrangements.

3 unchanged sentences

Any debt or equity financing that we raise may contain terms that are not favorable to us or our stockholders.

If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish some rights to our technologies or our products, or grant licenses on terms that are not favorable to us.

If we raise additional funds through collaboration and

licensing arrangements with third parties, it may be necessary to relinquish some rights to our technologies or our products, or grant licenses on terms that are not favorable to us.

If we do not have or are not able to obtain sufficient funds, we may have to delay development or commercialization of our products.

4 unchanged sentences

Cash used in operating activities

Cash used in investing activities

Cash provided by (used in) investing activities

Cash used in financing activities

Effect of foreign exchange rate changes on cash and cash equivalents

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Operating Activities

During the year ended December 31, 2025, net cash used in operating activities was $23.7 million, consisting primarily of a $55.9 million gain on sale of our Desktop Portfolio, net of transaction costs, and net cash used in changes in our operating assets and liabilities of $15.3 million, partially offset by our net income of $19.5 million and noncash uses of $27.9 million, inclusive of a noncash use of $13.7 million related to the change in fair value of contingent consideration increase.

Net cash used in changes in our operating assets and liabilities of $15.3 million consisted primarily of a $ 5.9 million decrease from changes in accounts payable and accrued expenses, a $3.7 million decrease from changes in inventory and a $3.2 million decrease from changes in deferred revenue, primarily related to assets and liabilities that were divested with our Desktop Portfolio.

During the year ended December 31, 2024, net cash used in operating activities was $30.2 million, primarily resulting from our net loss of $72.2 million and net cash used in changes in our operating assets and liabilities of $2.5 million, partially offset by noncash charges of $44.5 million.

1 unchanged sentence

Noncash changes consisted primarily of a $40.7 million goodwill impairment charge and $11.8 million in stock-based compensation charges, partially offset by $13.2 million from the change in fair value of contingent consideration.

During the year ended December 31, 2023, net cash used in operating activities was $25.1 million, primarily resulting from our net loss of $36.4 million and net cash used in changes in our operating assets and liabilities of $1.6 million, partially offset by noncash charges of $12.9 million.

Net cash used in changes in our operating assets and liabilities for the year ended December 31, 2023, consisted primarily of a $3.9 million decrease from changes in inventory and a $1.6 million decrease from changes in operating lease liabilities, partially offset by a $1.7 million increase from changes in right-of-use operating lease assets, a $2.0 million increase from changes in accounts payable and accrued expenses and a $0.7 million increase from changes in account receivable.

Investing Activities

During the year ended December 31, 2025, net cash provided by investing activities was $50.7 million, due primarily to $69.9 million of proceeds from the sale of the Desktop Portfolio and $47.8 million of proceeds from the maturity of marketable securities, partially offset by $64.0 million in purchases of marketable securities.

In addition, we used $2.0 million for the acquisition of KAF.

During the year ended December 31, 2024, net cash used in investing activities was $46.3 million, due to cash paid with the acquisition of RedWave of $44.8 million and $0.6 million in purchases of property and equipment.

In addition, $55.5 million in cash was used for purchases of marketable securities, partially offset by $54.6 million in proceeds from maturities of marketable securities.

During the year ended December 31, 2023, net cash used in investing activities was $26.4 million, due to $48.9 million in purchases of marketable securities, partially offset by $24.5 million in proceeds from maturities of marketable securities and $2.0 million in purchases of property and equipment.

Financing Activities

Cash used in financing activities during the year ended December 31, 2024, was $0.4 million, due primarily to a $0.5 million payment for contingent consideration earned with our acquisition of Trace Analytics GmbH.

Cash used in financing activities during the year ended December 31, 2023, was $15.9 million, consisting primarily of the repayment of $15.0 million outstanding under the 2022 Revolver and $1.1 million in payments for contingent consideration related to the release of the $0.9 million assignment of the pension liability in connection with our acquisition of Trace Analytics GmbH and the $0.2 million initial fair value of contingent consideration, related to the $0.5 million initial milestone achievement in August 2023, that was paid in 2023.

Cash used in financing activities during the year ended December 31, 2025, was $0.7 million, due primarily to a $0.7 million payment for contingent consideration achieved with our acquisition of KAF.

Cash used in financing activities during the year ended December 31, 2024, was $0.4 million, due primarily to a $0.5 million payment for contingent consideration achieved with our acquisition of Trace Analytics GmbH.

Contractual Obligations

We have operating lease obligations for office space and certain equipment, which have remaining lease terms ranging from less than one year to nine years.

We have operating lease obligations for office space, which have remaining lease terms ranging from two years to nine years.

The total future minimum payments under such leases are $6.0 million as of December 31, 2025, of which $1.1 million is expected to be paid in 2026.

4 unchanged sentences

We have not included future payments under this agreement in the table of contractual obligations above since the payment obligations under this agreement are contingent upon generating product sales.

During the year ended December 31, 2023, we made no cash contributions to our foreign pension plan, assumed as a part of Trace Analytics GmbH acquisition.

The plan was transferred and the Company was released from the pension obligation in April 2023.

Critical Accounting Policies and Significant Judgments and Estimates

12 unchanged sentences

Allocation of the transaction price is determined at the contract’s inception and is not updated to reflect changes between contract inception and when the performance obligations are satisfied.

We derive revenue primarily from the sale of handheld and desktop products and related consumables and services.

Revenue is recognized when control of the promised products, consumables or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products, consumables or

services (the transaction price).

We derive revenue primarily from the sale of devices and related consumables and services.

Revenue is recognized when control of the promised devices, consumables or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those devices, consumables or services (the transaction price).

A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of accounting under ASC 606.

1 unchanged sentence

To indicate the transfer of control, we must have a present right to payment, legal title must have passed to the customer, the customer must have the significant risks and rewards of ownership, and where acceptance is other than perfunctory, the customer must have accepted the product or service.

Our principal terms of sale are freight on board, or FOB, shipping point, or equivalent, and, as such, we primarily transfer control and record revenue for product sales upon shipment.

Our principal terms of sale are freight on board, or FOB, shipping point, or equivalent, and, as such, we primarily transfer control and record revenue for devices and consumables sales upon shipment.

Sales arrangements with delivery terms that are not FOB shipping point are not recognized upon shipment and the transfer of control for revenue recognition is evaluated based on the associated shipping terms and customer obligations.

17 unchanged sentences

Compensation expense for those awards is recognized, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award.

The straight-line method of expense recognition is applied to all awards with service-only conditions, while the graded vesting method is applied to all grants with both service and performance conditions.

The straight-line method of expense recognition is applied to all awards with service-only conditions, while the

graded vesting method is applied to all grants with both service and performance conditions.

Forfeitures are recorded as they occur instead of estimating forfeitures that are expected to occur.

4 unchanged sentences

We regularly review inventory quantities on-hand for excess and obsolete inventory and, when circumstances indicate, record charges to write down inventories to their estimated net realizable value, after evaluating historical sales, future demand, market conditions and expected product life cycles.

Such charges are classified as cost of revenue in the consolidated statements of operations and comprehensive loss.

Such charges are classified as cost of revenue in the consolidated statements of operations and comprehensive income (loss).

Any write-down of inventory to net realizable value creates a new cost basis.

13 unchanged sentences

To determine the fair value of long-lived assets, we utilize the valuation technique or techniques deemed most appropriate based on the nature of the asset or asset group, which may include the use of quoted market prices, prices for similar assets or other valuation techniques such as discounted future cash flows or earnings.

Business combination

Business Combinations

Under the acquisition method of accounting, we generally recognize the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition.

2 unchanged sentences

These valuations require significant estimates and assumptions, especially with respect to intangible assets.

We estimate the fair value of the contingent consideration earnouts using the Monte Carlo Simulation or probability weighted scenario depending on the nature of the contingent consideration and update the fair value of the contingent consideration at each reporting period based on the estimated probability of achieving the earnout targets and applying a discount rate that captures the risk associated with the expected contingent payments.

To the extent that these estimates change in the future regarding the likelihood of achieving these targets, we may need to record material adjustments to

our accrued contingent consideration.

discount rate that captures the risk associated with the expected contingent payments.

To the extent that these estimates change in the future regarding the likelihood of achieving these targets, we may need to record material adjustments to our accrued contingent consideration.

Such changes in the fair value of contingent consideration are recorded as contingent consideration expense or income in the consolidated statements of operations.

15 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis