13 unchanged sentences
We have audited the accompanying consolidated balance sheets of 908 Devices Inc.
−Removed: and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity, and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).
+Added: and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive loss, of stockholders’ equity, and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
22 unchanged sentences
Cash and cash equivalents
−Removed: Accounts receivable, net of allowance for doubtful accounts of $ 25 and $ 1,750 at December 31, 2022 and December 31, 2021
+Added: Marketable securities
+Added: Accounts receivable, net of allowance for credit losses of $ 395 and $ 25 at December 31, 2023 and December 31, 2022
Prepaid expenses and other current assets
34 unchanged sentences
Year Ended December 31,
−Removed: Product and service revenue
−Removed: License and contract revenue
+Added: Product revenue
+Added: Service revenue
+Added: Contract revenue
Total revenue
Cost of revenue:
−Removed: Product and service cost of revenue
−Removed: License and contract cost of revenue
+Added: Product cost of revenue
+Added: Service cost of revenue
+Added: Contract cost of revenue
Total cost of revenue
4 unchanged sentences
Loss from operations
−Removed: Other income (expense):
+Added: Other income, net:
Interest income
Interest expense
−Removed: Other income, net
−Removed: Total other income (expense), net
+Added: Other expense, net
+Added: Total other income, net
+Added: Loss from operations before income taxes
+Added: Benefit for income taxes
Net loss per share
7 unchanged sentences
Year Ended December 31,
−Removed: Other comprehensive income (loss)
+Added: Other comprehensive income
Foreign currency translation adjustment
−Removed: Total other comprehensive (income) loss
+Added: Unrealized gain on marketable securities, net of tax of $ 0
+Added: Total other comprehensive income
Comprehensive loss
6 unchanged sentences
Issuance of common stock upon exercise of stock options
−Removed: Issuance of common stock, net of issuance costs of $ 376
Stock-based compensation expense
+Added: Issuance of common stock upon ESPP purchase
Vesting of restricted stock units
+Added: Foreign currency translation adjustments
Balances at December 31, 2022
4 unchanged sentences
Foreign currency translation adjustments
+Added: Unrealized gain on marketable securities
Balances at December 31, 2023
10 unchanged sentences
Provision for inventory obsolescence
−Removed: Provision for doubtful accounts
+Added: Net amortization of premiums and accretion of discounts on marketable securities
+Added: Provision for credit losses
Change in fair value of contingent consideration
12 unchanged sentences
Purchases of property and equipment
+Added: Purchases of marketable securities
+Added: Proceeds from sales and maturities of marketable securities
Acquisitions, net of cash acquired
1 unchanged sentence
Cash flows from financing activities:
−Removed: Proceeds from public offerings, net of underwriting discounts and commissions
Payments for withholding taxes on vested awards
3 unchanged sentences
Repayment on revolving line of credit
−Removed: Repayment of notes payable
−Removed: Payments of debt issuance costs
−Removed: Net cash provided by financing activities
+Added: Payments for contingent consideration
+Added: Net cash (used in) provided by financing activities
Effect of foreign exchange rate changes on cash and cash equivalents
−Removed: Net (decrease) increase in cash, cash equivalents and restricted cash
+Added: Net decrease in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period
1 unchanged sentence
Supplemental disclosure of noncash investing and financing information:
−Removed: Public offering costs included in accounts payable and accrued expenses
Property and equipment included in account payable
Transfers of inventory to property and equipment
+Added: Transfers of property and equipment to inventory
Reconciliation of cash, cash equivalents and restricted cash:
11 unchanged sentences
(the “Company”) was incorporated in the State of Delaware on February 10, 2012 .
−Removed: The Company is a commercial-stage technology company providing a suite of purpose-built handheld and desktop mass spectrometry devices for the point-of-need to interrogate unknown and invisible materials in a broad array of markets including life sciences research, bioprocessing, industrial biotech, forensics, and adjacent markets.
+Added: The Company is a commercial-stage technology company providing a suite of purpose-built handheld and desktop devices used at the point-of-need for chemical and biochemical analysis in a broad array of markets including life sciences research, bioprocessing, pharma/biopharma, forensics and adjacent markets.
The Company is subject to risks and uncertainties common to technology companies in the device industry and of similar size, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, uncertainty of market acceptance of products, and the need to obtain additional financing to fund operations.
−Removed: Potential risks and uncertainties also include, without limitation, uncertainties regarding the duration and magnitude of the impact of the COVID-19 pandemic on the Company’s business and the economy generally.
+Added: Potential risks and uncertainties also include, without limitation, uncertainties regarding higher inflation and interest rates.
Products currently under development will require additional research and development efforts prior to commercialization and will require additional capital and adequate personnel and infrastructure.
1 unchanged sentence
The Company operates in an environment of rapid change in technology and competition.
−Removed: In March 2020, the World Health Organization declared the global novel coronavirus disease 2019 (“COVID-19”) outbreak a pandemic.
−Removed: The impact of this pandemic has been and may continue to be extensive in many aspects of society, which has resulted in and may continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.
−Removed: While the Company maintains an inventory of finished products and raw materials used in its products, as the situation around COVID-19, including any variants thereof, evolves further, the pandemic could lead to shortages in the raw materials necessary to manufacture its products.
−Removed: An additional potential impact to the Company’s business is the negative impact to the Company’s customers’ and potential customer’s ability to make investments and timely payments for purchased products as a result of allocating resources to address COVID-19 issues or in response to the rising inflation.
Underwritten Public Offerings
2 unchanged sentences
Upon the closing of the IPO, all of the shares of the Company’s outstanding redeemable convertible preferred stock then outstanding automatically converted into 14,691,929 shares of common stock.
−Removed: On November 15, 2021, the Company completed an underwritten public offering, pursuant to which it issued and sold 3,150,000 shares of common stock at a public offering price of $ 32.00 per share ( “ November 2021 Offering”).
+Added: On November 15, 2021, the Company completed an underwritten public offering, pursuant to which it issued and sold 3,150,000 shares of common stock at a public offering price of $ 32.00 per share (the “November 2021 Offering”).
The Company received net proceeds of $ 94.4 million after deducting underwriting discounts and commissions and other offering costs.
−Removed: The Company acquired TRACE Analytics GmbH, located in Braunschweig, Germany (“Trace”) in August 2022.
−Removed: In February 2023, Trace formally changed its name to 908 Devices GmbH.
−Removed: Trace is a leading provider of online analysis systems for biotech applications in research, development, and production.
−Removed: Trace’s products are used for monitoring and
−Removed: control of complex processes in industrial pharmaceutical productions under continuous measurement conditions.
−Removed: With the acquisition of Trace, the Company has acquired enabling sampling technology that it expects to integrate within future product offerings.
+Added: The Company acquired Trace Analytics GmbH, located in Braunschweig, Germany in August 2022.
+Added: In February 2023, Trace Analytics GmbH formally changed its name to 908 Devices GmbH.
+Added: 908 Devices GmbH is a leading provider of online analysis systems for biotech applications in research, development, and production.
+Added: 908 Devices GmbH’s products are used for monitoring and control of complex processes in industrial pharmaceutical productions under continuous measurement conditions.
+Added: With the acquisition of 908 Devices GmbH, the Company acquired enabling sampling technology that it expects to integrate within future product offerings.
See Note 18, Acquisition , for further information.
Basis of Presentation
−Removed: The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
+Added: The Company’s consolidated financial statements have been prepared in conformity with GAAP.
Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, 908 Devices Securities Corporation, 908 Devices (Shanghai) Technology Co., Ltd.
+Added: and 908 Devices GmbH.
All intercompany balances and transactions have been eliminated.
3 unchanged sentences
The Company expects to continue to generate operating losses in the foreseeable future.
−Removed: As of March 15, 2023, the issuance date of the consolidated financial statements, the Company expects that its cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of the consolidated financial statements.
−Removed: The Company may seek additional funding through private or public equity financings, debt financings, collaborations, strategic alliances and marketing, distribution, or licensing arrangements.
+Added: As of March 8, 2024, the issuance date of the consolidated financial statements, the Company expects that its cash, cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 12 months from the issuance date of the consolidated financial statements.
+Added: The Company may seek additional funding through private or public equity financings, debt financings, collaborations, strategic alliances and marketing, channel partner, or licensing arrangements.
The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into collaborations or other arrangements.
14 unchanged sentences
Risk of Concentrations of Credit, Significant Customers and Significant Suppliers
−Removed: Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.
+Added: Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, and accounts receivable.
The Company’s cash and cash equivalents and restricted cash are maintained in bank deposit accounts and money market funds that regularly exceed federally insured limits.
The Company is exposed to credit risk on its cash, cash equivalents and restricted cash in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”).
−Removed: Please refer to Note 19 for further discussion regarding the potential impacts of the closure of the Company’s two financial institutions at which the Company currently hold deposits.
+Added: The Company’s marketable securities are invested in U.S.
+Added: treasury securities and as a result, the Company believes represent minimal credit risk.
Significant customers are those that accounted for 10 % or more of the Company’s total revenue or accounts receivable.
−Removed: One customer represented 28 % and 43 % of total revenue, respectively, for the year ended December 31, 2022 and 2021.
−Removed: As of December 31, 2022, two customers accounted for 20 % and 12 % of gross accounts receivable.
+Added: One customer represented 21 % of total revenue for the year ended December 31, 2023.
+Added: represented 28 % of total revenue for the year ended December 31, 2022.
+Added: As of December 31, 2023, one customer accounted for 19 % of gross accounts receivable.
As of December 31, 2022, two customers accounted for 20 % and 12 %, respectively, of gross accounts receivable.
3 unchanged sentences
The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.
+Added: Restricted Cash
+Added: Restricted cash primarily represents collaterals for the corporate credit cards and a letter of credit issued as security for the lease for the Company’s facility in Morrisville, North Carolina.
Accounts Receivable, net
−Removed: Accounts receivable are presented net of a provision for doubtful accounts, which is an estimate of amounts that may not be collectible.
−Removed: The allowance for doubtful accounts is the best estimate of the amount of probable credit losses in the existing accounts receivable.
−Removed: An allowance for doubtful accounts is established when it is probable a credit loss has been incurred based on historical collection information, a review of major customer accounts receivable balances and an assessment of current economic conditions.
−Removed: The Company writes off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues collection of the receivable.
−Removed: During the year ended December 31, 2021, the Company deemed certain receivables from a customer in the Middle East uncollectible due to credit and economic conditions, including the impact of COVID-19, and recorded a provision for bad debts of $ 1.7 million.
−Removed: During the year ended December 31, 2022, the Company concluded that the receivable was uncollectable and offset the invoices against the provision for bad debts.
−Removed: As of December 31, 2022 and 2021, the Company’s allowance for doubtful accounts were less than $ 0.1 million and $ 1.8 million, respectively.
+Added: Accounts receivable are presented net of an allowance for credit losses, which is an estimate of amounts that may not be collectible.
+Added: The Company performs ongoing credit evaluations of its customers and monitors economic conditions to identify facts and circumstances that may indicate its receivables are at risk of collection.
+Added: The Company provides reserves against accounts receivable for estimated credit losses, if any, that may result from a customer’s inability to pay based on the composition of its accounts receivable, current economic conditions and historical credit loss activity.
+Added: Amounts deemed uncollectible are charged or written-off against the reserve.
+Added: As of December 31, 2023 and December 31, 2022, the Company recorded a $ 0.4 million allowance and less than a $ 0.1 million allowance for credit losses, respectively.
+Added: The following is a summary of the activity of the Company’s allowance for credit losses (in thousands):
+Added: Year Ended December 31,
+Added: Balances at beginning of period
+Added: Current period change for expected credit loss
+Added: Deduction / recoveries collected
+Added: Balances at end of period
Inventory is valued at the lower of cost or net realizable value.
1 unchanged sentence
The Company regularly reviews inventory quantities on-hand for excess and obsolete inventory and, when circumstances indicate, records charges to write down inventories to their estimated net realizable value, after evaluating historical sales, future demand, market conditions and expected product life cycles.
−Removed: Such charges are classified as cost of revenue in the consolidated statements of operations and comprehensive loss.
+Added: Such charges are classified as cost of revenue in the consolidated statements of operations.
Any write-down of inventory to net realizable value creates a new cost basis.
1 unchanged sentence
The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year.
−Removed: The Company has determined that certain sales incentive
−Removed: programs meet the requirements to be capitalized.
−Removed: Total capitalized costs to obtain a contract were not significant during the periods presented and are included in other current assets and other long-term assets in the Company’s consolidated balance sheets.
+Added: The Company has determined that certain sales incentive programs meet the requirements to be capitalized.
+Added: Total capitalized costs to obtain a contract were not significant during
+Added: the periods presented and are included in other current assets and other long-term assets in the Company’s consolidated balance sheets.
The Company accounts for leases under ASC 842, Leases (“ASC 842”).
29 unchanged sentences
Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets.
−Removed: impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value.
+Added: If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts
+Added: of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value.
An impairment loss can be recognized in loss from operations when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount.
14 unchanged sentences
● Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.
−Removed: The Company's financial instruments consist primarily of accounts receivable, accounts payable, accrued expenses and contingent consideration.
−Removed: The Company’s cash equivalents are carried at fair value, determined according to the fair value hierarchy described above (see Note 3, Fair value measurements ).
+Added: The Company's financial instruments consist primarily of cash equivalents, marketable securities, accounts receivable, accounts payable, accrued expenses and contingent consideration.
+Added: The Company’s cash equivalents and marketable securities, consisting of money market funds (a Level 1 measurement) and U.S.
+Added: treasury notes (a Level 2 measurement), are carried at fair value, determined according to the fair value hierarchy described above (see Note 3, Fair value measurements ).
The carrying values of the Company’s accounts receivable, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.
1 unchanged sentence
The Company’s contingent consideration is measured at its fair value at each balance sheet date using unobservable inputs in the valuation methodology (a Level 3 measurement).
+Added: Marketable Securities
+Added: The Company’s marketable securities are classified as available-for-sale and are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity.
+Added: Premiums and discounts on marketable securities are amortized and accreted, respectively, to earliest call date and maturity, respectively, and included in interest income in the consolidated statements of operations.
+Added: When the fair value is below the amortized cost basis of a marketable security, an estimate of expected credit losses is made.
+Added: The credit-related impairment amount is recognized in the consolidated statements of operations.
+Added: Credit losses are recognized through the use of an allowance for credit losses account in the consolidated balance sheet and subsequent improvements in expected credit losses are recognized as a reversal of an amount in the allowance account.
+Added: If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security prior to recovery of its amortized cost basis, then the allowance for the credit loss is written-off and the excess of the amortized cost basis of the asset over its fair value is recorded in the consolidated statements of operations.
+Added: There were no credit losses recorded for the year ended December 31, 2023.
Goodwill and Intangible Assets
Goodwill is not amortized, but is evaluated for impairment on an annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may not be recoverable.
−Removed: In assessing the recoverability of goodwill, the Company must make assumptions regarding the estimated future cash flows, and other factors, to
−Removed: determine the fair value of these assets.
+Added: In assessing the recoverability of goodwill, the Company must make assumptions regarding the estimated future cash flows, and other factors, to determine the fair value of these assets.
If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges against these assets in the reporting period in which the impairment is determined.
1 unchanged sentence
The Company has the option of performing a qualitative assessment to determine whether further impairment testing is necessary before performing the quantitative assessment.
−Removed: If as a result of the quantitative assessment, it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test will be required.
+Added: If as a result of the qualitative assessment, it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test will be required.
The quantitative goodwill impairment test requires management to estimate and compare the fair value of the reporting unit with its carrying value.
11 unchanged sentences
Revenues and expenses are translated at average rates in effect during the reporting period.
−Removed: Translation adjustments are included in accumulated other comprehensive loss.
+Added: Translation adjustments are included in accumulated other comprehensive income (loss).
Product Warranties
8 unchanged sentences
Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the Company’s chief operating decision maker, or decision-making group, in deciding how to allocate resources and assess performance.
−Removed: The Company has determined that its chief
−Removed: operating decision maker is its Chief Executive Officer.
+Added: The Company has determined that its chief operating decision maker is its Chief Executive Officer.
See Note 18, Segment Reporting and Geographic Data , for disclosure of tangible assets by Geographic locations.
16 unchanged sentences
For extended warranty and support, control transfers to the customer over the term of the arrangement.
−Removed: Revenue for extended warranty and support is recognized based upon the period of time elapsed under the arrangement as this period represents the transfer of benefits or services under the agreement.
+Added: Revenue for extended warranty and support is
+Added: recognized based upon the period of time elapsed under the arrangement as this period represents the transfer of benefits or services under the agreement.
The Company recognizes a receivable at the point in time at which it has an unconditional right to payment.
23 unchanged sentences
Three years and beyond
−Removed: License and Contract Revenue
+Added: Contract Revenue
The Company generates revenue from short and long-term contracts associated with the design and development and delivery of detection devices or related design and support services.
3 unchanged sentences
The Company’s contracts with the U.S.
−Removed: government typically are subject to the Federal Acquisition Regulation (“FAR”) and are priced based on estimated or actual costs of producing goods or providing services.
+Added: government typically are subject to the
+Added: Federal Acquisition Regulation (“FAR”) and are priced based on estimated or actual costs of producing goods or providing services.
The FAR provides guidance on the types of costs that are allowable in establishing prices for goods or services provided under U.S.
18 unchanged sentences
The Company includes contract assets within prepaid and other current assets in the accompanying consolidated balance sheet.
−Removed: The Company had contract assets related to contract or license revenue totaling $ 0.4 million and $ 0.2 million, respectively, for the years ended December 31, 2022 and 2021.
+Added: The Company had no contract assets related to contract revenue as of December 31, 2023 and $ 0.4 million of contract assets related to contract revenue as of December 31, 2022.
Contract liabilities represent the Company’s obligation to transfer goods or services to a customer for which it has received consideration (or the amount is due) from the customer.
−Removed: As of December 31, 2022, the Company had contract liabilities totaling $ 2.5 million related to contract and license revenue, which the Company expects to recognize in 2024 and beyond.
−Removed: As of December 31, 2021, the Company had contract liabilities totaling $ 2.6 million related to contract and license revenue, of which the Company recognized $ 0.1 million in 2022.
+Added: As of December 31, 2023, the Company had no contract liabilities.
+Added: As of December 31, 2022, the Company had contract liabilities of $ 2.5 million, which was recognized as product revenue as the Company satisfied its performance obligations under the AVCAD production contract during the year 2023.
The Company recognizes deferred revenue by first allocating from the beginning deferred revenue balance to the extent that the beginning deferred revenue balance exceeds the revenue to be recognized.
Billings during the period are added to the deferred revenue balance to be recognized in future periods.
−Removed: As of December 31, 2022, the Company’s wholly- or partially-unsatisfied performance obligations totaled $ 0.3 million related to contract and license agreements entered prior to period end, which the Company expects to recognize in 2023.
+Added: As of December 31, 2023, the Company held no wholly- or partially-unsatisfied performance obligations related to contract agreements entered prior to period end.
Distribution Channels
−Removed: A majority of the Company’s revenue is generated by sales in conjunction with its distribution partners, such as its international distributors and, in the United States, for end customers where a government contract is required or a customer has a pre-existing relationship.
−Removed: When the Company transacts with a distribution partner, its contractual arrangement is with the partner and not with the end-use customer.
−Removed: Whether the Company transacts business with and receives the order from a distribution partner or directly from an end-use customer, its revenue recognition policy and resulting pattern of revenue recognition for the order are the same.
+Added: A majority of the Company’s revenue is generated by sales in conjunction with its channel partners, such as its international channel partners and, in the United States, for end customers where a government contract is required or a customer has a pre-existing relationship.
+Added: When the Company transacts with a channel partner, its contractual arrangement is with the partner and not with the end-use customer.
+Added: Whether the Company transacts business with and receives the order from a channel partner or directly from an end-use customer, its revenue recognition policy and resulting pattern of revenue recognition for the order are the same.
Disaggregated Revenue
−Removed: The Company’s product and service revenue consists of sales of devices and consumables and the sale of service and extended warranty plans.
+Added: The Company’s product and service revenue consists of sales of devices and recurring revenue which includes consumables, accessories and the sale of service and extended warranty plans.
The following table presents the Company’s revenue by revenue stream (in thousands):
2 unchanged sentences
Device sales revenue
−Removed: Consumables and service revenue
+Added: Recurring revenue
Total product and service revenue
−Removed: License and contract revenue
+Added: Contract revenue
Total revenue
1 unchanged sentence
Year Ended December 31,
+Added: Handheld revenue:
+Added: Device sales revenue
+Added: Recurring revenue
+Added: Total handheld revenue
+Added: Desktop revenue:
+Added: Device sales revenue
+Added: Recurring revenue
+Added: Total desktop revenue
Total product and service revenue
2 unchanged sentences
Pharmaceutical/Biotechnology
+Added: Academia and other
Total product and service revenue
4 unchanged sentences
Americas other
−Removed: International sales are comprised of product and service revenue, with all license and contract revenue being attributable to North America.
+Added: International sales are comprised of product and service revenue, with all contract revenue being attributable to North America.
Shipping and Handling Fees and Costs
9 unchanged sentences
The Company expenses costs of advertising as incurred.
−Removed: Advertising costs were $ 1.8 million and $ 1.7 million during the years ended December 31, 2022 and 2021, respectively.
+Added: Advertising costs remained at $ 1.8 million during the years ended December 31, 2023 and 2022, respectively.
All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure.
2 unchanged sentences
The Company measures stock-based option awards granted to employees, consultants and directors based on their fair value on the date of grant using the Black-Scholes option-pricing model.
−Removed: The fair value of restricted stock units is determined based on the number of shares granted and the closing price of our common stock quoted on the Nasdaq Global Market on the date of grant.
+Added: The fair value of restricted stock units is
+Added: determined based on the number of shares granted and the closing price of our common stock quoted on the Nasdaq Global Market on the date of grant.
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.
−Removed: The Company classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.
+Added: The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.
Other Comprehensive Income (Loss)
Other comprehensive income (loss) refers to revenues, expenses, gains and losses that are excluded from net loss as these amounts are recorded directly as an adjustment to shareholders' equity, net of tax.
−Removed: The Company's other comprehensive income was composed of foreign currency translation adjustments.
+Added: The Company's other comprehensive income was composed of foreign currency translation adjustments and unrealized gain or loss on marketable securities.
Net Income (Loss) per Share
The Company has one class of shares outstanding and basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period.
−Removed: Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number
−Removed: of shares of common stock outstanding for the period, including potential dilutive common shares assuming the dilutive effect of any potential dilutive securities outstanding for the fiscal year.
+Added: Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period, including potential dilutive common shares assuming the dilutive effect of any potential dilutive securities outstanding for the fiscal year.
Potential dilutive securities include warrants, stock options, restricted stock units, and shares to be purchased under the Company’s employee stock purchase plan.
5 unchanged sentences
These valuations require significant estimates and assumptions, especially with respect to intangible assets.
−Removed: The Company estimates 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 updates 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.
+Added: The Company estimates 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, the Company may need to record material adjustments to its accrued contingent consideration.
4 unchanged sentences
The Company bases the discount rates used to arrive at a present value as of the date of acquisition on the time value of money and certain industry-specific risk factors.
−Removed: The Company believes the estimated purchased customer relationships, developed technology, software and trade name amounts determined represent the fair value at the date of acquisition and do not exceed the amount a third-party would pay for the assets.
+Added: The Company believes the estimated purchased customer relationships, developed technology, software and
+Added: trade name amounts determined represent the fair value at the date of acquisition and do not exceed the amount a third-party would pay for the assets.
The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns.
7 unchanged sentences
The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.
−Removed: The provision for
−Removed: income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, which are considered appropriate as well as the related net interest and penalties.
+Added: The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, which are considered appropriate as well as the related net interest and penalties.
In August 2022, the U.S.
16 unchanged sentences
The Company adopted the guidance as on January 1, 2022 and the adoption did not have a material impact on its consolidated financial statements.
−Removed: Recently Issued Accounting Pronouncements
−Removed: The Company qualifies as “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company.
In June 2016, the FASB issued ASU No.
2 unchanged sentences
The standard eliminates the probable initial recognition threshold and requires an entity to reflect its current estimate of all expected credit losses.
−Removed: The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.
+Added: The allowance for credit losses is a valuation account
+Added: that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.
For public entities except smaller reporting companies, the guidance is effective for annual reporting periods beginning after December 15, 2019 and for interim periods within those fiscal years.
3 unchanged sentences
Early application is allowed.
−Removed: The Company is in process of adopting new accounting guidance regarding the accounting for credit losses as of January 1, 2023.
−Removed: This new accounting guidance requires the Company to move from an incurred loss model to a current expected credit loss (“CECL”) model.
−Removed: The adoption of this standard is not expected to have a material impact on the Company’s balance sheets, results of operations or cash flows.
+Added: The Company adopted this standard effective January 1, 2023 and deemed no material impact on our consolidated financial statements.
+Added: Recently Issued Accounting Pronouncements
+Added: The Company qualifies as “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company.
+Added: In November 2023, the FASB issued ASU No.
+Added: 2023-07, Segment Reporting (Topic 280).
+Added: The accounting guidance requires the Company to expand annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.
+Added: For public entities, the guidance is effective for annual reporting periods beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024.
+Added: Early application is allowed.
+Added: The Company is currently assessing the impact of the adoption of this guidance.
+Added: In December 2023, the FASB issued ASU No.
+Added: 2023-09, Income Taxes (Topic 740).
+Added: The accounting guidance requires public entities, on an annual basis, to provide disclosure of specific categories in their tax rate reconciliations, as well as disclosure of income taxes paid disaggregated by jurisdiction.
+Added: The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.
+Added: The Company is currently assessing the impact of the adoption of this guidance.
Fair Value Measurements
2 unchanged sentences
Cash equivalents - Money market funds
+Added: Cash equivalents - U.S.
+Added: Treasury securities
+Added: Marketable securities - U.S.
+Added: Treasury securities due in 3 - 6 months
+Added: Total assets measured at fair value
Other current liabilities:
Acquisition-related contingent consideration
+Added: Total liabilities measured at fair value
+Added: Fair Value Measurements at December 31, 2022 Using:
+Added: Cash equivalents - Money market funds
+Added: Other current liabilities:
+Added: Acquisition-related contingent consideration
Acquisition-related contingent consideration - pension liability
2 unchanged sentences
Total liabilities measured at fair value
−Removed: Fair Value Measurements at December 31, 2021 Using:
−Removed: Cash equivalents:
Money Market Funds
−Removed: Money Market Funds
Money market funds were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy.
−Removed: There were no transfers into or out of Level 3 during the year ended December 31, 2022 or 2021.
+Added: There were no transfers between Level 1, Level 2 or Level 3 during the years ended December 31, 2023 or 2022.
+Added: Marketable Securities
+Added: treasury securities were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy.
Contingent Consideration
2 unchanged sentences
The unobservable inputs used in the fair value measurements include the probabilities of successful achievement of certain technological integration targets, forecasted results or targets, volatility, and discount rates.
−Removed: The total maximum payments due relate to the technological integration and revenue targets is approximately $ 2 million, of which the value as of December 31, 2022 is approximately $ 0.9 million.
−Removed: The payment contingent on the seller completing the assignment of the pension liability is $ 0.9 million.
−Removed: The weighted average probability of achieving the technology integration target is approximately 95 % .
−Removed: The average estimated revenue volatility and discount rate are approximately 40.9 % and 23.0 % , respectively.
−Removed: Increases or decreases in these assumptions may result in a higher or lower fair value measurement, respectively.
+Added: The sellers achieved two of three milestones under the share purchase and transfer agreement and the Company paid $ 0.5 million in August 2023 and $ 0.5 million in February 2024.
+Added: During the fourth quarter of 2023, the probability weighted fair value of the future earnout was determined to be zero.
+Added: Accordingly, the accumulated accretion under the last milestone and the relative contingent consideration have been reduced to zero .
The following table provides a roll-forward of the fair value of the Company’s contingent consideration, for which fair value is determined using Level 3 inputs (in thousands):
−Removed: Balances as of December 31, 2021
−Removed: Acquisition date fair value of contingent consideration - earnout
−Removed: Acquisition date fair value of contingent consideration - pension liability
+Added: Balance as of December 31, 2022
Accretion - earnout
+Added: Deduction - earnout
+Added: Contingent consideration payment
Balance as of December 31, 2023
+Added: In April 2023, the Company received notice that the pension obligation had been transferred and no longer in Trace Analytics GmbH’s name and therefore t he Company released the $ 0.9 million assignment of the pension liability and paid out the sellers.
Please refer to Note 18, Acquisition , for further detail.
Changes in the fair value of contingent consideration resulting from a change in the underlying inputs are recognized in our consolidated statements of operations until the arrangement is settled.
+Added: Marketable Securities
+Added: Marketable securities by security type consisted of the following (in thousands):
+Added: December 31, 2023
+Added: Credit Losses
+Added: Marketable securities - U.S.
+Added: Treasury securities
+Added: The Company purchased a total of approximately $ 48.9 million of U.S.
+Added: treasury securities during the year ended December 31, 2023.
+Added: treasury securities that matured were approximately $ 24.5 million and none were sold before maturity.
+Added: Interest earned on sales of marketable securities is $ 0.8 million for the year ended December 31, 2023.
+Added: The Company did no t have marketable securities as of December 31, 2022.
Inventory consisted of the following (in thousands):
6 unchanged sentences
The following is a rollforward of the Company’s goodwill balance (in thousands):
−Removed: Year Ended December 31,
+Added: December 31, 2023
Balances at beginning of period
−Removed: Goodwill acquired
Foreign currency impact
1 unchanged sentence
The Company performed its annual impairment evaluation using both a quantitative and qualitative approach at November 1, 2023, and concluded it was more likely than not that goodwill has not been impaired.
−Removed: Based on the most recent quantitative analysis the fair values of the Company’s reporting unit was greater than their carrying amounts and, therefore, no impairment was required.
+Added: Based on the fair values of the Company’s reporting unit was greater than its carrying amount and, therefore, no impairment was required.
No further triggering events were identified subsequent to our annual impairment evaluation.
8 unchanged sentences
Developed Technology
+Added: December 31, 2022
+Added: Accumulated Amortization
+Added: Translation adjustments
+Added: Net Book Value
+Added: Customer Relationships
+Added: Developed Technology
Amortization expense for intangible assets was recorded in the following expense categories of its consolidated statements of operations (in thousands):
−Removed: Product and service cost of revenue
+Added: Year Ended December 31,
+Added: Product cost of revenue
Selling, general and administrative expenses
−Removed: Estimated future amortization expense for the intangible assets as of December 31, 2022 are as following (in thousands):
+Added: Estimated future amortization expense for the intangible assets as of December 31, 2023 is as following (in thousands):
Property and Equipment, Net
30 unchanged sentences
This agreement created a revolving line of credit totaling $ 25.0 million and eliminated the existing term loan.
−Removed: Borrowings under the revolving line of credit bear interest at an annual rate equal to the greater of (i) one-half percent ( 0.5 %) above the prime rate or (ii) 4.0 % and mature on March 11, 2024 .
−Removed: Borrowings are collateralized by substantially all of the Company’s property, excluding intellectual property, which is subject to a negative pledge.
−Removed: The 2021 Revolver subjects the Company to various customary covenants, including requirements as to financial reporting and financial covenants (including an unrestricted minimum cash level of $ 10.0 million), and restrictions on the Company’s ability to dispose of its business or property, to change its line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on the Company’s property, to pay any dividends or make other distributions on capital stock other than dividends payable solely in capital stock, to redeem capital stock, to enter into in-bound licensing agreements, to engage in transactions with affiliates, and to encumber the Company’s intellectual property.
−Removed: Events of default under the 2021 Revolver include failure to make payments when due, insolvency events, failure to
−Removed: comply with covenants or material adverse events with respect to the Company.
−Removed: Upon the occurrence of an event of default and until such event of default is no longer continuing, the annual interest rate will be 5.0 % above the otherwise applicable rate.
+Added: Borrowings under the revolving line of credit bore interest at an annual rate equal to the greater of (i) one-half percent ( 0.5 %) above the prime rate or (ii) four percent ( 4.0 %) and were scheduled to mature on March 11, 2024 .
+Added: Borrowings were collateralized by substantially all of the Company’s property, excluding intellectual property, which was subject to a negative pledge.
+Added: The 2021 Revolver subjected the Company to various customary covenants, including requirements as to financial reporting and financial covenants (including an unrestricted minimum cash level of $ 10.0 million), and restrictions on the Company’s ability to dispose of its business or property, to change its line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on the Company’s property, to pay any dividends or make other distributions on capital stock other than dividends payable solely in capital stock, to redeem capital stock, to enter into in-bound licensing agreements, to engage in transactions with affiliates, and to encumber the Company’s intellectual property.
+Added: Events of default under the 2021 Revolver included failure to make payments when due, insolvency events, failure to comply with covenants or material adverse events with respect to the Company.
+Added: Upon the occurrence of an event of default and until such event of default was no longer continuing, the annual interest rate would be five percent ( 5.0 %) above the otherwise applicable rate.
The terms of the 2021 Revolver required that the existing term loan outstanding under the 2019 Loan be repaid with an advance under the line of credit.
−Removed: Accordingly, on March 11, 2021, the Company used $ 14.5 million of proceeds from the revolving line of credit to repay all amounts then due on the existing term loan.
+Added: Accordingly, on March 11, 2021, the Company used $ 14.5 million of proceeds from the 2021 Revolver to repay all amounts then due on the existing term loan.
The Company accounted for the transaction as a debt extinguishment and recorded a loss on extinguishment of $ 0.2 million, which was included in interest expense in the consolidated statements of operations and comprehensive loss.
3 unchanged sentences
2022 Loan Revolver
−Removed: On November 2, 2022, the Company entered into a Loan and Security Agreement (the “2022 Revolver”), by and between, the Company, as borrower, and Silicon Valley Bank (“SVB”), as lender.
−Removed: The 2022 Revolver provides for a revolving line of credit of up to $ 35.0 million.
−Removed: The Company is permitted to make interest-only payments on the revolving line of credit through November 2, 2025, at which time all outstanding indebtedness shall be immediately due and payable.
−Removed: The outstanding principal amount of any advance shall accrue 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 %).
−Removed: The Company’s obligations under the 2022 Revolver are secured by substantially all of the Company’s assets, excluding its intellectual property, which is subject to a negative pledge.
−Removed: The revolving line of credit under the 2022 Revolver terminates on November 2, 2025.
−Removed: As of December 31, 2022, the outstanding principal balance under the 2022 Revolver is $ 15.0 million, which was repaid in full on January 4, 2023.
+Added: On November 2, 2022, the Company entered into a Loan and Security Agreement (the “2022 Revolver”), by and between, the Company, as borrower, and Silicon Valley Bank (“SVB”), a division of First Citizens Bank, as lender.
+Added: The 2022 Revolver provided for a revolving line of credit of up to $ 35.0 million.
+Added: The Company was 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.
+Added: 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 %).
+Added: The Company’s obligations under the 2022 Revolver were secured by substantially all of the Company’s assets, excluding its intellectual property, which was subject to a negative pledge.
+Added: The revolving line of credit under the 2022 Revolver was scheduled to terminate on November 2, 2025.
+Added: 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.
+Added: The 2022 Revolver contained 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
+Added: 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.
+Added: 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.
−Removed: The 2022 Revolver also contains certain financial covenants, including a requirement that the amount of unrestricted and unencumbered cash minus advances under the 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.
−Removed: The 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, maintain no more than $ 3.6 million in non-SVB accounts at any point in time, in each case, subject to customary exceptions.
−Removed: As of March 14, 2023, the Company has no amounts outstanding under the 2022 Revolver.
−Removed: The ability to access the 2022 Revolver will be dependent on the Company maintaining compliance with certain financial covenants, including maintaining the appropriate amount of deposits with SVB, and SVB being able to fulfill its obligations if the Company were to draw down under the 2022 Revolver.
−Removed: Please refer to Note 19 for further discussion regarding the potential impacts of the closure of SVB.
+Added: On March 10, 2023, SVB, one of our financial institutions, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver.
+Added: On March 12, 2023, the U.S.
+Added: Department of the Treasury, Federal Reserve Board, and FDIC released a joint statement announcing that the FDIC would complete its resolution of SVB in a manner that fully protected all depositors and that depositors would have access to all of their money starting March 13, 2023.
+Added: As of March 31, 2023, the Company had transferred substantially all its cash and cash equivalents away from SVB and deposited the funds with new financial institutions.
+Added: 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.
+Added: The Company recorded a loss on extinguishment of debt of $ 0.5 million in the three months ended March 31, 2023, which was included in interest expense in the condensed consolidated statements of operations.
+Added: On August 4, 2023, the Company entered into a Default Waiver and First Amendment to Loan and Security Agreement (the “Amended 2022 Revolver”), by and between, the Company, as borrower, and SVB, as lender.
+Added: The Amended 2022 Revolver provides for a revolving line of credit of up to $ 10.0 million.
+Added: 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.
+Added: 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 %).
+Added: 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.
+Added: The revolving line of credit under the Amended 2022 Revolver terminates on November 3, 2025.
+Added: 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.
+Added: 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.
+Added: The Amended 2022 Revolver also contains certain financial covenants, including a requirement that the Company maintain $ 20.0 million on account at or through SVB and 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.
+Added: 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.
Post-Retirement Benefit Obligations
Defined Benefit Plan
−Removed: The Company maintains foreign pension plan for a Trace employee in Germany, which grants periodic post-retirement payment for one employee.
−Removed: In connection with recording the initial purchase accounting of Trace in August 2022, the Company assumed this pension liability of $ 0.9 million.
+Added: The Company maintained a foreign pension plan for a 908 Devices GmbH employee in Germany, which grants periodic post-retirement payment for one employee.
+Added: In connection with recording the initial purchase accounting of 908 Devices GmbH in August 2022, the Company assumed this pension liability of $ 0.9 million.
The Company also recorded an equal and offsetting indemnification asset in the initial purchase accounting resulting in no net impact to the overall purchase price allocation.
−Removed: As of December 31, 2022, the Company and the employee are in the process of discharging or transferring this pension liability from Trace, at which point, the liability and related indemnification asset will be removed from the Company’s consolidated balance sheet.
−Removed: Further disclosures of the measurement of the pension liabilities are not considered material.
+Added: In April 2023, t he Company received notice that the pension obligation had been transferred and no longer in 908 Devices GmbH’s name and therefore t he Company released the $ 0.9 million assignment of the pension liability and paid out the sellers.
See Note 3, Fair Value Measurements, and Note 18, Acquisition, for further information.
−Removed: The Company did not contribute to the plan in the year ended December 31, 2022.
+Added: The Company did no t contribute to the plan in the year ended December 31, 2023 or 2022.
As of December 31, 2023 and 2022, the Company had outstanding warrants for the purchase of 92,703 shares of common stock at an exercise price of $ 9.17 per share, of which warrants for the purchase of 49,078 shares and 43,625 shares expire in 2027 and 2028, respectively.
5 unchanged sentences
Common stockholders are not entitled to receive dividends, unless declared by the board of directors.
−Removed: Public Offerings
−Removed: On November 15, 2021, the Company completed an underwritten public offering, pursuant to which it issued and sold 3,150,000 shares of common stock at a public offering price of $ 32.00 per share.
−Removed: The Company received net proceeds of $ 94.4 million after deducting underwriting discounts and commissions and other offering costs.
Stock-Based Compensation
2012 Stock Option and Grant Plan
−Removed: The Company’s 2012 Stock Option and Grant Plan (the “2012 Plan”) provided for the Company to sell or issue incentive stock options or nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units
−Removed: and other stock-based awards to employees, directors, and non-employee consultants of the Company.
+Added: The Company’s 2012 Stock Option and Grant Plan (the “2012 Plan”) provided for the Company to sell or issue incentive stock options or nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to employees, directors, and non-employee consultants of the Company.
The 2012 Plan was administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors.
1 unchanged sentence
Following the effectiveness of the Company’s 2020 Stock Option and Incentive Plan (the “2020 Plan”) in December 2020, no future awards will be made under the 2012 Plan.
−Removed: Additionally, shares underlying awards under the 2012 Plan that expire or are terminated, surrendered, or canceled without the delivery of shares will be available for future awards under the 2020 Plan.
+Added: Additionally, shares
+Added: underlying awards under the 2012 Plan that expire or are terminated, surrendered, or canceled without the delivery of shares will be available for future awards under the 2020 Plan.
2020 Stock Option and Incentive Plan
5 unchanged sentences
On January 1, 2024, the number of shares reserved and available for issuance under the 2020 Plan automatically increased by 1,300,761 shares.
+Added: In March 2023, the compensation committee of the Company’s board of directors granted an aggregate of 53,794 performance-based restricted stock units, (“PSUs”) under the 2020 Stock Option and Incentive Plan to the Company’s chief executive officer.
+Added: Each PSU is equivalent in value to one share of the Company’s common stock.
+Added: The maximum payout percentage for all PSUs granted by the Company is 100 %.
+Added: The vesting of the shares underlying the PSUs is subject to the achievement of stock price levels pre-established by the compensation committee at the grant date.
+Added: The PSUs are subject to the market and service conditions and valued using the Monte Carlo simulation model, which requires certain assumptions, including the risk-free interest rate, expected volatility, and the estimated dividend yield.
+Added: The risk-free interest rate used in the Monte Carlo simulation model is based on zero-coupon yields implied by U.S.
+Added: treasury issues with remaining terms similar to the performance period on the PSUs.
+Added: The performance period of the PSUs represents the period of time between the PSU grant date and the end of the performance period.
+Added: Expected volatility is based on historical data of the peers and certain indices over the most recent time period equal to the performance period.
2020 Employee Stock Purchase Plan
2 unchanged sentences
As of December 31, 2023, 772,487 shares remained available for issuance under the 2020 ESPP.
−Removed: During the year ended December 31, 2022 and 2021, the Company issued 56,486 shares and no shares, respectively, under the 2020 ESPP plan.
−Removed: On January 1, 2023, the number of shares reserved and available for issuance under the 2020 ESPP automatically increased by 307,295 shares.
+Added: During the year ended December 31, 2023 and 2022, the Company issued 93,644 shares and 56,486 shares, respectively, under the 2020 ESPP plan.
+Added: On January 1, 2024, the number of shares reserved and available for issuance under the 2020 ESPP did not increase pursuant to the determination of the administrator of the 2020 ESPP.
Stock Option Valuation
The fair value of stock option grants and stock-based compensation associated with the 2020 ESPP is estimated using the Black-Scholes option-pricing model.
−Removed: For stock options valued, the Company estimated its expected stock volatility based on the historical volatility of a publicly traded set of peer companies due to limited company-specific historical and implied volatility information.
+Added: For stock options valued, the Company estimated its expected stock volatility based on the historical volatility of a publicly traded set of peer companies due to limited company-specific
+Added: historical and implied volatility information.
For stock-based compensation associated with the 2020 ESPP, the Company estimated its expected stock volatility based on the volatility of its own traded stock price.
26 unchanged sentences
The following table summarizes the Company’s restricted stock units activity for the fiscal year ended December 31, 2023:
−Removed: Unvested at beginning of period
+Added: Outstanding at beginning of period
Vested and released
1 unchanged sentence
The weighted average grant date fair value for RSUs granted for the years ended December 31, 2023 and 2022 was $ 8.69 and $ 15.21 , respectively.
−Removed: The aggregate intrinsic value of the RSUs vested and released for the years ended December 31, 2022 and 2021 was $ 0.9 million and less than $ 0.1 million, respectively.
−Removed: The remaining unrecognized compensation expense for outstanding restricted stock units as of December 31, 2022 was $ 13.8 million and the weighted-average period over which this cost will expected to be recognized is 3.1 years.
+Added: The aggregate intrinsic value of the RSUs vested and released for the years ended December 31, 2023 and 2022 was $ 2.5 million and $ 0.9 million, respectively.
+Added: The remaining unrecognized compensation expense for outstanding restricted stock units as of December 31, 2023 was $ 15.4 million and the weighted-average period over which this cost is expected to be recognized is 2.6 years.
+Added: The weighted average grant date fair value for PSUs granted in March 2023 was $ 3.99 .
+Added: No PSUs were vested during the year ended December 31, 2023.
+Added: The remaining unrecognized compensation expense for outstanding PSUs as of December 31, 2023 was $ 0.1 million and the weighted-average period over which this cost is expected to be recognized is 2.1 years.
Stock-Based Compensation
12 unchanged sentences
On January 2, 2018, the Company entered a new operating lease in Boston, Massachusetts (the “Lease”), for 37,500 rentable square feet of office space and is considered the Company’s corporate headquarters.
−Removed: A security deposit of $ 0.5 million was paid to the property owner and the Company issued a warrant to purchase 70,983 shares of Series D preferred stock at a purchase price of $ 5.6351 per share.
+Added: A security deposit of $ 0.5 million was paid to the property owner and the Company issued a warrant to purchase 43,625 shares of Series D
+Added: preferred stock at a purchase price of $ 5.6351 per share.
The initial fair value of the warrants of $ 0.3 million was recorded as additional rent payments, increasing the value of the ROU asset and preferred stock warrant liability.
−Removed: The initial term of the lease is through July 2025 and has additional renewal options.
+Added: The initial term of the lease is through October 2025.
The annualized base rent will increase by 2.5 % annually on the anniversary of the commencement date.
−Removed: The Company is obligated to pay its portion of
−Removed: real estate taxes and costs related to the premise, including costs of operations, maintenance, repair, replacement and management of the new leased premises.
−Removed: The Company had a facility lease in California for approximately 1,500 square feet that expired in February 2021.
−Removed: The Company also has a facility lease in North Carolina for approximately 2,000 square feet that had an expiration date of November 2020.
−Removed: In October 2020, the Company entered into an extension agreement for the North Carolina lease to extend it for an additional two years until November 2022.
−Removed: In October 2022, the Company entered into an extension agreement for the North Carolina lease to extend until June 2023.
+Added: The Company is obligated to pay its portion of real estate taxes and costs related to the premise, including costs of operations, maintenance, repair, replacement and management of the new leased premises.
+Added: The Company had a facility lease in North Carolina for approximately 2,000 square feet that had an expiration date of November 2020 then extended until June 2023.
In July 2022, the Company entered into a new operating lease agreement in Morrisville, North Carolina (the “New NC Lease”), to expand the Company’s research and development activities focused on its desktop offerings and enable the ability to standup an additional manufacturing site for the Company.
−Removed: The New NC Lease is for approximately 13,300 rentable square feet and occupancy is expected in the first half of 2023.
−Removed: The New NC Lease is for a term of 88 months with total lease costs of approximately $ 4.0 million, which will be commenced upon occupancy of the facility.
−Removed: In October 2022, Trace entered into a new operating lease agreement in Braunschweig, Germany, as its existing lease was expiring and to increase the existing manufacturing site and set up European base of operations for the Company.
+Added: The New NC Lease is for approximately 13,300 rentable square feet and is for a term of 88 months with total lease costs of approximately $ 4.0 million.
+Added: The New NC Lease commenced in March 2023.
+Added: In October 2022, 908 Devices GmbH entered into a new operating lease agreement in Braunschweig, Germany, as its existing lease was expiring and to increase the existing manufacturing site and set up European base of operations for the Company.
The lease in Braunschweig is for approximately 7,500 rentable square feet and commenced in January 2023.
14 unchanged sentences
Future annual minimum lease payments under operating leases as of December 31, 2023 are as follows (in thousands):
−Removed: Year Ending December 31,
Total future minimum lease payments
imputed interest
−Removed: Leases commencing in 2023
Total operating lease liabilities
5 unchanged sentences
Royalty obligations are expensed when incurred or over the minimum royalty periods and have not been material.
−Removed: Some of the arrangements include minimum royalties over a defined term.
−Removed: The future minimum royalty payments are $ 0.1 million per year, through the end of the patents’ lives.
−Removed: The Company has the right to terminate the agreements with written notice.
+Added: In October 2023, the Company notified one of the parties and terminated the license arrangement as of December 31, 2023.
+Added: The Company will no longer incur minimum royalty payments of $ 0.1 million per year.
401(k) Savings Plan
5 unchanged sentences
The Company agreed to pay three milestone based earnouts under the Trace purchase agreement for the total potential payout of $ 2.0 million.
−Removed: Milestones are based on target revenues, and technical integration of Trace systems and knowledge, and range from the closing date of August 3, 2022 to June 30, 2024.
+Added: Milestones are based on target revenues, and technical integration of 908 Devices GmbH (formerly Trace Analytics) systems and knowledge, and range from the closing date of August 3, 2022 to June 30, 2024.
In addition, the Company withheld $ 0.9 million of consideration.
−Removed: See Note 17, Acquisition .
+Added: During 2023, the Company received notice that the pension obligation had been transferred and was no longer in Trace’s name and therefore the Company released the $ 0.9 million assignment of the pension liability.
+Added: The Trace acquisition consideration withheld in respect of the pension plan was paid out to the sellers in April 2023 .
+Added: Two of three milestone based earnouts were achieved and a $ 0.5 million payment was made in August 2023 and a $ 0.5 million payment was made in February 2024.
+Added: During the fourth quarter of 2023, the probability weighted fair value of the future earnout was determined to be zero.
+Added: Accordingly, the accumulated accretion under the last milestone and the relative contingent consideration have been reduced to zero .
+Added: See Note 3, Fair Value Measurements .
Indemnification Agreements
In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties.
−Removed: addition, the Company has entered into indemnification agreements with its executive officers and members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or services as directors or officers.
+Added: In addition, the Company has entered into indemnification agreements with its executive officers and members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or services as directors or officers.
The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited.
11 unchanged sentences
Options to purchase common stock
+Added: Performance stock units
Restricted stock units
+Added: During the years ended December 31, 2023 and 2022, the Company recognized an income tax benefit of $ 0.2 million and $ 0 , respectively.
+Added: The income tax benefit recognized during the year ended December 31, 2023 primarily resulted from a reduction in the deferred tax liabilities recorded as part of our acquisition of 908 Devices GmbH.
During the years ended December 31, 2023 and 2022, the Company did not record income tax benefits for the net operating losses incurred or for the research and development tax credits generated in each year, due to its uncertainty of realizing a benefit from those items.
8 unchanged sentences
Effective income tax rate
−Removed: Net deferred tax assets consisted of the following (in thousands):
+Added: Net deferred tax liabilities consisted of the following (in thousands):
Deferred tax assets:
21 unchanged sentences
Both ownership changes are not expected to have a material impact to the Company’s net operating loss carryforwards or research and development tax credit carryforwards as these net operating losses and tax credit carryforwards may be utilized, subject to annual limitation, assuming sufficient taxable income is generated before expiration.
−Removed: The Company assessed that $ 17.5 million of costs related to specified research and development to be capitalized during the year ended December 31, 2022 under the IRC Section 174(a), which was amended by Tax Cuts and Job Act in 2018.
−Removed: Based on the significant pre-tax loss incurred during 2022, the Company has recorded corresponding valuation allowance to offset $ 3.9 million deferred tax impact due to this assessment.
The Company has not conducted a study to document qualified activities for research and development tax credits generated.
3 unchanged sentences
Management has considered the Company’s history of cumulative net operating losses incurred since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets.
−Removed: Accordingly, as of December 31 2022, a full valuation allowance has been established against the net deferred tax assets, except for $ 2.7 million deferred tax liabilities recorded under our foreign jurisdiction, and a full valuation allowance has been established against the net deferred tax assets as of December 31, 2021.
−Removed: Management revaluates the positive and negative evidence at each reporting period.
+Added: Accordingly, as of December 31, 2023 and 2022, a full valuation allowance has been established against the net deferred tax assets, except for deferred tax liabilities recorded under our foreign jurisdiction, which amounted to $2.4 million and $2.7 million as of December 31, 2023 and 2022, respectively.
Changes in the valuation allowance for deferred tax assets related primarily to the increase in net operating loss carryforwards and research and development tax credit carryforwards and were as follows (in thousands):
5 unchanged sentences
The Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision.
−Removed: As of December 31, 2022 and 2021, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts had been recognized in the Company’s consolidated statements of operations and comprehensive loss.
+Added: As of December 31, 2023 and 2022, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts had been recognized in the Company’s consolidated statements of operations.
The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates.
2 unchanged sentences
however, carryforward attributes that were generated prior to 2020 may still be adjusted upon examination by federal, state, or local tax authorities if they either have been or will be used in a future period.
−Removed: The Company has completed the examination by the Internal Revenue Service for the year ending December 31, 2018 and no material adjustments have been proposed as the result of the audit.
The Company has not received notice of examination by any other jurisdictions for any other tax year open under statute.
−Removed: On August 3, 2022, the Company entered into a share purchase and transfer agreement and completed its acquisition of 100 % of the registered share capital of Trace, for total purchase price consideration of $ 17.3 million, comprised of (i) a $ 14.4 million initial cash payment, (ii) up to $ 2.0 million contingent cash consideration upon achievement of certain milestones over a twenty four month period and (iii) $ 0.9 million contingent pension liability holdback to be released upon discharging or transferring of such liability from Trace.
−Removed: Trace is a leading provider of online analysis systems for biotech applications in research, development, and production.
−Removed: Trace’s products are used for monitoring and controlling of complex processes in industrial pharmaceutical productions under continuous measurement conditions.
+Added: On August 3, 2022, the Company entered into a share purchase and transfer agreement and completed its acquisition of 100 % of the registered share capital of 908 Devices GmbH, for total purchase price consideration of $ 17.3 million, comprised of (i) a $ 14.4 million initial cash payment, (ii) up to $ 2.0 million contingent cash consideration upon achievement of certain milestones over a twenty four month period and (iii) $ 0.9 million contingent pension liability holdback to be released upon discharging or transferring of such liability from 908 Devices GmbH.
+Added: 908 Devices GmbH is a leading provider of online analysis systems for biotech applications in research, development, and production.
+Added: 908 Devices GmbH’s products are used for monitoring and controlling of complex processes in industrial pharmaceutical productions under continuous measurement conditions.
The Company expects to integrate acquired sampling technology within future product offerings.
1 unchanged sentence
Under the acquisition method of accounting, the assets acquired and liabilities assumed from Trace have been recorded as of the acquisition date, at their respective fair values, and consolidated with those of the Company.
−Removed: The Company has preliminarily allocated the purchase price to the net tangible and intangible assets based on their estimated fair values as of August 3, 2022.
−Removed: The valuation of assets acquired and liabilities assumed has not yet been finalized as of December 31, 2022.
−Removed: Finalization of the valuation during the measurement period could result in a change in the amounts recorded for the acquired intangible assets, assumed pension liability, indemnification assets, goodwill
−Removed: and income taxes among other items.
−Removed: The completion of the valuation will occur no later than one year from the acquisition date.
−Removed: The following table presents the preliminary allocation of the acquisition date purchase consideration for the transaction including the contingent consideration and the preliminary allocation of the purchase consideration (in thousands):
+Added: The Company has allocated the purchase price to the net tangible and intangible assets based on their fair values as of August 3, 2022.
+Added: The following table presents the allocation of the acquisition date purchase consideration for the transaction including the contingent consideration and the allocation of the purchase consideration (in thousands):
Consideration Transferred:
19 unchanged sentences
See Note 2 for the amortization periods.
−Removed: Revenue and net loss related to Trace’s operations was $ 0.8 million and $ 0.1 million, respectively, for the period following the acquisition date through December 31, 2022, and is included in the Company’s consolidated statements of operations.
−Removed: The following unaudited pro forma information presents the consolidated results of operations of the Company and Trace for the year ended December 31, 2022 and 2021 as if the acquisition of Trace had been completed on January 1, 2021 and have been calculated after applying the Company’s accounting policies.
−Removed: These pro forma consolidated financial results have been prepared for comparative purposes only and include certain adjustments that reflect pro forma results of operations, such as increased amortization for the fair value of acquired intangible assets, transaction related costs that were incurred in 2022 related to the acquisition which are reflected in the pro forma results for 2021, and consequential adjustments relating to the tax effect of these adjustments in combining the Company and Trace businesses.
−Removed: The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings which may result from the consolidation of the operations of the Company and Trace.
−Removed: Accordingly, these unaudited pro forma results are
−Removed: presented for informational purposes only and are not necessarily indicative of the results of operations that would have been achieved had the acquisition occurred as of January 1, 2021, nor are they intended to represent or be indicative of future results of operations (in thousands):
+Added: Revenue and net loss related to 908 Devices GmbH’s operations was $ 0.8 million and $ 0.1 million, respectively, for the year ended December 31, 2022 and is included in the Company’s consolidated statements of operations.
+Added: The following unaudited pro forma information presents the consolidated results of operations of the Company and 908 Devices GmbH for the year ended December 31, 2022 as if the acquisition of 908 Devices GmbH had been completed on January 1, 2022 and have been calculated after applying the Company’s accounting policies.
+Added: These pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments that reflect pro forma results of operations, such as consequential adjustments relating to the tax effect of these adjustments in combining the Company and Trace businesses.
+Added: The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings which may result from the consolidation of the operations of the Company and 908 Devices GmbH.
+Added: Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of the results of operations
+Added: that would have been achieved had the acquisition occurred as of January 1, 2022, nor are they intended to represent or be indicative of future results of operations (in thousands):
+Added: Year Ended December 31,
Revenue (unaudited)
18 unchanged sentences
The total fair value of these stock options at the grant date was $ 2.1 million using the Black-Scholes option pricing model, and the value is being amortized as stock compensation expense over the vesting term.
−Removed: Closure of Financial Institutions
−Removed: On March 10, 2023, SVB, one of our financial institutions, was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver.
−Removed: Similarly, Signature Bank, one of our other financial institutions, was closed on March 12, 2023 by its New York charter authority.
−Removed: At the time of closing, the Company had substantially all of its cash and cash equivalents at SVB and Signature Bank, and all of its restricted cash of $ 0.2 million supporting two outstanding letters of credit at SVB.
−Removed: Based upon the announcement on March 12, 2023, from the U.S.
−Removed: Department of the Treasury, the U.S.
−Removed: Federal Reserve and the FDIC, the Company expects to have access to all of its deposits at both SVB and Signature Bank.
−Removed: As of March 14, 2023, the Company maintains the 2022 Revolver with SVB and had no balances outstanding as of the recent
−Removed: closure of SVB.
−Removed: The ability to access the 2022 Revolver will be dependent on the Company maintaining compliance with certain financial covenants, including maintaining the appropriate amount of deposits with SVB, maintaining the minimum cash requirement, and SVB being able to fulfill its obligations if the Company were to draw down under the 2022 Revolver.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
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.