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• We may not compete successfully with our initial or future products in the highly competitive life sciences technology market.
−Removed: • We are dependent upon third parties for certain aspects of the development and commercialization of the Nautilus
+Added: • We are dependent upon third parties for certain aspects of the development and commercialization of the Nautilus platform.
• Our business depends significantly on research and development spending by pharmaceutical companies as well as by academic institutions and other research institutions and any reduction in spending could limit demand for our products.
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• We are currently subject to, and may in the future become subject to additional, U.S.
−Removed: federal and state laws and regulations, as well as the laws and regulations of other countries, relating to how we collect, store and processes personal information.
+Added: federal and state laws and regulations, as well as the laws and regulations of other countries, relating to how we collect, store and process personal information.
• Future expansion of our development and commercialization activities outside of the United States, may subject us to an increased risk of inadvertently conducting activities in a manner that violates the U.S.
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• We are highly dependent on our key personnel, and if we are unable to recruit and retain key executives and scientists, we may not be able to achieve our goals.
−Removed: • Our operations and financial results could be adversely impacted by the COVID-19 pandemic in the United States and the rest of the world.
+Added: • Our operations and financial results could be adversely impacted by global and national events, such as the COVID-19 pandemic, conflicts in Eastern Europe, and general economic downturns.
• Global supply chain interruptions may negatively impact the development and commercialization of our products.
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General Risk Factors
−Removed: • We will incur significant increased costs and management resources as a result of operating as a public company.
+Added: • We will continue to incur significant increased costs and management resources as a result of operating as a public company.
• Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common shares.
• Our ability to timely and accurately report our financial results and projections as a public company may be impacted by the effectiveness of our internal controls, and our estimates and judgments relating to critical accounting policies.
+Added: Our risk factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.
Risks Related to Our Business
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Even if profitability is achieved, we may not be able to sustain profitability.
−Removed: We incurred net losses of $50.3 million, $15.6 million and $9.6 million during the years ended December 31, 2021, 2020 and 2019, respectively.
+Added: We incurred net losses of $57.9 million and $50.3 million during the years ended December 31, 2022 and December 31, 2021, respectively.
As of December 31, 2022, we had an accumulated deficit of $138.6 million.
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We are investing substantially all of our management efforts and financial resources in the development and commercialization of our Nautilus platform.
−Removed: Additionally, in developing our platform technology, we may rely on co-development partners to assist us in the development of certain component technologies in our platform.
−Removed: These partners may not be successful in delivering these component technologies on time, to our specifications, or at all, which could have an adverse impact on our ability to meet our development timelines, and/or our products level of currently anticipated functionality and performance.
−Removed: While our goal is to leverage our Nautilus platform to comprehensively measure the human proteome, the human proteome is dynamic and far more complex and diverse in structure, composition and number of variants than either the genome or transcriptome.
+Added: Additionally, in developing our platform technology, we currently rely on co-development partners to assist us in the development of certain component technologies in our platform.
+Added: We have experienced difficulties with some of these partners successfully delivering these component technologies on time and to our specifications, and these partners may not be successful in delivering these component technologies on time, to our specifications, or at all, in the future, which could have an adverse impact on our ability to meet our development timelines, and/or our products level of currently anticipated functionality and performance.
+Added: While our goal is to leverage our Nautilus p latform to comprehensively measure the human proteome, the human proteome is dynamic and far more complex and diverse in structure, composition and number of variants than either the genome or transcriptome.
If we cannot successfully complete platform development, if we are unable to achieve our goals for mapping the proteome, if our products fail to deliver currently anticipated functionality and levels of performance, if our products are found by a court of law to infringe the intellectual property of another party, or if we are unable to obtain broad scientific and market acceptance of our products and technologies, we may never recognize material revenue and may be unable to continue our operations.
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and finally a broader commercial launch phase.
−Removed: We are currently in the collaboration phase during which we are seeking to enter collaborations with a small number of research customers, including with biopharmaceutical companies and key opinion leaders in proteomics whose assessment and validation of our products can significantly influence other researchers in their respective markets and/or fields.
−Removed: During this phase, we plan to provide early access program partners with broad-scale analysis and profiling of samples analyzed in its facility and shared via a cloud platform.
−Removed: We do not anticipate that these activities will result in any material revenue.
−Removed: During this phase, we expect to work closely with early access customers to demonstrate a unique value proposition for our Nautilus platform .
−Removed: We expect this second phase to lead into the third phase of broad commercialization by the end of 2023.
−Removed: We do not expect to realize any material revenue prior to the second half of 2023.
+Added: We are currently in the collaboration phase during which we have entered into and are seeking to enter into collaborations with a small number of research customers, including with biopharmaceutical companies and key opinion leaders in proteomics whose assessment and validation of our products can significantly influence other researchers in their respective markets and/or fields.
+Added: We do not anticipate that these activities will
+Added: result in any material revenue.
+Added: During the second, early access phase, we expect to work closely with early access customers to demonstrate a unique value proposition for our Nautilus platform.
+Added: During this phase, we plan to provide early access program partners with broad-scale analysis and profiling of samples analyzed in our facility and shared via a cloud platform.
+Added: We anticipate meaningful early access engagements and associated revenue to begin at the start of 2024.
+Added: We expect this second phase to lead into the third phase of broad commercialization and launch of the proteome analysis platform in mid-2024.
Achieving the scientific and commercial objectives identified above within currently anticipated timelines will require substantial investments in our technologies and in the underlying science.
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Establishing collaborations is difficult and time-consuming.
−Removed: Discussions may not lead to collaborations on favorable terms, if at all, and particularly where we are negotiating against major
−Removed: pharmaceutical companies, we may have relatively less leverage in negotiating favorable terms.
+Added: Discussions may not lead to collaborations on favorable terms, if at all, and particularly where we are negotiating against major pharmaceutical companies, we may have relatively less leverage in negotiating favorable terms.
To the extent we agree to work exclusively with a party in a given field, our opportunities to collaborate with others in that field would be limited.
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In that regard, we anticipate that our initial market focus will be pharmaceutical development and associated research, which are characterized by demanding and exacting requirements for product performance and accuracy.
−Removed: widespread adoption of our Nautilus platform takes longer than anticipated or does not occur, our business will be materially and adversely affected.
+Added: If widespread adoption of our Nautilus platform takes longer than anticipated or does not occur, our business will be materially and adversely affected.
More specifically, the successful introduction of new technologies in life science markets requires substantial engagement with the scientific community in order to encourage community acceptance of the utility, performance, and cost of the technology relative to its benefits in the applicable field or fields of research.
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In these journal publications, the researchers describe not only their discoveries but also the methods and typically the products used to fuel these discoveries.
−Removed: We expect that references to the use of our Nautilus platform in peer-reviewed journal publications will be critical to our ability to obtain widespread acceptance within the scientific community.
+Added: We expect that references to the use of our Nautilus p latform in peer-reviewed journal publications will be critical to our ability to obtain widespread acceptance within the scientific community.
In addition, continuing collaborative relationships with key opinion leaders will be vital to maintaining any market acceptance we achieve.
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• the rate of adoption of our Nautilus platform by biopharmaceutical companies, laboratories, academic institutions and others;
+Added: • the prices at which we will be able to sell our Nautilus platform instruments and consumables;
• our ability to develop new products, workflows, and solutions that meet customer requirements;
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We cannot assure you that we will be successful in addressing any of these criteria or any additional criteria that might affect the market acceptance of our products.
−Removed: If we are unsuccessful in achieving and maintaining market acceptance of our Nautilus platform , our business, financial condition and results of operations would be adversely affected.
+Added: If we are unsuccessful in achieving and maintaining market acceptance of our Nautilus p latform, our business, financial condition and results of operations would be adversely affected.
We have no experience in manufacturing our products at commercial scale.
If we are unable to establish manufacturing capacity by ourselves or with partners in a timely manner after completing development, commercialization of our Nautilus platform would be delayed, which would result in lost revenue and harm our business.
−Removed: In order for us to commercialize our Nautilus platform in volume, we will need to establish internal manufacturing capacity or to contract with one or more manufacturing partners, or both.
+Added: In order for us to commercialize our Nautilus p latform in volume, we will need to establish internal manufacturing capacity or to contract with one or more manufacturing partners, or both.
Our technology is complex, and the manufacturing process for our products will be similarly complex, involving a large number of unique precision parts in addition to the production of various reagents and antibodies.
−Removed: We may encounter unexpected difficulties in manufacturing our Nautilus platform , including our proteome analysis system and related consumables.
−Removed: Among other factors, we will need to develop reliable supply chains for the various components in our platform and consumables to support large-scale commercial production.
−Removed: In connection with our Nautilus platform , we intend to utilize over 300 complex reagents and various antibodies in order to generate deep proteomic information at the speed and scale which we expect our Nautilus platform to perform.
+Added: We may encounter unexpected difficulties in manufacturing our Nautilus p latform, including our proteome analysis system and related consumables.
+Added: Among other factors, we will need to develop reliable supply chains for the various components in our platform instruments and consumables to support large-scale commercial production.
+Added: In connection with our Nautilus p latform, we may utilize long lead time instrument system components, such as cameras and lasers, and as a result, it may impact our ability to consistently source such components.
+Added: Additionally, we intend to utilize over 300 complex reagents and various antibodies in order to generate deep proteomic information at the speed and scale which we expect our Nautilus p latform to perform.
Such reagents and antibodies are expected to be more difficult to manufacture and more expensive to procure.
There are no assurances that we will be able to build manufacturing or consumable production capacity internally or find one or more suitable manufacturing or production partners, or both, to meet the volume and quality requirements necessary to be successful in the proteomics market.
−Removed: in connection with establishing third party relationships or sourcing component supplies, including with respect to reagents and antibodies, we may incur costs that are higher than currently expected and that may adversely affect our gross margins and operating results following commercialization.
−Removed: Assuming we complete development of our Nautilus platform , we may experience manufacturing and product quality issues as we increase the scale of our production.
+Added: In addition, in connection with establishing third party relationships or sourcing component supplies, including with respect to instrument components, reagents and antibodies, we may incur costs that are higher than currently expected and that may adversely affect our gross margins and operating results following commercialization.
+Added: Assuming we complete development of our Nautilus p latform, we may experience manufacturing and product quality issues as we increase the scale of our production.
Any delay or inability in establishing or expanding our manufacturing capacity could diminish our ability to develop or sell our products, result in increased or unanticipated costs, result in lost revenue, and seriously harm our business, results of operations and financial condition.
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In addition to our internal organization, we may seek to enlist one or more third parties to assist with sales, distribution, and customer service and support globally or in certain regions of the world.
−Removed: In certain markets, we could seek to establish partnerships with larger market participants to provide access to their distribution channels and which could also involve scientific or technological collaboration.
+Added: In certain markets, we could seek to establish
+Added: partnerships with larger market participants to provide access to their distribution channels and which could also involve scientific or technological collaboration.
There is no guarantee, if we do seek to enter into any of these arrangements, that we will be successful in attracting desirable partners or that we will be able to enter into such arrangements on commercially favorable terms.
−Removed: If our commercialization efforts, or those of any third-party partners, are not successful, our Nautilus platform may not gain market acceptance, which could materially impact our business and results of operations.
+Added: If our commercialization efforts, or those of any third-party partners, are not successful, our Nautilus p latform may not gain market acceptance, which could materially impact our business and results of operations.
The size of the markets for our Nautilus platform may be smaller than estimated, and new market opportunities may not develop as quickly as we expect, or at all, limiting our ability to successfully sell our products.
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In addition, our Nautilus platform may not impact the field of proteomics in the same manner or degree, or within the same time frame, that NGS technologies have impacted the field of genomics, or at all.
−Removed: While we believe our assumptions and the data underlying our estimates of the total addressable market for our products are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates, or
−Removed: those underlying the third-party data we have used, may change at any time, thereby reducing the accuracy of our estimates.
+Added: While we believe our assumptions and the data underlying our estimates of the total addressable market for our products are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates, or those underlying the third-party data we have used, may change at any time, thereby reducing the accuracy of our estimates.
As a result, our estimates of the total addressable market for our products may be incorrect.
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We are dependent on single source suppliers for some of the components and materials used in our Nautilus platform, and the loss of any of these suppliers could harm our business.
−Removed: We rely on single source suppliers for certain components and materials used in our Nautilus platform , including our click-reagent modified oligos, glass that is nano-fabricated into our biochips and high-speed stage used in the instrument.
+Added: We rely on single source suppliers for certain components and materials used in our Nautilus platform , including our click-reagent modified oligos, glass or silicon that is nano-fabricated into our biochips and high-speed stage used in the instrument.
The loss of any of these single source suppliers would require us to expend significant time and effort to locate and qualify an alternative source of supply for these components.
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Given their complexity, our suppliers may not be able to provide these reagents and antibodies in a cost-effective manner or in a time frame that is consistent with our expected future needs.
−Removed: If our suppliers cease or interrupt production or if suppliers fail to supply materials, products or services to us for any reason, such interruption could delay development, or interrupt the commercial supply, with the potential for additional costs and lost revenue.
+Added: If our suppliers cease or interrupt production or if suppliers fail to supply materials, products or services to us for any reason, such interruption could delay development, or interrupt the commercial supply, with the potential for additional costs
+Added: and lost revenue.
If this were to occur, we might also need to seek alternative means to fulfill our manufacturing needs.
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• better established, larger scale and lower cost manufacturing capabilities.
−Removed: We cannot assure investors that our products will compete favorably or that we will be successful in the face of increasing competition from products and technologies introduced by our existing or future competitors or by companies entering our
−Removed: markets or that are developed by our customers internally.
+Added: We cannot assure investors that our products will compete favorably or that we will be successful in the face of increasing competition from products and technologies introduced by our existing or future competitors or by companies entering our markets or that are developed by our customers internally.
In addition, we cannot assure investors that our competitors do not have or will not develop products or technologies that currently or in the future will enable them to produce competitive products with superior functionality or performance or at lower costs than ours or that are able to run comparable experiments at a lower total experiment cost.
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Despite our contractual assurances and contingency planning, it is possible that one or more of our third party collaborators may fail to deliver their respective technologies to us on time or in accordance with our specifications, and such failure could negatively impact the timing of the commercialization of the Nautilus platform, its performance, or its cost.
−Removed: Our business will depend significantly on research and development spending by pharmaceutical companies as well as by academic institutions and other research institutions.
+Added: Our business will depend significantly on research and development spending by pharmaceutical companies as well as by academic and other research institutions.
Any reduction in spending could limit demand for our products and adversely affect our business, results of operations, financial condition and prospects.
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Our operating results may fluctuate substantially due to reductions and delays in research and development expenditures by these customers.
−Removed: For example, reductions in capital expenditures by these customers may result in lower than expected system sales and, similarly, reductions in operating expenditures by these customers could result
−Removed: in lower than expected sales of our Nautilus platform .
+Added: For example, reductions in capital expenditures by these customers may result in lower than expected system sales and, similarly, reductions in operating expenditures by these customers could result in lower than expected sales of our Nautilus platform .
These reductions and delays may result from factors that are not within our control, such as:
−Removed: • changes in economic conditions;
−Removed: • changes in government programs that provide funding to research institutions and companies;
+Added: • decreases in government funding of research and development;
+Added: • changes in economic conditions, including recessionary effects and inflationary pressures;
+Added: • changes in government programs that provide funding to research institutions and companies, including changes in the amount of funds allocated to different areas of research or changes that have the effect of increasing the length of time of the funding process;
• changes in the regulatory environment affecting life science and Ag-Bio companies engaged in research and commercial activities;
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• higher than anticipated service, replacement and warranty costs;
−Removed: • the impact of the COVID-19 pandemic on the economy, investment in life sciences and research industries, our business operations, and resources and operations of our customers, suppliers, and distributors;
+Added: • the impact of the COVID-19 pandemic, the conflicts in Eastern Europe, and other national and global events on the economy, investment in life sciences and research industries, our business operations, and resources and operations of our customers, suppliers, and distributors;
• general industry, economic and market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.
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Our prospects must be considered in light of the uncertainties, risks, expenses, and difficulties frequently encountered by companies in their early stages of operations.
−Removed: Consequently, predictions about our future success or viability are highly uncertain and may not be as accurate as they could be if we had a longer operating history or a company history of successfully developing and commercializing products.
+Added: Consequently, predictions about our future
+Added: success or viability are highly uncertain and may not be as accurate as they could be if we had a longer operating history or a company history of successfully developing and commercializing products.
In addition, as a business with a limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown obstacles.
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• changes we may make in our research and development spending plans;
+Added: • the effect of competing technological and market developments;
• our need to implement additional infrastructure and internal systems;
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If we raise funds by issuing debt securities, those debt securities could have rights, preferences and privileges senior to those of holders of our Common Stock.
−Removed: The terms of debt securities issued or borrowings pursuant to a credit agreement could impose significant restrictions on our operations.
+Added: The terms of debt securities issued or borrowings
+Added: pursuant to a credit agreement could impose significant restrictions on our operations.
If we raise funds through collaborations or licensing arrangements, we might be required to relinquish significant rights to our technologies or products or grant licenses on terms that are not favorable to us.
+Added: We may be unable to raise additional funds or to enter into such agreements or arrangements on favorable terms, or at all.
+Added: Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID‑19 pandemic, the conflicts in Eastern Europe, and otherwise.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, if we require it, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges, or unforeseen circumstances could be significantly limited, and could have a material adverse effect on our business, financial condition, results of operations and prospects.
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We may not be able to file and prosecute all necessary or desirable patent applications, or maintain, enforce and license any patents that may issue from such patent applications, at a reasonable cost or in a timely manner or in all jurisdictions.
−Removed: It is also possible that we will fail to identify patentable aspects of our research
−Removed: and development output before it is too late to obtain patent protection.
+Added: It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.
Moreover, we may not develop additional proprietary products, methods and technologies that are patentable.
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Any successful third-party challenge to our patents could result in diminished or lost rights, for example, due to narrowing, unenforceability or invalidity of such patents and increased competition to our business.
−Removed: The outcome of patent litigation or other proceedings is generally uncertain, and any attempt by us to enforce our patent rights against others or to challenge the patent rights of others may not be successful, or, regardless of success, may take substantial time and result in substantial cost, and may divert our efforts and attention from other aspects of our business.
+Added: outcome of patent litigation or other proceedings is generally uncertain, and any attempt by us to enforce our patent rights against others or to challenge the patent rights of others may not be successful, or, regardless of success, may take substantial time and result in substantial cost, and may divert our efforts and attention from other aspects of our business.
Any of the foregoing events could have a material adverse effect on our business, financial condition and results of operations.
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The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability.
−Removed: Some of our patents or patent applications may be challenged at a future point in time in opposition, derivation, reexamination, inter partes review, post-grant review or interference or other similar proceedings.
+Added: Some of our patents or patent applications may be challenged at a future point in time in opposition, derivation, reexamination, inter partes review,
+Added: post-grant review or interference or other similar proceedings.
Any successful third-party challenge to our patents in this or any other proceeding could result in the unenforceability or invalidity of such patents, which may lead to increase d competition to our business, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
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In particular, we anticipate that with respect to our technologies, these trade secrets and know how will over time be disseminated within the industry through independent development, the publication of journal articles describing the methodology, and the movement of personnel between academic and industry scientific positions.
−Removed: In addition to pursuing patents on our technology, we takes steps to protect our intellectual property and proprietary technology by entering into agreements, including confidentiality agreements, non-disclosure agreements and intellectual property assignment agreements, with our employees, consultants, academic institutions, corporate partners and, when needed, our advisers.
+Added: In addition to pursuing patents on our technology, we take steps to protect our intellectual property and proprietary technology by entering into agreements, including confidentiality agreements, non-disclosure agreements and intellectual property assignment agreements, with our employees, consultants, academic institutions, corporate partners and, when needed, our advisers.
However, we cannot be certain that such agreements have been entered into with all relevant parties, and we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors or other third parties will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
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While extensions may be available, the life of a patent, and the protection it affords, is limited.
−Removed: In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which comp ensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date.
+Added: In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which comp ensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common
+Added: inventor and having an earlier expiration date.
Even if patents covering our products are obtained, once the patent life has expired, we may be open to competition from competitive products.
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Litigation may be necessary to defend against these claims.
−Removed: If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable
−Removed: intellectual property rights and face increased competition to our business.
+Added: If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights and face increased competition to our business.
Any such litigation or the threat thereof may adversely affect our ability to hire employees or contract with advisors, contractors and consultants.
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In addition, we are aware that we might not be able to obtain ownership of or seek a license to any intellectual property developed during a research collaboration with a third party.
−Removed: An adverse determination in any such proceeding may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar technology, without payment to us, or could limit the duration of the patent protection covering our technology and products.
+Added: An adverse determination in any such proceeding may result in loss of exclusivity or freedom to operate or in patent claims
+Added: being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar technology, without payment to us, or could limit the duration of the patent protection covering our technology and products.
Such challenges may also result in our inability to develop, manufacture or commercialize our products without infringing third-party patent rights.
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Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source software licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code.
−Removed: Some open source software licenses contain requirements
−Removed: that the licensee make its source code publicly available if the licensee creates modifications or derivative works using the open source software, depending on the type of open source software the licensee uses and how the licensee uses it.
+Added: Some open source software licenses contain requirements that the licensee make its source code publicly available if the licensee creates modifications or derivative works using the open source software, depending on the type of open source software the licensee uses and how the licensee uses it.
If we combine our proprietary software with open source software in a certain manner, we could, under certain open source software licenses, be required to release the source code of our proprietary software to the public for free.
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Our products are currently labeled and promoted, and are, and in the n ear-future will be, sold primarily to research companies and academic and research institutions as research use only (“RUO”) products, and are not currently intended to be used, for clinical diagnostic tests or as medical devices.
−Removed: If we elect to label and market our products for use as, or in the performance of, clinical diagnostics in the United States, thereby subjecting them to FDA regulation as medical devices, we would be required to obtain premarket 510(k) clearance or premarket approval from the FDA, unless an exception applies.
+Added: If we elect to label and market our products for use as, or in the
+Added: performance of, clinical diagnostics in the United States, thereby subjecting them to FDA regulation as medical devices, we would be required to obtain premarket 510(k) clearance or premarket approval from the FDA, unless an exception applies.
We may in the future register with the FDA as a medical device manufacturer and list some of our products with the FDA pursuant to an FDA Class I listing for general purpose laboratory equipment.
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We could also be subject to additional FDA post-marketing obligations for such products, any or all of which would increase our costs and divert resources away from other projects.
−Removed: If we sought and received regulatory clearance or approval and are not able to maintain regulatory compliance
−Removed: with applicable laws, we could be prohibited from marketing our products for use as, or in the performance of, clinical diagnostics and/or could be subject to enforcement actions, including warning letters and adverse publicity, fines, injunctions, and civil penalties;
+Added: If we sought and received regulatory clearance or approval and are not able to maintain regulatory compliance with applicable laws, we could be prohibited from marketing our products for use as, or in the performance of, clinical diagnostics and/or could be subject to enforcement actions, including warning letters and adverse publicity, fines, injunctions, and civil penalties;
recall or seizure of products;
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As a result, the time required to obtain clearances or approvals outside the United States may differ from that required to obtain FDA clearance or approval and we may not be able to obtain foreign regulatory approvals on a timely basis or at all.
−Removed: Once the Brexit transition period ends, for medical device products we intend to market in the U.K., we will be subject to regulatory requirements of the Medicines and Healthcare products Regulatory Agency (the “MHRA”).
+Added: Following Brexit, medical device products entering the U.K.
+Added: market will have to comply with the regulatory requirements of the Medicines and Healthcare products Regulatory Agency (the “MHRA”), including the new UK Medical Device Regulations, which are scheduled to go into effect by July 2024.
These foreign regulations and any future requirements that may be implemented by regulatory authorities will increase the difficulty of obtaining and maintaining regulatory approvals and compliance in Europe in the future.
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We do not currentl y expect our Nautilus platform to be subject to the clearance or approval of the FDA, as it is not intended to be used for the diagnosis, treatment or prevention of disease.
−Removed: However, as we expand our product line and the applications and uses of our current or products into new fields, certain of our future products could become subject to regulation by the FDA, or comparable international agencies, including requirements for regulatory clearance or approval of such products before they can be marketed.
+Added: However, as we expand our product line and the applications
+Added: and uses of our current or products into new fields, certain of our future products could become subject to regulation by the FDA, or comparable international agencies, including requirements for regulatory clearance or approval of such products before they can be marketed.
Also, even if our products are labeled, promoted, and intended as RUO, the FDA or comparable agencies of other countries could disagree with our conclusion that our products are intended for research use only or deem our sales, marketing and promotional efforts as being inconsistent with RUO products.
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In August 2020, as part of the Trump Administration’s efforts to combat COVID-19 and consistent with the President’s direction in Executive Orders 13771 and 13924, the Department of Health and Human Services (the “HHS”) announced rescission of guidance and other informal issuances of the FDA regarding premarket review of LDT absent notice-and-comment rulemaking, stating that, absent notice-and-comment rulemaking, those seeking approval or clearance of, or an emergency use authorization, for an LDT may nonetheless voluntarily submit a premarket approval application, premarket notification or an Emergency Use Authorization request, respectively, but are not required to do so.
−Removed: Although the Biden administration has not taken affirmative steps to rescind this August 2020 announcement, this 2020 policy statement is no longer posted on the HHS website.
+Added: In November 2021, HHS under the Biden administration issued a statement that withdrew the August 2020 policy announcement stating that HHS does not have a policy on LDTs that is separate from FDA’s longstanding approach.
Legislative and administrative proposals to amend the FDA’s oversight of LDTs have been introduced in recent years, including the Verifying Accurate Leading-edge IVCT Development Act of 2021 (VALID Act).
+Added: In September 2022, Congress passed the FDA user fee reauthorization legislation without the substantive FDA policy riders, including the VALID Act, but Congress may revisit the policy riders and enact other FDA programmatic reforms in the future.
It is unclear how such action as well as future legislation by federal and state governments and changes in FDA regulation will impact the industry, including our business and that of our customers.
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Such laws include, without limitation, state and federal anti-kickback or anti-referral laws, healthcare fraud and abuse laws, false claims laws, privacy and security laws, the Physician Payments Sunshine Act and related transparency and manufactu rer reporting laws, and other laws and regulations applicable to medical device manufacturers.
−Removed: If our operations are found to be in violation of any applicable FDA or healthcare laws and regulations, we may be subject to penalties, monetary damages, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility
−Removed: to obtain clearance or approvals from the FDA, fees from regulators, fines, significant settlements or judgments, or exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, or other restrictions on our operations, any of which could adversely impact our financial results.
+Added: If our operations are found to be in violation of any applicable FDA or healthcare laws and regulations, we may be subject to penalties, monetary damages, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain clearance or approvals from the FDA, fees from regulators, fines, significant settlements or judgments, or exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, or other restrictions on our operations, any of which could adversely impact our financial results.
Any action against us for an alleged or suspected violation by a private party or governmental agency could cause us to incur significant legal expenses, adversely impact our reputation, and could divert our management’s attention from the operation of our business, even if our defense is successful.
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We may also be required to conduct clinical studies to support our currently marketed products or planned product launches.
−Removed: If we are required to conduct such clinical trials or to obtain regulatory authorization, delays in the commencement of our product launches or our changes to our current marketing strategy could significantly increase our costs and delay our commercialization plans, which could harm our financial prospects.
+Added: If we are required to conduct
+Added: such clinical trials or to obtain regulatory authorization, delays in the commencement of our product launches or our changes to our current marketing strategy could significantly increase our costs and delay our commercialization plans, which could harm our financial prospects.
We are currently subject to, and may in the future become subject to additional, U.S.
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In November 2020, California passed the California Privacy Rights Act (the “CPRA”), which amends and expands the CCPA.
−Removed: While most of the substantive provisions in CPRA will not take effect until 2023 and although the CCPA includes exemptions for certain clinical trial data, the law may increase our compliance costs and potential liability with respect to other personal information we collect about California customers.
+Added: Most substantive provisions in CPRA are effective as of January 1, 2023.
+Added: Although the CCPA includes exemptions for certain clinical trial data, the law may increase our compliance costs and potential liability with respect to other personal information we collect about California customers.
It is possible that these consumer, health-related and data protection laws may be interpreted and applied in a manner that is inconsistent with our practices.
If so, this could result in government-imposed fines or orders requiring that we change our practices, which could adversely affect our business.
−Removed: In addition to the CCPA, numerous other states’ legislatures are considering or have enacted similar data privacy laws that will require ongoing compliance efforts and investment, including Virginia and Colorado.
+Added: In addition to the CCPA, numerous other states’ legislatures are considering or have enacted similar data privacy laws that will require ongoing compliance efforts and investment, including Virginia, Utah, Connecticut and Colorado.
In addition, laws in all 50 U.S.
−Removed: states require businesses to provide notice to consumers whose personal
−Removed: information has been disclosed as a result of a data breach.
+Added: states require businesses to provide notice to consumers whose personal information has been disclosed as a result of a data breach.
State laws are changing rapidly and there is discussion in the U.S.
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Such a notice could harm our reputation and our ability to compete.
−Removed: We are in the process of evaluating compliance needs but do not currently have in place formal policies and procedures related to the storage, collection and processing of information, and has not conducted any internal or external data privacy audits, to ensure our compliance with all applicable data protection laws and regulations.
+Added: We are in the process of evaluating compliance needs but do not currently have in place formal policies and procedures related to the storage, collection and processing of information, and have not conducted any internal or external data privacy audits, to ensure our compliance with all applicable data protection laws and regulations.
Additionally, we do not currently have policies and procedures in place for assessing our third-party vendors’ compliance with applicable data protection laws and regulations.
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Any failure or perceived failure by us or our third-party vendors, collaborators, contractors and consultants to comply with any applicable federal, state or similar foreign laws and regulations relating to data privacy and security, or could result in damage to our reputation, as well as proceedings or litigation by governmental agencies or other third parties, including class action privacy litigation in certain jurisdictions, which would subject us to significant fines, sanctions, awards, penalties or judgments, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: If we commercialize our Nautilus platform outside of the United States, our international business could expose us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States.
+Added: If we commercialize our Nautilus platform outside of the United States, our international business could expose us to business, tax, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States.
If we commercialize our Nautilus platform outside of the United States, our international business may be adversely affected by changing economic, political and regulatory conditions in foreign countries.
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• potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements and other trade barriers;
−Removed: • difficulties and costs of staffing and managing foreign operations;
+Added: • difficulties and costs of staffing and managing foreign operations, including compliance with diverse and complex local employment laws and practices;
• difficulties protecting, maintaining, enforcing or procuring intellectual property rights.
If one or more of these risks occurs, it could require us to dedicate significant resources to remedy such occurrence, and if we are unsuccessful in finding a solution, our financial results will suffer.
−Removed: In addition, if we commercialize our Nautilus platform outside of the United States, we intend to rely on distributors for sales of our Nautilus platform and related products.
+Added: In addition, if we commercialize our Nautilus platform outside of the United States, we may rely on distributors for sales of our Nautilus platform and related products.
To do so we must attract distributors and maintain distributors to maximize the commercial opportunity for our platform.
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If current or future distributors do not perform adequately, or we are unable to enter into effective arrangements with distributors in particular geographic areas, we may not realize long-term international revenue growth and our financial results will suffer.
−Removed: If we expand our development and commercialization activities outside of the United States, we will be subject to an increased risk of inadvertently conducting activities in a manner that violates the U.S.
+Added: If we expand our development and commercialization activities outside of the United States, we will be subject to an increased risk of conducting activities in a manner that violates the U.S.
Foreign Corrupt Practices Act and similar laws.
−Removed: If that occurs, we may be subject to civil or criminal penalties which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
+Added: If that occurs, we may be subject to civil or criminal penalties and other adverse consequences which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
We are subject to the U.S.
−Removed: Foreign Corrupt Practices Act, or the FCPA, which prohibits corporations and individuals from paying, offering to pay, or authorizing the payment of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.
−Removed: We are also subject to the UK Anti-Bribery Act, which prohibits both domestic and international bribery, as well as bribery across both public and private sectors.
+Added: Foreign Corrupt Practices Act, or the FCPA, and similar anti-corruption laws which generally prohibit companies, their employees, agents, representatives, business partners, and third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector.
+Added: Specifically, the FCPA which prohibits corporations and individuals from paying, offering to pay, or authorizing the payment of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.
+Added: We are also subject to the UK Bribery Act, which prohibits both domestic and international bribery, as well as bribery across both public and private sectors.
If we choose to establish and expand our commercial operations outside of the United States we will need to comply with non-U.S.
−Removed: regulatory requirements, will need to establish and expand business relationships with various third parties, and we will interact more frequently with foreign officials, including regulatory authorities.
−Removed: Expanded programs to maintain compliance with such laws will be costly and may not be effective.
−Removed: Any interactions with any such parties or individuals where compensation is provided that are found to be in violation of such laws could result in substantial fines and penalties and could materially harm our business.
+Added: regulatory requirements, may need to establish and expand business relationships with various third parties, and we, our employees, agents, representatives, business partners and third-party intermediaries may interact more frequently with foreign officials, including regulatory authorities, and we may be held liable for the corrupt or other illegal activities of these employees, agents, representatives, business partners or third-party intermediaries, even if we do not explicitly authorize such activities.
+Added: Any interactions with any such parties or individuals where improper payments are provided that are found to be in violation of such laws could result in substantial fines and penalties and could materially harm our business.
+Added: We cannot assure you that all of our employees, agents, representatives, business partners and third-party intermediaries will not take actions in violation of applicable law for which we may ultimately be held responsible.
+Added: These laws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions.
+Added: While we have policies and procedures to address compliance with such laws, we cannot assure you that none of our employees, agents, representatives, business partners or third-party intermediaries will take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.
+Added: Further, as we increase our international sales and business, our risks under these laws may increase and expanded programs to maintain compliance with such laws may be costly and may not be effective.
Furthermore, any finding of a violation under one country’s laws may increase the likelihood that we will be prosecuted and be found to have violated another country’s laws.
−Removed: If our business practices outside the United States are found to be in violation of the FCPA, UK Anti-Bribery Act or other similar laws, we may be subject to significant civil and criminal penalties which co uld have a material adverse effect on our financial condition and results of operations.
+Added: If our business practices are alleged to be or are found to be in violation of the FCPA, UK Bribery Act or other similar anti-corruption laws, we may be subject to whistleblower complaints, sanctions, settlements, prosecution, enforcement actions, fines, damages, adverse media coverage, investigations, loss of export privileges, significant civil and criminal penalties, or suspension or debarment from government contracts, all of which co uld have a material adverse effect on our reputation, financial condition and results of operations.
+Added: Responding to any investigation or action will likely result in materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.
Environmental and health safety laws may result in liabilities, expenses and restrictions on our operations.
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Environmental laws and regulations could become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with violations.
−Removed: We cannot assure you that violations of these laws and regulations will not occur in the future or have not occurred in the past as a result of human error, accidents, equipment failure or other causes.
+Added: We cannot assure you that violations of these laws and regulations will not occur in the future or have not occurred in the past as a result of human error, accidents,
+Added: equipment failure or other causes.
The expense associated with environmental regulation and remediation could harm our financial condition and operating results.
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We rely, or will rely, on information technology systems to keep financial records, facilitate our research and development initiatives, manage our manufacturing operations, maintain quality control, fulfill customer orders, maintain corporate records, communicate with staff and external parties and operate other critical functions.
−Removed: Our information technology systems and those of our vendors and partners are potentially vulnerable to disruption due to breakdown, malicious intrusion and computer viruses or other disruptive events, including, but not limited to, natural disasters and catastrophes.
+Added: Our information technology systems and those of our vendors and partners are potentially vulnerable to disruption due to breakdown, malicious intrusion and computer viruses, ransomware or other malicious software, or other disruptive events, including, but not limited to, natural disasters and catastrophes.
Cyberattacks and other malicious internet-based activity continue to increase and cloud-based platform providers of services have been and are expected to continue to be targeted.
−Removed: Methods of attacks on information technology systems and data security breaches change frequently, are increasingly complex and sophisticated, including social engineering and phishing scams, and can originate from a wide variety of sources.
+Added: Furthermore, there may be a heightened risk of potential cyberattacks by state actors or others since the escalation of the conflicts in Eastern Europe.
+Added: Methods of attacks on information technology systems and attempting or effecting data security breaches and incidents change frequently, are increasingly complex and sophisticated, including social engineering and phishing scams, and can originate from a wide variety of sources.
In addition to traditional computer “hackers,” malicious code, such as viruses and worms, employee theft or misuse, denial-of-service attacks and sophisticated nation-state and nation-state supported actors now engage in attacks, including advanced persistent threat intrusions.
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Moreover, it is possible that we may not be able to anticipate, detect, appropriately react and respond to, or implement effective preventative measures against, all cybersecurity incidents.
−Removed: If our security measures, or those of our vendors and partners, are compromised due to any cybersecurity attacks or data security breaches, including as a result of third-party action, employee or customer error, malfeasance, stolen or fraudulently obtained log-in credentials or otherwise, our reputation could be damaged, our business and reputation may be harmed, we could become subject to litigation and we could incur significant liability.
−Removed: If we were to experience a prolonged system disruption in our information technology systems or those of certain of our vendors and partners, it could negatively impact our
−Removed: ability to serve our customers, which could adversely impact our business, financial condition, results of operations and prospects.
+Added: If our security measures, or those of our vendors and partners, are compromised due to any cybersecurity attacks or data security breaches, including as a result of third-party action, employee or customer error, malfeasance, stolen or fraudulently obtained log-in credentials or otherwise, or if any of these events is perceived to have occurred, our reputation could be damaged, our business and reputation may be harmed, we could become subject to litigation and we could incur significant liability.
+Added: If we were to experience a prolonged system disruption in our information technology systems or those of certain of our vendors and partners, it could negatively impact our ability to serve our customers, which could adversely impact our business, financial condition, results of operations and prospects.
If operations at our facilities were disrupted, it may cause a material disruption in our business if we are not capable of restoring functionality on an acceptable timeframe.
−Removed: In addition, our information technology systems, and those of our vendors and partners, are potentially vulnerable to data security breaches, whether by internal bad actors, such as employees or other third parties with legitimate access to our or our third-party providers’ systems, or external bad actors, which could lead to the exposure of personal data, sensitive data and confidential information to unauthorized persons.
−Removed: Any such data security breaches could lead to the loss of trade secrets or other intellectual property, or could lead to the exposure of personal information, including sensitive personal information, of our employees, customers and others, any of which could have a material adverse effect on our business, reputation, financial condition and results of operations.
+Added: In addition, our information technology systems, and those of our vendors and partners, are potentially vulnerable to data security breaches and incidents, whether by internal bad actors, such as employees or other third parties with legitimate access to our or our third-party providers’ systems, or external bad actors, which could lead to the exposure of personal data, sensitive data and confidential information to unauthorized persons.
+Added: Any such data security breaches could lead to the loss of trade secrets or other intellectual property, or could lead to the loss, unavailability, exposure, unauthorized modification, alteration or other processing of personal information, including sensitive personal information, of our employees, customers and others, any of which could have a material adverse effect on our business, reputation, financial condition and results of operations.
In addition, any such access, disclosure or other loss or unauthorized use of information or data could result in legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and security of personal information, including federal, state and foreign data protection and privacy regulations, violations of which could result in significant penalties and fines.
−Removed: Additionally, a new privacy law, the California Privacy Rights Act (CPRA), was approved by California voters in the election on November 3, 2020.
−Removed: The CPRA will modify the California Consumer Privacy Act significantly, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply.
−Removed: In addition, U.S.
−Removed: and international laws and regulations that have been applied to protect user privacy (including laws regarding unfair and deceptive practices in the U.S.
−Removed: and GDPR in the E.U.) may be subject to evolving interpretations or applications.
Furthermore, defending a suit, regardless of its merit, could be costly, divert management’s attention and harm our reputation.
In addition, although we seek to detect and investigate data security incidents, security breaches and other incidents of unauthorized access to our information technology systems and data can be difficult to detect and any delay in identifying such breaches or incidents may lead to increased harm and legal exposure of the type described above.
−Removed: Moreover, there could be public announcements regarding any cybersecurity incidents and any steps we take to respond to or remediate such incidents, and if securities analysts or investors perceive these announcements to be negative, it could, among other things, have a material adverse effect on the price of our Common Stock.
−Removed: The cost of protecting against, investigating, mitigating and responding to potential breaches of our information technology systems and data security breaches and complying with applicable breach notification obligations to individuals, regulators, partners and others can be significant.
+Added: Moreover, there could be public announcements regarding any actual or perceived cybersecurity incidents and any steps we take to respond to or remediate such incidents, and if securities analysts or investors perceive these announcements to be negative, it could, among other things, have a material adverse effect on the price of our Common Stock.
+Added: The cost of protecting against, investigating, mitigating and responding to potential breaches of our information technology systems and data security breaches and incidents and complying with applicable breach notification obligations to individuals, regulators, partners and others can be significant.
As cybersecurity incidents continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.
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Because of the complex and technical nature of our system and the dynamic market in which we compete, any failure to attract and retain a sufficient number of qualified employees could materially harm our ability to develop and commercialize our technology.
+Added: This competition has become exacerbated by the increase in employee resignations in 2022 reported by employers nationwide and continued high rates of employee turnover in 2023.
+Added: As part of our retention and incentive efforts, in addition to salary and cash incentives, we have issued stock options that vest over time.
+Added: The value to employees of stock options that vest over time may be significantly affected by decreases in our stock price (whether or not related to or proportional to our operating performance) and may at any time be insufficient to counteract more lucrative offers from other companies.
+Added: We may face challenges in retaining and recruiting such individuals due to sustained declines in our stock price that could reduce the retention value of equity awards.
We may acquire other companies or technologies, which could divert our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and harm our operating results.
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For instance, “stay-at-home” orders were imposed in California, where our primary research and development facility is located, and in Washington state, where our primary corporate facility is located, that required reductions in capacity or shutdowns of businesses as well as the implementation of social distancing protocols and other plans and measures.
−Removed: During March and April of 2020, the volume of ongoing lab work was reduced, and only critical program work in the lab continued with staggered lab employee work shifts to minimize risk of exposure to COVID-19, which has and may continue to disrupt or delay our ability to conduct development activities.
+Added: During March and April of 2020, the volume of ongoing lab work was reduced, and only critical program work in the lab continued with staggered lab employee work shifts to minimize risk of exposure to COVID-19.
+Added: While we have largely resumed normal operations, any resurgence or worsening of the COVID-19 pandemic may cause us to reinstitute certain measures to protect employee safety which may further disrupt or delay our ability to conduct development activities.
Additionally, our suppliers have also been impacted by the COVID-19 pandemic.
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and lower availability of certain reagents.
−Removed: To the extent that any governmental authority imposes additional regulatory requirements or changes existing laws, regulations, and policies that apply to our business and operations, such as workplace safety measures, our product development may be delayed, and we may incur further costs in bringing our business and operations into compliance with changing or new laws, regulations, and policies.
+Added: To the extent that any governmental authority imposes additional regulatory requirements or changes existing laws, regulations, and policies that apply to our business and operations, such as workplace safety measures, our product development
+Added: may be delayed, and we may incur further costs in bringing our business and operations into compliance with changing or new laws, regulations, and policies.
While we are currently in the development stage, we expect that substantially all of our revenue will be derived from sales of our Nautilus platform , including our instruments and consumables, to biopharmaceutical companies and academic and research institutions.
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This impact could have a material, adverse impact on our liquidity, capital resources, operations and business and those of the third parties on which we rely and could worsen over time.
−Removed: The extent to which the COVID-19 pandemic impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
+Added: The extent to which the COVID-19 pandemic impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, the emergence or further spread of additional variants, and the risk of waning immunity among persons already vaccinated among others.
While we do not yet know the full extent of potential impacts on our business, any of these occurrences could significantly harm our business, results of operations and financial condition.
Unfavorable U.S.
−Removed: or global economic conditions as a result of the COVID-19 pandemic, or otherwise, could adversely affect our ability to raise capital and our business, results of operations and financial condition.
−Removed: While the potential economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the COVID-19 pandemic has resulted in, and may continue to result in, extreme volatility and disruptions in the capital and credit markets, reducing our ability to raise additional capital through equity, equity-linked or debt financings, which could negatively impact our short-term and long-term liquidity and our ability to operate in accordance with our operating plan, or at all.
+Added: or global economic conditions as a result of multiple global events, including the COVID-19 pandemic, the conflict in Eastern Europe, increasing interest rates and general economic downturns, could adversely affect our ability to raise capital and our business, results of operations and financial condition.
+Added: While the potential economic impact brought by multiple adverse global circumstances, such as the COVID-19 pandemic, conflicts in Eastern Europe, potential uncertainty related to Taiwan and its relationship with China, increasing interest rates and general economic downturns are difficult to assess or predict, both as to magnitude and duration, these events have resulted in, and may continue to result in, extreme volatility and disruptions in the capital and credit markets, reducing our ability to raise additional capital through equity, equity-linked or debt financings, which could negatively impact our short-term and long-term liquidity and our ability to operate in accordance with our operating plan, or at all.
Additionally, our results of operations could be adversely affected by general conditions in the global economy and financial markets.
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A weak or declining economy could strain our customers’ budgets or cause delays in their payments to us.
−Removed: Any of the foregoing could harm our business, and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our ability to raise capital, business, results of operations and financial condition.
+Added: As a result of such events, we or our contractors, partners and/or suppliers could experience shortages, business disruptions or delays for materials sourced or manufactured in countries affected by such events, and their ability to supply us with services or components may be adversely affected.
+Added: In addition, our contractors and suppliers have raised and may continue to raise prices for goods and services we employ in our research and development efforts and for components or materials used in our Nautilus platform.
+Added: Additionally, there is ongoing uncertainty regarding the federal budget and federal spending levels, including the possible impacts of a failure to increase the “debt ceiling.” Any U.S.
+Added: government default on its debt could have broad macroeconomic effects that could, among other things, disrupt access to capital markets and deepen recessionary conditions.
+Added: Further, as of December 31, 2022, we had cash, cash equivalents and long-term investments of $313.6 million, consisting of U.S.
+Added: treasury securities, mutual funds, commercial paper, corporate debt securities, and agency bonds.
+Added: Any default by the U.S.
+Added: government or credit downgrade of the securities we hold could impact the liquidity or valuation of our investments.
+Added: Any of the foregoing could harm our business, financial condition and results of operations, and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our ability to raise capital, business, results of operations and financial condition.
Global supply chain interruptions could adversely affect our ability to develop and commercialize our products .
We may be subject to supply chain interruptions.
−Removed: Current or future supply chain interruptions that could be exacerbated by global political tensions, such as the situation in Ukraine, could negatively impact our ability to further develop our products or to manufacture and deliver our products or services, which could negatively impact our timelines and business results.
+Added: Current or future supply chain interruptions that could be exacerbated by global political tensions, such as the situation in Eastern Europe and uncertainty related to Taiwan and its relationship with China, could negatively impact our ability to further develop our products or to manufacture and deliver our products or services, which could negatively impact our timelines and business results.
+Added: For example, as discussed in the risk factor above entitled “ The COVID-19 pandemic and efforts to reduce its spread have adversely impacted and are expected to continue to materially and adversely impact, our business and operations ,” we have experienced some supply disruptions due to the COVID-19 pandemic, including closures at certain chip manufacturers, which led to extended lead times for certain chips;
+Added: diversion of certain lab materials needed to support COVID-19 relief efforts;
+Added: and lower availability of certain reagents, and delays similar to those we experienced during the COVID-19 pandemic could impact us if they recur or are exacerbated due to the situation in Eastern Europe.
If our facilities become unavailable or inoperable, our research and development program and commercialization launch plan could be adversely impacted and manufacturing of our instruments and consumables could be interrupted.
Our Seattle, Washington, facility houses our corporate executive team and our software development operations, while our San Carlos, California facility houses our research and development team.
−Removed: Our facilities in Seattle and San Carlos are vulnerable to natural disasters, public health crises, including the impact of the COVID-19 pandemic, and catastrophic events.
+Added: Our facilities in Seattle and San Carlos are vulnerable to natural disasters, public health crises, including the impact of the COVID-19 pandemic, and other catastrophic events.
For example, our San Carlos facilities are located near earthquake fault zones and are vulnerable to damage from earthquakes as well as other types of disasters, including fires, floods, power loss, communications failures and similar events.
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If our research and development program or planned commercialization program were disrupted by a disaster or catastrophe, the launch of new products, including our Nautilus platform , and the timing of improvements to our products could be significantly delayed and could adversely impact our ability to compete with other available products and solutions.
−Removed: If our capabilities are impaired, we may not be able to manufacture and ship our products in a timely manner, which would adversely
−Removed: impact our business.
+Added: If our capabilities are impaired, we may not be able to manufacture and ship our products in a timely manner, which would adversely impact our business.
Although we possess insurance for damage to our property and the disruption of our business, this insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, or at all.
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Accordingly, we cannot assure you of your ability to sell your shares of our Common Stock when desired or at prices at or above the price you paid for your shares or at all.
−Removed: The market price of our Common Stock may be volatile, which could result in substantial losses for investors.
−Removed: The trading price of our Common Stock has been and may continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.
+Added: The market price of our Common Stock has been and may continue to be volatile, which could result in substantial losses for investors.
+Added: The market price of our Common Stock has been and may continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.
The market price of our Common Stock may fluctuate due to a variety of factors, including:
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• sales of our Common Stock by us or by our insiders or other stockholders;
−Removed: • the expiration of market standoff or lock-up agreements;
• general economic, industry and market conditions;
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Following periods of such volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company.
−Removed: Because of the potential volatility of our Common Stock price, we may become the target of securities litigation in the future.
+Added: Because of the potential volatility of our Common Stock price, we may
+Added: become the target of securities litigation in the future.
Securities litigation could result in substantial costs and divert management’s attention and resources from our business.
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This in turn could have a material adverse effect on our stock price and may prevent attempts by our stockholders to replace or remove the board of directors or management.
−Removed: A significant portion of our total outstanding shares of Common Stock were initially restricted from immediate resale in connection with the closing of the Business Combination but the restrictions have expired and such shares may now be sold into the market.
−Removed: This could cause the market price of our Common Stock to drop significantly, even if our business is doing well.
+Added: The sale or the perception of future sales of a substantial number of shares of our Common Stock could cause the market price of our Common Stock to drop significantly, even if our business is doing well.
Sales of a substantial number of shares of our Common Stock in the public market could occur at any time.
These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Common Stock.
−Removed: As of the completion of the Business Combination, (i) the Nautilus stockholders (excluding Perspective Life Sciences Master Fund Ltd, a Cayman Islands exempted company (the “Perceptive PIPE Investor”), and ARYA Sciences Holdings III, a Cayman Islands exempted limited company (the “Sponsor”)) owned, collectively, approximately 66.4% of our outstanding Common Stock, (ii) ARYA’s initial shareholders, the Sponsor and the Perceptive PIPE Investor owned approximately 10.2% of our outstanding Common Stock and (iii) the PIPE Investors other than the Perceptive PIPE Investor owned approximately 11.7% of our outstanding Common Stock.
−Removed: Pursuant to the Amended and Restated Registration Rights and Lock-Up Agreement (the “Registration Rights and Lock-Up Agreement”) and our Bylaws, subject to certain exceptions, ARYA’s initial shareholders, the Sponsor, the Perceptive PIPE Investor and the Nautilus stockholders were restricted from selling or transferring any shares of our Common Stock for a period of 180 days from the closing of the Business Combination.
−Removed: However, such restrictions expired on December 6, 2021, and these shares of Common Stock may now be sold into the market.
−Removed: Pursuant to the Registration Rights and Lock-Up Agreement and the Subscription Agreements entered into in connection with the PIPE Financing, we filed resale registration statements to provide for the resale of the shares issued in the PIPE Financing and the shares of our Common Stock held by the parties to the Registration Rights and Lock-Up Agreement.
−Removed: The market price of our Common Stock could decline if the holders of previously restricted shares and/or holders whose shares are registered under such registration statements sell their shares or are perceived by the market as intending to sell their shares.
+Added: Pursuant to the Amended and Restated Registration Rights and Lock-Up Agreement (the “Registration Rights and Lock-Up Agreement”) and the Subscription Agreements entered into in connection with the PIPE Financing, we have filed resale registration statements to provide for the resale of the shares issued in the PIPE Financing and the shares of our Common Stock held by the parties to the Registration Rights and Lock-Up Agreement.
+Added: The market price of our Common Stock could decline if the holders whose shares are registered under such registration statements sell their shares or are perceived by the market as intending to sell their shares.
We do not expect to pay any dividends for the foreseeable future.
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The foregoing shall not apply to any claims under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”).
−Removed: In addition, unless we give an Alternative Forum Consent, the federal district courts of the United States shall be the sole and exclusive forum for resolving any action asserting a claim arising under the Securities Act.
+Added: In addition, unless we give an Alternative Forum Consent, the federal district courts of the United States shall be the sole and exclusive forum for resolving any action asserting a claim arising under the Securities Act against any person in connection with any offering of the Company’s securities, including any auditor, underwriter, expert, control person or other defendant.
Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions.
Accordingly, both state and federal courts have jurisdiction to entertain such claims.
−Removed: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the federal
−Removed: district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
+Added: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of our securities shall be deemed to have notice of and consented to the foregoing bylaw provisions.
18 unchanged sentences
General Risk Factors
−Removed: We will incur significant increased costs and management resources as a result of operating as a public company.
−Removed: As a public company, we will incur significant legal, accounting, compliance and other expenses that we did not incur as a private company and these expenses may increase even more after we are no longer an “emerging growth company.” Our
−Removed: management and other personnel will need to devote a substantial amount of time and incur significant expense in connection with compliance initiatives.
−Removed: As a public company, we will bear all of the internal and external costs of preparing and distributing periodic public reports in compliance with our obligations under the securities laws.
+Added: We will continue to incur significant increased costs and management resources as a result of operating as a public company.
+Added: As a public company, we will continue to incur significant legal, accounting, compliance and other expenses that we did not incur as a private company and these expenses may increase even more after we are no longer an “emerging growth company.” Our management and other personnel will need to devote a substantial amount of time and incur significant expense in connection with compliance initiatives.
+Added: As a public company, we will continue to bear all of the internal and external costs of preparing and distributing periodic public reports in compliance with our obligations under the securities laws.
In addition, regulations and standards relating to corporate governance and public disclosure, including the SOX, and the related rules and regulations implemented by the SEC and The Nasdaq Stock Market LLC, have increased legal and financial compliance costs and will make some compliance activities more time-consuming.
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As of December 31, 2022, we had U.S .
−Removed: federal and state net operating loss carryforw ards, or NOLs, of $0.5 million for federal and $9.1 million for state, which if not utilized will expire in 2037.
−Removed: Federal net operating loss carryforwards of $31.6 million that arose after the 2017 tax year will carryforward indefinitely.
+Added: federal and state net operating loss carryforw ards, or NOLs, of $0.5 million for federal purposes and $21.1 million for state purposes, which if not utilized will expire in 2037.
+Added: Federal NOLs of $51.5 million that arose after the 2017 tax year will carry forward indefinitely and will be subject to the 80% of taxable income limitation.
We ma y use these NOLs to offset against taxable income for U.S.
4 unchanged sentences
Similar rules may apply under state tax laws.
−Removed: We have not conducted a 382 study to determine whether the use of our NOLs is impaired.
−Removed: We may have previously undergone an “ownership change.” In addition, the future issuances or sales of our stock, including certain transactions involving our stock that are outside of our control, could result in future “ownership changes.” “Ownership changes” that have occurred in the past or that may occur in the future could result in the imposition of an annual limit on the amount of pre-ownership change NOLs and other tax attributes we can use to reduce our taxable income, potentially increasing and accelerating our liability for income taxes, and also potentially causing those tax attributes to expire unused.
+Added: We have not conducted a Section 382 study to determine whether the use of our NOLs is impaired.
+Added: We may have previously undergone an “ownership change.” In addition, future issuances or sales of our stock, including certain transactions involving our stock that are outside of our control, could result in future “ownership changes.” “Ownership changes” that have occurred in the past or that may occur in the future could result in the imposition of an annual limit on the amount of pre-ownership change NOLs and other tax attributes we can use to reduce our taxable income, potentially increasing and
+Added: accelerating our liability for income taxes, and also potentially causing those tax attributes to expire unused.
States may impose other limitations on the use of our NOLs.
−Removed: Any limitation on using NOLs could, depending on the extent of such limitation and the NOLs previously used, result in our retaining less cash after payment of U.S.
+Added: Any limitation on using NOLs could, depending on the extent of such limitations and the NOLs previously used, result in our retaining less cash after payment of U.S.
federal and state income taxes during any year in which we have taxable income, rather than losses, than we would be entitled to retain if such NOLs were available as an offset against such income for U.S.
federal and state income tax reporting purposes, which coul d adversely impact our operating results.
+Added: Changes in tax laws could have a material adverse effect on our future business, cash flows, results of operations or financial condition.
+Added: We may in the future be subject to the tax laws, regulations, and policies of several taxing jurisdictions.
+Added: Changes in tax laws, as well as other factors, could cause us to experience fluctuations in our tax obligations and effective tax rates and otherwise adversely affect our tax positions and/or our tax liabilities.
+Added: For example, many countries and local jurisdictions and organizations such as the Organisation for Economic Co-operation and Development have proposed or implemented new tax laws or changes to existing tax laws, including additional taxes on payroll or employees.
+Added: Any new or changes to tax laws could adversely affect our future effective tax rate, operating results, tax credits or incentives or tax payments, which could have a material adverse effect on our future business, cash flows, results of operations or financial condition if we expand internationally.
+Added: For example, the United States recently enacted the Inflation Reduction Act of 2022, which implements, among other changes, a 1% excise tax on certain stock buybacks effective January 1, 2023.
+Added: Further, on January 1, 2022, a provision of the Tax Cuts and Jobs Act of 2017 went into effect that eliminates the option to deduct domestic research and development costs in the year incurred and instead requires taxpayers to amortize such costs over five years.
+Added: Such changes, among others, may adversely affect our future effective tax rate, business, cash flows, results of operations and financial condition.
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner or prevent fraud, which would harm our business.
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This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
−Removed: We have elected to avail
−Removed: ourselves of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
+Added: We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
7 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.