Quanterix Corp 10-Q/A

ITEM 4. CONTROLS AND PROCEDURES As previously disclosed in the section titled “Part II, Item 9A. Controls and Procedures” in our Amended Annual Report, management concluded that our internal control over financial reporting was not effective at a reasonable assurance level as of December 31, 2023 due to the material weaknesses in the effectiveness of our internal controls associated with 39 Table of Contents the valuation of our inventory, inclusive of the subsequently identified control design deficiency related to the capitalization of labor and overhead costs in our inventory balances (the “Inventory Valuation MW”), and the accounting for property and equipment, net (the “Property and Equipment MW”). A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Based on our updated evaluation of the effectiveness of internal control over financial reporting under the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and in light of the material weaknesses discussed above, our management continued to conclude that our internal control over financing reporting was not effective at the reasonable assurance level as of March 31, 2024. If not remediated, or if we identify further material weaknesses in our internal control, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in additional material misstatements in our consolidated financial statements or a failure to meet our reporting and financial obligations. Evaluation of Disclosure Controls and Procedures We have established disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide a reasonable assurance of achieving their objectives. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2024 . Because our efforts to remediate the material weaknesses in our internal control over financial reporting are still underway and we have not had a sufficient period of time to test the operating effectiveness of our internal control over financial reporting, which we view as an integral part of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at a reasonable assurance level as of March 31, 2024 . Nevertheless, based on a number of factors, including the performance of additional procedures by management designed to ensure the reliability of our financial reporting, we believe that the Consolidated Financial Statements and Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows as of the dates, and for the periods, presented, in conformity with U.S. GAAP. Remediation Efforts Management, with oversight from the Audit Committee of our Board of Directors, continues taking steps to remediate the control deficiencies that resulted in the Inventory Valuation MW and Property and Equipment MW described above by implementing changes to our internal control over financial reporting. Our remediation plans, which include addressing the additional deficiency related to the Restatement, include, but are not limited to, the efforts summarized below: • we have engaged accounting advisory consultants to: ◦ implement new software solutions to automate key manual inventory valuation processes and outputs, some of which we began to use in the second quarter of 2024; ◦ assess our current enterprise resource planning system and identify opportunities to enhance our use of the system through automating certain controls and processes, for which development of system enhancements were made and continue to be underway; and ◦ design new internal controls evaluating the accounting for inventory, including enhancements to inventory valuation review procedures. 40 Table of Contents • we have redesigned our analysis of labor and overhead cost capitalization, including related controls; • we continue to strengthen and document our existing controls and, starting in the first quarter of 2024, have implemented additional compensating controls and will continue to do so throughout the remainder of fiscal year 2024; • we continue to execute controls that we worked to improve during fiscal year 2023 that did not have a sufficient period of time to demonstrate operating effectiveness as of December 31, 2023; • we have hired a Head of SOX Transformation to oversee the remediation of our material weaknesses and further drive improvements across our internal controls; • we continue to evaluate, enhance, and add personnel in the finance organization with a focus on the requisite experience in the areas of accounting, SEC financial reporting, and associated internal controls; • we have hired additional accounting consultants to provide additional depth and breadth in our period end closes, financial reporting capabilities, and internal controls compliance until we have filled key additions or vacancies on our team with qualified personnel for a sufficient period of overlap to ensure successful transition of responsibilities; • we continue to enhance the effectiveness of the related controls based on the recommendations provided by the third-party consulting firm we engaged to assess our remediation plan; and • we continue to provide trainings on a regular basis related to internal control over financial reporting for all control owners. We have taken significant steps in our remediation plan and continue our efforts to remediate the material weaknesses described above. We believe that the implementation of the above steps will allow us to address the deficient controls within our internal control environment. As we continue to evaluate and work to improve our internal control over financial reporting, we will take additional measures to address control deficiencies and we may modify certain of the remediation measures described above. Following our design and implementation of our remediation efforts, we will need to demonstrate their operating effectiveness. We expect the remediation of the Property and Equipment MW to continue through fiscal year 2024 and based on the Restatement, we expect the remediation of the Inventory Valuation MW, including the additional control design deficiency, will continue into fiscal year 2025. We will not be able to consider any material weakness remediated until the applicable remedial controls operate for a sufficient period of time and our management has concluded, through testing, that our controls are operating effectively. Changes in Internal Control over Financial Reporting Other than the changes outlined to remediate the material weaknesses described above, there were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 41 Table of Contents PART II — OTHER INFORMATION ITEM 6. EXHIBITS Exhibit Number Exhibit Description Filed Herewith Incorporated by Reference herein from Form or Schedule Filing Date SEC File/ Reg. Number 3.1 Amended and Restated Certificate of Incorporation. 8-K 12/15/2017 001-38319 3.2 Restated Bylaws. 10-Q 8/8/2023 001-38319 31.1 Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 31.2 Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 32.1 Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. X 101.SCH XBRL Taxonomy Extension Schema Document. X 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. X 101.DEF XBRL Taxonomy Extension Definition. X 101.LAB XBRL Taxonomy Extension Label Linkbase Document. X 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. X 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). X 42 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. QUANTERIX CORPORATION Dated: December 23, 2024 By: /s/ Masoud Toloue Masoud Toloue President and Chief Executive Officer (principal executive officer) Dated: December 23, 2024 By: /s/ Vandana Sriram Vandana Sriram Chief Financial Officer (principal financial officer and principal accounting officer) 43