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Item 1A. Risk Factors

2025-02-13 compared with 2024-02-15 · 391 added, 472 removed, 916 unchanged (49% of the section changed)

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• Fluctuations in our operating results due to a variety of factors;

• Our ability to generate sufficient revenue, to attain cash flows from operating activities in excess of our capital investment requirements and to achieve and maintain profitability;

• Our dependency on the availability of government funding to and research and development spending by research institutions;

• Our ability to compete effectively;

• Our pricing strategy;

• Existing, enhanced or new trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers;

• Our ability to increase penetration into our existing customer segments and to maintain and increase the effectiveness of our commercial organization;

• The size of the market for our solutions;

• Our ability to generate revenue from recently introduced or recently announced products;

• The timing of our introduction of new products or new product capabilities, including any delays related to such introductions;

• Our dependency on research and development spending by research institutions;

• The complexity of data generated by our products;

• Our ability to effectively manage product transitions and forecast customer demand, including for both existing and newly introduced products;

• Our ability to generate sufficient revenue, to attain cash flows from operating activities in excess of our capital investment requirements and to achieve and maintain profitability;

• Our ability to consistently manufacture our products to necessary specifications in necessary quantities and at acceptable cost and performance level;

• Our ability to develop new products or new versions of existing products and enhance the capabilities of our existing products;

• Our dependency on revenue generated from the sale of our Chromium solutions;

• Doing business internationally, including in China and elsewhere in the Asia-Pacific region;

• Our ability and the ability of our partners to ship and manufacture products to the necessary specifications and quantities, and within necessary timeframes, to meet demand;

• Doing business internationally, including in China and elsewhere in the Asia-Pacific region, and exposure to interest and foreign currency exchange rates;

• The ability of suppliers to meet our needs and the needs of our customers;

• Our products are specialized, complex and difficult to manufacture and we could experience production problems, including in sourcing raw materials and undetected errors and defects in our solutions;

• Our ability to develop new products and enhance the capabilities of our existing products;

• Our ability to effectively manage product transitions and forecast customer demand, including for both existing and newly introduced products;

• The success of our products in achieving and sustaining scientific acceptances.

• The complexity of our operations and manufacturing our products, including in sourcing raw materials and preventing errors and defects in our solutions;

• Our limited operating history, losses since inception, fluctuations in revenue and management of growth;

• The success of our products in achieving and sustaining scientific acceptance and generating revenue.

Risks related to our regulatory environment and taxation:

• Our products could become subject to more onerous government regulation;

• Compliance with existing or enhanced trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers;

• Changes in tax laws or regulations that are applied adversely to us or our customers;

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Risks related to our intellectual property, information technology and data security:

• Our success will depend on our ability to obtain, maintain and protect our intellectual property rights;

• Our ability to obtain, maintain and protect our intellectual property rights;

• Our dependence on certain intellectual property rights that are licensed to us.

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• The volatility of the market price of our Class A common stock.

The summary risk factors described above should be read together with the text of the full risk factors below in this section entitled “ Risk Factors ” and the other information set forth in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC.

The summary risk factors described above should be read together with the text of the full risk factors below in this section titled “ Risk Factors ” and the other information set forth in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC.

The risks summarized above or described in full below are not the only risks that we face.

Additional risks and uncertainties not precisely known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and future growth prospects.

Risks related to our business and industry

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These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to:

• delays in, changes in terms of, or reduction of governmental funding of life sciences research, generally, or of research projects which could utilize our solutions, specifically, or other changes that impact budgets, budget cycles or seasonal or other spending patterns of our customers, including potential freezes of, reductions in or reduced availability of National Institutes of Health (NIH) or other funding for our customers;

• modifications to our commercial processes and organization, including changes we made to our commercial processes and organization to increase effectiveness;

• the timing and magnitude of our price changes, including the effects of potentially lowering prices for certain of our products in 2025;

• the effects of competition, including competition with both new and existing companies offering products that compete or intend to compete with our products and may offer performance, price or other advantages as well as researchers developing their own solutions;

• enhanced trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers, including retaliatory measures taken by trade partners;

• the effects of inflation on us or our customers, manufacturers and suppliers, including increases in the cost of labor and materials, including as a result of tariffs imposed by the United States which are currently, or in the future, under consideration, proposed or enacted;

• excess capacity expenses and inventory write-downs;

• fluctuations in demand for our products, which may vary significantly, our ability to accurately forecast demand, and our ability to increase penetration with our existing customers and to expand to new customers;

• changes in general market conditions and other factors, including factors unrelated to our operating performance or the performance of our competitors;

• the success of our recently introduced and recently announced products and new versions of existing products, and our ability to generate revenue for such products, and the introduction of new products or product enhancements by us or others in our industry including the timing of such introductions;

• risks related to our business and demand for our products in China and elsewhere in the Asia-Pacific region, including competition or other factors;

• the timing and magnitude of our price changes;

• changes in volume and product mix, particularly from products with lower gross margins than other products that we sell, or changes in costs related to our instruments and consumables, including products which incur royalty payment obligations at higher rates than other products we sell;

• changes in governmental funding of life sciences research and development or other changes that impact budgets, budget cycles or seasonal or other spending patterns of our customers;

• changes in the competitive environment, including new product introductions, new versions of existing products with additional capabilities and features or pricing changes;

• disruptions in customers’ on-going experiments or interruptions in the ability of our customers to complete research projects;

• investment decisions we make with respect to the allocation of our resources, including regarding product development or to support our commercial organization;

• differences in purchasing patterns across our customer base or across our three platforms and variances in consumables spending for each of our platforms;

• our ability and the ability of our partners to successfully manufacture our instruments and consumables in necessary quantities at necessary quality, including due to the impacts of supply chain disruptions, logistics, shipping and other distribution disruptions and labor shortages;

• the timing and amount of expenditures that we may incur to acquire, develop or commercialize additional products and technologies or for other purposes;

• shortages, delays, production problems, distribution and quality issues with the materials we purchase for manufacturing, which could impact our ability to manufacture and ship our instruments, consumables and related components;

• our inability or the inability of our customers to source our products or necessary equipment, components and materials used in our products or in conjunction with our products because of issues with suppliers, including supply chain disruptions, logistics, shipping and other distribution disruptions and labor shortages;

• excess capacity expenses and higher inventory write-downs;

• our dependence and the dependence of our customers on single source and sole source suppliers for some of the equipment, components and materials used in our products or in conjunction with our products;

• the effects of inflation on us or our customers, manufacturers and suppliers, including increases in the cost of labor and materials;

• risks related to our business and demand for our products in China and elsewhere in the Asia-Pacific region, including competition or other factors;

• differences in purchasing patterns across our customer base or across our two portfolios and variances in consumables spending for each of our portfolios;

• higher than anticipated warranty costs;

• the timing and amount of expenditures that we may incur to acquire, develop or commercialize additional products and technologies or for other purposes;

• the timing and amount of expenditures (including success fees) related to litigation, as well as the outcomes of and related rulings in the litigation and administrative proceedings which may vary substantially from quarter to quarter;

• the outcome of any current or future litigation or governmental investigations involving us or other third parties;

• our inability or the inability of our customers to source our products or necessary equipment, components and materials used in our products or in conjunction with our products, including shortages of consumables or other components and materials used in gene sequencing (which occurred in 2024), because of issues with suppliers, including supply chain disruptions, logistics, shipping and other distribution disruptions and labor shortages;

• changes in customer payment timing trends including potential increases in the days sales outstanding (DSO);

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• difficulties encountered by our commercial carriers in delivering our instruments or consumables, whether as a result of external factors such as weather, customs or import processes, transportation bottlenecks, port lockdowns or slowdowns or fuel shortages or internal issues such as labor disputes or difficulties hiring and retaining adequate staffing;

• disruptions in customers’ on-going experiments or interruptions in the ability of our customers to complete research projects;

• reductions in or other difficulties relating to staffing, capacity, shutdowns or slowdowns of laboratories and other institutions, such as reduced or delayed spending on instruments or consumables due to reductions in or other difficulties relating to staffing, capacity, shutdowns or slowdowns of laboratories and other institutions in which our instruments and solutions are used;

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Such a stock price decline could occur even when we have met or exceeded any previously publicly stated guidance we may provide.

Our business is significantly dependent on researchers who rely heavily on government funding, including NIH grants, and any reduction in, modification of the terms of or delay in such funding could adversely affect our sales and financial performance.

A substantial portion of our revenue is derived from sales to academic institutions, research organizations and other entities that rely heavily on government funding, including grants from the National Institutes of Health (NIH) and other government agencies.

Government funding is subject to annual appropriations and budgetary constraints, and there is no assurance that such funding will continue at current levels or at all.

Changes in government budgets, priorities or policies could result in reduced or delayed funding for our customers' research.

If researchers experience reductions or delays in government funding, or modifications of the terms or conditions of funding, they may reduce or delay their purchases of our products and services, which could have a material adverse effect on our business, financial condition and results of operations.

Any changes in government regulations or policies that affect the terms of research funding could impact our customers’ ability to secure funding and, consequently, their demand for our products and services.

For example, on February 7, 2025, the NIH imposed a standard indirect rate of 15% across all NIH grants for indirect costs, defined as “facilities” and “administration,” in lieu of a separately negotiated rate for indirect costs in every grant.

Indirect costs represented $9 billion of the $35 billion in grants awarded by the NIH in 2023, which is more than 25% of total grant dollars awarded by the NIH.

Research institutions may face increased financial pressure due to this change or any future caps on indirect costs.

The imposition of this cap, or other changes to grant terms and conditions, could lead to reduced funding available for purchasing research supplies and equipment, thereby negatively impacting our sales.

In addition, various state, federal and international agencies that provide grants and other funding may be subject to budgetary or other constraints that could result in spending reductions, reduced grant making, reduced allocations or budget cutbacks, which could jeopardize the ability of researchers to purchase our products.

For example, congressional appropriations to the NIH have generally increased year-over-year in recent years, but the NIH also experiences occasional year-over-year decreases in appropriations.

There is no guarantee that NIH appropriations will not decrease in the future.

For example, in January 2025 the Executive Office of the President’s Office of Management and Budget (OMB) issued a memorandum “temporarily paus[ing] all activities related to obligation or disbursement of all Federal financial assistance...” which may have the effect of preventing customers or potential customers from accessing grants or funding.

Further, in January 2025 a number of scientific gatherings and panels across federal science agencies, including several meetings of NIH study sections which review applications for fellowships and grants, were canceled pursuant to agency notices.

These meetings can be hard to reschedule and can substantially delay grant approvals.

Any cancellations or pauses in the ability of NIH or other funding bodies to make and execute decisions to fund research which uses our products could delay or prevent researchers from purchasing our products, negatively impacting our financial results.

A decrease in the amount of, or delay in the approval of, appropriations to or disbursements from the NIH or other funding organizations, such as the Medical Research Council in the United Kingdom, could result in less funding available for life sciences research.

Reductions, delays or modified grant terms could also result in a decrease the aggregate amount of grants awarded or funding disbursed for life sciences research or the redirection of existing funding to other projects or priorities, any of which in turn could cause our customers and potential customers to reduce or delay purchases of our products.

Our operating results may fluctuate substantially due to any such reductions and delays.

Any decrease in our customers’ budgets or expenditures, or in the size, scope or frequency of their capital or operating expenditures could materially and adversely affect our business, operating results and financial condition.

Our business currently depends significantly on research and development spending by research institutions, a reduction in which could limit demand for our products and materially and adversely affect our business and operating results.

A large portion of our revenue comes from sales of Chromium, Visium and Xenium products to research institutions.

As a result, the demand for our products will depend upon research priorities and purchasing patterns of these customers, the ability of such customers to adequately staff, access and utilize labs and conduct research, the research and development budgets of these customers and the ability of such customers to receive funding for research, all of which are impacted by factors beyond our control, such as:

• decreases or delays in funding of research and development;

• changes in, restrictions upon, availability of, delays or interruptions to funding or other incentives for our customers including administrative or other delays in funding or incentive award processes, changes in the amount of funds or other incentives allocated to different areas of research, changes that have the effect of increasing the length of the funding or incentive award process;

• competitor product offerings or pricing;

• changes in our customers' research priorities;

• macroeconomic conditions including regional, national or global economic downturns, inflation, interest rate or currency fluctuations, trade policies and tariffs, regulatory changes, political instability, labor market conditions, supply chain disruptions and technological changes;

• risks related to our business in China and elsewhere in the Asia-Pacific region, including macroeconomic conditions, local competition or other factors:

• scientists’ and customers’ opinions of the utility of our products or services;

• our inability or the inability of our customers to source products or necessary equipment, components and materials used in our products or in conjunction with our products because of issues with suppliers or distribution networks, including supply chain disruptions, logistics, shipping and other distribution disruptions and labor shortages;

• citation of new products, new versions of existing products or services in published research;

• changes in the regulatory environment;

• differences in budgetary cycles;

• delays in spending while customers or potential customers assess and validate newly introduced products or versions of our products prior to purchasing;

• market-driven pressures to consolidate operations and reduce costs;

• reductions in or other difficulties relating to staffing, capacity, slowdowns or shutdowns of laboratories or other institutions in which our solutions are used, including reduced or delayed spending on instruments or consumables due to reductions in or other difficulties relating to staffing, capacity, slowdowns or shutdowns of laboratories or other institutions in which our solutions are used;

• market acceptance of relatively new technologies, such as ours.

Our industry is highly competitive.

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In addition, they may have greater name recognition than we do.

Other competitors are in the process of developing novel technologies which may lead to products that rival or replace our products.

Established companies with multiple product lines may give away or sell products at a significant discount that compete with ours in order to drive adoption and usage of other products they sell.

If we are forced to reduce the prices on our products in response, it could negatively impact our revenue and financial results.

In addition, other competitors are in the process of developing novel technologies which may lead to products that rival or replace our products.

We expect new competitors to continue to emerge and the intensity of competition with both new and existing competitors to continue to increase.

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Any failure to compete effectively could materially and adversely affect our business, financial condition and operating results.

Price reductions, discounting or future price changes may negatively impact our financial results if we are unable to achieve offsetting benefits.

We have recently taken a number of steps to lower the cost of single cell experiments through the introduction of new products and new versions of existing products that deliver lower price per cell and per sample and we may in the future choose to implement strategic price reductions or discounting of our products and services.

While we believe these actions will drive increased customer adoption, they will also result in lower revenue per unit sold.

While we plan to offset these reductions through increased sales volume, operational cost savings and improved operating leverage, our ability to do so will be dependent upon whether our customers increase their usage of our products, and there can be no assurance that these offsetting measures will be successful or will occur in the same time period as the price reductions.

We may experience corresponding increases in demand or customers may push out purchases to future periods in anticipation of future product introductions or price reductions or discounting, which would negatively impact our financial results.

If we are unable to fully offset the impact of lower cost of experiments or lower pricing or discounting through these initiatives, our revenue, gross margins, operating income and overall financial results could be adversely affected.

The negative impact could be particularly pronounced if:

• the anticipated increase in sales volume fails to materialize or is lower than expected;

• our cost reduction and efficiency initiatives do not generate the projected savings;

• competitive pressures require us to implement price reductions more extensively or rapidly than planned;

• we experience delays in implementing operational improvements and cost control measures;

• macroeconomic conditions or other factors negatively impact customer demand or purchasing patterns.

The success of our pricing strategy depends on numerous factors, many of which are outside our control.

If we are unable to successfully execute our pricing strategy while maintaining our profitability, our business, financial condition, results of operations and prospects may be materially and adversely affected.

Enhanced trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers may materially harm our business.

We are continuing to expand our international operations as part of our growth strategy and have experienced an increasing concentration of sales in certain regions outside the United States, including in the Asia-Pacific region.

For the years ended December 31, 2024 and 2023, sales outside of North America constituted a substantial component of our total sales revenue and our largest markets outside of North America were China and Germany.

There is currently significant uncertainty about the future relationship between the United States and its trade partners, most significantly China, with respect to trade policies, treaties, government regulations and tariffs and the United States has stated it is considering tariffs or other restrictions on goods from a number of other countries.

This may subject our business to retaliatory measures taken by trade partners, including China or other countries which would have an adverse impact on our financial results.

Such measures could include restrictions on our ability to sell or import our products into other countries or increase the prices of our products.

For example, in February 2025, the United States increased tariffs on goods imported into the United States from China by 10%, and China responded by imposing a 15% tariff on coal and liquified natural gas products and a 10% tariff on crude oil, agricultural machinery and certain automobiles.

These tariffs could increase our costs, negatively impacting our financial results.

It is possible further tariffs may be imposed that could cover imports of the export or sale of our products.

Our business may be adversely impacted by retaliatory trade measures taken by trade partners, which could materially harm our business, financial condition and results of operations.

The nature of the dispute between the United States and its trade partners is evolving and additional products such as ours could become subject to tariffs, which could adversely affect the marketability of our products and our results of operations.

Further, the continued threats of tariffs, trade restrictions and trade barriers could have a generally disruptive impact on the global economy, including increases in inflation and interest rates, and, therefore, negatively impact our sales.

Given the relatively fluid regulatory environment between

the United States and its trade partners and uncertainty how each will act with respect to tariffs, international trade agreements and policies, there could be additional tax or other regulatory changes in the future.

Any such changes could directly or indirectly adversely impact our financial results and results of operations.

In February 2025, China’s Ministry of Commerce (MOFCOM) added Illumina, Inc., the largest sequencer manufacturer, to MOFCOM’s Unreliable Entity List, potentially in response to tariffs imposed by the United States.

In connection with this designation, MOFCOM may impose restrictions or prohibitions on Illumina’s China-related import or export activities, investments in China, relevant personnel or transportation entering China, work permits, stay or residence status, fines or other penalties.

Our Chromium and Visium products are often utilized with Illumina sequencers by researchers conducting single cell or spatial experiments.

As a result of Illumina’s designation by MOFCOM as an “unreliable entity,” it may now be difficult or impossible for certain users or potential users of our products in China to access or utilize Illumina’s products, including in connection with planned or potential Chromium or Visium experiments, and our business in China may suffer as a result.

If China were to expand the Unreliable Entity List to include other life sciences companies, including 10x, our business in China, which represented approximately ten percent of our total revenue in 2024, could be materially impacted or eliminated.

In recent years, the United States government has a renewed focus on export control matters.

For example, the Export Control Reform Act of 2018 and regulatory guidance thereunder have imposed additional controls and may result in the imposition of further additional controls, on the export of certain “emerging and foundational technologies.” Our current and future products may be subject to these heightened regulations, which could increase our compliance costs.

Trade actions, including the imposition of new, or changes in existing, tariffs, trade restrictions, trade barriers, export controls, antitrust investigations or retaliatory measures taken by trade partners in response to U.S.

trade practices could adversely impact our business, financial condition and results of operations.

Our future success is dependent upon our ab ility to increase penetration in our existing customer segments.

Our customer base includes academic, government, biopharmaceutical, biotechnology and other institutions.

Our success will depend upon our ability to increase our penetration among these customers, to expand to new customers and to expand our opportunities by developing and marketing new products as well as new versions of and new applications for existing products.

We regularly introduce new versions of existing products, and our future success will partially depend on our ability to commercialize these products and gain customer acceptance of these products.

We may not be able to further penetrate our existing customers or expand to new customers.

Any failure to increase penetration with existing customers and expand to new customers could adversely impact our operating results.

Our past or future efforts to maintain and increase the effectiveness of our commercial organization may not succeed.

We have in the past needed to, and may in the future need to, identify, adopt and adhere to new or modified commercial processes to maintain and increase the effectiveness of our commercial organization.

In 2024, we modified our commercial processes and organization to increase effectiveness.

While we believe such changes will serve the long term best interests of the Company, we believe that in the short term these changes negatively impacted our financial results in 2024 and may continue to negatively impact our results in the future.

There is no guarantee that the modifications we have made to our commercial processes and organization will result in increased effectiveness.

If the modifications to our commercial processes and organization do not result in increased effectiveness, our business, results of operations and growth prospects may be harmed.

Additionally, we may face difficulties identifying, recruiting, training and retaining qualified personnel to staff and manage our commercial organization.

Certain of our products, certain customers or certain segments, including biopharmaceutical or translational segments, may require personnel with different skills or experience than those we currently employ in our commercial organization.

For example, our restructuring left a number of territories without sales coverage, and we are hiring to fill those positions.

We are also in the process of building a team of specialized commercial staff focused on sales of our Xenium products.

If we are unable to quickly fill vacant roles and ramp new personnel, our financial results may be negatively impacted.

The size of the market for our solutions may be smaller than estimated and new opportunities may not develop as quickly as we expect, or at all, limiting our ability to successfully sell our solutions.

The demand for genomics products is new and evolving, making it difficult to predict with any accuracy the total potential demand for our current and future solutions.

Our estimates of the annual total addressable market for our current and future solutions are based on a number of internal and third-party estimates and assumptions.

In particular, our estimates are based on our expectations that researchers seeking life sciences research tools and technologies will view our solutions as competitive alternatives to, or better options than, existing tools and technologies, researchers who already own such existing tools and technologies will recognize the ability of our solutions to complement, enhance and enable new applications of their current tools and technologies and find the value proposition offered by our solutions convincing enough to purchase our solutions in addition to the tools and technologies they already own and the trends we have seen among our customers with respect to placements of our instruments are representative of the broader demand.

Underlying each of these expectations are a number of estimates and assumptions, including the assumption that government or other sources of funding will continue to be available to life sciences researchers at times and in amounts necessary to allow them to purchase our solutions.

The demand for genomics products continues to evolve, making it difficult to predict with any accuracy the total potential demand for our solutions.

Our estimates of the annual total addressable market and annual serviceable addressable market for our current and future solutions are based on a number of internal and third-party estimates and assumptions.

In particular, our market estimates are based on assumptions regarding the size of the global life sciences research tools market, the number of labs and companies participating in such market and currently using single cell, spatial or adjacent research techniques and the anticipated spend levels of such potential customers were they to adopt our solutions.

Underlying our market estimates are a number of

estimates and assumptions, including the assumption that government or other sources of funding will continue to be available to life sciences researchers at times and in amounts necessary to allow them to purchase our solutions.

In addition, our growth strategy involves launching new solutions and expanding sales of existing solutions into new areas in which we have limited or no experience.

We also expect to pursue additional opportunities that will further expand our opportunity, including new potential applications of our single cell, spatial and in situ technologies in the future.

We also expect to pursue additional opportunities that will further expand our opportunity, including new products and new potential applications of our single cell, spatial and in situ technologies in the future.

Sales of new or existing solutions into new opportunities may take several years to develop and mature and we cannot be certain that these opportunities will develop as we expect.

For example, new life sciences technology is often not adopted until a sufficient amount of research conducted using such technology has been published in peer-reviewed publications.

Because there can be a considerable delay between the launch of a new life sciences product or a new application of an existing life science product and publication of research using such product, new life sciences products or applications do not generally contribute a meaningful amount of revenue in the year they are introduced.

In certain situations, new life sciences products or applications, even if sufficiently covered in peer-reviewed publications, may not be adopted until the consistency and accuracy of such technology, method or device has been proven.

As a result, the sizes of the annual total addressable market for new products and applications are even more difficult to predict.

While we believe our assumptions and the data underlying our estimates of the total annual addressable market for our solutions 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 annual total addressable market for our solutions may be incorrect.

Because there can be a considerable delay between the launch of a new life sciences product, new version or a new application of an existing life science product and publication of research using such product, new life sciences products, versions or applications do not generally contribute a meaningful amount of revenue in the year they are introduced.

In certain situations, new life sciences products, versions or applications, even if sufficiently covered in peer-reviewed publications, may not be adopted until the consistency and accuracy of such technology, method or device has been proven.

As a result, the sizes of the commercial opportunities available for new products, versions and applications are even more difficult to predict.

While we believe our assumptions and the data underlying our market estimates for our solutions 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 annual total addressable market and annual serviceable addressable market for our solutions may be incorrect.

The future growth of our current and future solutions depends on many factors beyond our control including, among other factors, recognition and acceptance of our solutions by the scientific community as best practice and the growth, prevalence and costs of competing products and solutions.

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If demand for our current and future solutions are smaller than estimated or do not develop as we expect, our growth may be limited and our business, financial condition and operational results may be adversely affected.

Our future success is dependent upon our ab ility to increase penetration in our existing customer segments and to maintain and increase the effectiveness of our commercial organization.

Our customer base includes academic, government, biopharmaceutical, biotechnology and other institutions.

We regularly introduce new versions of existing products, and our future success will partially depend on our ability to commercialize these products.

We may not be able to further penetrate our existing customers or expand to new customers.

Any failure to increase penetration with existing customers and expand to new customers could adversely impact our operating results.

Certain of our products, certain customers or certain segments, including biopharmaceutical or translational segments, may require commercial team or other personnel with different skills or experience than those we currently employ in our commercial organization.

We may also need to identify, adopt and adhere to new or modified commercial processes to maintain and increase the effectiveness of our commercial organization.

If we are unsuccessful in adopting and adhering to such commercial processes, or in identifying, recruiting, training and retaining qualified personnel to staff and manage our commercial organization including personnel holding organizational, regional or other leadership positions, our business, results of operations and growth prospects may be harmed.

We may not be able to develop new products, enhance the capabilities of our existing products to keep pace with rapidly changing technology and customer requirements or successfully manage the transition to new product offerings, any of which could have a material adverse effect on our business and operating results.

Our success depends on our ability to develop new products and applications for our technology while improving the performance and cost-effectiveness of our existing products, in each case in ways that address current and anticipated customer requirements.

Our products generate large-scale complex data which requires advanced analytics to interpret.

Our products generate highly complex data that can present significant challenges in terms of understanding and interpretation, particularly for customers who may lack bioinformatics expertise or dedicated computational resources.

The advanced nature of the data generated by our products requires a certain level of expertise to analyze and interpret effectively.

Some of our customers may lack the necessary technical skills or resources to fully understand and utilize the data.

As a result, they may experience difficulties in deriving actionable insights, which could delay additional usage of our products or diminish their perceived value.

To address the complexity of data, we may need to provide extensive training and support to our customers.

Despite these investments, there is no guarantee that customers will achieve the necessary level of proficiency or efficiency in analyzing data.

Providing ongoing customer education and technical assistance may increase operational costs, and place additional demands on our customer support teams.

If customers struggle to extract meaningful insights from their data, this could reduce the perceived value of our solutions and slow adoption of our solutions.

If customers encounter difficulties with data analysis, it could negatively impact their satisfaction with our products, lead to delays in reordering our products or services desire or lead them to decide not to purchase additional products or services, any of which would negatively impact our financial results.

Our failure to effectively manage product transitions or accurately forecast customer demand could result in excess or obsolete inventory and resulting charges.

Because the market for our products is characterized by rapid technological advances, we frequently introduce new products or new versions of existing products designed for improved ease-of-use, improved performance or additional features and functionality.

At times, we preannounce products and services, in some cases before such products and services have been fully developed or tested, and risk failing to meet expectations when and if such products and services become available.

The risks associated with the introduction of new products or new versions include the difficulties of predicting customer demand and effectively managing inventory levels to ensure adequate supply of the new product or new versions and avoiding excess supply of the legacy product, including legacy versions of our instruments which are supplanted by new versions.

For example, we recorded charges of $11.3 million and $7.8 million in 2024 and 2023 related to excess and obsolete inventory.

At times the risk that we will not be able to source the necessary equipment, components and materials to manufacture our products led us, and may

again lead us, to carry higher inventory.

Further, differences in purchasing patterns across our customer base could negatively impact our ability to accurately forecast demand.

We may strategically enter into non-cancelable commitments with vendors to purchase materials for our products in advance of demand to take advantage of favorable pricing, address concerns about the availability of future supplies or build safety stock to help ensure customer shipments are not dela yed should we experience higher than anticipated demand for materials with long lead times.

During periods of decreased demand, which in the past have occurred and which may occur again, these non-cancelable commitments could result in additional inventory-related charges.

These factors may result in excess or obsolete inventory charges adversely impacting our financial results and condition.

We may be unable to consistently manufacture our instruments and consumables to the necessary specifications or in quantities necessary to meet demand at an acceptable cost or at an acceptable performance level.

Our products are integrated solutions with many different components that work together.

As such, a quality defect in a single component can compromise the performance of the entire solution.

Certain of our consumables are manufactured at our Pleasanton, California, Singapore, Taiwan and other facilities using complex processes, sophisticated equipment and strict adherence to specifications and quality systems procedures.

Our Chromium, Visium CytAssist and Xenium instruments are manufactured by our third-party manufacturers at their facilities.

In order to successfully generate revenue from our products, we need to manufacture products that meet our specifications before we allow them to be shipped and to supply our customers with products that meet their expectations for quality and functionality in accordance with established specifications.

In order to ensure we are able to meet these expectations, our Pleasanton, California, Singapore and Taiwan manufacturing facilities, as well as the facilities of our third-party manufacturers, have obtained International Organization for Standardization (“ISO”) quality management certifications and employ other quality control measures.

On occasion, our customers have experienced quality control and manufacturing defects and may again in the future.

Additionally, as we continue to evolve and introduce new products and new versions of existing products, and as our products incorporate increasingly sophisticated technology, it will be increasingly difficult to ensure our products are produced in the necessary quantities without sacrificing quality and in the necessary timeframes.

There is no assurance that we or our third-party manufacturers will be able to continue to manufacture our products so that they consistently achieve the product specifications, quality and volumes that meet our requirements or our customers' expectations.

Certain of the raw and other materials we use and certain of our consumables have a shelf life, after which their performance is not ensured.

In the past the expiration of raw and other materials have increased, and may in the future increase, our operational costs and cause delays in manufacturing adequate volumes of our products within the timeframes required.

Shipments of defective instruments or consumables to customers resulting in recalls and warranty replacements have increased, and may in the future increase, our costs, and depending upon current inventory levels and the availability and lead time for additional inventory, could lead to availability issues.

Any design issues, unforeseen manufacturing problems, such as contamination of our third-party manufacturer's facilities, equipment malfunctions, aging components, quality issues with components and materials sourced from third-party suppliers, or failures to strictly follow procedures or meet specifications, may have a material adverse effect on our brand, business, financial condition and operating results and could result in us or our third-party manufacturers losing ISO quality management certifications.

If we or our third-party manufacturers fail to manufacture products without defects that meet our specifications or maintain ISO quality management certifications, our customers might choose not to purchase products from us.

Furthermore, we or our third-party manufacturers may not be able to increase manufacturing to meet anticipated demand or may experience downtime.

In addition, as we increase manufacturing capacity, we have needed, and in the future may need, also to make corresponding improvements to other operational functions, such as our customer service and billing systems, compliance programs and our internal quality assurance programs.

We have needed and may in the future need additional equipment, manufacturing and warehouse space and trained personnel to process higher volumes of products.

We cannot assure you that such increases in scale, related improvements and quality assurance will be successfully implemented or that equipment, manufacturing and warehouse space and appropriate personnel will be available or that they will realize their intended benefits.

As we develop additional products, we may need to bring new equipment online, implement new systems, technology, controls and procedures and hire personnel with different qualifications.

Our ability to increase our manufacturing capacity at our Pleasanton, California, Singapore, Taiwan and other locations is complicated by the use of our proprietary equipment that is not readily available from third-party manufacturers.

The risk of manufacturing defects or quality control issues is generally higher for new products and new versions of existing products, whether produced by us or a third-party manufacturer, products that are transitioned from one manufacturer to another, particularly if manufacturing is transitioned or initiated with a manufacturer we have not worked with in the past, and products that are transferred from one manufacturing facility to another.

Our current product roadmap calls for the introduction of new products and new versions of existing products, which may require that we utilize manufacturers with which we have little or no prior manufacturing experience, which could increase the risk of manufacturing defects or quality control issues.

The expansion of our manufacturing capabilities has increased and in the future could increase the risk of manufacturing defects or quality control issues in the consumables we manufacture.

We and our third-party manufacturers may not be able to launch new products or new versions of existing products on time, transition manufacturing of existing products to new manufacturers, transition our manufacturing capabilities to a new location or transition manufacturing of any additional consumables in-house without manufacturing def ects or other issues.

An inability to manufacture products and components that consistently meet specifications, in necessary quantities and at commercially acceptable costs will have a negative impac t and may have a material adverse effect on our business, financial condition and results of operations.

Our instruments, consumables and related components are specialized, complex and difficult to manufacture.

We could experience production problems that impact our ability to manufacture and ship our instruments, consumables and related components, which would materially and adversely affect our business, financial condition and results of operations.

The manufacturing processes we and our third-party manufacturers use to produce our instruments, consumables and related components are specialized and highly complex and require high-quality components.

We may have quality variations, supply issues, backorders, delays, shortages or production difficulties of needed components and may require components that are difficult to obtain or manufacture in necessary quantities and at necessary quality, in a timely manner or in accordance with regulatory requirements.

Such issues, issues with our manufacturing processes or the manufacturing processes of our third-party manufacturers, shipping issues, inaccurate demand forecasts or other production issues could result in our inability to produce our products in sufficient volumes and at sufficient quality to meet demand, supply our products to our customers and for our research and development needs, backorders, insufficient inventory, excess inventory, shipping delays, product deficiencies or other operational failures.

For example, in the past the COVID-19 pandemic disrupted air, sea and other travel in the United States and globally.

Similar disruptions in the future could reduce or eliminate our ability to receive components or supply our customers.

Many other factors could cause production or shipping delays or interruptions, including difficulties in transporting materials, equipment, raw material or other shortages, raw material failures, spoilage, equipment malfunctions, facility contamination, labor problems, natural disasters, tariffs, trade disputes and other trade restrictions, infectious disease, conflict, war, civil unrest, epidemics or pandem ics , disruption in utility services, terrorist activities or circumstances beyond our control.

Additionally, we and our third-party manufacturers may encounter problems in hiring and retaining the experienced specialized personnel needed to develop and operate our manufacturing processes or the manufacturing processes of our third-party manufacturers, which could result in backorders, shortages, delays in our production or difficulties in maintaining compliance with applicable regulatory requirements.

These issues, or any other problems with the production or timely manufacture and shipment of our instruments, consumables and related components, could materially harm our business, financial condition and results of operations.

Undetected errors or defects in our solutions could harm our reputation and decrease market acceptance of our solutions.

Our instruments and consumables, as well as the software that accompanies them, have in the past and may again in the future contain undetected errors or defects due to design, manufacturing, delivery or other issues.

Disruptions or other performance problems with our products or software may adversely impact our customers’ research or business, harm our reputation and result in reduced revenue or increased costs associated with product repairs or replacements.

If that occurs, we may also incur significant costs, the attention of our key personnel could be diverted or other significant customer relations problems may arise.

We have and may again in the future also be subject to warranty claims related to errors or defects in our solutions, and in the future we may be subject to breach of contract for damages related to such errors or defects.

We may not be able to develop new products or new versions of existing products, enhance the capabilities of our existing products to keep pace with rapidly changing technology and customer requirements or successfully manage the transition to new product offerings, any of which could have a material adverse effect on our business and operating results.

Our success depends on our ability to develop new products.

new versions and applications for our technology while improving the performance and cost-effectiveness of our existing products, in each case in ways that address current and anticipated customer requirements.

Such success is dependent upon several factors, including feasibility, competition among our products for Company resources and in customer purchasing decisions, functionality, competitive pricing and integration with existing and emerging technologies.

The development timelines of certain potential new products may be delayed or precluded due to prioritization of other new products.

The development timelines of certain potential new products or new versions may be delayed or precluded due to prioritization of other new products or versions.

New technologies, techniques or products offered by others could emerge that might offer better combinations of price and performance or better address customer requirements as compared to our current or future products or in some cases our own new products or new versions of existing products could erode sales or supplant the demand for other products we sell.

In addition, while we have invested, and expect to continue to invest, significantly in research and development and the commercialization of both new products and improved versions of existing products, investment decisions we make or have made with respect to the allocation of our substantial but finite resources, including regarding product development or to support our commercial organization, may not be successful or realize their anticipated benefits.

The timing of our price changes or introduction of new products or new product capabilities could negatively impact our business.

Our customers may pull in purchasing decisions in advance of announced future price increases or push out purchases to future periods in anticipation of future price reductions, which could cause fluctuations in our operating results.

Current and potential customers for our current and future products, including customers interested in genomics, single cell analysis, spatial analysis or in situ solutions, are accustomed to rapid technological change and innovation.

In addition, while we have invested, and expect to continue to invest, significantly in research and development and the commercialization of both new products and new versions of existing products, investment decisions we make or have made with respect to the allocation of our substantial but finite resources, including regarding product development or to support our commercial organization, may not be successful or realize their anticipated benefits.

Existing and potential customers for our current and future products, including customers interested in genomics, single cell analysis, spatial analysis or in situ solutions, are accustomed to rapid technological change and innovation.

Competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements.

Due to the significant lead time involved in bringing a new product to market, we are required to make a number of assumptions and estimates regarding the technical or commercial feasibility of a new product, including assumptions and estimates regarding our or our partners’ ability to design and manufacture potential solutions, the biological analytes that researchers will want to measure, the appropriate method of measuring such analytes, how researchers intend to use the resulting data and the scope and type of data that will be most useful to researchers.

Due to the significant lead time involved in bringing a new product or version to market, we are required to make a number of assumptions and estimates regarding the technical or commercial feasibility of a new product or version, including assumptions and estimates regarding our or our partners’ ability to design and manufacture potential solutions, the biological analytes that researchers will want to measure, the appropriate method of measuring such analytes, how researchers intend to use the resulting data and the scope and type of data that will be most useful to researchers.

As a result, it is possible that we may fail to introduce certain products which we intended (and in some cases may have publicly announced our intention) to bring to market or we may introduce a new product or a new version of an existing product that fails to meet the performance or price expectations of our customers, uses technologies or methods of analysis that have been displaced by the time of launch, competes with one or more of our other products in a way which harms our business, addresses an opportunity that no longer exists or is smaller than anticipated, targets biological analytes or produces data that provides less utility to researchers than anticipated or otherwise is not competitive at the time of launch.

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Our revenues may suffer while customers transition their research to utilize our new products or new versions of existing products, as such transitions can be lengthy and require significant time to reach purchasing levels equivalent to those of our existing products.

We face significant competition from both established and early-stage companies, including on price, and the timing and magnitude of our price changes could adversely affect our business, financial condition or results of operations.

Our ability to mitigate downward pressure on our selling prices will be dependent upon our ability to maintain or increase the value we offer to researchers.

If we decrease prices, we may not see corresponding increases in demand.

By contrast, if we increase prices, such increases in our prices could result in volume losses as customers purchase fewer units.

If such losses are greater than expected, if we lose existing or potential customers due to price increases, if we decrease prices and demand does not increase in line with our expectations, if we incur substantial expenses or losses associated with unsuccessful product development or launch activities, if the costs to develop, manufacture or sell a new product or new version of an existing product compare unfavorably to other products we sell (including due to incurring royalty payment obligations at higher rates than other products we sell) or if we experience a lack of market acceptance of our new products or new versions of existing products, such events could adversely affect our business, financial condition or results of operations.

Because our solutions are used with other products, including third-party sequencers in the case of our Chromium and Visium solutions, to conduct an experiment, we also expect to face competition from these complementary products, either directly or indirectly, as researchers and labs look to reduce the total cost of any given experiment.

For example, if a third-party sequencer manufacturer were successful in vertically integrating their product to provide functionality equivalent to our instruments, they potentially could be able to deliver a solution that is capable of running comparable experiments with a total experiment cost that would be less than the cost of running such experiments using our products together with third-party sequencers.

Conversely, if genome sequencing falls out of favor as a preferred approach for genomic research, whether through the development of alternative solutions or real or perceived problems with sequencing itself or if our products are not compatible with third-party sequencers used by our customers or potential customers, the utility of our products which are used in conjunction with third-

party sequencers could be significantly impacted.

Because our Chromium and Visium solutions are used with third-party sequencers to conduct an experiment, we also expect competition from third-party sequencer manufacturers as researchers and labs look to reduce the total cost of any given experiment.

For example, if a third-party sequencer manufacturer were successful in providing functionality akin to our products, they potentially could be able to deliver a solution that is capable of running comparable experiments with a total experiment cost that would be less than the cost of running such experiments using our products together with third-party sequencers.

The integration of competing products with sequencing products could also create a “stickiness” effect advantaging such a third-party sequencer manufacturer, where a potential 10x customer could choose a competing product due to perceived or actual ease of use, simplified workflow or lower overall cost.

Conversely, if genome sequencing falls out of favor as a preferred approach for genomic research, whether through the development of alternative solutions or real or perceived problems with sequencing itself or if our Chromium and Visium products are not compatible with third-party sequencers used by our customers or potential customers, the utility of our products which are used in conjunction with third-party sequencers could be significantly impacted.

It is critical to our success that we anticipate changes such as these in technology and customer requirements and successfully introduce new, enhanced and competitive technologies to meet our customers’ and prospective customers’ needs on a timely and cost-effective basis.

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The success of any enhancement to our solutions depends on several factors, including technical specifications, timely completion and delivery, competitive pricing and features, adequate quality testing, integration with existing technologies and overall market acceptance.

Any new solution that we develop may not be introduced in a timely or cost-effective manner, may contain errors, vulnerabilities or bugs, or may not achieve the market acceptance necessary to generate significant revenue.

Any new solution that we develop

may not be introduced in a timely or cost-effective manner, may contain errors, vulnerabilities or bugs, or may not achieve the market acceptance necessary to generate significant revenue.

If we are unable to successfully develop new solutions, enhance our existing solutions to meet customer requirements or expectations, or otherwise gain market acceptance, our business, results of operations and financial condition could be harmed.

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We aim to create and deliver repeatable, user-friendly, prescriptive approaches to deployment that allow users of all kinds to effectively and easily deploy our solutions, and if we fail to do so, our business and results of operations could be harmed.

The typical development cycle of new life sciences products can be lengthy and complicated and may require new scientific discoveries or advancements and complex technology and engineering.

The typical development cycle of new life sciences products or new versions of existing products can be lengthy and complicated and may require new scientific discoveries or advancements and complex technology and engineering.

Such developments may involve external suppliers and service providers, making the management of development projects complex and subject to risks and uncertainties regarding timing, timely delivery of required components or services and satisfactory technical performance of such components or assembled products.

In the near term, we expect that a large portion of our revenue will continue to be derived from sales of Chromium, Visium and Xenium products, including our instruments and consumables, to research institutions.

• changes in our customers' research priorities;

• decreases in funding of research and development;

• macroeconomic conditions;

• risks related to our business in China and elsewhere in the Asia-Pacific region, including macroeconomic conditions, local competition or other factors:

• scientists’ and customers’ opinions of the utility of our products or services;

• competitor product offerings or pricing;

• changes in, availability of or interruptions to funding or other incentives for our customers, including VAT and import tax exemptions available or potentially available to certain of our customers in China, including administrative or other delays in funding or incentive award processes, changes in the amount of funds or other incentives allocated to different areas of research, changes that have the effect of increasing the length of the funding or incentive award process;

• citation of new products or services in published research;

• changes in the regulatory environment;

• differences in budgetary cycles;

• market-driven pressures to consolidate operations and reduce costs;

• market acceptance of relatively new technologies, such as ours.

In addition, various state, federal and international agencies that provide grants and other funding may be subject to stringent budgetary constraints that could result in spending reductions, reduced grant making, reduced allocations or budget cutbacks, which could jeopardize the ability of these customers, or the customers to whom they provide funding, to purchase our products.

For example, congressional appropriations to the National Institutes of Health (the “NIH”) have generally increased year-over-year in recent years, but the NIH also experiences occasional year-over-year decreases in appropriations.

There is no guarantee that NIH appropriations will not decrease in the future.

A decrease in the amount of, or delay in the approval of, appropriations to NIH or other similar United States or international organizations, such as the Medical Research Council in the United Kingdom, could result in fewer grants benefiting life sciences research.

These reductions or delays could also result in a decrease in the aggregate amount of grants awarded for life sciences research or the redirection of existing funding to other projects or priorities, any of which in turn could cause our customers and potential customers to reduce or delay purchases of our products.

Our operating results may fluctuate substantially due to any such reductions and delays.

Our customers may encounter problems in hiring and retaining the personnel needed to utilize our products or train others to use our products, which could result in decreased demand for our products and could materially and adversely affect our business, operating results and financial condition.

Additionally, the research of our customers often requires long uninterrupted studies performed on a consistent basis over time.

Reductions in or other difficulties relating to staffing, capacity, lab slowdowns or shutdowns or interruptions in the ability of our customers to complete research projects could be particularly damaging to these studies, our customers and our business.

We are significantly dependent upon revenue generated from the sale of our Chromium solutions, and in particular our Single Cell Gene Expression solutions.

We are significantly dependent upon revenue generated from the sale of our Chromium solutions, and in particular our Universal Gene Expression solutions.

We currently generate the majority of our revenue from the sale of our instruments and consumables for our Chromium platform.

There can be no assurance that we will be able to sustain or increase the success we have achieved with our Chromium solutions.

There can be no assurance that we will be able to sustain or increase the success we have historically achieved with our Chromium solutions.

For example, revenue from single cell solutions decreased year-over-year in 2024.

In addition, we may not be able to design future Chromium products that will meet the needs of our customers or become and remain commercially successful.

Our expectations are based on the continued success of our existing solutions and the future success of new products and new versions of existing products that we launch.

If our Chromium solutions decrease or do not increase in line with our expectations, our revenue and financial results could be materially and adversely impacted.

Revenue from our single cell solutions decreased year-over-year in 2024 which adversely impacted our financial results, and if revenue from our single cell solutions continues to decrease, remains flat or does not increase in line with our expectations, our revenue and financial results could be materially and adversely impacted.

Doing business internationally creates operational and financial risks for our business.

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We believe that a significant portion of our future revenue will come from international sources.

We sell directly in North America and certain regions of Europe and have a significant portion of our sales and customer service personnel in the United States.

We sell our products through third-party distributors in Asia, certain regions of Europe, Oceania, Central America, South America, the Middle East and Africa.

We sell directly in North America and certain regions of Asia, Oceania and Europe and have a significant portion of our sales and customer service personnel in the United States.

We sell our products through third-party distributors in certain regions of Asia, Europe, Oceania, Central America, South America, the Middle East and Africa.

As a result, we or our distribution partners may be subject to additional regulations.

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• challenges in staffing and managing foreign operations, including executing our commercial goals and our dependence on our distributors in certain regions;

• tariffs or other restrictions imposed by the United States on goods from other countries and tariffs or other restrictions imposed by other countries on United States goods, or increases in existing tariffs;

• changes in diplomatic and trade relationships, including new or enhanced tariffs or duties, trade protection measures, import or export licensing requirements, trade embargoes and other trade barriers;

• currency fluctuations ;

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• reduced protection for intellectual property rights in some countries and practical difficulties of enforcing intellectual property or other legal rights abroad;

• changes in diplomatic and trade relationships, including new tariffs, trade protection measures, import or export licensing requirements, trade embargoes and other trade barriers;

• deterioration of political relations between the United States and China, the United States and Russia or other nations or political organizations, which could have a material adverse effect on our sales and operations in these countries;

• the potential need for localized software, documentation and post-sales support;

• changes in social, political and economic conditions or in laws, regulations and policies governing foreign trade, manufacturing, development and investment both domestically as well as in the other countries and jurisdictions into which we sell our products, including as a result of the United Kingdom’s exit from the European Union;

• difficulties in obtaining export licenses or in overcoming other trade barriers and restrictions resulting in delivery delays or our inability to manufacture or sell our products in certain countries;

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• increased financial accounting and reporting burdens and complexities;

• the potential need for localized software, documentation and post-sales support;

• higher levels of credit risk and payment fraud and longer payment cycles associated with, and increased difficulty of payment collections from certain international customers;

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Our business in China subjects us to unique commercial, operational, competitive and regulatory risks.

Weakening economic conditions in China, our dependence on local distributors and other third parties to commercialize our products in China, local competition and trade tensions between the United States and China, among other factors, have in the past resulted, and may again result, in difficulty generating revenue for sales of our products in China.

For example, we believe that in the past certain of our distributors in China held excess inventory of certain of our products, in part due to fluctuations in customer purchasing patterns in China due to COVID-19, which we believe resulted in lower than anticipated sales of our products to our distributors in China in 2023 as such distributors sold off such excess inventory.

Weakening economic conditions in China, our dependence on local distributors and other third parties to commercialize our products in China, and local competition and trade tensions between the United States and China (including recent U.S.

tariffs imposed or threatened to be imposed on China and any potential retaliatory actions taken by China), among other factors, have in the past resulted, and may again result, in difficulty generating revenue for sales of our products in China.

In February 2025, the United States increased tariffs on goods imported into the United States from China by 10%, and China responded by imposing a 15% tariff on coal and liquified natural gas products and a 10% tariff on crude oil, agricultural machinery and certain automobiles.

If maintained, the newly announced tariffs and the potential escalation of trade disputes could directly impact our Chinese operations and sales and indirectly impact our business by restricting or otherwise adversely affecting the operations of our distributors, suppliers and other third parties.

For example, in February 2025, China’s Ministry of Commerce (MOFCOM) added Illumina, Inc., the largest sequencer manufacturer, to MOFCOM’s Unreliable Entity List, potentially in response to tariffs imposed by the United States.

Our Chromium and Visium products are often utilized with Illumina sequencers by researchers conducting single cell or spatial experiments.

If China were to expand the Unreliable Entity List to include other life sciences companies, including 10x, our business in China, which represented approximately ten percent our total revenue in 2024, could be materially impacted or eliminated.

Additionally, we believe that in the past certain of our distributors in China held excess inventory of certain of our products, in part due to fluctuations in customer purchasing patterns in China due to COVID-19, which we believe resulted in lower than anticipated sales of our products to our distributors in China in 2023 as such distributors sold off such excess inventory.

Excess inventory held by our distributors, in China or elsewhere, may negatively impact our revenues in the future.

Our ability to sell our products in China may be negatively impacted by evolving laws and regulations in the U.S.

Certain risks and uncertainties of doing business in China are solely within the control of the Chinese government, and Chinese law regulates the scope of our investments and business conducted within China.

The Chinese government may adopt new regulations that may impact entities operating in China, potentially with little advance notice.

In order to maintain access to the Chinese market, we may be required to comply with significant technical and other regulatory requirements, at times with short notice.

Certain risks and uncertainties of doing business in China are within the control of the Chinese government, and Chinese law regulates the scope of our investments and business conducted within China.

The Chinese government requires compliance with significant technical and other regulatory requirements and may adopt new regulations that may impact entities operating in China, including us, our distributors, suppliers and other third parties, potentially with little advance notice, which may directly or indirectly impact our sales and operations in China.

These actions may increase the cost of doing business in China or limit how we may do business in China, which could materially and adversely affect our business.

In addition, we have suppliers and manufacturing in Taiwan.

In addition, we have suppliers, employees and manufacturing operations in Taiwan.

As a result, our business could be materially and negatively impacted by adverse changes in China-Taiwan relations.

Accordingly, further deterioration in military, political and economic relations between China and Taiwan, as well as the ongoing geopolitical and economic uncertainty between the U.S.

and China and other geopolitical risks with respect to China and Taiwan, may cause disruptions in our ability to source products from China Taiwan, including which may, directly or indirectly, harm our business.

Our products are integrated solutions with many different components that work together.

As such, a quality defect in a single component can compromise the performance of the entire solution.

Our Chromium and Visium CytAssist instruments are manufactured by our third-party manufacturers at their facilities.

In order to ensure we are able to meet these expectations, our Pleasanton, California and Singapore manufacturing facilities, as well as the facilities of our third-party manufacturers, have obtained International Organization for Standardization (“ISO”) quality management certifications and employ other quality control measures.

On occasion, our customers have experienced quality control and manufacturing defects and may again in the future.

Additionally, as we continue to grow and introduce new products, and as our products incorporate increasingly sophisticated technology, it will be increasingly difficult to ensure our products are produced in the necessary quantities without sacrificing quality and in the necessary timeframes.

Certain of the raw materials we use and certain of our consumables have a shelf life, after which their performance is not ensured.

Expiring raw materials could increase our operational costs and cause delays in manufacturing adequate volumes of our products within the timeframes required.

Shipments of defective instruments or consumables to customers may result in recalls and warranty replacements, which would increase our costs, and depending upon current inventory levels and the availability and lead time for additional inventory, could lead to availability issues.

Any future design issues, unforeseen manufacturing problems, such as contamination of our third-party manufacturer's facilities, equipment malfunctions, aging components, quality issues with components and materials sourced from third-party suppliers, or failures to strictly follow procedures or meet specifications, may have a material adverse effect on our brand, business, financial condition and operating results and could result in us or our third-party manufacturers losing ISO quality management certifications.

or our third-party manufacturers fail to manufacture products without defects that meet our specifications or maintain ISO quality management certifications, our customers might choose not to purchase products from us.

Furthermore, we or our third-party manufacturers may not be able to increase manufacturing to meet anticipated demand or may experience downtime.

In addition, as we have increased, and expect in the future we will increase, manufacturing capacity, we have needed, and in the future may need, also to make corresponding improvements to other operational functions, such as our customer service and billing systems, compliance programs and our internal quality assurance programs.

We have needed and expect in the future also to need additional equipment, manufacturing and warehouse space and trained personnel to process higher volumes of products.

As we develop additional products, we may need to bring new equipment online, implement new systems, technology, controls and procedures and hire personnel with different qualifications.

The risk of manufacturing defects or quality control issues is generally higher for new products, whether produced by us or a third-party manufacturer, products that are transitioned from one manufacturer to another, particularly if manufacturing is transitioned or initiated with a manufacturer we have not worked with in the past, and products that are transferred from one manufacturing facility to another.

Our current product roadmap calls for the introduction of new products and new versions of existing products, which may require that we utilize manufacturers with which we have little or no prior manufacturing experience and the risk of manufacturing defects or quality control issues could increase as a result.

The expansion of our manufacturing capabilities has increased and in the future could increase the risk of manufacturing defects or quality control issues in the consumables we manufacture.

and China and other geopolitical risks with respect to China and Taiwan, may cause disruptions in our ability to source products or materials from or to China and Taiwan, which may, directly or indirectly, harm our business.

We and our customers are dependent on single source and sole source suppliers for some of the equipment, components and materials used in our products and in conjunction with our products and the loss of any of these suppliers could harm our business.

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We are therefore subject to the risk that these third-party suppliers will not be able or willing to continue to provide us with equipment, materials and components that meet our needs, specifications, quality standards and delivery schedules.

Factors that could impact our suppliers’ willingness and ability to continue to provide us with the required equipment, materials and components include shortages, alternative priorities, logistics, shipping or other distribution difficulties, disruption at or affecting our suppliers’ facilities, such as difficulties hiring and retaining adequate staffing, work stoppages or natural disasters, infectious disease, epidemics or pandemics, adverse weather or other conditions that affect their supply, the financial condition of our suppliers, disagreements, disputes or deterioration in our relationships with these suppliers or the decision by such suppliers to introduce products that compete directly with our solutions.

Factors that could impact our suppliers’ willingness and ability to continue to provide us with the required equipment, materials and components include shortages, alternative priorities, logistics, tariffs or other trade restrictions impacting our suppliers, shipping or other distribution difficulties, disruption at or affecting our suppliers’ facilities, such as difficulties hiring and retaining adequate staffing, work stoppages or natural disasters, infectious disease, epidemics or pandemics, adverse weather or other conditions that affect their supply, the financial condition of our suppliers, disagreements, disputes or deterioration in our relationships with these suppliers or the decision by such suppliers to introduce products that compete directly with our solutions.

If we are not able to obtain equipment, materials and components that meet our needs, specifications, quality standards and delivery schedule on satisfactory terms, our business will be harmed.

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We do not have long-term contracts with many of these sole source suppliers.

Lead times for some of these components can be several months or more and in the past have been, and in the future could be again, extended due to supply chain disruptions, labor shortages or other factors.

In the event that demand increases, a manufacturing ‘lot’ does not meet our specifications, we fail to forecast and place purchase orders sufficiently in advance or other issues surface in our supply chain this could result in a material shortage.

Some of the components

and formulations are proprietary to our vendors, thereby making second sourcing and development of a replacement difficult.

Lead times for some of these components can be several months or more and in the past have been, and in the future could be, extended due to supply chain disruptions, labor shortages or other factors.

Some of the components and formulations are proprietary to our vendors, thereby making second sourcing and development of a replacement difficult.

Furthermore, such vendors may have intellectual property rights that could prevent us from sourcing such reagents from other vendors.

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While we make the majority of our equipment in-house, we have not qualified secondary sources for all equipment, materials or components that we source through a single supplier and qualification of a secondary supplier may not prevent future supply issues.

Labor shortages, logistics, shipping or other distribution operations difficulties or disruption in the supply of equipment, materials or components could impair our ability to sell our products and meet customer demand, and also could delay the launch of new products, any of which could harm our business and results of operations.

Labor shortages, logistics, shipping or other distribution operations difficulties or disruption in the supply of equipment, materials or components could impair our ability to sell our products and meet customer demand, and also could delay the launch of new products or new versions of existing products, any of which could harm our business and results of operations.

If we were to have to change suppliers, the new supplier may not be able to provide us equipment, materials or components in a timely manner and in adequate quantities that are consistent with our quality standards and on satisfactory pricing terms.

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In addition, our suppliers or customers may face difficulties in procuring or delivering, or in some cases may be unable to procure or deliver, the equipment, materials or components from their own suppliers necessary to supply us with products, equipment, components or materials or conduct experiments using our solutions.

• tariffs, trade disputes and other trade restrictions could have a material impact on the ability of suppliers to meet our or our customers’ needs;

• competition for shipping and air transport in the past impacted, and in the future may impact, our ability to timely deliver products to our customers;

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• the storage and distribution of vaccines in the past impacted, and in the future may impact, the availability of cold storage for components and materials used by us and our customers in connection with our products.

Our instruments, consumables and related components are specialized, complex and difficult to manufacture.

needs, backorders, insufficient inventory, excess inventory, shipping delays, product deficiencies or other operational failures.

For example, in the past the COVID-19 pandemic disrupted air, sea and other travel in the United States and globally.

Similar disruptions in the future could reduce or eliminate our ability to receive components or supply our customers.

Many other factors could cause production or shipping delays or interruptions, including difficulties in transporting materials, equipment, raw material or other shortages, raw material failures, spoilage, equipment malfunctions, facility contamination, labor problems, natural disasters, infectious disease, conflict, war, civil unrest, epidemics or pandem ics , disruption in utility services, terrorist activities or circumstances beyond our control.

Certain disruptions in supply of, and changes in the competitive environment for, raw materials integral to the manufacturing of our products may adversely affect our profitability.

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A significant disruption in the supply of materials could decrease production and shipping levels, materially increase our operating costs and materially adversely affect our profit margins.

Shortages of materials or interruptions in production and transportation systems, labor strikes, work stoppages, infectious disease, epidemics or pandemics, geopolitical issues, conflict, war, civil unrest, acts of terrorism or other interruptions to or difficulties in the employment of labor or transportation that adversely impact equipment, materials and components we require for the production of our products, may adversely affect our ability to maintain production of our products and generate revenue.

Shortages of materials or interruptions in production and transportation systems, labor strikes, work stoppages, infectious disease, epidemics or pandemics, geopolitical issues (including tariffs, trade disputes and other trade restrictions), conflict, war, civil unrest, acts of terrorism or other interruptions to or difficulties in the employment of labor or transportation that adversely impact equipment, materials and components we require for the production of our products, may adversely affect our ability to maintain production of our products and generate revenue.

In addition, a significant prolonged increase in inflation could negatively impact the cost of materials and components.

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If we were to experience a significant disruption in the supply of, or prolonged shortage of, critical components from any of our suppliers and could not procure the components from other sources, we would be unable to manufacture our products and to ship such products to our customers in a timely fashion, which would adversely affect our sales, margins and customer relations.

Undetected errors or defects in our solutions could harm our reputation and decrease market acceptance of our solutions.

Our instruments and consumables, as well as the software that accompanies them, may contain undetected errors or defects due to design, manufacturing, delivery or other issues.

If that occurs, we may also incur significant costs, the attention of our key personnel could be diverted or other significant customer relations problems may arise.

We may also be subject to warranty claims or breach of contract for damages related to errors or defects in our solutions.

Our failure to effectively manage product transitions or accurately forecast customer demand could result in excess or obsolete inventory and resulting charges.

Because the market for our products is characterized by rapid technological advances, we frequently introduce new products with improved ease-of-use, improved performance or additional features and functionality.

The risks associated with the introduction of new products include the difficulties of predicting customer demand and effectively managing inventory levels to ensure adequate supply of the new product and avoiding excess supply of the legacy product, including legacy versions of our instruments which are supplanted by new versions.

In addition, in the past supply chain disruptions, logistics, shipping and other distribution disruptions and labor shortages have made it more difficult to predict customer demand and effectively manage inventory levels for our instruments and consumables and at times the risk that we will not be able to source the necessary equipment, components and materials to manufacture our products led us, and may again lead us, to carry higher inventory.

Further, differences in purchasing patterns across our customer base could negatively impact our ability to accurately forecast demand.

During periods of decreased demand, which in the past have occurred and which may occur again, these non-cancelable commitments could result in additional inventory-related charges which may adversely impact our financial results and condition.

If our existing and new products fail to achieve and sustain sufficient scientific acceptance, we will not generate expected revenue and our prospects may be harmed.

Our limited operating history and fluctuations in revenue make it difficult to evaluat e our future prospects and the risks and challenges we may encounter.

We launched our first product in mid-2015 and have historically experienced revenue growth, though our revenue decreased year-over-year in 2024.

In addition, we operate in highly competitive markets characterized by rapid technological advances and our business has, and we expect it to continue, to evolve over time to remain competitive.

Our limited operating history, evolving business and fluctuations in revenue make it difficult to evaluate our future prospects and the risks and challenges we may encounter and may increase the risk that we will not continue to grow at or near historical rates.

If we fail to address the risks and difficulties that we face, including those described elsewhere in this “ Risk Factors ” section, our business, financial condition and results of operations could be adversely affected.

We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by companies with limited operating histories in rapidly changing industries.

If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations could be materially and adversely affected.

If our existing and new products or new versions of existing products fail to achieve and sustain sufficient scientific acceptance, we will not generate expected revenue and our prospects may be harmed.

The life sciences scientific community is comprised in part of a small number of early adopters and key opinion leaders who significantly influence the rest of the community.

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In such journal publications, the researchers will describe not only their discoveries but also the methods and typically the products used to fuel such discoveries.

Mentions in peer-reviewed journal publications is a good barometer for the general acceptance of our products as best practices.

Ensuring that early adopters and key opinion leaders publish research involving the use of our products is important to ensuring our products gain widespread acceptance and market growth.

Continuing to maintain good relationships with such key opinion leaders is vital to growing our market.

We believe mentions in peer-reviewed journal publications is a good barometer for the general acceptance of our products as best practices.

The number of times our products were mentioned in peer-reviewed publications has increased significantly since launching our first product in 2015.

During this time, our revenue has also increased significantly.

Ensuring that early adopters and key opinion leaders publish research involving the use of our products is important to ensuring our products gain widespread acceptance and market growth.

Continuing to maintain good relationships with such key opinion leaders is vital to growing our market.

Our products may not continue to be mentioned in peer-reviewed articles with frequency.

Any new products or new versions of existing products that we introduce in the future may not be mentioned in peer-reviewed articles.

If too few researchers describe the use of our products, too many researchers shift to a competing product and publish research outlining their use of that product or too many researchers negatively describe the use or usability of our products in publications, it may drive existing and potential customers away from our products, which could harm our operating results.

If too few researchers describe the use of our products, too many researchers shift to a competing product and publish research outlining their use of that product or too many researchers negatively describe the use or usability of our products in publications, our existing and potential customers may be driven away from our products, which could harm our operating results.

If we do not sustain or successfully manage our growth and anticipated growth, our business and prospects will be harmed.

We have historically experienced rapid growth and we expect that future growth will place significant strains on our management, operational and manufacturing systems and processes, financial systems and internal controls and other aspects of our business.

For example, we consummated two acquisitions in each of 2018 and 2020, one in 2021 and another in 2023, and we intend to continue to make investments that meet management’s criteria to expand or add key technologies that we believe will facilitate the commercialization of new products or new versions of existing products in the future.

We have historically experienced rapid organizational growth and we expect that future growth will place significant strains on our management, operational and manufacturing systems and processes, financial systems and internal controls and other aspects of our business.

will facilitate the commercialization of new products or new versions of existing products in the future.

We intend to launch additional new products and new versions of existing products in the near future.

Further development and commercialization of our current and future products are key elements of our growth strategy.

Further development and commercialization of our current and future products are key elements of our strategy.

Developing and launching new products and innovating and improving our existing products have required us to hire and retain additional scientific, sales and marketing, software, manufacturing, distribution and quality assurance personnel.

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As we have grown, our employees have become more geographically dispersed.

We may face challenges integrating, developing and motivating our rapidly growing and increasingly dispersed employee base, including as a result of certain of our employees working remotely.

In addition, certain members of our management have not previously worked together for an extended period of time, do not have experience managing a public company or do not have experience managing a global business, which may affect how they manage our growth.

To effectively manage our growth, we must continue to improve our systems and processes and other aspects of our business and continue to effectively expand, train and manage our personnel.

As our organization continues to grow, and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative products.

If we do not successfully manage our anticipated growth, our business, results of operations and growth prospects will be harmed.

Our limited operating history and rapid revenue growth make it difficult to evaluat e our future prospects and the risks and challenges we may encounter.

We launched our first product in mid-2015 and have historically experienced rapid revenue growth.

In addition, we operate in highly competitive markets characterized by rapid technological advances and our business has, and we expect it to continue, to evolve over time to remain competitive.

Our limited operating history, evolving business and rapid growth make it difficult to evaluate our future prospects and the risks and challenges we may encounter and may increase the risk that we will not continue to grow at or near historical rates.

We have encountered in the past, and will

encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries.

We may face challenges integrating, developing and motivating our employee base, including as a result of certain of our employees working remotely.

To effectively manage our business, we must continue to improve our systems and processes and continue to effectively expand, train and manage our personnel.

As our organization continues to evolve, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative products or versions.

If we do not successfully manage our anticipated organizational growth, our business, results of operations and growth prospects will be harmed.

We have incurred significant losses since inception, we expect to incur losses in the future and we may not be able to generate sufficient revenue to achieve and maintain cash flows from operating activities in excess of our capital investment requirements or profitability.

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We also expect that our operating expenses will continue to increase as we grow our business.

To date, we have financed our operations principally from the sale of convertible preferred stock, stock option exercises and purchases under our 2019 Employee Stock Purchase Plan, the sale of Class A common stock in our initial public offering ("IPO") and our September 2020 follow-on offering, revenue from sales of our products and the incurrence of indebtedness.

There can be no assurance that our revenue and gross profit will increase sufficiently such that our net losses decline, or we attain cash flows from operating activities in excess of our capital investment requirements on a sustained basis or attain profitability, in the future.

Further, our limited operating history and rapid revenue growth over the last several years make it difficult to effectively plan for and model future growth and operating expenses.

To date, we have financed our operations principally from equity offerings, revenue from sales of our products and the incurrence of indebtedness.

There can be no assurance that our revenue and gross profit will increase sufficiently such that our net losses decline, or that we attain cash flows from operating activities in excess of our capital investment requirements on a sustained basis or attain profitability, in the future.

Further, our limited operating history and fluctuations in revenue over the last several years make it difficult to effectively plan for and model future revenue and operating expenses.

Our ability to achieve or sustain profitability is based on numerous factors, many of which are beyond our control, including general economic, industry and market conditions, customer purchasing decisions, the impact of market acceptance of our products, future product development, our market penetration and margins and current and future litigation.

Additionally, inflationary pressures could adversely impact our financial results.

Our operating costs have increased, and may continue to increase, due to the recent growth in inflation.

Our operating costs have increased, and may continue to increase, due to the recent growth in inflation, which may be exacerbated by tariffs imposed by the United States which are currently, or in the future, under consideration, proposed or enacted.

We may not fully offset these cost increases by raising prices for our instruments and consumables, which could result in downward pressure on our margins.

Further, our customers may choose to reduce their business with us if we increase our pricing.

Further, while we anticipate lowering prices on certain of our products in 2025, our customers may choose to reduce their business with us if in the future we increase our pricing.

Additionally, changes in our product mix may negatively affect our gross margins.

We may never be able to generate sufficient revenue to achieve or sustain cash flows from operating activities in excess of our capital investment requirements or profitability and our recent and historical growth should not be considered indicative of our future performance.

Our failure to achieve or maintain growth, cash flows from operating activities in excess of our capital investment requirements or profitability could negatively impact the value of our Class A common stock.

We may never be able to generate sufficient revenue to achieve or sustain cash flows from operating activities in excess of our capital investment requirements or profitability and our historical growth should not be considered indicative of our future performance.

Our failure to achieve, return to or maintain growth, cash flows from operating activities in excess of our capital investment requirements or profitability could negatively impact the value of our Class A common stock.

Our results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates.

Historically, most of our revenue has been denominated in U.S.

dollars, although we have sold our products and services in local currency outside of the United States, principally the euro.

For the years ended December 31, 2024 and 2023, approximately 27% and 23%, respectively, of our sales were denominated in currencies other than U.S.

Our expenses are generally denominated in the currencies in which our operations are located.

As our operations in countries outside of the United States grow, our results of operations and cash flows will become increasingly subject to fluctuations due to changes in foreign currency exchange rates, which could harm our business in the future.

During periods of economic crises, foreign currencies may be devalued significantly against the U.S.

dollar, reducing our margins.

In addition, because we conduct business in currencies other than U.S.

dollars, but report our results of operations in U.S.

dollars, we also face remeasurement exposure to fluctuations in currency exchange rates, which could hinder our ability to predict our future results and earnings and could materially impact revenue and our results of operations.

We do not currently maintain a program to hedge foreign currency exposures and even if in the future we implement a program to hedge such exposures, we may not be successful in mitigating the effects of fluctuations in foreign currency exchange rates.

Due to our exposure to currencies other than U.S.

dollars, an increase in the value of certain currencies against the U.S.

dollar could increase our costs by increasing labor and other costs that are denominated in local currency.

There can be no assurance that any future hedging activities which are designed to partially offset this impact, will be successful.

In addition, our currency hedging activities, if any, in the future, could themselves be subject to risk.

These could include risks related to counterparty performance under future hedging contracts and risks related to currency fluctuations.

We depend on our key personnel and other highly qualified personnel, and if we are unable to recruit, train, retain and ensure the health and safety of our personnel, we may not achieve our goals.

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As we grow, we may continue to make changes to our management team, which could make it difficult to execute on our business plans and strategies.

New hires, including executive hires such as a future new Chief Commercial Officer, often require significant training and, in most cases, take significant time before they achieve full productivity.

New hires, including executive hires, often require significant training and, in most cases, take significant time before they achieve full productivity.

Our failure to successfully integrate our personnel into our business could adversely affect our business.

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We do not maintain key person life insurance for an y of our employees.

Additionally, we have not entered into fixed term contracts with almost any of our employees and as a result, almost any of our employees could leave our company with little or no prior notice which could harm our business.

Additionally, we have not entered into fixed term contracts with almost any of our employees, including Drs.

Saxonov and Hindson, and as a result, almost any of our employees could leave our company with little or no prior notice which could harm our business.

Many of our scientific personnel in the United States are qualified foreign nationals whose ability to live and work in the United States is contingent upon the continued availability of appropriate visas.

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Additionally, our current or future employees may be negatively affected by delays, disruptions or changes in United States immigration policies.

Past United States administrations have made restricting immigration and reforming the work visa process a priority and these efforts may adversely affect our ability to find qualified personnel.

Our continued growth depends, in part, on attracting, retaining and motivating highly trained sales personnel, including individuals with the necessary scientific background and ability to understand our systems at a technical level to effectively identify and sell to potential new customers.

The current United States administration has made restricting immigration and reforming the work visa process a priority and these efforts may adversely affect our ability to find qualified personnel.

Our continued success depends, in part, on attracting, retaining and motivating highly trained sales personnel, including individuals with the necessary scientific background and ability to understand our systems at a technical level to effectively identify and sell to potential new customers.

In addition, the continued development of complementary software tools, such as our analysis tools and visualization software, requires us to compete for highly trained software engineers in the San Francisco Bay Area and elsewhere and for highly trained customer service personnel globally.

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Additionally, we compete with both companies that may have greater financial resources than we do and early stage companies that promise short-term growth opportunities.

We may not be able to attract, retain, train or motivate qualified employees in the future and our inability to do so could materially harm our operating results and growth prospects.

We may not be able to attract, retain, train or motivate qualified employees in the future and our inability to do so could materially harm our operating results and prospects of success.

If our facilities or our third-party manufacturers’ facilities become unavailable or inoperable, our research and development programs could be adversely impacted and manufacturing of our instruments and consumables could be interrupted.

Much, and in some cases all, of the manufacturing process for our instruments takes place at our third-party manufacturers' facilities.

The manufacturing process for our instruments takes place at our third-party manufacturers' facilities.

Many of our consumables are manufactured at our facilities in Pleasanton, California, Singapore, Taiwan or other of our facilities using proprietary equipment.

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Our Chromium, Visium CytAssist and Xenium instruments are manufactured by our partners at their facilities, while we perform optical and final assembly, instrument integration and testing of our Xenium instrument in-house.

The facilities and the equipment we and our third-party manufacturers use to manufacture our instruments and consumables and that we use in our research and development programs would be costly to replace and could require substantial lead times to repair or replace.

The facilities

and the equipment we and our third-party manufacturers use to manufacture our instruments and consumables and that we use in our research and development programs would be costly to replace and could require substantial lead times to repair or replace.

Our facilities are vulnerable to natural disasters and catastrophic events.

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If our products become unavailable during the planning process, researchers may use alternative products.

If our research and development programs were disrupted by a disaster or catastrophe or for other reasons, the launch of new products and the timing of improvements to existing products could be significantly delayed and could adversely impact our ability to compete with other available products and solutions.

If our research and development programs were disrupted by a disaster or catastrophe or for other reasons, the launch of new products or new versions of existing products and the timing of improvements to existing products could be significantly delayed and could adversely impact our ability to compete with other available products and solutions.

If our or our third-party manufacturers’ 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, may not cover every potential type of loss event (including earthquakes as we do not carry earthquake insurance coverage) and may not continue to be available to us on acceptable terms, or at all.

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, may not cover every potential type of loss event (including earthquakes as we do not carry earthquake insurance coverage) and may not continue to be available to us on acceptable terms, or at all.

We rely exclusively on commercial carriers to transport our products, including perishable consumables, to our customers in a timely and cost-efficient manner and if delivery of our products is disrupted, our business will be harmed.

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We may decide to reduce our real estate commitments but be unable to do so.

For example, in 2023 we vacated some of our leased office space located in Pleasanton, California comprising of approximately 43,000 square feet for the remaining lease term through 2026 and entered into agreements to sublease some of the vacated office space.

Our real estate leases, which generally obligate us for long periods, subject us to potential financial risk.

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Customers utilize our service teams and online content for help with a variety of topics, including how to use our products efficiently, how to integrate our products into existing workflows, how to determine which of our other products may be needed for a given experiment and how to resolve technical, analysis and operational issues if and when they arise.

As we introduce new products and e nhance existing products, we expect utilization of our customer service teams to increase.

In particular, the introduction of new or improved products that utilize different workflows or variations on existing workflows may require additional customer service efforts to ensure customers use such products correctly and efficiently.

As we introduce new products and new versions of existing products , we expect utilization of our customer service teams to increase.

In particular, the introduction of new products or new versions that utilize different workflows or variations on existing workflows may require additional customer service efforts to ensure customers use such products correctly and efficiently.

While we have developed significant resources for remote training, including an extensive library of online videos, we may need to rely more on these resources for future customer training or we may experience increased expe nses to enhance our online and remote solutions.

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We believe that these metrics are representative of our current business;

however, these metrics may not accurately reflect all aspects of our business and we anticipate that these metrics may change or may be substituted for additional or different metrics as our business grows and as we introduce new products.

If our management fails to review other relevant information or change or substitute the key business metrics they review as our business grows and we introduce new products, their ability to accurately formulate financial projections and make strategic decisions may be compromised and our business, financial results and future growth prospects may be adversely impacted.

If our management fails to review other relevant information or change or substitute the key business metrics they review as our business evolves and we introduce new products or new versions of existing products, their ability to accurately formulate financial projections and make strategic decisions may be compromised and our business, financial results and future growth prospects may be adversely impacted.

Investments and acquisitions could disrupt our business, cause dilution to our stockholders and otherwise harm our business.

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• failure to realize anticipated benefits or synergies from such a transaction;

• unanticipated costs of or legal exposure related to complying with existing and future laws and regulations, including land use, environmental or antitrust-related laws and regulations;

• unanticipated costs of or legal exposure related to complying with existing and future laws and regulations, including land use, antitrust, environmental or hazardous waste-related laws and regulations;

• disruption in our relationships with customers, distributors, manufacturers, suppliers or other third parties as a result of such a transaction;

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• potential higher taxes if our tax positions relating to certain acquisitions were challenged.

Foreign acquisitions, such as our acquisitions of Spatial Transcriptomics Holdings AB, CartaNA AB and Tetramer Shop involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries.

Foreign acquisitions, such as our acquisitions of Spatial Transcriptomics Holdings AB, CartaNA AB, Tetramer Shop ApS and Centrillion Technologies Taiwan Co.

Ltd., involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries.

Even if we identify a strategic transaction that we wish to pursue, we may be prohibited from consummating such transaction due to the terms of future indebtedness we may incur or due to circumstances outside our control including regulatory approval considerations.

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We believe that this seasonality results from a number of factors, including the procurement and budgeting cycles of many of our customers, especially government- or grant-funded customers, whose cycles often coincide with government fiscal year ends.

Furthermore, the academic budgetary cycle similarly requires grantees to ‘use or lose’ their grant funding, which seems to be tied disproportionately to the end of the calendar year, driving sales higher during the fourth quarter.

Similarly, our biopharmaceutical customers typically have calendar year fiscal years which also result in a disproportionate amount of their purchasing activity occurring during our fourth quarter.

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Our reliance on distributors for sales of our products in certain geographies outside of the United States could limit or prevent us from selling our products and impact our revenue.

We sell our products through third-party distributors in Asia, certain regions of Europe, Oceania, Central America, South America, the Middle East and Africa.

We sell our products through third-party distributors in certain regions of Asia, Europe, Oceania, Central America, South America, the Middle East and Africa.

We intend to continue to grow our business internationally and to do so we must attract additional distributors and retain existing distributors to maximize the commercial opportunity for our products.

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Additionally, excess inventory held by our distributors may reduce or delay purchases by such distributors.

For example, we believe that in the past certain of our distributors in China held excess inventory of certain of our products, in part due to fluctuations in customer

purchasing patterns in China due to COVID-19, which we believe resulted in lower than anticipated sales of our products to our distributors in China in 2023 as such distributors sold off such excess inventory.

Our distribution relationships are non-exclusive.

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Our business could be negatively impacted by reduced demand for our products related to one or more significant local, regional or global economic or social disruptions.

These disruptions have included and may in the future include a slow-down, recession or inflationary pressures in the general economy, reduced market growth rates, tighter credit markets for us, our suppliers, vendors or customers, a significant shift in government policies (including funding for scientific research or changes in laws or policies governing the terms of foreign trade, in particular increased trade restrictions, tariffs or taxes on imports or exports), significant social unrest, or the deterioration of economic relations between countries (such as the U.S.

and China) or regions.

Additionally, these and other economic conditions may cause our suppliers, distributors, contractors or other third-party suppliers or manufacturers to suffer financial or operational difficulties that they cannot overcome, resulting in their inability to provide us with the materials and services we need, in which case our business and results of operations could be adversely affected.

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We, our suppliers and our customers are exposed to inflationary pressure and a variety of market risks, including the effects of increases in energy and raw material prices, foreign currency exchange rates and interest rates.

Such risks are inherently unpredictable and difficult to mitigate.

Such risks are inherently unpredictable and difficult to mitigate and may be exacerbated by tariffs imposed by the United States which are currently, or in the future, under consideration, proposed or enacted.

As a result, significant increases in energy and raw material prices, foreign currency exchange rates or interest rates as well as increased material, freight, logistics, and similar costs could have an adverse effect on our financial condition or results of operations.

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Higher government deficits and debt, tighter monetary policy and potentially higher interest rates may drive a higher cost of capital for our business.

Our results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates.

Historically, most of our revenue has been denominated in U.S.

dollars, although we have sold our products and services in local currency outside of the United States, principally the euro.

For the years ended December 31, 2023 and 2022, approximately 23% and 18%, respectively, of our sales were denominated in currencies other than U.S.

Our expenses are generally denominated in the currencies in which our operations are located.

During periods of economic crises, foreign currencies may be devalued significantly against the U.S.

dollar, reducing our margins.

In addition, because we conduct business in currencies other than U.S.

dollars, but report our results of operations in U.S.

We do not currently maintain a program to hedge foreign currency exposures and even if in the future we do implement a program to hedge such exposures, we may not be successful in mitigating the effects of fluctuations in foreign currency exchange rates.

Due to our exposure to currencies other than U.S.

dollars, an increase in the value of certain currencies against the U.S.

dollar could increase our costs by increasing labor and other costs that are denominated in local currency.

There can be no assurance that any future hedging activities which are designed to partially offset this impact, will be successful.

In addition, our currency hedging activities, if any, in the future, could themselves be subject to risk.

These could include risks related to counterparty performance under future hedging contracts and risks related to currency fluctuations.

AI and machine learning technologies may expose us to significant risks, including development and deployment challenges, regulatory uncertainties, competition for investor research and potential hard-to-predict changes to our business, which could adversely affect our business, results of operations and financial condition.

We use artificial intelligence (“AI”), machine learning and automated decision-making technologies (collectively, “AI Technologies”) in our business and are making targeted investments in this area.

Increased investment may be required in the future to continuously improve our use of AI Technologies.

As with many technological innovations, there are significant risks involved in developing, maintaining and deploying these technologies and there can be no assurance that the usage of or our investments in such technologies will always enhance our products or services or be beneficial to our business, including our efficiency or profitability.

Further, the regulatory framework for AI Technologies is rapidly evolving as many federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations.

Additionally, existing laws and regulations may be interpreted in ways that could affect the operation of our AI Technologies, or could be rescinded or amended as new administrations take differing approaches to evolving AI Technologies.

As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet completely determine the impact future laws, regulations, standards or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations.

Additionally, in recent years both public and private investment in AI Technologies has increased substantially, and because investment markets and investor attention are finite, focus of the investment community on opportunities related to AI Technologies may divert investor attention and resources away from us and our industry.

Further, in the future AI Technologies may meaningfully change fundamental aspects of our business including, for example, our cost structure, how we sell our products or how customers or potential customers conduct their experiments.

The ways in which AI Technologies could affect us are uncertain and difficult to predict at present and in the future may significantly impact our business, results of operations and financial condition.

If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

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Any failure to maintain effective disclosure controls and internal control over financial reporting could materially and adversely affect our business, results of operations and financial condition and could cause a decline in the trading price of our Class A common stock.

The continuing impact of "Brexit" may have a negative effect on our business.

Following a national referendum and subsequent legislation, the United Kingdom formally withdrew from the European Union, commonly referred to as “Brexit” and ratified a trade and cooperation agreement governing its future relationship with the European Union (“EU”).

Among other things, the agreement, which became effective in 2021, addresses trade, economic arrangements, law enforcement, judicial cooperation and governance.

Because the agreement merely sets forth a framework in many respects that requires complex additional bilateral negotiations between the United Kingdom and the European Union, and does not for example provide for the wholesale mutual recognition of product certification, significant uncertainty remains about the practical impacts of the new relationship.

Brexit has had, and may continue to have, a significant adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets.

The illegal distribution and sale by third parties of counterfeit or unfit versions of our products or stolen products could have a negative impact on our reputation and business.

Third parties might illegally distribute and sell counterfeit or unfit versions of our products, which do not meet our rigorous manufacturing, distribution and quality standards.

The illegal distribution and sale by third parties of stolen, counterfeit or unfit versions of our products could have a negative impact on our reputation and business.

Third parties might illegally distribute and sell stolen, counterfeit or unfit versions of our products, which do not meet our rigorous manufacturing, distribution and quality standards.

As we expand our business internationally, we expect to encounter counterfeit versions of our products, including our consumables.

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In addition, should our investments cease paying or reduce the amount of interest paid to us, our interest income would decrease.

Interest rate fluctuations can negatively impact the returns on our fixed-income investments.

Indebtedness may impair our financial and operating flexibility.

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The FDA and foreign authorities could disagree with our assessment that our products are properly marketed as RUOs, or could conclude that products labeled as RUO are actually intended for clinical diagnostic use, and could take enforcement action against us, including requiring us to stop distribution of our products until we are in compliance with applicable regulations, which would reduce our revenue, increase our costs and adversely affect our business, prospects, results of operations and financial condition.

In the event that the FDA or foreign authorities requires us to obtain marketing authorization or certification of our RUO products in the

future, there can be no assurance that these authorities will grant any clearance, approval or certification requested by us in a timely manner, or at all.

In the event that the FDA or foreign authorities requires us to obtain marketing authorization or certification of our RUO products in the future, there can be no assurance that these authorities will grant any clearance, approval or certification requested by us in a timely manner, or at all.

We may also in the future decide to develop products that are intended for clinical or diagnostic uses.

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In addition, the process of obtaining approval or clearance from the FDA or certification from notified bodies in the EU or approved bodies in the United Kingdom for new products, or with respect to enhancements or modifications to existing products, could take a significant period of time, require the expenditure of substantial resources, involve rigorous pre-clinical and clinical testing, require changes to products or result in limitations on the indicated uses of products.

There can be no assurance that we will receive the required approvals, clearances or certifications for any new products or for modifications to our existing products on a timely basis or that any approval, clearance or certification will not be subsequently withdrawn or conditioned upon extensive post-market study requirements.

extensive post-market study requirements.

Moreover, even if we receive FDA clearance or approval or certification from foreign bodies of new products or modifications to existing products, we will be required to comply with extensive regulations relating to the development, research, clearance, approval, certification, distribution, marketing, advertising and promotion, manufacture, adverse event reporting, recordkeeping, import and export of such products, which may substantially increase our operating costs and have a material impact on our business, profits and results of operations.

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Occurrence of any of the foregoing could harm our reputation, business, financial condition, results of operations and prospects.

Enhanced trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers may materially harm our business.

For the years ended December 31, 2023 and 2022, sales outside of North America constituted approximately 40% and 45%, respectively, of our sales revenue and our largest markets outside of North America were China and Germany.

There is currently significant uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, treaties, government regulations and tariffs.

Additionally, our business may be adversely impacted by retaliatory trade measures taken by China or other countries.

Such measures could include restrictions on our ability to sell or import our instruments and/or consumables into certain countries or have the effect of increasing the prices of our instruments and/or consumables.

Although the United States and China signed an interim trade agreement in January 2020 (the “Phase One deal”), the parties are continuing to negotiate a trade agreement.

time, it is unknown whether the Phase One deal will last, whether there will be sufficient progress on Phases Two and Three to lead to a further reduction in U.S.-China trade tensions and what effect the ultimate trade agreement will have on our business.

There are also pressures on the U.S.

Administration to retaliate against China over China’s inability to prevent COVID-19 from spreading outside of the country’s borders and China’s actions in Hong Kong, which could lead to additional U.S., Chinese and other tariffs, or a resumption of trade hostilities, exposing us to increased tariffs in the U.S.

and Chinese markets.

Therefore, it is possible further tariffs may be imposed that could cover imports of the export or sale of our instruments and/or consumables, or our business may be adversely impacted by retaliatory trade measures taken by China or other countries, which could materially harm our business, financial condition and results of operations.

The nature of the dispute between the United States and China is evolving and additional products such as ours could become subject to tariffs, which could adversely affect the marketability of our products and our results of operations.

Further, the continued threats of tariffs, trade restrictions and trade barriers could have a generally disruptive impact on the global economy and, therefore, negatively impact our sales.

Given the relatively fluid regulatory environment in China and the United States and uncertainty how the United States or foreign governments will act with respect to tariffs, international trade agreements and policies, there could be additional tax or other regulatory changes in the future.

Any such changes could directly and adversely impact our financial results and results of operations.

In recent years, the United States government has a renewed focus on export control matters.

The imposition of new, or changes in existing, tariffs, trade restrictions, trade barriers, export controls or retaliatory trade measures taken by other countries could adversely impact our business, financial condition and results of operations.

We are subject to risks related to taxation in multiple jurisdictions and changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.

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In addition, the Inflation Reduction Act of 2022 recently became law and imposes a minimum tax on certain corporations with book income of at least $1 billion, subject to certain adjustments, and a 1% excise tax on certain stock buybacks and similar corporate actions.

While certain other draft legislation has been proposed in the U.S., the likelihood of any proposed changes to the tax law being enacted or implemented is unclear, and we are currently unable to predict whether such changes will occur.

With the change in the U.S.

Executive and Legislative branches in 2025, the likelihood of any proposed changes to the tax law being enacted or implemented is unclear, and we are currently unable to predict whether such changes will occur.

If any such changes are implemented, we are currently unable to predict the ultimate impact on our business and therefore there can be no assurance our business will not be adversely affected.

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For example, on December 12, 2022, the European Union member states agreed to implement the “Pillar Two” global corporate minimum tax rate as of January 1, 2024.

In addition, various other countries where we do business have implemented or plan to implement the “Pillar Two” global corporate minimum tax rate in 2024 and are also actively considering changes to their tax laws

to adopt certain parts of the OECD’s proposals.

In addition, various other countries where we do business have implemented or plan to implement the “Pillar Two” global corporate minimum tax rate and are also actively considering changes to their tax laws to adopt certain parts of the OECD’s proposals.

The enactment of this and similar legislation could significantly increase our tax obligations in many countries where we do business.

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While we do not make gene sequencing or gene editing products, our products are used to better understand genomic information that could further gene editing endeavors.

For example, our Chromium Single Cell Gene Expression solution allows users to examine cells that have been genetically perturbed using clustered regularly interspaced short palindromic repeats (“CRISPR”) gene editing technology.

For example, certain of our solutions allow users to examine cells that have been genetically perturbed using clustered regularly interspaced short palindromic repeats (“CRISPR”) gene editing technology.

Advances in genome editing or gene therapy, such as CRISPR Cas9 technology have been subject to negative publicity and increased regulatory scrutiny, in part due to the underlying ethical, legal, privacy and social concerns regarding the use or potential misuse of such technology.

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However, it is also possible that we may fail to identify patentable aspects of inventions made in the course of the development, manufacture and commercialization activities conducted by or on behalf of us before it is too late to obtain patent protection on such inventions.

If we fail to timely file for patent protection in any jurisdiction, we may be precluded from doing so at a later date.

If we fail to timely file for patent protection in any

jurisdiction, we may be precluded from doing so at a later date.

Although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, suppliers, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

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Some of our patents and patent applications may in the future be co-owned with third parties.

If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products,

services and technology.

In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us.

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Mechanisms for such challenges include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings).

In a patent or other intellectual property infringement proceeding, a court may decide that a patent or other intellectual property right of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims or other intellectual property narrowly or refuse to stop the other party from using the technology at issue on the

grounds that our patents or other intellectual property do not cover the technology in question.

Furthermore, even if our patents or other intellectual property rights are found to be valid and infringed, a court may refuse to grant injunctive relief against the infringer and instead grant us monetary damages and/or ongoing royalties.

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A third party may hold intellectual property rights, including patent rights, that are important or necessary to the development, manufacture and/or commercialization of our current and/or future products or technologies, in which case we would need to acquire or obtain a license to such intellectual property rights from such third party.

A third party that perceives us to be a

competitor may be unwilling to assign or license its intellectual property rights to us.

A third party that perceives us to be a competitor may be unwilling to assign or license its intellectual property rights to us.

In addition, the licensing or acquisition of third-party intellectual property rights is a competitive area, and other companies may also pursue similar strategies to license or acquire such third party’s intellectual property rights.

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Such security measures may not, for example, in the case of misappropriation of a trade secret by an employee, consultant or other third party with authorized access, provide adequate protection for our proprietary information.

Our security measures may not prevent an employee,

consultant or other third party from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.

Our security measures may not prevent an employee, consultant or other third party from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.

Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products or services that we consider proprietary.

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In addition, trade secrets may be independently developed by others in a manner that could prevent legal recourse by us.

If any of our intellectual property rights or confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.

If any of our intellectual property rights or confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such

information was independently developed by a competitor, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.

We may be subject to claims that we or our employees have misappropriated the intellectual property rights of a third party, including trade secrets or know-how, or are in breach of non-competition or non-solicitation agreements with our competitors.

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If we or our patent licensors fail to maintain the patents and patent applications covering our products, services or technology, we may not be able to stop a competitor from marketing products, services or technologies that are the same as or similar to our products, services or technologies which would have a material adverse effect on our business, financial condition and results of operations.

Changes in patent law could diminish the value of our patents in general, thereby impairing our ability to protect our current and future products, services or technologies, and could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our current or future patents.

Changes in patent law or the organizational changes to the USPTO could diminish the value of our patents in general, thereby impairing our ability to protect our current and future products, services or technologies, and could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our current or future patents.

Our ability to obtain patents and the breadth of any patents obtained is uncertain in part because, to date, some legal principles remain unresolved, and there has not been a consistent policy regarding the breadth or interpretation of claims allowed in patents in the United States and other countries.

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In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.

Depending on actions by the United States Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we own or that we might obtain or license in the future.

Depending on actions by the United States Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken

our ability to obtain new patents or to enforce patents that we own or that we might obtain or license in the future.

An inability to obtain, enforce, and defend patents covering our proprietary technologies would materially and adversely affect our business prospects and financial condition.

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Specifically, these decisions stand for the proposition that patent claims that recite laws of nature (for example, the relationships between gene expression levels and the likelihood of risk of recurrence of cancer) are not themselves patentable unless those patent claims have sufficient additional features that provide practical assurance that the processes are genuine inventive applications of those laws rather than patent drafting efforts designed to monopolize the law of nature itself.

What constitutes a “sufficient” additional feature is uncertain.

Furthermore, in view of these decisions, in December 2014, the USPTO published revised guidelines for patent examiners to apply when examining process claims for patent eligibility.

This guidance was updated by the USPTO in July 2015 and additional illustrative examples provided in May 2016.

The USPTO provided additional guidance on examination procedures pertaining to subject matter eligibility in April 2018 and June 2018.

The guidance indicates that claims directed to a law of nature, a natural phenomenon or an abstract idea that do not meet the eligibility requirements should be rejected as non-statutory, patent ineligible subject matter;

What constitutes a “sufficient” additional feature is uncertain and has been subject to evolving regulatory guidance which indicates that claims directed to a law of nature, a natural phenomenon or an abstract idea that do not meet the eligibility requirements should be rejected as non-statutory, patent ineligible subject matter;

however, method of treatment claims that practically apply natural relationships should be considered patent eligible.

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Placement of a country on the Priority Watch List indicates that particular problems exist in that country with respect to intellectual property protection, enforcement, or market access for persons relying on intellectual property rights.

Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the specific problem areas.

Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the specific problem

It is possible that we will not be able to enforce our intellectual property rights against third parties that misappropriate our proprietary technology in those countries.

Additionally, organizational changes to the USPTO could increase the uncertainties, timing and costs related to the prosecution of our patent applications.

For example, in response to the deferred resignation program offered by the United States Office of Personnel Management to all employees of the United States federal civil service on January 28, 2025, a number of USPTO employees have resigned or indicated their intent to resign, including USPTO Commissioner for Patents Vaishali Udupa.

Reductions in the staff available to process, review and make decisions regarding patent applications as well as complete other patent-related activities could delay or prevent us from successfully prosecuting our current or future patent applications.

Intellectual property rights do not necessarily address all potential threats to our competitive advantage.

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During trademark registration proceedings, we may receive rejections.

Although we are given an opportunity to respond to those rejections, we may be unable to overcome such rejections.

Although we are given an opportunity to respond to those rejections, we may be unable to overcome such

In addition, in proceedings before the USPTO and comparable agencies in many foreign jurisdictions, third parties may also oppose our trademark applications and may seek to cancel trademark registrations or otherwise challenge our use of the trademarks.

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For example, in Europe, the GDPR went into effect in May 2018 and imposes stringent requirements for processing personal data of individuals within the European Economic Area ("EEA").

The processing of sensitive personal data, such as physical health conditions, may impose heightened compliance burdens under the GDPR and is a topic of active interest among foreign regulators.

The processing of sensitive personal data,

such as physical health conditions, may impose heightened compliance burdens under the GDPR and is a topic of active interest among foreign regulators.

In addition, the GDPR provides for breach reporting requirements, more robust regulatory enforcement and greater penalties for noncompliance than previous data protection laws, including fines of up to €20 million or 4% of a noncompliant company’s global annual revenue for the preceding financial year, whichever is greater.

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As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.

In the United States, California enacted the California Consumer Privacy Act of 2018 (the "CCPA"), which came into effect on January 1, 2020 and limits and imposes requirements on how we may collect and use personal information and provides for civil penalties for violations and a private right of action for data breaches.

Further, the California Privacy Rights Act (the "CPRA"), generally went into effect in January 2023.

It expands the CCPA and established a new California Privacy Protection Agency authorized to issue substantive regulations, which could result in increased privacy and information security enforcement.

In addition to applying to businesses that buy and sell personal information, the CPRA applies to businesses that buy, sell or share personal information and sets forth a new category of "sensitive personal information" that includes genetic data;

biometric or health information;

and sex life or sexual orientation information.

In addition to the modifications that enhance individuals' rights under the CCPA, the CPRA added five more rights, including the authority for the State to regulate the requirement for businesses to conduct risk assessments and cybersecurity audits.

There is still a significant amount of uncertainty with respect to the CPRA's three-year compliance roll-out and the impact it will have on us and others in our industry, however, we expect to incur increased compliance costs and may be subject to increased potential liability in the event we fail to comply.

In the United States, the California Consumer Privacy Act of 2018 (the ”CCPA”), as amended by the California Privacy Rights Act (collectively,(the "CCPA"), requires covered businesses that process the personal information of California residents to, among other things:

(i) provide certain disclosures to California residents regarding the business’s collection, use and disclosure of their personal information, (ii) receive and respond to requests from California residents to access, delete and correct their personal information, or to opt out of certain disclosures of their personal information, and (iii) enter into specific contractual provisions with services providers that process California resident personal information on the business’s behalf.

Additional compliance investment and potential business process changes may also be required.

Similar laws have passed in other states and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States.

The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.

Furthermore, the Federal Trade Commission (“FTC”) has authority to initiate enforcement actions against entities that mislead customers about HIPAA compliance, make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of personal health information, fail to implement policies to protect personal health information or engage in other unfair practices that harm customers or that may violate Section 5(a) of the FTC Act.

Furthermore, the Federal Trade Commission (“FTC”) has authority to initiate enforcement actions against entities that mislead customers about compliance with the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of personal health information, fail to implement policies to protect personal health information or engage in other unfair practices that harm customers or that may violate Section 5(a) of the FTC Act.

The FTC and many state Attorneys General also continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive.

For example, according to the FTC, failing to take appropriate steps to keep consumers’ personal information secure can constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the FTC Act.

The FTC expects a company’s data security measures to be reasonable and appropriate in light of the

sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

Any failure or perceived failure by us or our vendors or partners to comply with these laws and regulations, our privacy and notice policies, our privacy-related obligations to employees, customers or other third parties or privacy or security-related legal obligations, or any actual or perceived compromise of security that results in the unauthorized access to or disclosure, alteration, theft, loss, transfer or use of personal or other information, including personally identifiable information or other sensitive data, may result in governmental enforcement actions, fines and penalties, litigation or public statements critical of us by consumer advocacy groups or others and could cause our customers, partners or others to lose trust in us, which could have an adverse effect on our business.

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We have experienced cyberattacks and other security incidents and expect to continue to experience such events.

For example, in March 2020, we experienced a ransomware attack in which cybercriminals were able to access our information technology systems.

While we isolated the source of the attack and restored normal operations with no material day-to-day impact to us or our ability to access our data, we believe Confidential Information was stolen.

We believe the ransomware attack could lead to the disclosure of our trade secrets or other intellectual property, or could lead to the exposure of personal information of our employees.

The release of any of this information could, but is not reasonably likely to, have a material adverse effect on our business, operations, business strategy, results of operations or financial condition.

In addition, the March 2020 ransomware attack has not, but it is possible that it 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, but is not reasonably likely to, result in significant judgements against us, penalties and fines.

The cost of investigating, mitigating, responding to and remediating potential data security breaches and complying with applicable breach notification obligations to individuals, regulators, partners and others, including the March 2020 ransomware attack, could be significant.

Our insurance policies may not be adequate to compensate us for the potential costs and other losses arising from cybersecurity-related disruptions, failures, attacks or breaches.

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Threats involving the misuse or access of our network, systems, and information by our current or former employees, contractors, vendors, or partners, whether intentional or unintentional, also pose a risk to the security of our network, systems, information and data.

For example, we are subject to the risk that employees may inadvertently share Confidential Information with unintended third parties, or that departing employees may take, or create their own information based on, our Confidential Information upon leaving the company.

For example, we are subject to the risk that employees may inadvertently share Confidential Information with unintended

third parties, or that departing employees may take, or create their own information based on, our Confidential Information upon leaving the company.

In addition, any such insiders may be the victims of social engineering attacks that enable third parties to access our network, systems, and information using an authorized person’s credentials.

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Interruptions or failures in our operations or services may reduce our revenue, result in the loss of customers, adversely affect our ability to attract new customers or harm our reputation.

Significant interruptions to our research and development programs could cause us to delay the introduction of new products or improvements to existing products, which could adversely impact our business, our results of operations and the competitiveness of our products.

Significant interruptions to our research and development programs could cause us to delay the introduction of new products or new versions of existing products, which could adversely impact our business, our results of operations and the competitiveness of our products.

Our current solutions are capable of generating large datasets, the analysis of which can be time consuming without access to a high-performance computing system.

The visualization of such data can also be computationally intensive.

As we iterate and improve our products and as the related technologies advance, our continued growth may require an ability to provide our

customers with direct access to a high-performance computing system and/or alternative means of obtaining our software.

As we iterate and improve our products and as the related technologies advance, our continued growth may require an ability to provide our customers with direct access to a high-performance computing system and/or alternative means of obtaining our software.

As a result, we expect our reliance on internal and third-party data centers to increase in the future.

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The Bayh-Dole Act also provides that the Patent Owner manufacture products embodying the respective Government Funded Inventions domestically in accordance with certain requirements.

If this domestic manufacturing requirement is not met, the government agency that funded the relevant grant is entitled to exercise March-In Rights.

If this domestic manufacturing requirement is not met, the government agency that funded

the relevant grant is entitled to exercise March-In Rights.

We are subject to the Bayh-Dole Act with respect to certain licensed technologies that were developed with United States government grants.

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Furthermore, we may also become involved in other proceedings, such as reexamination, derivation or opposition proceedings before the USPTO or other jurisdictional body relating to our intellectual property rights or the intellectual property rights of others.

Third parties may assert infringement claims against us based on existing patents or patents that may be granted

in the future, regardless of their merit.

Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future, regardless of their merit.

Because patent applications can take many years to issue and because publication schedules for pending applications vary by jurisdiction, there may be applications now pending of which we are unaware and which may result in issued patents, which our current or future products or services infringe.

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Although patent, trademark, trade secret, and other intellectual property disputes have often been settled through licensing or similar arrangements, costs associated with such arrangements may be substantial and could include ongoing royalties.

We may not be able to obtain licenses on commercially reasonable terms, or at all, in which event our business would be materially and adversely affected.

We may not be able to obtain licenses on commercially reasonable terms, or at all, in which event our business would be materially and

adversely affected.

Even if we were able to obtain a license, the rights may be nonexclusive, which could result in our competitors and other third parties gaining access to the same intellectual property.

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Such proceedings could result in revocation of or amendment to our patents in such a way that they no longer cover our products or technologies.

With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel, and the patent examiner were unaware during prosecution.

With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel, and the patent examiner were unaware

during prosecution.

If a third party were to prevail on a legal assertion of invalidity and/or unenforceability, we may lose at least part, and perhaps all, of the patent protection on our products or technologies.

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We are involved in lawsuits to protect, enforce or defend our patents and other intellectual property rights, which are expensive, time consuming and could ultimately be unsuccessful.

On May 6, 2021, we filed suit against NanoString Technologies, Inc.

(“NanoString”) in the U.S.

District Court for the District of Delaware alleging that NanoString’s GeoMx Digital Spatial Profiler and associated instruments and reagents infringe U.S.

10,472,669, 10,662,467, 10,961,566, 10,983,113 and 10,996,219 (the “GeoMx Action”).

On May 19, 2021, we filed an amended complaint additionally alleging that the GeoMx products infringe U.S.

11,001,878 and 11,008,607.

On May 4, 2022, we filed an amended complaint in the GeoMx Action additionally alleging that the GeoMx products infringe U.S.

11,293,917 and withdrawing our claims of infringement of U.S.

We are seeking, among other relief, injunctive relief and unspecified damages (including attorneys’ fees) in relation to NanoString’s making, using, selling, offering to sell, exporting and/or importing in the United States the GeoMx Digital Spatial Profiler and associated instruments and reagents.

NanoString filed its answer to the GeoMx Action on May 18, 2022.

A Markman hearing was held on February 17, 2023 and the Court issued its claim construction order on February 28, 2023.

On September 7, 2023, the Court issued an order granting our motion for summary judgment that the asserted patents are not invalid for indefiniteness and denying NanoString’s motion for summary judgment that the asserted patents are invalid for indefiniteness and lack of written description.

On November 17, 2023, a jury found that NanoString willfully infringed the asserted patents and that the asserted patents are valid.

The jury awarded us more than $31 million in damages, consisting of approximately $25 million in lost profits and approximately $6 million in

Post-trial motions, including our motions for a permanent injunction, ongoing royalties, enhanced damages, attorneys’ fees and pre- and post-judgment interest, are pending.

NanoString filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the U.S.

bankruptcy court in Delaware on February 4, 2024, and the Court’s consideration of these post-trial motions is currently stayed due to the bankruptcy filing.

On February 28, 2022, we filed a second suit against NanoString in the U.S.

District Court for the District of Delaware alleging that NanoString’s CosMx Spatial Molecular Imager and associated instruments, reagents and services infringe U.S.

10,227,639 and 11,021,737 (the “CosMx Action”).

On May 12, 2022, we filed an amended complaint in the CosMx Action additionally alleging that the CosMx products additionally infringe U.S.

11,293,051, 11,293,052 and 11,293,054.

NanoString filed its answer to the CosMx Action on May 26, 2022.

On March 1, 2023, we filed a second amended complaint additionally alleging that the CosMx products infringe U.S.

We are seeking, among other relief, injunctive relief and unspecified damages (including attorneys’ fees) in relation to NanoString’s making, using, selling, offering to sell, exporting and/or importing in the United States the CosMx Spatial Molecular Imager and associated instruments, reagents and services.

NanoString filed its answer to the second amended complaint on March 22, 2023.

Discovery is in progress.

A Markman hearing was held on January 10, 2024, and the Court issued its claim construction order on February 1, 2024.

Trial is scheduled for September 2024.

This litigation is currently stayed due to NanoString’s bankruptcy filing.

On August 16, 2022, NanoString filed a counterclaim in the CosMx Action alleging that our Visium products infringe U.S.

11,377,689 (the “689 patent”).

We filed our answer to NanoString's counterclaim in the CosMx Action on August 30, 2022.

On November 23, 2022, we moved to sever claims relating to NanoString’s assertion of the 689 patent and consolidate those claims with the patent case NanoString filed against us on October 20, 2022 (discussed below).

On January 24, 2023, the Court granted our motion.

On May 1, 2023, NanoString filed a motion in the CosMx Action to add antitrust, unfair competition, tort, and contract counterclaims.

NanoString seeks, among other relief, injunction relief (including that we grant NanoString a license to the patents that we asserted against NanoString in the CosMx Action) and unspecified damages (including attorneys’ fees).

On July 10, 2023, the Court denied NanoString’s motion for leave to add a contract counterclaim but otherwise granted the motion for leave to amend.

On May 24, 2023, NanoString filed a motion to bifurcate its amended counterclaims and a motion for expedited discovery.

On June 6, 2023, the Court denied NanoString’s motion to bifurcate and granted its motion for expedited discovery.

We believe NanoString’s claims are meritless and intend to vigorously defend ourselves.

On October 20, 2022, NanoString filed suit against us in the U.S.

District Court for the District of Delaware alleging that our Visium products infringe U.S.

11,473,142 (“the 142 patent”), a continuation of the 689 patent (the “NanoString Action”).

NanoString seeks, among other relief, injunctive relief and unspecified damages (including attorneys’ fees) in relation to NanoString’s making, using, selling, offering to sell, exporting and/or importing in the United States Visium products and associated instruments, reagents and services.

On January 24, 2023, the Court severed NanoString’s claims with respect to the 689 patent from the CosMx Action and consolidated those claims with this action.

NanoString filed an amended complaint on January 27, 2023.

We filed an answer to the NanoString Action on February 10, 2023.

Discovery is in progress.

A Markman hearing was held on January 10, 2024, and the Court issued its claim construction order on February 1, 2024.

Trial is scheduled for December 2024.

We believe NanoString’s claims in the NanoString Action are meritless and intend to vigorously defend ourselves.

On August 16 and September 25, 2023, we filed petitions for inter partes review (“IPR”) of the 689 patent and the 142 patent, respectively.

On February 1, 2024, IPR was instituted for the 689 patent.

An institution decision for the IPR against the 142 patent is expected in April 2024.

On March 9, 2022, we filed suit in the Munich Regional Court in Germany alleging that NanoString’s CosMx Spatial Molecular Imager and associated instruments, reagents and services infringe EP Patent No.

2794928B1 (the “EP 928 patent”) (the “Germany CosMx Action”).

A hearing on infringement was held on March 23, 2023.

On May 17, 2023, the Munich Regional Court found that the CosMx products infringe the EP 928 patent and issued a permanent injunction requiring NanoString to stop selling and supplying CosMx instruments and reagents for RNA detection in Germany.

The injunction took effect on June 1, 2023.

On May 25, 2023, NanoString filed an appeal of the Germany CosMx Action in the Munich Higher Regional Court.

A hearing date has not yet been set for this appeal.

On October 30, 2023, NanoString requested that the Higher Regional Court temporarily stay enforcement of the injunction pending the appeal.

On December 20, 2023, the Higher Regional Court granted NanoString’s request conditioned upon NanoString posting a 2.3 million Euro security deposit.

To date, NanoString has not posted this security deposit.

On July 29, 2022, NanoString filed a nullity action with the German Federal Patent Court challenging the validity of the EP 928 patent.

On February 10, 2023, the Federal Patent Court issued a preliminary opinion upholding the validity of certain claims of the EP 928 patent directed to in situ analysis.

A hearing on validity is scheduled before the Federal Patent Court in May 2024.

On June 1, 2023, we filed requests for preliminary injunctions in the Munich Local Division of the Unified Patent Court (“UPC”) alleging that NanoString's CosMx Spatial Molecular Imager and associated instruments, reagents and services for RNA detection infringe the EP 928 patent and EP Patent No.

4108782 (the “EP 782 patent”).

Hearings were held for the EP 782 and EP 928 patents on September 5 and September 19, respectively.

On September 19, 2023, the UPC granted our request for the EP 782 patent and issued a preliminary injunction requiring NanoString to stop selling and supplying CosMx instruments and reagents for RNA detection in all 17 UPC member states.

On October 10, 2023, the UPC denied our preliminary injunction request for the EP 928 patent.

On October 2, 2023, NanoString filed an appeal of the preliminary injunction for the EP 782 patent in the UPC Court of Appeals.

A hearing was held before the UPC Court of Appeals on December 18, 2023, and a decision is pending.

On August 31 and September 18, 2023 we filed main requests in the Munich Local Division of the UPC alleging that NanoString's CosMx Spatial Molecular Imager and associated instruments, reagents and services for RNA detection infringe the EP 782 and EP 928 patents, respectively.

No hearings have yet been set for these main requests.

On July 18, 2023, NanoString filed an opposition in the European Patent Office challenging the validity of the EP 782 patent.

No schedule has yet been set for this opposition.

On July 27, 2023, NanoString filed a revocation action in the Munich Central Division of the UPC challenging the validity of the EP 928 patent.

A hearing in the revocation action is scheduled on April 17, 2024.

On January 30, 2024, NanoString filed a petition for IPR of U.S.

11,542,554, which is asserted by us against NanoString in the CosMx Action.

The impact of NanoString’s bankruptcy filing on our actions against NanoString outside of the U.S.

District Court for the District of Delaware is not yet fully resolved.

On May 3, 2022, we filed suit against Vizgen, Inc.

(“Vizgen”) in the U.S.

District Court for the District of Delaware alleging that Vizgen’s MERSCOPE Platform and workflow and/or Vizgen’s Lab Services program, including associated instruments and reagents, infringe U.S.

11,021,737, 11,293,051, 11,293,052, 11,293,054 and 11,299,767.

We seek, among other relief, injunction relief and unspecified damages (including attorneys’ fees) in relation to Vizgen’s making using, selling, offering to sell, exporting and/or importing in the United States the MERSCOPE Platform and workflow and/or Vizgen’s Lab Services program, including associated instruments and reagents.

On July 25, 2022, Vizgen filed a motion to dismiss our claims for willful and indirect infringement, which the Court denied on September 19, 2022.

Discovery is in progress.

A Markman hearing was held on January 10, 2024, and the Court issued its claim construction order on February 1, 2024.

Trial is scheduled for October 2024.

On August 30, 2022, Vizgen filed its answer and counterclaims alleging that our Xenium product infringes U.S.

11,098,303 (the “303 patent”).

Vizgen seeks, among other relief, injunction relief and unspecified damages (including attorneys’ fees) in relation to our making, using, selling, offering to sell, exporting and/or importing in the United States Xenium products, including associated instruments and reagents.

Vizgen also filed counterclaims alleging that we tortiously interfered with Vizgen’s contractual and business relationship with Harvard and that we engaged in unfair practices under Massachusetts state law.

On October 27, 2022, we filed a partial answer and motion to dismiss the infringement counterclaim and the tort counterclaims.

On February 2, 2023, our motion to dismiss was denied.

We believe Vizgen’s claims are meritless and intend to vigorously defend ourselves.

On March 15, 2023, we filed an amended complaint additionally alleging that the MERSCOPE Platform and workflow and Vizgen’s Lab Services program infringe U.S.

11,549,136 and withdrawing our claim of infringement of U.S.

On April 17, 2023, Vizgen filed its answer adding amended counterclaims including antitrust, unfair competition, tort, and contract counterclaims.

Vizgen seeks, among other relief, injunctive relief (including that we grant Vizgen a license to the patents that we asserted against Vizgen) and unspecified damages (including attorneys’ fees).

On May 18, 2023, we filed a motion to dismiss Vizgen’s amended counterclaims.

On July 10, 2023, the Court granted our motion to dismiss Vizgen’s contract counterclaim but otherwise denied our motion to dismiss.

We believe Vizgen’s claims are meritless and intend to vigorously defend ourselves.

On June 1, 2023, we filed suit in the Hamburg Local Division of the UPC alleging that Vizgen’s MERSCOPE products infringe the EP782 patent.

We seek, among other relief, injunction relief and unspecified damages (including attorneys’ fees) in relation to Vizgen’s MERSCOPE products in all 17 UPC member states.

A hearing has not yet been set.

On August 30, 2023, we filed a petition for IPR of the 303 patent.

An institution decision is expected by March 2023.

On August 24, 2022, we filed suit against Parse Biosciences, Inc.

("Parse") in the U.S.

District Court for the District of Delaware alleging that Parse’s Evercode Whole Transcriptomics products and ATAC-seq products infringe U.S.

10,155,981 (the “981 patent”), 10,697,013 (the “013 patent”), 10,240,197 (the “197 patent”), 10,150,995, 10,619,207, and 10,738,357.

We seek, among other relief, injunction relief and unspecified damages (including attorneys’ fees) in relation to Parse’s making using, selling, offering to sell, exporting and/or importing in the United States Parse’s Evercode Whole Transcriptomics products and ATAC-seq products.

On October 17, 2022, Parse filed a motion to dismiss alleging that the asserted claims are directed to patent ineligible subject matter.

The Court held a hearing on the motion to dismiss on November 22, 2022, and supplemental briefing was submitted on December 15, 2022.

On September 14, 2023, the Court denied the motion.

Parse filed its answer on October 6, 2023.

Discovery is in progress.

A Markman hearing is scheduled for February 2024, and trial is scheduled for December 2024.

Between April 20 and June 21, 2023, Parse filed petitions for IPR of all of the patents asserted.

On October 13, 2023, IPR was instituted on the 981 patent.

The PTAB denied institution of Parse’s petitions for IPR on the other five asserted patents.

On January 2 and 5, 2024, Parse filed rehearing requests with the PTAB for the 197 and 013 patents, respectively.

On November 6, 2023, Parse filed a motion to stay the Delaware action pending the IPRs.

On December 21, 2023, the court denied Parse’s motion to stay.

On February 5, 2024, the PTAB instituted IPRs for the 197 and 013 patents on Parse’s requests for rehearing.

On February 8, 2024, Parse filed a renewed motion to stay.

On December 1, 2023, we filed suit against Curio Bioscience, Inc.

(“Curio”) in the U.S.

District Court for the District of Delaware alleging that the Curio Seeker Spatial Mapping Kit and associated products and services infringe U.S.

10,480,022, 10,662,468, 11,001,879, 11,549,138, and 11,761,030.

On February 1, 2024, Curio filed a motion to dismiss alleging that the asserted claims are directed to patent ineligible subject matter.

A case schedule has not yet been set.

On December 4, 2023, we filed a request for a preliminary injunction in the Dusseldorf Local Division of the UPC alleging that the Curio Seeker Spatial Mapping Kit and associated products and services infringe EP Patent No.

2697391 (the “EP 391 patent”).

A hearing for the preliminary injunction request has been set for March 26, 2024.

In addition to the litigation discussed above, we may in the future be a party to other litigation or legal proceedings to protect, enforce or defend our patents or other intellectual property, which, if resolved adversely to us, could invalidate or render unenforceable our intellectual property or generally preclude us from restraining, enjoining or otherwise seeking to exclude competitors from commercializing products using technology developed or used by us.

In the past we have initiated, and we are currently involved in, litigation to defend our technology including technology developed through our significant investments in research and development.

It is our general policy not to out-license our patents but to protect our sole right to own and practice them.

There are inherent uncertainties in these legal matters, some of which are beyond management’s control, making the ultimate outcomes difficult to predict.

See Note 7, Commitments and Contingencies, to the consolidated financial statements included in this Annual Report on Form 10-K for information regarding certain legal proceedings in which we are involved.

In addition to the litigation in Note 7, we may in the future be a party to other litigation or legal proceedings to protect, enforce or defend our patents or other intellectual property, which, if resolved adversely to us, could invalidate or render unenforceable our intellectual property or generally preclude us from restraining, enjoining or otherwise seeking to exclude competitors from commercializing products using technology developed or used by us.

For example, our patents and any patents which we in-license may be challenged, narrowed, invalidated or circumvented.

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In the past we have provided, and in the future we may provide, guidance and other expectations regarding our expected financial and business performance.

Correctly identifying key factors affecting business conditions and predicting future events is inherently an uncertain process, and our guidance or the other expectations we set may not ultimately be accurate and has in the past been inaccurate in certain respects.

For example, in February 2022 we announced our expectations regarding full year 2022 revenue, which we revised in August 2022 to reflect lower expected revenue for full year 2022.

In August 2022, we announced our goal to attain cash flows from operating activities in excess of our capital investment requirements by the end of 2023.

While we achieved this goal for the quarter ended December 31, 2023, we may not be able to maintain such cash flows from operating activities in excess of our capital investment requirements on a sustained basis, including if we do not generate sufficient revenue or achieve our gross margin targets, if we acquire businesses or technologies (or complete expenditures related to previous acquisitions), if our spending is higher than anticipated or due to many other factors.

If our guidance varies from actual results or if we fail to meet other expectations regarding our business, the market value of our common stock could decline significantly.

Our guidance is based on a number of assumptions and does not reflect all possible impacts to our business including, for example, all potential impacts of recently announced changes to government funding of research and the other risks discussed in this section titled Risk Factors.

Correctly identifying key factors affecting business conditions and predicting future events is inherently an uncertain process, and our guidance or the other expectations we set may not ultimately

be accurate and has in the past been inaccurate in certain respects.

For example, we failed to meet our publicly announced expectations regarding full year revenue in both 2022 and 2024.

Further, in August 2022, we announced our goal to attain cash flows from operating activities in excess of our capital investment requirements by the end of 2023.

While we achieved this goal for the quarter ended December 31, 2023, we did not attain cash flows from operating activities in excess of our capital investment requirements for the full year ended December 31, 2024 and we may not be able to maintain cash flows from operating activities in excess of our capital investment requirements in the future on a sustained basis or at all due to a variety of factors, including if we do not generate sufficient revenue or achieve our gross margin targets, if we acquire businesses or technologies (or complete expenditures related to previous acquisitions) or if our spending is higher than anticipated.

If our guidance varies from actual results or if we fail to meet other expectations regarding our business, the market value of our Class A common stock could decline significantly.

The market price of our Class A common stock may be volatile, which could result in substantial losses for investors.

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• sales of our Class A common stock or Class B common stock by us, our insiders or other stockholders;

• natural disasters, infectious diseases, conflict, war, civil unrest, epidemics or pandemics such as COVID-19 outbreaks or resurgences or major catastrophic events;

• natural disasters, infectious diseases, conflict, war, civil unrest, epidemics or pandemics or resurgences or major catastrophic events;

• the other factors described in this “ Risk Factors ” section.

In recent years, stock markets in general, and the market for life sciences technology companies in particular (including companies in the genomics, biotechnology, diagnostics and related sectors), have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to changes in the operating performance of the companies whose stock is experiencing those price and volume fluctuations.

stock is experiencing those price and volume fluctuations.

Broad market and industry factors may seriously affect the market price of our Class A common stock, regardless of our actual operating performance.

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If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our operating results could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock.

For example, the market price of our common stock declined after our financial results for the quarter ended June 30, 2022 fell short of the expectations of securities analysts and investors.

For example, the market price of our common stock declined after our financial results for the quarters ended June 30, 2022 and September 30, 2024 fell short of the expectations of securities analysts and investors.

The preparation of financial statements in conformity with generally accepted accounting principles in the United States ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.

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The rules and regulations applicable to us as a public company and recent trends in the insurance market have made it more expensive for us to obtain director and officer liability insurance.

We have currently obtained only director and officer liability coverage (commonly referred to as “Side A” coverage).

We have currently obtained only director and officer liability

coverage (commonly referred to as “Side A” coverage).

This means that while our directors and officers have direct insurance coverage for acts which the company is not legally required or permitted to indemnify them, the company itself does not have coverage for amounts incurred in defending, among other things, stockholder derivative or securities class action lawsuits or in the event of certain investigative actions, for amounts it must pay as a result of such suits or amounts it must pay to indemnify our directors or officers.

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Any costs incurred in connection with such litigation could have a material adverse effect on our business, financial condition and results of operations.

In August 2021, the SEC announced that it had approved Nasdaq’s proposed rule change to advance board diversity and enhance transparency of board diversity statistics through new listing requirements.

Under these listing rules, Nasdaq-listed companies are required, subject to certain exceptions, to annually disclose diversity statistics regarding their directors’ voluntary self-identified characteristics and include on their boards of directors at least two “Diverse” directors or publicly disclose why their boards do not include such “Diverse” directors.

Under the phase-in period for these listing rules, for companies listed on the Nasdaq Global Select Market, this disclosure requirement regarding the existence of at least one “Diverse” director applies starting on the later of August 7, 2023, or the date that the company files its proxy statement for its annual shareholder meeting during 2023, and regarding the existence of at least two “Diverse” directors applies starting on the later of August 6, 2025, or the date that the company files its proxy statement for its annual shareholder meeting during 2025.

Under the proposed rule, a “Diverse” director is someone who self-identifies either as (i) female, (ii) Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, or two or more races or ethnicities, or (iii) lesbian, gay, bisexual, transgender or a member of the queer community.

Our board of directors currently includes two female directors, and three directors from an “underrepresented community.” However, if our current or future female or other “Diverse” directors no longer serve on our board of directors prior to the applicable dates for the new Nasdaq listing rules, we could be out of compliance with the Nasdaq listing rules.

We cannot assure that we can recruit, attract and/or retain qualified members of the board and meet gender and diversity requirements under Nasdaq listing rules, which may expose us to financial penalties and adversely affect our reputation.

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

What changed 10-K

Item 1A. Risk Factors