What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-13 compared with 2024-02-15 · 153 added, 186 removed, 865 unchanged (28% of the section changed)

39 unchanged sentences

Our audit procedures included, among others, evaluating the allocation of consideration using stand-alone selling price for a sample of individual sales transactions.

For the sample, we inspected the customer contract, identified the distinct performance obligation(s) in the contract, and recalculated the allocation of the transaction price.

For the sample, we inspected the customer contract, identified the distinct performance obligation(s) in the contract, and recalculated the allocation of the transaction prices.

For the sample, we further tested the timing of revenue recognition based on evidence of transfer of control of the goods to the customer or the recognition of revenue over time for extended warranty service performance obligations.

9 unchanged sentences

Marketable securities 49,335 29,411

Restricted cash — 2,633

Accounts receivable, net 87,862 114,832

3 unchanged sentences

Property and equipment, net 252,648 279,571

Restricted cash — 4,974

Operating lease right-of-use assets 57,290 65,361

40 unchanged sentences

Selling, general and administrative 344,343 343,330 298,300

Accrued contingent liabilities — — ( 660 )

Total operating expenses 609,041 674,642 563,967

4 unchanged sentences

Other expense, net ( 1,585 ) ( 307 ) ( 198 )

Total other income (expense) 16,566 5,973 ( 1,462 )

Total other income 16,859 16,566 5,973

Loss before provision for income taxes ( 177,700 ) ( 248,763 ) ( 161,971 )

31 unchanged sentences

Net loss — — — ( 166,000 ) — ( 166,000 )

Other comprehensive income — — — — 72 72

Other comprehensive loss — — — — ( 4,357 ) ( 4,357 )

Balance as of December 31, 2022 115,195,009 2 1,839,397 ( 1,029,321 ) ( 4,335 ) 805,743

Issuance of Class A common stock related to equity awards 3,900,353 — 19,483 — — 19,483

Vesting of shares subject to repurchase, including early exercised options — — 96 — — 96

Stock-based compensation — — 167,010 — — 167,010

Net loss — — — ( 255,099 ) — ( 255,099 )

Other comprehensive loss — — — — ( 4,357 ) ( 4,357 )

Other comprehensive income — — — — 3,906 3,906

Balance as of December 31, 2023 119,095,362 2 2,025,890 ( 1,284,420 ) ( 429 ) 741,043

2 unchanged sentences

Net loss — — — ( 182,627 ) — ( 182,627 )

Other comprehensive income — — — — 3,906 3,906

Other comprehensive loss — — — — ( 64 ) ( 64 )

Balance as of December 31, 2024 122,291,837 $ 2 $ 2,177,672 $ ( 1,467,047 ) $ ( 493 ) $ 710,134

7 unchanged sentences

Net loss $ ( 182,627 ) $ ( 255,099 ) $ ( 166,000 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Stock-based compensation expense 140,749 166,950 136,848

Depreciation and amortization 35,879 35,512 25,368

Asset impairment charges 9,845 — —

Lease and asset impairment charges 3,054 9,845 —

Amortization of right-of-use assets 7,829 8,107 7,638

9 unchanged sentences

Deferred revenue 11,209 10,932 3,350

Accrued contingent liabilities — — ( 44,173 )

Accrued expenses and other current liabilities ( 12,736 ) 28,301 3,336

1 unchanged sentence

Other noncurrent liabilities 776 1,284 ( 2,942 )

Net cash used in operating activities ( 15,197 ) ( 33,606 ) ( 21,373 )

Net cash provided by (used in) operating activities 6,664 ( 15,197 ) ( 33,606 )

Investing activities:

5 unchanged sentences

Purchase of marketable securities ( 48,876 ) — ( 282,871 )

Net cash provided by (used in) investing activities 133,492 ( 350,887 ) ( 106,729 )

Net cash (used in) provided by investing activities ( 32,631 ) 133,492 ( 350,887 )

Financing activities:

3 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 164 ) ( 33 ) ( 44 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 131,931 ( 368,720 ) ( 92,571 )

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 15,217 ) 131,931 ( 368,720 )

Cash, cash equivalents, and restricted cash at beginning of year 359,284 227,353 596,073

6 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease liabilities $ — $ 6,518 $ 16,562

Contingent consideration payable related to business acquisition $ — $ — $ 1,500

The accompanying notes are an integral part of these consolidated financial statements.

5 unchanged sentences

(the “Company”) is a life sciences technology company focused on building innovative products and solutions to interrogate, understand and master biological systems at resolution and scale that matches the complexity of biology.

The Company’s integrated solutions include the Company’s Chromium X Series and Chromium Connect instruments, which the Company refers to as “Chromium instruments,” the Company's Visium CytAssist and Xenium Analyzer instruments, which the Company refers to as “Spatial instruments,” and the Company’s proprietary microfluidic chips, slides, reagents and other consumables for the Company’s Chromium, Visium and Xenium solutions, which the Company refers to as “consumables.” The Company bundles its software with these products to guide customers through the workflow, from sample preparation through analysis and visualization.

The Company’s integrated solutions include the Company’s Chromium instruments and the Company's Visium CytAssist and Xenium Analyzer, which the Company refers to as “Spatial instruments,” and the Company’s proprietary microfluidic chips, slides, reagents and other consumables for the Company’s Chromium, Visium and Xenium solutions, which the Company refers to as “consumables.” The Company bundles its software with these products to guide customers through the workflow, from sample preparation through analysis and visualization.

The Company was incorporated in the state of Delaware in July 2012 and began commercial and manufacturing operations and selling its instruments and consumables in 2015.

13 unchanged sentences

The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources, making operating decisions and evaluating financial performance.

Cash Equivalents and Restricted Cash

The measures of profitability and significant segment expenses reviewed by the CODM are consistent with the presentation and disclosure in these consolidated financial statements.

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents.

16 unchanged sentences

Allowances for credit losses and write-downs are recognized in “Other expense, net,” and unrealized losses not related to credit losses are recognized in “Accumulated other comprehensive loss.” There are no allowances for credit losses for the periods presented.

As of December 31, 2023, the gross unrealized losses on available-for-sale securities are related to market interest rate changes and not attributable to credit.

Fair Value of Financial Instruments

9 unchanged sentences

Money market funds are classified as Level 1.

Level 2 assets consist primarily of corporate bonds, asset-backed securities, commercial paper, U.S.

Level 2 assets include corporate bonds, asset-backed securities, commercial paper, U.S.

Government Treasury and agency securities, and debt securities in government-sponsored entities based upon quoted market prices for similar movements in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets.

3 unchanged sentences

The Company reviews its accounts receivable and provides allowances of specific amounts if collectability is no longer reasonably assured based on historical experience and specific customer collection issues.

The allowance for doubtful accounts was $ 0.1 million as of December 31, 2023 and 2022, respectively.

The allowance for doubtful accounts was $ 0.1 million and $ 0.1 million as of December 31, 2024 and 2023, respectively.

Business Concentrations

2 unchanged sentences

In addition, the Company is reliant on several suppliers for key components for its reagent kits.

A significant disruption in the operations of the contract

manufacturers or suppliers may impact the production of the Company’s products for a substantial period of time, which could have a material adverse effect on its business, financial condition and results of operations.

A significant disruption in the operations of the contract manufacturers or suppliers may impact the production of the Company’s products for a substantial period of time, which could have a material adverse effect on its business, financial condition and results of operations.

Concentrations

6 unchanged sentences

For the years ended December 31, 2024, 2023, and 2022, no single customer represented more than 10% of revenue.

As of December 31, 2022, one of the Company's distributors accounted for 11 % of the Company’s outstanding accounts receivable.

No customer or distributor represented more than 10% of the Company’s outstanding accounts receivable as of December 31, 2024 or 2023.

19 unchanged sentences

If the evaluation indicates that the carrying amount of the ROU assets may not be recoverable, any potential impairment is measured based upon the fair value of the related ROU asset or asset group as determined by appropriate valuation techniques.

Note 7, Commitments and Contingencies - Lease Agreements, to the Notes to Consolidated Financial Statements for further details.

Refer to Note 7, Commitments and Contingencies - Lease Agreements, to the Notes to Consolidated Financial Statements for further details.

The Company has elected to not separate lease and non-lease components for any leases within its existing classes of assets and, as a result, accounts for any lease and non-lease components as a single lease component.

The Company has also elected to not apply the recognition requirement to any leases within its existing classes of assets with a term of 12 months or less.

Internal-Use Software

The Company capitalizes costs incurred to develop internal-use software within property and equipment, net and capitalizes costs to develop hosting arrangements within other noncurrent assets in the consolidated balance sheets.

Costs incurred during the preliminary planning and evaluation and post implementation stages of the project are expensed as incurred.

Costs incurred during the application development stage of the project are capitalized.

These costs are amortized on a straight-line basis over the estimated useful life of the asset.

Property and Equipment, Net

10 unchanged sentences

If indicators of impairment exist and the undiscounted future cash flows that the assets are expected to generate are less than the carrying value of the assets, the Company reduces the carrying amount of the assets to their estimated fair values based on a discounted cash flow approach or, when available and appropriate, to comparable market values.

The Company recorded impairment charges of $ 4.6 million primarily relating to intangible assets during the year ended December 31, 2023.

There were no impairment losses recorded for the years ended December 31, 2022 and 2021.

Refer to Note 5, Other Financial Statement Information - Intangible Assets, Net, to the Notes to Consolidated Financial Statements for further details.

The Company recorded impairment charges of $ 3.1 million and $ 9.8 million primarily relating to computer equipment, software, right-of-use assets, and intangible assets during the years ended December 31, 2024 and 2023, respectively.

There were no impairment losses recorded for the year ended December 31, 2022.

Refer to Note 5, Other Financial Statement Information , for further details.

Product Warranties

33 unchanged sentences

Stock-Based Compensation

The Company’s stock-based compensation expense relates to stock options, restricted stock units (“RSUs”), market-based performance stock awards ("PSAs") including performance stock options and performance RSUs granted pursuant to equity incentive plans and stock purchase rights under an Employee Stock Purchase Plan (“ESPP”).

The Company’s stock-based compensation expense relates to stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), market-based performance stock awards ("PSAs") including performance stock options and performance RSUs granted pursuant to equity incentive plans and stock purchase rights under an Employee Stock Purchase Plan (“ESPP”).

Stock-based compensation expense for its stock-based awards is based on their grant date fair value.

1 unchanged sentence

The Company estimates the fair value of stock option awards under an equity incentive plan and stock purchase rights under an ESPP on the grant date using the Black-Scholes option-pricing model.

The fair values of stock-based awards excluding PSAs are recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are recognized as they occur.

The fair values of stock-based awards excluding PSUs and PSAs are recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are recognized as they occur.

The Black-Scholes model considers several variables and assumptions in estimating the fair value of stock-based awards.

These variables include the per share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected annual dividend yield and the expected stock price volatility over the expected term.

The Company calculated the

expected term using the simplified method, which is the mid-point between the vesting and contractual term.

Due to the short trading period of the Company's stock, the Company has estimated volatility by reference to the historical volatilities of the Company and that of similar publicly traded peer companies.

The Company calculated the expected term using the simplified method, which is the mid-point between the vesting and contractual term.

Due to the short

trading period of the Company's stock, the Company has estimated volatility by reference to the historical volatilities of the Company and that of similar publicly traded peer companies.

The risk-free interest rate is based on the yield available on U.S.

3 unchanged sentences

If the related market condition is achieved earlier than its estimated derived service period, the stock-based compensation expense will be accelerated, and a cumulative catch-up expense will be recorded during the period in which the market condition is met.

For PSUs, management reassesses the probability of vesting at each reporting period, and any changes in estimates are recognized on a cumulative catch-up basis for the stock-based compensation expense.

Foreign Currency

6 unchanged sentences

Gains or losses from foreign currency remeasurement are included in “Other expense, net” in the consolidated statements of operations.

The Company recognized foreign currency transaction gains of $ 1.2 million and $ 0.2 million for the years ended December 31, 2023 and December 31, 2022, and foreign currency transaction losses of $ 0.9 million for the year ended December 31, 2021, respectively.

The Company recognized foreign currency transaction losses of $ 2.1 million for the year ended December 31, 2024.

The Company recognized foreign currency transaction gains of $ 1.2 million and $ 0.2 million for the years ended December 31, 2023 and 2022, respectively.

The Company uses the asset and liability method of accounting for income taxes, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

18 unchanged sentences

For the calculation of diluted net loss per share, basic net loss per share is adjusted by the effect of dilutive securities including awards under the Company’s equity compensation plans.

Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding.

Diluted net loss per share is computed by dividing net loss by the weighted-average number of dilutive shares of common stock outstanding.

For periods in which the Company reports net losses, diluted net loss per share is the same as basic net loss per share because potentially dilutive shares of common stock are not assumed to have been issued if their effect is anti-dilutive.

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

If the screen is met, the transaction is accounted for as an asset acquisition.

If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the requirements of a business in which case the transaction is accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date, and that the fair value of acquired intangibles be recorded on the balance sheet.

Transaction costs are expensed as incurred.

Any excess of the purchase price over the assigned fair values of the net assets acquired is recorded as goodwill.

Goodwill is not amortized, rather assessed, at least annually, for impairment at a reporting unit level.

During the goodwill impairment review, the Company assesses qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than the carrying amount, including goodwill.

The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations and overall financial performance.

If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair values of our reporting unit is less than the carrying amount, then no additional assessment is deemed necessary.

Otherwise, the Company proceeds to compare the estimated fair values of the reporting unit with the carrying value, including goodwill.

If the carrying amounts of the reporting unit exceed the fair value, the Company records an impairment loss based on the difference.

The Company accounts for asset acquisitions under ASC, Business Combinations Topic 805, Subtopic 50 , which requires the acquiring entity in an asset acquisition to recognize net assets based on the cost to the acquiring entity on a relative fair value basis, which includes transaction costs in addition to consideration given.

In-process research and development expense is expensed as incurred provided there is no alternative future use.

Contingent consideration payments in asset acquisitions are recognized when the contingency is resolved and the consideration is paid or becomes payable.

Upon recognition of the contingent consideration payment, the amount is included in the cost of the acquired asset or group of assets.

Recently Issued Accounting Pronouncement and Disclosure Rules

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes, which prescribes standardized categories and disaggregation of information in the reconciliation of provision for income taxes, requires disclosure of disaggregated income taxes paid, and modifies other income tax-related disclosure requirements.

The updated standard is effective beginning with the Company’s fiscal year 2025 annual reporting period.

Early adoption is permitted.

The Company is currently evaluating the impact that the updated standard will have on its related disclosures and will not early adopt this accounting standard.

Restructuring

1 unchanged sentence

Restructuring costs of $ 2.5 million were recorded in research and development and general and administrative expenses during the year ended December 31, 2023 in the Company's consolidated statements of operations.

The restructuring activities are expected to be substantially complete by the end of the first half of 2024.

The restructuring activities were completed as of December 31, 2024.

On August 3, 2022, the Company implemented a reduction in force plan in order to decrease costs and maintain a streamlined organization to support the business.

1 unchanged sentence

Restructuring costs of $ 0.3 million, $ 1.4 million and $ 2.5 million were recorded in cost of revenue, research and development expense, and selling, general and administrative expense, respectively, during the year ended December 31, 2022 in the Company's consolidated statements of operations.

The restructuring activities were substantially completed as of December 31, 2022.

The restructuring activities were completed as of December 31, 2022.

The following table is a summary of restructuring costs related to the Company’s restructuring activities as of December 31, 2024 (in thousands):

9 unchanged sentences

Balance at December 31, 2023 310 — 310

Restructuring Charge

Cash payments made

( 569 ) — ( 569 )

Balance at December 31, 2024

2023 Acquisition

19 unchanged sentences

Total net assets acquired $ 61,113

2021 Acquisition

Tetramer Shop Acquisition

On January 8, 2021 (the "acquisition date"), the Company purchased 100 % of the outstanding shares of Tetramer Shop ApS (“Tetramer Shop”), a privately held company based in Copenhagen, Denmark, for a total cash consideration of $ 8.5 million, net of cash acquired of $ 0.2 million and including $ 1.5 million of fair value of contingent consideration.

The contingent

consideration was recorded as a liability on the acquisition date and was paid in 2022 upon the successful completion of the transfer of Tetramer Shop's technology.

Tetramer Shop was a life sciences technology company which developed and provided reagents for precise monitoring of antigen-specific T-cells in research and development.

The Company acquired Tetramer Shop for its expertise in building empty, loadable major histocompatibility complex (MHC) molecules.

The acquisition was accounted for using the acquisition method of accounting, with Tetramer Shop treated as the acquiree.

The acquired assets, including identified intangible assets, and liabilities were recorded at their respective fair values with an amount recorded to goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets.

The fair values assigned to the assets acquired and liabilities assumed were based on management’s assumptions as of the reporting date.

Our consolidated statements of operations include the financial results of Tetramer Shop subsequent to the acquisition date.

Revenue related to Tetramer Shop since the acquisition date was included in our consolidated statements of operations.

The fair value of assets acquired, including goodwill and intangibles, and liabilities assumed as of the acquisition date were as follows (in thousands):

Cash and cash equivalents $ 224

Other assets acquired 83

Tangible assets acquired 307

Other liabilities assumed ( 652 )

Deferred tax liability - non-current ( 1,131 )

Total net tangible assets acquired and liabilities assumed ( 1,476 )

Intangible assets 5,640

Goodwill 4,511

Net assets acquired $ 8,675

The intangible assets as of the acquisition date included (in thousands):

Amount Weighted Average Useful Life (in years)

Developed technology $ 5,500 10

Customer relationships 140 3

The fair value of the intangible assets acquired in connection with the acquisition was determined using either the income or replacement cost methodologies.

The developed technology and customer relationships were amortized over ten years and three years , respectively.

During the year ended December 31, 2023, the Company recorded impairment charges of $ 4.5 million, in general and administrative expenses, related to this acquired developed technology.

The impairment charge was triggered by a decision to discontinue a product.

Identifiable Intangible Assets

Developed technology acquired primarily consists of existing technology related to developing reagents for precise monitoring of antigen-specific T-cells in research and development, enabling the Company to strengthen its efforts in immunology.

The Company valued the developed technology using the multi-period excess earnings method under the income approach.

Using this approach, the final fair values were calculated using expected future cash flows discounted to their net present values at an appropriate risk-adjusted rate of return.

The excess of purchase price over the fair value assigned to the assets acquired and liabilities assumed represents the amount of goodwill resulting from the acquisition.

The Company does not expect any portion of this goodwill to be deductible for tax purposes.

The goodwill attributable to the acquisition was recorded as a noncurrent asset and is not amortized but is subject to an annual review for impairment.

Other Financial Statement Information

10 unchanged sentences

Total available-for-sale securities $ 371,329 $ 18 $ — $ 371,347 $ 378,138 $ — $ ( 188 ) $ 377,950

The contractual maturities of marketable securities as of December 31, 2023 were as follows (in thousands):

Due in one year or less $ 28,045

Due after one year to five years 1,366

The company incurred gross realized losses of $ 1.7 million and no gross realized gains from the sale of available-for-sales debt securities during the year ended December 31, 2023.

The Company incurred no material gross realized gains or losses from available-for-sales debt securities for the years ended December 31, 2022 and 2021.

The contractual maturities of marketable securities as of December 31, 2024 were all less than one year.

The company incurred gross realized losses of $ 3.0 thousand and $ 1.7 million, from the sale of available-for-sales debt securities during the years ended December 31, 2024 and 2023, respectively.

The Company incurred no material gross realized

gains or losses from available-for-sales debt securities for the years ended December 31, 2022.

Realized gains (losses) on the sale of marketable securities are recorded in “Other expense, net” in the condensed consolidated statements of operations.

3 unchanged sentences

As of December 31, 2023, the gross unrealized losses on available-for-sale securities are related to market interest rate changes and not attributable to credit.

Inventory was comprised of the following (in thousands):

16 unchanged sentences

Depreciation expense was $ 33.9 million, $ 32.9 million and $ 22.8 million for the years ended December 31, 2024, 2023, and 2022, respectively.

During the year ended December 31, 2024, the Company recorded impairment charges of $ 2.1 million related to computer equipment and software of which $ 0.3 million, $ 0.7 million and $ 1.1 million was classified in cost of revenue, research and development, and selling, general and administrative expenses, respectively, in the consolidated statement of operations.

The impairment charge was triggered by a decision to discontinue a productivity engineering project.

Intangible Assets, Net

7 unchanged sentences

Technology licenses 9.8 $ 22,504 $ ( 8,016 ) $ 14,488 $ 22,504 $ ( 6,546 ) $ 15,958

Developed technology N/A — — — 5,500 ( 1,100 ) 4,400

Developed technology 5.7 1,000 ( 92 ) 908 — — —

Customer relationships 0.9 945 ( 918 ) 27 945 ( 789 ) 156

2 unchanged sentences

During the year ended December 31, 2023, the Company recorded impairment charges of $ 4.6 million related to its developed technology and assembled workforce.

No impairment losses were recognized for intangible assets during the years ended December 31, 2022 and 2021.

No impairment losses were recognized for intangible assets during the years ended December 31, 2024 and December 31, 2022.

The estimated annual amortization of intangible assets for the next five years is shown below (in thousands):

7 unchanged sentences

Accrued commissions 5,938 6,410

Accrued acquisition-related compensation — 5,470

Other 2,848 3,179

4 unchanged sentences

Accrued legal and related costs 6,100 3,839

Accrued license fee — 6,231

Accrued royalties for licensed technologies 7,042 5,455

15 unchanged sentences

The contract liabilities of $ 33.2 million and $ 22.0 million as of December 31, 2024 and 2023, respectively, consisted of deferred revenue related to extended warranty service agreements.

A summary of the change in contract liabilities is as follows (in thousands):

Year Ended December 31,

26 unchanged sentences

Total revenue $ 610,785 $ 618,727 $ 516,409

1 Includes Hong Kong effective from the fiscal year of 2023.

Comparative periods have been adjusted for this inclusion.

Income (loss) before provision for income taxes were as follows (in thousands):

27 unchanged sentences

Acquisition related expenses — 2,296 —

Waived deductions under Section 59A 8,190 — —

Other 383 ( 199 ) 1,442

20 unchanged sentences

Net deferred tax liabilities $ ( 915 ) $ ( 206 )

1 Effective beginning January 1, 2022, under the 2017 Tax Cuts and Jobs Act, our research and development expenditures were capitalized and amortized.

As of December 31, 2024 and 2023, the Company maintained a full valuation allowance on its U.S.

11 unchanged sentences

The federal NOL carryforwards generated after December 31, 2017 totaling $ 632.9 million are carried forward indefinitely, while all others, along with the federal tax credit carryforwards, expire in years beginning in 2033.

As of December 31, 2023, the Company had state NOL carryforwards of $ 412.2 million, which begin to expire in 2033.

As of December 31, 2024, the Company had state NOL carryforwards of $ 424.5 million, which begin to expire primarily in 2033.

In addition, the Company had state tax credit carryforwards of $ 68.3 million, which do not expire.

The federal and state NOL and tax credit carryforwards are subject to change of ownership limitations provided by the Internal Revenue Code and similar state provisions.

In general, if the Company experiences a greater than 50 percentage point aggregate change in ownership over a 3-year period (a “Section 382 ownership change”), utilization of its pre-change NOL and credit carryforwards are subject to an annual limitation.

The Company completed a study through September 30, 2023 and determined that a Section 382 ownership change occurred in 2013.

As a result, the Company’s NOLs generated through November 1, 2013 may be subject to limitation under Section 382 of the Code.

The amount of pre-change NOL carryforwards which may be subject to this limitation is $ 4.8 million.

In addition, certain attributes are subject to annual limitations as a result of the Company’s acquisition of ReadCoor, Inc.

in 2020, which constituted a change in ownership as defined under Section 382.

Such limitations may result in expiration of a portion of the carryforwards before utilization.

The Company’s ability to use NOL or tax credit carryforwards to reduce future taxable income and liabilities may be further limited as a result of future changes in stock ownership.

As a result, if the Company generates taxable income, its ability to use pre-change NOL or tax credit carryforwards to offset U.

federal and state taxable income may still be subject to limitations, which could potentially result in increased future tax liability.

Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions.

Any annual limitation may result in the expiration of net operating losses and credits before utilization.

If an ownership change occurred, utilization of the net operating loss and tax credit carryforwards could be significantly reduced.

The total balance of unrecognized gross tax benefits, resulting primarily from research and development tax credits claimed on the Company’s annual tax returns, were as follows (in thousands):

Unrecognized tax benefits at beginning of year $ 45,713 $ 31,755

Reduction related to settlements with tax authorities ( 285 ) —

Reductions based on prior year tax provisions ( 1,617 ) —

15 unchanged sentences

The Company includes interest and penalties related to income tax matters within the provision for income taxes.

As of December 31, 2023, the total amount of gross interest and penalties accrued was $ 0.9 million.

The Company recognized interest and penalty expenses of $ 0.5 million in 2023.

The total amount of gross interest and penalties accrued was $ 1.6 million and $ 0.9 million for the years ended December 31, 2024 and 2023, respectively.

The Company recognized interest and penalty expenses of $ 0.7 million, $ 0.5 million and $ 0.2 million in 2024, 2023, and 2022, respectively.

The Company maintained undistributed earnings overseas as of December 31, 2024, and the Company believed the funds held by all non-U.S.

3 unchanged sentences

operations, the Company may be subject to withholding taxes in the foreign countries.

As a result of tax reform, the Company’s unrepatriated earnings are no longer subject to federal income tax in the U.S.

The Company’s unrepatriated earnings are not subject to federal income tax in the U.S.

when distributed.

8 unchanged sentences

The Company’s contract manufacturers make advance purchases of components based on the instrument unit forecasts and purchase orders placed by the Company.

To the extent these components are purchased by a contract manufacturer on the Company’s behalf and cannot be used by their other customers, the Company is obligated to purchase these components.

In addition, certain supplier agreements require that the Company to make minimum annual purchases under the agreements.

As of December 31, 2023, the Company has commitments to make a total of $ 13.0 million in purchases over the next two years .

To the extent these components are purchased by a contract manufacturer on the

Company’s behalf and cannot be used by their other customers, the Company is obligated to purchase these components.

In addition, certain supplier agreements require the Company to make minimum annual purchases under the agreements.

As of December 31, 2024, the Company has commitments to make a total of $ 13.2 million in purchases over the next one year .

To date, the Company has met the minimum purchase commitments.

As of December 31, 2023, the Company has entered into non-cancelable arrangements for subscription software services to make payments aggregating to $ 20.5 million over the next six years .

As of December 31, 2024, the Company has entered into non-cancelable arrangements for subscription software services to make payments aggregating to $ 19.6 million over the next five years .

Intellectual Property Licensing

12 unchanged sentences

The variable lease cost is comprised primarily of the Company’s proportionate share of operating expenses, property taxes and insurance and is classified as lease cost due to the Company’s election to not separate lease and non-lease components.

The sublease income for the years ended December 31, 2024 and 2023 were $ 1.2 million and $ 0.5 million, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 31, 2024, 2023 and 2022 were $ 17.8 million, $ 15.2 million and $ 12.1 million, respectively, and were included in net cash used in operating activities in the Company’s consolidated statements of cash flows.

9 unchanged sentences

Total operating lease liabilities $ 82,613

For the year ended December 31, 2024, the Company incurred approximately $ 1.0 million costs associated with exit activities related to the lease expirations.

The following table summarizes additional information related to operating leases as of December 31, 2024:

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Operating leases 5.8 % 5.9 %

During the year ended December 31, 2023, the Company made the decision to vacate some of its leased office space for the remaining lease term, sublease certain portions of the vacated office space and to terminate additional leased office space.

In connection with these actions, the Company recognized an aggregate $ 4.9 million of impairment losses associated with these long-lived assets of which $ 2.1 million was classified in research and development, and $ 2.8 million was classified in selling, general and administrative expenses in the consolidated statement of operations.

The Company is regularly subject to lawsuits, claims, arbitration proceedings, administrative actions and other legal and regulatory proceedings involving intellectual property disputes, commercial disputes, competition and other matters, and the Company may become subject to additional types of lawsuits, claims, arbitration proceedings, administrative actions, government investigations and legal and regulatory proceedings in the future.

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On September 7, 2023, the Court issued an order granting the Company’s 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.

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

The jury awarded the Company more than $ 31 million in damages, consisting of approximately $ 25 million in lost profits and approximately $ 6 million in royalties.

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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.

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

In May 2024, Bruker Corporation (“Bruker”) acquired certain assets and assumed certain liabilities of NanoString, including the litigation between 10x and NanoString, and the NanoString product lines at issue.

Post-trial briefing is complete following supplementation by the parties.

On December 23, 2024, the Court issued an opinion denying NanoString’s motion for judgement as a matter of law on invalidity, non-infringement and damages, and denied its request for a new trial.

In that opinion, the Court granted the Company’s motion for permanent injunction, supplemental damages, and pre-judgment and post-judgment interest.

Briefing with regard to the scope of the permanent injunction, supplemental damages, and pre- and post-judgment interest is ongoing.

Due to the uncertainties in collecting the jury award, the Company has not recorded a receivable from NanoString as of December 31, 2024.

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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 the Company’s Visium products infringe U.S.

11,377,689 (the “689 patent”).

The Company filed its answer to NanoString’s counterclaim in the CosMx Action on August 30, 2022.

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

On January 24, 2023, the Court granted the Company’s motion.

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

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The Company believes NanoString’s claims are meritless and intends to vigorously defend itself.

Trial is scheduled for May 2025.

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

11,377,689 (the “689 patent”).

The Company filed its answer to NanoString’s counterclaim in the CosMx Action on August 30, 2022.

On January 24, 2023, the Court granted the Company’s motion.

On October 20, 2022, NanoString filed suit against the Company in the U.S.

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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.

Trial is scheduled for November 2024.

The Company believes NanoString’s claims in the NanoString Action are meritless and intends to vigorously defend itself.

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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 September 5, 2024, trial was instituted for the 142 patent.

On January 30, 2024, NanoString filed a petition for IPR of U.S.

11,542,554, which is asserted by the Company against NanoString in the CosMx Action.

On August 23, 2024, IPR was instituted for the 554 patent.

On March 9, 2022, the Company 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.

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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 December 20, 2023, the Higher Regional Court granted NanoString’s request conditioned upon NanoString posting a 2.3 million Euro 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 May 7, 2024, the German Federal Patent Court revoked the German part of the EP 928 patent.

The Company strongly disagrees with this decision and will appeal the decision.

On June 1, 2023, the Company 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 EP928 patent and EP Patent No.

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On October 2, 2023, NanoString filed an appeal of the preliminary injunction for the EP782 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.

A hearing was held before the UPC Court of Appeals on December 18, 2023.

The UPC Court of Appeals overturned the preliminary injunction on February 26, 2024.

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.

A hearing on the main request for EP 782 is scheduled for September 2025.

No hearing has yet been set for the main request with regard to EP 928.

On July 18, 2023, NanoString filed an opposition in the European Patent Office challenging the validity of the EP782 patent.

No schedule has yet been set for this opposition.

A hearing is scheduled for March 2025.

On July 27, 2023, NanoString filed a revocation action in the Munich Central Division of the UPC challenging the validity of the EP928 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 the Company against NanoString in the CosMx Action.

The impact of NanoString’s bankruptcy filing on the Company’s actions against NanoString outside of the U.S.

District Court for the District of Delaware is not yet fully resolved.

A hearing in the revocation action took place on September 18, 2024.

Following the hearing, the UPC revoked EP928.

The Company strongly disagrees with this decision and has appealed.

On May 3, 2022, the Company filed suit against Vizgen, Inc.

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11,021,737, 11,293,051, 11,293,052, 11,293,054 and 11,299,767.

The Company seeks, 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.

The Company seeks, among other relief, injunctive 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 the Company’s claims for willful and indirect infringement, which the Court denied on September 19, 2022.

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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 the Company’s 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 the Company’s making, using, selling, offering to sell, exporting and/or importing in the United States Xenium products, including associated instruments and reagents.

Vizgen seeks, among other relief, injunctive relief and unspecified damages (including attorneys’ fees) in relation to the Company’s 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 the Company tortiously interfered with Vizgen’s contractual and business relationship with Harvard and that the Company engaged in unfair practices under Massachusetts state law.

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On July 10, 2023, the Court granted the Company’s motion to dismiss Vizgen’s contract counterclaim but otherwise denied the Company’s motion to dismiss.

The Company believes Vizgen’s claims are meritless and intends to vigorously defend itself.

On June 1, 2023, the Company filed suit in the Hamburg Local Division of the Unified Patent Court alleging that Vizgen’s MERSCOPE products infringe the EP782 patent.

The Company seeks, 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, the Company filed a petition for IPR of the 303 patent.

An institution decision is expected by March 2023.

On November 5, 2024, the parties filed cross-motions for summary judgment.

The Company filed a motion for summary judgment on Vizgen’s antitrust, unfair competition, and tort counterclaims.

Vizgen filed a motion for summary judgment to limit the availability of damages and to invalidate the 737, 051, 052, and 136 patents.

Vizgen also moved to exclude two of the Company’s expert witnesses.

On January 3, 2025, the Court granted the Company’s motion for summary judgment regarding Vizgen’s antitrust, unfair competition, and tort counterclaims with the exception of a limited counterclaim of tortious interference.

The Court denied Vizgen’s motion for summary judgment and motion to exclude the Company’s expert witnesses.

The Company believes Vizgen’s remaining tortious interference claim is meritless and intends to vigorously defend itself.

Trial on the Company’s claims and on Vizgen’s non-patent counterclaims began on February 3, 2025.

On February 5, 2025, the parties signed a binding term sheet resolving the worldwide litigation between 10x, Vizgen and Harvard.

On August 24, 2022, the Company filed suit against Parse Biosciences, Inc.

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On September 14, 2023, the Court denied the motion.

Parse filed its answer on October 6, 2023.

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.

A Markman hearing was held on February 21, 2024, and the Court issued its claim construction order on May 3, 2024.

Trial is scheduled for March 2025.

Between April 20 and June 21, 2023, Parse filed petitions for IPR of all of the patents asserted.

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On January 2 and 5, 2024, Parse filed rehearing requests with the PTAB for the 197 and 013 patents, respectively.

On February 5, 2024, the PTAB instituted IPRs for the 197 and 013 patents on Parse’s requests for rehearing.

On September 17, 2024, the PTAB found the challenged claims of the 981 patent unpatentable.

The Company strongly disagrees with this decision and has appealed.

The final written decisions for the 197 and 013 patents are expected in February 2025.

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 February 20, 2024, the court denied Parse’s renewed motion to stay.

On December 1, 2023, the Company filed suit against Curio Bioscience, Inc.

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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.

The Court denied that motion on May 9, 2024.

On May 31 and June 20, 2024, Curio answered the Complaint and filed antitrust and unfair competition counterclaims.

The Company filed a motion to dismiss Curio’s unfair competition and antitrust counterclaims on July 5, 2024.

The Company believes Curio’s counterclaims are meritless and intends to vigorously defend itself.

Trial is scheduled for May 2026.

On December 4, 2023, the Company 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.

A hearing was held on March 26, 2024.

On April 30, 2024, the UPC granted the Company’s request and issued a preliminary injunction requiring Curio to stop offering, marketing, using or possessing these Curio Seeker products and services in Germany, France and Sweden.

Curio did not appeal the preliminary injunction.

On March 25, 2024, the Company filed a main request in the Dusseldorf Local Division of the UPC alleging that the Curio Seeker Spatial Mapping Kit and associated products and services infringe the EP 391 patent.

A hearing in the main action is expected in May 2025.

Capital Stock

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The exercise price of an ISO and NSO shall not be less than 100 % of the fair market value of the shares on the date of grant.

Stock Options

A summary of the Company’s stock option activity under the Plans is as follows:

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Balance as of December 31, 2023 5,946,786 $ 42.17 6.3 $ 144,350,070

Granted 387,757 51.31

Exercised ( 717,982 ) 5.91

Cancelled and forfeited ( 623,332 ) 84.31

Forfeited ( 634,222 ) 60.04

Balance as of December 31, 2024 4,594,582 $ 45.37 5.4 $ 13,834,082

Vested and exercisable as of December 31, 2024 3,876,752 $ 44.07 4.9 $ 13,834,082

The Company did not grant stock options during the year ended December 31, 2024.

The weighted-average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $ 33.67 , and $ 32.95 per share, respectively.

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As of December 31, 2024, the total unrecognized stock-based compensation related to stock options was $ 19.5 million, which will be recognized over a weighted-average period of approximately two years .

Stock Option Valuation Assumptions

The fair value of each employee option grant was estimated on the date of grant using the Black-Scholes option pricing model and the following assumptions for the periods indicated:

Year Ended December 31,

2023 2022 2021

Expected volatility 70 % – 71 %

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1.6 % – 4.1 %

1.0 % – 1.1 %

Expected term 5.3 – 6.1 years

5.3 – 6.1 years

6.0 – 6.1 years

Expected dividend — % — %

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Vested ( 2,092,526 ) 53.10

Cancelled ( 922,152 ) 54.42

Forfeited ( 1,042,750 ) 41.32

Outstanding as of December 31, 2024 6,493,387 $ 35.55

As of December 31, 2023, the total unrecognized stock-based compensation related to RSUs was $ 224.6 million, which will be recognized over a weighted-average period of approximately two years .

Market-based Performance Stock Awards (PSAs)

As of December 31, 2024, the total unrecognized stock-based compensation related to RSUs was $ 194.4 million, which will be recognized over a weighted-average period of approximately three years .

Performance Stock Awards

In March 2024, the Company granted 219,168 performance stock units (“PSUs”) under the 2019 Plan to certain members of management which are subject to the achievement of certain performance conditions established by the Company’s Compensation Committee of the Board of Directors as described below:

50 % of target PSUs earned will be based on the Company’s compound annual growth rate (CAGR) of the Company’s Revenue over a two-year performance period from January 1, 2024 to December 31, 2025.

Holders may earn from 0 % to 175 % of the target amount of shares and earned PSUs will then be subject to service-based vesting;

50 % of target PSUs earned will be based on the relative Total Shareholder Return (TSR) of the Company’s common stock as compared to the TSR of the members of the Russell 3000 Medical Equipment and Services Sector Index over a three-year performance period from January 1, 2024 to December 31, 2026.

Depending on the results relative to the TSR market condition, the holders may earn from 0 % to 200 % of the target amount of shares which will vest at the end of the performance period.

The PSUs will be forfeited if the performance conditions are not achieved at the end of the relative performance periods as described above.

The vesting of the PSUs can also be triggered upon certain change in control events or in the event of death or disability.

The weighted-average grant date fair values of the PSUs relating to CAGR and TSR components were $ 37.43 and $ 44.80 per share respectively.

Stock-based compensation expense recognized for the PSUs relating to TSR components were approximately $ 1.3 million for the year ended December 31, 2024.

The PSUs relating to CAGR components were not deemed probable of vesting as of December 31, 2024, and no expenses were recognized for 2024.

The Company estimated the fair values of shares granted under the market-based TSR PSUs using a Monte Carlo

simulation model with the following assumptions:

Year Ended December 31, 2024

Expected volatility 66 %

Risk-free interest rate 4.5 %

Expected dividend yield — %

In March 2023, the Company granted 172,842 performance restricted stock unit awards (“PSAs”) under the 2019 Plan to certain members of management, which are subject to the achievement of certain escalating stock price thresholds established by the Company's Compensation Committee of the Board of Directors.

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The weighted-average grant date fair value of the PSAs was $ 43.13 .

Stock-based compensation expense recognized for these market-based awards was approximately $ 5.1 million for the year ended December 31, 2023.

Stock-based compensation expense recognized for these market-based awards was approximately $ 1.7 million and $ 5.1 million for the years ended December 31, 2024 and 2023, respectively.

The Company estimates the fair values of shares granted under the PSAs using a Monte Carlo simulation model with the following assumptions:

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The weighted-average grant date fair value of the PSAs was $ 22.55 .

Stock-based compensation expense recognized for these market-based awards was approximately $ 10.0 million and $ 3.3 million for the years ended December 31, 2023 and 2022, respectively.

The Company estimates the fair values of shares under the Performance stock options using a Monte Carlo simulation model with the following assumptions:

Stock-based compensation expense recognized for these market-based awards was approximately $ 2.4 million, $ 10.0 million and $ 3.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company estimated the fair values of shares under the Performance stock options using a Monte Carlo simulation model with the following assumptions:

Year Ended December 31,

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Expected dividend — %

As of December 31, 2023, none of the escalating stock price thresholds had been met for any of the PSAs, resulting in no shares vesting or becoming exercisable.

As of December 31, 2024, the performance criteria for the stock awards was not met and therefore no shares vested or become exercisable.

2019 Employee Stock Purchase Plan

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During the years ended December 31, 2024, 2023 and 2022, 385,967 , 217,537 , and 151,028 shares of Class A common stock, respectively, were issued under the ESPP.

The ESPP provides that the maximum number of shares of the Company’s Class A common stock made available for sale thereunder will be 3,486,671 , which number will be automatically increased on the first day of each

calendar year commencing on January 1, 2021 and ending on January 1, 2029 in an amount equal to the lesser of (i) 1 % of the total number of shares of common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such number of shares of the Company’s Class A common stock as determined by the Company’s board of directors.

The ESPP provides that the maximum number of shares of the Company’s Class A common stock made available for sale thereunder will be 3,686,671 , which number will be automatically increased on the first day of each calendar year commencing on January 1, 2021 and ending on January 1, 2029 in an amount equal to the lesser of (i) 1 % of the total number of shares of common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such number of shares of the Company’s Class A common stock as determined by the Company’s board of directors.

However, if on January 1 of a calendar year the Company’s board of directors has not either confirmed the 1 % described in clause (i) or approved a lesser number of shares of the Company’s Class A common stock for such calendar year, the Company’s board of directors will be deemed to have waived the automatic increase and no such increase will occur for such calendar year.

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As of December 31, 2024, there were 2,705,096 shares available for issuance under the ESPP.

For the years ended December 31, 2023 and 2022, the weighted average grant date fair values of the ESPP shares purchased, using the Black-Scholes option pricing model, were $ 16.91 and $ 33.74 , respectively.

For the years ended December 31, 2024, 2023, and 2022 the weighted average grant date fair values of options granted under the ESPP, using the Black-Scholes option pricing model, were $ 6.42 , $ 16.91 , and $ 33.74 respectively.

The following assumptions were used in estimating the fair values of shares under the ESPP:

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Under this plan, employee and employer contributions and accumulated plan earnings qualify for favorable tax treatment under Section 401(k) of the Internal Revenue Code.

Commencing in 2022, the Company matched 100 % of the first 3 % of the employee's eligible compensation, up to a maximum of two thousand dollars annually per employee.

The Company contributed $ 1.8 million and $ 2.0 million for the years ended December 31, 2023 and 2022, respectively.

The Company matches 100 % of the first 3 % of the employee's eligible compensation, up to a maximum of two thousand dollars annually per employee.

The Company contributed $ 1.9 million, $ 1.8 million, and $ 2.0 million for the years ended December 31, 2024, 2023, and 2022 respectively.

Net Loss Per Share

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Shares committed under ESPP 124,652 48,302 46,548

Shares subject to repurchase — — 18,750

Total 11,212,621 11,329,222 13,847,297

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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 8. Financial Statements and Supplementary Data