# Standard Biotools Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Standard Biotools Inc.](/companies/lab.md) (CIK 1162194)
- Form: 10-Q
- Filed: 2025-05-06
- Accepted by EDGAR: May 6, 2025, 17:05 ET
- Period: 2025-03-31
- Accession: 0000950170-25-064606
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1162194/000095017025064606/lab-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1162194/000095017025064606/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $40.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $21.1m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $19.7m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $11.3m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $38.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$33.0m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | −$151.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$26.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.07 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.07 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 378,228,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$30.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $5.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 3 months, 2025-01-01 to 2025-03-31 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-03-31 | $150.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $344.0m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $579.6m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $56.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $125.0m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $454.6m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 33,140 characters.

*You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited financial information and the notes thereto included appearing elsewhere in this Quarterly Report on Form 10-Q, and the audited financial information and the notes thereto included in our Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of our Annual Report, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.*

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “Standard BioTools” the “Company,” “we,” “us,” and “our” refer to Standard BioTools Inc. and its subsidiaries.

### Overview

At Standard BioTools, Inc., we are committed to setting the new standard in the life science tools industry through strategic consolidation, best-in-class operations and a world-class management team. Our established portfolio includes essential, standardized next-generation solutions designed to help biomedical researchers develop better therapeutics faster. We offer a diverse range of instrumentation, consumables, and services that generate high-quality data across early discovery, translational and clinical research. With advanced technologies in proteomics and genomics, we empower scientists to gain deeper biological insights, accelerate discoveries, and drive improved health outcomes across diverse therapeutic areas including immunology, oncology, neuroscience, cardiometabolic diseases and more.

We have built a solid foundation supporting a differentiated portfolio of life science tools, offering broad multi-omic capabilities that drive innovation and accelerate the pace of drug development. Our solutions are designed to unlock complex biological information across plasma, single-cell and spatial proteomics, as well as genomic analyses, enabling researchers to explore disease mechanisms with unprecedented depth and precision. By integrating our advanced platforms – SomaScan™, CyTOF™, Hyperion™, Biomark™, and KREX™ – we empower scientists to generate high-content data across therapeutic areas, from immuno-oncology to neurology and infectious diseases. Each system is engineered to extract meaningful molecular signatures, providing researchers with the tools they need to decode intricate biological networks. Together, these technologies accelerate discovery, offering a comprehensive approach to understanding the complexities of health and disease.

### Factors Affecting Our Performance

The following factors have been important to our business, and we expect them to impact our results of operations and financial condition in future periods:

- Continued adoption of our services and products:
- We have a well-established base of marquee customer and key opinion leader (“KOL”) relationships in place, and as we grow further, we expect to win contracts with new customers and expand the scope of existing contracts with existing customers.
- We continue to focus on growth in instrument placements, including the SomaScan® Authorized Sites program, which we expect to drive future growth in sales of consumables, SomaScan® assay kits, and field services.
- We continue to enhance our proteomics offering through continuous improvements to our proteomics instruments, and the commercial release of the LabThread SLX, which is a fully integrated system optimized for running the SomaScan® assay.
- Total revenue may vary from period to period based on, among other things, the timing and size of new contracts, fluctuations in customer consumption of and adoption trends, ramp time and productivity of our salesforce, the impact of significant transactions, and seasonality. Failure to effectively develop and expand our sales and marketing capabilities or improve the productivity of our sales and marketing organization could harm our ability to expand our potential customer and sales pipeline, increase our customer base, and achieve broader market acceptance of our offering.
- Continued investment in growth:
- We continue to invest significantly in our laboratory process and commercial infrastructure.
- Investments in R&D will include hiring of employees with the necessary scientific and technical backgrounds to enable enhancements to our existing services and products and bring new services and products to market.
- Ability to lower operating costs:
- As we integrate with SomaLogic, we continue to focus on improving operating discipline through implementation of lean SBS principles to build more efficient operations and reduce costs.
- We intend to reduce manufacturing costs, in part, by modifying our assays and laboratory processes to use materials and technologies that provide equal or greater quality at lower cost, improving how we manage our materials and negotiating favorable terms for our materials purchases.
- We intend to reduce the cost of performing the SomaScan® assay as we move to either a less expensive array or Next Generation Sequencing system for our DNA readout of the protein concentrations present in a sample.
- Seasonality:
- Our revenue can be seasonal dependent upon 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.
- Expansion of our proteomic content:
- The SomaScan® 11K Platform now includes protein measurements on a broader range of sample types, including cerebrospinal fluid, aqueous humor, tissue homogenates and cell lysates. The SomaScan® Platform provides the largest number of protein measurements and the greatest number of orthogonally confirmed protein reagents in the proteomics industry —11,000 protein measurements simultaneously from sample volumes as low as 55 µl—giving researchers access to half of the human proteome in just one assay.
- We added the KREX™ precision antibody profiling services and kits to our SomaScan™ suite of solutions, enabling the detection of autoantibody biomarkers and protein interactions for basic, translational and clinical research.
- To maintain our competitive advantage in the proteomics market, we plan to increase the number of protein reagents for commercial availability based on allocated funding, resource availability, and the successful validation of new reagents.
- We continue to expand our proteomics database and artificial intelligence and machine learning analytics to drive value and market opportunities.

### Financial Operations Overview

### Revenue

We generate our revenue from the sale of products and services. We also derive revenue from collaborative arrangements, license agreements, grants, and royalties. Customers include top biopharmaceutical companies and leading academic research universities.

#### Product revenue

We generate product revenue from the sale of instruments and consumables. Consumables revenue is largely driven by the size of our active installed base of instruments and the level of usage per instrument. Consumables revenue is also driven by the sale of SomaScan® assay kits, which is driven by the number of active SomaScan® Authorized Sites and the number of assays performed at those sites.

#### Service revenue

We generate service revenue from the sale of lab services and field services. Lab services revenue is primarily generated by performing the SomaScan® assay on customer samples to generate data on protein biomarkers. We expect lab services revenue to increase over the long-term with new and recurring sales opportunities. With the enhancement of our proteomic services, we expect to capture more market opportunities outside of the United States region, as well as winning contracts with new customers and expanding the scope of sales with existing customers.

Field services revenue primarily consists of post-warranty service contracts, preventive maintenance plans, installation and training for our instruments. We expect the average selling prices of our products and services to fluctuate over time based on market conditions, product mix and currency fluctuations.

#### Collaboration and other revenue

Collaboration and other revenue consists of fees earned for R&D services, except for grant revenue R&D services that are classified in other revenue. We believe expanding collaborative arrangements with KOLs will allow for further enhancements of our integrated platform, lower barriers to adoption and introduce or expand new market channels and customers within geographic regions and markets we do not currently operate in.

### Cost of Revenue

#### Cost of product revenue

Cost of product revenue consists primarily of raw materials, equipment and production costs, salaries and other personnel costs, overhead and other direct costs related to product revenue. In addition, cost of product revenue includes amortization of developed technology, royalty costs for licensed technologies included in our products, warranty costs, provisions for excess and obsolete inventory, and stock-based compensation expense, and shipping and handling costs. Cost of product revenue is recognized in the period the related revenue is recognized. Shipping and handling costs incurred for product shipments are included in cost of product revenue in the consolidated statements of operations. Our cost of product revenue and related product margin may fluctuate depending on the capacity utilization of our manufacturing facilities in response to market conditions and the demand for our products.

#### Cost of service revenue

Cost of service revenue consists of raw materials and production costs, personnel-related costs, overhead and other direct costs. It also includes costs for production variances for SOMAmer® reagents, such as yield losses, material usages, spending and capacity variances. Cost of service revenue is recognized in the period the related revenue is recognized.

Our cost of service revenue and related service margin may fluctuate depending on the variability in material and labor costs of servicing.

#### Cost of collaboration and other revenue

Cost of collaboration and other revenue consists primarily of personnel-related costs and other direct costs related to collaboration and other revenue.

### Research and Development

R&D expenses consist primarily of personnel-related costs related to enhancing our technologies and supporting development and commercialization of new and existing products and services. R&D expenses also consist of laboratory supply costs, clinical study costs, consulting fees, and other allocated overhead expenses. We plan to continue to invest significantly in our R&D efforts, including hiring additional employees, with an expected focus on advancing our proteomics products and services. As a result, we expect R&D expenses will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue.

### Selling, General, and Administrative

SG&A expenses consist primarily of personnel costs for our sales and marketing, business development, finance, legal, human resources, information technology and general management teams, as well as professional services, including legal and accounting services.

### Restructuring and Related Charges

Restructuring and related charges primarily consist of severance costs related to our recent reduction-in-force and facilities costs for floors we have subleased or have the intent to sublease (net of sublease income) under our facility lease in South San Francisco. These costs, including a reduction in force, are incurred to improve operational efficiency, achieve cost savings and align our workforce to the future needs of the business. In addition to the reduction in force, we are reducing leased office space, optimizing our manufacturing footprint and streamlining support functions.

### Transaction and Integration Expenses

Transaction and integration expenses consist of costs incurred in connection with acquisition-related activities, including legal, advisory, accounting and other transaction-related costs including integration costs.

### Bargain Purchase Gain

Bargain purchase gain represents the excess of fair value of the assets acquired and liabilities assumed over the fair value of the consideration transferred in connection with the Merger with SomaLogic. We determined that the bargain purchase gain was primarily attributable to a rapid decline in our stock price in the days following the announcement of the Merger, which persisted through the Closing Date.

### Results of Operations

The following table presents our unaudited condensed consolidated statements of operations and as a percentage of total revenue for the three months ended March 31, 2025 and 2024 ($ in thousands):

|  | Three Months Ended March 31, 2025 |  | 2024 |  |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $40,795 | 100% | $45,540 | 100% |
| Cost of revenue | 21,054 | 52% | 21,352 | 47% |
| Gross profit | 19,741 | 48% | 24,188 | 53% |
| Operating expenses: |  |  |  |  |
| Research and development | 11,328 | 28% | 15,980 | 35% |
| Selling, general and administrative | 38,707 | 95% | 46,943 | 103% |
| Restructuring and related charges | 1,552 | 4% | 4,284 | 9% |
| Transaction and integration expenses | 1,124 | 3% | 17,163 | 38% |
| Total operating expenses | 52,711 | 129% | 84,370 | 185% |
| Loss from operations | (32,970) | (81)% | (60,182) | (132)% |
| Bargain purchase gain | — | —% | 25,213 | 55% |
| Interest income | 2,916 | 7% | 6,207 | 14% |
| Interest expense | (2) | (0)% | (1,033) | (2)% |
| Other income (expense), net | 3,872 | 9% | (2,234) | (5)% |
| Loss before income taxes | (26,184) | (64)% | (32,029) | (70)% |
| Income tax expense | 151 | 0% | (128) | (0)% |
| Net loss | $(26,033) | (64)% | $(32,157) | (70)% |

### Revenue

The following table sets forth revenue by product type, presented in dollars and as a percentage of total revenue ($ in thousands):

| Product revenue: | Three Months Ended March 31, 2025 | 2024 | Year-over-Year Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Instruments | $7,778 | $6,285 | $1,493 | 24% |
| Consumables | 14,454 | 17,307 | (2,853) | (16)% |
| Total product revenue | 22,232 | 23,592 | (1,360) | (6)% |
| Service revenue: |  |  |  |  |
| Lab services | 12,106 | 14,862 | (2,756) | (19)% |
| Field services | 5,501 | 6,165 | (664) | (11)% |
| Total service revenue | 17,607 | 21,027 | (3,420) | (16)% |
| Collaboration and other revenue | 956 | 921 | 35 | 4% |
| Total revenue | $40,795 | $45,540 | $(4,745) | (10)% |

Total revenue decreased by $4.7 million, or 10%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decline was primarily driven by a $2.9 million, or 16%, decrease in consumables revenue, primarily due to lower sales volume. Lab services revenue declined by $2.8 million, or 19%, primarily due to elevated backlogs at the beginning of the first quarter of 2024, which contributed to higher lab services revenue in the prior-year period. These declines were partially offset by a $1.5 million, or 24%, increase in instruments revenue, primarily driven by higher sales of our Hyperion XTi spatial proteomics platform.

### Cost of Revenue and Gross Profit

Cost of revenue, gross profit, and gross margin were as follows ($ in thousands):

|  | Three Months Ended March 31, 2025 | 2024 | Year-over-Year Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Cost of product revenue | $10,730 | $12,781 | $(2,051) | (16)% |
| Cost of service revenue | 10,302 | 8,509 | 1,793 | 21% |
| Cost of collaboration and other revenue | 22 | 62 | (40) | (65)% |
| Total cost of revenue | $21,054 | $21,352 | $(298) | (1)% |
| Gross profit | $19,741 | $24,188 | $(4,447) | (18)% |
| Gross margin | 48.4% | 53.1% | N/A | (4.7)% |

Gross profit decreased by $4.4 million, or 18%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease in gross profit was primarily driven by the decline in revenues during the current period. Gross margins decreased primarily as a result of lower sales volume and lower price realization.

### Operating Expenses

Operating expenses were as follows ($ in thousands):

|  | Three Months Ended March 31, 2025 | 2024 | Year-over-Year Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $11,328 | $15,980 | $(4,652) | (29)% |
| Selling, general and administrative | 38,707 | 46,943 | (8,236) | (18)% |
| Restructuring and related charges | 1,552 | 4,284 | (2,732) | (64)% |
| Transaction and integration expenses | 1,124 | 17,163 | (16,039) | (93)% |
| Total operating expenses | $52,711 | $84,370 | $(31,659) | (38)% |

### Research and Development

R&D expense decreased by $4.7 million, or 29%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease was primarily driven by a reduction in employee headcount as a result of restructuring activities undertaken during 2024. Additionally, R&D expense decreased due to reduced investment in certain long-term instrument projects.

### Selling, General and Administrative

SG&A expense decreased by $8.2 million, or 18%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily caused by a reduction in employee headcount as a result of restructuring activities undertaken during 2024.

### Restructuring and Related Charges

Restructuring and related charges consisted of the following (in thousands):

|  | Three Months Ended March 31, 2025 | 2024 | Year-over-Year Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Severance and other termination benefits | $834 | $3,386 | $(2,552) | (75)% |
| Facilities and other | 718 | 898 | (180) | (20)% |
| Total restructuring and related charges | $1,552 | $4,284 | $(2,732) | (64)% |

Restructuring and related charges decreased by $2.7 million, or 64%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, as restructuring activities stemming from the Merger, were completed in 2024.

### Transaction and Integration Expenses

Transaction and integration expenses decreased by $16.0 million, or 93%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was due significant legal, advisory, accounting, and integration expenses incurred in connection with the Merger during the three months ended March 31, 2024, the majority of which were one-time in nature. During the three months ended March 31, 2025, the Company primarily incurred residual integration costs resulting from the Merger and acquisition of Sengenics. The Company expects to incur additional transaction and integration expenses in connection with future transactions.

### Bargain purchase gain

Bargain purchase gain decreased by $25.2 million, or 100%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The bargain purchase gain recognized during the three months ended March 31, 2024 was due to the consummation of the Merger, which resulted in the fair value of assets acquired and liabilities assumed exceeding the fair value of the consideration transferred due to a decline in our stock price following the announcement of the Merger. The Company did not recognize any gains on bargain purchases of businesses during the three months ended March 31, 2025.

### Interest Income

Interest income decreased by $3.3 million, or 53%, for the three months ended March 31, 2025 compared the three months ended March 31, 2024. The decrease was primarily due to a decrease in the interest earned on balances of money market funds and short-term investments. The interest earned on money market funds and short-term investments decreased due to lower account balances during the three months ended March 31, 2025.

### Interest Expense

Interest expense decreased by $1.0 million, or 99%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. During 2024, the Company fully repaid its outstanding term loan facility, as well as the balance on convertible notes issued during 2019. As a result, the Company had no material debt outstanding during the three months ended March 31, 2025, which resulted in negligible interest expense for the period.

### Other Income (Expense), net

Other income (expense), net increased by $6.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was primarily driven by a decrease in the fair value of our contingent consideration liability, which resulted in a $3.4 million gain. The increase was further driven by more favorable impacts from foreign currency transactions for the three months ended March 31, 2025 compared to the prior-year period.

### Income Tax Expense

We recorded an income tax benefit of $0.2 million and income tax expense of $0.1 million in the three months ended March 31, 2025 and 2024, respectively. The decrease in our tax provision reflects the effect of our foreign operations, which reported lower pre-tax income in the three months ended March 31, 2025 compared to the same period in 2024.

Our effective tax rates for both periods differ from the 21% U.S. Federal statutory tax rate primarily due to valuation allowances recorded against deferred tax assets on domestic losses and the tax rate differences between the United States and foreign countries.

### Liquidity and Capital Resources

We have experienced operating losses since inception and have an accumulated deficit of $1,211.7 million as of March 31, 2025. To date, we have funded our operating losses primarily through equity offerings, term loans, convertible notes and redeemable preferred stock. Our ability to fund future operations and meet debt covenant requirements will depend upon our level of future revenue and operating cash flow and our ability to access additional funding through either equity offerings, issuances of debt instruments or both.

Our liquidity and capital requirements depend upon many factors, including market acceptance of our products and services; effectiveness of our business improvement initiatives and restructuring programs; costs of supporting sales growth, product quality, R&D and capital expenditures, including our enterprise resource planning upgrade; and costs and timing of acquiring other businesses, assets or technologies.

We continually evaluate our liquidity requirements considering our operating needs, growth initiatives and capital resources. We expect that our existing liquidity and sources of capital will be sufficient to support our operations for at least the next 12 months from the filing date of this Quarterly Report on Form 10-Q.

### Sources of Liquidity

Our principal sources of liquidity are cash, cash equivalents and short-term investments. Our collective balances of cash, cash equivalents and short-term investments were $258.1 million and $292.9 million at March 31, 2025 and December 31, 2024, respectively.

### Capital Resources and Commitments

We have entered into arrangements that serve as sources of capital and the associated contractual agreements may result in firm or contingent obligations of us. In addition to our common stockholders’ equity, our sources of capital have historically included debt and operating leases. Our operating lease arrangements require cash repayment, and our convertible debt contains rights that may result in their conversion to our common stock prior to maturity. However, as of March 31, 2025, we have fully repaid all traditional debt obligations and no longer maintain access to credit facilities. Accordingly, our ongoing sources of capital are primarily limited to equity and cash generated from operations.

We also enter into contractual and legally binding commitments to purchase goods. Most of these contracts are cancellable with little or no notice or penalty. However, once a vendor has incurred costs to fulfill a contract with us, and which costs cannot be otherwise deployed, we are liable for those costs upon cancellation.

In connection with the Merger, we assumed a purchase commitment of $6.9 million to IDT. Under the contract manufacturing agreement with IDT, we are required to spend $2.3 million per year for three years. We entered into a similar agreement with LGC in 2024, under which we are required to make annual purchases of $1.0 million for two years, resulting in a purchase obligation of $2.0 million. As of March 31, 2025, the remaining outstanding purchase commitment related to these agreements totaled $8.9 million.

### Cash Flow Activity

Our cash flow summary was as follows ($ in thousands):

| Cash flow summary: | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash used in operating activities | $(30,283) | $(62,476) |
| Net cash provided by investing activities | 14,625 | 318,075 |
| Net cash used in financing activities | (46) | (19,733) |
| Effect of foreign exchange rate fluctuations on cash and cash equivalents | 357 | (21) |
| Net (decrease) increase in cash, cash equivalents and restricted cash | $(15,347) | $235,845 |

We derive cash flows from operations primarily by collecting amounts due from sales of our products and services, and fees earned under our product development and license agreements. Our cash flows from operating activities are also significantly influenced by our use of cash for operating expenses and working capital to support the business. We have historically experienced negative cash flows from operating activities as we have expanded our business and built our infrastructure, domestically and internationally.

In the three months ended March 31, 2025, we used $19.7 million of net proceeds from the sales and maturities of short-term investments to help fund $30.3 million of net cash used in operating activities. We did not repurchase any common stock or repay and debt during the three months ended March 31, 2025.

In the three months ended March 31, 2024, we used $38.8 million of net proceeds from the sales and maturities of short-term investments to help fund $62.5 million of net cash used in operating activities, $11.1 million of common stock repurchases under the 2024 Stock Repurchase Program, and $8.2 million of repayments on our term loan facility and convertible notes issued in 2014.

### Operating Activities

Net cash used in operating activities decreased by $32.2 million for the three months ended March 31, 2025 compared to the same period in 2024. The decrease in cash use is due to a decrease in operating expenses for the three months ended March 31, 2025 compared to the same period in 2024, resulting from the completion of restructuring activities during 2024.

### Investing Activities

Net cash provided by investing activities was $14.6 million for the three months ended March 31, 2025, compared to $318.1 million for the same period in 2024. The activity for the three months ended March 31, 2025 is primarily due to $19.7 million of proceeds from sales and maturities of short-term investments, net of purchases. In contrast, the net cash provided for the three months ended March 31, 2024 reflects $280.0 million of cash acquired in the Merger, along with $38.8 million of proceeds from sales and maturities of short-term investments, net of purchases.

### Financing Activities

Cash used in financing activities was less than $0.1 million for the three months ended March 31, 2025 compared to $19.7 million for the three months ended March 31, 2024. During the three months ended March 31, 2024, we executed $11.1 million of common share repurchases under the 2024 Stock Repurchase Program and made $8.2 million of payments on the Company's term loan and convertible notes issued in 2014. We did not repurchase any common shares or repay any debt during the three months ended March 31, 2025.

### Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements and related notes, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the use of estimates and assumptions to determine the value of the assets, liabilities, revenues and expenses reported on the condensed consolidated balance sheets and statements of operations. We develop these estimates after considering historical transactions, the current economic environment and various other assumptions considered reasonable under the circumstances. Actual results may differ materially from these estimates and judgments. Accounts that rely heavily on estimated information to determine their values include revenue, trade receivables, inventories, right-of-use assets, goodwill, long-lived intangible assets, lease liabilities and income tax liabilities (assets). Refer to Item 7 in our Annual Report for additional information regarding our critical accounting policies and estimates.

### Goodwill and Long-Lived Assets

Goodwill represents the excess of the purchase price of an acquired entity over the fair value of the net assets acquired and liabilities assumed in a business combination. We assess goodwill at the reporting unit level on an annual basis during the fourth quarter, or more frequently if events or changes in circumstances suggest that goodwill impairment exists. A significant amount of judgment is involved in determining if an indicator of impairment exists.

For those reporting units where events or change in circumstances indicate that potential impairment indicators exist, we perform a quantitative assessment to determine whether the carrying value of goodwill can be recovered. When performing the annual goodwill impairment test, we may start with an optional qualitative assessment. As part of the qualitative assessment, we evaluate all events and circumstances, including both positive and negative events, in their totality, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we bypass the qualitative assessment, or if the qualitative assessment indicates that a quantitative analysis should be performed, we perform a quantitative assessment to estimate the fair value of each reporting unit and compare the fair value of each reporting unit to its carrying value. We generally estimate a reporting unit's fair value using a discounted cash flow approach which is dependent on several significant estimates and assumptions related to forecasts of future revenues, cost of sales, expenses and the weighted average cost of capital for each reporting unit. If the carrying amount of a reporting unit exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. The impairment of goodwill is limited to the total amount of goodwill allocated to the reporting unit. Any adverse changes in the significant estimates and assumptions used in our goodwill impairment test could have a significant impact on our goodwill impairment analyses and could have a material impact on our consolidated financial statements.

Our most recent assessment in the first quarter of 2025 did not indicate existence of impairment. However, during the first quarter of 2025, the price per share of our common stock has declined substantially. Management will continue to monitor our market capitalization relative to our net book value, and if our stock price does not increase, we may be required to perform additional impairment analyses for our reporting unit and could be required to recognize a non-cash goodwill impairment charge in the near future. Refer to Note 4 to our accompanying unaudited financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for additional information on goodwill and long-lived assets.

There have been no significant changes to our significant accounting policies described in our Annual Report, other than as disclosed in Note 1 to our accompanying financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

### Recent Accounting Pronouncements

From time to time, new accounting standards are issued by FASB or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

## Market risk

As filed, 1,900 characters.

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign exchange rates, as well as, to a lesser extent, inflation and capital market risk.

### Interest Rate Risk

We are exposed to interest rate risk in the ordinary course of our business. Our cash and cash equivalents are comprised of funds held in checking accounts and money market accounts.

### Foreign Currency Risk

Due to our operations outside of the United States, we are exposed to market risk related to changes in foreign currency exchange rates. Historically, we have not hedged our foreign currency exposure. Changes in the relative values of currencies occur regularly and, in some instances, could materially adversely affect our business, our financial conditions, our results of operations or our cash flows. For the three months ended March 31, 2025 and 2024, changes in foreign currency exchange rates did not have a material impact on our historical financial position, our business, our financial condition, our results of operations or our cash flows.

### Inflation Risk

We do not believe that inflation had a material effect on our business, financial condition, results of operations or cash flows in the last two years. If global inflation trends continue, we expect appreciable increases in labor and other operating costs.

### Capital Market Risk

We generate our revenue from the sale of products and services and from collaborative arrangements, license agreements, grants, and royalties, but we may in the future raise funds through other sources. One possible source of funding is through further securities offerings. Our ability to raise funds in this manner depends upon capital market forces affecting our stock price among other things.

## Controls and procedures

As filed, 2,986 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our CEO and our Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31,

2025, our CEO and CFO concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

### Changes in Internal Control Over Financial Reporting

During the three months ended March 31, 2025, we implemented a new enterprise resource planning system which constituted a change in the Company’s internal control over financial reporting. Management is taking appropriate steps to test and validate the design and operational effectiveness of the controls associated with the new system. There have been no other changes in our internal control over financial reporting that occurred during the three months ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Limitations on the Effectiveness of Controls

Control systems, no matter how well conceived and operated, are designed to provide a reasonable, but not an absolute, level of assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Because of the inherent limitations in any control system, misstatements due to error or fraud may occur and not be detected.

## Risk factors

As filed, 947 characters.

We operate in a rapidly changing environment that involves numerous uncertainties and risks. You should carefully consider the risk factors discussed in Part I Item 1A “Risk Factors” in our Annual Report, which could materially affect our business, financial condition or results of operations. The risks in our Annual Report are not the only ones we face. Our business is also subject to the risks that affect many other companies, such as employee relations, general economic conditions, global geopolitical events and international operations. Further, additional risks not currently known to us or that we currently believe are immaterial may in the future materially and adversely affect our business, operations, liquidity and stock price. If any of these risks occur, our business, results of operations or financial condition could suffer, the trading price of our securities could decline, and you may lose all or part of your investment.

Filed May 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-064606. Last ingested by Listed: Nov 3, 2026, 21:00 ET. No prices; not investment advice.