Content analysis
?Positive | ||
Negative | ||
Uncertain | ||
Constraining | ||
Legalese | ||
Litigous | ||
Readability |
H.S. junior Avg
|
Financial report summary
?Risks
- Our success depends on our ability to drive adoption of our PhenoCycler and PhenoImager platforms.
- Our revenue has been primarily generated from sales of our PhenoCycler and PhenoImager platforms and reagents. If our products do not continue to gain market acceptance, our revenue could be materially and adversely impacted.
- If we fail to enter into new customer relationships or maintain and expand existing relationships, our future operating results would be adversely affected as a general matter.
- Our operating results have fluctuated significantly in the past and may fluctuate significantly in the future, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations.
- Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
- Acquisitions could disrupt our business, cause dilution to our stockholders and otherwise harm our business.
- We generally recognize revenue from first-year warranty, extended warranty and service contracts over the contract term, and changes in sales of such contracts may not be immediately reflected in our operating results.
- If we were to be sued for product liability, we could face substantial liabilities that exceed our resources.
- Our business, financial condition, results of operations and prospects may be harmed if our customers discontinue or spend less on research, development and production and other scientific endeavors.
- If we are unable to support demand for the PhenoCycler and PhenoImager platforms and consumables, and for our future product offerings, including ensuring that we have adequate capacity to meet increased demand, or if we are unable to successfully manage our anticipated growth, our business could suffer.
- The sizes of the markets for our solutions may be smaller than estimated and new market opportunities may not develop as quickly as we expect, or at all, limiting our ability to successfully sell our solutions.
- If we fail to offer high quality customer service, our business and reputation could suffer.
- Our management uses certain key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions and such metrics may not accurately reflect all of the aspects of our business needed to make such evaluations and decisions, in particular as our business continues to grow.
- We may need to raise additional capital to fund our existing operations, improve our platform, expand our service offerings or develop and commercialize new products and technologies, or expand our operations.
- Our Midcap Trust Term Loan contains covenants, which restrict our operating activities, and we may be required to repay the outstanding indebtedness in an event of default, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
- Our actual operating results may differ significantly from any operating guidance we may provide.
- Our market is highly competitive, and if we cannot compete successfully with our competitors, we may be unable to increase or sustain our revenue, or achieve and sustain profitability.
- We must develop new products and service offerings, adapt to rapid and significant technological change and respond to introductions of new products and services by competitors to remain competitive.
- We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.
- We have limited experience in marketing and sales, and if we are unable to expand our marketing and sales organization to adequately address our customers’ needs, our business may be adversely affected.
- The loss of any member of our senior management team or our inability to attract and retain highly skilled scientists, engineers and salespeople could adversely affect our business.
- Due to the significant resources required to enable access in new markets, we must make strategic and operational decisions to prioritize certain markets, technology offerings or partnerships. We may expend our resources to access markets, develop technologies or form certain partnerships that do not yield meaningful revenue, or we may fail to capitalize on markets, technologies or partnerships that may be more profitable or with a greater potential for success.
- If our operating facilities, including those of our third-party manufacturers, become damaged or inoperable, our ability to conduct and pursue our business activities may be jeopardized.
- Our insurance policies are expensive and protect us only from some business risks, which leaves us exposed to significant uninsured liabilities.
- Security incidents, loss of data or modification of information, and other disruptions could compromise information related to our business or prevent us from accessing critical information, result in a significant disruption of our activities and expose us to liability, which could adversely affect our business and our reputation.
- Seasonality may cause fluctuations in our revenue and results of operations.
- Public health crises such as COVID-19 and similar pandemics or outbreaks have caused and could cause disruptions to the development of our platform technologies and products and business interruptions, and adversely impact our business, financial condition and results of operations.
- We outsource to a limited number of third-party manufacturers who are dependent upon third-party suppliers, including single source suppliers, making us vulnerable to supply shortages and price fluctuations, which could harm our business.
- We outsource the manufacturing of our instruments and reagents to third-party manufacturers. The failure of these manufacturers to manufacture finished goods on a timely basis could adversely affect our business.
- We forecast sales to determine requirements for components and materials used in our systems, and if our forecasts are incorrect, we may experience delays in shipments or increased inventory costs.
- We market certain of our products as Research Use Only, or RUO, in the United States. Our RUO products support the research and development activities conducted by academic/research institutions and biopharmaceutical companies of potential diagnostic and therapeutic products and services for which they may later pursue investigation and clearance, authorization or approval from regulatory authorities, such as the FDA.
- We are currently subject to, and may in the future become subject to additional, U.S. state and federal, and non-U.S. laws and regulations, industry guidelines, and contracts, imposing obligations on how we collect, store, use and process personal information. Our actual or perceived failure to comply with such obligations could harm our business. Ensuring compliance with such laws could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.
- As we continue to expand our product, technology and service offerings and the applications and uses of our products into new fields, we may become subject to additional government regulations, and the regulatory approval and maintenance process for such products may be expensive, time-consuming and uncertain both in timing and in outcome.
- International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.
- We could be adversely affected by violations of the FCPA and the anti-bribery and anti-corruption laws of the United States or other countries.
- Unfavorable U.S. or global economic conditions could adversely affect our business, financial condition or results of operations.
- Our employees, consultants, distributors and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, and insider trading.
- We use biological and hazardous materials that require considerable expertise and expense for handling, storage and disposal and may result in claims against us.
- If we are unable to obtain and maintain sufficient patent or other intellectual property protection for our technology, including the PhenoCycler and PhenoImager platforms, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our products and our technology may be impaired.
- We heavily depend on intellectual property licensed from third parties, including our license agreements with Stanford for our PhenoCycler product, and Revvity (formerly Perkin Elmer, Inc.) for our PhenoImager product, and our licensors may not always act in our best interest. If such owners do not properly or successfully obtain, maintain or enforce the patents underlying such licenses, or if they retain or license to others any competing rights, our competitive position and business prospects may be adversely affected.
- Our products are dependent on intellectual property we license from third parties. If we fail to comply with our obligations under our intellectual property licenses, if the licenses are terminated, or if disputes regarding these licenses arise, we could lose significant rights that are important to our business and could interfere with our ability to operate our business.
- Changes in patent law and its interpretation in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products and technologies.
- Issued patents covering our products and technologies could be found invalid or unenforceable if challenged or unenforceable if challenged in court or before administrative bodies in the United States or abroad, which could harm our business, financial condition and results of operations.
- Our rights to develop and commercialize our products and technologies are subject, in part, to the terms and conditions of licenses granted to us by others.
- If we cannot acquire or license rights to use technologies on reasonable terms or at all, we may not be able to commercialize our current or any future products or technologies.
- We have limited foreign intellectual property rights and we may not be able to protect our intellectual property rights throughout the world, which could harm our business, financial condition and results of operations.
- If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business could be harmed.
- We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed trade secrets or other confidential information of their former employers or other third parties or claims asserting ownership of what we regard as our own intellectual property.
- We may not be able to protect and enforce our trademarks and trade names, or build name recognition in our markets of interest thereby harming our competitive position.
- We may be subject to claims challenging the ownership or inventorship of our patents and other intellectual property and, if unsuccessful in any of these proceedings, we may be required to obtain licenses from third parties, which may not be available on commercially reasonable terms, or at all, or to cease the development, manufacture and commercialization of one or more of our products.
- We may become involved in litigation related to intellectual property, which could be time-intensive and costly and may adversely affect our business, financial condition, results of operations and prospects, and may require us to pay damages, or prevent us from making our existing or future products.
- Intellectual property litigation could cause us to spend substantial resources, distract our personnel from their normal responsibilities and result in negative publicity and other harms.
- We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful.
- Obtaining and maintaining our patent protection depends on compliance with various required procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
- Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time.
- Our use of “open source” software could adversely affect our ability to offer our products and technologies and subject us to possible litigation.
- Intellectual property rights do not necessarily address all potential threats.
- The market price of our common stock has been and is likely to continue to be volatile, and you may be unable to sell your shares at or above the price at which you purchased them.
- Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.
- We are an “emerging growth company” and a “smaller reporting company” and the reduced disclosure requirements applicable to “emerging growth companies” and “smaller reporting companies” may make our common stock less attractive to investors.
- If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our operating results could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock.
- Future sales and issuances of our common stock or rights to purchase our common stock, including pursuant to our equity incentive plans, or other equity securities or securities convertible into our common stock, could result in additional dilution of the percentage ownership of our stockholders and could cause the stock price of our common stock to decline.
- We do not intend to pay dividends for the foreseeable future. Consequently, any gains from an investment in our common stock will likely depend on whether the price of our common stock increases.
- Our directors, officers and principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders.
- We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.
- The failure to successfully implement and maintain accounting systems could materially adversely impact our business, results of operations, and financial condition.
- Our results of operations and financial condition could be materially adversely affected by changes in accounting principles.
- Provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management.
- Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
- Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
- Our ability to use our net operating losses and certain other tax attributes may be limited.
Management Discussion
- Product revenue increased by $9.8 million, or 17%, for the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase was primarily driven by a $5.8 million increase in consumable revenue resulting from a larger installed base of 1,183 systems as of December 31, 2023, as compared to 934 systems as of December 31, 2022, and a $3.5 million increase in instrument revenue resulting from 249 new system placements during the year ended December 31, 2023, compared to 237 new system placements for the year ended December 31, 2022.
- Service and other revenue increased by $12.0 million, or 70%, for the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase was primarily due to an increase relating to lab services operations, revenue generated from companion diagnostic development, and other immaterial changes.
- Cost of product revenue increased by $4.8 million, or 23%, for the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase in cost of product revenue was primarily driven by a $2.0 million charge in the second quarter of 2023 for expired inventory and inventory expected to expire before use, and costs associated with increased instrument and consumable sales. Cost of service and other revenue increased by $4.0 million, or 38%, for the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase was primarily due to increases in costs for lab services driven by an increase in activity, as well as an increase in extended warranty costs as there were higher customer renewals due to the maturity of the installed base.