Exhibit 99.1 908 Devices Reports Fourth Quarter and Full Year 2023 Financial Results and Provides 2024 Revenue Outlook Fourth quarter 2023 revenue increased 23% compared to prior year, driven by handheld revenue increasing 57% BOSTON – March 5, 2024 – 908 Devices Inc. (Nasdaq: MASS), a pioneer of purpose-built handheld and desktop devices for chemical and biochemical analysis, today reported financial results for the quarter and full year ended December 31, 2023. "We made solid progress in 2023 towards our ...

Analysis for life NOVEMBER 2023 Forward-looking statements are based on information available at the time those statements are made and/or management's good faith beliefs and assumptions as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include our ability to achieve profitability for any period in the ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and notes for the period ended September 30, 2023 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Total Assets | $208,475 | $242,587 | | Total Liabilities | $38,546 | $51,988 | | Total Stockholders' Equity | $169,929 | $190,599 | - Total assets decreased by **$34.1 million** from December 31, 2022, to September 30, 2023, primarily due to a significant reduction in cash and cash equivalents, partially offset by an increase in marketable securities[12](index=12&type=chunk) - Total liabilities decreased by **$13.4 million**, largely driven by the repayment of long-term debt[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over specific three and nine-month periods | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenue | $14,297 | $15,797 | $35,878 | $35,209 | | Gross Profit | $7,869 | $9,338 | $18,047 | $20,101 | | Loss from Operations | $(9,089) | $(7,154) | $(33,045) | $(25,044) | | Net Loss | $(7,093) | $(6,259) | $(28,970) | $(23,772) | | Net Loss per Share (Basic & Diluted) | $(0.22) | $(0.20) | $(0.90) | $(0.76) | - Total revenue for the three months ended September 30, 2023, decreased by **$1.5 million (9.5%)** compared to the same period in 2022, primarily due to a decrease in product and contract revenue[14](index=14&type=chunk) - Net loss increased for both the three-month and nine-month periods, reaching **$(7.093) million** and **$(28.970) million**, respectively, driven by higher operating expenses and, for the nine-month period, increased cost of revenue[14](index=14&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the total comprehensive loss, including net loss and other comprehensive income or loss items | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Loss | $(7,093) | $(6,259) | $(28,970) | $(23,772) | | Foreign currency translation adjustment | $(404) | $(613) | $(170) | $(613) | | Unrealized gains on marketable securities, net of tax of $0 | $248 | — | $360 | — | | Total other comprehensive (loss) income | $(156) | $(613) | $190 | $(613) | | Comprehensive Loss | $(7,249) | $(6,872) | $(28,780) | $(24,385) | - Comprehensive loss for the three months ended September 30, 2023, was **$(7.249) million**, an increase from **$(6.872) million** in the prior year, primarily due to the higher net loss[16](index=16&type=chunk) - Unrealized gains on marketable securities contributed positively to other comprehensive income in 2023, whereas no such gains were recorded in 2022[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%27%20Equity) This section outlines changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Total Stockholders' Equity | $169,929 | $190,599 | | Common Stock Shares Outstanding | 32,371,428 | 31,859,847 | | Additional Paid-in Capital | $332,080 | $323,969 | | Accumulated Deficit | $(163,171) | $(134,200) | - Total stockholders' equity decreased by **$20.67 million** from December 31, 2022, to September 30, 2023, primarily due to the accumulated net loss[18](index=18&type=chunk) - Additional paid-in capital increased by **$8.11 million**, reflecting stock-based compensation expense and proceeds from stock option exercises and ESPP purchases[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities | Metric (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | | Net Cash Used in Operating Activities | $(23,129) | $(15,814) | | Net Cash Used in Investing Activities | $(31,036) | $(15,195) | | Net Cash (Used in) Provided by Financing Activities | $(16,030) | $768 | | Net Decrease in Cash, Cash Equivalents and Restricted Cash | $(70,209) | $(30,264) | - Net cash used in operating activities increased to **$(23.1) million** for the nine months ended September 30, 2023, from **$(15.8) million** in the prior year, driven by a higher net loss and changes in operating assets and liabilities[20](index=20&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) - Net cash used in investing activities significantly increased to **$(31.0) million**, primarily due to purchases of marketable securities, compared to **$(15.2) million** in the prior year which included an acquisition[20](index=20&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) - Financing activities shifted from providing **$0.8 million** in cash in 2022 to using **$(16.0) million** in 2023, mainly due to the repayment of the 2022 Revolver and contingent consideration payments[20](index=20&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and specific financial line items [1. Nature of the Business and Basis of Presentation](index=11&type=section&id=1.%20Nature%20of%20the%20Business%20and%20Basis%20of%20Presentation) This note describes the company's core business, recent acquisition, and ongoing financial performance challenges - 908 Devices Inc. is a commercial-stage technology company providing handheld and desktop devices for chemical and biochemical analysis in life sciences, bioprocessing, pharma/biopharma, and forensics markets[21](index=21&type=chunk) - The company acquired TRACE Analytics GmbH (now 908 Devices GmbH) in August 2022 to integrate enabling sampling technology into future product offerings[23](index=23&type=chunk) - The company has incurred recurring losses since inception, with a net loss of **$29.0 million** for the nine months ended September 30, 2023, and an accumulated deficit of **$163.2 million**[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines key accounting principles, including revenue recognition and concentration risks - The financial statements are prepared in conformity with GAAP and condensed for interim reporting, requiring estimates and assumptions, particularly for revenue recognition, inventory valuation, and fair value of acquired assets[28](index=28&type=chunk)[29](index=29&type=chunk) - The company faces concentration risk with

Financial Data and Key Metrics Changes - Revenue for Q2 2023 was $12.1 million, a 9% increase compared to $11.1 million in the prior year period [9] - Gross profit was $5.8 million for Q2 2023, down from $6.6 million in the prior year, with a gross margin of 48% compared to 60% [4] - Net loss for Q2 2023 was $9.3 million, compared to $8.1 million in the prior year [6] - Recurring revenues increased 39% to $4 million compared to $2.9 million in the prior year, representing 33% of total revenue [47] Business Line Data and Key Metrics Changes - Desktop revenue decreased to $3.1 million from $3.7 million in the prior year, primarily due to a decrease in device placements [3] - Handheld revenue from the MX908 device was $8.8 million, a 27% increase compared to $6.9 million in the prior year [9] - The company shipped 15 desktop devices during Q2, including five REBEL, four ZipChip interfaces, and six MAVEN devices [3] Market Data and Key Metrics Changes - The company noted ongoing weakness in the bioprocessing market, which is being offset by strong demand for handheld devices in the forensics market [11] - The installed base of devices globally increased to more than 2,500 [17] Company Strategy and Development Direction - The company is focused on revolutionizing chemical detection by expanding its product portfolio to address diverse end markets [7] - A new product, the MX908 Beacon, was introduced for remote air monitoring, leveraging the existing MX908 device [25][96] - The company aims to penetrate new accounts and radiate across existing accounts to drive broader enterprise adoption [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the results and highlighted the importance of handheld devices in addressing the growing need for chemical detection [31] - The company expects full-year revenues to be in the range of $49 million to $52 million, representing growth of 4% to 11% over the previous year [52] - Management acknowledged challenges in the bioprocessing space but noted positive engagement and opportunities in the pipeline [58] Other Important Information - The company has approximately $153 million in cash and no debt outstanding [6] - A pilot program with law enforcement agencies in Tennessee aims to enhance drug identification processes using the MX908 device [22] Q&A Session Summary Question: What is the visibility into demand for 2024? - Management indicated that while the environment remains muted for 2023, there are positive conversations and engagement with customers, suggesting potential demand for 2024 [60][64] Question: How is the handheld business performing? - The handheld business has been strong, with international demand contributing positively, and management is tracking several enterprise deals as the U.S. government fiscal year-end approaches [65][66] Question: What is the company's exposure to China? - The company has limited exposure to China, with about 5% of sales coming from that region, focusing primarily on the Americas and Europe [99] Question: How is the MX908 Beacon performing? - Initial feedback on the MX908 Beacon has been positive, and it is expected to drive additional MX908 sales as it can be purchased as an add-on or standalone [90][96]

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited condensed consolidated financial statements and notes for periods ended June 30, 2023, and December 31, 2022 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $210.8 million, driven by reduced cash, while liabilities decreased due to debt repayment Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :-------------------------------- | :------------ | :------------------ | | Cash and cash equivalents | $132,996 | $188,422 | | Marketable securities | $19,691 | — | | Total current assets | $181,077 | $215,626 | | Total assets | $210,830 | $242,587 | | Total current liabilities | $20,194 | $19,226 | | Long-term debt | — | $15,000 | | Total liabilities | $36,371 | $51,988 | | Total stockholders' equity | $174,459 | $190,599 | - Cash and cash equivalents decreased by **$55.4 million** from December 31, 2022, to June 30, 2023, while marketable securities increased from zero to **$19.7 million**[12](index=12&type=chunk) - Long-term debt was fully repaid, decreasing from **$15.0 million** at December 31, 2022, to zero at June 30, 2023[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue increased, but net loss widened due to higher costs and operating expenses, despite increased interest income Condensed Consolidated Statements of Operations (in thousands, except per share) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $12,094 | $11,106 | $21,581 | $19,412 | | Total cost of revenue | $6,300 | $4,472 | $11,403 | $8,649 | | Gross profit | $5,794 | $6,634 | $10,178 | $10,763 | | Total operating expenses | $16,733 | $15,003 | $34,134 | $28,653 | | Loss from operations | $(10,939) | $(8,369) | $(23,956) | $(17,890) | | Interest income | $1,689 | $293 | $2,706 | $464 | | Net loss | $(9,346) | $(8,099) | $(21,879) | $(17,514) | | Net loss per share (Basic & Diluted) | $(0.29) | $(0.26) | $(0.68) | $(0.56) | - Total revenue increased by **8.9%** for the three months and **11.2%** for the six months ended June 30, 2023, compared to prior year periods[14](index=14&type=chunk) - Gross profit decreased by **12.7%** for the three months and **5.4%** for the six months ended June 30, 2023, due to higher cost of revenue[14](index=14&type=chunk) - Net loss increased by **15.4%** for the three months and **25.0%** for the six months ended June 30, 2023, driven by higher operating expenses and cost of revenue[14](index=14&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss reported, with other comprehensive income from foreign currency and marketable securities gains Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(9,346) | $(8,099) | $(21,879) | $(17,514) | | Foreign currency translation adjustment | $(57) | — | $234 | — | | Unrealized gains on marketable securities, net of tax | $112 | — | $112 | — | | Total other comprehensive income | $55 | — | $346 | — | | Comprehensive loss | $(9,291) | $(8,099) | $(21,533) | $(17,514) | - Total other comprehensive income was **$55 thousand** for the three months and **$346 thousand** for the six months ended June 30, 2023, primarily from foreign currency translation adjustments and unrealized gains on marketable securities[17](index=17&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased due to net loss, partially offset by stock-based compensation and option exercises Condensed Consolidated Statements of Stockholders' Equity (in thousands, except share amounts) | Metric | December 31, 2022 | June 30, 2023 | | :-------------------------------- | :---------------- | :------------ | | Common Stock Shares | 31,859,847 | 32,326,861 | | Common Stock Amount | $32 | $32 | | Additional Paid-in Capital | $323,969 | $329,361 | | Accumulated Other Comprehensive Income | $798 | $1,144 | | Accumulated Deficit | $(134,200) | $(156,078) | | Total Stockholders' Equity | $190,599 | $174,459 | - Accumulated deficit increased by **$21.9 million** from December 31, 2022, to June 30, 2023, reflecting the net loss for the period[19](index=19&type=chunk) - Additional paid-in capital increased by **$5.4 million**, driven by stock-based compensation expense (**$4.7 million**) and issuance of common stock from options and ESPP (**$0.6 million**)[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash decreased by $55.4 million, primarily from operating and investing activities and debt repayment Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(18,529) | $(10,876) | | Net cash used in investing activities | $(21,121) | $(689) | | Net cash (used in) provided by financing activities | $(15,782) | $597 | | Net decrease in cash, cash equivalents and restricted cash | $(55,426) | $(10,968) | | Cash, cash equivalents and restricted cash at end of period | $133,167 | $213,165 | - Net cash used in operating activities increased to **$18.5 million** for the six months ended June 30, 2023, from **$10.9 million** in the prior year, mainly due to a higher net loss[20](index=20&type=chunk) - Net cash used in investing activities significantly increased to **$21.1 million**, primarily driven by **$19.6 million** in purchases of marketable securities[20](index=20&type=chunk) - Financing activities shifted from providing **$0.6 million** in cash in 2022 to using **$15.8 million** in 2023, largely due to the repayment of **$15.0 million** in long-term debt[20](index=20&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed explanations of accounting policies, financial line items, and business operations [1. Nature of the Business and Basis of Presentation](index=9&type=section&id=1.%20Nature%20of%20the%20Business%20and%20Basis%20of%20Presentation) 908 Devices Inc. provides chemical/biochemical analysis devices, with recurring losses but sufficient liquidity - The company provides purpose-built handheld and desktop devices for chemical and biochemical analysis in life sciences, bioprocessing, pharma/biopharma, and forensics markets[21](index=21&type=chunk) - Acquired TRACE Analytics GmbH in August 2022, renamed 908 Devices GmbH, to integrate enabling sampling technology into future product offerings[23](index=23&type=chunk) - Incurred net losses of **$21.9 million** for the six months ended June 30, 2023, and had an accumulated deficit of **$156.1 million**, but expects sufficient liquidity for at least the next 12 months[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines accounting policies, revenue recognition, and disaggregated revenue data by stream, type, end-user, and geography - The unaudited condensed consolidated financial statements are prepared in conformity with GAAP and SEC rules for interim reporting, with certain disclosures condensed or omitted[28](index=28&type=chunk) - Significant estimates include revenue recognition, inventory valuation, fair value of acquired assets/liabilities, and stock-based awards, with ongoing evaluation for global economic uncertainties[29](index=29&type=chunk) - Revenue is recognized when control of products or services transfers to customers, primarily FOB shipping point for products, and over time for extended warranty/support[50](index=50&type=chunk) Disaggregated Revenue by Stream (in thousands) | Revenue Stream | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Device sales revenue | $7,959 | $7,755 | $13,042 | $13,287 | | Recurring revenue | $3,990 | $2,853 | $8,169 | $5,350 | | Contract revenue | $145 | $498 | $370 | $775 | | Total revenue | $12,094 | $11,106 | $21,581 | $19,412 | Disaggregated Revenue by Device Type (in thousands) | Device Type | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Handheld revenue | $8,822 | $6,937 | $14,994 | $11,407 | | Desktop revenue | $3,127 | $3,671 | $6,217 | $7,230 | Disaggregated Revenue by End-User Entity Type (in thousands) | End-User Type | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Government | $8,812 | $7,002 | $14,992 | $11,719 | | Pharmaceutical/Biotechnology | $3,106 | $3,577 | $6,158 | $6,705 | | Academia and other | $31 | $29 | $61 | $213 | Disaggregated Revenue by Geography (in thousands) | Geography | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $7,857 | $9,460 | $14,350 | $15,512 | | Europe, Middle East and Africa | $3,954 | $1,245 | $5,942 | $2,601 | | Asia Pacific | $221 | $391 | $797 | $1,273 | | Americas other | $62 | $10 | $492 | $26 | [3. Fair Value Measurements](index=25&type=section&id=3.%20Fair%20Value%20Measurements) Fair value measurements for cash equivalents, marketable securities, and acquisition-related contingent consideration Fair Value Measurements at June 30, 2023 (in thousands) | Asset/Liability | Level 1 | Level 2 | Level 3 | Total | | :-------------------------------- | :------ | :------ | :------ | :------ | | Cash equivalents - Money market funds | $90,527 | — | — | $90,527 | | Cash equivalents - U.S. Treasury securities | — | $9,969 | — | $9,969 | | Marketable securities - U.S. Treasury securities | — | $19,691 | — | $19,691 | | Acquisition-related contingent consideration (current) | — | — | $973 | $973 | | Acquisition-related contingent consideration (long-term) | — | — | $156 | $156 | - The total maximum payments for acquisition-related contingent consideration is approximately **$2 million**, with a fair value of **$1.1 million** as of June 30, 2023[80](index=80&type=chunk) - The **$0.9 million** pension liability contingent consideration from the Trace acquisition was released and paid out in April 2023[81](index=81&type=chunk) [4. Marketable Securities](index=27&type=section&id=4.%20Marketable%20Securities) Company held $29.7 million in available-for-sale marketable securities as of June 30, 2023 Marketable Securities at June 30, 2023 (in thousands) | Security Type | Amortized Cost | Gross Unrealized Gain | Fair Value | | :-------------------------------- | :------------- | :-------------------- | :--------- | | Cash equivalents - U.S. Treasury securities | $9,932 | $37 | $9,969 | | Marketable securities - U.S. Treasury securities | $19,616 | $75 | $19,691 | | Total | $29,548 | $112 | $29,660 | - The company did not have marketable securities as of December 31, 2022, indicating a new investment strategy in the first half of 2023[83](index=83&type=chunk) [5. Inventory](index=27&type=section&id=5.%20Inventory) Total inventory increased to $14.1 million, with increases across raw materials, work-in-progress, and finished goods Inventory (in thousands) | Inventory Component | June 30, 2023 | December 31, 2022 | | :------------------ | :------------ | :---------------- | | Raw materials | $9,579 | $8,343 | | Work-in-progress | $2,916 | $2,722 | | Finished goods | $1,640 | $1,448 | | Total | $14,135 | $12,513 | - Raw materials increased by **$1.2 million**, work-in-progress by **$0.2 million**, and finished goods by **$0.2 million** from December 31, 2022, to June 30, 2023[84](index=84&type=chunk) [6. Goodwill and Intangible Assets, net](index=28&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets,%20net) Goodwill increased due to foreign currency, while net intangible assets decreased due to amortization Goodwill Roll Forward (in thousands) | Metric | Six Months Ended June 30, 2023 | | :---------------------- | :----------------------------- | | Balances at beginning of period | $10,050 | | Foreign currency impact | $135 | | Balances at end of period | $10,185 | Intangible Assets, net (in thousands) | Intangible Asset | June 30, 2023 Net Book Value | December 31, 2022 Net Book Value | | :----------------- | :--------------------------- | :------------------------------- | | Customer Relationships | $2,962 | $3,129 | | Developed Technology | $4,964 | $5,073 | | Software | $200 | $235 | | Trade Name | $36 | $51 | | Total | $8,162 | $8,488 | - Amortization expense for intangible assets was **$219 thousand** for the three months and **$437 thousand** for the six months ended June 30, 2023, recorded in product cost of revenue and selling, general and administrative expenses[86](index=86&type=chunk) [7. Accrued Expenses](index=30&type=section&id=7.%20Accrued%20Expenses) Total accrued expenses decreased to $6.0 million, mainly from lower employee compensation and contingent consideration Accrued Expenses (in thousands) | Accrued Expense Category | June 30, 2023 | December 31, 2022 | | :----------------------- | :------------ | :---------------- | | Accrued employee compensation and benefits | $2,506 | $4,909 | | Accrued warranty | $854 | $1,119 | | Contingent consideration | $973 | $1,243 | | Total Accrued Expenses | $6,034 | $8,847 | - Accrued employee compensation and benefits decreased by **$2.4 million**, and contingent consideration decreased by **$0.3 million**[87](index=87&type=chunk) - The product warranty obligation decreased from **$1.1 million** at the beginning of the six-month period to **$0.9 million** at June 30, 2023, due to settlements exceeding new provisions[87](index=87&type=chunk) [8. Long-Term Debt](index=30&type=section&id=8.%20Long-Term%20Debt) Company repaid $15.0 million debt, defaulted on covenants, and entered an amended $10.0 million credit line - The 2021 Revolver was voluntarily terminated on November 2, 2022, with no outstanding amounts[90](index=90&type=chunk) - The **$15.0 million** outstanding principal balance under the 2022 Revolver was fully repaid on January 4, 2023[94](index=94&type=chunk) - The company defaulted on its 2022 Revolver covenants by transferring cash away from SVB after its closure in March 2023, resulting in a **$0.5 million** loss on extinguishment of debt[98](index=98&type=chunk) - An Amended 2022 Revolver, effective August 4, 2023, reduced the line of credit to **$10.0 million**, waived prior defaults, and requires maintaining **$20.0 million** at SVB and a minimum unrestricted cash level[99](index=99&type=chunk)[102](index=102&type=chunk) [9. Equity and Net Income (Loss) per Share](index=34&type=section&id=9.%20Equity%20and%20Net%20Income%20(Loss)%20per%20Share) Common shares outstanding were 32.3 million, with anti-dilutive securities excluded from net loss per share - The company had **32,326,861** common shares outstanding as of June 30, 2023[12](index=12&type=chunk) Net Loss Per Share (Basic and Diluted) | Metric | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | | :-------------------------------- | :------------------------------- | :----------------------------- | | Net loss per share (Basic and Diluted) | $(0.29) | $(0.68) | - Potential dilutive securities totaling **4,513,853 shares** (warrants, options, PSUs, RSUs) were excluded from diluted EPS calculations for the six months ended June 30, 2023, due to the net loss making their effect anti-dilutive[105](index=105&type=chunk) [10. Stock-Based Compensation](index=35&type=section&id=10.%20Stock-Based%20Compensation) Stock-based compensation expense increased, with $17.7 million unrecognized cost for unvested RSUs Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $140 | $86 | $255 | $149 | | Research and development expenses | $732 | $421 | $1,327 | $681 | | Selling, general and administrative expenses | $1,706 | $1,387 | $3,162 | $2,353 | | Total | $2,578 | $1,894 | $4,744 | $3,183 | - Unrecognized compensation cost for unvested RSUs was **$17.7 million** as of June 30, 2023, with a weighted average recognition period of **3.0 years**[106](index=106&type=chunk) - **53,794** performance-based restricted stock units (PSUs) were granted in March 2023, with vesting contingent on stock price levels and valued using the Monte Carlo simulation model[107](index=107&type=chunk)[108](index=108&type=chunk) [11. Leases](index=35&type=section&id=11.%20Leases) Operating lease expenses reported, with new leases in North Carolina and Germany for R&D and manufacturing Lease Expense (in thousands) | Lease Expense Component | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $485 | $583 | $969 | $1,165 | | Short-term lease cost | $16 | $11 | $32 | $20 | | Variable lease cost | $27 | $2 | $54 | $4 | | Total Lease Cost | $528 | $596 | $1,055 | $1,189 | - A new operating lease in Morrisville, North Carolina, for **13,300 sq ft** commenced in March 2023, with total costs of approximately **$4.0 million** over 88 months[110](index=110&type=chunk) - A new operating lease in Braunschweig, Germany, for **7,500 sq ft** commenced in January 2023, with total costs of approximately **$0.4 million** over 60 months[111](index=111&type=chunk) - The weighted-average remaining lease term for operating leases was **4.25 years** at June 30, 2023, with a weighted-average discount rate of **8.5%**[112](index=112&type=chunk) [12. Commitments and Contingencies](index=36&type=section&id=12.%20Commitments%20and%20Contingencies) Royalty arrangements, 401(k) contributions, acquisition earnouts, and no material legal proceedings - The company has royalty arrangements with future minimum payments of **$0.1 million** per year through the end of the patents' lives[115](index=115&type=chunk) - Contributions to the 401(k) savings plan were **$0.3 million** for the six months ended June 30, 2023[116](index=116&type=chunk) - Contingent consideration for the Trace acquisition includes up to **$2.0 million** for milestone-based earnouts through June 30, 2024[117](index=117&type=chunk) - The **$0.9 million** pension liability from the Trace acquisition was released and paid out to sellers in April 2023[118](index=118&type=chunk) - The company is not currently involved in any material legal proceedings[120](index=120&type=chunk) [13. Acquisition](index=37&type=section&id=13.%20Acquisition) Acquired TRACE Analytics GmbH for $17.3 million, allocating $9.6 million to goodwill for synergies - Acquired **100%** of TRACE Analytics GmbH on August 3, 2022, for a total purchase price of **$17.3 million**[121](index=121&type=chunk) - The purchase consideration included a **$14.4 million** initial cash payment, up to **$2.0 million** in contingent cash consideration, and a **$0.9 million** contingent pension liability holdback[121](index=121&type=chunk) - The acquisition was accounted for as a business purchase, with **$9.6 million** allocated to goodwill, representing cost and revenue synergies[123](index=123&type=chunk)[124](index=124&type=chunk) Allocation of Purchase Consideration (in thousands) | Item | Amount | | :-------------------------------- | :----- | | Cash paid | $14,400 | | Net cash and working capital adjustment | $113 | | Contingent consideration - pension liability | $900 | | Contingent consideration - earnout | $737 | | Total consideration transferred | $16,150 | | Goodwill | $9,566 | | Intangible assets (Customer Relationships, Developed Technology, Software, Trade Name) | $8,424 | [14. Segment Reporting and Geographic Data](index=40&type=section&id=14.%20Segment%20Reporting%20and%20Geographic%20Data) Company operates in a single segment, with most long-lived assets located in the United States - The company operates in one segment[126](index=126&type=chunk) Long-Lived Assets by Geography (in thousands) | Geography | June 30, 2023 | December 31, 2022 | | :---------- | :------------ | :---------------- | | United States | $9,555 | $7,852 | | All other countries | $521 | $63 | | Total long-lived assets | $10,076 | $7,915 | - Long-lived assets in the United States increased by **$1.7 million**, and in other countries by **$0.5 million**, from December 31, 2022, to June 30, 2023[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management's analysis of financial condition, operational results, liquidity, and critical accounting policies [Overview](index=40&type=section&id=Overview) 908 Devices Inc. develops analysis devices, with revenue growth but increased net losses and accumulated deficit - The company's devices are used for point-of-need chemical and biochemical analysis in life sciences, bioprocessing, pharma/biopharma, and forensics[128](index=128&type=chunk) - Revenue for the six months ended June 30, 2023, was **$21.6 million**, with a net loss of **$21.9 million**, leading to an accumulated deficit of **$156.1 million**[133](index=133&type=chunk) - The company expects to continue incurring net losses due to investments in commercial sales, manufacturing, and R&D, and is monitoring macroeconomic conditions like inflation and interest rates[133](index=133&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - The company believes existing cash, cash equivalents, and revenue will fund operations for at least the next 12 months[135](index=135&type=chunk) [Factors Affecting Our Performance](index=44&type=section&id=Factors%20Affecting%20Our%20Performance) Performance driven by device sales, recurring revenue, revenue mix, gross margin, and product adoption stages - Device sales are a key indicator of business success and future recurring revenue, with growth strategies including sales expansion and technology enhancements[146](index=146&type=chunk)[147](index=147&type=chunk) - Handheld device sales are often large government orders with long sales cycles, leading to period-to-period fluctuations and customer concentration[148](index=148&type=chunk) - Recurring revenue, including consumables and services, was **39%** of total product and service revenue for the six months ended June 30, 2023, up from **29%** in the prior year[151](index=151&type=chunk) - Recurring revenue is expected to increase as the device installed base expands, with desktop devices having a higher recurring revenue percentage than handheld devices[151](index=151&type=chunk)[152](index=152&type=chunk) - Gross margins are higher for direct sales compared to distributor sales, and the company aims to mitigate downward pressure on selling prices by expanding applications and improving data quality[153](index=153&type=chunk)[154](index=154&type=chunk) [Device sales](index=44&type=section&id=Device%20sales) Device sales growth driven by expanded efforts and technology, with varied sales cycles and customer concentration - Handheld device sales are often large government orders with long sales cycles and can be concentrated in a small number of customers[148](index=148&type=chunk) - Desktop device sales cycles typically range from three to twelve months, varying by customer size[149](index=149&type=chunk) [Recurring revenue](index=46&type=section&id=Recurring%20revenue) Recurring revenue grew to 39% of total, expected to increase with installed base, especially for desktop devices - Recurring revenue was **39%** of total product and service revenue for the six months ended June 30, 2023, compared to **29%** in the prior year[151](index=151&type=chunk) - Rebel and ZipChip Interface devices require consumables kits for all operations, driving higher recurring revenue compared to MX908 handheld devices[152](index=152&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) [Revenue mix and gross margin](index=46&type=section&id=Revenue%20mix%20and%20gross%20margin) Revenue mix fluctuates, with consumables growing; gross margins higher for direct sales, aiming for improvement - Consumables revenue is expected to constitute a larger percentage of product and service revenue over time as the device installed base grows[153](index=153&type=chunk) - Gross margins are higher for direct sales compared to sales through distributors[153](index=153&type=chunk) - The company aims to mitigate downward pressure on average selling prices and improve gross margins by increasing the value proposition of its devices and consumables[154](index=154&type=chunk) [Product adoption](index=46&type=section&id=Product%20adoption) Customer product adoption stages (testing, trials, pilot, deployment) are monitored for financial projections - Product adoption stages include testing (internal/external evaluation), trials (assessing functionality in operational environment), pilot (initial quantity purchase for broader opportunity), and deployment (enterprise-wide rollout)[155](index=155&type=chunk)[157](index=157&type=chunk) [Key Business Metrics](index=48&type=section&id=Key%20Business%20Metrics) Product placements and cumulative placements are key metrics, showing units recognized as revenue Product Placements (Units Recognized as Revenue) | Device Type | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Handheld | 107 | 102 | 169 | 165 | | Desktop | 15 | 22 | 31 | 42 | Cumulative Product Placements | Device Type | June 30, 2023 | June 30, 2022 | | :------------ | :------------ | :------------ | | Handheld | 2,189 | 1,815 | | Desktop | 401 | 327 | - Handheld product placements increased by **5 units** QoQ and **4 units** YoY for the respective periods, while desktop placements decreased by **7 units** QoQ and **11 units** YoY[159](index=159&type=chunk) [Components of Our Results of Operations](index=48&type=section&id=Components%20of%20Our%20Results%20of%20Operations) Details revenue, cost of revenue, gross profit, operating expenses, and other income/expense components - Device sales accounted for **61%** of product and service revenue for the six months ended June 30, 2023, while recurring revenue accounted for **39%**[161](index=161&type=chunk) - Product cost of revenue includes raw materials, freight, royalties, manufacturing costs, and personnel, while service cost of revenue includes personnel, travel, and warranty costs[169](index=169&type=chunk)[170](index=170&type=chunk) - Gross profit margin is influenced by market pricing, sales mix, inventory, manufacturing costs, and warranty obligations, with expectations for long-term improvement due to economies of scale[172](index=172&type=chunk)[173](index=173&type=chunk) - Research and development expenses are expected to increase due to continued investment in product development, hardware/software engineering, and consultant services[174](index=174&type=chunk) - Selling, general and administrative expenses are projected to rise with increased sales, marketing, and administrative personnel, new product introductions, and public company operating costs[175](index=175&type=chunk)[178](index=178&type=chunk) - The company has a full valuation allowance against its net deferred tax assets due to recurring net operating losses and tax credits[182](index=182&type=chunk) [Revenue](index=48&type=section&id=Revenue) Revenue categorized into product/service (device, recurring) and contract, with expected growth in recurring - Product and service revenue includes sales of handheld (MX908) and desktop (Rebel, ZipChip Interface, Maven) devices, and recurring revenue from consumables and extended warranty/service plans[162](index=162&type=chunk)[163](index=163&type=chunk)[165](index=165&type=chunk) - Contract revenue is generated from short and long-term agreements, primarily with the U.S. government, for design, development, and delivery of detection devices or related services[167](index=167&type=chunk) [Cost of Revenue, Gross Profit and Gross Margin](index=51&type=section&id=Cost%20of%20Revenue,%20Gross%20Profit%20and%20Gross%20Margin) Cost of revenue components detailed; long-term gross profit margin improvement expected from economies of scale - Product cost of revenue includes raw materials, freight, royalties, contract manufacturer costs, and personnel[169](index=169&type=chunk) - Service cost of revenue includes salaries, travel, facility costs, and warranty expenses[170](index=170&type=chunk) - Gross profit margin is expected to increase over the long term as sales and production volumes rise, leading to cost efficiencies[173](index=173&type=chunk) [Operating Expenses](index=51&type=section&id=Operating%20Expenses) R&D and SG&A expenses expected to increase with continued investment and business expansion - R&D expenses include employee-related costs, product design, third-party development, research materials, and facilities expenses[174](index=174&type=chunk)[176](index=176&type=chunk) - SG&A expenses primarily cover salaries, stock-based compensation for sales, marketing, and administrative personnel, as well as professional services and public company operating costs[175](index=175&type=chunk)[178](index=178&type=chunk) [Other Income (Expense)](index=53&type=section&id=Other%20Income%20(Expense)) Includes interest income from cash, interest expense from borrowings, and debt extinguishment losses - Interest income is derived from invested cash balances[179](index=179&type=chunk) - Interest expense includes costs from loan agreements, amortization of deferred financing costs, and losses on debt extinguishment[180](index=180&type=chunk) [Provision for Income Taxes](index=53&type=section&id=Provision%20for%20Income%20Taxes) No U.S. income tax benefits recognized due to net operating losses and full valuation allowance - A full valuation allowance has been recorded against net deferred tax assets due to the unlikelihood of realizing net operating loss carryforwards and tax credits[182](index=182&type=chunk) - As of December 31, 2022, the company had **$92.3 million** in federal and **$64.0 million** in state operating loss carryforwards, and **$5.9 million** in federal and **$2.8 million** in state R&D tax credit carryforwards[182](index=182&type=chunk) [Results of Operations](index=54&type=section&id=Results%20of%20Operations) Detailed comparison of financial performance for three and six months ended June 30, 2023 and 2022 Summary of Results of Operations (Three Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :-------------------------------- | :----- | :----- | :------------ | :------- | | Total revenue | $12,094 | $11,106 | $988 | 8.9% | | Total cost of revenue | $6,300 | $4,472 | $1,828 | 40.9% | | Gross profit | $5,794 | $6,634 | $(840) | (12.7)% | | Total operating expenses | $16,733 | $15,003 | $1,730 | 11.5% | | Loss from operations | $(10,939) | $(8,369) | $(2,570) | (30.7)% | | Interest income | $1,689 | $293 | $1,396 | 476.5% | | Net loss | $(9,346) | $(8,099) | $(1,247) | (15.4)% | [Comparison of the three months ended June 30, 2023 and 2022](index=54&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030,%202023%20and%202022) Revenue increased, but gross profit decreased, and net loss widened due to higher costs and operating expenses [Revenue, Cost of Revenue and Gross Profit (Product)](index=54&type=section&id=Revenue,%20Cost%20of%20Revenue%20and%20Gross%20Profit%20(Product)) Product revenue increased, but cost of revenue surged, leading to decreased gross profit and margin Product Revenue, Cost, and Gross Profit (Three Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :------------------ | :----- | :----- | :------------ | :------- | | Product revenue | $9,595 | $9,082 | $513 | 6% | | Product cost of revenue | $4,800 | $3,304 | $1,496 | 45% | | Gross profit | $4,795 | $5,778 | $(983) | (17)% | | Gross profit margin | 50% | 64% | (14)% | | - Product revenue increase was primarily due to **$1.1 million** higher handheld device revenues (5 additional placements and higher ASP) and **$0.3 million** increase in consumable and accessory revenue, partially offset by **$0.8 million** decrease in desktop device sales (9 fewer Rebel placements)[185](index=185&type=chunk)[186](index=186&type=chunk) - Product cost of revenue increased due to **$0.5 million** higher unabsorbed overhead from lower production builds, **$0.5 million** higher materials/supplies for warranty/production, **$0.2 million** from higher volume, **$0.2 million** from product mix, and **$0.1 million** in intangible amortization[187](index=187&type=chunk) [Revenue, Cost of Revenue and Gross Profit (Service)](index=56&type=section&id=Revenue,%20Cost%20of%20Revenue%20and%20Gross%20Profit%20(Service)) Service revenue and gross profit increased significantly, with improved gross profit margin from leverage Service Revenue, Cost, and Gross Profit (Three Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :------------------ | :----- | :----- | :------------ | :------- | | Service revenue | $2,354 | $1,526 | $828 | 54% | | Service cost of revenue | $1,448 | $1,057 | $391 | 37% | | Gross profit | $906 | $469 | $437 | 93% | | Gross profit margin | 38% | 31% | 7% | | - Increase in service revenue was primarily from handheld extended service contracts and training, and desktop service arrangements[189](index=189&type=chunk) - Service gross profit margin improved due to leveraging fixed infrastructure across handheld and desktop services[191](index=191&type=chunk) [Revenue, Cost of Revenue and Gross Profit (Contract)](index=57&type=section&id=Revenue,%20Cost%20of%20Revenue%20and%20Gross%20Profit%20(Contract)) Contract revenue and gross profit decreased due to completion of prior year government contracts Contract Revenue, Cost, and Gross Profit (Three Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :------------------ | :----- | :----- | :------------ | :------- | | Contract revenue | $145 | $498 | $(353) | (71)% |\n| Contract cost of revenue | $52 | $111 | $(59) | (53)% | | Gross profit | $93 | $387 | $(294) | (76)% | | Gross profit margin | 64% | 78% | (14)% | | - The decrease in contract revenue was primarily due to the completion of work in 2022 related to a prime contract with the U.S. government and a subcontract with a commercial entity holding a U.K. government prime contract[192](index=192&type=chunk) [Operating Expenses (Research and development)](index=57&type=section&id=Operating%20Expenses%20(Research%20and%20development)) R&D expenses increased due to higher headcount, stock-based compensation, and occupancy costs Research and Development Expenses (Three Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :-------------------------------- | :----- | :----- | :------------ | :------- | | Research and development expenses | $5,525 | $4,293 | $1,232 | 29% | - The increase was driven by a **$0.5 million** increase in salaries and related costs, a **$0.3 million** increase in stock-based compensation, and a **$0.2 million** increase in occupancy expenses[195](index=195&type=chunk) [Operating Expenses (Selling, general and administrative expenses)](index=57&type=section&id=Operating%20Expenses%20(Selling,%20general%20and%20administrative%20expenses)) SG&A expenses increased due to higher personnel, stock-based compensation, and acquisition costs Selling, General and Administrative Expenses (Three Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :-------------------------------- | :----- | :----- | :------------ | :------- | | Selling, general and administrative expenses | $11,208 | $10,710 | $498 | 5% | - Key drivers of the increase included a **$0.3 million** rise in stock-based compensation, **$0.2 million** in acquisition-related costs, **$0.2 million** in personnel costs, and **$0.1 million** in credit loss provision[196](index=196&type=chunk) - These increases were partially offset by a **$0.4 million** decrease in insurance costs, particularly director and officer insurance premiums[198](index=198&type=chunk) [Other Income (Interest income)](index=59&type=section&id=Other%20Income%20(Interest%20income)) Interest income significantly increased due to higher interest rates on invested cash balances - Interest income increased by **$1.4 million** to **$1.7 million** for the three months ended June 30, 2023, from **$0.3 million** in the prior year, driven by higher interest rates[199](index=199&type=chunk) [Other Income (Other income (expense), net)](index=59&type=section&id=Other%20Income%20(Other%20income%20(expense),%20net)) Other income (expense), net, remained stable with no material change from the prior year period - Other income (expense), net, was **$0.2 million** for the three months ended June 30, 2023, showing no material change from the prior year[200](index=200&type=chunk) [Comparison of the six months ended June 30, 2023 and 2022](index=59&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030,%202023%20and%202022) Revenue increased, but gross profit decreased, and net loss widened due to higher costs and operating expenses Summary of Results of Operations (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :-------------------------------- | :----- | :----- | :------------ | :------- | | Total revenue | $21,581 | $19,412 | $2,169 | 11.2% | | Total cost of revenue | $11,403 | $8,649 | $2,754 | 31.8% | | Gross profit | $10,178 | $10,763 | $(585) | (5.4)% | | Total operating expenses | $34,134 | $28,653 | $5,481 | 19.1% | | Loss from operations | $(23,956) | $(17,890) | $(6,066) | (33.9)% | | Interest income | $2,706 | $464 | $2,242 | 483.2% | | Net loss | $(21,879) | $(17,514) | $(4,365) | (25.0)% | [Revenue, Cost of Revenue and Gross Profit (Product)](index=60&type=section&id=Revenue,%20Cost%20of%20Revenue%20and%20Gross%20Profit%20(Product)) Product revenue increased, but cost of revenue surged, leading to decreased gross profit and margin Product Revenue, Cost, and Gross Profit (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :------------------ | :----- | :----- | :------------ | :------- | | Product revenue | $16,617 | $15,589 | $1,028 | 7% | | Product cost of revenue | $8,586 | $6,276 | $2,310 | 37% | | Gross profit | $8,031 | $9,313 | $(1,282) | (14)% | | Gross profit margin | 48% | 60% | (12)% | | - Product revenue increase was driven by **$1.2 million** higher consumable and accessory revenue, offset by a **$0.2 million** decrease in device sales (desktop sales down **$1.7 million**, handheld sales up **$1.5 million**)[202](index=202&type=chunk) - Product cost of revenue increased due to **$0.7 million** higher unabsorbed overhead, **$0.6 million** higher materials/supplies for warranty/production, **$0.3 million** from higher volume, **$0.2 million** in intangible amortization, and **$0.2 million** in shipping costs[203](index=203&type=chunk) [Revenue, Cost of Revenue and Gross Profit (Service)](index=60&type=section&id=Revenue,%20Cost%20of%20Revenue%20and%20Gross%20Profit%20(Service)) Service revenue and gross profit increased significantly, with improved gross profit margin from leverage Service Revenue, Cost, and Gross Profit (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :------------------ | :----- | :----- | :------------ | :------- | | Service revenue | $4,594 | $3,048 | $1,546 | 51% | | Service cost of revenue | $2,718 | $2,126 | $592 | 28% | | Gross profit | $1,876 | $922 | $954 | 103% | | Gross profit margin | 41% | 30% | 11% | | - Increase in service revenue was primarily from handheld extended service contracts and training, and desktop service arrangements[205](index=205&type=chunk) - Service gross profit margin improved due to leveraging fixed infrastructure across handheld and desktop services[208](index=208&type=chunk) [Revenue, Cost of Revenue and Gross Profit (Contract)](index=62&type=section&id=Revenue,%20Cost%20of%20Revenue%20and%20Gross%20Profit%20(Contract)) Contract revenue and gross profit decreased due to completion of prior year government contracts Contract Revenue, Cost, and Gross Profit (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :------------------ | :----- | :----- | :------------ | :------- | | Contract revenue | $370 | $775 | $(405) | (52)% | | Contract cost of revenue | $99 | $247 | $(148) | (60)% | | Gross profit | $271 | $528 | $(257) | (49)% | | Gross profit margin | 73% | 68% | 5% | | - The decrease in contract revenue was primarily due to the completion of work in 2022 related to a prime contract with the U.S. government and a subcontract with a commercial entity holding a U.K. government prime contract[209](index=209&type=chunk) [Operating Expenses (Research and development)](index=62&type=section&id=Operating%20Expenses%20(Research%20and%20development)) R&D expenses increased due to higher headcount, stock-based compensation, occupancy, and program spend Research and Development Expenses (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :-------------------------------- | :----- | :----- | :------------ | :------- | | Research and development expenses | $10,923 | $8,198 | $2,725 | 33% | - The increase was driven by a **$1.2 million** increase in salaries and related costs, **$0.6 million** in stock-based compensation, **$0.4 million** in occupancy expenses, and **$0.2 million** in program spend[212](index=212&type=chunk) [Operating Expenses (Selling, general and administrative expenses)](index=64&type=section&id=Operating%20Expenses%20(Selling,%20general%20and%20administrative%20expenses)) SG&A expenses increased due to higher personnel, stock-based compensation, acquisition, travel, and marketing Selling, General and Administrative Expenses (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Change Amount | Change % | | :-------------------------------- | :----- | :----- | :------------ | :------- | | Selling, general and administrative expenses | $23,211 | $20,455 | $2,756 | 13% | - Key drivers of the increase included a **$1.5 million** rise in salaries and related costs, **$0.8 million** in stock-based compensation, **$0.3 million** in acquisition-related costs, and **$0.2 million** in travel and marketing spend[213](index=213&type=chunk) - These increases were partially offset by a **$0.7 million** decrease in insurance costs[213](index=213&type=chunk) [Other Income (Interest income)](index=64&type=section&id=Other%20Income%20(Interest%20income)) Interest income significantly increased due to higher interest rates on invested cash balances - Interest income increased by **$2.2 million** to **$2.7 million** for the six months ended June 30, 2023, from **$0.5 million** in the prior year, driven by higher interest rates[214](index=214&type=chunk) [Other Income (Interest expense)](index=64&type=section&id=Other%20Income%20(Interest%20expense)) Interest expense increased due to a $0.5 million loss on extinguishment of debt related to the 2022 Revolver - Interest expense increased by **$0.5 million** for the six months ended June 30, 2023, primarily due to a **$0.5 million** loss on extinguishment of debt related to the 2022 Revolver[215](index=215&type=chunk) [Other Income (Other expense, net)](index=64&type=section&id=Other%20Income%20(Other%20expense,%20net)) Other expense, net, remained stable with no material change from the prior year period [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) Company had $152.7 million in liquidity, repaid debt, defaulted on covenants, and secured an amended credit line - As of June 30, 2023, the company had **$152.7 million** in cash, cash equivalents, and marketable securities, expected to fund operations for at least 12 months[217](index=217&type=chunk) - The **$15.0 million** outstanding balance under the 2022 Revolver was fully repaid on January 4, 2023[225](index=225&type=chunk) - The company defaulted on its 2022 Revolver covenants by transferring cash from SVB in March 2023[230](index=230&type=chunk) - An Amended 2022 Revolver, effective August 4, 2023, reduced the credit line to **$10.0 million**, waived prior defaults, and requires maintaining **$20.0 million** at SVB and a minimum unrestricted cash level[231](index=231&type=chunk)[233](index=233&type=chunk) [Cash Flows](index=70&type=section&id=Cash%20Flows) Net cash decreased by $55.4 million, primarily from operating, investing, and financing activities Summary of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2023 | 2022 | | :-------------------------------- | :----- | :----- | | Cash used in operating activities | $(18,529) | $(10,876) | | Cash used in investing activities | $(21,121) | $(689) | | Cash (used in) provided by financing activities | $(15,782) | $597 | | Net decrease in cash, cash equivalents and restricted cash | $(55,426) | $(10,968) | [Operating Activities](index=70&type=section&id=Operating%20Activities) Net cash used in operating activities increased due to net loss and changes in operating assets/liabilities - Net cash used in operating activities was **$18.5 million** for the six months ended June 30, 2023, primarily from a **$21.9 million** net loss and **$3.4 million** used in changes in operating assets and liabilities[237](index=237&type=chunk) - Changes in operating assets and liabilities included a **$1.7 million** decrease from inventory and a **$0.9 million** decrease from accounts payable and accrued expenses[237](index=237&type=chunk) [Investing Activities](index=70&type=section&id=Investing%20Activities) Net cash used in investing activities significantly increased due to marketable securities and equipment purchases - Net cash used in investing activities was **$21.1 million** for the six months ended June 30, 2023, driven by **$19.6 million** in marketable securities purchases and **$1.5 million** in property and equipment purchases[239](index=239&type=chunk) [Financing Activities](index=70&type=section&id=Financing%20Activities) Cash used in financing activities due to debt repayment and pension liability payment - Cash used in financing activities was **$15.8 million** for the six months ended June 30, 2023, mainly from the **$15.0 million** repayment of the 2022 Revolver and a **$0.9 million** pension liability payment[240](index=240&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=70&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) Financial statements require estimates and judgments; no significant changes to critical accounting policies - Financial statements require estimates and judgments for revenue recognition, inventory valuation, fair value of acquired assets/liabilities, and stock-based awards[242](index=242&type=chunk) - No significant changes to critical accounting policies were made for the six months ended June 30, 2023[244](index=244&type=chunk) [Recently Issued Accounting Pronouncements](index=72&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) Details on recently issued accounting pronouncements are provided in Note 2 of the financial statements - Details on recently issued accounting pronouncements are provided in Note 2 of the financial statements[245](index=245&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=72&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, market risk disclosures are not required for this period - The company is a smaller reporting company and is not required to provide market risk disclosures[246](index=246&type=chunk) [Item 4. Controls and Procedures](index=72&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective; no material changes in internal control over financial reporting - Disclosure controls and procedures were deemed effective at a reasonable assurance level as of June 30, 2023[247](index=247&type=chunk) - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter[248](index=248&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The company is not currently party to any material legal proceedings[251](index=251&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors occurred during the three months ended June 30, 2023 - No material changes to risk factors occurred during the three months ended June 30, 2023[252](index=252&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds to report for this period - No unregistered sales of equity securities or use of proceeds[253](index=253&type=chunk) [Item 3. Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities to report for this period - No defaults upon senior securities[254](index=254&type=chunk) [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures to report for this period - No mine safety disclosures[255](index=255&type=chunk) [Item 5. Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No other information to report for this period - No other information to report[256](index=256&type=chunk) [Item 6. Exhibits](index=48&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Quarterly Report, including certifications and loan agreement amendments - Exhibits include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2), a Default Waiver and First Amendment to Loan and Security Agreement (10.18), and Inline XBRL documents[258](index=258&type=chunk) Signatures [Signatures](index=49&type=section&id=Signatures) The report was signed by the CEO and CFO on August 8, 2023 - The report was signed by Kevin J. Knopp, Ph.D., CEO, and Joseph H. Griffith IV, CFO, on August 8, 2023[263](index=263&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-39815 908 DEVICES INC. (Exact name of registrant as specified in its charter) Delaware 45-4524096 (State or ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39815 908 DEVICES INC. (Exact name of registrant as specified in its charter) | Delaware | 45-4524096 | | --- | -- ...

Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was $11.6 million, down from $15.8 million in the prior year period, with a notable shipment of MX-908 devices to the U.S. Army in Q4 2021 contributing to this decline [30] - Total revenue for the full year 2022 was $46.9 million, an 11% increase from $42.2 million in 2021 [11][59] - Gross profit for Q4 2022 was $5.9 million, with a gross margin of 51%, down from 58% in the prior year period [31] - Net loss for the full year 2022 was $33.6 million, compared to $22.2 million in the prior year [62] Business Line Data and Key Metrics Changes - Desktop revenue grew by more than 25% year-over-year, significantly outpacing overall growth [11] - Handheld revenue from the MX-908 product for Q4 2022 was $7.1 million, including 55 device shipments [30] - Recurring revenue for the full year was $15.7 million, representing a 101% increase year-over-year, driven primarily by handheld accessories and consumables [60] Market Data and Key Metrics Changes - The company has 17 enterprise accounts with over 800 devices of additional opportunity, up 15% compared to year-end 2021 [7][118] - There are currently 2,220 active clinical trials for advanced therapies, indicating a growing market for the company's products [5] Company Strategy and Development Direction - The company is focused on developing and launching new products to meet the growing demand for robust analytics at the point of need, with a strategy to broaden its bio-analytics platform [45][54] - The acquisition of TRACE Analytics has strengthened the company's core microfluidics technology, enhancing its product offerings [8][49] - The company aims to maintain a disciplined approach to capital deployment, with a focus on profitability and efficient spending [33][105] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued industry headwinds through the first half of 2023, with protracted capital purchasing cycles affecting sales [4] - Despite challenges, management remains confident in the long-term trajectory and the value of the technology platform [25][67] - The company expects revenue for 2023 to be in the range of $48 million to $52 million, representing growth of 2% to 11% over 2022 [66] Other Important Information - Operating expenses for the full year 2022 were $61.4 million, up from $45.3 million in the prior year, primarily due to increased personnel costs [29] - The company ended 2022 with $188 million in cash and cash equivalents, providing a strong cash runway [64] Q&A Session Summary Question: What challenges are being seen within bioprocess? - Management noted that customers are under pressure, leading to slower deal velocity and more thoughtful cash investments [37] Question: What are customers looking for in purchasing decisions? - Management indicated that consumables and service revenue for desktops were up about 55% for Q4, suggesting positive indicators for future purchases [40] Question: What is the outlook for 2023? - Management expressed cautious optimism, noting that while there are macro headwinds, there are also signs of recovery and strong demand for advanced therapeutics [108][110] Question: How is the company addressing the reduction in workforce? - The company implemented a 6% reduction in headcount to maintain a disciplined approach to capital deployment and ensure expenses do not outpace revenue growth [105][106]

24 0 Flexible integrations for Process Development & GMP Easy to operate & Real-time (data up to every 2 min) Native protein analysis Peptide mapping Diagnostics Intact mass verification Oligonucleotide QC mAb PTM characterization 26 40+ DEVICES COMPATIBLE 'MAINFRAMES' Growth catalysts Market Trends Support Long Term Growth 3 of 5 fentanyl-laced fake prescription pills contain a lethal dose Drive to Bioprocessing 4.0 FORENSICS Our ADVANCED THERAPIES SARTORIUS AMBR 15 Adjust Controls Temperature Feed rate Sp ...

908 Devices Inc. (NASDAQ:MASS) Q3 2022 Results Conference Call November 14, 2022 8:30 AM ET Company Participants Kelly Gura - IR Kevin Knopp - CEO and Co-Founder Joe Griffith - CFO Conference Call Participants Max Masucci - Cowen Daniel Arias - Stifel Puneet Souda - Leerink Madeline Mollman - William Blair Operator Good day and thank you for standing by. Welcome to the 908 Devices Third Quarter 2022 Financial Results Conference Call. [Operator Instructions] I would now like to hand the conference over to yo ...