908 Devices(MASS) - 2022 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for 908 Devices Inc., detailing financial position, performance, cash flows, and significant accounting policies Condensed Consolidated Balance Sheets As of June 30, 2022, total assets decreased to $247.0 million from $260.9 million at year-end 2021, primarily due to reduced cash and cash equivalents Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $212,994 | $224,073 | | Inventory | $11,178 | $7,918 | | Total current assets | $238,678 | $252,893 | | Total assets | $246,995 | $260,906 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $15,434 | $14,836 | | Long-term debt | $15,000 | $15,000 | | Total liabilities | $45,880 | $46,302 | | Accumulated deficit | $(118,151) | $(100,637) | | Total stockholders' equity | $201,115 | $214,604 | Condensed Consolidated Statements of Operations and Comprehensive Loss For the six months ended June 30, 2022, total revenue increased to $19.4 million, but net loss widened to $17.5 million due to higher operating expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2022 | Q2 2021 | Six Months 2022 | Six Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $11,106 | $8,277 | $19,412 | $13,820 | | Gross profit | $6,634 | $4,379 | $10,763 | $7,287 | | Loss from operations | $(8,369) | $(7,455) | $(17,890) | $(13,265) | | Net loss | $(8,099) | $(7,424) | $(17,514) | $(13,519) | | Net loss per share (basic and diluted) | $(0.26) | $(0.27) | $(0.56) | $(0.49) | Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity decreased to $201.1 million as of June 30, 2022, primarily due to a $17.5 million net loss Changes in Stockholders' Equity (Six Months Ended June 30, 2022, in thousands) | Description | Amount | | :--- | :--- | | Balance at December 31, 2021 | $214,604 | | Net loss | $(17,514) | | Stock-based compensation expense | $3,183 | | Issuance of common stock (options/ESPP) | $1,382 | | Balance at June 30, 2022 | $201,115 | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities improved to $10.9 million for the six months ended June 30, 2022, with overall cash and equivalents decreasing by $11.0 million Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(10,876) | $(16,938) | | Net cash used in investing activities | $(689) | $(625) | | Net cash provided by (used in) financing activities | $597 | $(290) | | Net decrease in cash | $(10,968) | $(17,853) | | Cash at end of period | $213,165 | $141,374 | Notes to Unaudited Condensed Consolidated Financial Statements These notes detail the company's business, accounting policies, customer concentration, disaggregated revenue, and the subsequent acquisition of TRACE Analytics GmbH - One customer accounted for 19% of total revenue and 13% of gross accounts receivable for the six months ended June 30, 2022[35] Disaggregated Revenue (Six Months Ended June 30, in thousands) | Revenue Stream | 2022 | 2021 | | :--- | :--- | :--- | | By Type | | | | Device sales revenue | $13,287 | $10,092 | | Consumables and service revenue | $5,350 | $3,180 | | License and contract revenue | $775 | $548 | | Total Revenue | $19,412 | $13,820 | | By Geography | | | | Americas | $15,538 | $10,489 | | Europe, Middle East and Africa | $2,601 | $2,171 | | Asia Pacific | $1,273 | $1,160 | - The company acquired TRACE Analytics GmbH on August 3, 2022, for an initial $15.3 million cash payment and up to $2.0 million in contingent consideration[84] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance, highlighting 40% revenue growth in H1 2022, widening net losses due to strategic investments, and a sufficient liquidity position Overview The company develops and sells mass spectrometry devices, reporting $19.4 million in revenue and a $17.5 million net loss for H1 2022, with continued losses expected due to growth investments - The company manufactures purpose-built handheld (MX908) and desktop (Rebel, ZipChip) mass spectrometry devices for point-of-need analysis[89][91] - For the six months ended June 30, 2022, the company generated $19.4 million in revenue and incurred a net loss of $17.5 million, with an accumulated deficit of $118.2 million[93] Factors Affecting Our Performance Performance is driven by device sales, recurring revenue, and revenue mix, with recurring revenue representing 29% of product and service revenue in H1 2022 - Device sales are a primary performance driver, with varying sales cycles depending on customer type, such as long cycles for government and variable cycles for pharma/biotech[100][102][103] - Recurring revenue from consumables and services, a key focus, represented 29% of product and service revenue for the six months ended June 30, 2022, up from 24% in the prior year[104] Key Business Metrics Product placements, a key business metric, totaled 207 units for the six months ended June 30, 2022, contributing to 2,142 cumulative placements Product Placements (Units) | Device | Q2 2022 | Q2 2021 | Six Months 2022 | Six Months 2021 | | :--- | :--- | :--- | :--- | :--- | | MX908 | 102 | 84 | 165 | 137 | | Rebel | 14 | 12 | 29 | 21 | | ZipChip Interface | 8 | 7 | 13 | 11 | | Total | 124 | 103 | 207 | 169 | Cumulative Product Placements (Units) | Device | June 30, 2022 | June 30, 2021 | | :--- | :--- | :--- | | MX908 | 1,815 | 1,295 | | Rebel | 129 | 67 | | ZipChip Interface | 198 | 168 | | Total | 2,142 | 1,530 | Results of Operations This section details financial results, showing 34% revenue growth in Q2 2022 and 40% for H1 2022, alongside increased operating expenses leading to wider losses Q2 2022 vs Q2 2021 Comparison (in thousands) | Metric | Q2 2022 | Q2 2021 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $11,106 | $8,277 | $2,829 | 34% | | Gross Profit | $6,634 | $4,379 | $2,255 | 51.5% | | Product & Service Gross Margin | 59% | 51% | 8 p.p. | - | | R&D Expenses | $4,293 | $3,055 | $1,238 | 41% | | SG&A Expenses | $10,710 | $8,779 | $1,931 | 22% | | Loss from Operations | $(8,369) | $(7,455) | $(914) | 12% | Six Months 2022 vs 2021 Comparison (in thousands) | Metric | H1 2022 | H1 2021 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $19,412 | $13,820 | $5,592 | 40% | | Gross Profit | $10,763 | $7,287 | $3,476 | 47.7% | | Product & Service Gross Margin | 55% | 52% | 3 p.p. | - | | R&D Expenses | $8,198 | $6,020 | $2,178 | 36% | | SG&A Expenses | $20,455 | $14,532 | $5,923 | 41% | | Loss from Operations | $(17,890) | $(13,265) | $(4,625) | 35% | Liquidity and Capital Resources As of June 30, 2022, the company held $213.0 million in cash, deemed sufficient for the next twelve months, with $10.9 million net cash used in operations for H1 2022 - The company held $213.0 million in cash and cash equivalents as of June 30, 2022[153] - Net cash used in operating activities for the six months ended June 30, 2022, was $10.9 million, an improvement from $16.9 million in the prior year[159][160] - The company maintains a $25.0 million revolving line of credit, maturing in March 2024, subject to covenants including a $10.0 million minimum cash level[156] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk[169] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of the report period end[170] - No material changes occurred in internal control over financial reporting during the most recently completed fiscal quarter[171] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings - The Company is not currently party to any material legal proceedings[174] Item 1A. Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's 2021 Annual Report on Form 10-K - There are no material changes to the risk factors discussed in the company's 2021 Annual Report on Form 10-K[175] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities and no material change in the planned use of IPO proceeds - There has been no material change in the planned use of IPO proceeds from that described in the final prospectus filed on December 18, 2020[179] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - No defaults upon senior securities were reported[181] Item 4. Mine Safety Disclosures This item is not applicable to the company's operations - This item is not applicable[182] Item 5. Other Information The company reports no other information for this item - No other information is reported for this item[183] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications and XBRL data - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act of 2002 and Inline XBRL documents[186]