908 Devices(US:MASS)2024-03-07 16:00PART I Business 908 Devices Inc. develops and commercializes handheld and desktop mass spectrometry devices for point-of-need chemical and biochemical analysis in life sciences, bioprocessing, and forensics - The company has sold over 2,800 handheld and desktop devices to more than 700 customers in 56 countries, including all of the top 20 pharmaceutical companies by revenue27 - The company's technology platform is built on three core elements: High-Pressure Mass Spec (HPMS), microfluidics for sample handling, and embedded analytics with machine learning to provide actionable answers444760 Total Addressable Market (TAM) Projections | Market Segment | 2022 TAM Estimate (billions USD) | 2027 TAM Estimate (billions USD) | | :--- | :--- | :--- | | Total TAM | $5.7 | $27 | | Handhelds (Forensics, QC) | $1.3 | >$3.9 | | Desktops (Bioprocess) | $0.8 | ~$15 | | Research Chromatography | $3.6 | >$8.1 | Product Portfolio Overview | Product | Type | Primary Market | Key Function | | :--- | :--- | :--- | :--- | | MX908 | Handheld | Field Forensics | Rapid analysis of unknown solid, liquid, vapor, and aerosol materials | | Rebel | Desktop | Bioprocessing | Real-time analysis of extracellular environment (cell culture media) | | Maverick | Desktop | Bioprocessing | In-line optical analyzer for real-time monitoring of bioprocess parameters | | Maven & Trace C2 | Desktop | Bioprocessing | On-line devices for continuous monitoring and control of specific analytes | | ZipChip | Interface | Life Sciences Research | Plug-and-play separation platform for conventional Mass Spec instruments | Risk Factors The company faces diverse risks including macroeconomic factors, a history of net losses, competition, product reliance, long sales cycles, and regulatory compliance - A majority of the company's 2023 product and service revenue was derived from sales of its handheld products, primarily the MX908, to the field forensics market202 - The company has a history of net losses since its inception in 2012 and may not achieve or maintain profitability in the future181 - Sales cycles can be long and unpredictable, ranging from several months to over a year, particularly with government customers who require extensive evaluation, budgeting, and procurement processes207 - The company relies on a limited number of suppliers for several key components, and in some cases, a single supplier, which poses a risk to manufacturing and supply chain stability218 - Products are currently marketed as Research Use Only (RUO). If the FDA were to determine they are intended for diagnostic purposes, the company would face more onerous regulatory requirements, costs, and potential delays210 Unresolved Staff Comments The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments358 Cybersecurity The company's cybersecurity risk management is overseen by the Board of Directors, with no material incidents identified to date - The Board of Directors, through its audit committee, has overall oversight responsibility for cybersecurity risks, receiving quarterly reports from the Director of Information Technology359 - The company maintains a cybersecurity program that includes periodic risk assessments, security testing, and a vulnerability management process to mitigate cyber risks361 - To date, no cybersecurity incidents or threats have been identified that have had a material effect on the company366 Properties The company leases its primary facilities, including corporate headquarters in Boston, MA, European operations in Germany, and an R&D facility in North Carolina - The company's corporate headquarters is a leased 37,500 sq. ft. facility in Boston, Massachusetts, with the lease expiring in October 2025367 - Additional leased facilities are located in Braunschweig, Germany (7,500 sq. ft.) and Morrisville, North Carolina (13,300 sq. ft.) to support European operations and R&D/manufacturing expansion, respectively367 Legal Proceedings The company is not currently a party to any material legal proceedings - The company is not currently subject to any material legal proceedings368 Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable369 PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on Nasdaq under "MASS", has approximately 22 holders, and does not anticipate paying cash dividends - The company's common stock trades on the Nasdaq Global Market under the symbol "MASS"372 - The company has never paid cash dividends and does not intend to in the foreseeable future, with its ability to do so also restricted by its credit agreement377 Management's Discussion and Analysis of Financial Condition and Results of Operations In fiscal year 2023, total revenue increased by 7% to $50.2 million, while net loss widened to $36.4 million due to increased operating expenses Consolidated Statement of Operations Summary (2023 vs. 2022) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $50,229 | $46,852 | 7.2% | | Product Revenue | $40,214 | $37,499 | 7.2% | | Service Revenue | $9,645 | $6,976 | 38.3% | | Contract Revenue | $370 | $2,377 | -84.4% | | Gross Profit | $25,322 | $26,023 | -2.7% | | Gross Margin | 50.4% | 55.5% | -5.1 p.p. | | Operating Expenses | $68,080 | $61,405 | 10.9% | | R&D | $21,904 | $17,526 | 25.0% | | SG&A | $46,176 | $43,879 | 5.2% | | Loss from Operations | ($42,758) | ($35,382) | 20.8% | | Net Loss | ($36,399) | ($33,563) | 8.4% | - Recurring revenue (from consumables and services) constituted 33% of total product and service revenue in 2023, down slightly from 35% in 2022401 Product Placements (Units) | Product Type | 2023 Placements | 2022 Placements | | :--- | :--- | :--- | | Handheld | 402 | 370 | | Desktop | 66 | 80 | - As of December 31, 2023, the company had $121.0 million in cash and cash equivalents and $24.6 million in marketable securities453 - In March 2023, the company was in default of its loan covenants with Silicon Valley Bank (SVB) after transferring funds away from the institution following its collapse. The default was subsequently waived and the loan agreement was amended in August 2023466467 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, 908 Devices Inc. is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide this information514 Financial Statements and Supplementary Data This section presents the company's audited consolidated financial statements for fiscal years 2023 and 2022, including balance sheets, statements of operations, and cash flows Key Balance Sheet Data (as of Dec 31) | Account | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $121,041 | $188,422 | | Marketable securities | $24,641 | $0 | | Total Assets | $202,981 | $242,587 | | Total Liabilities | $37,490 | $51,988 | | Total Stockholders' Equity | $165,491 | $190,599 | Key Cash Flow Data (Year Ended Dec 31) | Account | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Cash used in operating activities | ($25,059) | ($20,930) | | Cash used in investing activities | ($26,400) | ($15,807) | | Cash (used in) provided by financing activities | ($15,935) | $1,179 | | Net decrease in cash | ($67,381) | ($35,540) | - The company acquired Trace Analytics GmbH (now 908 Devices GmbH) in August 2022 for a total potential consideration of $17.3 million, adding enabling sampling technology and expanding its European presence541702 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None714 Controls and Procedures Management concluded disclosure controls were effective as of December 31, 2023, with no material changes to internal control over financial reporting during the fourth quarter - Management concluded that disclosure controls and procedures were effective as of the end of the period covered by the report716 - No changes in internal control over financial reporting occurred during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls717 Other Information The company reports no directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during the fourth quarter of 2023 - No directors or executive officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fourth quarter ended December 31, 2023722 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Not applicable723 PART III Directors, Executive Officers and Corporate Governance Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's 2024 Annual Meeting Proxy Statement - Information is incorporated by reference from the registrant's upcoming Proxy Statement for its 2024 Annual Meeting of Stockholders725 Executive Compensation Information regarding executive compensation is incorporated by reference from the company's 2024 Annual Meeting Proxy Statement - Information is incorporated by reference from the registrant's upcoming Proxy Statement for its 2024 Annual Meeting of Stockholders727 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information regarding security ownership of beneficial owners and management is incorporated by reference from the company's 2024 Annual Meeting Proxy Statement - Information is incorporated by reference from the registrant's upcoming Proxy Statement for its 2024 Annual Meeting of Stockholders728 Certain Relationships and Related Transactions, and Director Independence Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's 2024 Annual Meeting Proxy Statement - Information is incorporated by reference from the registrant's upcoming Proxy Statement for its 2024 Annual Meeting of Stockholders729 Principal Accountant Fees and Services Information regarding principal accountant fees and services is incorporated by reference from the company's 2024 Annual Meeting Proxy Statement - Information is incorporated by reference from the registrant's upcoming Proxy Statement for its 2024 Annual Meeting of Stockholders730 PART IV Exhibit and Financial Statement Schedules This section lists financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, with schedules omitted if not required or already included - This item provides an index of all financial statements and exhibits filed with the Form 10-K732734 Form 10-K Summary The company indicates that there is no Form 10-K summary - None740