Alpha Teknova Inc

Previous wording

We generated revenue of $9.6 million during the three months ended June 30, 2024, which represents a decrease of $1.9 million compared to revenue of $11.5 million during the three months ended June 30, 2023. For the three months ended June 30, 2024 and 2023, only 4.0% and 3.9%, respectively, of our revenue was generated from customers located outside of the United States. We generated revenue of $18.9 million during the six months ended June 30, 2024, which represents a decrease of $1.7 million compared to revenue of $20.6 million during the six months ended June 30, 2023. Excluding revenue of $2.7 million from a single large Clinical Solutions order that was delivered during the three and six months ended June 30, 2023, total revenue was up 9% and 5% for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, respectively. For the six months ended June 30, 2024 and 2023, only 4.3% and 4.1%, respectively, of our revenue was generated from customers located outside of the United States. Our sales outside of the United States are denominated in U.S. Dollars.

Current wording

We generated revenue of $9.6 million during the three months ended September 30, 2024, which represents an increase of $1.4 million compared to revenue of $8.2 million during the three months ended September 30, 2023. For the three months ended September 30, 2024 and 2023, only 5.4% and 4.2%, respectively, of our revenue was generated from customers located outside of the United States. We generated revenue of $28.5 million during the nine months ended September 30, 2024, which represents a decrease of $0.3 million compared to revenue of $28.8 million during the nine months ended September 30, 2023. For the nine months ended September 30, 2024 and 2023, only 4.7% and 4.1%, respectively, of our revenue was generated from customers located outside of the United States. Our sales outside of the United States are denominated in U.S. Dollars.

Previous wording

We had an operating loss of $5.1 million during the three months ended June 30, 2024, compared to an operating loss of $7.0 million during the three months ended June 30, 2023. We had an operating loss of $13.1 million during the six months ended June 30, 2024, compared to an operating loss of $15.9 million during the six months ended June 30, 2023. While our expenses may fluctuate over the short term, we expect our expenses will continue to increase in future periods, but at a slower rate, in connection with our ongoing activities as we:

Current wording

We had an operating loss of $7.4 million during the three months ended September 30, 2024, compared to an operating loss of $8.8 million during the three months ended September 30, 2023. We had an operating loss of $20.5 million during the nine months ended September 30, 2024, compared to an operating loss of $24.7 million during the nine months ended September 30, 2023. While our expenses may fluctuate over the short term, we expect our expenses will continue to increase in future periods, but at a slower rate, in connection with our ongoing activities as we:

Previous wording

We are closely monitoring economic uncertainty in the U.S. and abroad. General inflation in the U.S. has risen to levels not experienced in recent decades. General inflation, including rising prices for our raw materials and other inputs, as well as rising salaries and other expenses, negatively impact our business by increasing our cost of sales and operating expenses. In addition, the U.S. Federal Reserve has raised, and may again raise, interest rates in response to concerns about inflation. Inflation, together with increased interest rates, may cause our customers to reduce, delay, or cancel orders for our goods and services, thereby causing a decrease in or change in timing of sales of our products and services. We cannot predict the impact of future inflation and interest rate increases on the results of our operations. For further information regarding the impact of these economic factors on the Company, please see the risk factors identified in Part I, Item 1A, Risk Factors, of our 2023 Annual Report on Form 10-K.

Current wording

We are closely monitoring economic uncertainty in the U.S. and abroad. General inflation in the U.S. has risen to levels not experienced in recent decades. While the rate of inflation has moderated in 2024, general inflation, including rising prices for our raw materials and other inputs, as well as rising salaries and other expenses, negatively impact our business by increasing our cost of sales and operating expenses. In addition, during 2023 and early 2024, the U.S. Federal Reserve has raised interest rates in response to concerns about inflation, and although the U.S. Federal Reserve lowered interest rates in September of 2024, the direction and timing of future interest rate changes remains uncertain. Inflation, together with increased interest rates, may cause our customers to reduce, delay, or cancel orders for our goods and services, thereby causing a decrease in or change in timing of sales of our products and services. We cannot predict the impact of future inflation and interest rate changes on the results of our operations. For further information regarding the impact of these economic factors on the Company, please see the risk factors identified in Part I, Item 1A, Risk Factors, of our 2023 Annual Report on Form 10-K.

Previous wording

Total revenue was $9.6 million and $11.5 million for the three months ended June 30, 2024 and 2023, respectively. Excluding revenue of $2.7 million from a single large Clinical Solutions order that was delivered during the three months ended June 30, 2023, total revenue was up 9% and Clinical Solutions revenue was up 66%.

Current wording

Total revenue was $9.6 million and $8.2 million for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Clinical Solutions revenue was $1.6 million for the three months ended June 30, 2024, a decrease of $2.1 million, or 57.2%, compared to $3.7 million for the three months ended June 30, 2023. The decrease in Clinical Solutions revenue was attributable to lower average revenue per customer, partially offset by an increased number of customers.

Current wording

Lab Essentials revenue was $7.2 million for the three months ended September 30, 2024, a decrease of $0.1 million, or 1.6%, compared to $7.3 million for the three months ended September 30, 2023. The decrease in Lab Essentials revenue was attributable to lower average revenue per customer, partially offset by an increased number of customers.

Previous wording

Revenue from U.S. sales was $9.2 million and $11.1 million for the three months ended June 30, 2024 and 2023, respectively. Revenue from U.S. sales as a percentage of our total revenue was consistent period over period, representing 96.0% and 96.1% of our total revenue during the three months ended June 30, 2024 and 2023, respectively.

Current wording

Revenue from U.S. sales was $9.1 million and $7.8 million for the three months ended September 30, 2024 and 2023, respectively. Revenue from U.S. sales as a percentage of our total revenue was consistent period over period, representing 94.6% and 95.8% of our total revenue during the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Revenue from international sales was $0.4 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively. Revenue from international sales as a percentage of our total revenue was also consistent, representing 4.0% and 3.9% of our total revenue during the three months ended June 30, 2024 and 2023, respectively.

Current wording

Revenue from international sales was $0.5 million and $0.3 million for the three months ended September 30, 2024 and 2023, respectively. Revenue from international sales as a percentage of our total revenue was also consistent period over period, representing 5.4% and 4.2% of our total revenue during the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Research and development expenses were $0.7 million and $1.5 million for the three months ended June 30, 2024 and 2023, respectively. The decrease was primarily driven by reduced headcount and supplies expense.

Current wording

Research and development expenses were $0.6 million and $1.4 million for the three months ended September 30, 2024 and 2023, respectively. The decrease was primarily driven by reduced headcount and supplies expense.

Previous wording

Sales and marketing expenses were $1.5 million and $2.2 million for the three months ended June 30, 2024 and 2023, respectively. The decrease was primarily driven by reduced headcount.

Current wording

Sales and marketing expenses were $1.6 million and $2.4 million for the three months ended September 30, 2024 and 2023, respectively. The decrease was primarily driven by reduced headcount.

Previous wording

Total other expenses, net was $0.4 million and not significant for the six months ended June 30, 2024 and 2023, respectively. The increase in total other expenses, net was primarily due to lower interest capitalized. Additionally, interest expense was lower due to a lower debt balance outstanding despite higher interest rates, partially offset by lower interest income earned on short-term liquid investments. Capitalized interest costs were zero and $0.9 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Total other expenses, net was $0.1 million and $1.4 million for the three months ended September 30, 2024 and 2023, respectively. The decrease in total other expenses, net was primarily due to the $0.8 million loss on extinguishment of debt incurred during the three months ended September 30, 2023. Additionally, interest expense was lower due to a lower debt balance outstanding despite higher interest rates, partially offset by higher interest income earned on short-term liquid investments.

Previous wording

Our benefit from income taxes was not significant for the three months ended June 30, 2024, and our provision for income taxes was not significant for the three months ended June 30, 2023. The effective tax rates for the three months ended June 30, 2024 and 2023 were 0.1% and (0.2)%, respectively. The effective tax rates differ from the federal statutory rate primarily due to operating losses not expected to produce an income tax benefit.

Current wording

Our benefit from income taxes was not significant for the three months ended September 30, 2024, and our provision for income taxes was not significant for the three months ended September 30, 2023. The effective tax rates for the three months ended September 30, 2024 and 2023 were 0.1% and (0.1)%, respectively. The effective tax rates differ from the federal statutory rate primarily due to operating losses not expected to produce an income tax benefit.

Previous wording

The following tables set forth our results of operations for the six months ended June 30, 2024 and 2023 (dollars in thousands):

Current wording

The following tables set forth our results of operations for the nine months ended September 30, 2024 and 2023 (dollars in thousands):

Previous wording

Our revenue disaggregated by product category for the six months ended June 30, 2024 and 2023, was as follows (dollars in thousands):

Current wording

Our revenue disaggregated by product category for the nine months ended September 30, 2024 and 2023, was as follows (dollars in thousands):

Previous wording

Lab Essentials revenue was $7.6 million in each of the three months ended June 30, 2024 and 2023. Lab Essentials revenue was consistent as an increase in number of customers was offset by a similar decline in average revenue per customer.

Current wording

Lab Essentials revenue was $22.1 million in each of the nine months ended September 30, 2024 and 2023. Lab Essentials revenue was consistent as the decline in average revenue per customer was offset by a similar increase in number of customers.

Previous wording

Clinical Solutions revenue was $3.3 million for the six months ended June 30, 2024, a decrease of $2.0 million, or 37.6%, compared to $5.3 million for the six months ended June 30, 2023. The decrease in Clinical Solutions revenue was attributable to lower average revenue per customer, partially offset by an increased number of customers.

Current wording

Clinical Solutions revenue was $5.2 million for the nine months ended September 30, 2024, a decrease of $0.6 million, or 10.4%, compared to $5.9 million for the nine months ended September 30, 2023. The decrease in Clinical Solutions revenue was attributable to lower average revenue per customer, partially offset by an increased number of customers. Excluding revenue of $2.7 million from a single large order, Clinical Solutions revenue was up 66% for the nine months ended September 30, 2024.

Previous wording

Our revenue disaggregated by geographic region, for the six months ended June 30, 2024 and 2023, was as follows (dollars in thousands):

Current wording

Our revenue disaggregated by geographic region, for the nine months ended September 30, 2024 and 2023, was as follows (dollars in thousands):

Previous wording

Revenue from U.S. sales was $18.1 million and $19.8 million for the six months ended June 30, 2024 and 2023, respectively. Revenue from U.S. sales as a percentage of our total revenue was consistent period over period, representing 95.7% and 95.9% of our total revenue during the six months ended June 30, 2024 and 2023, respectively.

Current wording

Revenue from U.S. sales was $27.2 million and $27.6 million for the nine months ended September 30, 2024 and 2023, respectively. Revenue from U.S. sales as a percentage of our total revenue was consistent period over period, representing 95.3% and 95.9% of our total revenue during the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Revenue from international sales was $0.8 million in each of the six months ended June 30, 2024 and 2023. Revenue from international sales as a percentage of our total revenue was also consistent, representing 4.3% and 4.1% of our total revenue during the six months ended June 30, 2024 and 2023, respectively.

Current wording

Revenue from international sales was $1.3 million and $1.2 million for the nine months ended September 30, 2024 and 2023, respectively. Revenue from international sales as a percentage of our total revenue was also consistent period over period, representing 4.7% and 4.1% of our total revenue during the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Gross profit percentage was 29.2% and 43.9% for the three months ended June 30, 2024 and 2023, respectively. The decrease in gross profit percentage was primarily driven by lower Clinical Solutions revenue and increased overhead costs, largely depreciation expense following the completion of our new manufacturing facility in the prior year, partially offset by reduced headcount.

Current wording

Gross profit percentage was 17.9% and 31.1% for the nine months ended September 30, 2024 and 2023, respectively. The decrease in gross profit percentage was primarily driven by $2.8 million of non-recurring and non-cash charges related to the disposal of expired inventory and write down of excess inventory created in the second half of 2022 when we increased production to meet high demand. Excluding the $2.8 million of non-recurring and non-cash charges, gross profit for the nine months ended September 30, 2024, would have been 27.6%. The decrease in gross profit was also driven by increased overhead costs, largely depreciation expense following the completion of our new manufacturing facility in the prior year, which were partially offset by reduced headcount.

Previous wording

Our operating expenses for the six months ended June 30, 2024 and 2023, were as follows (dollars in thousands):

Current wording

Our operating expenses for the nine months ended September 30, 2024 and 2023, were as follows (dollars in thousands):

Previous wording

Research and development expenses were $1.5 million and $2.9 million for the six months ended June 30, 2024 and 2023, respectively. The decrease was primarily driven by reduced headcount and supplies expense.

Current wording

Research and development expenses were $2.2 million and $4.3 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease was primarily driven by reduced headcount and supplies expense.

Previous wording

Sales and marketing expenses were $3.1 million and $4.5 million for the six months ended June 30, 2024 and 2023, respectively. The decrease was primarily driven by reduced headcount.

Current wording

Sales and marketing expenses were $4.8 million and $6.9 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease was primarily driven by reduced headcount.

Previous wording

General and administrative expenses were $12.9 million and $13.3 million for the six months ended June 30, 2024 and 2023, respectively. Excluding the one-time, non-recurring charges related to the reduction in workforce of $1.3 million and $0.7 million for the six months ended June 30, 2024 and 2023, respectively, general and administrative expenses decreased $1.0 million. The decrease was driven by reduced headcount and spending, primarily on professional fees and insurance, partially offset by increased stock-based compensation expense related to the stock option repricing as well as facility costs. See “Notes to Financial Statements—Note 12. Stock-Based Compensation” for a more detailed discussion of the stock option repricing.

Current wording

General and administrative expenses were $17.8 million and $19.4 million for the nine months ended September 30, 2024 and 2023, respectively. Excluding the one-time, non-recurring charges related to the reduction in workforce of $1.3 million for the nine months ended September 30, 2024 and the non-recurring charges related to the reduction in workforce of $0.7 million and the $0.4 million write off related to ATM Facility costs during the nine months ended September 30, 2023, general and administrative expenses decreased $1.8 million compared to the nine months ended September 30, 2023. The decrease was driven by reduced headcount and spending, primarily on professional fees and insurance, partially offset by increased stock-based compensation expense related to the stock option repricing as well as facility costs. See “Notes to Financial Statements—Note 12. Stock-Based Compensation” for a more detailed discussion of the stock option repricing.

Previous wording

Amortization of intangible assets was consistent at $0.6 million for each of the six months ended June 30, 2024 and 2023.

Current wording

Amortization of intangible assets was consistent at $0.9 million for each of the nine months ended September 30, 2024 and 2023.

Previous wording

We incurred a $2.2 million impairment charge related to long-lived assets for the three months ended June 30, 2023, with no comparable charges for the three months ended June 30, 2024. Refer to “Notes to Financial Statements—Note 6—Property, Plant, and Equipment, Net,” in our 2023 Annual Report on Form 10-K for details regarding the impairment.

Current wording

We incurred a $2.2 million impairment charge related to long-lived assets for the nine months ended September 30, 2023, with no comparable charges for the nine months ended September 30, 2024. Refer to “Notes to Financial Statements—Note 6—Property, Plant, and Equipment, Net,” in our 2023 Annual Report on Form 10-K for details regarding the impairment.

Previous wording

Our other expenses, net for the six months ended June 30, 2024 and 2023, were as follows (dollars in thousands):

Current wording

Our other expenses, net for the nine months ended September 30, 2024 and 2023, were as follows (dollars in thousands):

Previous wording

Total other expenses, net was $0.3 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively. The increase in total other expenses, net was primarily due to lower amounts of interest capitalized. Additionally, interest expense was lower due to a lower debt balance outstanding despite higher interest rates, partially offset by lower interest income earned on short-term liquid investments. Capitalized interest costs were zero and $0.3 million for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Total other expenses, net was $0.6 million and $1.4 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease in total other expenses, net was primarily due to the $0.8 million loss on extinguishment of debt incurred during the nine months ended September 30, 2023 coupled with lower interest capitalized. Additionally, interest expense was lower due to a lower debt balance outstanding despite higher interest rates, partially offset by higher interest income earned on short-term liquid investments. Capitalized interest costs were zero and $0.9 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Our benefit from income taxes for the six months ended June 30, 2024 and 2023, was as follows (dollars in thousands):

Current wording

Our (benefit from) and provision for income taxes for the nine months ended September 30, 2024 and 2023, was as follows (dollars in thousands):

Previous wording

Our benefit from income taxes was not significant in either of the six months ended June 30, 2024 and 2023. The effective tax rates for the six months ended June 30, 2024 and 2023 were 0.3% and 0.0%, respectively. The effective tax rates differ from the federal statutory rate primarily due to operating losses not expected to produce an income tax benefit.

Current wording

Our benefit from income taxes was not significant for the nine months ended September 30, 2024, and our provision for income taxes was not significant for the nine months ended September 30, 2023. The effective tax rates for the nine months ended September 30, 2024 and 2023 were 0.2% and (0.0)%, respectively. The effective tax rates differ from the federal statutory rate primarily due to operating losses not expected to produce an income tax benefit.

Previous wording

The primary sources of financing for our operations were our (i) initial public offering, which we completed in June 2021 (IPO) and resulted in net proceeds to us of $99.1 million, (ii) registered direct offering and concurrent private placement completed in September 2023 (collectively, the September 2023 Offerings), which resulted in aggregate gross proceeds of $22.9 million before deducting offering expenses of $0.4 million and the prepayment of $10.0 million owed under the Term Loan as discussed below, and (iii) private placement completed in July 2024 (the July 2024 Offering), which resulted in aggregate gross proceeds of $15.4 million before deducting offering expenses payable by the Company.

Current wording

The primary sources of financing for our operations are our (i) initial public offering, which we completed in June 2021 (IPO) and resulted in net proceeds to us of $99.1 million, (ii) registered direct offering and concurrent private placement completed in September 2023 (collectively, the September 2023 Offerings), which resulted in aggregate gross proceeds of $22.9 million before deducting offering expenses of $0.4 million and the prepayment of $10.0 million owed under the Term Loan as discussed below, and (iii) private placement completed in July 2024 (the July 2024 Offering), which resulted in aggregate gross proceeds of $15.4 million before deducting offering expenses payable by the Company.

Previous wording

Our principal liquidity requirements are to fund our operations and capital expenditures. During the three and six months ended June 30, 2024, we incurred net losses of $5.4 million and $13.5 million, respectively. In addition, as of June 30, 2024, we had an accumulated deficit of $105.2 million and $12.1 million in borrowings outstanding under our Term Loan (defined below). As of June 30, 2024, we had $27.9 million of working capital, which included $18.6 million in cash and cash equivalents.

Current wording

Our principal liquidity requirements are to fund our operations and capital expenditures. During the three and nine months ended September 30, 2024, we incurred net losses of $7.6 million and $21.0 million, respectively. In addition, as of September 30, 2024, we had an accumulated deficit of $112.8 million and $12.1 million in borrowings outstanding under our Term Loan (defined below). As of September 30, 2024, we had $36.2 million of working capital, which included $31.7 million in cash and cash equivalents and short-term investments.

Previous wording

As of June 30, 2024, we had an outstanding principal amount of $12.1 million under a senior secured term loan (the Term Loan) pursuant to Amendment No. 5 to our Credit Agreement with MidCap Financial Trust (MidCap). On March 8, 2024, we entered into limited waivers and amendments (collectively Amendment No. 5, or, as amended, the Amended Credit Agreement) which includes a waiver from MidCap of the revenue covenant violations for each of the periods ending November 30, 2023 and January 31, 2024. Amendment No. 5 also reduced the revenue covenants for future periods up to and including for the twelve months ending December 31, 2024, from $42.0 million to $34.0 million. Amendment No. 5 also removed those requirements for the periods ending January 31, 2025 through December 31, 2025, instead requiring that for each applicable twelve-month period ending after December 31, 2024, the Company’s minimum net revenue requirement will be determined by MidCap in its reasonable discretion in consultation with the Company’s senior management and based on financial statements and projections delivered to MidCap in accordance with the financial reporting requirements in the Amended Credit Agreement, so long as the minimum net revenue requirements for those periods shall not be less than the greater of (x) the applicable minimum net revenue requirement for the twelve-month period ending on the last day of the immediately preceding month and (y) $34.0 million. In addition, Amendment No. 5 also removed the advance rate for finished goods inventory in the determination of the borrowing base for the Revolving Loan and increased the minimum cash requirement from $9.0 million to $10.0 million. Finally, Amendment No. 5 conditions the next borrowing under the Revolving Loan on the Company achieving net revenue for the preceding twelve-month period of at least $38.0 million down from $45.0 million. See

Current wording

As of September 30, 2024, we had an outstanding principal amount of $12.1 million under a senior secured term loan (the Term Loan) pursuant to Amendment No. 5 to our Credit Agreement with MidCap Financial Trust (MidCap). On March 8, 2024, we entered into limited waivers and amendments (collectively Amendment No. 5, or, as amended, the Amended Credit Agreement) which includes a waiver from MidCap of the revenue covenant violations for each of the periods ending November 30, 2023 and January 31, 2024. Amendment No. 5 also reduced the revenue covenants for future periods up to and including for the twelve months ending December 31, 2024, from $42.0 million to $34.0 million. Amendment No. 5 also removed those requirements for the periods ending January 31, 2025 through December 31, 2025, instead requiring that for each applicable twelve-month period ending after December 31, 2024, our minimum net revenue requirement will be determined by MidCap in its reasonable discretion in consultation with the our senior management and based on financial statements and projections delivered to MidCap in accordance with the financial reporting requirements in the Amended Credit Agreement, so long as the minimum net revenue requirements for those periods shall not be less than the greater of (x) the applicable minimum net revenue requirement for the twelve-month period ending on the last day of the immediately preceding month and (y) $34.0 million. In addition, Amendment No. 5 also removed the advance rate for finished goods inventory in the determination of the borrowing base for the Revolver and increased the minimum cash requirement from $9.0 million to $10.0 million. Under the terms of the Amended Credit Agreement, cash and cash equivalents as well as short-term investments in U.S. Treasuries are included in the determination of the minimum cash covenant. Finally, Amendment No. 5 conditions the next borrowing under the Revolver on the Company achieving net revenue for the preceding twelve-month period of at least $38.0 million down from $45.0 million. See “Notes to Financial Statements—Note 10—Long-term Debt, Net,” for a more detailed discussion of the material terms of our Amended Credit Agreement.

Previous wording

We were in compliance with our financial covenants under the terms of the Amended Credit Agreement as of June 30, 2024. As a result of recent business improvements and actions taken by management in the current fiscal year to amend our credit agreement, reduce operating costs, and raise additional capital, management believes that there is no longer substantial doubt about our ability to continue as a going concern for the twelve-month period following the date on which the accompanying unaudited financial statements are being issued. However, debt service requirements in the future require that we continue to execute our plans both in terms of operations and financial results. Additionally, unforeseen events or changes in assumptions may occur and result in material differences between our future financial results or forecasts and the current financial forecast, and those differences could result in management concluding in the future that there is substantial doubt about our ability to continue as a going concern based upon the new information.

Current wording

We were in compliance with our financial covenants under the terms of the Amended Credit Agreement as of September 30, 2024. As a result of recent business improvements, benefits from the Amended Credit Agreement, and actions taken by management in the current fiscal year to reduce operating costs, and raise additional capital, management believes that there is no longer substantial doubt about our ability to continue as a going concern for the twelve-month period following the date on which the accompanying unaudited financial statements are being issued. However, debt service requirements in the future require that we continue to execute our plans both in terms of operations and financial results. Additionally, unforeseen events or changes in assumptions may occur and result in material differences between our future financial results or forecasts and the current financial forecast, and those differences could result in management concluding in the future, as it has in the past, that there is substantial doubt about our ability to continue as a going concern based upon the new information.

Previous wording

Net cash used in operating activities was $9.4 million for the six months ended June 30, 2024, which primarily consisted of net loss of $13.5 million plus net adjustments for non-cash charges of $6.6 million, offset by net changes in operating assets and liabilities of $2.6 million. The primary non-cash adjustments to net loss included $3.3 million of depreciation and amortization, $2.1 million of stock-based compensation, and $0.9 million provision for inventory. The main drivers of the changes in operating assets and liabilities were a $1.8 million decrease in accrued liabilities, a $0.7 million increase in accounts receivable, a $0.4 million decrease in accounts payable, and a $0.3 million increase in inventories, partially offset by a $0.4 million decrease in prepaid expenses and other current assets and a $0.2 million decrease other non-current assets.

Current wording

Net cash used in operating activities was $11.5 million for the nine months ended September 30, 2024, which primarily consisted of net loss of $21.0 million plus net adjustments for non-cash charges of $12.4 million, offset by net changes in operating assets and liabilities of $2.9 million. The primary non-cash adjustments to net loss included $4.9 million of depreciation and amortization, a $4.2 million provision for inventory, $2.9 million of stock-based compensation, and $0.3 million of amortization of debt financing costs. The main drivers of the changes in operating assets and liabilities were a $0.9 million increase in prepaid and other current assets, a $0.7 million decrease in accrued liabilities, a $0.7 million increase in accounts receivable, a $0.4 million decrease in accounts payable, and a $0.3 million increase in inventories, partially offset by a $0.3 million decrease other non-current assets.

Previous wording

Net cash used in operating activities was $11.5 million for the six months ended June 30, 2023, which primarily consisted of net loss of $16.0 million plus net adjustments for non-cash charges of $7.0 million, offset by net changes in operating assets and liabilities of $2.5 million. The primary non-cash adjustments to net loss included $2.4 million of depreciation and amortization, $2.2 million impairment charge related to long-lived assets, $2.1 million of stock-based compensation, and $0.2 million amortization of debt financing costs. The main drivers of the changes in operating assets and liabilities were a $1.4 million decrease in accounts payable, $1.2 million decrease in accrued liabilities, $1.1 million increase in contract assets, and a $0.3 increase in accounts receivable, partially offset by a $1.0 million decrease in prepaid expenses and other current assets, a $0.2 million decrease other non-current assets, and a $0.2 million decrease in inventories.

Current wording

Net cash used in operating activities was $15.9 million for the nine months ended September 30, 2023, which primarily consisted of net loss of $26.1 million plus net adjustments for non-cash charges of $10.8 million, offset by net changes in operating assets and liabilities of $0.6 million. The primary non-cash adjustments to net loss included $4.0 million of depreciation and amortization, $3.1 million of stock-based compensation, a $2.2 million impairment charge related to long-lived assets, $0.8 million loss on extinguishment of debt, and $0.4 million in amortization of debt financing costs. The main drivers of the changes in operating assets and liabilities were a $0.9 million decrease in accounts payable, a $0.7 million increase in accounts receivable, a $0.7 million increase in prepaid expenses and other current assets, partially offset by a $0.8 million increase in accrued liabilities, a $0.6 million decrease in inventories, and a $0.3 million decrease other non-current assets.

Previous wording

Net cash used in investing activities was $0.1 million for the six months ended June 30, 2024, which consisted of purchases of property, plant, and equipment of $0.2 million, partially offset by proceeds from the sale of certain long-lived assets of $0.1 million.

Current wording

Net cash used in investing activities was $25.9 million for the nine months ended September 30, 2024, which consisted of purchases of short-term investments of $25.4 million and purchases of property, plant, and equipment of $0.6 million, partially offset by proceeds from the sale of certain long-lived assets of $0.1 million.

Previous wording

Net cash used in investing activities was $6.7 million for the six months ended June 30, 2023, which consisted of purchases of property, plant, and equipment.

Current wording

Net cash used in investing activities was $7.6 million for the nine months ended September 30, 2023, which consisted of purchases of property, plant, and equipment.

Previous wording

Net cash used in financing activities was $0.4 million for the six months ended June 30, 2024, which was primarily attributable to repayments of financed insurance premiums of $0.4 million, partially offset by proceeds of $0.1 million from the issuance of common stock under our employee stock purchase plan.

Current wording

Net cash used in financing activities was $10.5 million for the nine months ended September 30, 2024, which was primarily attributable to net proceeds from the July 2024 Offering of $15.2 million, proceeds from financed insurance premiums of $0.4 million and proceeds of $0.1 million from the issuance of common stock under our employee stock purchase plan, partially offset by the repayment of financed insurance premiums of $0.6 million.

Previous wording

Net cash used in financing activities was $0.2 million for the six months ended June 30, 2023, which was primarily attributable to the payment of ATM Facility costs of $0.4 million, partially offset by proceeds of $0.1 million from the exercise of stock options and $0.1 million from issuance of common stock under our employee stock purchase plan.

Current wording

Net cash provided by financing activities was $13.4 million for the nine months ended September 30, 2023, which was primarily attributable to proceeds from the September 2023 Offerings of $22.9 million and proceeds from financed insurance premiums of $1.0 million, partially offset by repayment of long-term debt of $10.0 million, repayment of financed insurance premiums of $0.3 million and payment of offering costs of $0.4 million related to the ATM Facility. We also received proceeds of $0.1 million from the exercise of stock options and $0.1 million from issuance of common stock under our employee stock purchase plan.