NEOGENOMICS INC

Previous wording

The following discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and the notes thereto included herein. The information contained below includes statements of the Company’s or management’s beliefs, expectations, hopes, goals and plans that, if not historical, are forward-looking statements subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. For a discussion on forward-looking statements, see the information set forth in the introductory note to this Quarterly Report on Form 10-Q under the caption “Forward-Looking Statements,” which information is incorporated herein by reference.

Current wording

The following discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and the notes thereto included herein. The information contained below includes statements of the Company’s or management’s beliefs, expectations, goals and plans that, if not historical, are forward-looking statements subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. For a discussion on forward-looking statements, see the information set forth in the introductory note to this Quarterly Report on Form 10-Q under the caption “Forward-Looking Statements,” which information is incorporated herein by reference.

Previous wording

As of June 30, 2024, we operated College of American Pathologists (“CAP”) accredited and Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) certified laboratories in Fort Myers, Florida; Aliso Viejo and San Diego, California; Research Triangle Park, North Carolina; and Houston, Texas; and a CAP accredited full-service, sample-processing laboratory in Cambridge, United Kingdom. We also have several, small, non-processing laboratory locations across the United States for providing analysis services. We currently offer the following types of testing services:

Current wording

As of September 30, 2024, we operated College of American Pathologists (“CAP”) accredited and Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) certified laboratories in Fort Myers, Florida; Aliso Viejo and Carlsbad, California; Research Triangle Park, North Carolina; and Houston, Texas; and a CAP accredited full-service, sample-processing laboratory in Cambridge, United Kingdom. We also have several, small, non-processing laboratory locations across the United States for providing analysis services. We currently offer the following types of testing services:

Previous wording

In our Advanced Diagnostics segment, we enter into both short-term and long-term contracts, ranging from one month to several years. While the volume of this testing is not as directly affected by seasonality as described above, the testing volume does vary based on the terms of the contract. Our volumes are often based on how quickly sponsors can get patient enrollees for their trials and seasonality can impact how quickly patients are enrolled. Many of our long-term contracts contain specific performance obligations where the testing is performed on a specific schedule. In addition, this results in backlog that can be significant and highly dependent on pharmaceutical clinical trial enrollment.

Current wording

In our Advanced Diagnostics segment, we enter into both short-term and long-term contracts, ranging from one month to several years. While the volume of this testing is not as directly affected by seasonality as described above, the testing volume does vary based on the terms of the contract. Our volumes are often based on how quickly sponsors can get patient enrollees for their trials and seasonality can impact how quickly patients are enrolled. Many of our long-term contracts contain specific performance obligations where the testing is performed on a specific schedule. In addition, this results in a backlog that can be significant and highly dependent on pharmaceutical clinical trial enrollment.

Previous wording

On April 29, 2024, the FDA announced a final rule on the regulation of Laboratory Developed Tests (“LDTs”) which amends the FDA's regulations to make explicit that LDT's are devices under the Federal Food, Drug, and Cosmetic Act (“FD&C Act”). The FDA issued a policy to phase out, over the course of four years, its general enforcement discretion approach to LDTs and also issued targeted enforcement discretion policies for certain categories of LDTs. The FDA is allowing currently marketed tests offered as LDTs (that were first marketed before May 6, 2024) to stay on the market without requiring pre-market review and approval by the FDA. Similarly, the FDA will not require pre-market review and approval by the FDA for tests approved by the New York State Department of Health Clinical Laboratory Evaluation Program. The Company is currently assessing how these regulatory changes may affect our operations.

Current wording

On April 29, 2024, the FDA announced a final rule on the regulation of Laboratory Developed Tests (“LDTs”) which amends the FDA's regulations to make explicit that LDT's are devices under the Federal Food, Drug, and Cosmetic Act (“FD&C Act”). The FDA issued a policy to phase out, over the course of four years, its general enforcement discretion approach to LDTs and also issued targeted enforcement discretion policies for certain categories of LDTs. The FDA is allowing currently marketed tests offered as LDTs (that were first marketed before May 6, 2024) to stay on the market without requiring pre-market review and approval by the FDA. Similarly, the FDA will not require pre-market review and approval by the FDA for tests approved by the New York State Department of Health Clinical Laboratory Evaluation Program.

Previous wording

Results of Operations for the Three and Six Months Ended June 30, 2024 as Compared to the Three and Six Months Ended June 30, 2023

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2024 as Compared to the Three and Nine Months Ended September 30, 2023

Previous wording

Clinical Services revenue for the three and six months ended June 30, 2024 increased $18.2 million and $37.9 million, respectively, when compared to the same periods in 2023. The increase in Clinical Services revenue reflects an increase in clinical testing volume, a more favorable test mix and an increase in average unit price due to strategic reimbursement initiatives.

Current wording

Clinical Services revenue for the three and nine months ended September 30, 2024 increased $18.2 million and $56.1 million, respectively, when compared to the same periods in 2023. The increase in Clinical Services revenue reflects an increase in clinical testing volume and an increase in average unit price due to more higher value tests and strategic reimbursement initiatives.

Previous wording

Advanced Diagnostics revenue for the three months ended June 30, 2024 decreased $0.6 million compared to the same periods in 2023, and increased $1.4 million sequentially over the prior quarter. Advanced Diagnostics revenue for the six months ended June 30, 2024 decreased $1.3 million compared to the same periods in 2023. These decreases were primarily driven by international site closures, restructuring activities and other macro pharmaceutical market conditions.

Current wording

Advanced Diagnostics revenue for the three months ended September 30, 2024 decreased $2.4 million compared to the same period in 2023. Advanced Diagnostics revenue for the nine months ended September 30, 2024 decreased $3.7 million compared to the same period in 2023. These decreases were primarily driven by international site closures, restructuring activities and lower RaDaR® revenue.

Previous wording

(1) Clinical Services cost of revenue adjustments for the three months ended June 30, 2024 includes $4.3 million of amortization of acquired intangible assets and $0.2 million of stock-based compensation. Clinical Services cost of revenue adjustments for the three months ended June 30, 2023 includes $4.3 million of amortization of acquired intangible assets. Clinical Services cost of revenue adjustments for the six months ended June 30, 2024 includes $8.6 million of amortization of acquired intangible assets and $0.5 million of stock-based compensation. Clinical Services cost of revenue adjustments for the six months ended June 30, 2023 includes $8.5 million of amortization of acquired intangible assets. There were no stock-based compensation amounts recorded for the three and six months ended June 30, 2023.

Current wording

(1) Clinical Services cost of revenue adjustments for the three months ended September 30, 2024 includes $4.3 million of amortization of acquired intangible assets and $0.2 million of stock-based compensation. Clinical Services cost of revenue adjustments for the three months ended September 30, 2023 includes $4.3 million of amortization of acquired intangible assets. Clinical Services cost of revenue adjustments for the nine months ended September 30, 2024 includes $13.0 million of amortization of acquired intangible assets and $0.7 million of stock-based compensation. Clinical Services cost of revenue adjustments for the nine months ended September 30, 2023 includes $12.8 million of amortization of acquired intangible assets. There were no stock-based compensation amounts recorded for the three and nine months ended September 30, 2023.

Previous wording

(2) Advanced Diagnostics cost of revenue adjustments for the three months ended June 30, 2024 includes $0.6 million of amortization of acquired intangible assets and $0.1 million of stock-based compensation. Advanced Diagnostics cost of revenue adjustments for the three months ended June 30, 2023 includes $0.6 million of amortization of acquired intangible assets. Advanced Diagnostics cost of revenue adjustments for the six months ended June 30, 2024 includes $1.2 million of amortization of acquired intangible assets and $0.2 million of stock-based compensation. Advanced Diagnostics cost of revenue adjustments for the six months ended June 30, 2023 includes $1.2 million of amortization of acquired intangible assets. There were no stock-based compensation amounts recorded for the three and six months ended June 30, 2023.

Current wording

(2) Advanced Diagnostics cost of revenue adjustments for the three months ended September 30, 2024 includes $0.6 million of amortization of acquired intangible assets and $0.1 million of stock-based compensation. Advanced Diagnostics cost of revenue adjustments for the three months ended September 30, 2023 includes $0.6 million of amortization of acquired intangible assets. Advanced Diagnostics cost of revenue adjustments for the nine months ended September 30, 2024 includes $1.8 million of amortization of acquired intangible assets and $0.3 million of stock-based compensation. Advanced Diagnostics cost of revenue adjustments for the nine months ended September 30, 2023 includes $1.8 million of amortization of acquired intangible assets. There were no stock-based compensation amounts recorded for the three and nine months ended September 30, 2023.

Previous wording

Consolidated cost of revenue increased 5.7% and 7.9% for the three and six months ended June 30, 2024, respectively, when compared to the same periods in 2023. The increases were primarily due to higher compensation and benefit costs, an increase in supplies expense, and an increase in depreciation expense.

Current wording

Consolidated cost of revenue increased 3.7% and 6.4% for the three and nine months ended September 30, 2024, respectively, when compared to the same periods in 2023. The increases were primarily due to higher compensation and benefit costs, an increase in supplies expense, and an increase in depreciation expense.

Previous wording

Gross profit margin for the three and six months ended June 30, 2024 was 44.1% and 43.0%, respectively, compared to 40.8% and 40.4%, respectively, in the same periods of 2023. The increases of 3.3% and 2.6% for the three and six months ended June 30, 2024, respectively, were primarily related to the increase in revenue offset by higher compensation and benefit costs and an increase in supplies expense.

Current wording

Gross profit margin for the three and nine months ended September 30, 2024 was 44.6% and 43.6%, respectively, compared to 41.0% and 40.6%, respectively, in the same periods of 2023. The increases of 3.6% and 3.0% for the three and nine months ended September 30, 2024, respectively, were primarily related to the increase in revenue offset by higher compensation and benefit costs and an increase in supplies expense.

Previous wording

General and administrative expenses increased $3.0 million for the three months ended June 30, 2024, when compared to the same period in 2023. This increase was partially due to a $3.2 million increase in compensation and benefit costs, and a $2.7 million increase in legal and professional fees. These increases were partially offset by a decrease of $0.6 million in technology and equipment costs, a $0.5 million decrease in credit card fees, and a $0.3 million decrease in insurance costs.

Current wording

General and administrative expenses increased $5.5 million for the three months ended September 30, 2024, when compared to the same period in 2023. This increase was partially due to a $4.8 million increase in legal and professional fees including a settlement payment for IP litigation, a $1.1 million increase in technology and equipment costs, and a $0.5 million increase in compensation and benefit costs. These increases were partially offset by a decrease of $0.5 million in amortization expense.

Previous wording

General and administrative expenses increased $7.3 million for the six months ended June 30, 2024, when compared to the same period in 2023. This increase was partially due to a $5.0 million increase in compensation and benefit costs, and a

Current wording

General and administrative expenses increased $12.8 million for the nine months ended September 30, 2024, when compared to the same period in 2023. This increase was partially due to a $9.7 million increase in legal and professional fees including a settlement payment for IP litigation, and a $5.4 million increase in compensation and benefit costs. These increases were partially offset by a $1.4 million decrease in amortization expense, and a $0.6 million decrease in technology and equipment costs.

Previous wording

Research and development expenses relate to costs of developing new proprietary and non-proprietary genetic tests, including compensation and benefit costs, including stock-based compensation, maintenance of laboratory equipment, laboratory supplies (reagents), and outside consultants and experts assisting our research and development team.

Current wording

Research and development expenses relate to costs of developing new proprietary and non-proprietary genetic tests, compensation and benefit costs including stock-based compensation, maintenance of laboratory equipment, laboratory supplies (reagents), and outside consultants and experts assisting our research and development team.

Previous wording

Research and development expenses increased $0.4 million for the three months ended June 30, 2024 when compared to the same period in 2023. This increase was primarily due to a $0.3 million increase in compensation and benefit costs, and a $0.3 million increase in technology and equipment costs. These increases were partially offset by a $0.1 million decrease in facilities costs and a $0.1 million decrease in supplies costs.

Current wording

Research and development expenses increased $2.4 million for the three months ended September 30, 2024 when compared to the same period in 2023. This increase was primarily due to a $1.9 million decrease in research and development tax credits, a $0.3 million increase in technology and equipment costs, and a $0.1 million increase in compensation and benefits costs.

Previous wording

Research and development expenses increased $0.6 million for the six months ended June 30, 2024 when compared to the same period in 2023. This increase was primarily due to a $0.7 million increase in compensation and benefit costs, a $0.6 million increase in technology and equipment costs, and a $0.2 million increase in supplies costs. These increases were partially offset by a $0.4 million increase in research and development tax credits and a $0.3 million decrease in facilities costs.

Current wording

Research and development expenses increased $3.0 million for the nine months ended September 30, 2024 when compared to the same period in 2023. This increase was primarily due to a $1.5 million decrease in research and development tax credits, a $0.9 million increase in technology and equipment costs, and a $0.7 million increase in compensation and benefits costs.

Previous wording

Sales and marketing expenses increased $2.8 million for the three months ended June 30, 2024 when compared to the same period in 2023. This increase was primarily due to a $2.5 million increase in compensation and benefit costs and travel expenses due to the expansion of our sales force.

Current wording

Sales and marketing expenses increased $2.8 million for the three months ended September 30, 2024 when compared to the same period in 2023. This increase was primarily due to a $2.6 million increase in compensation and benefit costs due to the expansion of our sales force as well as higher commissions due to increases in sales volume.

Previous wording

Sales and marketing expenses increased $6.7 million for the six months ended June 30, 2024 when compared to the same period in 2023. This increase was primarily due to a $6.3 million increase in compensation and benefit costs and travel expenses due to the expansion of our sales force.

Current wording

Sales and marketing expenses increased $9.5 million for the nine months ended September 30, 2024 when compared to the same period in 2023. This increase was primarily due to a $9.0 million increase in compensation and benefit costs and travel expenses due to the expansion of our sales force as well as higher commissions due to increases in sales volume.

Previous wording

Restructuring charges decreased $1.5 million and $3.8 million for the three and six months ended June 30, 2024, respectively, when compared to the same period in 2023. For the three months ended June 30, 2024, the charges were comprised of $0.7 million in severance and other employee costs, $0.7 million in Facility Footprint Optimization costs, and $0.1 million of consulting and other costs. For the six months ended June 30, 2024, the charges were comprised of $1.4 million in severance and other employee costs, $1.7 million in Facility Footprint Optimization costs, and $0.8 million of consulting and other costs. We are continuing the restructuring program in 2024 and expect to incur additional restructuring charges of approximately $1.7 million. Our restructuring activities are expected to be complete by December 31, 2024.

Current wording

Restructuring charges decreased $1.1 million and $4.9 million for the three and nine months ended September 30, 2024, respectively, when compared to the same period in 2023. For the three months ended September 30, 2024, the charges were primarily comprised of $0.1 million in severance and other employee costs and $0.9 million in Facility Footprint Optimization costs. Consulting and other costs were immaterial for the three months ended September 30, 2024. For the nine months ended September 30, 2024, the charges were comprised of $1.5 million in severance and other employee costs, $2.6 million in Facility Footprint Optimization costs, and $0.8 million of consulting and other costs. We are continuing the restructuring program in 2024 and expect to incur additional restructuring charges of approximately $0.6 million. Our restructuring activities are expected to be complete by December 31, 2024.

Previous wording

Interest income for the three and six ended June 30, 2024 and 2023 is as follows (dollars in thousands):

Current wording

Interest income for the three and nine months ended September 30, 2024 and 2023 is as follows (dollars in thousands):

Previous wording

Interest income was $4.6 million and $9.4 million for the three and six months ended June 30, 2024, respectively, compared to income of $4.3 million and $7.5 million for the same periods in 2023, respectively. Interest income includes interest earned on funds held in our cash equivalent and marketable securities accounts. The increase in interest income for the three and six months ended June 30, 2024 was due to the higher interest rate environment experienced when compared to the same periods in 2023.

Current wording

Interest income was $4.7 million and $14.1 million for the three and nine months ended September 30, 2024, respectively, compared to income of $4.5 million and $12.1 million for the same periods in 2023, respectively. Interest income includes interest earned on funds held in our cash equivalent and marketable securities accounts. The increase in interest income for the three and nine months ended September 30, 2024 was due to the higher interest rate environment experienced when compared to the same periods in 2023.

Previous wording

Interest expense for the three and six months ended June 30, 2024 and 2023 is as follows (dollars in thousands):

Current wording

Interest expense for the three and nine months ended September 30, 2024 and 2023 is as follows (dollars in thousands):

Previous wording

Interest expense was $1.7 million and $3.4 million for the three and six months ended June 30, 2024, respectively, compared to expense of $1.8 million and $3.5 million for the same periods in 2023, respectively. Interest expense for the three and six months ended June 30, 2024 and 2023 primarily reflects the effective interest rate on the 2028 Convertible Notes and the 2025 Convertible Notes which is 0.70% and 1.96%, respectively. Interest on the 2028 Convertible Notes and 2025 Convertible Notes began accruing upon issuance and is payable semi-annually.

Current wording

Interest expense was $1.6 million and $5.0 million for the three and nine months ended September 30, 2024, respectively, compared to expense of $1.7 million and $5.2 million for the same periods in 2023, respectively. Interest expense for the three and nine months ended September 30, 2024 and 2023 primarily reflects the effective interest rate on the 2028 Convertible Notes and the 2025 Convertible Notes which is 0.70% and 1.96%, respectively. Interest on the 2028 Convertible Notes and 2025 Convertible Notes began accruing upon issuance and is payable semi-annually.

Previous wording

The following table provides consolidated net loss for each period along with the computation of basic and diluted net loss per share for the three and six months ended June 30, 2024 and 2023 (in thousands, except net loss per share data):

Current wording

The following table provides consolidated net loss for each period along with the computation of basic and diluted net loss per share for the three and nine months ended September 30, 2024 and 2023 (in thousands, except net loss per share data):

Previous wording

“Adjusted EBITDA” is defined by NeoGenomics as net (loss) income from continuing operations before: (i) interest income, (ii) interest expense, (iii) tax (benefit) or expense, (iv) depreciation and amortization expense, (v) stock-based compensation expense, and, if applicable in a reporting period, (vi) restructuring charges, (vii) intellectual property (“IP”) litigation, and (viii) other significant or non-operating (income) or expenses, net.

Current wording

“Adjusted EBITDA” is defined by NeoGenomics as net (loss) income from continuing operations before: (i) interest income, (ii) interest expense, (iii) tax (benefit) or expense, (iv) depreciation and amortization expense, (v) stock-based compensation expense, and, if applicable in a reporting period, (vi) restructuring charges, (vii) intellectual property (“IP”) litigation costs, (viii) CEO transition costs, and (ix) other significant or non-operating (income) or expenses, net.

Previous wording

The following is a reconciliation of GAAP net loss to Non-GAAP EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2024:

Current wording

The following is a reconciliation of GAAP net loss to Non-GAAP EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2024:

Previous wording

(1) For the three months ended June 30, 2024, other significant (income) expenses, net, includes site closure costs, severance costs, and fees related to non-recurring legal matters. For the three months ended June 30, 2023, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items. For the six months ended June 30, 2024, other significant (income) expenses, net, includes site closure costs, severance costs, and fees related to non-recurring legal matters. For the six months ended June 30, 2023, other significant (income) expenses, net, CEO transition costs, fees related to a regulatory matter and other non-recurring items.

Current wording

(2) For the three months ended September 30, 2024, other significant (income) expenses, net, includes site closure costs, severance costs, and fees related to non-recurring legal matters. For the three months ended September 30, 2023, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items. For the nine months ended September 30, 2024, other significant (income) expenses, net, includes site closure costs, severance costs, and fees related to non-recurring legal matters. For the nine months ended September 30, 2023, other significant (income) expenses, net, includes fees related to a regulatory matter and other non-recurring items.

Previous wording

The following table presents a summary of our consolidated cash flows for operating, investing and financing activities for the six months ended June 30, 2024 and 2023 as well balances of cash and cash equivalents and working capital:

Current wording

The following table presents a summary of our consolidated cash flows for operating, investing and financing activities for the nine months ended September 30, 2024 and 2023 as well balances of cash and cash equivalents and working capital:

Previous wording

Cash used in operating activities during the six months ended June 30, 2024 was $12.0 million compared to $14.2 million in the same period in 2023. This $2.2 million decrease was primarily driven by our operating results (net loss adjusted for depreciation, amortization of intangibles, and other non-cash charges) which resulted in $14.9 million of lower cash used by operating activities year-over-year, offset by a $12.6 million increase in cash used resulting from net changes in operating assets and liabilities. The decrease in cash used related to our operating activities was primarily driven by an improvement in gross profit of $23.3 million. In addition, timing of cash receipts and cash payments in the ordinary course of business caused operating cash flow to fluctuate from period to period.

Current wording

Cash used in operating activities during the nine months ended September 30, 2024 was $2.8 million compared to $19.7 million in the same period in 2023. This $17.0 million decrease was primarily driven by our operating results (net loss adjusted for depreciation, amortization of intangibles, and other non-cash charges) which resulted in $16.4 million of lower cash used by operating activities year-over-year and a $0.6 million decrease in cash used resulting from net changes in operating assets and liabilities. The decrease in cash used related to our operating activities was primarily driven by an improvement in gross profit of $35.8 million. In addition, timing of cash receipts and cash payments in the ordinary course of business caused operating cash flow to fluctuate from period to period.

Previous wording

During the six months ended June 30, 2024, cash provided by investing activities was $21.8 million compared to $38.7 million in the same period in 2023. This change was primarily due to a $22.4 million decrease in proceeds from maturities of marketable securities, partially offset by an increase in purchases of property and equipment of $1.2 million .

Current wording

During the nine months ended September 30, 2024, cash provided by investing activities was $18.3 million compared to $59.5 million in the same period in 2023. This change was primarily due to a $40.2 million decrease in proceeds from maturities of marketable securities, partially offset by an increase in purchases of property and equipment of $7.8 million including the costs associated with implementing LIMS and the build out of our Research Triangle Park facility.

Previous wording

During the six months ended June 30, 2024, cash provided by financing activities was $2.8 million compared to $1.4 million in the same period in 2023. The cash provided by financing activities during the six months ended June 30, 2024 consisted of $2.8 million for the net issuance of common stock. The primary reason for the increase in cash provided by financing activities year-over-year was the timing of cash payments for stock option exercises which can fluctuate from period to period.

Current wording

During the nine months ended September 30, 2024, cash provided by financing activities was $4.0 million compared to $3.3 million in the same period in 2023. The cash provided by financing activities during the nine months ended September 30, 2024 consisted of $4.0 million for the net issuance of common stock. The primary reason for the increase in cash provided by financing activities year-over-year was the timing of cash payments for stock option exercises which can fluctuate from period to period.

Previous wording

We had $355.1 million in unrestricted cash and cash equivalents as of June 30, 2024 in addition to $32.8 million of marketable securities available to support current operational liquidity needs. We anticipate that the cash on hand, marketable securities and cash collections are sufficient to fund our near-term capital, and operating needs for at least the next 12 months. Operating needs include, but are not limited to, the planned costs to operate our business, including amounts required to fund working capital including the convertible senior notes due 2025, capital expenditures, continued research and development efforts, and potential strategic acquisitions and investments.

Current wording

We had $362.0 million in unrestricted cash and cash equivalents as of September 30, 2024 in addition to $25.8 million of marketable securities available to support current operational liquidity needs. We anticipate that the cash on hand, marketable securities and cash collections are sufficient to fund our near-term capital, and operating needs for at least the next 12 months. Operating needs include, but are not limited to, the planned costs to operate our business, including amounts required to fund working capital including the convertible senior notes due 2025, capital expenditures, continued research and development efforts, and potential strategic acquisitions and investments.

Previous wording

We forecast capital expenditures in order to execute on our business plan and maintain growth; however, the actual amount and timing of such capital expenditures will ultimately be determined by the volume of business. We currently anticipate that our capital expenditures for the year ending December 31, 2024 will be in the range of $35.0 million to $40.0 million. During the six months ended June 30, 2024, we purchased, with cash, approximately $18.7 million of capital equipment, software and leasehold improvements. We have funded and plan to continue funding these capital expenditures with cash and financing.

Current wording

We forecast capital expenditures in order to execute on our business plan and maintain growth; however, the actual amount and timing of such capital expenditures will ultimately be determined by the volume of business. We currently anticipate that our capital expenditures for the year ending December 31, 2024 will be in the range of $35.0 million to $40.0 million. During the nine months ended September 30, 2024, we purchased, with cash, approximately $29.5 million of capital equipment, software and leasehold improvements. We have funded and plan to continue funding these capital expenditures with cash.