RAPID MICRO BIOSYSTEMS INC

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated condensed financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and related notes thereto for the year ended December 31, 2023, included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 1, 2024 (the “2023 Form 10-K”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of the 2023 Form 10-K and this Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated condensed financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and related notes thereto for the year ended December 31, 2023, included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 1, 2024 (the “2023 Form 10-K”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Previous wording

Since our inception, we have incurred net losses in each year. We generated revenue of $5.6 million and $5.0 million for the three months ended March 31, 2024 and 2023, respectively, and incurred net losses of $13.3 million and $13.9 million for those same periods, respectively. As of March 31, 2024, we had an accumulated deficit of $441.7 million. We expect to continue to incur net losses in connection with our ongoing activities, including:

Current wording

Since our inception, we have incurred net losses in each year. We generated revenue of $6.6 million and $5.0 million for the three months ended June 30, 2024 and 2023, respectively, and incurred net losses of $12.6 million and $14.0 million for those same periods, respectively. As of June 30, 2024, we had an accumulated deficit of $454.3 million. We expect to continue to incur net losses in connection with our ongoing activities, including:

Previous wording

Until such time as we can generate revenue sufficient to achieve profitability, we expect to finance our operations through a combination of equity offerings and debt financings. If we are unable to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue our expansion plans including the further development and commercialization efforts of one or more of our products, or may be forced to reduce or terminate our operations.

Current wording

While we are implementing our Operational Efficiency Program with the goal of achieving positive cash flow without additional financing, there can be no assurance that we will attain this goal. Our Operational Efficiency Program and intention to attain positive cash flow are based on our expectations and underlying assumptions of business performance that are generally consistent with our historical performance, including with respect to revenue growth and gross margin improvement, which may not be replicated in future periods. Our goal also depends on our ability to realize additional cost savings that we believe are reasonably achievable, but are not guaranteed. While we seek to achieve and sustain positive cash flow, if we are unable to generate revenue, improve our gross margins, and/or control our operating costs sufficiently, we may need to raise additional funding, which we would expect to secure through a combination of equity offerings and debt financings. If we are unable to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue our expansion plans including the further development and commercialization efforts of one or more of our products, or may be forced to reduce or terminate our operations.

Previous wording

We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiple factors as described below, each of which presents growth opportunities for our business. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described under the section titled “Risk Factors” to this Quarterly Report on Form 10-Q and other factors as set forth in Part I, Item 1A of the 2023 Form 10-K.

Current wording

We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiple factors as described below, each of which presents growth opportunities for our business. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described under the section titled “Risk Factors” to this Quarterly Report on Form 10-Q.

Previous wording

There is an opportunity to broaden adoption and increase utilization of our Growth Direct platform throughout our existing customers' organizations as these customers purchase more systems. These additional systems will allow our existing customers to convert more of their test volume at existing locations, to support multiple locations, to meet redundancy requirements, or to increase capacity. As of March 31, 2024, approximately 40% of our customers have purchased Growth Direct systems for multiple sites, and approximately 55% of our customers have purchased multiple Growth Direct systems. Increased utilization amongst existing customers can also occur as customers advance through the Growth Direct platform adoption cycle, from early validation of initial applications to validation and conversion of multiple applications on the Growth Direct platform, or as the result of new product approvals or increases in their manufacturing volumes for existing products.

Current wording

There is an opportunity to broaden adoption and increase utilization of our Growth Direct platform throughout our existing customers' organizations as these customers purchase more systems. These additional systems will allow our existing customers to convert more of their test volume at existing locations, to support multiple locations, to meet redundancy requirements, or to increase capacity. As of June 30, 2024, approximately 44% of our customers have purchased Growth Direct systems for multiple sites, and approximately 58% of our customers have purchased multiple Growth Direct systems. Increased utilization amongst existing customers can also occur as customers advance through the Growth Direct platform adoption cycle, from early validation of initial applications to validation and conversion of multiple applications on the Growth Direct platform, or as the result of new product approvals or increases in their manufacturing volumes for existing products.

Previous wording

At the same time, we also expect future revenues from both products and services to grow at rates significantly higher than the related costs to provide and support those products and services. As a result, we also expect increasing revenues from both products and services to contribute significantly to future gross margin expansion. We have experienced positive trends in gross margin, improving from (36)% to (27)% for the three months ended March 31, 2023 and 2024, respectively.

Current wording

At the same time, we also expect future revenues from both products and services to grow at rates significantly higher than the related costs to provide and support those products and services. As a result, we also expect increasing revenues from both products and services to contribute significantly to future gross margin expansion. We have experienced positive trends in gross margin, improving from (38)% for the three months ended June 30, 2023 to (3)% for the three months ended June 30, 2024, and from (37)% for the six months ended June 30, 2023 to (14)% for the six months ended June 30, 2024.

Previous wording

We regularly review the number of Growth Direct systems validated and cumulative Growth Direct systems validated in each period as indicators of our business performance. Management focuses on validated Growth Direct systems as a leading indicator of likely future recurring revenue as well as a reflection of our success supporting our customers in validating placed systems. We expect our validated Growth Direct systems to continue to grow over time as we increase our base of cumulative systems placed and then install and validate those systems. After a Growth Direct system is placed with a customer and installed, we work with the customer to validate the system, which typically takes anywhere from three to nine months. Once a validation has been completed, we generally expect our customers to transition from their legacy manual method to our automated method and begin regular utilization of consumables over a period of up to three months after the validation is completed. However, the timeline for such transition may be longer depending on the specific circumstances of each individual customer. In addition, in exceptional cases, we have reacquired Growth Direct systems from customers that were previously placed and, in some cases, previously validated. Our metrics showing cumulative systems placed and cumulative systems validated are not reduced to reflect these reacquired systems.

Current wording

We regularly review the number of Growth Direct systems validated and cumulative Growth Direct systems validated in each period as indicators of our business performance. Management focuses on validated Growth Direct systems as a leading indicator of likely future recurring revenue as well as a reflection of our success supporting our customers in validating placed systems. We expect our validated Growth Direct systems to continue to grow over time as we increase our base of cumulative systems placed and then install and validate those systems. After a Growth Direct system is placed with a customer and installed, we work with the customer to validate the system, which typically has taken anywhere from three to nine months. Once a validation has been completed, we generally expect our customers to transition from their legacy manual method to our automated method and begin regular utilization of consumables over a period of up to three months after the validation is completed. However, the timeline for such transition may be longer depending on the specific circumstances of each individual customer. In addition, in exceptional cases, we have reacquired Growth Direct systems from customers that were previously placed and, in some cases, previously validated. Our metrics showing cumulative systems placed and cumulative systems validated are not reduced to reflect these reacquired systems.

Previous wording

We regularly assess trends relating to our recurring revenue, which is the revenue from consumables and service contracts, based on our product offerings, our customer base and our understanding of how our customers use our products. Recurring revenue was 66.7% and 64.6% of our total revenue for the three months ended March 31, 2024 and 2023, respectively. Our recurring revenue as a percentage of the total product and service revenue will generally vary based upon the number of Growth Direct systems placed and the cumulative number of validated systems in the period, as well as other variables such as the volume of tests being conducted and the test application(s) being used on customers' Growth Direct systems.

Current wording

We regularly assess trends relating to our recurring revenue, which is the revenue from consumables and service contracts, based on our product offerings, our customer base and our understanding of how our customers use our products. Recurring revenue was 58.1% and 71.8% of our total revenue for the three months ended June 30, 2024 and 2023, respectively. Recurring revenue was 62.0% and 68.2% of our total revenue for the six months ended June 30, 2024 and 2023, respectively. Our recurring revenue as a percentage of the total product and service revenue will generally vary based upon the number of Growth Direct systems placed and the cumulative number of validated systems in the period, as well as other variables such as the volume of tests being conducted and the test application(s) being used on customers' Growth Direct systems.

Previous wording

We derive product revenue primarily from the sale of our Growth Direct systems and related consumables as well as our LIMS connection software, which the majority of our customers purchase. As of March 31, 2024, we had placed 144 Growth Direct systems to over 40 customers globally, including 70% of the top twenty pharmaceutical companies as measured by revenue and the manufacturers of 21% of globally approved cell and gene therapies, including manufacturers of 86% of approved gene-modified autologous CAR-T cell therapies.

Current wording

Growth Direct systems with over 40 customers globally, including 70% of the top twenty pharmaceutical companies as measured by revenue and the manufacturers of 20% of globally approved cell and gene therapies, including manufacturers of 100% of approved gene-modified autologous CAR-T cell therapies.

Previous wording

Our consumable revenue is a recurring product revenue stream comprised of two proprietary consumables to capture test samples for analysis on the Growth Direct system, an Environmental Monitoring, or EM, consumable, and a Water/Bioburden consumable, or W/BB, consumable. Both proprietary consumables support the growth-based compendial method for MQC testing mandated by global regulators and provide results that are comparable to traditional consumables. Our consumables are designed with features that enable automation on the Growth Direct system, with bar coding for tracking and data integrity, and physical characteristics for robotic handling, to support vision detection and prevent counterfeiting.

Current wording

Our consumable revenue is a recurring product revenue stream comprised of two proprietary consumables to capture test samples for analysis on the Growth Direct system, an Environmental Monitoring consumable, and a Water/Bioburden consumable. Both proprietary consumables support the growth-based compendial method for MQC testing mandated by global regulators and provide results that are comparable to traditional consumables. Our consumables are designed with features that enable automation on the Growth Direct system, with bar coding for tracking and data integrity, and physical characteristics for robotic handling, to support vision detection and prevent counterfeiting.

Previous wording

Our research and development costs are expensed as incurred. We believe that our continued investment in research and development is essential to our long-term competitive position, and we expect these expenses to increase in future periods.

Current wording

Our research and development costs are expensed as incurred. As part of our Operational Efficiency Program, we are reducing research and development employee-related expenses and certain other non-employee-related costs. We believe that our continued investment in research and development is essential to our long-term competitive position. For future periods, we expect our research and development expenses to increase or decrease commensurate with the size, scope and complexity of our research and development activities.

Previous wording

Sales and marketing expenses consist primarily of salaries, commissions, benefits and other personnel costs including stock-based compensation expense as well as costs relating to travel, consulting, public relations and allocated information technology and facility-related costs for our employees engaged in sales and marketing activities. We expect sales and marketing expenses to increase in future periods as the number of sales and marketing personnel grows and we continue to expand our geographic reach and capabilities, broaden our customer base and introduce new products.

Current wording

Sales and marketing expenses consist primarily of salaries, commissions, benefits and other personnel costs including stock-based compensation expense as well as costs relating to travel, consulting, public relations and allocated information technology and facility-related costs for our employees engaged in sales and marketing activities. As part of the Operational Efficiency Program, we are reducing sales and marketing employee-related expenses associated with reduced headcount. For future periods, we expect sales and marketing expenses to increase or decrease as and when we make investments into our sales and marketing organization, including in the number of sales and marketing personnel and our continued efforts to expand our geographic reach and capabilities, broaden our customer base and introduce new products.

Previous wording

General and administrative expenses consist primarily of salaries, bonuses and other personnel costs including stock-based compensation expense for our executive, finance, legal, human resources and general management employees, as well as director and officer insurance costs and professional fees for legal, patent, accounting, audit, investor relations, recruiting, consulting, regulatory, compliance, board of directors' fees and other services. General and administrative expenses also include direct and allocated information technology and facility-related costs. General and administrative expenses are expected to increase in future years as the number of administrative personnel grows to support increasing business size and complexity.

Current wording

General and administrative expenses consist primarily of salaries, bonuses and other personnel costs including stock-based compensation expense for our executive, finance, legal, human resources and general management employees, as well as director and officer insurance costs and professional fees for legal, patent, accounting, audit, investor relations, recruiting, consulting, regulatory, compliance, board of directors' fees and other services. General and administrative expenses also include direct and allocated information technology and facility-related costs. As part of our Operational Efficiency Program, we are reducing general and administrative employee-related expenses associated with reduced headcount. For future periods, we expect these expenses to increase or decrease, as applicable, commensurate with the size, scope and complexity of our general and administrative functions.

Previous wording

We generated significant taxable losses during each of the three months ended March 31, 2024 and 2023 and, therefore, have not recorded any U.S. federal or state income tax expense during those periods. However, we did record an immaterial amount of foreign income tax expense during each of those periods.

Current wording

We generated significant taxable losses during each of the three and six months ended June 30, 2024 and 2023 and, therefore, have not recorded any U.S. federal or state income tax expense during those periods. However, we did record an immaterial amount of foreign income tax expense during each of those periods.

Previous wording

Service revenue increased by $0.2 million, or 10.9%. The increase in service revenue was primarily due to increases in revenues related to validations and installations as well as service contracts due to an increase in the cumulative number of Growth Direct systems validated and under such contracts.

Current wording

Service revenue increased by $0.2 million, or 13.5%. The increase in service revenue was primarily due to increases in revenue related to validations and installations as well as higher service contract revenue due to an increase in the cumulative number of Growth Direct systems validated and under such contracts.

Previous wording

Cost of product revenue increased by $0.2 million, or 3.9%. The increase was driven primarily by costs associated with a higher volume of consumables partially offset by incremental cost as a result of the impact of the mix of consumables sold.

Current wording

Cost of product revenue increased by $0.2 million, or 4.9%. The increase was driven primarily by costs associated with the higher volume of Growth Direct systems sold but was largely offset by decreased material, labor and overhead costs as a result of the impact of cost reduction activities, improvements in production efficiencies and increased output for both consumables and systems.

Previous wording

General and administrative expenses decreased by $0.8 million, or 13.0%. The decrease was largely attributable to a $0.6 million reduction in bonus expense. Bonus expense for the first quarter of 2023 included a portion of retention bonuses that were put into place in connection with a restructuring action we implemented in August 2022. This retention bonus program expired in the third quarter of 2023 and had no impact on the first quarter of 2024. Lower third-party legal fees and business insurance premiums also contributed to the decrease.

Current wording

General and administrative expenses decreased by $0.9 million, or 13.5%. The decrease was largely attributable to a $0.4 million reduction in both headcount-related costs and bonus expense related to the 2022 retention bonus program which ended in the third quarter of 2023. Lower public company operating costs, including third-party legal fees and business insurance premiums, also contributed to the decrease.

Previous wording

Interest income, which was related to interest earned on our investments, remained flat for each of the three months ended March 31, 2024 and 2023.

Current wording

Interest income, which is related to interest earned on our investments, decreased $0.2 million as a result of lower investment balances during the three months ended June 30, 2024.

Previous wording

Other expense, which is comprised of miscellaneous expenses unrelated to our core business, remained flat for each of the three months ended March 31, 2024 and 2023.

Current wording

Other expense, which is comprised of miscellaneous expenses unrelated to our core business, were flat for each of the three months ended June 30, 2024 and 2023.

Previous wording

In October 2013, we entered into an operating lease for office and manufacturing space in Lowell, Massachusetts. In March 2022, we amended the lease to increase the amount of facility space subject to the lease and extend the expiration of the lease from July 2026 to July 2029. The terms of the amendment include options for a one-time, five-year extension of the lease and early termination of the lease in July 2026 (subject to an early termination fee). Monthly rent payments are fixed and future minimum lease payments under the lease (as amended) are $3.5 million as of March 31, 2024, including $0.6 million in short-term obligations.

Current wording

In October 2013, we entered into an operating lease for office and manufacturing space in Lowell, Massachusetts. In March 2022, we amended the lease to increase the amount of facility space subject to the lease and extend the expiration of the lease from July 2026 to July 2029. The terms of the amendment include options for a one-time, five-year extension of the lease and early termination of the lease in July 2026 (subject to an early termination fee). Monthly rent payments are fixed and future minimum lease payments under the lease (as amended) are $3.3 million as of June 30, 2024, including $0.6 million in short-term obligations.

Previous wording

In June 2021, we entered into a sublease agreement for office and back-up manufacturing space in Lexington, Massachusetts, which expires in June 2029. The sublease includes an option to terminate the sublease in July 2026, subject to an early termination fee. Monthly rent payments are fixed and future minimum lease payments over the term of the sublease are $4.0 million as of March 31, 2024, including $0.7 million in short-term obligations. Concurrent with entering into the sublease agreement, we executed an option agreement with the property owner which provides us the option to enter into a new direct lease for our Lexington, Massachusetts facility for an additional five years following expiration of the sublease.

Current wording

In June 2021, we entered into a sublease agreement for our Lexington, Massachusetts headquarters, which expires in June 2029. The sublease includes an option to terminate the sublease in July 2026, subject to an early termination fee. Monthly rent payments are fixed and future minimum lease payments over the term of the sublease are $3.8 million as of June 30, 2024, including $0.7 million in short-term obligations. Concurrent with entering into the sublease agreement, we executed an option agreement with the property owner which provides us the option to enter into a new direct lease for our Lexington, Massachusetts facility for an additional five years following expiration of the sublease.

Previous wording

During the three months ended March 31, 2024, net cash used in operating activities was $15.5 million, a decrease of $1.2 million compared to the prior-year period. The lower use of net cash was primarily a result of the timing of payments to vendors, and increased receipts of our accounts receivable due to increased sales. The lower usage of cash related to these activities was partially offset by higher usage of cash to settle accrued expenses and other current liabilities, mainly as a result of higher annual bonus program payments made during the three months ended March 31, 2024. During the three months ended March 31, 2023, these payments were limited due to annual bonuses being temporarily replaced by a retention bonus program for non-executive employees in that period. The temporary retention bonus program was put into place in connection with our 2022 Restructuring and concluded in the third quarter of 2023.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities was $25.6 million, a decrease of $0.2 million compared to the prior-year period. The lower use of net cash was primarily a result of the timing of payments to vendors. This decrease was offset by increased inventory purchases, decreased receipts of our accounts receivable due to the timing of system placements, and higher usage of cash to settle accrued expenses and other current liabilities mainly as a result of higher annual bonus program payments made during the six months ended June 30, 2024. During the six months ended June 30, 2023, these payments were limited due to annual bonuses being temporarily replaced by a retention bonus program for non-executive employees in that period. The temporary retention bonus program was established in connection with our August 2022 restructuring action and concluded in the third quarter of 2023.

Previous wording

During the three months ended March 31, 2024, net cash provided by investing activities was $13.5 million, compared to $13.9 million during the three months ended March 31, 2023. The change was largely attributable to a lower level of investment maturities, partially offset by fewer investment purchases.

Current wording

During the six months ended June 30, 2024, net cash provided by investing activities was $38.3 million, compared to $27.4 million during the six months ended June 30, 2023. The change was largely attributable to lower investment maturities partially offset by lower investment purchases.

Previous wording

On February 2, 2024, we received a notification letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC ("Nasdaq") notifying us that the bid price for our Class A common stock, par value $0.01 per share, had closed below $1.00 per share for the preceding thirty consecutive business days and that, as a result, we were not in compliance with the minimum bid price requirement for continued inclusion on the Nasdaq Global Select Market under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”). The notification has no immediate effect on the listing of our common stock on Nasdaq. We have a period of 180 calendar days to regain compliance with the Bid Price Requirement, which will expire on July 31, 2024. To regain compliance, the closing bid price of our common stock must be at least $1.00 or higher for a minimum of ten consecutive business days, though Nasdaq has the discretion to extend the ten business day period to up to 20 consecutive business days.

Current wording

On February 2, 2024, we received a notification letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC ("Nasdaq") notifying us that the bid price for our Class A common stock, par value $0.01 per share, had closed below $1.00 per share for the preceding thirty consecutive business days and that, as a result, we were not in compliance with the minimum bid price requirement for continued inclusion on the Nasdaq Global Select Market under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”). To regain compliance, the closing bid price of our common stock must be at least $1.00 or higher for a minimum of ten consecutive business days, though Nasdaq has the discretion to extend the ten business day period to up to 20 consecutive business days.

Previous wording

If we do not regain compliance by July 31, 2024, we may be eligible for an additional 180 calendar compliance period. To qualify, we would need to transfer the listing of our common stock to the Nasdaq Capital Market, provided that we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the Bid Price Requirement. If we are not eligible or it appears to Nasdaq that we will not be able to cure the deficiency during the additional compliance period, Nasdaq will provide written notice that our common stock will be subject to delisting. In the event of such notification, we may appeal Nasdaq’s delisting determination. However, there can be no assurance that, if we receive a delisting notice and appeal the delisting determination by Nasdaq, such appeal would be successful. We intend to monitor the closing bid price of our common stock and take such reasonable measures to regain compliance with the Bid Price Requirement, which may include the implementation of a reverse stock split. There can be no assurance that we will be able to regain compliance with the Bid Price Requirement for continued listing on Nasdaq.

Current wording

The initial period during which we were required to regain compliance with the Bid Price Requirement expired on July 31, 2024. Because we did not regain compliance with the requirement during the initial period, we will transfer the listing of our Class A common stock to the Nasdaq Capital Market, effective at the opening of business on August 5, 2024, in order to secure an additional 180 calendar day compliance period ending on January 27, 2025. As a condition of securing such additional compliance period, we informed Nasdaq that we intend to regain compliance with the Bid Price Requirement during the second compliance period, which may include the implementation of a reverse stock split if necessary. We intend to monitor the closing bid price of our Class A common stock and take such reasonable measures to regain compliance with the Bid Price Requirement. However, there can be no assurance that we will be able to regain compliance with the Bid Price Requirement even during the second compliance period, nor can there be any assurance that we will receive the necessary approvals from our stockholders to effect a reverse stock split. If we do not cure the deficiency during the additional compliance period and regain compliance with the Bid Price Requirement, Nasdaq will provide written notice that our common stock will be subject to delisting. In the event of such notification, we may appeal Nasdaq’s delisting determination. However, there can be no assurance that, if we receive a delisting notice and appeal the delisting determination by Nasdaq, such appeal would be successful. As a result, there can be no assurance that we will be able to continue the listing of our Class A common stock on Nasdaq.

Previous wording

There have been no significant changes in our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Form 10-K, other than as disclosed in Note 2 — Summary of Significant Accounting Policies — to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Current wording

Our significant accounting policies are described in more detail in Note 2 — Summary of Significant Accounting Policies to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. There have been no significant changes in our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Form 10-K, other than as disclosed in Note 2 — Summary of Significant Accounting Policies — to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.