RAPID MICRO BIOSYSTEMS INC

Previous wording

Since our inception, we have incurred net losses in each year. We generated revenue of $22.5 million and $17.1 million for the years ended December 31, 2023 and 2022, respectively, and incurred net losses of $52.5 million and $60.8 million for those same years. As of December 31, 2023, we had an accumulated deficit of $428.4 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 $28.1 million and $22.5 million for the years ended December 31, 2024 and 2023, respectively, and incurred net losses of $46.9 million and $52.5 million for those same years. As of December 31, 2024, we had an accumulated deficit of $475.3 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 implemented 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 equity offerings, debt financings or a combination thereof. If we are unable to raise capital or enter into such agreements as, if 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.

Previous wording

There is an opportunity to increase broader adoption and utilization of our Growth Direct platform throughout our existing customers’ organizations by existing customers purchasing 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 December 31, 2023, 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 increase broader adoption and utilization of our Growth Direct platform throughout our existing customers’ organizations by existing customers purchasing 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 December 31, 2024, approximately 41% of our customers have purchased Growth Direct systems for multiple sites, and approximately 57% 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

The majority of our customers are large global pharmaceutical manufacturers and CDMOs. In order to meet the expectations of our customers, we have made significant investments to build infrastructure and develop capabilities in areas such as procurement, manufacturing, distribution, quality and after sales service. Given our current business scale, our revenues are not yet sufficient to fully cover these costs, impacting our current gross margin profile.

Current wording

The majority of our customers are large global pharmaceutical manufacturers and CDMOs. In order to meet the expectations of our customers, we have made significant investments to build infrastructure and develop capabilities in areas such as procurement, manufacturing, distribution, quality and after-sales service. Given our current business scale, our revenues are not yet sufficient to fully cover these costs, impacting our current gross margin profile. For additional information, see Item 1. Business -Gross margin improvement included in this Annual Report on Form 10-K.

Previous wording

Recurring revenue was 60.2% and 64.1% of our total revenue for the years ended December 31, 2023 and 2022, 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 systems validated and in routine use in the period, as well as other variables such as the volume of tests being conducted, and the test application(s) being used on those Growth Direct systems.

Current wording

We regularly assess trends relating to 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 55.1% and 60.2% of our total revenue for the years ended December 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 systems validated and in routine use in the period, as well as other variables such as the volume of tests being conducted, and the test application(s) being used on those 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 December 31, 2023, we had placed 141 Growth Direct systems to forty customers globally, including 70% of the top twenty pharmaceutical companies as measured by revenue and the manufacturers of approximately 24% of globally approved cell and gene therapies, including manufacturers of 100% of approved gene-modified autologous CAR-T cell therapies..

Current 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 December 31, 2024, we had placed 162 Growth Direct systems to forty-six customers globally, including 70% of the top twenty largest pharmaceutical companies as measured by revenue and the manufacturers of approximately 17% of U.S. Food and Drug Administration

Previous wording

Our consumable revenue is a recurring product revenue stream composed 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 to prevent counterfeiting.

Current wording

Our consumable revenue is a recurring product revenue stream composed of three proprietary consumables to capture test samples for analysis on the Growth Direct system, an Environmental Monitoring ("EM") consumable, a Water/Bioburden ("W/BB") consumable, and a Sterility ("ST") consumable. Our 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 to prevent counterfeiting.

Previous wording

Cost of product revenue primarily consists of costs for raw material parts and associated freight, shipping and handling costs, salaries and other personnel costs including stock-based compensation expense, contract manufacturer costs, scrap, warranty cost, inventory reserves, royalties, depreciation and amortization expense, allocated information technology and facility-related costs, overhead and other costs related to those sales recognized as product revenue in the period.

Current wording

Cost of product revenue primarily consists of costs for raw material parts and associated freight, shipping and handling costs, salaries and other personnel costs including stock-based compensation expense, contract manufacturer costs, scrap, warranty cost, inventory reserves, depreciation and amortization expense, allocated information technology and facility-related costs, overhead and other costs related to those sales recognized as product revenue in the period.

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 have implemented actions to reduce research and development employee-related expenses associated with reduced headcount 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 have implemented actions to reduce sales and marketing employee-related expenses associated with reduced headcount and certain other non-employee-related costs. For future periods, 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.

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 periods 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 have implemented actions to reduce general and administrative employee-related expenses associated with reduced headcount and certain other non-employee-related costs. For future periods, we expect these expenses to increase or decrease, as applicable, as the size, scope and complexity of our general and administrative functions increase or decrease.

Previous wording

Interest income, net is comprised of interest income from investments.

Current wording

Interest income, net is comprised primarily of interest income from investments.

Previous wording

We generated significant taxable losses during the years ended December 31, 2023 and 2022, 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. Additionally, as a result of a favorable outcome related to a tax examination for our German subsidiary, Rapid Micro Biosystems Europe GmbH, we recorded an income tax benefit of $0.6 million during the year ended December 31, 2022.

Current wording

We generated significant taxable losses during the years ended December 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.

Previous wording

We have not recorded any U.S. federal or state income tax benefits for the net operating losses, or NOLs, we have incurred in each year or for the research and development tax credits we have generated in the United States. As of December 31, 2023, we had U.S. federal and state NOL carryforwards of $229.3 million and $100.4 million, respectively. These NOLs may be available to offset future taxable income and begin to expire in 2038 and 2032, respectively. Additionally, we had a U.S. federal NOL carryforward of $216.5 million generated since 2018, which do not expire. As of December 31, 2023, we also had U.S. federal and state research and development tax credit carryforwards of $2.2 million and $3.2 million, respectively. These tax credits may be available to offset future tax liabilities and begin to expire in 2038 and 2024, respectively. Utilization of the U.S. federal and state NOL carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation due to ownership changes that have occurred previously or that could occur in the future.

Current wording

We have not recorded any U.S. federal or state income tax benefits for the net operating losses, or NOLs, we have incurred in each year or for the research and development tax credits we have generated in the United States. As of December 31, 2024, we had U.S. federal and state NOL carryforwards of $268.4 million and $114.8 million, respectively. These NOLs may be available to offset future taxable income and begin to expire in 2038 and 2032, respectively. Additionally, we had a U.S. federal NOL carryforward of $255.6 million generated since 2018, which do not expire. As of December 31, 2024, we also had U.S. federal and state research and development tax credit carryforwards of $2.8 million and $3.2 million, respectively. These tax credits may be available to offset future tax liabilities and begin to expire in 2038 and 2025, respectively. Utilization of the U.S. federal and state NOL carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation due to ownership changes that have occurred previously or that could occur in the future.

Previous wording

Product revenue increased by $3.7 million, or 33.9%, with the increase primarily attributable to 16 Growth Direct system placements in 2023, compared to 9 in the prior year, as well as higher consumable shipment volumes due to an increase in cumulative validated Growth Direct systems. The mix of consumable products sold also had a positive impact on revenue partially offset by lower net system pricing.

Current wording

Product revenue increased by $3.9 million, or 26.5%, with the increase primarily attributable to an increase in Growth Direct system placements in 2024 as well as higher consumable shipment volumes due to an increase in cumulative validated Growth Direct systems. Additionally, higher selling prices for both consumables and systems as well as increased sales of other product were realized during the year.

Previous wording

Service revenue increased by $1.6 million, or 26.9%. The increase was largely attributable to increased recurring service maintenance contracts due to our growing number of validated Growth Direct systems at customer sites. The increase in Growth Direct system placements also led to increased validation services revenue.

Current wording

Service revenue increased by $1.6 million, or 20.9%. The increase was largely due to increased recurring revenue from service contracts due to our growing number of validated Growth Direct systems at customer sites as well as increases in validation service revenue.

Previous wording

Cost of product revenue increased by $1.6 million, or 8.6%. The increase was driven by costs related to higher volume of both Growth Direct system placements and consumable shipments. This increase was partially offset by a net improvement in production costs driven in part by higher production volumes in systems and the benefit of cost reduction activities in consumables.

Current wording

Cost of product revenue increased by $1.0 million, or 4.9%. The increase was driven by costs related to higher volume of both Growth Direct system placements and consumable shipments. This increase was partially offset by a favorable mix impact of product sold as well as a reduction in our costs to manufacture our products.

Previous wording

Cost of service revenue increased by $0.7 million, or 10.4%. This increase was primarily due to higher employee-related costs due to increases in headcount to support the growing number of Growth Direct systems placed and validated.

Current wording

Cost of service revenue decreased by $0.8 million, or 10.4%. This decrease was primarily due to lower employee-related costs due to lower headcount.

Previous wording

Research and development expenses remained relatively flat year over year. The slight decrease in expense was attributable to a decrease in spending on third-party contractors, which was largely offset by an increase in compensation and benefit costs as a result of higher headcount.

Current wording

Sales and marketing expenses remained relatively flat year over year. The slight decrease was primarily attributable to a reduction in consulting fees partially offset by an increase in headcount-related costs.

Previous wording

Interest income for the years ended December 31, 2023 and 2022 was $4.2 million and $1.8 million, respectively. The increase of $2.4 million, or 136.8%, was the result of higher interest income due to higher interest rates earned on our investments.

Current wording

Interest income for the years ended December 31, 2024 and 2023 was $3.2 million and $4.2 million, respectively. The decrease of $1.0 million, or 24.8%, was due to lower investment balances during the year.

Previous wording

Other (expense) income, which is comprised of miscellaneous expenses unrelated to our core business, remained relatively flat for the year ended December 31, 2023.

Current wording

Other (expense) income, which is comprised of miscellaneous expenses and income unrelated to our core business, remained relatively flat between the years ended December 31, 2024 and 2023.

Previous wording

Since our inception, we have incurred operating losses. To date, we have funded our operations primarily through proceeds from sales of redeemable convertible preferred stock, borrowings under loan agreements, revenue from sales of our products, services and contracts and proceeds from our IPO.

Current wording

Since our inception, we have incurred operating losses. To date, we have funded our operations primarily through proceeds from sales of redeemable convertible preferred stock, borrowings under loan agreements, revenue from sales of our products and services, and proceeds from our IPO.

Previous wording

On December 15, 2023, we entered into a sales agreement, or the ATM Agreement, to establish an "at-the-market" facility with Cowen and Company, LLC, or Cowen, pursuant to which we may issue and sell shares of our Class A common stock having aggregate sales proceeds of up to $50,000,000 from time to time through Cowen, acting as sales agent and/or principal. The prospectus we filed related to the ATM Agreement permits us to issue and sell up to $10,000,000 of shares of Class A common stock from time to time through Cowen. Under the ATM Agreement, we agreed to pay Cowen a commission of up to 3.0% of the gross proceeds from any sales of shares of our Class A common stock under this facility. During the year ended December 31, 2023 through the filing date of this Annual Report, we did not issue or sell any shares of our Class A common stock under this facility.

Current wording

If our expectations and underlying assumptions of business performance, including revenue growth, gross margin improvements, and/or control of operating costs, are not realized, we may need to raise additional funding, which could be through equity offerings, debt financings or a combination thereof. For example, on December 15, 2023, we entered into a sales agreement, or the ATM Agreement, to establish an "at-the-market" facility with Cowen and Company, LLC, or Cowen, pursuant to which we may issue and sell shares of their Class A common stock. During the year ended December 31, 2024 through the filing date of this Annual Report on Form 10-K, we did not issue or sell any shares of our Class A common stock under this facility. If we are unable to raise capital as, if and when, needed, we may have to significantly delay, scale back or discontinue our expansion plans including further development and commercialization efforts of one or more of our products.

Previous wording

We believe that our cash, cash equivalents and short and long-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months following the date the consolidated financial statements contained in this Annual Report on Form 10-K for the year ended December 31, 2023 were issued.

Current wording

We believe that our cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months following the date the consolidated financial statements contained in this Annual Report on Form 10-K for the year ended December 31, 2024 were issued.

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 $3.7 million as of December 31, 2023, 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 $3.0 million as of December 31, 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 agreement 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 $4.2 million as of December 31, 2023, 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 the Lexington facility for an additional five years following expiration of the sublease.

Current 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 agreement 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 $3.4 million as of December 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 the Lexington facility for an additional five years following expiration of the sublease.

Previous wording

During the year ended December 31, 2023, net cash used in operating activities was $45.1 million, a decrease of $13.5 million compared to the prior year. The lower use of net cash was primarily a result of working capital and inventory management activities resulting in significantly lower inventory purchases throughout 2023. The timing of payments to vendors and the timing of employee bonus payments also had a positive impact on net cash used in operating activities.

Current wording

During the year ended December 31, 2024, net cash used in operating activities was $44.2 million, a decrease of $0.9 million compared to the prior year. The decreased use of net cash was primarily a result of working capital and reduced headcount resulting in less employee related costs, such as travel, business insurance, etc. The timing of payments to vendors and cash collections from customers contributed to the reduction in net cash used in operating activities.

Previous wording

During the year ended December 31, 2023, net cash provided by investing activities was $42.2 million, compared to net cash used in investing activities of $93.5 million during the year ended December 31, 2022. The change was largely attributable to an increase in investment maturities as well as fewer purchases of both investments and property and equipment.

Current wording

During the year ended December 31, 2024, net cash provided by investing activities was $36.7 million, a decrease of $5.5 million compared to the year ended December 31, 2023. The change was largely attributable to lower cash inflows from maturities and sales of short-term investments (net of outflow for purchases), marginally offset by lower purchases of property and equipment.

Previous wording

During the year ended December 31, 2023, net cash provided by financing activities was $0.1 million, a decrease of $0.5 million compared to the year ended December 31, 2022. In both periods, substantially all of the net cash provided by financing activities related to proceeds from stock option exercises and purchases from our ESPP.

Current wording

During the year ended December 31, 2024, net cash provided by financing activities was $0.2 million, an increase of $0.1 million compared to the year ended December 31, 2023. In both periods, substantially all of the net cash provided by financing activities related to proceeds from stock option exercises and purchases from our ESPP.

Previous wording

On February 2, 2024, we received a notification letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC, or 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 thirty (30) 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), or the Bid Price Requirement. 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 Class A 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. Previously, in September 2023, we received a similar notification letter from Nasdaq related to a deficiency in the Bid Price Requirement, for which we regained compliance later in that month.

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”). In order to extend the time period during which we were required to regain compliance with the Bid Price Requirement, we transferred the listing of our Class A common stock to the Nasdaq Capital Market effective as of August 5, 2024. On November 11, 2024, we received a letter from the staff of Nasdaq indicating that we had regained compliance with the Bid Price Requirement, following ten (10) consecutive business days during which the closing bid price of our Class A common stock was equal to or greater than $1.00 per share.

Previous wording

We measure all restricted common stock and restricted stock units granted to employees based on the common stock value on the date of grant. The purchase price of the restricted common stock was the common stock value on the date of grant.

Current wording

We measure all restricted common stock and restricted stock granted to employees based on the common stock value on the date of grant. The purchase price of the restricted common stock was the common stock value on the date of grant.

Previous wording

We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more, (ii) the last day of our fiscal year following the fifth anniversary of the date of the closing of the IPO, (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.

Current wording

We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (ii) the last day of our fiscal year following the fifth anniversary of the date of the closing of the IPO, (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.