RAPID MICRO BIOSYSTEMS INC

Previous wording

We are an innovative life sciences technology company that enables the safe and efficient manufacture of pharmaceutical products through our rapid automated microbial quality control ("MQC") detection platform. We develop, manufacture, market and sell the Growth Direct system and related proprietary consumables, and value-added services to enable rapid MQC testing in the manufacture of biologics, cell and gene therapies, vaccines, sterile injectables, and other healthcare products. Our system delivers the power of industrial automation to bioprocessing and pharmaceutical manufacturing firms by modernizing and digitizing their MQC operations. Our Growth Direct platform, developed with over 15 years of active feedback from our customers, was purpose-built to meet the growing demands posed by the increasing scale, complexity, and regulatory scrutiny confronting global pharmaceutical manufacturing. Our Growth Direct platform comprises the Growth Direct system, optional laboratory information management system ("LIMS") connection software (which the majority of our customers purchase) and other software, proprietary consumables, and comprehensive field service, validation services and post-warranty service contracts. Once embedded and validated in our customers’ facilities, our Growth Direct platform provides for recurring revenues through ongoing sales of consumables and service contracts.

Current wording

We are an innovative life sciences technology company that enables the safe and efficient manufacture of pharmaceutical products through our rapid automated microbial quality control ("MQC") detection platform. We develop, manufacture, market and sell the Growth Direct system and related proprietary consumables, and value-added services to enable rapid MQC testing in the manufacture of biologics and cell and gene therapies, vaccines, sterile injectables, and other healthcare products. Our system delivers the power of industrial automation to bioprocessing and pharmaceutical manufacturing firms by modernizing and digitizing their MQC operations. Our Growth Direct platform, developed with over 15 years of active feedback from our customers, was purpose-built to meet the growing demands posed by the increasing scale, complexity, and regulatory scrutiny confronting global pharmaceutical manufacturing. Our Growth Direct platform comprises the Growth Direct system, optional laboratory information management system ("LIMS") connection software (which the majority of our customers purchase), proprietary consumables, and comprehensive field service, validation services and post-warranty service contracts. Once embedded and validated in our customers’ facilities, our Growth Direct platform provides for recurring revenues through ongoing sales of consumables and service contracts.

Previous wording

Since inception, we have devoted a majority of our resources to designing, developing, and building our proprietary Growth Direct platform and associated products, launching our Growth Direct platform commercially, advancing our technological capabilities, expanding our sales and marketing infrastructure to grow our sales, building a global customer support team to deliver our value-added services, investing in robust manufacturing and supply chain operations to serve our customers globally, and providing general and administrative support for these operations. To date, we have funded our operations primarily with proceeds from sales of redeemable convertible preferred stock, borrowings under loan agreements, revenue from products, services and contracts, and proceeds from our IPO, as well as our cost-reimbursement/cost sharing contracts with the U.S. Department of Health and Human Services Biomedical Advanced Research & Development Authority ("BARDA").

Current wording

Since our inception, we have devoted a majority of our resources to designing, developing, and building our proprietary Growth Direct platform and associated products, launching our Growth Direct platform commercially, expanding our sales and marketing infrastructure to grow our sales, building global customer service and support teams to deliver our value-added services, investing in robust manufacturing and supply chain operations to serve our customers globally, and providing general and administrative support for these operations. Prior to our IPO, we funded our operations primarily with proceeds from sales of preferred stock, borrowings under loan agreements and product and service sales, as well as our cost-reimbursement contract with the U.S. Department of Health and Human Services Biomedical Advanced Research & Development Authority ("BARDA").

Previous wording

Since our inception, we have incurred net losses in each year. We generated revenue of $7.6 million and $6.1 million for the three months ended September 30, 2024 and 2023, respectively, and incurred net losses of $11.3 million and

Current wording

Since our inception, we have incurred net losses in each year. We generated revenue of $7.2 million and $5.6 million for the three months ended March 31, 2025 and 2024, respectively, and incurred net losses of $11.3 million and $13.3 million for those same periods, respectively. As of March 31, 2025, we had an accumulated deficit of $486.5 million. We expect to continue to incur net losses in connection with our ongoing activities, including:

Previous wording

We believe that our cash and cash equivalents and investments as of September 30, 2024 enable us to fund our operating expenses and capital expenditure requirements for at least twelve months following the issuance date of the unaudited interim condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.”

Current wording

We believe that our cash, cash equivalents and investments as of March 31, 2025 enable us to fund our operating expenses and capital expenditure requirements for at least twelve months following the issuance date of the unaudited interim condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.”

Previous wording

The current inflationary and interest rate environment could have a negative impact on our results of operations, cash flows and overall financial condition. We may experience inflationary pressures on significant cost categories including labor, materials and freight. We continue to monitor the impact of inflation on these costs in order to minimize its effects through productivity improvements and cost reductions. There can be no assurance, however, that our operating results will not be affected by inflation in the future. In addition, inflation and increased interest rates may decrease demand for our Growth Direct systems, as our customers may face economic uncertainty as a result. A decrease in demand for our products or increases in our costs, as well as any steps we may take to mitigate changes, could impact our overall growth. However, the related financial impact cannot be reasonably estimated at this time.

Current wording

The current inflationary and interest rate environment could have a negative impact on our results of operations, cash flows and overall financial condition. The widespread use of tariffs may have an inflationary effect on the prices of goods and services, including those that we utilize in the production of our products and delivery of our services. As a result, due to tariffs and other macroeconomic factors, we may experience inflationary pressures on significant cost categories including labor, materials and freight. We continue to monitor the impact of inflation on these costs in order to minimize its effects through productivity improvements and cost reductions. There can be no assurance, however, that our operating results will not be affected by inflation in the future. In addition, inflation and increased interest rates (or the impact on the broader macroeconomic environment resulting from the foregoing) may decrease demand for our Growth Direct systems, as our customers may face economic uncertainty as a result. A decrease in demand for our products or increases in our costs, as well as any steps we may take to mitigate changes, could impact our overall growth. However, the related financial impact cannot be reasonably estimated at this time.

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 September 30, 2024, approximately 42% 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.

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 March 31, 2025, approximately 40% of our customers have purchased Growth Direct systems for multiple sites, and approximately 60% 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

We made the Growth Direct Rapid Sterility application available for commercial sale and placed the first Rapid Sterility system at one of our existing customers in the second quarter of 2024. We plan to continue efforts to scale our manufacturing capabilities for the Rapid Sterility application through the end of 2024.

Current wording

We made the Growth Direct Rapid Sterility application available for commercial sale and placed the first Rapid Sterility system at one of our existing customers in the second quarter of 2024. We plan to continue efforts to scale our manufacturing capabilities for the Rapid Sterility application.

Previous wording

The majority of our customers are large global pharmaceutical manufacturers and contract development and manufacturing organizations, or 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. In the third and fourth quarters of 2024 and continuing into the first quarter of 2025, we achieved positive gross margins for the first time in our company's history. Maintaining these positive gross margins in future periods will depend on our ability to execute on our business objectives, including generating sufficient revenues to cover the costs of producing and delivering our products and services. In addition, in order to further improve our gross margins, we seek to reduce such costs and are actively targeting numerous areas including:

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 recently experienced positive trends in our gross margins, improving from (27)% for the three months ended September 30, 2023 to 8% for the three months ended September 30, 2024, and from (33)% for the nine months ended September 30, 2023 to (5)% for the nine months ended September 30, 2024. While we expect gross margins to continue to trend positively, expansion in gross margins in future periods may not be linear and may be subject to variability from period to period.

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. While we expect gross margins to continue to trend positively in the future, expansion in gross margins in future periods may not be linear and may be subject to variability from period to period.

Previous wording

The number of Growth Direct system placements and rate of growth varies from period-to-period due to factors including, but not limited to, Growth Direct system order volume and timing, and access to customer sites (including the timing of customer site construction activities). As a result, we expect to experience continued variability in our period-to-period number of Growth Direct system placements due to the aforementioned factors.

Current wording

The number of Growth Direct system placements and rate of growth varies from period-to-period due to factors including, but not limited to, Growth Direct system order volume and timing as well as access to customer sites (including the timing of customer site construction activities). As a result, we expect to experience continued variability in our period-to-period number of Growth Direct system placements due to the aforementioned factors.

Previous wording

The number of validated Growth Direct systems and rate of growth varies from period-to-period due to factors including, but not limited to, Growth Direct system placement volume and timing, whether customers have previously validated Growth Direct systems within their site or network, access to customer sites, customer site readiness, availability of required customer personnel and the time to install and validate each individual system. As a result, we expect to experience continued fluctuations in our period-to-period number of Growth Direct systems validated due to the aforementioned factors.

Current wording

The number of validated Growth Direct systems and rate of growth varies from period-to-period due to factors including, but not limited to, Growth Direct system placement volume and timing, whether customers have previously validated Growth Direct systems within their site or global network, access to customer sites, customer site readiness, availability of required customer personnel and the time to install and validate each individual system. As a result, we expect to experience continued fluctuations in our period-to-period number of Growth Direct systems validated due to the aforementioned factors.

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 48.3% and 55.5% of our total revenue for the three months ended September 30, 2024 and 2023, respectively. Recurring revenue was 56.8% and 63.4% of our total revenue for the nine months ended September 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.

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 55.1% and 66.7% of our total revenue for the three months ended March 31, 2025 and 2024, 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 generate revenue from sales of our Growth Direct system (including our LIMS connection and other software), consumables, validation services, service contracts, and field service. We primarily sell our products and services through direct sales representatives. The arrangements are noncancellable and nonrefundable after ownership passes to the customer.

Current wording

We generate revenue from sales of our Growth Direct system (including our LIMS connection and other software), consumables, validation services, service contracts, and field service. We primarily sell our products and services through direct sales representatives. Our sales arrangements are noncancellable and nonrefundable after ownership passes to the customer.

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 September 30, 2024, we had placed 156 Growth Direct systems with over 40 customers globally, including 70% of the top twenty pharmaceutical companies as measured by revenue, and the manufacturers of approximately 19% of globally approved cell and gene therapies, including manufacturers of 100% of approved gene-modified autologous CAR-T cell therapies.

Current wording

Growth Direct systems with approximately 50 customers globally, including approximately 70% of the top twenty pharmaceutical companies as measured by revenue, and the manufacturers of 17% of globally approved cell and gene therapies, including manufacturers of 86% of approved gene-modified autologous CAR-T cell therapies.

Previous wording

We expect our Growth Direct system revenue to continue to grow over time as we increase system placements into our existing customers and markets and expand into new customers and markets.

Current wording

We expect our Growth Direct system revenue to continue to grow over time as we increase system placements into our existing customers and markets and expand into new customers, markets and products.

Previous wording

We expect consumable revenue to increase in future periods as our base of cumulative validated Growth Direct systems grows and those systems enter routine use and utilize our consumables on a recurring, ongoing basis.

Current wording

We expect consumable revenue to increase in future periods as our base of cumulative validated Growth Direct systems grows and those systems enter routine use and utilize our consumables on a recurring, ongoing basis. In addition, greater utilization of our systems by our customers, as well as adoption by customers of new product offerings, including sterility-related consumables, is also expected to increase our consumables revenue.

Previous wording

As part of our Operational Efficiency Program, we have implemented actions to reduce employee-related expenses and certain other non-employee related costs. For future periods, we expect our costs of revenue to increase or decrease commensurate with product and service volumes. Such costs may be further impacted by our ongoing efforts to reduce product costs and increase manufacturing productivity and efficiencies as well as service productivity.

Current wording

For future periods, we expect our costs of revenue to increase or decrease commensurate with product and service volumes. Such costs may be further impacted by our ongoing efforts to reduce product costs and increase manufacturing productivity and efficiencies as well as service productivity. In addition, our product costs may be adversely impacted by recently enacted and potential future tariffs by the U.S. and other jurisdictions in which we conduct business. At this time, while we do not expect such impacts on our product costs to rise to levels that are material to our results of operations in the near-term, future changes in policies and other macroeconomic conditions could materially and adversely affect our operating expenses and results of operations.

Previous 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.

Current 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. 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. 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 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.

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. 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. 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, commensurate with the size, scope and complexity of our general and administrative functions.

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. 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 and nine months ended September 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.

Current wording

We generated significant taxable losses during each of the three months ended March 31, 2025 and 2024 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 $0.4 million, or 20.8%. 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.

Current wording

Service revenue increased by $1.2 million, or 63.5%. The increase in service revenue was primarily due to increases in revenue related to validations and installations (including one-time services unrelated to new system sales) 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 service revenue decreased by $0.4 million, or 20.0%. This decrease was primarily attributable to lower service headcount and headcount-related costs.

Current wording

Cost of service revenue decreased by $0.2 million, or 9.6%. This decrease was primarily attributable to lower service headcount and headcount-related costs.

Previous wording

Interest income, which is related to interest earned on our investments, decreased $0.3 million primarily as a result of lower investment balances during the three months ended September 30, 2024.

Current wording

Interest income, which is related to interest earned on our investments, decreased $0.5 million, or 52.6%, primarily as a result of lower investment balances during the three months ended March 31, 2025.

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 $3.2 million as of September 30, 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 $2.9 million as of March 31, 2025, including $0.6 million in short-term obligations.

Previous 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 $3.6 million as of September 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.

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 $3.3 million as of March 31, 2025, 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 nine months ended September 30, 2024, net cash used in operating activities was $34.2 million, a decrease of $1.3 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 customer cash receipts. This decrease was offset by increased inventory purchases, and higher usage of cash to settle accrued expenses and other current liabilities mainly as a result of higher annual bonus payments made during the nine months ended September 30, 2024. During the nine months ended September 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.

Current wording

During the three months ended March 31, 2025, net cash used in operating activities was $9.1 million, a decrease of $6.5 million compared to the three months ended March 31, 2024. The lower use of net cash was primarily a result of lower personnel-related costs due to reduced headcount, as well as the volume and timing of payments to vendors and increased customer cash receipts. This decrease was offset by increased inventory purchases and the timing of recognition of product and service revenue initially included in deferred revenue.

Previous wording

Net cash provided by investing activities was $32.1 million during each of the nine months ended September 30, 2024 and 2023. Lower investment maturities and sales were offset by lower investment purchases and a reduction in cash used to purchase property and equipment in the current-year period.

Current wording

During the three months ended March 31, 2025, net cash provided by investing activities was $10.7 million, a decrease of $2.8 million compared to the three months ended March 31, 2024. Higher investment maturities in the prior-year period were offset by no investment purchases and a reduction in cash used to purchase property and equipment in the current-year period.

Previous wording

During the nine months ended September 30, 2024, net cash provided by financing activities was flat compared to the nine months ended September 30, 2023, at $0.2 million.

Current wording

During the three months ended March 31, 2025, net cash provided by financing activities was $0.4 million, an increase of $0.2 million compared to the three months ended March 31, 2024. Higher proceeds from stock option exercises was the primary driver of this increase.

Previous wording

Our revenues vary from quarter to quarter as a result of factors such as our customers’ budgetary cycles and extended summer vacation periods that can impact our ability to deliver products and provide onsite services to our customers during those periods. We expect this variability to continue for the foreseeable future, which may cause fluctuations in our operating results and financial metrics.

Current wording

Our revenues vary from quarter to quarter as a result of factors such as our customers’ budgetary cycles and extended summer vacation periods that can impact our ability to progress system sales processes, deliver products and provide onsite services to our customers during those periods. We expect this variability to continue for the foreseeable future, which may cause fluctuations in our operating results and financial metrics.

Previous wording

Further, even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common shares less attractive because we may rely on these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.

Current wording

Further, even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.