MAXCYTE INC

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited**condensed consolidated financial statements and related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our audited consolidated financial statements and related notes for the year ended December 31, 2023 included in the 2023 Form 10-K, as well as the information contained under Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, the “Risk Factors” section contained in the 2023 Form 10-K and other information provided from time to time in our other filings with the SEC.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited**condensed consolidated financial statements and related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our audited consolidated financial statements and related notes for the year ended December 31, 2024 included in our Annual Report on Form 10-K filed with the SEC on March 11, 2025, (the “2024 Form 10-K”), as well as the information contained under Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, the “Risk Factors” section contained in the 2024 Form 10-K and other information provided from time to time in our other filings with the SEC.

Previous wording

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described under the caption “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and the 2023 Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

Current wording

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described under the caption “Risk Factors” and elsewhere in the 2024 Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

Previous wording

Since our inception, we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve profitability will depend on the successful further development, commercialization adoption, and market acceptance of our products. We generated revenue of $29.9 million and incurred a net loss of $30.5 million for the nine months ended September 30, 2024. As of September 30, 2024, we had an accumulated deficit of $206.3 million. We expect to continue to incur net losses as we focus on growing commercial sales of our products in both the U.S. and international markets, including growing our sales force, scaling our manufacturing operations, and continuing research and development efforts to develop new products and further enhance our existing products.

Current wording

Since our inception, we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve profitability will depend on the successful further development, commercialization adoption, and market acceptance of our products. We generated revenue of $10.4 million and incurred a net loss of $10.3 million for the three months ended March 31, 2025. As of March 31, 2025, we had an accumulated deficit of $227.1 million. We expect to continue to incur net losses as we focus on growing commercial sales of our products in both the U.S. and international markets, including growing our sales force, scaling our manufacturing operations, and continuing research and development efforts to develop new products and further enhance our existing products.

Previous wording

We have continued to enter into SPL agreements with our cell therapy customers. These agreements, which are discussed in more detail under the caption “Results of Operations” below, provide us with revenue from instrument sales and leases and disposables sales as well as pre-commercial milestones based on progress of our partners’ programs through the clinic and sales-based payments upon commercialization of our partners’ programs. In the first three quarters of 2024, we signed SPL agreements with six new partners: Lion TCR, Imugene, and Wugen in January, Be Biopharma in March, Legend Biotech in May, and Kamau Therapeutics in September. We continue to grow our SPL pipeline and, while the specific timing of any agreement is uncertain, we look forward to continuing to build on our existing SPL partnerships and develop additional SPL partnerships in the future.

Current wording

We have continued to enter into SPL agreements with our cell therapy customers. These agreements, which are discussed in more detail under the caption “Results of Operations” below, provide us with revenue from instrument sales and leases and disposables sales as well as pre-commercial milestones based on progress of our partners’ programs through the clinic and sales-based payments upon commercialization of our partners’ programs. In the first quarter of 2025, we signed an SPL agreement with a new partner, TG Therapeutics. We continue to grow our SPL pipeline and, while the specific timing of any agreement is uncertain, we look forward to continuing to build on our existing SPL partnerships and develop additional SPL partnerships in the future.

Previous wording

We generate revenue principally from the sale of instruments and single-use PAs and buffer, and from the lease of instruments to our customers. Our SPL partnerships also include associated clinical progress milestones and sales-based payments to us, in addition to annual lease payments.

Current wording

We generate revenue principally from the sale of instruments, single-use PAs and consumables as well as from licenses and service offerings to our customers. Our SPL agreements also include associated clinical progress milestones and sales-based payments to us, in addition to annual license payments.

Previous wording

In order to evaluate how our sales are trending across key markets, as well as the contribution of program-related revenue from our SPL partnerships, we separately analyze revenue derived from our cell therapy customers and drug discovery customers, as well as the performance-based milestone revenues we recognize under our SPL partnerships. Cell therapy revenues include primarily revenue from instruments sold, annual license fees for instruments under lease, and sales of our proprietary disposables. Drug discovery revenue includes primarily revenue from instruments sold, sales of our proprietary disposables and, occasionally, instruments leased. Core revenue includes sales and leases of instruments and disposables to cell therapy and drug discovery customers, excluding SPL program-related revenue. Program-related revenues include clinical progress milestone and sales-based revenues derived from SPL agreements. Milestone revenues are recognized when a customer achieves the associated milestone event.

Current wording

In order to evaluate how our sales are trending across key markets, as well as the contribution of program economics from our SPL agreements, we separately analyze our core revenue and our performance-based milestone revenues we recognize under our SPL agreements. Core revenue includes instrument sales, PAs and consumables, research and clinical licenses, and assay services, while non-core revenue relates to SPL program-related revenue. We recognize both

Previous wording

Total core revenue for the three months ended September 30, 2024 was $8.1 million, an increase of $1.5 million, or 23%, compared to $6.6 million for the three months ended September 30, 2023. Our overall increase in core revenue was primarily driven by increases in disposable sales of $1.2 million, and an aggregate increase of other components of core revenue of $0.3 million.

Current wording

Total core revenue for the three months ended March 31, 2025 was $8.2 million, an increase of $55,000, or 1%, compared to the three months ended March 31, 2024. Our overall increase in core revenue was primarily driven by increases in PA revenue of $0.4 million and assay service revenue of $.1 million, offset by a decrease in instrument sales of $0.5 million.

Previous wording

The $1.4 million decrease in program-related revenues for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 resulted from the variability in achievement of contractually specified clinical and regulatory milestones during the three months ended September 30, 2023 and reflects the expected variability from period to period in the level of program-related revenue given the small number of individual triggering events which currently generate this portion of revenue. We expect program-related revenue to continue to experience variability for some time, although we anticipate that variability may moderate as the volume of SPL partnerships and associated milestones grows and matures.

Current wording

The $1.0 million decrease in program-related revenues for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 resulted from customer variability in achievement of contractually specified clinical and regulatory milestones during the respective periods. We expect program-related revenue to continue to experience variability for some time, although we anticipate that variability may moderate as the volume of SPL partnerships and associated milestones grows and matures.

Previous wording

We expect total revenue to increase over time as our customers’ programs advance and our markets grow, resulting in additional instrument sales and leases and disposable sales and also as the percentage of our installed base that are under cell therapy license agreements increases. We expect revenue from disposable and instrument sales and instrument licenses to cell therapy customers will continue to grow as those customers advance their preclinical pipeline programs into clinical development and move their existing drug development programs into later-stage clinical trials and, potentially, into commercialization. In addition, we believe we are well-positioned to attract new customers who may contribute to these revenues, based on the underlying growth in the cell therapy pipeline among companies in this market, the extent to which capital is available to support such companies, and in particular the switch by some cell therapy companies away from viral to non-viral approaches. We expect, however, that our revenue may fluctuate from period to period due to the timing

Current wording

We expect total revenue to increase over time as our customers’ programs advance and our markets grow, resulting in additional instrument sales and license and PA sales and also as the percentage of our installed base that are under SPL license agreements increases. We expect revenue from PA and instrument sales and instrument licenses to cell therapy customers will continue to grow as those customers advance their preclinical pipeline programs into clinical development and move their existing drug development programs into later-stage clinical trials and, potentially, into commercialization. In addition, we believe we are well-positioned to attract new customers who may contribute to these revenues, based on the underlying growth in the cell therapy pipeline among companies in this market, the extent to which capital is available to support such companies, and in particular the switch by some cell therapy companies away from viral to non-viral approaches. We expect, however, that our revenue may fluctuate from period to period due to the timing of securing product sales and licenses, the inherently uncertain nature of the timing of our partners’ achievements of clinical progress, and our dependence on the program decisions of our partners.

Previous wording

During the three months ended September 30, 2024, gross margin was 76% compared to 90% for the three months ended September 30, 2023. The decrease in gross margin was primarily due to an increase in cost of goods sold, described below, and a decrease in program-related revenue. We price our instruments at a premium given what we believe to be the broad benefits of our platform, and the limited availability of alternative clinically-validated non-viral delivery approaches. Instrument pricing also depends upon the customer’s specific market. However, the market for non-viral delivery is highly competitive, and introduction of a Good Manufacturing Practices (“GMP”) grade platform by a competitor that delivers similar performance across a similar diversity of cell types could negatively impact our business and lead to increased price pressure that negatively impacts our gross margins.

Current wording

Our gross profit in future periods will depend on a variety of factors, including sales mix among instruments, disposables and milestones, the specific mix among types of instruments or disposables, the proportion of revenues associated with instrument leases as opposed to sales, changes in the costs to produce our various products, the launch of new products or changes in existing products, our cost structure for manufacturing including changes in production volumes, and the pricing of our products which may be impacted by market conditions. We price our instruments at a premium given what we believe to be the broad benefits of our platform, and the limited availability of alternative clinically-validated non-viral delivery approaches. Instrument pricing also depends upon the customer’s specific market. However, the market for non-viral delivery is highly competitive, and introduction of a Good Manufacturing Practices (“GMP”) grade platform by a competitor that delivers similar performance across a similar diversity of cell types could negatively impact our business and lead to increased price pressure that negatively impacts our gross margins.

Previous wording

Cost of goods sold increased by $1.1 million, or 143%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily driven by increases in disposable sales, an increase in inventory reserves, and lower absorption of manufacturing overhead costs.

Current wording

Cost of goods sold increased by $0.1 million, or 7%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was primarily driven by increases in disposable sales and assay services.

Previous wording

Gross profit decreased by $1.0 million, or 14%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily driven by the increase in cost of goods sold described above, and a decrease in program-related revenue.

Current wording

Gross profit decreased by $1.0 million, or 11%, for the three months ended March 31, 2025 compared to the three months ended March, 2024. The decrease was primarily driven by the decrease in program-related revenue.

Previous wording

We expect that our cost of goods sold will generally increase or decrease modestly as our instrument and disposables revenue increases or decreases. We expect our gross margin to benefit from realization of program-related revenue from our SPL agreements, to the extent that such revenue grows to be a significant proportion of overall revenues, as there is no cost of goods sold associated with such revenue. However, realization and timing of these potential milestone revenues is uncertain.

Current wording

We expect that our cost of goods sold will generally increase or decrease modestly as our instrument, PA and assay service revenue increases or decreases. We expect our gross margin to benefit from realization of program-related revenue from our SPL agreements, to the extent that such revenue grows to be a significant proportion of overall revenues, as there is no cost of goods sold associated with such revenue. However, realization and timing of these potential milestone revenues is uncertain.

Previous wording

Sales and marketing expenses decreased by $0.8 million, or 12%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily driven by a $0.3 million decrease in occupancy expense, a $0.3 million decrease in marketing expense, a $0.1 million decrease in travel expense, and a $0.1 million decrease in compensation expense.

Current wording

Research and development expenses decreased by $0.8 million, or 12%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily driven by a $0.5 million decrease in

Previous wording

Sales and marketing expenses increased by $0.4 million, or 2%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily driven by a $1.1 million increase in compensation expenses, a $0.6 million increase in professional fees, offset by a $0.2 million decrease in stock-based compensation, a $0.6 million decrease in occupancy expenses and a $0.5 million decrease in marketing expenses.

Current wording

Sales and marketing expenses decreased by $1.7 million, or 23%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily driven by a $1.1 million decrease in compensation expenses due to a reduction in headcount during the three months ended March 31, 2025 and one-time severance changes during the three months ended March 31, 2024, a $0.4 million decrease in professional fees due to timing of expenses, and a $0.2 million decrease in travel expense, commensurate with the reduction in headcount.

Previous wording

General and administrative expenses primarily consist of salaries, benefits, stock-based compensation and travel costs for employees in our executive, accounting and finance, legal, corporate development, human resources, information systems, and office administration functions as well as professional services fees, such as consulting, audit, tax and legal fees,

Current wording

General and administrative expenses primarily consist of salaries, benefits, stock-based compensation and travel costs for employees in our executive, accounting and finance, legal, corporate development, human resources, information systems, and office administration functions as well as professional services fees, such as consulting, audit, tax and legal fees, general corporate costs, facilities and allocated overhead expenses, and public company fees associated with being a Nasdaq and AIM-listed public company such as director fees, U.K. Nominated Adviser and broker fees, investor relations consultants fees and insurance costs. These expenses are exclusive of depreciation and amortization.

Previous wording

General and administrative increased $0.9 million, or 14% for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily driven by a $0.6 million increase in legal expense, a $0.2 million increase in stock-based compensation, a $0.1 million increase in public company expenses, and a $0.1 million increase in occupancy expenses, offset by a $0.1 million decrease in compensation expense.

Current wording

General and administrative increased $1.4 million, or 20% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was primarily driven by a $0.7 million increase in legal expense, and a $0.5 million increase in professional fees, both related to additional expenses incurred to complete the acquisition of SeQure, a $0.1 million increase in stock-based compensation, and a $0.1 million increase in compensation expense.

Previous wording

We expect that our general and administrative expenses will continue to increase in absolute dollars in future periods, primarily due to increased headcount to support anticipated growth in the business. We expect these expenses to vary from period to period as a percentage of revenue.

Current wording

We expect that our general and administrative expenses will continue to increase in absolute dollars in future periods, primarily due to increased headcount to support anticipated growth in the business.

Previous wording

Depreciation and amortization expense decreased by $12,000 or 1%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Current wording

Depreciation and amortization expense decreased by 7,000, or 2% for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Previous wording

Interest income represents interest on our cash balances and investments, Interest income decreased $0.2 million, 8% for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was driven by decreases in interest rates and average cash and investment balances during the three months ended September 30, 2024.

Current wording

Interest income represents interest on our cash balances and investments, Interest income decreased $0.7 million, or 26% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was driven by decreases in interest rates and average cash and investment balances during the three months ended March 31, 2025.

Previous wording

Since our inception, we have experienced losses and negative cash flows from operations. For the nine months ended September 30, 2024, we incurred a net loss of $30.5 million. As of September 30, 2024, we had an accumulated deficit of $206.3 million. To date, we have funded our operations primarily with proceeds from sales of common stock, borrowings under loan agreements and cash flows associated with sales and licenses of our products to customers. On August 3, 2021, we completed our U.S. IPO, generating gross proceeds of $201.8 million. We received net proceeds of $184.3 million after deducting aggregate underwriting commissions and offering expenses of $17.6 million.

Current wording

Since our inception, we have experienced losses and negative cash flows from operations. For the three months ended March 31, 2025, we incurred a net loss of $10.3 million. As of March 31, 2025, we had an accumulated deficit of $227.1 million. To date, we have funded our operations primarily with proceeds from sales of common stock, borrowings under loan agreements and cash flows associated with sales and licenses of our products to customers. On August 3, 2021, we completed our U.S. IPO, generating gross proceeds of $201.8 million. We received net proceeds of $184.3 million after deducting aggregate underwriting commissions and offering expenses of $17.6 million.

Previous wording

We expect to incur near-term operating losses as we continue to invest in expanding our business through growing our sales and marketing efforts, continued research and development, product development and expanding our product offerings. Based on our current business plan, we believe that our existing cash, cash equivalents, short-term investments and internally generated cash flows will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date these financial statements have been issued.

Current wording

We expect to incur near-term operating losses as we continue to invest in expanding our business through growing our sales and marketing efforts, continued research and development, product development and expanding our product offerings. Based on our current business plan, we believe that our existing cash, cash equivalents, short-term investments and internally generated cash flows will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date these consolidated financial statements have been issued.

Previous wording

Net cash used in operating activities for the nine months ended September 30, 2024 was $19.8 million, and consisted primarily of our net loss of $30.5 million, which was offset in part by net non-cash expenses of $9.7 million. Net non-cash expenses include stock-based compensation of $9.9 million, depreciation and amortization expenses of $3.3 million, an increase to our excess and obsolete inventory reserve of $0.8 million, and an aggregate $0.7 million in other non-cash charges offset by amortization of discounts on investments of $5.1 million. We also had net cash inflows of $1.0 million due to changes in our operating assets and liabilities. Net changes in our operating assets and liabilities consisted primarily of an increase in deferred revenue of $1.6 million, a decrease in accounts receivable of $1.3 million, and a decrease in inventory of $0.8 million, offset by a decrease in accounts payable and accrued expenses of $1.4 million due to timing considerations, an increase in other assets of $0.7 million, a decrease in operating lease liabilities of $0.4 million and an increase in prepaid expenses and other current assets of $0.2 million.

Current wording

Net cash used in operating activities for the three months ended March 31, 2025 was $14.4 million, and consisted primarily of our net loss of $10.3 million, which was offset in part by net non-cash expenses of $3.5 million. Net non-cash expenses include stock-based compensation of $3.0 million, depreciation and amortization expenses of $1.1 million, and an aggregate $0.3 million in other non-cash charges offset by amortization of discounts on investments of $0.9 million. We also had net cash outflows of $7.8 million due to changes in our operating assets and liabilities. Net changes in our operating assets and liabilities consisted primarily of a decrease in accounts payable and accrued expenses of $5.6. million due to timing considerations, a decrease in deferred revenue of $1.3 million, an increase in accounts receivable of $0.8 million, a decrease in operating lease liabilities of $0.3 million, and an increase in other assets of $0.3 million, offset by decreases in inventory and prepaid expenses and other current assets of $0.5 million and $0.1 million, respectively.

Previous wording

Net cash used in operating activities for the nine months ended September 30, 2023 was $22.7 million, and consisted primarily of our net loss of $32.6 million, offset in part by net non-cash expenses of $8.9 million, including stock-based compensation of $10.4 million, depreciation and amortization expenses of $3.1 million, and other non-cash charges of $0.6 million, offset by amortization of discounts on investments of $5.1 million. We also had net cash inflows of $1.0 million due to changes in our operating assets and liabilities. Net changes in our operating assets and liabilities consisted primarily of a decrease in accounts receivable of $3.6 million due to increased cash collections, a decrease in tenant improvements allowance (“TIA”) receivable of $1.9 million, an increase in accounts payable and accrued expenses of $1.5 million, and a decrease in other assets of $0.2 million, offset by a $4.1 million increase in inventory, a decrease in deferred revenue of $1.1 million, and a $0.9 million increase in prepaid expenses and other current assets.

Current wording

Net cash used in operating activities for the three months ended March 31, 2024 was $10.6 million, and consisted primarily of our net loss of $9.5 million, offset in part by net non-cash expenses of $2.4 million, including stock-based compensation of $3.0 million, depreciation and amortization expenses of $1.1 million, aggregate other non-cash charges of $0.3 million, offset by amortization of discounts on investments of $2.0 million. We also had net cash outflows of $3.4 million due to changes in our operating assets and liabilities. Net changes in our operating assets and liabilities consisted primarily of a decrease in accounts payable and accrued expenses of $3.3 million due to timing considerations, a decrease in deferred revenue of $0.6 million, an increase in accounts receivable of $0.3. million and a decrease in operating lease liabilities of $0.1 million, offset by a decrease in prepaid expenses and other current assets of $0.7 million and a decrease in inventory of $0.2 million.

Previous wording

Net cash provided by investing activities during the nine months ended September 30, 2023 was $59.1 million, which was primarily attributable to maturities of investments of $247.5 million, partially offset by purchases of investments of $185.6 million and purchases of property and equipment of $2.8 million.

Current wording

Net cash provided by investing activities during the three months ended March 31, 2025 was $9.5 million, which was primarily attributable to maturities of investments of $46.6 million, offset by purchases of investments of $34.6 million, $1.8 million for the acquisition of SeQure, net of cash acquired, and purchases of property and equipment of $0.7 million.

Previous wording

Net cash provided by investing activities during the nine months ended September 30, 2024 was $8.6 million, which was primarily attributable to maturities of investments of $128.4 million, offset by purchases of investments of $118.3 million and purchases of property and equipment of $1.5 million.

Current wording

Net cash used in investing activities during the three months ended March 31, 2024 was $14.4 million, which was primarily due to purchases of investments of $48.0 million and purchases of property and equipment of $0.8 million, offset by maturities of investments of $34.4 million.

Previous wording

Net cash provided by financing activities during the nine months ended September 30, 2023 was $1.7 million, which was attributable to proceeds from the exercise of stock options.

Current wording

Net cash provided by financing activities during the three months ended March 31, 2025 and 2024 was $0.4 million and $0.7 million, respectively, from the exercise of stock options.

Previous wording

Our contractual obligations and commitments as of September 30, 2024 consisted exclusively of operating lease obligations. In May 2021, we entered into the Headquarters Lease for new office, lab and warehouse/manufacturing space. The Headquarters Lease term expires on August 31, 2035. The total incremental remaining non-cancellable lease payments under the lease agreement are $26.7 million through the lease term. We expect to be able to fund our obligations under this lease, both in the short-term and in the long-term, from cash on hand, investments and operating cash flows.

Current wording

Our contractual obligations and commitments as of March 31, 2025 consisted exclusively of operating lease obligations. In May 2021, we entered into the Headquarters Lease for new office, lab and warehouse/manufacturing space. The Headquarters Lease term expires on August 31, 2035. The total incremental remaining non-cancellable lease payments under the Headquarters Lease was $25.6 million through the lease term. Upon acquisition of SeQure, we assumed the SeQure Lease, which term expires December 31, 2027. The total incremental remaining non-cancellable lease payments under the SeQure lease was $1.1 million throughout the lease term. We expect to be able to fund our obligations under these leases, both in the short-term and in the long-term, from cash on hand, investments and operating cash flows.

Previous wording

There have been no material changes to our critical accounting policies and estimates from those disclosed in our consolidated financial statements and the related notes and other financial information included in the 2023 Form 10-K.

Current wording

There have been no material changes, except as described below to our critical accounting estimates from those disclosed in our consolidated financial statements and the related notes and other financial information included in the 2024 Form 10-K.

Previous wording

We will remain an EGC until the earliest of: (i) December 31, 2026, which is the last day of the fiscal year following the fifth anniversary of our IPO in the U.S.; (ii) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (iii) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (iv) the last day of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of June 30 of such fiscal year.

Current wording

We will remain an EGC until the earliest of: (i) December 31, 2026, which is the last day of the fiscal year following the fifth anniversary of our IPO in the U.S.; (ii) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (iii) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (iv) the last day of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of June 30 of such fiscal year. The Company expects to retain its emerging growth company (“EGC”) status through the last day of the fiscal year following the fifth anniversary of the first sale of its registered common equity, that is, through December 31, 2026.