10x Genomics Inc
For the period ended Dec 31, 2024. Filed Feb 13, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 13, 2025
TXG$59.28+2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-15.
0001770787-24-000017
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-13.
0001770787-25-000013
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 99 current paragraphs.
48 unchanged; 41 reworded; 9 added; 14 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Pricing changes
Current report
We believe that price changes can affect purchasing decisions by our customers and potential customers. We believe that lowering prices for our products can unlock elasticity of demand and increase purchases of both instruments and consumables. We expect to lower prices for certain of our products in 2025 and expect sales of our instruments and consumables to increase over time as a result of introducing lower prices for our instruments and consumables.
Current report
Cost of revenue decreased $13.1 million, or 6%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The decrease was primarily driven by lower manufacturing costs of $22.6 million due to decreased sales and change in product mix, partially offset by higher royalties of $9.8 million.
Current report
Selling, general and administrative expenses increased $1.0 million, or 0.3%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase was primarily driven by an increase in outside legal expenses of $21.2 million, an increase in allocated costs for facilities and information technology to support operational expansion of $1.7 million, partially offset by a decrease in personnel expenses of $18.6 million, including a $21 million reduction in stock-based compensation expense, and a decrease in other expenses of $4.4 million.
Current report
Critical Accounting Policies and Estimates
Current report
During the year ended December 31, 2024, we granted PSUs to certain members of management which are subject to the achievement of certain performance conditions established by the Company’s Compensation Committee of the Board of Directors as described below:
Current report
i.50% of target PSUs earned will be based on the Company’s compound annual growth rate (CAGR) of the Company’s Revenue over a two-year performance period from January 1, 2024 to December 31, 2025. Holders may earn from 0% to 175% of the target amount of shares and earned PSUs will then be subject to service-based vesting; and
Current report
ii.50% of target PSUs earned will be based on the relative Total Shareholder Return (TSR) of the Company’s common stock as compared to the TSR of the members of the Russell 3000 Medical Equipment and Services Sector Index over a three-year performance period from January 1, 2024 to December 31, 2026. Depending on the results relative to the TSR market condition, the holders may earn from 0% to 200% of the target amount of shares which will vest at the end of the performance period.
Current report
The PSUs will be forfeited if the performance conditions are not achieved at the end of the relative performance periods as described above. The vesting of the PSUs can also be triggered upon certain change in control events or in the event of death or disability. The PSUs relating to CAGR components were not deemed probable of vesting as of December 31, 2024, no expenses were recognized for 2024.
Removed paragraphs (14)
Previous report
•scale our technology platforms and introduce new products and services;
Previous report
•protect and defend our intellectual property;
Previous report
•acquire businesses or technologies; and
Previous report
•invest in processes, tools and infrastructure to support the growth of our business.
Previous report
Our sales process varies considerably depending upon the type of customer to whom we are selling. Our sales process with small laboratories and individual researchers is often short, and in some cases, we receive purchase orders from these customers in under a month. Our sales process with other institutions can be longer with most customers submitting purchase orders within six months. Given the variability of our sales cycle, we have in the past experienced, and likely will in the future experience, fluctuations in our instrument sales on a period-to-period basis.
Previous report
For each of the years ended December 31, 2023, 2022 and 2021, our Single Cell Gene Expression consumables, which were introduced in 2016, were our highest selling consumables product. For the year ended December 31, 2023, the remaining consumables revenue was comprised of sales of our Single Cell Immune Profiling, Single Cell Multiome ATAC+Gene Expression, Single Cell Gene Expression Flex, Single Cell ATAC, and Visium and Xenium consumables. Revenue contribution from our Single Cell Gene Expression, Single Cell Multiome ATAC+Gene Expression and Single Cell Immune Profiling consumables decreased as a percentage of overall consumables revenue while revenue contribution from our Single Cell Gene Expression Flex, Single Cell ATAC and Visium and Xenium consumables increased as a percentage of overall consumables revenue for the year ended December 31, 2023.
Previous report
Accrued contingent liabilities
Previous report
In 2021, accrued contingent liabilities were comprised of the original charge, estimated royalties and interest charges primarily related to our litigation with Bio-Rad Laboratories, Inc. We did not incur any accrued contingent liabilities in 2023 and 2022.
Previous report
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards and other pre-change attributes, such as tax credits, to offset its post-change income may be limited. In general, an “ownership change” will occur if there is a cumulative change in our ownership by “5% shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. The annual limitation generally is determined by multiplying the value of our stock at the time of such ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the NOL carryforwards before utilization. We completed a study through September 30, 2023 to determine whether an ownership change had occurred under Section 382 or 383 of the Code, and we determined that an ownership change occurred in 2013. As a result, our NOLs generated through November 1, 2013 may be subject to limitation under Section 382 of the Code. In addition, certain ReadCoor tax attributes are subject to annual limitations as a result of our acquisition of ReadCoor, which constituted an ownership change of ReadCoor. Such limitations may result in expiration of a portion of our NOL or tax credit carryforwards before utilization. Our ability to use NOL or tax credit carryforwards to reduce future taxable income and liabilities may be further limited as a result of future changes in stock ownership. As a result, if we generate taxable income, our ability to use our pre-change NOL or tax credit carryforwards to offset U.S. federal and state taxable income may still be subject to limitations, which could potentially result in increased future tax liability.
Previous report
Cost of revenue increased $89.0 million, or 74%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was primarily driven by higher manufacturing costs of $79.0 million due to increased sales and higher costs of newly introduced products, $4.4 million of higher inventory write-downs and $4.4 million of higher warranty charges.
Previous report
Selling, general and administrative expenses increased $45.0 million, or 15%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was primarily driven by increases in outside legal expenses of $18.1 million, personnel expenses of $14.4 million, including $14.7 million in stock-based compensation expense, $6.4 million for facilities and information technology including lease impairment charges of $2.8 million, $4.5 million of impairment charges relating to the discontinuance of a product line, and higher consulting and professional services of $1.8 million. The increase in personnel expenses was partially offset by $2.5 million in restructuring expenses for the year ended December 31, 2022.
Previous report
Excluding acquisitions, we expect our operating expenditures to continue to increase in 2024 and beyond as we increase our investment in new and existing research and development projects, commercial efforts to support revenue growth and incentives to retain key talent. In addition, we expect increased legal costs in 2024 to support the protection of our intellectual property portfolio.
Previous report
Acquisition
Previous report
Critical Accounting Estimates
Reworded paragraphs (41)
Previous wording
We are a life sciences technology company focused on building innovative products and solutions to interrogate, understand and master biology. Our integrated solutions include instruments, consumables and software for analyzing biological systems at resolution and scale that matches the complexity of biology. We have launched multiple products that enable researchers to understand and interrogate biological analytes in their full biological context. Our commercial product portfolio leverages our Chromium X Series and Chromium Connect instruments, which we refer to as “Chromium instruments,” our Visium CytAssist, an instrument designed to simplify the Visium solution workflow by facilitating the transfer of transcriptomic probes from standard glass slides to Visium slides, and our Xenium Analyzer, an instrument designed for fully automated high-throughput analysis of cells in their tissue environment, which we refer to as “Spatial instruments,” and our proprietary microfluidic chips, slides, reagents and other consumables for our Chromium, Visium and Xenium solutions, which we refer to as “consumables.” We bundle our software with these products to guide customers through the workflow, from sample preparation through analysis and visualization.
Current wording
We are a life sciences technology company focused on building innovative products and solutions to interrogate, understand and master biology. Our integrated solutions include instruments, consumables and software for analyzing biological systems at resolution and scale that matches the complexity of biology. Our commercial product portfolio leverages our Chromium instruments and our Visium CytAssist and our Xenium Analyzer, which we refer to as “Spatial instruments,” and our proprietary microfluidic chips, slides, reagents and other consumables for our Chromium, Visium and Xenium solutions, which we refer to as “consumables.” We bundle our software with these products to guide customers through the workflow, from sample preparation through analysis and visualization. Customers purchase instruments and consumables from us for use in their experiments. In addition to instrument and consumable sales, we derive revenue from post-warranty service contracts for our instruments.
Previous wording
Since our inception in 2012, we have incurred net losses in each year. Our net losses were $255.1 million and $166.0 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $1.3 billion and cash and cash equivalents and marketable securities totaling $388.7 million. We expect to continue to incur significant expenses for the foreseeable future and to incur operating losses in the near term. We expect our expenses will increase in connection with our ongoing activities, as we:
Current wording
Since our inception in 2012, we have incurred net losses in each year. Our net losses were $182.6 million and $255.1 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $1.5 billion and cash and cash equivalents and marketable securities totaling $393.4 million. We expect to continue to incur significant expenses for the foreseeable future and to incur operating losses in the near term. We expect our expenses will modestly increase in connection with our ongoing activities, including in connection with our efforts to attract, hire and retain qualified personnel.
Previous wording
We regularly review a number of operating and financial metrics, including cumulative instruments sold and total consumables reactions, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We believe that these metrics are representative of our current business; however, we anticipate these may change or may be substituted for additional or different metrics as our business grows and as we introduce new products.
Current wording
We regularly review a number of operating and financial metrics, including cumulative instruments sold and total consumables reactions, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We believe that these metrics are representative of our current business; however, we anticipate these may change or may be substituted for additional or different metrics as our business grows and as we introduce new products or new versions of existing products.
Previous wording
Our products are sold to academic and translational researchers and biopharmaceutical companies. Our Chromium Controller, Chromium X Series and Visium CytAssist instruments are user installable and do not require in-person training. Our Chromium Connect and Xenium instruments require installation and we offer in-person training for their use. We believe cumulative instruments sold is one of the indicators of our ability to drive customer adoption of our products. We define cumulative instruments sold as the cumulative number of Chromium instruments, including the Chromium X Series, the Chromium Connect and the legacy Chromium Controller, Visium CytAssist instruments and Xenium instruments sold since inception.
Current wording
Our products are sold to academic and translational researchers and biopharmaceutical companies. Our Chromium and Visium CytAssist instruments are user installable and do not require in-person training. Our Xenium instrument requires installation and we offer in-person training for its use. We believe cumulative instruments sold is one of the indicators of our ability to drive customer adoption of our products. We define cumulative instruments sold as the cumulative number of Chromium instruments, Visium CytAssists and Xenium Analyzers sold since inception.
Previous wording
Our quarterly instrument unit volumes can fluctuate due to a number of factors, including the procurement and budgeting cycles of many of our customers, especially government and academic institutions where unused funds may be forfeited or future budgets reduced if purchases are not made by their fiscal year end, and the purchasing patterns of international customers which vary due to procurement or budgeting cycles, holidays or other factors which may result in a disproportionate amount of their purchasing activity occurring in specific periods. Similarly, our biopharmaceutical customers typically have calendar year fiscal years which may result in a disproportionate amount of their purchasing activity occurring during our fourth quarter. We also believe the timing of unit sales has been impacted and will continue to be impacted by the timing of product introductions and transitions which can either accelerate or delay demand of existing and new products depending on the needs of individual researchers to conclude existing studies or to use new and improved product capabilities. Also, the timing of our price increases, typically at the beginning of a new calendar year, can pull forward additional volume to the quarter before. We therefore believe that an annual representation of cumulative instruments sold is most appropriate for assessing trends in our business.
Current wording
Our quarterly instrument unit volumes can fluctuate due to a number of factors, including the procurement and budgeting cycles of many of our customers, especially government and academic institutions where unused funds may be forfeited or future budgets reduced if purchases are not made by their fiscal year end, and the purchasing patterns of international customers which vary due to procurement or budgeting cycles, holidays or other factors which may result in a disproportionate amount of their purchasing activity occurring in specific periods. Similarly, our biopharmaceutical customers typically have calendar year fiscal years which may result in a disproportionate amount of their purchasing activity occurring during our fourth quarter. We also believe the timing of unit sales has been impacted and will continue to be impacted by the timing of product introductions and transitions which can either accelerate or delay demand of existing and new products or new versions of existing products depending on the needs of individual researchers to conclude existing studies or to use capabilities of new products or versions. Also, the timing and magnitude of our price changes can influence quarterly instrument unit volumes. For example, we believe that historical announcements of price increases have caused customers to pull forward purchases of instruments. Conversely, we anticipate that announced price decreases could postpone instrument purchases to future quarters. We therefore believe that an annual representation of cumulative instruments sold is most appropriate for assessing trends in our business.
Previous wording
A consumable reaction is the reagent setup needed to perform an experiment using one of our solutions. Reactions represent the unit volumes that we sell when a researcher purchases our consumables. As such, consumable reactions sold is an appropriate metric for assessing trends in our business. The figures in the table above (rounded to the nearest hundred) represent the total consumable reactions for the years ended December 31, 2023 and 2022.
Current wording
A consumable reaction is the reagent setup needed to perform an experiment using one of our solutions. Reactions represent the unit volumes that we sell when a researcher purchases our consumables. As such, consumable reactions sold is an appropriate metric for assessing trends in our business. The figures in the table above (rounded to the nearest hundred) represent the total consumable reactions, by product platform and in total, for the years ended December 31, 2024, 2023 and 2022.
Previous wording
We believe that our financial performance has been and in the foreseeable future will continue to be primarily driven by the following factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations. Our ability to successfully address the factors below is subject to various risks and uncertainties, including those described under the heading “Risk Factors.”
Current wording
We believe that our financial performance has been and in the foreseeable future will continue to be primarily driven by the following factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to grow and improve our results of operations. Our ability to successfully address the factors below is subject to various risks and uncertainties, including those described under the heading “Risk Factors.”
Previous wording
Management focuses on instrument sales as an indicator of current business success and a leading indicator of likely future sales of consumables. We expect our instrument sales to continue to grow as we increase penetration in our existing markets and expand into, or offer new features and solutions that appeal to, new markets.
Current wording
Management focuses on instrument sales as an indicator of current business success and a leading indicator of likely future sales of consumables. We expect the number of cumulative instruments sold to continue to grow as we increase penetration in our existing markets and expand into, or offer new features and solutions that appeal to, new markets.
Previous wording
We plan to grow our instrument sales in the coming years through multiple strategies including expanding our sales efforts globally and continuing to enhance the underlying technology and applications for life sciences research. We regularly solicit feedback from our customers and focus our research and development efforts on enhancing the fleet of 10x instruments and enabling their ability to use additional applications that address their needs, which we believe in turn helps to drive additional sales of our instruments and consumables. In 2020, we introduced our Chromium Connect instrument, which is an automated version of our legacy Chromium Controller instrument. In 2021, we introduced our Chromium X Series which consists of the Chromium X, a high-throughput instrument to deliver routine million cell experiments, and the Chromium iX, an instrument capable of running experiments for tens of thousands of cells seamlessly upgradable to the Chromium X as scientists expand their research projects. In 2022, we introduced our Visium CytAssist instrument, which streamlines the workflow of our Visium Spatial assays, and our Xenium Analyzer instrument, which is designed for fully automated high-throughput analysis of cells in their tissue environment.
Current wording
We plan to grow our instrument sales in the coming years through multiple strategies including expanding our sales efforts globally, adjusting prices for our instruments and continuing to enhance the underlying technology and applications for life sciences research. We regularly solicit feedback from our customers and focus our research and development efforts on enhancing the fleet of 10x instruments and enabling their ability to use additional applications that address their needs, and we believe that these efforts help to drive sales of our instruments and consumables.
Previous wording
We regularly assess trends relating to recurring consumable revenue based on our product offerings, our customer base and our understanding of how our customers use our products. We sell additional instruments and launch additional consumables solutions, some of which do not require the use of a 10x instrument, to drive increased consumables usage by our existing customers and to gain new customers. Consumables revenue on an absolute basis is expected to increase over time and remain the bulk of our revenue.
Current wording
We regularly assess trends relating to recurring consumable revenue based on our product offerings, our customer base and our understanding of how our customers use our products. We sell additional instruments and launch additional consumables solutions, some of which do not require the use of a 10x instrument, and adjust prices of our consumables to drive increased consumables usage by our existing customers and to gain new customers. Consumables revenue on an absolute basis is expected to increase over time and remain the bulk of our revenue.
Previous wording
Our revenue is derived from sales of our instruments, consumables and services. There have been fluctuations in the mix between instruments and consumables and amongst our consumables. Each of our consumables solutions is designed to allow researchers to study a different aspect of biology, such as DNA, RNA, protein or epigenetics, at a resolution and scale that may be impractical or impossible using previously existing tools. As each of our solutions has been introduced, they have been initially purchased by a small number of early adopters. As these early adopters successfully perform experiments and publish scientific articles using our solutions, the utility of these solutions is more broadly understood and the solutions are then subsequently adopted by the larger research community. The revenue contribution from these and other consumable products has varied and is expected to vary on a quarterly basis due to several factors, including the publication of scientific papers demonstrating the value of the consumables, the availability of grants to fund research, budgetary timing, our introduction of new product features and new consumables offerings and our own manufacturing capacity or the capacity of our partners.
Current wording
Our revenue is derived from sales of our instruments, consumables and services. There have been fluctuations in the mix between instruments and consumables and amongst our consumables. Each of our consumables solutions is designed to allow researchers to study a different aspect of biology, such as RNA, protein or epigenetics, at a resolution and scale that may be impractical or impossible using previously existing tools. As each of our solutions has been introduced, they have been initially purchased by a small number of early adopters. As these early adopters successfully perform experiments and publish scientific articles using our solutions, the utility of these solutions is more broadly understood and the solutions are then subsequently adopted by the larger research community. The revenue contribution from these and other consumable products has varied and is expected to vary on a quarterly basis due to several factors, including the publication of scientific papers demonstrating the value of the consumables, the availability of grants to fund research, budgetary timing, our introduction of new product features or configurations and new consumables offerings and our own manufacturing capacity or the capacity of our partners. For each of the years ended December 31, 2024, 2023 and 2022, our Chromium Universal Gene Expression consumables were our highest selling consumables products.
Previous wording
Our margins are generally higher for those instruments and consumables that we sell directly to customers as compared to those that we sell through distributors. While we expect the mix of direct sales as compared to sales through distributors to remain relatively constant in the near term, we are evaluating increasing our direct sales capabilities in certain geographies.
Current wording
Our margins are generally higher for those instruments and consumables that we sell directly to customers as compared to those that we sell through distributors. We expect the mix of direct sales as compared to sales through distributors to remain relatively constant in the near term.
Previous wording
We expect our gross margin will continue to trend lower due in part to change in product mix with newly introduced products, the impacts of inflation including, among other impacts, employee compensation and benefits, increased supply chain costs and increased costs due to expanding our operations infrastructure. In particular, the Xenium instrument currently carries a significantly lower margin than our other instruments. We believe that potential increases for average selling price, as well as potential opportunities for cost reductions due to economies of scale will improve instrument margin over the long term.
Current wording
We expect our gross margin to trend lower due in part to change in product mix with newly introduced products and product versions, lower prices of our products and the impacts of inflation including, among other impacts, employee compensation and benefits and increased supply chain costs.
Previous wording
We have invested, and will continue to invest, in our manufacturing capabilities and commercial infrastructure. We completed the expansion of our research and development center and manufacturing facility adjacent to our Pleasanton global headquarters in 2023. Excluding acquisitions, we expect our operating expenditures to continue to increase in 2024 and beyond as we increase our investment in new and existing research and development projects, increase commercial efforts to support revenue growth and incentives to retain key talent. In addition, we expect increased legal costs in 2024 to support the protection of our intellectual property portfolio. As cost of revenue, operating expenses and capital expenditures fluctuate over time, we may experience short-term, negative impacts to our results of operations and cash flows, but we are undertaking such investments in the belief that they will contribute to long-term growth.
Current wording
Historically, our revenue growth has been driven by the development of new solutions and quick adoption of our solutions by our customer base. We intend to continue to make focused investments to support the growth of our business and therefore expect expenses to increase. Excluding acquisitions, we do not expect our operating expenditures to meaningfully increase in 2025. As cost of revenue, operating expenses and capital expenditures fluctuate over time, we may experience short-term, negative impacts to our results of operations and cash flows, but we are undertaking such investments in the belief that they will contribute to long-term growth.
Previous wording
We have made, and intend to continue to make, investments that meet management’s criteria to expand or add key technologies that we believe will facilitate the commercialization of new products in the future. Such investments could take the form of an acquisition of a business, asset acquisition or the exclusive or non-exclusive in-license of intellectual property rights. Any such acquisitions we make may affect our future financial results. Our 2023 acquisition of certain intangible and other assets from Centrillion Technologies, Inc. and Centrillion Technology Holdings Corp. and 2020 acquisitions of CartaNA and ReadCoor were largely comprised of purchases of intellectual property which were expensed as in-process research and development in the quarter during which such acquisitions occurred or when certain technology development milestones were met. While we have not previously entered into material joint-development, partnership or joint-venture agreements, we may in the future decide to do so and any such arrangements may limit our rights and the commercial opportunities of any jointly developed technology.
Current wording
We have made, and intend to continue to make, investments that meet management’s criteria to expand or add key technologies that we believe will facilitate the commercialization of new products and new versions of existing products in the future. Such investments could take the form of an acquisition of a business, asset acquisition or the exclusive or non-exclusive in-license of intellectual property rights. Any such acquisitions we make may affect our future financial results. While we have not previously entered into material joint-development, partnership or joint-venture agreements, we may in the future decide to do so and any such arrangements may limit our rights and the commercial opportunities of any jointly developed technology.
Previous wording
Our revenue from consumables includes sales of our Chromium, Visium and Xenium consumable products. Our consumables are designed to work exclusively with our instruments. Our Chromium, Xenium and Visium Spatial Proteogenomics consumables require the use of a 10x Genomics instrument, while use of a 10x instrument is optional for our Visium Spatial Gene Expression solution. Our instruments and consumables are generally sold without the right of return. Revenue is recognized as instruments and consumables are shipped. Revenue is recognized net of any sales incentive, distributor rebates and commissions and any taxes collected from customers. Instrument service agreements are typically entered into for a one-year term, with the coverage period beginning after the expiration of the standard one-year warranty period. Revenue from the sale of instrument service agreements are recognized ratably over the coverage period.
Current wording
Our revenue from consumables includes sales of our Chromium, Visium and Xenium consumable products. Our consumables are designed to work exclusively with our instruments. Our Chromium, Xenium and Visium consumables require the use of a 10x Genomics instrument, with the exception of our Spatial Gene Expression v1 solution. Our instruments and consumables are generally sold without the right of return. Revenue is recognized as instruments and consumables are shipped. Revenue is recognized net of any sales incentive, distributor rebates and commissions and any taxes collected from customers. Instrument service agreements are typically entered into for a one-year term, with the coverage period beginning after the expiration of the standard one-year warranty period. Revenue from the sale of instrument service agreements are recognized ratably over the coverage period.
Previous wording
Cost of revenue. Cost of revenue primarily consists of manufacturing costs incurred in the production process including personnel and related costs, costs of component materials, manufacturing overhead, packaging and delivery costs and allocated costs including facilities and information technology. In addition, cost of revenue includes royalty costs for licensed technologies included in our products, warranty costs, provisions for slow-moving and obsolete inventory and personnel and related costs and component costs incurred in connection with our obligations under our instrument service agreements. We record royalty accruals relating to sales of majority of our products as cost of revenue.
Current wording
Cost of revenue. Cost of revenue primarily consists of manufacturing costs incurred in the production process including personnel and related costs, costs of component materials, manufacturing overhead, packaging and delivery costs and allocated costs including facilities and information technology. In addition, cost of revenue includes royalty costs for licensed technologies included in our products, warranty costs, provisions for slow-moving and obsolete inventory and personnel and related costs and component costs incurred in connection with our obligations under our instrument service agreements. When applicable, we record royalty accruals relating to sales of our products as cost of revenue.
Previous wording
Gross profit/gross margin. Gross profit is calculated as revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross profit and gross margins in future periods are expected to fluctuate from quarter to quarter and will depend on a variety of factors, including: market conditions that may impact our pricing; sales mix changes among consumables, instruments and services; product mix changes between established products and new products; impacts of inflation and increased supply chain costs; excess and obsolete inventories; royalties; our cost structure for manufacturing operations relative to volume; and product warranty obligations. We currently anticipate that we will experience an increase in absolute dollars of both revenue and cost of revenue as we grow our business.
Current wording
Gross profit/gross margin. Gross profit is calculated as revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross profit and gross margins in future periods are expected to fluctuate from quarter to quarter and will depend on a variety of factors, including: market conditions that may impact our pricing; sales mix changes among consumables, instruments and services; product mix changes between established products and new products and new versions of existing products; impacts of inflation and increased supply chain costs; excess and obsolete inventories; royalties; our cost structure for manufacturing operations relative to volume; and product warranty obligations. We currently anticipate that we will experience an increase in absolute dollars of both revenue and cost of revenue as we grow our business.
Previous wording
We plan to continue to invest in our research and development efforts to enhance existing products and develop new products. As a result of these and other initiatives, we expect research and development expense will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue. Having completed the expansion of our global headquarters in Pleasanton in 2023, we expect allocated facilities and information technology costs to remain relatively flat in 2024.
Current wording
We plan to continue to modestly invest in our research and development efforts to enhance existing products and develop new products and new versions of existing products. As a result of these and other initiatives, we expect research and development expense will modestly increase in absolute dollars in future periods and vary from period to period as a percentage of revenue.
Previous wording
Selling, general and administrative. Selling, general and administrative expense primarily consists of costs related to the selling and marketing of our products, including sales incentives and advertising expenses and costs associated with our finance, accounting, legal (excluding accrued contingent liabilities), human resources and administrative personnel. Related costs associated with these functions, such as attorney and accounting fees, recruiting services, administrative services, insurance, public relations and communication activities, marketing programs and trade show appearances, travel, customer service costs, safety equipment purchases and cleaning and allocated costs including facilities and information technology, are also included in selling, general and administrative expenses.
Current wording
Selling, general and administrative. Selling, general and administrative expense primarily consists of costs related to the selling and marketing of our products, including sales incentives and advertising expenses and costs associated with our finance, accounting, legal, human resources and administrative personnel. Related costs associated with these functions, such as attorney and accounting fees, recruiting services, administrative services, insurance, public relations and communication activities, marketing programs and trade show appearances, travel, customer service costs, safety equipment purchases and cleaning and allocated costs including facilities and information technology, are also included in selling, general and administrative expenses.
Previous wording
We expect to incur additional selling, general and administrative expenses due to continued investment in our sales, marketing and customer service efforts to support the anticipated growth of our business and increased legal costs to support the protection of our intellectual property portfolio. We expect infrastructure costs including allocated facilities and information technology costs to remain flat in absolute dollars. As a result of these and other initiatives, we expect selling, general and administrative expenses to vary from period to period as a percentage of revenue and increase in absolute dollars in future periods. We expect our stock-based compensation expense allocated to cost of revenue, research and development expenses and selling, general and administrative expenses to increase in absolute dollars.
Current wording
We expect to incur additional selling, general and administrative expenses due to continued investment in our sales, marketing and customer service efforts to support the anticipated growth of our business. We expect infrastructure costs including allocated facilities and information technology costs to remain flat in absolute dollars. As a result of these and other initiatives, we expect selling, general and administrative expenses to vary from period to period as a percentage of revenue and increase in absolute dollars in future periods. We expect our stock-based compensation expense allocated to cost of revenue, research and development expenses and selling, general and administrative expenses to decrease in absolute dollars.
Previous wording
As of December 31, 2023, we had federal net operating loss (“NOL”) carryforwards of $672.3 million and federal tax credit carryforwards of $77.3 million. Our federal NOLs generated after December 31, 2017, which total $665.9 million, are carried forward indefinitely, while all of our other federal NOL and tax credit carryforwards expire beginning in 2033. As of December 31, 2023, we had state NOL carryforwards of $412.2 million, which expire beginning in 2033. In addition, we had state tax credit carryforwards of $58.5 million, which carry forward indefinitely. Our ability to utilize such carryforwards for income tax savings is subject to certain conditions and may be subject to certain limitations in the future due to ownership changes. As such, there can be no assurance that we will be able to utilize such carryforwards. We have experienced a history of losses and a lack of future taxable income would adversely affect our ability to utilize these NOL and tax credit carryforwards. We currently maintain a full valuation allowance against these tax assets.
Current wording
As of December 31, 2024, we had federal net operating loss (“NOL”) carryforwards of $638.7 million and federal tax credit carryforwards of $88.5 million. Our federal NOLs generated after December 31, 2017, which total $632.9 million, are carried forward indefinitely, while all of our other federal NOL and tax credit carryforwards expire beginning in 2033. As of December 31, 2024, we had state NOL carryforwards of $424.5 million, which primarily expire beginning in 2033. In addition, we had state tax credit carryforwards of $68.3 million, which carry forward indefinitely. Our ability to utilize such carryforwards for income tax savings is subject to certain conditions and may be subject to certain limitations in the future due to ownership changes. As such, there can be no assurance that we will be able to utilize such carryforwards. We have experienced a history of losses and a lack of future taxable income would adversely affect our ability to utilize these NOL and tax credit carryforwards. We currently maintain a full valuation allowance against these tax assets.
Previous wording
Revenue increased $102.3 million, or 20%, for the year ended December 31, 2023 as compared to year ended December 31, 2022. Instruments revenue increased $51.1 million, or 71%, to $123.5 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to higher volume of Spatial instruments sold. The revenues for the years ended December 31, 2023 and 2022 included twelve and three months of sales of Xenium instruments, respectively. Chromium instruments revenue decreased $10.7 million, or 18%, to $47.9 million primarily due to lower volume of Chromium instruments sold and changes in product mix. Consumables revenue increased $44.0 million, or 10%, to $479.6 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily driven by growth in both Chromium and Spatial consumables sales.
Current wording
Revenue decreased $7.9 million, or 1%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Instruments revenue decreased $30.8 million, or 25%, to $92.7 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to lower volume of Chromium and Spatial instruments sold. Consumables revenue increased $13.9 million, or 3%, to $493.4 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by growth in Spatial consumables sales, partially offset by lower Chromium consumables sales due primarily to price decreases and changes in product mix. Service revenue increased $8.9 million, or 57%, for the year ended December 31, 2024 as compared to year ended December 31, 2023, primarily driven by increased service plans for both Chromium and Spatial instruments.
Previous wording
Research and development expense increased $4.7 million, or 2%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was primarily driven by an increase in personnel expenses of $15.0 million, including $13.6 million in stock-based compensation expense and higher costs for facilities and information technology of $4.6 million including a lease impairment charge of $2.1 million. The increase was partially offset by lower costs of laboratory materials, supplies and expensed equipment of $13.7 million used to support our research and development efforts and $2.0 million in consulting and professional services.
Current wording
Research and development expense decreased $5.6 million, or 2%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The decrease was primarily driven by a decrease in allocated costs for facilities and information technology of $2.7 million, a decrease in personnel expenses of $2.5 million, including a $6.5 million reduction in stock-based compensation expense, a decrease in depreciation and amortization of $1.4 million, partially offset by an increase in other expenses of $0.8 million.
Previous wording
Interest income increased by $10.3 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was primarily due to interest income generated from our cash equivalents and marketable securities during the year ended December 31, 2023 reflecting an increase in interest rates.
Current wording
Interest income increased by $1.5 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase was primarily due to interest income generated from our investments in marketable securities and an increase in interest rates during the year ended December 31, 2024.
Previous wording
Other expense, net increased by $0.1 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022 and was driven by realized and unrealized losses from foreign currency rate measurement fluctuations.
Current wording
Other expense, net increased by $1.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023 and was driven by realized and unrealized losses from foreign currency rate measurement fluctuations.
Previous wording
The Company’s provision for income taxes was $6.3 million and $4.0 million, respectively, for the year ended December 31, 2023 and 2022. The provision for income taxes increased by $2.3 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was primarily due to higher foreign income.
Current wording
The Company’s provision for income taxes was $4.9 million and $6.3 million, respectively, for the years ended December 31, 2024 and 2023. The provision for income taxes decreased by $1.4 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The decrease was primarily due to lower foreign income.
Previous wording
As of December 31, 2023, we had approximately $388.7 million in cash and cash equivalents, and marketable securities which were primarily held in U.S. banks. We have generated negative cumulative cash flows from operations since inception through the year ended December 31, 2023, and we have generated losses from operations since inception as reflected in our accumulated deficit of $1.3 billion.
Current wording
As of December 31, 2024, we had approximately $393.4 million in cash and cash equivalents, and marketable securities which were primarily held in U.S. banks. We have generated negative cumulative cash flows from operations since inception through the year ended December 31, 2024, and we have generated losses from operations since inception as reflected in our accumulated deficit of $1.5 billion.
Previous wording
We currently anticipate making aggregate capital expenditures of between approximately $20 million and $25 million during the next 12 months, which we expect to include, among other expenditures, equipment to be used for manufacturing and research and development.
Current wording
We currently anticipate making aggregate capital expenditures of between approximately $12 million and $17 million during the next 12 months, which we expect to include, among other expenditures, equipment to be used for manufacturing and research and development.
Previous wording
Our future capital requirements will depend on many factors including our revenue growth rate, research and development efforts, investments in or acquisitions of complementary or enhancing technologies or businesses, the timing and extent of additional capital expenditures to invest in existing and new facilities, the expansion of sales and marketing and international activities, legal costs associated with defending and enforcing intellectual property rights and the introduction of new products.
Current wording
Our future capital requirements will depend on many factors including our revenue growth rate, research and development efforts, investments in or acquisitions of complementary or enhancing technologies or businesses, the timing and extent of additional capital expenditures to invest in existing and new facilities, the expansion of sales and marketing and international activities, legal costs associated with defending and enforcing intellectual property rights and the introduction of new products and new versions of existing products.
Previous wording
We take a long-term view in growing and scaling our business and we regularly review acquisition and investment opportunities, and we may in the future enter into arrangements to acquire or invest in businesses, real estate, services and technologies, including intellectual property rights, and any such acquisitions or investments could significantly increase our capital needs. We regularly review opportunities that meet our long-term growth objectives.
Current wording
We take a long-term view in growing and scaling our business and we regularly review acquisition and investment opportunities, and we may in the future enter into arrangements to acquire or invest in businesses, services and technologies, including intellectual property rights, and any such acquisitions or investments could significantly increase our capital needs. We regularly review opportunities that meet our long-term growth objectives.
Previous wording
In January 2023, we signed an agreement to acquire certain intangible and other assets from Centrillion Technologies, Inc. and Centrillion Technology Holdings Corp. for an upfront cash payment of $10.0 million relating to an intellectual property license. Upon the close of the transaction on July 14, 2023, we paid additional cash consideration of $10.0 million upon acquiring the assets. Under the agreement, we are obligated to provide additional cash consideration if certain technology development milestones are met. As of December 31, 2023, we have paid $21.3 million relating to the completion of development milestones. We paid an additional $20.0 million in January 2024 in relation to a development milestone which was accrued in our consolidated financial statements as of December 31, 2023. Up to $15.0 million of cash consideration is due if an additional technology development milestone is met. Furthermore, we expect to pay cash consideration tied to future sales milestones if such milestones are met.
Current wording
In January 2023, we signed an agreement to acquire certain intangible and other assets from Centrillion Technologies, Inc. and Centrillion Technology Holdings Corp. for an upfront cash payment of $10.0 million relating to an intellectual property license. Upon the close of the transaction on July 14, 2023, we paid additional cash consideration of $10.0 million upon acquiring the assets. Under the agreement, we are obligated to provide additional cash consideration if certain technology development milestones are met. As of December 31, 2024, we have paid $41.3 million relating to the completion of development milestones. Up to $15.0 million of cash consideration is due if an additional technology development milestone is met. Furthermore, we expect to pay cash consideration tied to future sales milestones if such milestones are met.
Previous wording
The net cash used in operating activities of $33.6 million for the year ended December 31, 2022 was due primarily to a net loss of $166.0 million, net cash outflow from changes in operating assets and liabilities of $39.4 million, partially offset by stock-based compensation expense of $136.8 million, depreciation and amortization of $25.4 million, amortization of leased right-of-use assets of $7.6 million, loss on disposal of property and equipment of $1.1 million and amortization of premium and accretion of discount on marketable securities, net of $0.9 million. The net cash outflow from operating assets and liabilities was primarily due to an increase in inventory of $21.2 million due to anticipated demand including new product introductions and supply chain management, an increase in accounts receivable of $18.9 million primarily due to increase in revenue and timing of collections, a decrease of $6.4 million due to payment of operating lease liabilities, an increase in prepaid expenses and other current assets of $4.5 million and a decrease in other noncurrent liabilities of $2.9 million. The net cash outflow from operating assets and liabilities was partially offset by an increase in accounts payable of $5.9 million due to timing of vendor payments, an increase in deferred revenue of $3.4 million, an increase in accrued expenses and other current liabilities of $3.3 million, an increase in accrued compensation and other related benefits of $1.1 million and a decrease in other noncurrent assets of $0.9 million.
Current wording
The net cash provided by operating activities of $6.7 million for the year ended December 31, 2024 was due primarily to a net loss of $182.6 million, partially offset by stock-based compensation expense of $140.7 million, depreciation and amortization of $35.9 million, net cash inflow from changes in operating assets and liabilities of $1.3 million, lease and asset impairment charges of $3.1 million, amortization of leased right-of-use assets of $7.8 million, and other non-cash expenses of $0.5 million. The net cash inflow from operating assets and liabilities was primarily due to a decrease in accounts receivable of $27.0 million primarily due to reduced revenue, an increase in deferred revenue of $11.2 million, an increase in accrued compensation and other related benefits of $3.7 million, and an increase in other noncurrent liabilities of $0.8 million. The net cash inflow from operating assets and liabilities was partially offset by a decrease in accrued expenses and other current liabilities of $12.7 million, a decrease of $12.5 million due to payment of operating lease liabilities, an increase in inventory of $9.8 million, a decrease in accounts payable of $3.4 million due to timing of vendor payments, an increase in prepaid expenses and other current assets of $1.9 million, and an increase in other noncurrent assets of $1.1 million.
Previous wording
The net cash used in investing activities of $350.9 million in the year ended December 31, 2022 was due to purchases of marketable securities of $282.9 million, purchases of property and equipment of $131.7 million and payment of acquisition-related holdback cash and contingent consideration of $4.0 million, partially offset by proceeds from sales and maturities of marketable securities of $49.1 million and $18.5 million, respectively.
Current wording
The net cash used in investing activities of $32.6 million in the year ended December 31, 2024 was due to the purchase of marketable securities of $48.9 million, purchases of property and equipment and intangible assets of $12.4 million and $1.0 million, respectively, partially offset by the proceeds from sales and maturities of marketable securities of $3.9 million and $25.8 million, respectively.
Previous wording
The net cash provided by financing activities of $15.8 million in the year ended December 31, 2022 was primarily from proceeds of $21.2 million from the issuance of common stock from the exercise of stock options and employee stock purchase plan purchases partially offset by payments on financing arrangements of $5.4 million.
Current wording
The net cash provided by financing activities of $10.9 million in the year ended December 31, 2024 was primarily from proceeds of $10.9 million from the issuance of common stock from the exercise of stock options and employee stock purchase plan purchases.
Previous wording
Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report are prepared in accordance with GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.
Current wording
Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report are prepared in accordance with GAAP. We believe that our accounting policies related to revenue recognition are important in understanding our consolidated financial position and results of operations. The other accounting policies and estimates below also involve a significant degree of judgment and complexity. The preparation of consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.
Previous wording
We believe that the accounting estimates described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information, see Note 2 of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Current wording
For further information, see Note 2 of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Previous wording
We regularly enter into contracts that include various combinations of products and services which are generally distinct and accounted for as separate performance obligations. The transaction price is allocated to each performance obligation in proportion to its standalone selling price. We determine standalone selling price using average selling prices with consideration of current market conditions. If the product or service has no history of sales or if the sales volume is not sufficient, we rely upon prices set by management, adjusted for applicable discounts.
Current wording
We regularly enter into contracts that include various combinations of products and services which are generally distinct and accounted for as separate performance obligations. The recognition of revenue can be complex due to the volume of sales transactions including multiple performance obligations. The transaction price is allocated to each performance obligation in proportion to its standalone selling price. We determine standalone selling price using average selling prices with consideration of current market conditions. If the product or service has no history of sales or if the sales volume is not sufficient, we rely upon prices set by management, adjusted for applicable discounts.
Previous wording
Inventory is recorded at the lower of cost, determined on a first-in, first-out basis, or net realizable value. We use judgment to analyze and determine if the composition of our inventory is obsolete, slow-moving, unsalable or otherwise carried above the net realizable value and frequently review such determinations. We write down specifically identified unusable, obsolete, slow-moving or known unsalable inventory and inventory otherwise carried above the net realizable value in the period that it is first recognized by using a number of factors including product expiration dates, open and unfulfilled orders and sales forecasts. Any write-down of inventory to net realizable value establishes a new cost basis and will be maintained even if certain circumstances suggest that the inventory is recoverable in subsequent periods. Costs associated with the write-down of inventory are recorded to cost of revenue on our consolidated statements of operations. We make assumptions about future demand, market conditions and the release of new products that may supersede old ones. However, if actual market conditions are less favorable than anticipated, additional inventory write-downs could be required.
Current wording
Inventory is recorded at the lower of cost, determined on a first-in, first-out basis, or net realizable value. We use judgment to analyze and determine if the composition of our inventory is obsolete, slow-moving, unsalable or otherwise carried above the net realizable value and frequently review such determinations. We write down specifically identified unusable, obsolete, slow-moving or known unsalable inventory and inventory otherwise carried above the net realizable value in the period that it is first recognized by using a number of factors including product expiration dates, open and unfulfilled orders and sales forecasts. Any write-down of inventory to net realizable value establishes a new cost basis and will be maintained even if certain circumstances suggest that the inventory is recoverable in subsequent periods. Costs associated with the write-down of inventory are recorded to cost of revenue on our consolidated statements of operations. We make assumptions about future demand, market conditions and the release of new products and new versions of existing products that may supersede old ones. However, if actual market conditions are less favorable than anticipated, additional inventory write-downs could be required. For example, we recorded charges of $11.3 million and $7.8 million in the years ended December 31, 2024 and 2023, respectively, related to excess and obsolete inventory.
Previous wording
Our stock-based compensation relates to stock options, restricted stock units (“RSUs”), market-based performance stock awards ("PSAs") including performance stock options and performance RSUs granted pursuant to equity incentive plans and stock purchase rights under an Employee Stock Purchase Plan (“ESPP”). Stock-based compensation expense for stock-based awards are based on their grant date fair value. We determine the fair value of RSUs based on the closing price of our stock price, which is listed on Nasdaq Stock Market LLC, at the date of the grant. We estimate the fair value of stock option awards under an equity incentive plan and stock purchase right under an ESPP on the grant date using the Black-Scholes option-pricing model. The fair values of stock-based awards, excluding PSAs, are recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are recognized as they occur.
Current wording
Our stock-based compensation relates to stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), market-based performance stock awards ("PSAs") including performance stock options and performance RSUs granted pursuant to equity incentive plans, and stock purchase rights under an Employee Stock Purchase Plan (“ESPP”). Stock-based compensation expense for stock-based awards are based on their grant date fair value. We determine the fair value of RSUs based on the closing price of our stock price, which is listed on Nasdaq Stock Market LLC, at the date of the grant. We estimate the fair value of stock option awards under an equity incentive plan and stock purchase right under an ESPP on the grant date using the Black-Scholes option-pricing model. The fair values of stock-based awards, excluding PSAs, are recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are recognized as they occur.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Excluding acquisitions, we do not expect our operating expenditures to meaningfully increase in 2025.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Our products cover a wide variety of applications and allow researchers to analyze biological systems at fundamental resolutions and on massive scale, such as at the single cell level for millions of cells. Customers purchase instruments and consumables from us for use in their experiments. In addition to instrument and consumable sales, we derive revenue from post-warranty service contracts for our instruments.
Previous report — wording carried elsewhere
•attract, hire and retain qualified personnel;
Previous report — wording carried elsewhere
Our significant revenue growth has been driven by rapid innovation towards novel solutions that command price premiums and quick adoption of our solutions by our customer base. We intend to continue to make focused investments to increase revenue and scale operations to support the growth of our business and therefore expect expenses in this area to increase.
Previous report — wording carried elsewhere
On January 28, 2023, we signed an agreement to acquire certain intangible and other assets from Centrillion Technologies, Inc. and Centrillion Technology Holdings Corp. for an upfront cash payment of $10.0 million relating to an intellectual property license. Upon the close of the transaction on July 14, 2023, we paid additional cash consideration of $10.0 million upon acquiring the assets. Under the agreement, we are obligated to provide additional cash consideration if certain technology development milestones are met. As of December 31, 2023, we had paid $21.3 million relating to the completion of development milestones. We paid an additional $20.0 million in January 2024 in relation to a development milestone which was accrued in the Company's consolidated financial statements as of December 31, 2023. Up to $15.0 million of cash consideration is due if an additional technology development milestone is met. Furthermore, the Company expects to pay cash consideration tied to future sales milestones if such milestones are met. See Note 4 to the consolidated financial statements for further details.