Company: RPID
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001380106-25-000200
Chunk: 112

Company: RAPID MICRO BIOSYSTEMS, INC.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 3
Chunk 112
---
, personal care, cosmetics and food and beverage spaces, we have historically focused our selling efforts to pharmaceuticals manufacturers and specifically in North America, Europe and, to a lesser extent, Asia-Pacific. There can be no assurance that our distributor will be successful in achieving market penetration of our products in additional fields or geographies. Expanding the application of our products into such additional fields and geographies may introduce additional risks, including in respect of regulatory and compliance, as we seek to navigate and comply with laws and regulations applicable to such fields and territories. Any non-compliance by us or our distributor with applicable laws and regulations could lead to legal liabilities, financial penalties and reputational damage for us.

67

If we are unable to effectively manage these risks and uncertainties, our relationships with current and prospective collaborators may not deliver the expected benefits, and may also introduce risks that could adversely affect our business operations, financial condition, and results of operations.

Repair or replacement costs due to warranties we provide on our Growth Direct systems could have a material adverse effect on our business, financial condition and results of operations.

Our standard terms and conditions for customers generally provide for a one-year limited assurance warranty on Growth Direct systems, which is included in the sales price. Existing and future warranties place us at the risk of incurring future repair or replacement costs. We establish our accrual for estimated warranty expenses based on historical information, current cost data and future forecasts. We exercise judgment in determining the expected product warranty costs, using estimated material, labor and other costs. While we believe that historical experience provides a reliable basis for estimating such warranty cost, unforeseen quality issues or component failure rates could result in future costs in excess of such estimates. As of September 30, 2025, we had $0.4 million reserved for warranty costs. Substantial amounts of warranty claims could have a material adverse effect on our business, financial condition and results of operations.

Our insurance policies are expensive and protect us only from some business risks, which leaves us exposed to significant uninsured liabilities.

We do not carry insurance for all categories of risk that our business may encounter and our policies have limits and significant deductibles. Some of the policies we currently maintain include general liability, property, umbrella, cybersecurity, and directors’ and officers’ insurance.

Any additional product liability insurance coverage we acquire in the future, may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive and in the future we may not be able to maintain insurance coverage at a reasonable cost