All right. Hi, everybody. I'm Austin Moller. I'm the Aerospace and Defense Technology Analyst here at Canaccord Genuity. Today, we are joined by Kevin Knopp and Joe Griffith from 908 Devices. So, we are going to talk about mass spectrometers and why they're so important for military and law enforcement. So, I guess, just to start off, could you just give a brief overview of the company and talk about the company's transition from being a medical device business into the defense and public safety market.

Yeah, absolutely. Thanks so much for hosting us here today, Austin. I really appreciate the opportunity. Yeah, so 908 Devices is creating a category of handheld detection solutions aimed at public safety and defense customers, really geared towards chemical detection and drug detection applications specifically. So the fentanyl crisis, nitazines, xylozines, other compounds of the synthetic opioids, as well as toxic industrial chemicals, and having a complete suite of handheld devices to address those applications. From a medical device, as you put it, so 908 really is coming back to our roots a little bit here. So when we started the company in 2012, we built a handheld mass spec technology, which is taking a lab-grade technology of mass spec and taking it out of the lab and bringing it to the user that could have access at the point of need for immediate answers. And the pinnacle of that to us was a battery-powered, smallest that we could do at the time and developing a solution that didn't exist, new category. And we did so with purpose built for military and security applications. Now, you fast forward, that mass spec is a platform, and we continue to look through applied areas and markets as well as into life sciences. So when Austin's mentioning the medical devices, when we were at the throes of our IPO in 2020, we really were gearing up and launching products into the bioprocessing biopharma space. About 15 months ago, we've divested that business line, and now we're fully focused on the category of defining handheld detection for these public health, safety, and defense markets. So in many ways, coming back to our roots, an area that we know well, and an area that we've seen a lot of strong growth over those years. so how important is real-time chemical analysis for law enforcement given the extremely long wait times to get results from laboratories yeah it's so important because of that fact right so we serve law enforcement customers globally and we serve fire and hazmat customers globally speed is of essence to both categories starting with the the law enforcement side you're absolutely right. We work with customers that will tell us the backlog of their forensics labs using mass spec and other associated technologies in those labs can be six months or nine months. What that means in practice is in a law enforcement scenario, if someone is arrested, held, charged for a drug case, they may get released while waiting for those results. And then people are back on the street or not getting into therapy or getting other problems associated to it. So by using our technology, they're speeding it up. They're literally getting an immediate answer, maybe about 30 seconds or so, depending on our technology that we have. And they can use that as presumptive evidence in the case of many of our products approved by the state. And then they can use that for probable cause or for prosecution faster using those results. So time matters a lot. We work a lot with the Ohio Attorney General proving out this model. They've been strong supporters of this exact fact that their lab is backlogged. And in this way, they can triage it. They can move cases through faster. And then the same is true on the fire side, right? Answers matter quickly. So again, we're bringing more closer to lab-grade results right there in the field. So in the case of recent hazmat instances, Los Angeles, other areas where tanks were leaking, Having technology that can come in right away, identify and quantify an unknown gas and decide the hazard, what's around me for my community, the exposure to personnel, it's incredibly important to have speed.

Can you talk about some of the key differences in your product line between like the Viper MX908 and the new NearLab handheld device?

Yeah, very much. Happy to do so. On the top right of this slide behind us here is our flagship, and that's our MX908. That's our flagship device. We've got about 3,000 of those in the field in use across a lot of drug applications for Department of Corrections, a lot of applications for law enforcement, but also onto military and defense applications. So our flagship, it's our most sensitive device, measuring synthetic opioids through to chemical weapons through to nontraditional chemical agents. So it's a very high-sensitive, high-specific device. Below that, we would have our Viper product. So our Viper is our newest FTIR product. That product is a very unique product that takes three technologies into one box to do bulk chemical identification. So it takes a technology called FTIR and a technology called Raman, and it combines it with algorithms layer to give a very confidence-inspiring answer because you have two orthogonal approaches looking at that sample. From an analyte perspective, it can measure 38,000 different analytes and then provide that confirmatory result of a bulk ID. So geared really for customs agencies, ports of entry, hazmat teams, and users of that nature. And then the third product you mentioned is our newest product through acquisition. I brought one today. I'd be happy to show after as well. But this is our NearLab product. So this is also a bulk identification product where you just take this and you touch it against a potential counterfeit pill or a pile of a substance. And then there's about 400 different drug substances in here that it can ID in a few seconds. And it's all cloud connected through a subscription. It's the lowest price entry point of this product for us. And it's really meant for fast screening of routine police operations, police patrol operations on the drug detection side.

If anyone's got a bag of drugs, we can test it.

We can do it. We can do it.

Do you want to know what it is? So since we're on the point of the Neuralab handheld device, you recently completed this acquisition. Can you talk about how the Neuralab acquisition expands your TAM into Europe and other regions? And then how might the Neuralab product be cross-sold into the U.S. law enforcement market?

Yeah, absolutely. So the company has its origins at the University of Lausanne in Switzerland, a forensics institution very well respected across all of Europe. So a great beachhead for publications, acknowledgments across the scientific literature for supporting all of Europe. Great technology that's been vetted and validated. What they haven't had is a lot of exposure to the United States markets. And part of 908, we've talked already about our technology, and they're a very differentiated technology, but part of our, I would say, special sauce is really a rock star sales team that's coming to stride in these public safety markets and defense markets. And that means being able, at scale, to address those customers across law enforcement and fire emergency services. And that's exactly the playbook we used on a previous acquisition with RedWave, that we bring that platform of sales and marketing, we fill it with a new product that's very differentiated and bring it to our same customers. So that's exactly what we're doing with NearLab. So absolutely unlocking potential there and fitting right into the portfolio and being able to sell it as a complementary product. From the TAM side and SAM, we kind of look at it that it's about a $200 million market opportunity that is directly addressing today, part of a larger SAM that's in the, call it, $1.5 to $2 billion for all of the detection equipment, call it, in this space. But I think the really interesting thing to us is not just kind of the head-to-head competition that you might think from an analytical to analytical product or that user, but we do get very excited about some of the regulation tailwinds that we're seeing out there and there's there's some changes going on in in several states Colorado being one in about seven other states there's legislation that's changing on how those frontline police officers do screening of drugs today color metric kits are frequently used a color metric kit is is a great tool but But it's a small wet chemistry kit. So it's essentially, you pick out the right bag, you take the right ampule, you put in your substance, you break that, you shake it, and it might change a color. You have to worry about expiration dates, which kit did you use, did I use it correctly, did I interpret the results correctly, and oh, by the way, I might have consumed the sample. So the chain of custody, the chain of evidence, the concern that there can be false positives is causing many states to say that this is no longer allowed for arrest decisions. and we do see the near lab product opening and addressing that addressable market as well which we see is as meaningful and it's a little bit like we see some of the other public safety departments have public safety companies have done with a subscription model opening up product and opportunities across other sectors including body cameras and the like where you have a complete chain of evidence where you're you're observing a sample in our case you know who did that you know the audit trail of the results, you're housing those results for evidentiary purposes, and the whole thing has that chain of custody associated to it. So that's also part of the opportunity that we're excited about unlocking.

So what's the latest that you've heard about DHS funding from the big beautiful bill and then the new reconciliation 2.0 bill for DHS, and how might that translate into revenues for 908?

Yeah, for sure. So if I think of our product categories. We sell devices into state and local entities. We sell devices into federal and military customers in the U.S. and in the international equivalent. Now, a lot of our state and local customers use grant funding. They use grant funding to support the purchases of technology. A state, local enterprise, a city, municipality may use these grants. So as you mentioned, the flow of funding to these customers through that grant program is incredibly important and part of how we address that market. And there are absolutely some strong signals there, some strong movements by the federal government to ensure that those funds are available. So on the DHS side, with the one big beautiful bill, only about 60 percent of that allocation has made it to DHS. Part of DHS issues grants. There are grants, the UASI grants. There are other grants out of other parts of the federal government, including DOJ for the COPS grants, and also through the Office of National Drug Control Policy, there's grants for HIDA, which are the high-intensity drug task force. Very interesting data points on each of those, that there's a considerable amount of funding going to each of those. Recently, in June and July, each of those grant programs received large sums of money to re-up and make sure that there are opportunities for grants for these organizations. So if I think of Haida, they received the largest grant ever in June, which is about $277 million. If I think of the COPS program, it's in the $700 million. I believe about $400 million is specific more towards equipment. That's through DOJ. And if I think of UASI, that's another half a billion dollars or so of funding. And that they can use for equipment, they can use for vehicles, other apparatus that's required. And this administration has quite a priority on on fentanyl and um the border crisis so yes all of that funding i see is now becoming more available but it's not just a one and done like it clearly is a multi-year effect because as we're seeing it like many of these programs are multi-year in some cases out to fy 29 so that's already being pre-programmed so it's nice to kind of get away from you know some of that shutdown breakmanship which you know maybe we're doing a little bit better this year than than in the past, but absolutely those funds are starting to get to our customers and should be supportive for a number of years.

Can you talk a little bit about your involvement in the Army AVCAD program?

Yeah, I'd be very happy to do that. So there's a, our flagship device is what this relates to, and that's our MX908. Part of what it can do is measure aerosols and vapors. So it can measure a host of toxic industrial chemicals, including traditional chemical agents, pharmaceutical Zucco-based agents and other non-traditional chemical agents at very, very low levels to detect a hazardous environment and make sure it's safe for breathing. There was a program that has roots and requirements back even prior to 908's foundation in 2012, and that program identified gaps in the aerosol and vapor capabilities of the U.S. and started efforts to close that gap. We teamed with Smith's Detection in about 2014 or so, and then in 2018, I believe we had maybe our first contract award, and then most recently, we just completed a contract for LORIP, the low-rate initial production, by delivering approximately 150 or so component sets to Smith to build up a complete solution for the government for testing, debug, and preparation for the next phase of scale. That's all ongoing. What's very interesting to us currently as that contract has run its course, there's tremendous pressure to modernize the requirements process and modernize the procurement process for such legacy programs. Think of it this way. In Ukraine, drones with an explosive attached to it didn't exist in the timeframes that I've been covering so far. So there's tremendous pressure from the Secretary of War on down to find and field solutions that are, let's say, 80% solutions, but that can be done faster to get capabilities to the warfighter to close some of those capability gaps. So where we sit here today, the government is currently evaluating which way to go. They're currently evaluating whether to move forward with this GOTS, which is this custom development, and take it to the next stage and build another set and test it and work to roll it out, potentially to fill it with our COTS solution, so our commercial MX908 device, fill it with that, or a hybrid of the two in priority areas, perhaps fielding those first with our MX908. The detection technology in the AVCAD development is the same as what's in our COTS MX, which has already been extensively tested and validated. We feel very good that on the market we have the best and most capable aerosol and vapor detection technology, and we really feel good that the opportunity is there. And this may be a bit of a pause before an acceleration. So we're currently at that threshold waiting for decisions from the U.S. government, but really feel pretty confident we can win either way as this plays out.

So how does having your devices be connected to the cloud, allow the end users out there in the field to rapidly identify trends and drug smuggling all over the country or all over the world.

Yeah, another really area that's untapped that we're working towards unlocking more and more within 908 here. And we mentioned that this device, for instance, the NearLab device, it connects to a cloud, it's on a subscription service, it connects through a server where you can see all of your devices, all of your devices connected onto a network and being able to see how they're being used, utility fleet information location if you desire but you can also see within your walled garden you can see all of the trends that are happening so you can see what's most predominant in your particular area you could see a particular new substance coming and maybe seeing the track and flow if you have enough nodes so we see that with our near lab but we also see that with our mx 908 today, or our Viper, or our other FTIR products. We have products where we have a couple hundred devices connected to a similar ecosystem that I described called Team Leader that allows US Postal Inspection Service to do such a thing, where they can see which one has been active, the location, they can see trends, they can better manage their fleet, they can better prepare their resources and align their resources to it. So ultimately, we're working to connect all of our devices to a single ecosystem, including our next generation of our flagship that we anticipate releasing at the end of this year and should be a driver of 2027. We really see all of these having that common connection, and we're driving to have them all part of that ecosystem to allow such trends. Today, with our MX, we're doing what I described, but often there's a manual element to it, and we're working to more automate this and have this all available to the customer in real time.

Can you talk about the price points of some of your devices as they scale and how many of each needed to be deployed to a customer at each ASP all the way up from like an army unit or a lab down to like a squad car, individual officer?

Sure, happy to. Maybe use US list prices as a reference, and we have different channel and volume-based discounting that comes into play. But with the acquisition in NearLab, the device Kevin has there is a 10,000 US list price, and we span all the way up to our Viper, which is a little over 100,000 US lists. So in between, we have a total of six products. You have the Protector that's in the neighborhood of 35,000, and Explorer that's around 60,000. Our MX-908 is 75,000. Our threat ID is about 80. If I think about kind of the AbCAD solution and what's in the literature out there, that solution that includes the component set of our MX is in the neighborhood of 90,000. We do look at it from a deployment perspective that a lot of times it's an initial unit or two that is out there on test or a pilot that ultimately can graduate into an enterprise-type account. So state and local, those can be more onesies, twosies, maybe it's up to five or ten. Or someone like Ohio could be around 50 from a deployment perspective. But larger military accounts can be 50 in excess of 100 devices at a time. Near lab at the price point and the ability to get it out into each maybe responding officer or police officer could be in the hundreds of an opportunity in a given account or country. So hopefully that gives you a little bit of color, but really span. and Nealab brings in a lower price point to address a lower-end market need.

Can you talk about 908's manufacturing operations in Connecticut and Massachusetts and what the capacity expansion needs might be over the next 12 to 24 months to meet customer demand?

Yeah, we have a great team down in Danbury, Connecticut that does all of our manufacturing. We went through a significant transformation in 2025 where we used to be right in the seaport. Around the corner here in Boston, we were doing our mass spec manufacturing. and that's all being done out of Danbury now. So it's great to have everything under one roof, all of our products able to be nimble with labor, ramp up on mixed changes, common components. Thinking about baseline, we produced about 700 devices in 2025. The facility has capacity to do in the thousands. It's really about ramping up labor, allocating square footage. We have about a 40,000-square-foot facility there in Danbury. So it's a great hotbed. Some companies that are in the area with an experienced labor force. So it was a nice transformation that was leveraged by an acquisition we did a few years ago to move everything under one roof.

Maybe could you talk about how your systems can be incorporated into drone payloads? And do you see the drone instrument market as the next major growth driver for your TAM?

Yeah, that's a great question. We were speaking earlier about your panel there, a lot of activity in that space. Very clear, right, there's a lot of hazards that you'd prefer that you didn't have to put a human in harm's way. So absolutely, we see over time that more of their handheld devices will have opportunity to be on an unmanned drone platform or an unmanned vehicle of some sort. Today, we have some exposure there with our distributors, other partners that will take our equipment and then mount it on something like a quadrobot or, in some cases, even drones. Now, our limiter right there, I would say, is size and weight. And as the drones get more capacity, that opens up more opportunity for sensors and sensor payloads like ours on the chemical detection side. And as our roadmap keeps shrinking the technologies down and reducing their swap, We further believe that opens up. So today we have absolutely had some demonstrations. We're seeding areas of, you know, doing on fixed wing aircraft or doing on the quadrobots. And I think that can, over time, become a more substantial portion. Today we really do that through integrators, through distributors that we're providing the detection payload, and then they're putting it on to their vehicle or drone platform.

So when we think about the balance sheet, does your existing cash balance enable you to execute on the key programs that are in the current business plan and your expansion into Europe over the next 12 to 24 months?

It does, yes. I mean, we finished the quarter June 30th with over $100 million of cash on the balance sheet. Through our transformation in 25, the divestiture of our desktop, we've really reduced our burn. our adjusted EBITDA is kind of in the mid-single-digit range, mid-single-digit million range here in 2026, which gives us multiple years of runway to focus on organic growth opportunities and investing in international expansion, product launches, but also potentially to be opportunistic if we see things on the inorganic side. Near Lab just recently in the spring, but also as we think about filling out potential capabilities that our customers have needs and we can provide additional capabilities leveraging that commercial channel that Kevin highlighted. So, yes, feeling good about the balance sheet as it sits today and can be opportunistic if we're able to check boxes on opportunities going forward. But I definitely stress that we're focused on organic and the great portfolio we have today.

So if we think about the organic growth future pipeline, what new NAS spectrometers or detection devices may need to be developed for customers in the near future or just based on the conversations you're having with them?

Yeah, I mean, we have a very R&D-centric organization that's very novel, always thinking of the next thing and working on it, and as I alluded to, we are working on a next-generation version of our flagship there on the top right, our MX908. So I'm very excited for that. We're looking at something that's about half the size, half the weight, a little easier to use, very modern in its approach with communications connected to the cloud, as I previously was describing with our team leader functionality. So I think that's the feedback we get, is that people, for drone reasons or handheld reasons, they appreciate size and weight reduction. So first and foremost, we're working there. They appreciate the simplicity of an iPhone, so we're always striving to meet that need as close as we possibly can with a mass spectrometer. So that's an area that we're doing those developments and in the connectivity. And whether it's into military systems with programs like Avcat, But in incredibly important across domestic systems as well and being able to track and trends and do some of the aforementioned Things about that we mentioned your lab does do I have any audience questions here? Yeah, I mean the illicit drug crisis if you just think of it in a broad context beyond fentanyl Absolutely drives demand for this product internationally for instance our near lab product doesn't have to necessarily be fentanyl There can be different substances and different locales that are under different regulations or under different usage patterns, and we strive to ensure we have the right signatures so it's localized to meet that need.

Excellent. Well, I think we've come to the end of our time, but I just want to thank you again, Kevin and Joe, for just taking the time to teach us more about 908.

Yeah, thanks for the opportunity.