What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 144 added, 96 removed, 484 unchanged (33% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

2022 December 31,

2 unchanged sentences

Investments 152,024,000 226,041,000

Accounts receivable, net of allowance for doubtful accounts of $ 463,000 and $ 690,000 as of June 30, 2022 and December 31, 2021, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 496,000 and $ 690,000 as of September 30, 2022 and December 31, 2021, respectively

5,829,000 4,934,000

26 unchanged sentences

Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized and no shares issued or outstanding as of June 30, 2022 and December 31, 2021

Common stock, $ 0.0001 par value, 400,000,000 shares authorized at June 30, 2022 and December 31, 2021;

290,061,000 and 289,602,000 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

10,000,000 shares authorized and no shares issued or outstanding as of September 30, 2022 and December 31, 2021

Common stock, $ 0.0001 par value, 400,000,000 shares authorized at September 30, 2022 and December 31, 2021;

296,900,000 and 289,602,000 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

30,000 29,000

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

27 unchanged sentences

Three Months Ended

June 30, Six Months Ended

June 30, 2022

September 30, Nine Months Ended

September 30, 2022

2022 2021 2022 2021

$ ( 31,809,000 ) $ ( 20,753,000 ) $ ( 93,919,000 ) $ ( 49,486,000 )

Unrealized (loss) on investment securities

Other comprehensive loss:

Unrealized gain (loss) on investment securities

236,000 ( 116,000 ) ( 1,143,000 ) ( 116,000 )

Comprehensive Loss $ ( 32,439,000 ) $ ( 18,786,000 ) $ ( 63,491,000 ) $ ( 28,733,000 )

Foreign currency translation adjustments ( 140,000 ) — ( 140,000 ) —

Other comprehensive loss $ 96,000 $ ( 116,000 ) $ ( 1,283,000 ) $ ( 116,000 )

Total comprehensive loss $ ( 31,713,000 ) $ ( 20,869,000 ) $ ( 95,202,000 ) $ ( 49,602,000 )

See accompanying notes to the unaudited condensed consolidated financial statements.

18 unchanged sentences

Balance at June 30, 2021 279,054,000 $ 28,000 $ 518,255,000 $ ( 172,417,000 ) $ — $ 345,866,000

Stock option exercises 209,000 — 242,000 — — 242,000

Stock-based compensation expense — — 2,788,000 — — 2,788,000

Issue common stock, net of issuance costs 2,178,000 — 13,537,000 — — 13,537,000

Issue stock for warrant exercises — — 1,000 — — 1,000

Net loss — — — ( 20,753,000 ) — ( 20,753,000 )

Other comprehensive income (loss) — — — — ( 116,000 ) ( 116,000 )

Balance at September 30, 2021 281,441,000 $ 28,000 $ 534,823,000 $ ( 193,170,000 ) $ ( 116,000 ) $ 341,565,000

Balance at January 1, 2022 289,602,000 $ 29,000 $ 553,747,000 $ ( 216,119,000 ) $ ( 539,000 ) $ 337,118,000

3 unchanged sentences

Net loss — — — ( 29,952,000 ) — ( 29,952,000 )

Other comprehensive loss — — — — ( 1,098,000 ) ( 1,098,000 )

Other comprehensive income (loss) — — — — ( 1,098,000 ) ( 1,098,000 )

Balance at March 31, 2022 289,688,000 $ 29,000 $ 558,864,000 $ ( 246,071,000 ) $ ( 1,637,000 ) $ 311,185,000

4 unchanged sentences

Net loss — — — ( 32,158,000 ) — ( 32,158,000 )

Other comprehensive loss — — — — ( 281,000 ) ( 281,000 )

Other comprehensive income (loss) — — — — ( 281,000 ) ( 281,000 )

Balance at June 30, 2022 290,061,000 $ 29,000 $ 564,852,000 $ ( 278,229,000 ) $ ( 1,918,000 ) $ 284,734,000

Stock option exercises 132,000 — 111,000 — — 111,000

Stock-based compensation expense — — 6,059,000 — — 6,059,000

Issuance of common stock due to the vesting of restricted stock units, net of shares withheld to cover taxes 67,000 — — — — —

Issue common stock, net of issuance costs 6,640,000 1,000 22,550,000 — — 22,551,000

Net loss — — — ( 31,809,000 ) — ( 31,809,000 )

Other comprehensive income (loss) — — — — 96,000 96,000

Balance at September 30, 2022 296,900,000 $ 30,000 $ 593,572,000 $ ( 310,038,000 ) $ ( 1,822,000 ) $ 281,742,000

See accompanying notes to the unaudited condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

Operating activities:

7 unchanged sentences

Stock-based compensation 16,938,000 4,917,000

Provision for bad debt expense 33,000 —

Change in fair value of contingent consideration 237,000 —

25 unchanged sentences

Net cash provided by financing activities 22,861,000 334,144,000

Effect of exchange rates on cash and cash equivalents ( 124,000 ) —

Net increase in cash and cash equivalents 3,595,000 102,287,000

6 unchanged sentences

Transfer of instruments and servers from inventory to property and equipment, net $ 5,500,000 $ 4,530,000

Property and equipment included in accounts payable $ 857,000 $ —

Construction in progress included in accounts payable $ 106,000 $ —

Operating lease liabilities resulting from obtaining right-of-use assets $ 517,000 $ 2,309,000

Forgiveness of PPP Loan $ — $ 1,775,000

Stock issued for services $ — $ 15,000

Warrant exercise pursuant to cashless exercise $ — $ 129,000

7 unchanged sentences

The Company’s mission is to transform the way the world sees the genome through optical genome mapping (“OGM”) solutions, diagnostic services and software.

The Company offers OGM solutions for applications across basic, translational and clinical research.

The Company offers OGM solutions for applications across basic, translational and clinical research, and for other applications including bioprocessing.

Through its Lineagen, Inc.

(“Lineagen”) business, the Company also provides diagnostic testing for patients with clinical presentations consistent with autism spectrum disorder and other neurodevelopmental disabilities.

(doing business as Bionano Laboratories, “Bionano Laboratories”) business, the Company also provides diagnostic testing for patients with clinical presentations consistent with autism spectrum disorder and other neurodevelopmental disabilities.

Through its BioDiscovery, LLC (“BioDiscovery”) business, the Company also offers an industry-leading, platform-agnostic software solution, which integrates next-generation sequencing and microarray data designed to provide analysis, visualization, interpretation and reporting of copy number variants, single-nucleotide variants and absence of heterozygosity across the genome in one consolidated view.

4 unchanged sentences

All intercompany transactions and balances have been eliminated.

These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

As of June 30, 2022, the Company had approximately $ 27.2 million in cash and cash equivalents, $ 160.2 million in available for sale investment securities, and working capital of $ 188.4 million as a result of common stock offerings executed in the quarters ended December 31, 2020, March 31, 2021, and September 30, 2021.

These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Reclassifications

Certain amounts reported in prior years have been reclassified to conform with the presentation in the current year.

These reclassifications had no effect on the reported results of operations.

As of September 30, 2022, the Company had approximately $ 28.2 million in cash and cash equivalents, $ 152.0 million in available for sale investment securities, and working capital of $ 184.7 million as a result of common stock offerings executed in the quarters ended December 31, 2020, March 31, 2021, September 30, 2021, and September 30, 2022.

The Company believes its available cash, cash equivalents, and available for sale securities will be sufficient to fund operations, obligations as they become due and capital investments for at least the next 12 months.

3 unchanged sentences

COVID-19 and Other Geopolitical Events

The Company is subject to additional risks and uncertainties as a result of the continued spread of COVID-19, adverse macroeconomic events, such as the ongoing conflict between Ukraine and Russia and related sanctions, and uncertain market conditions, including higher inflation and supply chain disruptions, which could continue to have a material impact on the Company’s business and financial results.

The Company is subject to additional risks and uncertainties as a result of adverse geopolitical and macroeconomic events, such as the continued impact of COVID-19, the ongoing conflict between Ukraine and Russia and related sanctions, and uncertain market conditions, including higher inflation and supply chain disruptions, which could continue to have a material impact on the Company’s business and financial results.

The Company closely monitors and complies with various applicable guidelines and legal requirements in the jurisdictions in which it operates, which may continue to result in reduced business operations in response to new or existing stay-at-home orders, travel restrictions and other social distancing measures.

3 unchanged sentences

The Company’s manufacturing partners, suppliers, and customers, have implemented similar operational reductions.

Despite reporting an increase in revenue for the three and six months ended June 30, 2022 when compared to the same period in 2021, the Company experienced supply chain constraints that negatively impacted the Company’s first and second quarter 2021 and 2022 financial results.

Despite reporting an increase in revenue for the three and nine months ended September 30, 2022 when compared to the same period in 2021, the Company experienced supply chain constraints that

negatively impacted the Company’s first, second and third quarter 2021 and 2022 financial results.

Given the continued evolution of the COVID-19 pandemic and the related complexities and uncertainties associated with the additional variants, the future effects of COVID-19 are unknown and the Company’s financial results may continue to be negatively affected in the future.

The COVID-19 pandemic may also have long-term effects on the nature of the office environment and remote working, which may

present strategy, operational, talent recruiting and retention and workplace culture challenges that may adversely affect its business.

The COVID-19 pandemic may also have long-term effects on the nature of the office environment and remote working, which may present strategy, operational, talent recruiting and retention and workplace culture challenges that may adversely affect its business.

Following the recent invasion of Ukraine by Russia, the U.S.

4 unchanged sentences

As a result, our business and results of operations may be adversely affected by the ongoing military conflict between Ukraine and Russia and related sanctions, particularly to the extent it escalates to involve additional countries, further economic sanctions or wider military conflict.

During the three and six months ended June 30, 2022, the Company experienced supply chain challenges, which it largely attributes to the COVID-19 pandemic and the general disruptions from the ongoing conflict between Ukraine and Russia and related sanctions.

While neither the COVID-19 pandemic nor the Ukraine-Russia conflict prevented the Company from operating its business during the three and six months ended June 30, 2022, it experienced increased cost to secure certain component parts in its products and to produce its products at its contract manufacturers.

During the three and nine months ended September 30, 2022, the Company experienced supply chain challenges, which it largely attributes to the COVID-19 pandemic and the general disruptions from the ongoing conflict between Ukraine and Russia and related sanctions.

While neither the COVID-19 pandemic nor the Ukraine-Russia conflict prevented the Company from operating its business during the three and nine months ended September 30, 2022, it experienced increased cost to secure certain component parts in its products and to produce its products at its contract manufacturers.

The Company expects these increased costs to remain high as the COVID-19 pandemic, the Ukraine-Russia conflict and their respective effects persist.

4 unchanged sentences

Significant Accounting Policies

During the three and six months ended June 30, 2022, there were no changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

During the three and nine months ended September 30, 2022, there were no changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Issued But Not Yet Adopted Accounting Pronouncements

9 unchanged sentences

The standard was adopted on January 1, 2021, as the Company lost its status as an Emerging Growth Company effective December 31, 2021, and therefore was required to adopt the standard for the year ending December 31, 2021, using the modified retrospective method.

Under this transition method, the Company recognized and measured leases that existed at the adoption date in the consolidated balance sheet as of January 1, 2021.

In connection with the adoption of ASC 842, the Company elected the package of practical expedients requiring no reassessment of whether any expired or existing contracts contain leases, the lease classification of any expired or existing leases, or initial direct costs for any existing leases.

Under this transition method, the Company recognized and measured leases that existed at the adoption date in the audited consolidated balance sheet as of January 1, 2021.

In connection with the adoption of ASC 842, the Company elected the package of practical expedients requiring no reassessment of whether any expired or existing contracts contain

leases, the lease classification of any expired or existing leases, or initial direct costs for any existing leases.

The Company also made accounting policy elections not to apply the recognition requirements under ASC 842 to any short-term leases and to account for each separate lease and associated non-lease components as a single lease component for all the Company’s leases.

The adoption of this new accounting standard resulted in increased qualitative and quantitative disclosures regarding the amount,

timing, and uncertainty of cash flows arising from leases.

The adoption of this new accounting standard resulted in increased qualitative and quantitative disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases.

For further details, see Note 7, Commitments and Contingencies.

4 unchanged sentences

Early adoption is permitted.

The Company’s adoption of this accounting standard on January 1, 2022, did not have a material impact on the Company’s consolidated financial statements and related disclosures .

The Company’s adoption of this accounting standard on January 1, 2022, did not have a material impact on the Company’s unaudited condensed consolidated financial statements and related disclosures .

Net Loss Per Share

7 unchanged sentences

Potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would be anti-dilutive are as follows (in common stock equivalent shares):

2022 June 30,

September 30,

2022 September 30,

Stock options 24,586,000 10,661,000

6 unchanged sentences

Revenue by Source

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

5 unchanged sentences

Revenue by Geographic Location

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

1 unchanged sentence

Americas $ 3,679,000 51 % $ 2,557,000 55 % $ 9,618,000 49 % $ 6,419,000 55 %

EMEIA 2,609,000 39 % 940,000 25 % 4,348,000 35 % 2,518,000 36 %

EMEA 1,969,000 27 % 1,234,000 27 % 6,317,000 32 % 3,762,000 32 %

Asia Pacific 1,573,000 22 % 864,000 18 % 3,652,000 19 % 1,498,000 13 %

2 unchanged sentences

Americas consists of North America and South America.

EMEIA consists of Europe, the Middle East, India and Africa.

Asia Pacific includes China, Japan, South Korea, Singapore and Australia.

For the three months ended June 30, 2022 and 2021, the United States represented 37.4 % and 59.5 % of total revenue, respectively.

six months ended June 30, 2022 and 2021, the United States represented 40.9 % and 53.1 % of total revenue, respectively.

For the three and six months ended June 30, 2022, China represented 19.3 % and 12.9 % of total revenue, respectively.

No other countries represented greater than 10% of revenue during the three and six months ended June 30, 2022 and 2021.

EMEA consists of Europe, the Middle East, and Africa.

Asia Pacific includes China, Japan, South Korea, Singapore, India and Australia.

During the three months ended September 30, 2022, the Company changed the presentation of its revenues from India to be included in the Asia Pacific geographic region.

Prior to the three months ended September 30, 2022, the Company had presented revenues from India in the EMEA geographic region.

The impact of this change on prior period disclosures is immaterial.

For the three months ended September 30, 2022 and 2021, the United States represented 41.8 % and 44.2 % of total revenue, respectively.

For the three months ended September 30, 2022 and 2021, China represented 13.4 % and 17.9 % of total revenue, respectively.

Additionally, for the three months ended September 30, 2021, Canada represented 10.8 % of total revenue.

For the nine months ended September 30, 2022 and 2021, the United States represented 41.3 % and 50.0 % of total revenue, respectively.

For the nine months ended September 30, 2022, China represented 13.1 % of total revenue.

No other countries represented greater than 10% of revenue during the three and nine months ended September 30, 2022 and 2021.

Remaining Performance Obligations

As of June 30, 2022, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied was approximately $ 1.4 million.

As of September 30, 2022, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied was approximately $ 1.1 million.

These remaining performance obligations primarily relate to extended warranty and support and maintenance obligations.

1 unchanged sentence

Warranty revenue is included in service and other revenue.

The Company recognized revenue of approximately $ 0.2 million and $ 0.1 million during the three months ended June 30, 2022 and 2021, respectively, and revenue of approximately $ 0.5 million and $ 0.2 million during the six months ended June 30, 2022 and 2021, respectively, which was included in the contract liability balance at the end of the previous year.

The Company recognized revenue of approximately $ 0.1 million and $ 0.1 million during the three months ended September 30, 2022 and 2021, respectively, and revenue of approximately $ 0.6 million and $ 0.3 million during the nine months ended September 30, 2022 and 2021, respectively, which was included in the contract liability balance at the end of the previous year.

Balance Sheet Account Details

Accounts Receivable

September 30,

2022 December 31,

4 unchanged sentences

The components of inventories are as follows:

September 30,

2022 December 31,

Raw materials $ 5,254,000 $ 4,649,000

Work in process

7,072,000 1,660,000

Finished goods 12,720,000 6,078,000

$ 25,046,000 $ 12,387,000

Beginning with the third quarter for the year ended December 31, 2022, the Company revised its classification of its inventory between the categories in the table above.

The Company has revised the classification for the December 31, 2021 balance sheet .

Intangible Assets

Intangible assets that are subject to amortization consisted of the following for the periods presented:

June 30, 2022

September 30, 2022

December 31, 2021

6 unchanged sentences

Accrued expenses consist of the following:

September 30,

2022 December 31,

4 unchanged sentences

Insurance 970,000 1,011,000

Professional fees and royalties 368,000 288,000

Accrued royalties 82,000 288,000

Warranty liabilities 337,000 175,000

6 unchanged sentences

In February 2021, the Company applied for forgiveness of the PPP Loan, and in March 2021, the PPP Loan, including all accrued interest, was forgiven in full.

A gain on forgiveness of Paycheck Protection Program loan of $ 1.8 million was recognized during the six months ended June 30, 2021.

A gain on forgiveness of Paycheck Protection Program loan of $ 1.8 million was recognized during the nine months ended September 30, 2021.

Innovatus Loan and Security Agreement

In May 2021, the outstanding term loan with Innovatus (“Innovatus LSA”) was paid in full, including all accrued interest, the end of term fee, and a prepayment fee for a total of approximately $ 17.0 million.

Interest expense recognized during the three and six months ended June 30, 2021 totaled approximately $ 0.3 million and $ 0.9 million, respectively.

Interest expense recognized during the nine months ended September 30, 2021 totaled approximately $ 0.9 million.

Stockholders’ Equity and Stock-Based Compensation

12 unchanged sentences

If that were to occur and the Company were no longer considered a well-known seasoned issuer, the Company anticipates needing to amend its automatically effective shelf registration statement on Form S-3 prior to its filing of such annual report (or earlier if required by the Securities Act or the rules and regulations of the SEC) in order to sell securities under that Form S-3 on an ongoing basis.

On March 23, 2021, the Company entered into a Sales Agreement with Cowen and Company, LLC (“Cowen”) which provides for the sale, in the Company’s sole discretion, of shares of common stock having an aggregate offering price of up to

$ 350.0 million through or to Cowen, acting as sales agent or principal (the “Cowen ATM”).

The Company agreed to pay Cowen a commission of up to 3.0 % of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide Cowen with customary indemnification and contribution rights.

In August and September 2021, the Company sold approximately 2.3 million shares of common stock under the Cowen ATM at an average share price of $ 6.15 per share, and received gross proceeds of approximately $ 13.9 million before deducting offering costs of $ 0.6 million.

There were no sales of common stock under the Cowen ATM from January 1, 2022 to June 30, 2022.

In August 2022, the Company sold approximately 6.6 million shares of common stock under the Cowen ATM at an average share price of $ 3.46 per share, and received gross proceeds of approximately $ 23.1 million before deducting offering costs of $ 0.6 million.

Stock Warrants

A summary of the Company’s warrant activity during the six months ended June 30, 2022 was as follows:

A summary of the Company’s warrant activity during the nine months ended September 30, 2022 was as follows:

Shares of Stock under Warrants Weighted-

5 unchanged sentences

Canceled — — — —

Outstanding at June 30, 2022

Outstanding at September 30, 2022

4,356,000 $ 5.96 1.01 $ 397,000

Stock Options

A summary of the Company’s stock option activity during the six months ended June 30, 2022 was as follows:

A summary of the Company’s stock option activity during the nine months ended September 30, 2022 was as follows:

Shares of Stock under Stock Options Weighted-

5 unchanged sentences

Canceled ( 2,106,000 ) 4.83 — —

Outstanding at June 30, 2022

Outstanding at September 30, 2022

24,586,000 $ 3.39 8.89 $ 3,876,000

Vested and exercisable at June 30, 2022

Vested and exercisable at September 30, 2022

6,248,000 $ 3.82 7.98 $ 2,288,000

For the three months ended June 30, 2022, the weighted-average grant date fair value of stock options granted was $ 1.17 per share.

For the six months ended June 30, 2022, the weighted-average grant date fair value of stock options granted was $ 1.33 per share.

For the three months ended September 30, 2022, the weighted-average grant date fair value of stock options granted was $ 1.43 per share.

For the nine months ended September 30, 2022, the weighted-average grant date fair value of stock options granted was $ 1.34 per share.

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

7 unchanged sentences

One-third of the Restricted Shares will vest on October 18, 2022 and one-twelfth of the Restricted Shares shall vest every three months following October 18, 2022, subject to continuous service of a key employee.

The weighted average remaining contractual term for the restricted stock is 2.3 years as of June 30, 2022.

The weighted average remaining contractual term for the restricted stock is 2.1 years as of September 30, 2022.

The fair value of the restricted stock award is based on the market value of common stock as of the date of grant and is amortized to expense over the respective vesting period or the service period.

On October 4, 2022, the restricted stock award was modified due to the change in employment status of the key employee from full time to emeritus.

As a result of the modification, the restricted stock award vested in full on October 4, 2022.

The award was revalued on the modification date, resulting in a modified grant date fair value of $ 2.04 a share.

Restricted Stock Units and Performance Stock Units

The following table summarizes restricted share unit (“RSU”) activity during the six months ended June 30, 2022:

The following table summarizes restricted share unit (“RSU”) activity during the nine months ended September 30, 2022:

Stock Units Weighted- Average Grant Date Fair Value per Share

2 unchanged sentences

Forfeited — —

Outstanding at June 30, 2022

Outstanding at September 30, 2022

163,000 $ 4.74

The total intrinsic value of the RSUs that vested during the six months ended June 30, 2022 was $ 0.6 million, determined as of the date of vesting.

The weighted average remaining contractual term for the RSUs is 0.9 years as of June 30, 2022.

The following table summarizes performance share unit (“PSU”) activity during the six months ended June 30, 2022:

The total intrinsic value of the RSUs that vested during the nine months ended September 30, 2022 was $ 0.9 million, determined as of the date of vesting.

The weighted average remaining contractual term for the RSUs is 0.6 years as of September 30, 2022.

The following table summarizes performance share unit (“PSU”) activity during the nine months ended September 30, 2022:

Stock Units Weighted- Average Grant Date Fair Value per Share

1 unchanged sentence

Forfeited — —

Outstanding at June 30, 2022

Outstanding at September 30, 2022

290,000 $ 4.74

The weighted average remaining contractual term for the PSUs is 2.9 years as of June 30, 2022.

The weighted average remaining contractual term for the PSUs is 2.6 years as of September 30, 2022.

Executive Option Grants

1 unchanged sentence

These stock option grants were issued from the 2018 Stock Plan.

The shares subject to the option shall vest monthly over 48 months beginning on

the one-month anniversary of the Grant Date, such that the option shall be fully vested and exercisable on the four-year anniversary of the Grant Date.

The shares subject to the option shall vest monthly over 48 months beginning on the one-month anniversary of the Grant Date, such that the option shall be fully vested and exercisable on the four-year anniversary of the Grant Date.

Commitments and Contingencies

The Company discounts its lease payments using its incremental borrowing rate as of the commencement of the lease.

The Company has determined a weighted-average discount rate of 7 % as of June 30, 2022 and December 31, 2021.

The operating lease right-of-use asset and operating lease liability as of June 30, 2022 and December 31, 2021 are as follows:

June 30, 2022 December 31, 2021

The Company has determined a weighted-average discount rate of 7 % as of September 30, 2022 and December 31, 2021.

The operating lease right-of-use asset and operating lease liability as of September 30, 2022 and December 31, 2021 are as follows:

September 30, 2022 December 31, 2021

Operating lease right-of-use assets $ 6,030,000 $ 6,691,000

3 unchanged sentences

Total operating lease liability $ 6,478,000 $ 6,755,000

For the three and six months ended June 30, 2022, the Company recorded $ 0.5 million and $ 1.0 million, respectively, in expense related to operating leases, including amortized tenant improvement allowances.

For the three and six months ended June 30, 2021, the Company recorded $ 0.3 million and $ 0.5 million respectively, in expense related to operating leases, including amortized tenant improvement allowances.

The finance lease right-of-use asset and finance lease liability as of June 30, 2022 and December 31, 2021 are as follows:

June 30, 2022 December 31, 2021

For the three and nine months ended September 30, 2022, the Company recorded $ 0.5 million and $ 1.5 million, respectively, in expense related to operating leases, including amortized tenant improvement allowances.

For the three and nine months ended

September 30, 2021, the Company recorded $ 0.3 million and $ 0.8 million respectively, in expense related to operating leases, including amortized tenant improvement allowances.

The finance lease right-of-use asset and finance lease liability as of September 30, 2022 and December 31, 2021 are as follows:

September 30, 2022 December 31, 2021

Finance lease right-of-use assets $ 3,759,000 $ 3,926,000

3 unchanged sentences

Total finance lease liability $ 3,914,000 $ 3,941,000

For the three and six months ended June 30, 2022, the Company recorded $ 0.1 million and $ 0.3 million, respectively, in expense related to its finance lease.

The Company did no t hold a finance lease as of June 30, 2021.

The future minimum payments under non-cancellable operating and finance leases as of June 30, 2022, are as follows:

For the three and nine months ended September 30, 2022, the Company recorded $ 0.1 million and $ 0.4 million, respectively, in expense related to its finance lease.

The Company did no t hold a finance lease as of September 30, 2021.

The future minimum payments under non-cancellable operating and finance leases as of September 30, 2022, are as follows:

Operating Leases Finance Lease

14 unchanged sentences

Contingent Consideration

See Note 9 to our condensed consolidated financial statements for a discussion of the contingent consideration liability.

See Note 9 to our unaudited condensed consolidated financial statements for a discussion of the contingent consideration liability.

BioDiscovery Acquisition

1 unchanged sentence

Of the $ 40.0 million in shares of Company common stock, approximately $ 26.0 million is subject to vesting based on continuous service.

See Note 6 to our condensed consolidated financial statements for a discussion of the restricted stock vesting terms and accounting treatment.

See Note 6 to our unaudited condensed consolidated financial statements for a discussion of the restricted stock vesting terms and accounting treatment.

The purchase price allocation for the acquisition of BioDiscovery is preliminary and subject to revision as additional information about the fair value of assets and liabilities becomes available.

As permitted under ASC 805, the Company is allowed a measurement period, which may not exceed one year, in which to complete its accounting for the acquisition.

During the first quarter of 2022, the Company recorded an increase to the value of acquired contract liabilities in the amount of $ 94,000 , with the offset recorded to goodwill.

the first quarter of 2022, the Company recorded an increase to the value of acquired contract liabilities in the amount of $ 0.1 million, with the offset recorded to goodwill.

During the three months ended September 30, 2022, the Company recorded an increase to the value of acquired contract liabilities in the amount of $ 0.2 million, with the offset recorded to goodwill.

The purchase price is still subject to adjustment for the final determination of deferred and current tax assets and liabilities.

33 unchanged sentences

The following unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved as if the acquisitions had taken place as of January 1, 2020.

Six Months Ended June 30, Three Months Ended June 30,

Nine Months Ended September 30, Three Months Ended September 30,

Revenue $ 15,986,000 $ 6,519,000

7 unchanged sentences

Such valuations may be based on trade prices in active markets for identical assets or liabilities (Level 1 inputs) or valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets or liabilities, yield curves, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, and broker and dealer quotes, as well as other relevant economic measures.

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021:

June 30, 2022

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021:

September 30, 2022

Total Fair Value and Carrying Value on Balance Sheet Fair Value Measurement Category

17 unchanged sentences

Money Market Funds are classified as cash equivalents on the balance sheet.

As of June 30, 2022 and December 31, 2021, the Company held 47 and 57 securities in an unrealized loss position, respectively.

As of June 30, 2022 and December 31, 2021, the Company does not intend to sell these investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis.

As of September 30, 2022 and December 31, 2021, the Company held 51 and 57 securities in an unrealized loss position, respectively.

As of September 30, 2022 and December 31, 2021, the Company does not intend to sell these investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis.

The Company does not believe the unrealized losses incurred during the period are due to credit-related factors.

The credit ratings of the securities held remain of high quality, and the Company continues to receive payments of interest and principal as they become due, and our expectation is that those payments will continue to be received timely.

The credit ratings of the securities held remain of high quality, and the Company continues to receive payments of interest and principal as they

become due, and our expectation is that those payments will continue to be received timely.

As such, the Company has not recognized any impairment in its financial statements related to its available for sale investment securities.

5 unchanged sentences

The Company determined it is highly likely that the milestone will be achieved and therefore used a 95 % probability factor which is applied to the $ 10.0 million milestone consideration.

The change in fair value of the contingent consideration during the three and six month period ended June 30, 2022 was due to the passage of time.

During the three months ended June 30, 2022, the milestone consideration liability was reclassified from non-current liabilities to current liabilities.

Changes in estimated fair value of contingent consideration liability in the six months ended June 30, 2022 is as follows:

The change in fair value of the contingent consideration during the three and nine month period ended September 30, 2022 was due to the passage of time.

During the nine months ended September 30, 2022, the milestone consideration liability was reclassified from non-current liabilities to current liabilities.

Changes in estimated fair value of contingent consideration liability in the nine months ended September 30, 2022 is as follows:

Consideration

3 unchanged sentences

Cash payments —

Balance as of June 30, 2022

As of June 30, 2022, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities:

Balance as of September 30, 2022

As of September 30, 2022, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities:

Commercial Paper Corporate Notes/Bonds Securities of Government Sponsored Entities

17 unchanged sentences

Total $ 100,929,000 $ ( 69,000 ) $ 125,651,000 $ ( 470,000 ) $ — $ —

Included in interest income for the three-month period ended June 30, 2022 was interest income related to the Company’s available for sale securities of $ 0.2 million.

Included in interest income for the six-month period ended June 30, 2022 was interest income related to the Company’s available for sale securities of $ 0.3 million.

All available for sale securities are classified as current assets, even if the maturity when acquired by the Company is greater than one year due to the ability to liquidate within the next 12 months.

Included in interest income for the three-month period ended September 30, 2022 was interest income related to the Company’s available for sale securities of $ 0.4 million.

Included in interest income for the nine-month period ended September 30, 2022 was interest income related to the Company’s available for sale securities of $ 0.7 million.

All available for sale securities are

classified as current assets, even if the maturity when acquired by the Company is greater than one year due to the ability to liquidate within the next 12 months.

Related Party Transactions

The Company recorded $ 0.1 million in finance lease costs related to this lease for the three-month period ended June 30, 2022.

The Company recorded $ 0.3 million in finance lease costs related to this lease for the six-month period ended June 30, 2022.

Through the acquisition of BioDiscovery in October 2021, the Company inherited a building lease with a landlord owned by BioDiscovery’s former Director and Chief Executive Officer, who served as the Company’s Chief Informatics Officer from the date of the acquisition through October 2022, and now serves as Chief Informatics Officer, Emeritus.

The Company recorded $ 0.1 million in finance lease costs related to this lease for the three-month period ended September 30, 2022.

The Company recorded $ 0.4 million in finance lease costs related to this lease for the nine-month period ended September 30, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements