What changed in this filing

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Item 1. Financial Statements

2020-11-09 compared with 2020-08-07 · 186 added, 115 removed, 745 unchanged (29% of the section changed)

3 unchanged sentences

(In thousands)

June 30, December 31,

September 30, December 31,

Current assets:

1 unchanged sentence

Short-term investments — 36,978

Accounts receivable (net of allowances of $ 101 and $ 6 , at June 30, 2020 and December 31, 2019, respectively)

Accounts receivable (net of allowances of $ 324 and $ 6 , at September 30, 2020 and December 31, 2019, respectively)

17,613 18,981

Grant receivable 7,456 —

Inventories 19,560 13,884

19 unchanged sentences

Deferred revenue, non-current 7,684 8,168

Deferred grant income, non-current 18,224 —

Other non-current liabilities 536 573

2 unchanged sentences

Stockholders’ equity:

Preferred stock, $ 0.001 par value, 10,000 shares authorized, no shares issued and outstanding at either June 30, 2020 or December 31, 2019

Preferred stock, $ 0.001 par value, 10,000 shares authorized, no shares issued and outstanding at either September 30, 2020 or December 31, 2019

Common stock:

$ 0.001 par value, 200,000 shares authorized at June 30, 2020 and December 31, 2019;

71,283 and 69,956 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

$ 0.001 par value, 200,000 shares authorized at September 30, 2020 and December 31, 2019;

74,115 and 69,956 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital 810,923 777,765

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(In thousands, except per share amounts)

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

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

2020 2019 2020 2019

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(In thousands)

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

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

2020 2019 2020 2019

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Balance as of June 30, 2020 71,283 $ 71 $ 786,193 $ ( 809 ) $ ( 652,736 ) $ 132,719

Issuance of restricted stock, net of shares withheld for taxes, and other 258 1 ( 124 ) — — ( 123 )

Issuance of common stock from option exercises 94 — 450 — — 450

Issuance of common stock from at-the-market offering, net of issuance costs 2,480 2 20,226 — — 20,228

Equity issuance costs — — ( 180 ) — — ( 180 )

Stock-based compensation expense — — 4,358 — — 4,358

Net loss — — — — ( 5,999 ) ( 5,999 )

Other comprehensive income, net of tax — — — 520 — 520

Balance as of September 30, 2020 74,115 $ 74 $ 810,923 $ ( 289 ) $ ( 658,735 ) $ 151,973

See accompanying notes

FLUIDIGM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

Common Stock Additional

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Balance as of June 30, 2019 69,400 $ 69 $ 771,263 $ ( 623 ) $ ( 598,069 ) $ 172,640

Issuance of restricted stock, net of shares withheld for taxes, and other 149 1 ( 70 ) — — ( 69 )

Issuance of common stock from option exercises 1 — 1 — — 1

Stock-based compensation expense — — 3,055 — — 3,055

Net loss — — — — ( 12,887 ) ( 12,887 )

Other comprehensive income (loss), net of tax — — — ( 135 ) — ( 135 )

Balance as of September 30, 2019 69,550 $ 70 $ 774,249 $ ( 758 ) $ ( 610,956 ) $ 162,605

See accompanying notes

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities

21 unchanged sentences

Purchases of investments — ( 52,719 )

Proceeds from RADx grant 11,151 —

Proceeds from sale of investments 5,010 —

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Financing activities

Payment of debt issuance cost ( 375 ) ( 15 )

Proceeds from issuance of common stock from at-the-market offering, net of commissions 20,226 —

Payment of debt and equity issuance costs ( 509 ) ( 128 )

Proceeds from exercise of stock options 450 1,049

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2020

September 30, 2020

Description of Business

9 unchanged sentences

GAAP) and include the accounts of our wholly owned subsidiaries.

As of June 30, 2020, we had wholly owned subsidiaries in Singapore, Canada, the Netherlands, Japan, France, the United Kingdom, China, Germany and Norway.

As of September 30, 2020, we had wholly owned subsidiaries in Singapore, Canada, the Netherlands, Japan, France, the United Kingdom, China, Germany and Norway.

All subsidiaries, except for Singapore, use their local currency as their functional currency.

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These reclassifications were immaterial and did not affect prior period total assets, total liabilities, stockholders’ equity, total revenue, total costs and expenses, loss from operations or net loss.

Unaudited Interim Financial Information

The accompanying interim condensed consolidated financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented.

The year-end condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S.

The condensed consolidated results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the full year or for any other year or interim period.

The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2019 included in our annual report on Form 10-K, filed with the SEC on February 27, 2020.

Use of Estimates

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The full extent to which the COVID-19 pandemic impacts our business, results of operations and financial condition will depend on numerous evolving factors including, but not limited to, the magnitude and duration of the pandemic, the extent to which it will impact worldwide macroeconomic conditions, including the speed of recovery, and governmental and business reactions to the pandemic.

We assessed certain accounting matters that generally require consideration of forecasted financial information in the context of information available to us and the unknown impact of COVID-19 as of June 30, 2020.

These accounting matters included, but were not limited to, our allowance for doubtful accounts and credit losses, inventory and related reserves and the carrying value of goodwill and other long-lived assets.

Actual results could differ materially from these estimates and could have a material adverse effect on our consolidated financial statements.

Actual results could differ materially from these estimates and could have a material adverse effect on our condensed consolidated financial statements.

Foreign Currency

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Service revenue is derived from the sale of instrument service contracts, repairs, installation, training and other specialized product support services.

We also generate revenue from

development agreements, license and royalty agreements and grants.

We also generate revenue from development agreements, license and royalty agreements and grants.

Revenue is reported net of any sales, use and value-added taxes we collect from customers as required by government authorities.

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We recognize revenue from license agreements when the license is transferred to the customer and the customer is able to use and benefit from the license.

contracts that include sales-based royalties, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied.

For contracts that include sales-based royalties, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied.

In March 2020, we entered into an agreement to settle intellectual property infringement claims, in which we received a $ 3.5 million payment in exchange for a perpetual license under certain Fluidigm intellectual property.

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To reduce credit risk, we perform credit evaluations of our customers.

One customer from whom we derived development revenue exceeded 10% of revenue for the three months ended June 30, 2020.

No other customer represented more than 10% of total revenue for three and six months ended June 30, 2020 or 2019.

Including the development revenue, revenues from our five largest customers were 32 % and 30 % of total revenue for the three months ended June 30, 2020 and 2019, respectively.

Revenues from our five largest customers were 23 % and 20 % of total revenue for the six months ended June 30, 2020 and 2019, respectively.

There was no single customer that represented more than 10% of total accounts receivable at June 30, 2020, or December 31, 2019.

One customer from whom we derived development revenue exceeded 10 % of revenue for the three and nine months ended September 30, 2020.

No other customer represented more than 10% of total revenue for the three and nine months ended September 30, 2020 or 2019.

Including the development revenue, revenues from our five largest customers were 31 % and 25 %

of total revenue for the three months ended September 30, 2020 and 2019, respectively.

Revenues from our five largest customers were 23 % and 20 % of total revenue for the nine months ended September 30, 2020 and 2019, respectively.

There was no single customer that represented more than 10% of total accounts receivable at September 30, 2020, or December 31, 2019.

Our products include components that are currently procured from a single source or a limited number of sources.

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We did not recognize any impairment of intangibles for any of the periods presented herein.

Deferred Grant Income

In September 2020, we executed a definitive contract with the National Institutes of Health (NIH) for a project under the NIH Rapid Acceleration of Diagnostics (RADx) program.

The definitive contract, which amended the letter contract we entered

into with the NIH in July 2020 (collectively, the NIH Contract), has a total value of up to $ 34.0 million upon the achievement of certain conditional milestones.

Proceeds from the NIH Contract will be used primarily to expand production capacity and product throughput capabilities.

Accounting for the NIH Contract does not fall under ASC 606, Revenue from Contracts with Customers, as the NIH will not benefit directly from our expansion or product development.

As there is no authoritative guidance under U.S.

GAAP on accounting for government assistance to for-profit business entities, we applied International Accounting Standards (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, by analogy when accounting for the NIH Contract payments to Fluidigm.

The NIH Contract proceeds meet the definition of grants related to assets as the primary condition for the payments is to fund the purchase and construction of longer-term assets to scale up production capacity.

Under IAS 20, government grants related to assets are presented in the statement of financial position either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset.

Either of these two methods of presentation of grants related to assets in financial statements are regarded as acceptable alternatives under IAS 20.

We have elected to record the grants received as deferred income using the first method.

Under IAS 20, grant proceeds are recognized when there is reasonable assurance the conditions of the grant will be met and the grant will be received.

With the NIH Contract, this occurs when either each milestone has been accepted by NIH or management concludes the conditions of the grant have been substantially met.

We record the NIH Contract proceeds as deferred income.

Proceeds used for capital expenditures will be amortized over the period of depreciation for the assets as a reduction of depreciation expense.

Any portion of the proceeds used to reimburse research and development expense are recorded as a reduction of those expenses incurred to date.

Convertible Notes

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In March 2018, we entered into separate privately negotiated transactions with certain holders of our 2014 Notes to exchange $ 150.0 million in aggregate principal amount of the 2014 Notes for our 2.75 % Exchange Convertible Senior Notes due 2034 (2018 Notes).

As the 2018 Notes were convertible, at our election, into cash, shares of our common stock, or a combination of cash and shares of our common stock, we accounted for the 2018 Notes under the cash conversion guidance in ASC 470, whereby the embedded conversion option in the 2018 Notes was separated and

accounted for in equity.

In the first quarter of 2019, the 2018 Notes were converted into 19.5 million shares of our common stock and the 2018 Notes were retired.

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Most of the issuance proceeds were used to retire approximately $ 50.2 million of aggregate principal amount of our 2014 Notes, leaving approximately $ 1.1 million of aggregate principal amount of our 2014 Notes outstanding.

As the 2019 Notes do not provide for a cash conversion feature, the 2019 Notes are recorded for as debt in their entirety in accordance with ASC 470.

As the 2019 Notes do not provide for a cash conversion feature, the 2019 Notes are recorded as debt in their entirety in accordance with ASC 470.

For the 2014, 2018 and 2019 Notes, offering-related costs, including underwriting costs, were capitalized as debt issuance costs, recorded as an offset to the carrying value of the related Notes, and are amortized over the expected term of the related Notes using the effective interest method.

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Total comprehensive loss for all periods presented has been disclosed in the condensed consolidated statements of comprehensive loss.

The components of accumulated other comprehensive loss, net of tax, for the three and six months ended June 30, 2020 is as follows (in thousands):

The components of accumulated other comprehensive loss, net of tax, for the three and nine months ended September 30, 2020 are as follows (in thousands):

Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Investments Accumulated Other Comprehensive Income (Loss)

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Ending balance at June 30, 2020 $ ( 812 ) $ 3 $ ( 809 )

Immaterial amounts of unrealized gains and losses have been reclassified into the condensed consolidated statement of operations for the three and six months ended June 30, 2020 and 2019.

Other comprehensive income (loss) 523 ( 3 ) 520

Ending balance at September 30, 2020 $ ( 289 ) $ — $ ( 289 )

Immaterial amounts of unrealized gains and losses have been reclassified into the condensed consolidated statement of operations for the three and nine months ended September 30, 2020 and 2019.

Net Loss per Share

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The following potentially dilutive common shares were excluded from the computations of diluted net loss per share for the periods presented because including them would have been anti-dilutive (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Stock options, restricted stock units and performance awards 7,652 5,342

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Measurement of Credit Losses on Financial Instruments, and (2) in November 2018, ASU 2018-19-Codification Improvements to Topic 326, Financial Instruments-Credit Losses.

ASU 2016-13 is intended to improve financial reporting by requiring more timely recording of credit losses on loans and other financial instruments held by financial institutions and other organizations.

ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the leasing standard.

ASU 2016-13 is intended to improve financial reporting by requiring more timely recording of credit losses on loans and other financial

instruments held by financial institutions and other organizations.

ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the lease standard.

These ASUs are effective for fiscal years beginning after December 15, 2019, and interim periods within those years, with early adoption permitted.

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Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06 Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

The amendment to this ASU reduces the number of accounting models for convertible instruments and allows more contracts to qualify for equity classification, which is expected to result in more convertible instruments being accounted for as a single unit, rather than being bifurcated between debt and equity.

The new guidance is effective for fiscal years beginning after December 15, 2021.

We are currently evaluating the impact of adoption on our condensed consolidated financial statements.

In November 2019, the FASB issued ASU 2019-12-Income Taxes (Topic 740):

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Other current liabilities 15

Deferred tax liability 566

Deferred tax liability, net 566

Fair value of identifiable net assets acquired $ 4,994

Goodwill acquired on acquisition $ 2,220

In July 2020, we entered into a letter contract with the National Institutes of Health (NIH) for a project under the NIH Rapid Acceleration of Diagnostics (RADx) program.

The RADx program provides grants to support a range of new lab-based and point-of-care tests that could significantly increase the number, type and availability of COVID-19 tests.

On September 28, 2020, we executed a definitive contract with the NIH as an amendment to the letter contract (collectively, the NIH Contract).

The NIH Contract has a total value of up to $ 34.0 million upon the achievement of certain conditional milestones.

Proceeds from the NIH Contract will be used primarily to expand production capacity and product throughput capabilities for COVID-19 testing with Fluidigm microfluidics technology.

We expect to complete the NIH Contract by the end of 2021.

The NIH has the right to terminate the NIH Contract for convenience.

In the event of termination for convenience, Fluidigm will be paid a percentage of the NIH Contract price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable charges.

In the event of termination for cause due to our default, NIH is not liable for supplies or services not accepted.

If we fail to deliver within the time specified in the NIH Contract and the delay is due to Fluidigm’s fault or negligence, we are required to pay liquidated damages in the amount of 33 % of the amount(s) already disbursed to date under the NIH Contract within six months from the date of termination.

The following table summarizes the activity under the NIH Contract through September 30, 2020 (in thousands):

Total value of milestones reasonably assured $ 18,607

Amounts applied against research and development expenses 383

Deferred grant income $ 18,224

Total value of milestones reasonably assured $ 18,607

Funding received 11,151

Grant receivable from RADx $ 7,456

Disaggregation of Revenue

The following table presents our revenue for the three and six months ended June 30, 2020 and 2019, respectively, based on geographic area and by source (in thousands):

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

The following table presents our revenue for the three and nine months ended September 30, 2020 and 2019, respectively, based on geographic area and by source (in thousands):

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

2020 2019 2020 2019

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Total revenue $ 39,861 $ 26,496 $ 93,536 $ 84,803

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

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

2020 2019 2020 2019

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We reported $ 20.0 million of deferred revenue in our December 31, 2019 consolidated balance sheet.

During the six months ended June 30, 2020, $ 6.2 million of the opening balance was recognized as revenue and $ 8.4 million of net additional advance payments were received from customers, primarily associated with instrument service contracts.

At June 30, 2020, we reported $ 22.2 million of deferred revenue.

The following table summarizes the expected timing of revenue recognition for unfulfilled performance obligations associated with instrument service contracts that were partially completed at June 30, 2020 (in thousands):

During the nine months ended September 30, 2020, $ 8.8 million of the opening balance was recognized as revenue and $ 9.9 million of net additional advance payments were received from customers, primarily associated with instrument service contracts.

At September 30, 2020, we reported $ 21.1 million of deferred revenue.

Fiscal Year Expected Revenue (1)

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in February 2014, we recognized goodwill of $ 104.1 million and $ 112.0 million of developed technology.

In the first quarter of 2020, we recognized $ 2.2 million of goodwill from the InstruNor acquisition and $ 5.4 million of developed technology (see Note 3).

In the first quarter of 2020, we recognized $ 2.2 million (Euro 2.0 million) of goodwill from the InstruNor acquisition and $ 5.4 million (Euro 4.9 million) of developed technology (see Note 3).

As the goodwill and developed technology from the InstruNor acquisition are recorded in the functional currency of our European operations, which is the Euro, these balances are revalued each period and the U.S.

dollar value of these assets will fluctuate as foreign exchange rates change.

We are amortizing InstruNor developed technology over 8.0 years.

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Intangible assets, net, were as follows (in thousands):

June 30, 2020

Gross Amount Accumulated Amortization Net Weighted-Average Amortization Period

September 30, 2020

Gross Amount Accumulated Amortization and Translation Net Weighted-Average Amortization Period

Developed technology $ 117,380 $ ( 74,425 ) $ 42,955 9.9 years

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December 31, 2019

Gross Amount Accumulated Amortization Net Weighted-Average Amortization Period

Gross Amount Accumulated Amortization and Translation Net Weighted-Average Amortization Period

Developed technology $ 112,000 $ ( 65,800 ) $ 46,200 10.0 years

Patents and licenses $ 11,274 $ ( 8,342 ) $ 2,932 7.8 years

Total amortization expense for the three months ended June 30, 2020 and 2019 was $ 3.2 million and $ 3.1 million, respectively.

Amortization of intangibles was $ 6.4 million and $ 6.2 million for the six months ended June 30, 2020 and 2019, respectively.

Based on the carrying value of intangible assets, net, as of June 30, 2020, the amortization expense is expected to be as follows (in thousands):

Total amortization expense for the three months ended September 30, 2020 and 2019 was $ 3.2 million and $ 3.0 million, respectively.

Amortization of intangibles was $ 9.6 million and $ 9.2 million for the nine months ended September 30, 2020 and 2019, respectively.

Based on the carrying value of intangible assets, net, as of September 30, 2020, the amortization expense is expected to be as follows (in thousands):

Fiscal Year Developed Technology Amortization Expense Patents and Licenses Amortization Expense Total

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Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

Cash, cash equivalents and restricted cash consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

September 30, 2020 December 31, 2019

Cash and cash equivalents $ 72,345 $ 21,661

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Total cash, cash equivalents and restricted cash $ 73,360 $ 23,736

Short-term restricted cash of approximately $ 75 thousand is included in prepaid expenses and other current assets and $ 1.0 million of non-current restricted cash is included in other non-current assets in the condensed consolidated balance sheet as of June 30, 2020.

Inventories consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

Short-term restricted cash of approximately $ 15 thousand is included in prepaid expenses and other current assets and $ 1.0 million of non-current restricted cash is included in other non-current assets in the condensed consolidated balance sheet as of September 30, 2020.

Inventories consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

September 30, 2020 December 31, 2019

Raw materials $ 8,768 $ 6,133

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Property and Equipment, net

Property and equipment consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

Property and equipment consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

September 30, 2020 December 31, 2019

Computer equipment and software $ 4,363 $ 3,997

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Property and equipment, net $ 7,531 $ 8,056

Activity for our warranty accrual for the six months ended June 30, 2020 and 2019, which are included in other accrued liabilities, is summarized below (in thousands):

Six Months Ended June 30,

Activity for our warranty accrual for the nine months ended September 30, 2020 and 2019, which is included in other accrued liabilities, is summarized below (in thousands):

Nine Months Ended September 30,

Beginning balance $ 1,390 $ 863

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We received $ 195.2 million, net of underwriting discounts, from the issuance of the 2014 Notes and incurred approximately $ 1.1 million in offering-related expenses.

The underwriting discount of $ 6.0 million and the debt issuance costs of $ 1.1 million were recorded as offsets to the proceeds.

The underwriting discount and offering-related expenses are being amortized to interest expense using the effective-interest rate method.

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We have retired the majority of the 2014 Notes through the issuance of the 2018 Notes and 2019 Notes, as discussed below.

As of June 30, 2020, there is $ 1.1 million aggregate principal of the 2014 Notes outstanding.

As of September 30, 2020, there is $ 1.1 million aggregate principal of the 2014 Notes outstanding.

2018 Senior Convertible Notes (2018 Notes)

In March 2018, we entered into separate privately negotiated transactions with certain holders of our 2014 Notes to exchange $ 150.0 million in aggregate principal amount of the 2014 Notes for 2018 Notes, leaving $ 51.3 million of the aggregate principal amount of 2014 Notes outstanding.

In March 2018, we entered into separate privately negotiated transactions with certain holders of our 2014 Notes to exchange $ 150.0 million in aggregate principal amount of the 2014 Notes for 2018 Notes, leaving $ 51.3 million of the aggregate principal amount of the 2014 Notes outstanding.

As of the closing of the 2018 Notes on March 12, 2018, the estimated fair value was $ 145.5 million.

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Those certain specified events included holders who converted their 2018 Notes voluntarily prior to our exercise of the issuer’s conversion option described below or in connection with a make-whole fundamental change prior to February 6, 2023, entitling the holders, under certain circumstances, to a make-whole premium in the form of an increase in the conversion rate determined by reference to a make-whole table set forth in the indenture governing the 2018 Notes.

Any time prior to the maturity of the 2018 Notes, we could convert the 2018 Notes, in whole but not in part, into cash, shares of our common stock, or combination thereof, if the closing price of our common stock equaled or exceeded 110 % of the conversion price then in effect for a specified number of days.

prior to the maturity of the 2018 Notes, we could convert the 2018 Notes, in whole but not in part, into cash, shares of our common stock, or combination thereof, if the closing price of our common stock equaled or exceeded 110 % of the conversion price then in effect for a specified number of days.

Offering-related costs for the 2018 Notes were approximately $ 2.8 million.

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In February 2019, we notified the trustee, U.S.

Bank National Association, of our intention to exercise our issuer’s conversion option with respect to the remaining approximately $ 11.9 million in aggregate principal amount of 2018 Notes.

In total, $ 150.0 million of the 2018 Notes were

converted into 19.5 million shares of our common stock and the bonds were retired.

Bank National Association, of our intention to exercise our issuer’s conversion option with respect to the remaining approximately $ 11.9 million in aggregate principal amount of the 2018 Notes.

In total, $ 150.0 million of the 2018 Notes were converted into 19.5 million shares of our common stock and the bonds were retired.

We recognized a loss of $ 9.0 million on the retirement of the 2018 Notes, which represented the difference between the fair value of the bonds retired and their carrying costs.

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The carrying values of the components of the 2014 Notes and the 2019 Notes are as follows (in thousands):

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

2.75 % 2014 Notes due 2034

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Subject to the level of this Borrowing Base, we may make and repay borrowings from time to time until the maturity of the Revolving Credit Facility.

The Borrowing Base as of June 30, 2020 under the Revolving Credit Facility was $ 7.3 million.

There were no borrowings outstanding under the Revolving Credit Facility at June 30, 2020.

The Borrowing Base as of September 30, 2020 under the Revolving Credit Facility was $ 15.0 million.

There were no borrowings outstanding under the Revolving Credit Facility at September 30, 2020.

The Revolving Credit Facility is collateralized by substantially all our property, other than intellectual property.

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Interest on any outstanding loans is due and payable monthly and the principal balance is due at maturity, though loans can be prepaid at any time without penalty.

In addition, we pay a quarterly unused revolving line facility fee of 0.75 % per annum on the average unused facility and an annual commitment fee of $ 112,500 .

Effective April 21, 2020, the Revolving Credit Facility was amended to extend the maturity date to August 2, 2022.

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During the existence of an event of default, interest on the obligations under the Revolving Credit Facility could be increased to 5.0 % above the otherwise applicable rate of interest.

We were in compliance with all the terms and conditions of the Revolving Credit Facility at June 30, 2020.

We were in compliance with all the terms and conditions of the Revolving Credit Facility at September 30, 2020.

We have operating leases for buildings, equipment and vehicles.

1 unchanged sentence

Some leases contain options to extend the lease, usually for up to five years , and termination options.

Supplemental balance sheet information related to leases was as follows as of June 30, 2020 and December 31, 2019 (in thousands, except for discount rate and lease term):

June 30, 2020 December 31, 2019

Supplemental balance sheet information related to leases was as follows as of September 30, 2020 and December 31, 2019 (in thousands, except for discount rate and lease term):

September 30, 2020 December 31, 2019

Operating lease right-of-use buildings $ 40,723 $ 6,234

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Future minimum lease payments over the life of the lease were discounted at a rate of 12.6 %, which was our estimated incremental collateralized borrowing rate for the term of the lease at the inception of the lease.

The following table presents the components of lease expense for the three and six months ended June 30, 2020 and 2019, respectively (in thousands):

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

The following table presents the components of lease expense for the three and nine months ended September 30, 2020 and 2019, respectively (in thousands):

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

2020 2019 2020 2019

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Cash paid for amounts included in the measurement of operating lease liabilities (included in net cash used in operating activities in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Operating cash flows from operating leases $ 3,443 $ 3,068

Future minimum lease payments under commenced non-cancelable operating leases, which are as of June 30, 2020 as follows (in thousands):

Future minimum lease payments under commenced non-cancelable operating leases, which are as of September 30, 2020 as follows (in thousands):

Fiscal Year Minimum Lease Payments for Operating Leases

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The following tables summarize our cash and available-for-sale securities that were measured at fair value by significant investment category within the fair value hierarchy (in thousands):

June 30, 2020

September 30, 2020

Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cash and Cash Equivalents Short-Term Marketable Securities Cash- Restricted

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Money market funds $ 23,201 $ — $ — $ 23,201 $ 23,201 $ — $ —

US treasury securities 2,428 3 — 2,431 — 2,431 —

Subtotal $ 25,197 $ 3 $ — $ 25,200 $ 22,769 $ 2,431 $ —

Total $ 73,360 $ — $ — $ 73,360 $ 72,345 $ — $ 1,015

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Total $ 60,678 $ 36 $ — $ 60,714 $ 21,661 $ 36,978 $ 2,075

There were no transfers between Level I and Level II measurements, and no changes in the valuation techniques used, during the six months ended June 30, 2020.

Based on an evaluation of securities that were in a loss position, we did not recognize any other-than-temporary impairment charges for the six months ended June 30, 2020 and 2019.

There were no transfers between Level I and Level II measurements, and no changes in the valuation techniques used, during the nine months ended September 30, 2020.

Based on an evaluation of securities that were in a loss position, we did not recognize any other-than-temporary impairment charges for the nine months ended September 30, 2020 and 2019.

None of our investments have been in a continuous loss position for more than 12 months.

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In 2019, we significantly reduced the amount of our outstanding debt.

As a result, these securities are not traded frequently, so it is difficult to estimate a reliable and accurate market price and represent Level III valuations.

A fair value for these assets cannot be determined by using readily observable inputs or measures, such as market prices or models.

As a result, our convertible notes are not regularly traded and it is difficult to estimate a reliable and accurate market price for these securities.

The estimated fair values for these securities represent Level III valuations since a fair value for these securities cannot be determined by using readily observable inputs or measures, such as market prices.

Fair values were estimated using pricing models and risk-adjusted value ranges.

The following table summarizes the par value, carrying value and the estimated fair value of the 2014 and 2019 Notes at June 30, 2020 and December 31, 2019, respectively (in thousands):

June 30, 2020 December 31, 2019

The following table summarizes the par value, carrying value and the estimated fair value of the 2014 and 2019 Notes at September 30, 2020 and December 31, 2019, respectively (in thousands):

September 30, 2020 December 31, 2019

Par Value Carrying Value Fair Value Par Value Carrying Value Fair Value

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Shareholders’ Equity

2020 At-the-Market Offering

In March 2020, we entered into an Open Market Sale Agreement (Sale Agreement) with Jefferies LLC (Jefferies) to sell shares of our common stock having aggregate sales proceeds of up to $ 50,000,000 , from time to time, through an “at-the-market” equity offering program under which Jefferies acts as sales agent.

During the third quarter of 2020, we sold 2.5 million shares of our common stock pursuant to the Sale Agreement, for aggregate gross proceeds of $ 20.9 million.

Our net proceeds from the sale of such shares of common stock were approximately $ 20.1 million, after deducting related expenses, including commissions of approximately $ 0.6 million and issuance costs of approximately $ 0.2 million.

InstruNor Acquisition

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As a result of this issuance of our common stock, we recorded a total of $ 133.3 million of equity, which was equivalent to the fair value of the bonds retired.

At June 30, 2020, we had reserved shares of common stock for future issuance under equity compensation plans as follows:

At September 30, 2020, we had reserved shares of common stock for future issuance under equity compensation plans as follows:

(in 000's) Securities To Be Issued Upon Exercise Of Options Securities To Be Issued Upon Release Of Restricted Stock and Performance Share Units Number Of Remaining Securities Available For Future Issuance

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If a participant owns stock representing more than 10 % of the voting power of all classes of our stock on the grant date, an incentive stock option awarded to the participant will have a term of no more than five years from the date of grant and an exercise price of at least 110 % of the fair market value of the underlying common stock on the date of grant.

Generally, options vest at a rate of either 25 % on the first anniversary of the option grant date and ratably

each month over the remaining period of 36 months, or ratably each month over 48 months.

Generally, options vest at a rate of either 25 % on the first anniversary of the option grant date and ratably each month over the remaining period of 36 months, or ratably each month over 48 months.

We may grant options with different vesting terms from time to time.

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The Inducement Plan provided for the grant of equity-based awards on terms substantially similar to the 2011 Plan.

In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, awards under the Inducement Plan were only be made to individuals not previously our employees or non-employee members of our board of directors (or following such individual’s bona fide period of non-employment), as an inducement material to the individual’s entry into employment with us or in connection with a merger or acquisition, to the extent permitted by Rule 5635(c)(3) of the Nasdaq Listing Rules.

In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, awards under the Inducement Plan were only be made to individuals not previously our

employees or non-employee members of our board of directors (or following such individual’s bona fide period of non-employment), as an inducement material to the individual’s entry into employment with us or in connection with a merger or acquisition, to the extent permitted by Rule 5635(c)(3) of the Nasdaq Listing Rules.

In June 2019, concurrently with the increase in shares available for grant under the 2011 Plan, the Inducement Plan was terminated such that no further grants could be made thereunder.

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The fair value of RSUs granted to employees was estimated on the date of grant by multiplying the number of shares granted by the fair market value of our common stock on the grant date.

Activity under the 2011 Plan, the 2009 Plan, and the Inducement Plan was as follows:

Activity under the various plans was as follows:

Restricted Stock Units :

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RSU forfeited ( 305 ) $ 6.39

Balance as of June 30, 2020 5,369 $ 5.06

As of June 30, 2020, the unrecognized compensation costs related to outstanding unvested RSUs under our equity incentive plans were $ 24.8 million.

Balance as of September 30, 2020 5,016 $ 4.99

As of September 30, 2020, the unrecognized compensation costs related to outstanding unvested RSUs under our equity incentive plans were $ 22.0 million.

We expect to recognize those costs over a weighted average period of 2.8 years.

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Options forfeited ( 408 ) $ 9.20

Balance as of June 30, 2020 1,858 $ 7.86 6.1 $ 163

Vested at June 30, 2020 1,372 $ 8.69 5.4 $ 115

Awards expected to vest at June 30, 2020 474 $ 5.50 8.1 $ 48

(1) Aggregate intrinsic value as of June 30, 2020 was calculated as the difference between the closing price per share of our common stock on the last trading day of June 30, 2020, which was $ 4.01 , and the exercise price of the options, multiplied by the number of in-the-money options.

As of June 30, 2020, the unrecognized compensation costs related to outstanding unvested options under our equity incentive plans were $ 1.4 million.

Balance as of September 30, 2020 1,626 $ 7.34 6.4 $ 2,514

Vested at September 30, 2020 1,259 $ 7.86 6.0 $ 1,799

Awards expected to vest at September 30, 2020 367 $ 5.56 7.9 $ 715

(1) Aggregate intrinsic value as of September 30, 2020 was calculated as the difference between the closing price per share of our common stock on the last trading day of September 30, 2020, which was $ 7.43 , and the exercise price of the options, multiplied by the number of in-the-money options.

As of September 30, 2020, the unrecognized compensation costs related to outstanding unvested options under our equity incentive plans were $ 1.1 million.

We expect to recognize those costs over a weighted average period of 1.4 years.

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The percentage of PSUs that vest will depend on our relative position at the end of the performance period and can range from 0 % to 200 % of the number of units granted.

Under FASB ASC Topic 718, the provisions of the PSU awards related to TSR are considered a market condition, and the effects of that market condition are reflected in the grant date fair value of the awards.

Under FASB ASC Topic 718, the provisions of the PSU awards related to TSR are considered a market

condition, and the effects of that market condition are reflected in the grant date fair value of the awards.

We used a Monte Carlo simulation pricing model to incorporate the market condition effects at our grant date.

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PSU forfeited ( 94 ) $ 14.26

Balance at June 30, 2020 962 $ 9.74

As of June 30, 2020, the unrecognized compensation costs related to these awards were $ 5.7 million.

Balance at September 30, 2020 962 $ 9.74

As of September 30, 2020, the unrecognized compensation costs related to these awards were $ 4.6 million.

We expect to recognize those costs over a weighted average period of 1.7 years.

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PSU forfeited ( 12 ) $ 7.05

Balance at June 30, 2020 48 $ 7.05

Balance at September 30, 2020 48 $ 7.05

2017 Employee Stock Purchase Plan

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The resetting of the purchase price is considered to be a modification of the original terms of the award.

Under ASC 718, the incremental fair value based on the difference between the fair value of the modified award and the fair value of the original award immediately before it was modified was approximately $ 0.3 million.

Under ASC 718, the incremental fair value based on the

difference between the fair value of the modified award and the fair value of the original award immediately before it was modified was approximately $ 0.3 million.

This amount was amortized over the remaining offering period which ended May 31, 2020.

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Total stock-based compensation expense recognized was as follows (in thousands):

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

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

2020 2019 2020 2019

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Employee stock purchase plan 243 291 800 561

Total Share-based Compensation $ 3,634 $ 2,992 $ 6,000 $ 5,263

Total stock-based compensation $ 4,357 $ 3,029 $ 10,358 $ 8,292

Our quarterly provision for income taxes is based on an estimated effective annual income tax rate.

Our quarterly provision for income taxes also includes the tax impact of certain unusual or infrequently occurring items, if any, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur.

We recorded a tax benefit of $ 1.1 million for both the three months ended June 30, 2020 and 2019.

We recorded a tax benefit of $ 1.8 million and $ 1.1 million for the six months ended June 30, 2020 and 2019, respectively.

We recorded a tax benefit of $ 0.2 million and $ 2.1 million for the three and nine months ended September 30, 2020, respectively.

We recorded a tax benefit of $ 1.2 million and $ 2.3 million for the three and nine months ended September 30, 2019, respectively.

The benefits for all periods were primarily attributable to the tax benefit from the amortization of our acquisition-related deferred tax liabilities partially offset by tax provisions for our foreign operations and state minimum income taxes.

Our tax benefit for income taxes for the periods presented differ from the 21% U.S.

Federal statutory rate for the six months ended June 30, 2020 and 2019, respectively, primarily due to maintaining a valuation allowance for most of our deferred tax assets, which primarily consist of net operating loss carryforwards.

Federal statutory rate for the nine months ended September 30, 2020 and 2019, respectively, primarily due to maintaining a valuation allowance for most of our deferred tax assets, which primarily consist of net operating loss carryforwards.

Our tax positions are subject to audits by multiple tax jurisdictions.

We believe that we have provided adequate reserves for uncertain tax positions for all tax years still open for assessment.

For the three and six months ended June 30, 2020, and 2019, respectively, we did not recognize any material interest or penalties related to uncertain tax positions.

For the three and nine months ended September 30, 2020, and 2019, respectively, we did not recognize any material interest or penalties related to uncertain tax positions.

Recording deferred tax assets is appropriate when realization of these assets is more likely than not.

Assessing the realizability of deferred tax assets is dependent upon several factors including historical financial results.

Assessing the realizability of deferred tax assets is dependent upon several factors including historical financial results and future expected financial results.

The deferred tax assets have been offset by valuation allowances.

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Most of our principal operations, other than manufacturing, and our decision-making functions are located at our corporate headquarters in the United States.

A summary table of our total revenue by geographic areas of our customers and by product and services for the three and six months ended June 30, 2020 and 2019 is included in Note 4 to the condensed consolidated financial statements.

Sales to customers in the United States represented $ 13.4 million, or 51 % of total revenues, and $ 27.5 million, or 51 % of total revenues, for the three and six months ended June 30, 2020, respectively.

Sales to customers in the United States

represented $ 9.9 million, or 35 % of total revenues, and $ 22.4 million, or 38 % of total revenues, for the three and six months ended June 30, 2019, respectively.

No foreign country or jurisdiction had sales in excess of 10% of total revenues for the three months ended June 30, 2020 and 2019, except for China, which had sales of $ 3.5 million, or 13 % of total revenues, and $ 4.0 million, or 14 % of total revenues, respectively.

There was no foreign country or jurisdiction with sales in excess of 10% of our total revenues for the six months ended June 30, 2020 or 2019, except for China, which had sales of $ 7.5 million, or 13 % of total revenues, for the six months ended June 30, 2019.

A summary table of our total revenue by geographic areas of our customers and by product and services for the three and nine months ended September 30, 2020 and 2019 is included in Note 5 to the condensed consolidated financial statements.

Sales to customers in the United States represented $ 23.3 million, or 58 % of total revenues, and $ 50.7 million, or 54 % of total revenues, for the three and nine months ended September 30, 2020, respectively.

Sales to customers in the United States represented $ 10.5 million, or 40 % of total revenues, and $ 32.9 million, or 39 % of total revenues, for the three and nine months ended September 30, 2019, respectively.

No foreign country or jurisdiction had sales in excess of 10% of total revenues for the three months ended September 30, 2020 and 2019, except for China, which had total revenues of $ 3.9 million, or 15 % of total revenues for the three months ended September 30, 2019.

There was no foreign country or jurisdiction with sales in excess of 10% of our total revenues for the nine months ended September 30, 2020 or 2019, except for China, which had sales of $ 11.4 million, or 13 % of total revenues, for the nine months ended September 30, 2019.

Development Agreement

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The development stage is expected to last approximately one year from the date of the agreement.

We recognized $ 3.0 million of development revenue from this agreement in the three and six months ended June 30, 2020, along with approximately $ 1.0 million of deferred revenue.

We recognized $ 3.2 million and $ 6.2 million of development revenue from this agreement in the three and nine months ended September 30, 2020, respectively.

Commitments and Contingencies

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Contingencies

In September 2020, a putative class action complaint alleging violations of the federal securities laws was filed against the Company (also naming our Chief Executive Officer and Chief Financial Officer as defendants) in the U.S.

District Court for the Northern District of California.

The complaint seeks unspecified damages on behalf of a purported class of persons and entities who acquired our common stock between February 7, 2019 and November 5, 2019.

The litigation is in its early stages and the lead plaintiff has not yet been determined.

We believe the claims alleged in the complaint lack merit and we intend to defend ourselves vigorously.

From time to time, we may be subject to various legal proceedings and claims arising in the ordinary course of business.

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As additional information becomes available, we continue to reassess the potential liability related to pending claims and litigation and may revise estimates.

Subsequent Events

In July 20, 2020, we entered into a letter contract with the National Institutes of Health (NIH) for a project under the NIH Rapid Acceleration of Diagnostics (RADx) program.

The RADx program aims to support a range of new lab-based and point-of-care tests that could significantly increase the number, type and availability of COVID-19 tests.

This project, with a total proposed budget of up to $ 37.0 million, contemplates expanding production capacity and throughput capabilities for COVID-19 testing with Fluidigm microfluidics technology.

The letter contract provides Fluidigm with access to up to $ 12.2 million of initial funding based on completion and delivery of certain validation milestones prior to execution of a definitive contract.

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