STANDARD BIOTOOLS INC. 10-Q

Item 1. Financial Statements STANDARD BIOTOOLS INC. (formerly known as FLUIDIGM CORPORATION) CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) March 31, December 31, 2022 2021 ASSETS Current assets: Cash and cash equivalents $ 29,983 $ 28,451 Accounts receivable (net of allowances of $ 356 at each of March 31, 2022 and December 31, 2021) 15,422 18,320 Inventories, net 23,245 20,825 Prepaid expenses and other current assets 4,547 4,470 Total current assets 73,197 72,066 Property and equipment, net 27,699 28,034 Operating lease right-of-use asset, net 36,389 37,119 Other non-current assets 3,445 3,689 Developed technology, net 24,875 27,927 Goodwill 106,333 106,379 Total assets $ 271,938 $ 275,214 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 12,517 $ 10,602 Accrued compensation and related benefits 7,964 4,920 Operating lease liabilities, current 3,209 3,053 Deferred revenue, current 12,291 11,947 Deferred grant income, current 3,603 3,535 Other accrued liabilities 7,589 8,673 Advances under revolving credit agreement, current — 6,838 Total current liabilities 47,173 49,568 Bridge loans 35,655 — Convertible notes, net 54,271 54,160 Term loan, net 10,106 10,049 Deferred tax liability 3,544 4,329 Operating lease liabilities, non-current 36,760 37,548 Deferred revenue, non-current 5,793 5,966 Deferred grant income, non-current 17,237 18,116 Obligation for Series B Preferred Stock 37,792 — Other non-current liabilities 1,494 882 Total liabilities 249,825 180,618 Commitments and contingencies Stockholders’ equity: Preferred stock, $ 0.001 par value, 10,000 shares authorized, no shares issued and outstanding at either March 31, 2022 or December 31, 2021 — — Common stock: $ 0.001 par value, 200,000 shares authorized at March 31, 2022 and December 31, 2021; 77,199 and 76,919 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively 77 77 Additional paid-in capital 835,379 831,424 Accumulated other comprehensive loss ( 1,057 ) ( 907 ) Accumulated deficit ( 812,286 ) ( 735,998 ) Total stockholders’ equity 22,113 94,596 Total liabilities and stockholders’ equity $ 271,938 $ 275,214 See accompanying notes 1 STANDARD BIOTOOLS INC. (formerly known as FLUIDIGM CORPORATION) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended March 31, 2022 2021 Revenue Product revenue $ 20,004 $ 24,728 Service revenue 6,144 6,286 Development revenue 88 1,480 Other revenue 268 300 Total revenue 26,504 32,794 Costs and expenses Cost of product revenue 12,339 11,663 Cost of service revenue 1,928 2,090 Research and development 8,865 10,753 Selling, general and administrative 30,875 27,608 Total costs and expenses 54,007 52,114 Loss from operations ( 27,503 ) ( 19,320 ) Interest expense ( 1,030 ) ( 887 ) Loss on forward sale of Series B Preferred Stock ( 37,792 ) — Unrealized loss on bridge loans ( 10,655 ) — Other income (expense), net 118 ( 285 ) Loss before income taxes ( 76,862 ) ( 20,492 ) Income tax benefit 574 1,671 Net loss $ ( 76,288 ) $ ( 18,821 ) Net loss per share, basic and diluted $ ( 0.99 ) $ ( 0.25 ) Shares used in computing net loss per share, basic and diluted 77,031 74,707 See accompanying notes 2 STANDARD BIOTOOLS INC. (formerly known as FLUIDIGM CORPORATION) CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands) (Unaudited) Three Months Ended March 31, 2022 2021 Net loss $ ( 76,288 ) $ ( 18,821 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustment ( 150 ) ( 443 ) Comprehensive loss $ ( 76,438 ) $ ( 19,264 ) See accompanying notes 3 STANDARD BIOTOOLS INC. (formerly known as FLUIDIGM CORPORATION) CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands) (Unaudited) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of December 31, 2021 76,919 $ 77 $ 831,424 $ ( 907 ) $ ( 735,998 ) $ 94,596 Issuance of restricted stock, net of shares withheld for taxes, and other 280 — ( 87 ) — — ( 87 ) Stock-based compensation expense — — 4,042 — — 4,042 Net loss — — — — ( 76,288 ) ( 76,288 ) Other comprehensive loss, net of tax — — — ( 150 ) — ( 150 ) Balance as of March 31, 2022 77,199 $ 77 $ 835,379 $ ( 1,057 ) $ ( 812,286 ) $ 22,113 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of December 31, 2020 74,543 $ 75 $ 815,624 $ 112 $ ( 676,761 ) $ 139,050 Issuance of restricted stock, net of shares withheld for taxes, and other 420 — ( 525 ) — — ( 525 ) Stock-based compensation expense — — 3,677 — — 3,677 Net loss — — — — ( 18,821 ) ( 18,821 ) Other comprehensive loss, net of tax — — — ( 443 ) — ( 443 ) Balance as of March 31, 2021 74,963 $ 75 $ 818,776 $ ( 331 ) $ ( 695,582 ) $ 122,938 See accompanying notes 4 STANDARD BIOTOOLS INC. (formerly known as FLUIDIGM CORPORATION) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended March 31, 2022 2021 Operating activities Net loss $ ( 76,288 ) $ ( 18,821 ) Adjustments to reconcile net loss to net cash used in operating activities: Loss on forward sale of Series B Preferred Stock 37,792 — Unrealized loss on bridge loans 10,655 — Stock-based compensation expense 4,042 3,677 Amortization of developed technology 2,968 2,983 Depreciation and amortization 1,003 934 Provision for excess and obsolete inventory 851 315 Amortization of debt discounts, premiums and issuance costs 211 132 Other non-cash items 104 163 Changes in assets and liabilities: Accounts receivable, net 2,917 9,843 Inventories, net ( 3,558 ) ( 2,896 ) Prepaid expenses and other assets ( 38 ) ( 2,763 ) Accounts payable 1,905 3,363 Accrued compensation and related benefits 3,037 ( 5,020 ) Deferred revenue 155 156 Other liabilities ( 1,346 ) ( 4,967 ) Net cash used in operating activities ( 15,590 ) ( 12,901 ) Investing activities Proceeds from NIH Contract — 2,000 Purchases of property and equipment ( 868 ) ( 6,923 ) Net cash used in investing activities ( 868 ) ( 4,923 ) Financing activities Proceeds from bridge loans 25,000 — Repayment of advances under credit agreement ( 6,838 ) — Repayment of long-term debt — ( 501 ) Payments for taxes related to net share settlement of equity awards and other ( 87 ) ( 525 ) Net cash provided by (used in) financing activities 18,075 ( 1,026 ) Effect of foreign exchange rate fluctuations on cash and cash equivalents ( 85 ) 74 Net increase (decrease) in cash, cash equivalents and restricted cash 1,532 ( 18,776 ) Cash, cash equivalents and restricted cash at beginning of period 29,467 69,536 Cash, cash equivalents and restricted cash at end of period $ 30,999 $ 50,760 Supplemental disclosures of cash flow information Cash paid for interest $ 102 $ 44 Cash paid for income taxes, net of refunds $ 488 $ 1,200 Non-cash right-of-use assets and lease liabilities $ ( 133 ) $ — Asset retirement obligations $ 722 $ 324 See accompan ying notes 5 STANDARD BIOTOOLS INC. (formerly known as FLUIDIGM CORPORATION) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 1. Description of Business Standard BioTools Inc. (Standard BioTools, the Company, we, our or us), previously known as Fluidigm Corporation, is driven by a bold vision – unleashing tools to accelerate breakthroughs in human health. Standard BioTools has an established portfolio of essential, standardized next-generation technologies that help biomedical researchers develop medicines faster and better. As a leading solutions provider, we provide reliable and repeatable insights in health and disease using our proprietary mass cytometry and microfluidics technologies that help transform scientific discoveries into better patient outcomes. Standard BioTools works with leading academic, government, pharmaceutical, biotechnology, plant and animal research, and clinical laboratories worldwide, focusing on the most pressing needs in translational and clinical research, including oncology, immunology, and immunotherapy. The Company was formerly known as Fluidigm Corporation and changed its name to Standard BioTools Inc. in April 2022, in connection with the completion of the private placement issuance discussed in Note 3. The Company was founded in 1999 and is headquartered in South San Francisco, California. 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP) and include the accounts of our wholly owned subsidiaries. As of March 31, 2022, we had wholly owned subsidiaries in Singapore, Canada, the Netherlands, Japan, France, Italy, the United Kingdom, China, Germany and Norway. All subsidiaries, except for Singapore, use their local currency as their functional currency. The Singapore subsidiary uses the U.S. dollar as its functional currency. All intercompany transactions and balances have been eliminated in consolidation. In the audited financial statements and the related notes for the year ended December 31, 2021 included in our annual report on Form 10-K, filed with the SEC on March 8, 2022, we disclosed that we had performed an assessment to determine whether there were conditions or events, considered in the aggregate, that raised substantial doubt about our ability to continue as a going concern for at least the twelve-month period following the date the financial statements were issued. We believed that our then-current level of cash and cash equivalents, together with committed financing facilities, were not sufficient to fund ongoing operations for at least the twelve-month period after the financial statements are issued. Since then, we have closed the $ 225 million Series B Preferred Equity Financing, as defined in Note 3, that was previously disclosed in Note 18 to our audited financial statements for the year ended December 31, 2021 as contingent on stockholder approval. The completion of this financing has eliminated the doubt about the Company’s ability to continue as a going concern. See Note 3 and Note 17 for further discussion. Certain prior period amounts in the condensed consolidated financial statements were reclassified to conform with the current period presentation. 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. GAAP. The condensed consolidated results of operations for the three months ended March 31, 2022 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, 2021 included in our annual report on Form 10-K, filed with the SEC on March 8, 2022. 6 Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions believed to be reasonable, which together form the basis for making judgments about the carrying values of assets and liabilities. 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, including the unknown impact of COVID-19 and the war in Ukraine. Accounting matters that rely on forecasted financial information included, but were not limited to, our inventory, and related reserves, and the carrying value of goodwill and other long-lived assets and liabilities. Actual results could differ materially from these estimates and could have a material adverse effect on our condensed consolidated financial statements. We also use significant judgment in determining the fair value of financial instruments, including the Bridge Loans, forward contracts on Series B Preferred Stock and other debt and equity instruments. Foreign Currency Assets and liabilities of non-U.S. subsidiaries that use the local currency as their functional currency are translated into U.S. dollars at exchange rates in effect on the balance sheet date. Income and expense accounts are translated at monthly average exchange rates during the year. The adjustments resulting from the foreign currency translations are recorded in accumulated other comprehensive loss, a separate component of stockholders’ equity. Private Placement Issuance See Note 3 for a detailed discussion of the transactions, including the accounting treatment, and additional information. Comprehensive Loss Comprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive income (loss) generally consists of unrealized gains and losses on our investments and foreign currency translation adjustments. Total comprehensive loss for all periods presented has been disclosed in the condensed consolidated statements of comprehensive loss. The component of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2022 is as follows (in thousands): Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Investments Accumulated Other Comprehensive Income (Loss) Ending balance at December 31, 2021 $ ( 907 ) $ — $ ( 907 ) Other comprehensive income (loss) ( 150 ) — ( 150 ) Ending balance at March 31, 2022 $ ( 1,057 ) $ — $ ( 1,057 ) Net Loss per Share Our basic and diluted net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding for the period. 7 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): Three Months Ended March 31, 2022 2021 Stock options, restricted stock units and performance awards 7,988 6,974 Bridge Loans 8,979 — Series B Convertible Preferred Stock Purchase Agreements 66,176 — 2019 Convertible Notes 18,966 18,966 2019 Convertible Notes potential make-whole shares 1,775 1,538 2014 Convertible Notes 10 10 Total 103,894 27,488 Potentially dilutive securities in the above table include the impact of the Bridge Loans and the Series B Convertible Preferred Stock Purchase Agreements, defined in Note 3. See Note 3 for further discussion. Recent Accounting Changes and Accounti ng Pronouncements Adoption of New Accounting Guidance 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. The Company adopted ASU 2020-06 effective January 1, 2022. The adoption of ASU 2020-06 did not have an impact on the Company’s 2014 and 2019 Convertible Notes. In November 2021, the FASB issued ASU 2021-10 Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. The amendment is effective for annual periods beginning after December 15, 2021. The amendment establishes financial disclosure requirements for business entities that receive government assistance that the entities account for by analogizing to a grant or contribution model because there is no specific authoritative guidance under U.S. GAAP that applies to the transaction. Entities that receive this type of assistance should include the following information in their annual report: (1) the nature of the transaction, (2) the significant terms and conditions, (3) the accounting treatment, (4) the line items on the balance sheet and income statement that are affected along with (5) the respective amounts that have been recorded. The Company adopted ASU 2021-10 effective January 1, 2022. The adoption of ASU 2021-10 did not have a material impact on the Company’s financial statements. Recent Accounting Pronouncements None . 3. Private Placement Issuance Overview of Transactions On January 23, 2022, we entered into (i) a Loan Agreement (the Casdin Bridge Loan Agreement) with Casdin Private Growth Equity Fund II, L.P. and Casdin Partners Master Fund, L.P. (collectively, Casdin) and (ii) a Loan Agreement (the Viking Bridge Loan Agreement, and together with the Casdin Bridge Loan Agreement, the Bridge Loan Agreements) with Viking Global Opportunities Illiquid Investments Sub-Master LP and Viking Global Opportunities Drawdown (Aggregator) LP (collectively, Viking and, together with Casdin, the Purchasers and each, a Purchaser). Each Bridge Loan Agreement provided for a $ 12.5 million term loan (the Bridge Loans) to the Company. The Bridge Loans were fully drawn on January 24, 2022. The Bridge Loans automatically converted into Series B Preferred Stock, defined below, upon the completion of the Preferred Equity Financ ing, defined below. Also on January 23, 2022, we entered into separate Series B Convertible Preferred Stock Purchase Agreements (the Purchase Agreements) with each of Casdin and Viking pursuant to which at the closing of the transactions contemplated thereby, and on the terms and subject to the conditions set forth therein, including the approval of our stockholders, we issued and sold an aggregate of $ 225 million of convertible preferred stock on April 4, 2022, consisting of: (i) 112,500 shares of the Company’s Series B-1 Convertible Preferred Stock, par value $ 0.001 per share (the Series B-1 Preferred Stock), at a purchase 8 price of $ 1,000 per share to Casdin; and (ii) 112,500 shares of the Company’s Series B-2 Convertible Preferred Stock, par value $ 0.001 per share (the Series B-2 Preferred Stock, and together with the Series B-1 Preferred Stock, the Series B Preferred Stock) at a purchase price of $ 1,000 per share to Viking (the Preferred Equity Financing, and together with the issuance of shares of Series B Preferred Stock in connection with the conversion of the Bridge Loans, the Private Placement Issuance). The rights, preferences and privileges of the Series B Preferred Stock are set forth in the Series B-1 Certificate of Designations and Series B-2 Certificate of Designations (collectively, the Series B Certificates of Designations), each as defined in the respective Purchase Agreements. The Series B Preferred Stock ranks senior to our common stock with respect to dividend rights, redemption rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The holders of Series B Preferred Stock are entitled to participate in all dividends declared on our common stock on an as-converted basis, on the terms and subject to the conditions set forth in the Series B Certificates of Designations. Our board of directors (the Board) called a meeting (Special Meeting) to ask our stockholders to consider, vote upon and approve (i) a proposal to amend the Company’s Eighth Amended and Restated Certificate of Incorporation (the Charter) to, among other things, increase the number of shares of common stock, par value $ 0.001 per share, that we are authorized to issue from two hundred million ( 200,000,000 ) shares to four hundred million ( 400,000,000 ) shares and to change the Company’s name to Standard BioTools Inc. (the Charter Amendment Proposal); (ii) a proposal to approve, in accordance with Nasdaq Listing Rule 5635, the issuance of (A) the Series B-1 Preferred Stock and the Series B-2 Preferred Stock pursuant to the Purchase Agreements, (B) the Series B-1 Preferred Stock and the Series B-2 Preferred Stock issuable pursuant to the terms of the Bridge Loan Agreements and (C) the common stock issuable upon the conversion of the Series B Preferred Stock (the Private Placement Issuance Proposal); and (iii) a proposal to adjourn the Special Meeting if the Special Meeting were convened and a quorum were present, but there were not sufficient votes to approve the Charter Amendment Proposal and the Private Placement Issuance Proposal (the Adjournment Proposal, and, together with the Private Placement Issuance Proposal and the Charter Amendment Proposal, the Stockholder Proposals). Each of the Private Placement Issuance Proposal and Charter Amendment Proposal were conditioned on the approval of the other proposal, and neither proposal would take effect unless both were approved by our stockholders. Our stockholders approved the Charter Amendment Proposal and Private Placement Issuance Proposal on April 1, 2022. The Private Placement Issuance closed on April 4, 2022. The proceeds of the Private Placement Issuance have been and will be used to fund expenses related to the Private Placement Issuance, as well as working capital, general corporate purposes and potential future merger and acquisition opportunities that we may identify from time to time. Bridge Loans Prior to their conversion, the Bridge Loans bore interest (i) from and including the effective date of the Bridge Loan Agreements to but excluding March 1, 2022, at 10 %, (ii) from and including March 1, 2022 to but excluding June 1, 2022, at 12 %, (iii) from and including June 1, 2022 to but excluding September 1, 2022, at 14 %, and (iv) from and including September 1, 2022 and thereafter, at 16 %. Interest accrued daily and was payable in kind by adding the accrued interest to the outstanding principal amount. Unless earlier converted, the outstanding principal amount of the Bridge Loans (inclusive of principal and accrued and unpaid interest) was due and payable in cash on the maturity date. The Bridge Loans automatically converted into Series B Preferred Stock upon the issuance of the shares of Series B Preferred Stock pursuant to the Purchase Agreements, in accordance with the terms of the Bridge Loan Agreements. The Bridge Loans converted into a number of shares of Series B Preferred Stock equal to (i) the then outstanding principal amount of the applicable Bridge Loan (including any interest added to the original principal amount thereof) plus accrued and unpaid interest (together, the Conversion Amount) on the Bridge Loans divided by $ 1,000 multiplied by (ii) the Conversion Price (as defined in the Series B Certificates of Designations) divided by $ 2.84 . If the Series B Preferred Stock had not been approved for issuance by our stockholders, or the Purchase Agreements were terminated, then the Bridge Loans would have become convertible, at each lender’s option, into common stock, par value $ 0.001 per share, of the Company at an initial conversion rate of 352.1126 shares of common stock per $1,000 of the Conversion Amount, subject to the cap set forth in the Bridge Loan Agreements. Unless earlier converted, the Bridge Loans, inclusive of principal and accrued and unpaid interest, would have become due and payable in cash on the maturity date. The maturity date of the Bridge Loans was 91 days after the maturity date of the Term Loan Facility as defined in Note 9. The latest possible maturity date of the Bridge Loans was September 30, 2025. The conversion rate was subject to customary adjustments as set forth in the Bridge Loan Agreements. 9 The carrying value of the Bridge Loans is as follows (in thousands): March 31, 2022 December 31, 2021 Principal amount $ 25,000 $ — Accrued and unpaid interest 499 — Conversion amount 25,499 — Unrealized loss on Bridge Loans 10,156 — Fair value of Bridge Loans $ 35,655 $ — Applying the guidance in ASC 825, we elected to record the Bridge Loans at their fair value. The change in fair value of the Bridge Loans from $ 25.0 million at inception to $ 35.7 million as of March 31, 2022, including the portion attributable to accrued interest, is reflected as a non-operating unrealized loss on the Bridge Loans in the accompanying consolidated statement of operations. In addition, as required under the fair value option, issuance costs associated with the debt of $ 0.2 million were recognized in selling, general and administrative expenses in the first quarter of 2022. The unrealized loss on the Bridge Loans was largely driven by an increase in the price of our common stock from $ 2.84 per share at inception to $ 3.59 per share as of March 31, 2022, and, to a lesser extent, to the change in value of the various conversion options under the Approval Scenario, discussed below. We employed a probability‐weighted expected return method in our valuation analysis of the Bridge Loans. Specifically, our analysis contemplated two scenarios: 1) our stockholders approve the transaction (Approval Scenario) and 2) our stockholders do not approve the transaction (Disapproval Scenario). To estimate the fair value of the Bridge Loans pursuant to the Approval Scenario, we employed a Monte Carlo Simulation (MCS) analysis based on the underlying Series B Preferred Stock into which the Bridge Loans were convertible. Given the convertibility of the Series B Preferred Stock into cash or our common stock, our MCS analysis simulated the value of the Series B Preferred Stock using a random‐walk process that incorporated the various provisions of the Series B Preferred Stock discussed below. Series B Convertible Preferred Stock Purchase Agreements The Purchase Agreements for the issuance of 225,000 shares of Series B Preferred Stock for $ 225 million at a future date, have been accounted for as forward sales contracts at fair value in accordance with ASC 480 because the Series B Preferred Stock includes certain contingent redemption features which create an obligation for the Company to repurchase its shares. The fair values of the forward sales contracts were determined using the MCS analysis discussed above. As noted above, given the convertibility of the Series B Preferred Stock into cash or our common stock under several scenarios, the MCS analysis simulated the value of our common stock and the resulting impact on the value of Series B Preferred Stock, given the various provisions discussed below. The fair value of 225,000 shares of Series B Preferred Stock was determined to be $ 262.8 million as of March 31, 2022. The $ 37.8 million difference between the fair value of the Series B Preferred Stock of $ 262.8 million and the par value of $ 225 million represents the value of the forward sales contracts and is recorded on the condensed consolidated balance sheet in non-current liabilities, while the change in the fair value of the forward sales contracts is included in non-operating income in the condensed consolidated statement of operations for the three months ended March 31, 2022. The increase in the fair value of the Series B Preferred Stock from January 23, 2022 to March 31, 2022 reflects the increase in the price of our common stock since the inception of the contracts through March 31, 2022, and the value of the various conversion rights and key provisions discussed below. The Series B Certificates of Designations contain several conversion rights and other key provisions described below. Holder Voluntary Conversion Rights The Series B Preferred Stock is convertible at the option of the holders thereof at any time into a number of shares of common stock equal to the Conversion Rate (as defined in the Series B Certificates of Designations), which is initially 294.1176 shares of common stock per share of Series B Preferred Stock, in each case subject to certain adjustments and certain limitations on conversion. Issuer Call Provision At any time after the fifth anniversary of the closing of the Private Placement Issuance, if the last reported sale price of the common stock is greater than 250 % of the Conversion Price (as defined in the Series B Certificates of Designations) as of such time for at least 20 consecutive trading days, we may elect to convert all of the outstanding shares of Series B Preferred Stock into shares of common stock. 10 Issuer Redemption Provision After the seventh anniversary of the closing of the Private Placement Issuance, subject to certain conditions, we may, at our option, redeem all of the outstanding shares of Series B Preferred Stock at a redemption price per share of Series B Preferred Stock, payable in cash, equal to the Liquidation Preference (as defined in the Series B Certificates of Designations). Change of Control Provisions If we undergo certain change of control transactions, each holder of outstanding shares of Series B Preferred Stock will have the option, subject to the holder’s right to convert all or a portion of the shares of Series B Preferred Stock held by such holder into common stock, to require us to purchase all or a portion of such holder’s outstanding shares of Series B Preferred Stock that have not been converted into common stock at a purchase price per share of Series B Preferred Stock, payable in cash, equal to the greater of (A) the Liquidation Preference of such share of Series B Preferred Stock, and (B) the amount of cash and/or other assets that such holder would have been entitled to receive if such holder had converted such share of Series B Preferred Stock into common stock immediately prior to the change of control transaction (Change of Control Put). In the event of a change of control in which we are not expected to be the surviving corporation or if the common stock will no longer be listed on a U.S. national securities exchange, we will have a right to redeem, subject to the holder’s right to convert into common stock prior to such redemption, all of such holder’s shares of Series B Preferred Stock, or if a holder exercises the Change of Control Put in part, the remainder of such holder’s shares of Series B Preferred Stock, at a redemption price per share payable in cash, equal to the greater of (A) the Liquidation Preference of such share of Series B Preferred Stock, and (B) the amount of cash and/or other assets that the holder would have received if such holder had converted such share of Series B Preferred Stock into common stock immediately prior to the change of control transaction. Liquidation Rights In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the Series B Preferred Stock has a liquidation preference equal to the greater of (i) the Liquidation Preference (as defined in the Series B Certificates of Designations, currently $ 3.40 ) and (ii) the amount per share of Series B Preferred Stock that such holder would have received had all holders of Series B Preferred Stock, immediately prior to such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, converted all shares of Series B Preferred Stock into common stock pursuant to the terms of the Series B Certificates of Designations (without regard to any limitations on conversion contained therein). 4. NIH Contract In 2020, we were awarded the NIH Contract under the RADx program to support the expansion of our production capacity and throughput capabilities for COVID-19 testing with our microfluidics technology. We completed the required milestones in 2021 and received the total NIH Contract value of $ 34.0 million. Proceeds from the NIH Contract have been used primarily for capital expenditures to expand production capacity and, to a lesser extent, to offset applicable operating costs. Grant proceeds that exceed the cost of the capital expenditures and expenses that have been and are expected to be incurred are recorded in other non-operating income. 11 The following table summarizes the activity under the NIH Contract as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Cash receipts from milestones achieved $ 34,016 $ 34,016 Cumulative amounts applied against operating costs (excluding depreciation) ( 4,526 ) ( 4,522 ) Cumulative amounts applied against depreciation expense for assets placed in service ( 1,510 ) ( 703 ) Cumulative amounts recognized as non-operating income ( 7,140 ) ( 7,140 ) Total deferred grant income $ 20,840 $ 21,651 Assets placed in service, gross $ 20,425 $ 16,890 Construction-in-progress 937 3,909 Cumulative amounts applied against depreciation expense ( 1,510 ) ( 703 ) Carrying value of property and equipment, net 19,852 20,096 Estimated future capital expenditures 988 1,555 Total deferred grant income $ 20,840 $ 21,651 Deferred grant income, current $ 3,603 $ 3,535 Deferred grant income, non-current 17,237 18,116 Total deferred grant income $ 20,840 $ 21,651 Deferred grant income, current on the condensed consolidated balance sheet represents amounts expected to be offset against depreciation expense over the next twelve months. Deferred grant income, non-current includes amounts expected to be offset against depreciation expense in later periods. We expect to spend $ 22.4 million on capital expenditures associated with the NIH Contract. We have incurred $ 21.4 million of capital expenditures th rough March 31, 2022, of which $ 20.4 million has been placed in service, while the remaining $ 0.9 million is included in construction-in-progress (See Note 8). We expect to place the remaining equipment in service by the end of the first half of 2022. 5. Development Agreement Effective March 31, 2020, we signed an OEM Supply and Development Agreement (Development Agreement) with a customer. Under the Development Agreement, we developed products based on our microfluidics technology. The Development Agreement provided for up-front and periodic milestone payments during the development stage, which was completed in the third quarter of 2021, and on-going annual payments of $ 0.4 million for sustaining efforts. We recognized $ 0.1 million and $ 1.5 million of development revenue from this agreement during the three months ended March 31, 2022 and March 31, 2021, respectively. 12 6. Revenue Disaggregation of Revenue The following table presents our revenue for the three months ended March 31, 2022 and 2021 based upon geographic area and source in thousands: Three Months Ended March 31, 2022 2021 Geographic Markets: Americas $ 12,930 $ 18,523 EMEA 8,609 9,142 Asia-Pacific 4,965 5,129 Total revenue $ 26,504 $ 32,794 Three Months Ended March 31, 2022 2021 Source: Instruments $ 7,523 $ 7,708 Consumables 12,481 17,020 Product revenue 20,004 24,728 Service revenue 6,144 6,286 Development revenue 88 1,480 Other revenue: License and royalty revenue 268 — Grant revenue — 300 Total other revenue 268 300 Total revenue $ 26,504 $ 32,794 Unfulfilled Performance Obligations We reported $ 17.9 million of deferred revenue on our December 31, 2021 consolidated balance sheet. During the three months ended March 31, 2022, $ 4.1 million of the opening balance was recognized as revenue and $ 4.3 million of net additional advance payments were received from customers, primarily associated with instrument service contracts. At March 31, 2022, we reported $ 18.1 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 as of March 31, 2022 (in thousands): Fiscal Year Expected Revenue (1) 2022 remainder of the year $ 10,437 2023 7,004 2024 3,678 Thereafter 2,190 Total $ 23,309 _______ (1) Expected revenue includes both billed amounts included in deferred revenue and unbilled amounts that are not reflected in our condensed consolidated financial statements and are subject to change if our customers decide to cancel or modify their contracts. Purchase orders for instrument service contracts can generally be canceled before the service period begins without penalty. We apply the practical expedient that permits us not to disclose information about unsatisfied performance obligations for service contracts with an expected term of one year or less. 13 7. Goodwill and Intangible Assets, net In connection with our acquisition of DVS 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 (Euro 2.0 million) of goodwill from the InstruNor acquisition and $ 5.4 million (Euro 4.9 million) of developed technology. 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 years. Goodwill and intangible assets with indefinite lives are not subject to amortization but are tested for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying amount of these assets may not be recoverable. Qualitative assessment includes assessing significant events and circumstances such as our current results, assumptions regarding future performance, strategic initiatives and overall economic factors, including the ongoing global COVID-19 pandemic and macroeconomic developments to determine the existence of potential indicators of impairment and assess if it is more likely than not that the fair value of our reporting unit or intangible assets is less than their carrying value. If indicators of impairment are identified, a quantitative impairment test is performed. There have been no indicators of impairment during the three months ended March 31, 2022. Intangible assets also include other patents and licenses, which are included in other non-current assets. Intangibl e assets, net, were as follows (in thousands): March 31, 2022 Gross Amount Accumulated Amortization Net Weighted-Average Amortization Period Developed technology $ 117,392 $ ( 92,517 ) $ 24,875 9.9 years Patents and licenses $ 11,259 $ ( 10,171 ) $ 1,088 7.0 years December 31, 2021 Gross Amount Accumulated Amortization Net Weighted-Average Amortization Period Developed technology $ 117,503 $ ( 89,576 ) $ 27,927 9.9 years Patents and licenses $ 11,257 $ ( 10,000 ) $ 1,257 7.0 years Total amortization expense for the three months ended March 31, 2022 and 2021 was $ 3.1 million and $ 3.2 million, respectively. Based on the carrying value of intangible assets as of March 31, 2022, the amortization expense is expected to be as follows (in thousands): Fiscal Year Developed Technology Amortization Expense Patents and Licenses Amortization Expense Total 2022 remainder of the year $ 8,905 $ 508 $ 9,413 2023 11,874 572 12,446 2024 2,074 8 2,082 2025 674 — 674 2026 674 — 674 Thereafter 674 — 674 Total $ 24,875 $ 1,088 $ 25,963 14 8. Balance Sheet Details Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Cash and cash equivalents $ 29,983 $ 28,451 Restricted cash 1,016 1,016 Total cash, cash equivalents and restricted cash $ 30,999 $ 29,467 Short-term restricted cash of approximately $ 16 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 March 31, 2022 and December 31, 2021. Inventories, net Inventories, net consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Raw materials $ 12,592 $ 9,345 Work-in-process 994 867 Finished goods 9,659 10,613 Total inventories, net $ 23,245 $ 20,825 Property and Equipment, net Property and equipment, net consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Computer equipment and software $ 5,777 $ 5,759 Laboratory and manufacturing equipment 33,884 30,260 Leasehold improvements 12,460 12,095 Office furniture and fixtures 2,065 2,074 Property and equipment, gross 54,186 50,188 Less accumulated depreciation and amortization ( 28,151 ) ( 26,703 ) Construction-in-progress 1,664 4,549 Property and equipment, net $ 27,699 $ 28,034 The majority of the amounts included in construction-in-progress are related to the NIH Contract (see Note 4). Accrued Compensation and Related Benefits Accrued compensation and related benefits, which is included in current liabilities on the condensed consolidated balance sheet consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Accrued incentive compensation $ 1,779 $ 14 Accrued vacation 3,737 3,388 Accrued payroll taxes and other 1,547 1,492 Accrued severance and retention bonuses 901 26 Accrued compensation and related benefits $ 7,964 $ 4,920 15 Long-term accrued s everance and retention bonuses of approximately $ 0.6 million and $ 0.1 million are included in non-current other liabilities on our condensed consolidated balance sheet as of March 31, 2022 and December 31, 2021, respectively. Warranties Accrued warranty is included in other current liabilities on our condensed consolidated balance sheet. Activity for our warranty accrual for the three months ended March 31, 2022 and 2021 is summarized below (in thousands): Three Months Ended March 31, 2022 2021 Beginning balance $ 1,170 $ 1,663 Accrual (release) for current period warranties 306 ( 150 ) Warranty costs incurred ( 264 ) ( 236 ) Ending balance $ 1,212 $ 1,277 9. Debt Bridge Loans See Note 3 for a discussion of the $ 35.7 million Bridge Loans outstanding as of March 31, 2022 as part of the Private Placement Issuance. 2014 Senior Convertible Notes (2014 Notes) and 2019 Senior Convertible Notes (2019 Notes) The carrying values of the components of the 2014 Notes and 2019 Notes are as follows (in thousands): March 31, 2022 December 31, 2021 2.75 % 2014 Notes due 2034 Principal amount $ 578 $ 578 Unamortized debt discount ( 8 ) ( 8 ) Unamortized debt issuance cost ( 2 ) ( 2 ) Net carrying value of 2014 Notes $ 568 $ 568 5.25 % 2019 Notes due 2024 Principal amount $ 55,000 $ 55,000 Unamortized debt issuance cost ( 1,297 ) ( 1,408 ) Net carrying value of 2019 Notes $ 53,703 $ 53,592 Net carrying value of all Notes $ 54,271 $ 54,160 2014 Senior Convertible Notes (2014 Notes) In February 2014, we closed an underwritten public offering of 2014 Notes. In 2019, the outstanding 2014 Notes were largely refinanced with the 2019 Notes, discussed below. The effective interest rate on the 2014 Notes, reflecting the impact of debt discounts and issuance costs, is approximately 3 %. The 2014 Notes will mature on February 1, 2034, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2014 Notes. Holders may require us to repurchase all or a portion of their 2014 Notes on each of February 6, 2024 and February 6, 2029, at a repurchase price in cash equal to 100 % of the principal amount of the 2014 Notes plus accrued and unpaid interest. As provided by the indenture governing the 2014 Notes, in February 2021, holders of $ 0.5 million of the 2014 Notes required us to repurchase their notes at 100 % of the principal amount plus accrued and unpaid interest. We recorded a loss of $ 9 thousand on the extinguishment of those notes, representing the difference between the price paid to extinguish the 2014 Notes and their carrying value, including unamortized debt issuance costs. As of March 31, 2022, there was $ 0.6 million aggregate principal of the 2014 Notes outstanding. 16 2019 Senior Convertible Notes (2019 Notes) In November 2019, we issued $ 55.0 million aggregate principal amount of 2019 Notes. Net proceeds of the 2019 Notes issuance were $ 52.7 million, after deductions for commissions and other debt issuance costs. $ 51.8 million of the proceeds of the 2019 Notes were used to retire $ 50.2 million aggregate principal amount of our 2014 Notes, leaving $ 1.1 million of aggregate principal value of 2014 Notes then outstanding. The 2019 Notes bear interest at 5.25 % per annum, payable semiannually on June 1 and December 1 of each year, beginning on June 1, 2020. The 2019 Notes will mature on December 1, 2024, unless earlier repurchased or converted pursuant to their terms. The 2019 Notes will be convertible at the option of the holder at any point prior to the close of business on the second scheduled trading day preceding the maturity date. The initial conversion rate of the 2019 Notes is 344.8276 shares of our common stock per $1,000 principal amount of 2019 Notes (which is equivalent to an initial conversion price of approximately $ 2.90 per share). The conversion rate is subject to adjustment upon the occurrence of certain specified events. Those certain specified events include voluntary conversion of the 2019 Notes prior to our exercise of the Issuer’s Conversion Option or in connection with a make-whole fundamental change, 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 2019 Notes. The conversion rate will not be adjusted for any accrued and unpaid interest. The 2019 Notes will also be convertible at our option upon certain conditions in accordance with the terms of the indenture governing the 2019 Notes. On or after December 1, 2021 to December 1, 2022, if the price of our common stock has equaled or exceeded 150 % of the Conversion Price (as defined in the indenture) then in effect for a specified number of days (Issuer’s Conversion Option), we may, at our option, elect to convert the 2019 Notes in whole but not in part into shares of common stock of the Company, determined in accordance with the terms of the indenture. On or after December 1, 2022, if the price of our common stock has equaled or exceeded 130 % of the Conversion Price then in effect for a specified number of days, we may, at our option, elect to convert the 2019 Notes in whole but not in part into shares of common stock of the Company, determined in accordance with the terms of the indenture. Offering-related costs for the 2019 Notes were capitalized as debt issuance costs and are recorded as an offset to the carrying value of the 2019 Notes. The effective rate on the 2019 Notes is 6.2 %. Revolving Credit Facility and Term Loan, net The carrying values of our term loan and advances under the Credit Facility, and the maximum amount available under the Credit Facility are as follows (in thousands): March 31, 2022 December 31, 2021 Term Loan Principal amount $ 10,000 $ 10,000 End of term fee accretion 133 79 Unamortized debt issuance cost ( 27 ) ( 30 ) Net carrying value of term loan $ 10,106 $ 10,049 Revolving Credit Facility Carrying value of advances under credit agreement $ — $ 6,838 In August 2018, we entered into a revolving credit facility with Silicon Valley Bank (as amended, the Revolving Credit Facility) in an aggregate principal amount of up to the lesser of (i) $ 15.0 million (Maximum Amount) or (ii) the sum of (a) 85 % of our eligible receivables and (b) 50 % of our eligible inventory, in each case, subject to certain limitations (Borrowing Base), provided that the amount of eligible inventory that may be counted towards the Borrowing Base shall be subject to a cap as set forth in the Revolving Credit Facility. On August 2, 2021, we amended our Revolving Credit Facility to extend the maturity date to August 2, 2023 and to provide for a new $ 10.0 million Term Loan Facility (the Term Loan Facility and, together with the Revolving Credit Facility, the Credit Facility). The stated maturity of the Term Loan Facility is July 1, 2025. However, if the principal amount of our convertible debt exceeds $ 0.6 million as of June 1, 2024 or if the maturity of our 2019 Notes has not been extended beyond January 1, 2026 by June 1, 2024, then the maturity date of the Term Loan Facility will be June 1, 2024. The Credit Facility is 17 collateralized by substantially all our property, other than intellectual property. The Credit Facility also includes a financial covenant that requires us to maintain a minimum Adjusted Quick Ratio, as defined in the agreement, of at least 1.25 to 1.00. The interest rate on advances made under the Revolving Credit Facility is the greater of (i) prime rate plus 0.50 % or (ii) 5.25 %. Interest on any outstanding amounts is due and payable monthly and the principal balance is due at maturity, though loans can be prepaid at any time without penalty. Fees for the Revolving Credit Facility include an annual commitment fee of $ 112,500 and a quarterly unused line fee based on the Borrowing Base. Total availability under the Revolving Credit Facility as of March 31, 2022 was $ 8.4 million. There were no borrowings outstanding under the Revolving Credit Facility at March 31, 2022. As of March 31, 2022, the Term Loan Facility was fully drawn. The interest rate on the Term Loan Facility is the greater of 4.0 % or a floating per annum rate equal to three quarters of one percentage point ( 0.75 %) above the prime rate. Interest on any outstanding term loan advances is due and payable monthly. In addition to the monthly interest payments, a final payment equal to 6.5 % of the original principal amount of each advance is due on the earlier of the maturity date or the date the advance is repaid. Principal balances are required to be repaid in twenty-four equal installments beginning on August 1, 2023. The effective interest rate on the Term Loan Facility, reflecting the impact of debt issuance costs, the end-of-term fee and expected timing of principal repayment was 6.3 % as of March 31, 2022. 10. Leases We have operating leases for buildings, equipment and vehicles. Existing leases have remaining terms of less than one year to eight years . 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 March 31, 2022 and December 31, 2021 (in thousands, except for discount rate and lease term): March 31, 2022 December 31, 2021 Operating lease right-of-use buildings $ 43,595 $ 43,457 Operating lease right-of-use equipment 82 84 Operating lease right-of-use vehicles 609 676 Total operating lease right-of-use assets, gross 44,286 44,217 Accumulated amortization ( 7,897 ) ( 7,098 ) Total operating lease right-of-use assets, net $ 36,389 $ 37,119 Operating lease liabilities, current $ 3,209 $ 3,053 Operating lease liabilities, non-current 36,760 37,548 Total operating lease liabilities $ 39,969 $ 40,601 Weighted average remaining lease term (in years) 7.5 7.7 Weighted average discount rate per annum 11.7 % 11.7 % 18 11. Fair Value of Financial Instruments 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): March 31, 2022 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cash and Cash Equivalents Cash- Restricted Assets: Cash and money market funds $ 29,983 $ — $ — $ 29,983 $ 29,983 $ — Cash-restricted 1,016 — — 1,016 — 1,016 Total cash, cash equivalents and restricted cash $ 30,999 $ — $ — $ 30,999 $ 29,983 $ 1,016 December 31, 2021 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cash and Cash Equivalents Cash- Restricted Assets: Cash and money market funds $ 28,451 $ — $ — $ 28,451 $ 28,451 $ — Cash-restricted 1,016 — — 1,016 — 1,016 Total cash, cash equivalents and restricted cash $ 29,467 $ — $ — $ 29,467 $ 28,451 $ 1,016 Cash and cash equivalents are Level I measurements. There were no transfers between Level I and Level II measurements, and no changes in the valuation techniques used during the three months ended March 31, 2022. We record our Bridge Loans and forward contracts on our Series B Preferred Equity Financing at their fair market values. See Note 3 for a discussion of these transactions and the determination of their fair market value. Our convertible notes, Bridge Loans, and forward sales contracts 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 estimated fair value of our term loan also represents a Level III valuation since the value cannot be determined by using readily observable inputs or measures, such as market prices. The fair value of our term loan was estimated using a discounted cash flows approach and current market interest rate data for similar loans. 19 The following table summarizes the par value, carrying value and the estimated fair value of our debt as of March 31, 2022 and December 31, 2021, respectively (in thousands): March 31, 2022 December 31, 2021 Par Value Carrying Value Fair Value Par Value Carrying Value Fair Value Bridge Loans $ 25,000 $ 35,655 $ 35,655 $ — $ — $ — Convertible Notes: 2014 Notes $ 578 $ 568 $ 601 $ 578 $ 568 $ 601 2019 Notes 55,000 53,703 74,998 55,000 53,592 81,880 Total Notes $ 55,578 $ 54,271 $ 75,599 $ 55,578 $ 54,160 $ 82,481 Term loan, net $ 10,000 $ 10,106 $ 9,796 $ 10,000 $ 10,049 $ 10,113 Advances under revolving credit agreement $ — $ — $ — $ 6,838 $ 6,838 $ 6,838 Total debt $ 90,578 $ 100,032 $ 121,050 $ 72,416 $ 71,047 $ 99,432 12. Shareholders’ Equity Common Shares Reserved As of March 31, 2022, we had reserved shares of common stock for future issuance under equity compensation plans as follows: In thousands Securities To Be Issued Upon Exercise Of Options Securities To Be Issued Upon Release Of Restricted Stock and Performance Share Units at Maximum Number Of Remaining Securities Available For Future Issuance 2011 Equity Incentive Plan 1,376 7,259 3,561 DVS Sciences Inc. 2010 Equity Incentive Plan 6 — — 2017 Inducement Award Plan 159 57 — 2017 Employee Stock Purchase Plan — — 2,633 1,541 7,316 6,194 Included in the securities to be issued upon release of RSUs and PSUs are the maximum number of shares that could be issued for performance share unit awards, which can vest at 0 %- 200 % of the number of awards granted. The number of shares available for future issuance also reflects PSU awards granted at the maximum number of shares that could be issued under these awards. 13. Stock-Based Plans Our board of directors sets the terms, conditions, and restrictions related to our 2017 Employee Stock Purchase Plan (ESPP) and the grant of stock options, restricted stock units (RSUs) and performance-based awards under our equity incentive plans. Our board of directors determines the number of awards to grant and also sets vesting criteria. In general, RSUs vest on a quarterly basis over a period of four years from the date of grant at a rate of 25 % on the first anniversary of the grant date and ratably each quarter over the remaining 12 quarters, or ratably over 16 quarters, subject to the employees’ continued employment. We may grant RSUs with different vesting terms from time to time. In the first quarter of 2022, we granted 0.8 million of retention RSUs which vest within one year . 20 Incentive stock options and non-statutory stock options granted under our 2011 Equity Incentive Plan (2011 Plan) have a term of no more than ten years from the date of grant and an exercise price of at least 100 % 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. We may grant options with different vesting terms from time to time. For performance-based share awards, our board of directors sets the performance objectives and other vesting provisions in determining the number of shares or value of performance units and performance shares that will be paid out. Such payout will be a function of the extent to which performance objectives or other vesting provisions have been achieved. 2011 Equity Incentive Plan In January 2011, our board of directors adopted the 2011 Plan under which incentive stock options, non-statutory stock options, RSUs, stock appreciation rights, performance stock units (PSUs), and performance shares may be granted to our employees, directors, and consultants. In April 2019, our board of directors authorized, and in June 2019, our stockholders approved an amendment and restatement of the 2011 Plan to make various changes, including increasing the number of shares reserved for issuance by approximately 5.0 million shares and extending the term of the 2011 Plan until April 2029. In May 2020, our board of directors authorized, and in June 2020, our stockholders approved, an increase of 1.4 million shares reserved for issuance under the 2011 Plan. In April 2021, our board of directors authorized, and in May 2021, our stockholders approved, an additional increase of 4.1 million shares reserved for issuance under the 2011 Plan. Activity under the various plans was as follows: Restricted Stock Units : Number of Units (in 000s) Weighted-Average Grant Date Fair Value per Unit Balance at December 31, 2021 5,141 $ 5.18 RSU granted 808 $ 3.62 RSU released ( 302 ) $ 5.40 RSU forfeited ( 70 ) $ 5.30 Balance at March 31, 2022 5,577 $ 4.94 As of March 31, 2022, the unrecognized compensation costs related to outstanding unvested RSUs under our equity incentive plans were $ 21.8 million. We expect to recognize those costs over a weighted average period of 2.2 years. Stock Options : Number of Options (000s) Weighted-Average Exercise Price per Option Weighted- Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value (1) in (000s) Balance at December 31, 2021 1,597 $ 7.08 5.6 $ 82 Options granted — $ — $ — Options exercised ( 8 ) $ 2.63 $ 7 Options forfeited ( 47 ) $ 14.84 $ — Balance as of March 31, 2022 1,542 $ 6.87 5.6 $ 35 Vested at March 31, 2022 1,469 $ 6.89 5.4 $ 35 Unvested awards at March 31, 2022 73 $ 6.34 8.4 $ — _______ (1) Aggregate intrinsic value as of March 31, 2022 was calculated as the difference between the closing price per share of our common stock on the last trading day of March 31, 2022, which was $ 3.59 , and the exercise price of the options, multiplied by the number of in-the-money options. As of March 31, 2022, the unrecognized compensation costs related to outstanding unvested options under our equity incentive plans were $ 0.1 million. We expect to recognize those costs over a weighted average period of 0.5 years. 21 Performance-based Awards: Performance Stock Units with Market Condition We have granted PSU awards to certain executive officers and senior level employees. The number of PSUs ultimately earned under these awards is calculated based on the Total Shareholder Return (TSR) of our common stock as compared to the TSR of a defined group of peer companies during the applicable three-year performance period. 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. Based on the performance of our stock relative to our defined group of peer companies, none of the PSUs awarded in 2019 for the 2019-2021 measurement period were vested. The performance adjustment in the table below reflects that no shares were issued upon vesting of the 2019 PSU awards. Activity under the TSR-based PSUs is as follows: Number of Units (in 000s) Weighted-Average Grant Date Fair Value per Unit Balance at December 31, 2021 1,210 $ 10.11 PSU granted — $ — Performance adjustment for 2019 awards ( 341 ) $ 16.97 PSU released — $ — PSU forfeited — $ — Balance at March 31, 2022 869 $ 7.00 As of March 31, 2022, the unrecognized compensation costs related to these awards were $ 3.2 million. We expect to recognize those costs over a weighted average period of 1.6 years. Performance Stock Units with Performance Conditions During 2019, we granted performance stock units to an employee. The number of performance stock units that ultimately vested under these awards was dependent on the employee achieving certain discrete operational milestones, the last of which was measured at December 31, 2021. In early 2022, it was determined that the operational milestones were not met and the 29 thousand awards that were outstanding on December 31, 2021 were cancelled. 2017 Employee Stock Purchase Plan (ESPP) Our ESPP offers U.S. and some non-U.S. employees the right to purchase shares of our common stock. Our ESPP program has a six-month offering period, with a new period commencing on the first trading day on or after May 31 and November 30 of each year. Employees are eligible to participate through payroll deductions of up to 10 % of their compensation. Employees may not purchase more than $ 25 thousand of stock for any calendar year. The purchase price at which shares are sold under the ESPP is 85 % of the lower of the fair market value of a share of our common stock on the first day of the offering period or the last day of the offering period. Stock-based Compensation Expense Total stock-based compensation expense recognized was as follows (in thousands): Three Months Ended March 31, 2022 2021 Restricted stock units, stock options and performance share units $ 3,942 $ 3,473 Employee stock purchase plan 100 204 Total stock-based compensation $ 4,042 $ 3,677 22 14. Income Taxes Our quarterly provision for income taxes is based on an estimated effective annual income tax rate. Our quarterly provision for income taxes also includes discrete items, such as changes in valuation allowances or adjustments upon finalization of tax returns as well as infrequently occurring items, if any, such as the effects of changes in tax laws or rates, in the interim period in which they occur. We recorded a tax benefit of $ 0.6 million and $ 1.7 million for the three months ended March 31, 2022 and 2021, respectively. Lower losses in our foreign operations in the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021 resulted in a lower tax benefit for our foreign operations for the three months ended March 31, 2022 compared to the prior year period. Our tax benefit for the periods presented in this report differs from the 21% U.S. Federal statutory rate principally because we maintain a valuation allowance for our domestic deferred tax assets, which primarily consist of net-operating loss carryforwards. 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 and future expected financial results. Domestic deferred tax assets have been offset by valuation allowances. Any release of valuation allowances could have the effect of decreasing the income tax provision in the period the valuation allowance is released. We continue to assess the likelihood that we will be able to recover our deferred tax assets, including those for which a valuation allowance is recorded. There can be no assurance that we will generate profits in the future periods enabling us to fully realize our deferred tax assets. The timing of recording a valuation allowance or the reversal of such valuation allowance is subject to objective and subjective factors that cannot be readily predicted in advance. 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 months ended March 31, 2022 and 2021, respectively, we did not recognize any material interest or penalties related to uncertain tax positions. 15. Information About Geographic Areas We operate in one reporting segment that develops, manufactures and commercializes tools for life science research. Our chief executive officer manages our operations and evaluates our financial performance on a consolidated basis. For purposes of allocating resources and evaluating regional financial performance, our chief executive officer reviews separate sales information for the different regions of the world. Our general and administrative expenses and our research and development expenses are not allocated to any specific region. 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 revenue by geographic areas of our customers and by product and services for the three months ended March 31, 2022 and 2021 is included in Note 6 to the condensed consolidated financial statements. Revenue from customers in the United States represented $ 11.8 million, or 45 % of total revenues, and $ 18.1 million, or 55 % of total revenues, for the three months ended March 31, 2022 and 2021, respectively. Revenue from customers in China represented $ 2.8 million, or 11 % of total revenues, and $ 3.0 million, or 9 % of total revenues, for the three months ended March 31, 2022 and 2021, respectively. With the exception of China for the three months ended March 31, 2022, no foreign country had revenue in excess of 10% of total revenues during any of the periods presented in this report. 16. Commitments and Contingencies Indemnification From time to time, we have entered into indemnification provisions under certain of our agreements in the ordinary course of business, typically with business partners, customers, and suppliers. Pursuant to these agreements, we may indemnify, hold harmless, and agree to reimburse the indemnified parties on a case-by-case basis for losses suffered or incurred by the indemnified parties in connection with any patent or other intellectual property infringement claim by any third party with respect to our products. The term of these indemnification provisions is generally perpetual from the time of the execution of the agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is typically not limited to a specific amount. In addition, we have entered into indemnification agreements with our officers, directors, and certain other employees. With certain exceptions, these agreements provide for indemnification for 23 related expenses including, among others, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. Contingencies In September 2020, a putative class action complaint alleging violations of the federal securities laws was filed against the Company (also naming our now-former Chief Executive Officer and our Chief Financial Officer as defendants) in the U.S. District Court for the Northern District of California (Reena Saintjermain, et al. v. Fluidigm Corporation, et al). The Court appointed a lead plaintiff and lead counsel in December 2020, and an amended complaint was filed on February 19, 2021. The complaint, as amended, 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 and alleges securities laws violations based on statements and alleged omissions made by the Company during such period. The Company filed a motion to dismiss the complaint on April 5, 2021 and, on August 4, 2021, the Court granted defendants’ motion to dismiss with leave to amend. A second amended complaint was filed on September 14, 2021. The Company filed a motion to dismiss the second amended complaint on October 29, 2021 and, on February 14, 2022, the Court granted defendants’ motion and dismissed the second amended complaint with prejudice. On March 15, 2022, plaintiff filed a Notice of Appeal to the U.S. Court of Appeals for the Ninth Circuit. We believe the claims alleged in the complaint lack merit and we intend to defend this action vigorously. From time to time, we may be subject to various legal proceedings and claims arising in the ordinary course of business. These include disputes and lawsuits related to intellectual property, mergers and acquisitions, licensing, contract law, tax, regulatory, distribution arrangements, employee relations and other matters. Periodically, we review the status of each matter and assess its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and a range of possible losses can be estimated, we accrue a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based only on the best information available at the time. As additional information becomes available, we continue to reassess the potential liability related to pending claims and litigation and may revise estimates. 17. Subsequent Event On April 1, 2022, our stockholders approved the Charter Amendment Proposal and Private Placement Issuance Proposal discussed in Note 3. The Private Placement Issuance closed on April 4, 2022. On April 4, 2022, we received $ 225 million, before expenses, and issued 225,000 shares of Series B Preferred Stock pursuant to the Purchase Agreements. The Bridge Loans converted into 30,559 shares of Series B Preferred Stock based on a Conversion Amount, as described in Note 3, of $ 25.5 million. Following stockholder approval of the Charter Amendment Proposal and the Private Placement Issuance Proposal, our name was changed to Standard BioTools Inc. Shortly after the closing of the Private Placement Issuance, we also changed the ticker symbol for our common stock to LAB. Upon the closing of the Private Placement Issuance, Dr. Michael Egholm was appointed as the Company’s President and Chief Executive Officer and as a member of the Board of Directors. In connection with the closing, we adopted the 2022 Inducement Equity Incentive Plan with an initial reserve of approximately 9.5 million shares. Effective April 4, 2022, we awarded options for 8.1 million shares of our common stock at an exercise price of $ 3.99 per share and 1.4 million restricted stock units to members of our management team, including Dr. Egholm under the 2022 Inducement Equity Incentive Plan. These awards vest over four years . 24