What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-14 compared with 2022-03-08 · 605 added, 541 removed, 645 unchanged (64% of the section changed)

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Index to Consolidated Financial Statements

Report of PricewaterhouseCoopers LLP-Independent Registered Public Accounting Firm (PCAOB ID 238 )

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Balance Sheets as of December 31, 202 2 and 202 1

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Consolidated Statements of Comprehensive Loss for the years ended December 31, 2022 and 202 1

Consolidated Statements of Stockholders' Equity for the years ended December 31, 202 1 , 20 20 and 20 1 9

Consolidated Statements of Stockholders' Equity (Deficit) for the years ended December 31, 2022 and 2021

Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021

Notes to Consolidated Financial Statements

Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 202 1 , 20 20 and 20 19

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Fluidigm Corporation

To the Board of Directors and Stockholders of Standard BioTools Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the consolidated financial statements, including the related notes and financial statement schedule, of Fluidigm Corporation and its subsidiaries (the “Company”) as listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

We have audited the consolidated financial statements, including the related notes, of Standard BioTools Inc.

and its subsidiaries (the “Company”) as listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company has incurred significant losses in each fiscal year since its inception and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinions

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that

controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

National Institutes of Health (NIH) Contract Accounting

As described in Notes 2 and 4 to the consolidated financial statements, in September 2020, the Company executed a definitive contract with the National Institutes of Health (NIH) for a project under the NIH Rapid Acceleration of Diagnostics (RADx) program, which has a total value of up to $34.0 million upon the achievement of certain milestones which were achieved and accepted by December 31, 2021.

As there is no authoritative guidance under U.S.

GAAP on accounting for government assistance to for-profit business entities, management 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 the Company.

Management has elected to record the grants received as deferred income with grant proceeds 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 occurred when either each milestone was accepted by NIH or management concluded the conditions of the grant were substantially met.

Grant proceeds that exceed the cost of the capital expenditures and expenses expected to be incurred are recorded in other non-operating income.

As of December 31, 2021, a total of $21.7 million has been recorded as deferred grant income, and during 2021 $7.1 million in other income associated with grant milestone receipts in excess of expected total costs under the grant was recorded.

The principal considerations for our determination that performing procedures relating to the NIH contract accounting is a critical audit matter are (i) the significant judgment by management when determining the applicable accounting model and milestone achievement;

and (ii) the significant audit effort and subjectivity in performing procedures and evaluating audit evidence related to the accounting policy selection, application, classification and recognition of excess grant proceeds recorded in other non-operating income.

Series B Redeemable Preferred Stock

As described in Note 3 to the consolidated financial statements, as of December 31, 2022 the Company has recorded $311.3 million in Series B Preferred Stock, classified as mezzanine equity, at its fair value upon issuance, net of any issuance costs.

The fair value of the Series B Redeemable Preferred Stock, which included a $60.1 million and $13.7 million loss on forward sale of preferred stock and loss on bridge loans, respectively, was determined by management using a Monte Carlo Simulation which relies on significant assumptions regarding the Company’s estimated yield and estimated term.

The principal considerations for our determination that performing procedures relating to the Series B Redeemable Preferred Stock is a critical audit matter are (i) the significant judgment by management in determining the mezzanine equity accounting classification and in developing the fair value estimate of these shares;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s determination of the mezzanine equity accounting classification and significant assumptions related to estimated yield and estimated term;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the NIH contract, including controls over the determination of the appropriate accounting model, which grant milestones are met, and classification of costs and other non-operating income associated with the NIH contract.

These procedures also included, among others (i) reading the executed agreement and correspondence with NIH, (ii) evaluating compliance with the contract requirements related to milestone

achievement, (iii) evaluating management’s accounting analysis, and (iv) testing the accuracy and evaluating the classification of costs and other non-operating income associated with the NIH contract.

These procedures included testing the effectiveness of controls over management’s determination of the mezzanine equity accounting classification and controls relating to the valuation of Series B Redeemable Preferred Stock, including controls over the Company’s methods, significant assumptions, and data.

These procedures also included, among others, (i) evaluating management’s determination of the mezzanine equity accounting classification, (ii) the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of fair value outcomes for a Monte Carlo Simulation, and (iii) comparing the independent range of fair value outcomes to management’s estimate to evaluate the reasonableness of management’s estimate.

Developing the independent range of fair value outcomes involved (i) testing the completeness and accuracy of data used in the Monte Carlo Simulation by comparing the data to an independent third-party source, and (ii) professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of significant assumptions related to estimated yield and estimated term.

/s/ PricewaterhouseCoopers LLP

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We have served as the Company’s auditor since 2015.

FLUIDIGM CORPORATION

STANDARD BIOTOOLS INC.

CONSOLIDATED BALANCE SHEETS

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Cash and cash equivalents $ 81,309 $ 28,451

Accounts receivable (net of allowances of $ 356 at each of December 31, 2021 and 2020, respectively)

Short-term investments 84,475 —

Accounts receivable (net of allowances of $ 592 and $ 356 at December 31, 2022 and 2021, respectively)

17,280 18,320

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Total assets $ 390,310 $ 275,214

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

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Advances under revolving credit agreement, current — 6,838

Term loan, current 2,083 —

Total current liabilities 43,443 49,568

Term loan, net 10,049 —

Convertible notes, net 54,615 54,160

Term loan, non-current 8,194 10,049

Deferred tax liability 1,055 4,329

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Commitments and contingencies (Note 17)

Stockholders’ equity:

Preferred stock, $ 0.001 par value, 10,000 shares authorized, no shares issued and outstanding at either December 31, 2021 or 2020

Mezzanine equity:

Redeemable preferred stock:

$ 0.001 par value ;

256 a nd no shares authorized, issued, and outstanding at December 31, 2022 and 2021, respectively;

aggregate liquidation preference of $ 255,559 and $ — as of December 31, 2022 and 2021, respectively

Stockholders’ equity (deficit):

Preferred stock:

$ 0.001 par value, 9,744 and 10,000 shares authorized at December 31, 2022, and 2021, respectively;

no shares issued and outstanding at either December 31, 2022 or 2021, respectively

Common stock:

$ 0.001 par value, 200,000 shares authorized at December 31, 2021 and 2020;

76,919 and 74,543 shares issued and outstanding at December 31, 2021 and 2020, respectively

$ 0.001 par value, 400,000 and 200,000 shares authorized at December 31, 2022 and 2021, respectively;

79,904 and 76,919 shares issued at December 31, 2022 and 2021, respectively;

79,482 and 76,919 shares outstanding at December 31, 2022 and 2021, respectively

Additional paid-in capital 847,008 831,424

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Accumulated deficit ( 926,096 ) ( 735,998 )

Total stockholders’ equity 94,596 139,050

Total liabilities and stockholders’ equity $ 275,214 $ 324,757

Treasury stock at cost:

422 and no shares at December 31, 2022 and 2021, respectively

Total stockholders’ equity (deficit) ( 81,467 ) 94,596

Total liabilities, mezzanine equity, and stockholders’ equity (deficit) $ 390,310 $ 275,214

See accompanying notes

FLUIDIGM CORPORATION

STANDARD BIOTOOLS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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Year Ended December 31,

2021 2020 2019

Product revenue $ 72,454 $ 100,376

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Interest expense ( 4,331 ) ( 3,823 )

Loss on forward sale of Series B Preferred Stock ( 60,081 ) —

Loss on bridge loans ( 13,719 ) —

Surplus funding from NIH Contract 153 7,140

Loss from extinguishment of debt ( 9 ) — ( 12,020 )

Other income, net 1,255 482

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See accompanying notes

FLUIDIGM CORPORATION

STANDARD BIOTOOLS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

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Year Ended December 31,

2021 2020 2019

Net loss $ ( 190,098 ) $ ( 59,237 )

Other comprehensive income (loss), net of tax

Other comprehensive loss, net of tax

Foreign currency translation adjustment ( 487 ) ( 1,019 )

Net change in unrealized gain (loss) on investments — ( 36 ) 36

Other comprehensive income (loss), net of tax ( 1,019 ) 694 105

Net change in unrealized loss on investments ( 502 ) —

Other comprehensive loss, net of tax ( 989 ) ( 1,019 )

Comprehensive loss $ ( 191,087 ) $ ( 60,256 )

See accompanying notes

FLUIDIGM CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

STANDARD BIOTOOLS INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands)

Common Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Accumulated

Deficit Total

Stockholders’

Shares Amount

Balance as of December 31, 2018 49,338 $ 49 $ 631,605 $ ( 687 ) $ ( 558,851 ) $ 72,116

Issuance of common stock on bond conversion 19,460 19 133,280 — — 133,299

Issuance of restricted stock, net of shares withheld for taxes, and other 666 1 ( 601 ) — — ( 600 )

Issuance of common stock from option exercises 195 — 1,058 — — 1,058

Issuance of common stock under ESPP 297 1 1,074 — — 1,075

Stock-based compensation expense — — 11,349 — — 11,349

Net loss — — — — ( 64,790 ) ( 64,790 )

Other comprehensive income (loss), net of taxes — — — 105 — 105

Capital Ac cum.

Deficit Treasury Stock Total

Equity (Deficit)

Shares Amount Shares Amount

Balance as of December 31, 2020 74,543 $ 75 $ 815,624 $ 112 $ ( 676,761 ) — $ — $ 139,050

Issuance of common stock from at-the-market offering, net of commissions 2,480 2 20,224 — — 20,226

Issuance of restricted stock, net of shares withheld for taxes, and other 1,050 1 ( 460 ) — — ( 459 )

Issuance of restricted stock, net of shares withheld for taxes 2,047 2 ( 1,795 ) — — — — ( 1,793 )

Issuance of common stock under ESPP 292 — 1,285 — — — — 1,285

Issuance of common stock from stock option exercises 96 — 451 — — 451

Equity issuance costs — — ( 176 ) — — ( 176 )

Cumulative effect of new accounting standard for Topic 326 Credit Losses — — — — ( 100 ) ( 100 )

Issuance of common stock from option exercises 37 — 209 — — — — 209

Stock-based compensation expense — — 16,101 — — — — 16,101

Acquisition of InstruNor AS 485 1 2,048 — — 2,049

Net loss — — — — ( 59,237 ) — — ( 59,237 )

Other comprehensive income (loss), net of taxes — — — 694 — 694

Other comprehensive loss, net of taxes — — — ( 1,019 ) — — — ( 1,019 )

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 2,047 2 ( 1,795 ) — — ( 1,793 )

Issuance of restricted stock, net of shares withheld for taxes 2,373 2 ( 213 ) — — — — ( 211 )

Issuance of common stock under ESPP 583 1 819 — — — — 820

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Stock-based compensation expense — — 14,880 — — — — 14,880

Repurchase of common stock — — — — — ( 422 ) ( 563 ) ( 563 )

Net loss — — — — ( 190,098 ) — — ( 190,098 )

Other comprehensive income (loss), net of taxes — — — ( 1,019 ) — ( 1,019 )

Other comprehensive loss, net of tax — — — ( 989 ) — — — ( 989 )

Balance as of December 31, 2022 79,904 $ 80 $ 847,008 $ ( 1,896 ) $ ( 926,096 ) ( 422 ) $ ( 563 ) $ ( 81,467 )

See accompanying notes

FLUIDIGM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

STANDARD BIOTOOLS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Year Ended December 31,

2021 2020 2019

Operating activities

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Adjustments to reconcile net loss to net cash used in operating activities:

Loss on forward sale of Series B Preferred Stock 60,081 —

Loss on bridge loans 13,719 —

Stock-based compensation expense 14,880 16,101

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Provision for excess and obsolete inventory 7,874 2,293

Lease amortization 497 2,017 ( 516 )

Impairment of InstruNor developed technology intangible 3,526 —

Amortization of debt discounts, premiums and issuance costs 830 624

Impairment of intangible asset — — 443

Loss from extinguishment of debt 9 — 12,020

Loss on disposal of property and equipment 12 212 89

Other non-cash items 273 520

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Accounts receivable, net 1,063 6,729

Inventories, net ( 4,782 ) ( 8,636 ) ( 3,047 )

Inventories ( 8,470 ) ( 4,782 )

Prepaid expenses and other assets 33 ( 436 )

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Investing activities

Purchases of short-term investments ( 137,302 ) —

Proceeds from NIH Contract — 1,318

Acquisition, net of cash acquired — ( 5,154 ) —

Purchases of investments — — ( 62,370 )

Proceeds from sale of investments — 5,010 —

Proceeds from maturities of investments — 31,800 25,600

Proceeds from sales and maturities of investments 53,000 —

Purchases of property and equipment, net ( 3,825 ) ( 13,264 )

Net cash provided by (used in) investing activities ( 11,946 ) 39,975 ( 39,301 )

Net cash used in investing activities ( 88,127 ) ( 11,946 )

Financing activities

Proceeds from bridge loans 25,000 —

Proceeds from issuance of Series B Preferred Stock 225,000 —

Proceeds from advances under revolving line of credit — 6,838

Proceeds from term loan — 10,000

Proceeds from advances under revolving credit agreement 6,838 — —

Proceeds from issuance of common stock, net of commissions — 20,226 —

Proceeds from 2019 Notes issuance — — 55,000

Repayment of advances under revolving line of credit ( 6,838 ) —

Repurchase of common stock ( 563 ) —

Repayment of long-term debt — ( 501 )

Payments of debt and equity issuance costs ( 12,547 ) ( 79 )

Proceeds from exercise of stock options 209 451 1,058

Proceeds from stock issuance from ESPP 1,285 1,323 1,075

Proceeds from ESPP issuance and exercise of stock options 917 1,494

Payments for taxes related to net share settlement of equity awards and other ( 211 ) ( 1,793 )

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Non-cash right-of-use assets and lease liabilities $ 651 $ ( 2,435 )

Unpaid debt and equity issuance costs $ — $ — $ 534

Asset retirement obligations $ 718 $ 710

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Description of Business

Fluidigm Corporation (the Company, Fluidigm, we, our or us) improves life by driving meaningful insights in health and disease.

Our innovative technologies explore the biological complexities of disease to advance human health through research, diagnostics and clinical applications.

We create, manufacture, and market a range of products and services, including instruments, consumables, reagents and software that are used by researchers and clinical labs worldwide.

Our customers are leading academic and government laboratories, as well as pharmaceutical, biotechnology, plant and animal research organizations, and clinical laboratories worldwide.

The Company was formerly known as Mycometrix Corporation and changed its name to Fluidigm Corporation in April 2001.

Fluidigm Corporation was founded in 1999 and is headquartered in South San Francisco, California.

Standard BioTools Inc.

(Standard BioTools, the Company, we, our or us) is driven by a bold vision – unleashing tools to accelerate breakthroughs in human health.

We have an established portfolio of essential, standardized next-generation technologies that help biomedical researchers develop medicines faster and better.

As a leading solutions provider, we endeavor to provide reliable and repeatable insights in health and disease using our proprietary mass cytometry and microfluidics technologies, respectively 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, formerly known as Fluidigm Corporation, changed its name to Standard BioTools Inc.

in April 2022, following the completion of the Private Placement Issuance (as defined and discussed in Note 3).

The Company was founded in 1999 and is headquartered in South San Francisco, California.

Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern and meet its obligations when they become due over the twelve-month period subsequent to the date the financial statements were issued.

The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities and reported expenses that may be necessary if we were unable to continue as a going concern.

For this annual report, we performed an assessment to determine whether there are conditions or events, considered in the aggregate, that raise 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.

Since our inception, we have incurred significant operating losses and generated negative cash flows from operations.

We have historically funded our operations primarily through the issuance of common stock and debt.

We believe that our current level of cash and cash equivalents, together with committed financing facilities, are not sufficient to fund ongoing operations for at least the twelve-month period after the financial statements were issued.

The existence of these conditions raises substantial doubt about the Company's ability to continue as a going concern for the twelve-month period following the date the financial statements were issued.

Our ability to continue as a going concern is dependent upon our success in obtaining additional equity or debt financing, attaining further operating efficiencies, reducing expenditures and ultimately, generating significant revenue growth.

We are evaluating strategies to obtain the required additional funding for future operations, including the potential consummation of the $ 225 million investment in Fluidigm disclosed in Note 18 Subsequent Events (the Private Placement Issuance), which is contingent on stockholder approval and satisfaction of customary closing conditions.

In the event the proposed investment does not occur, we would need to obtain the required additional funding for future operations from alternative sources.

These sources may include, but are not limited to, equity financing, debt or other financing arrangements, and restructuring of operations to grow revenues and decrease expenses.

Our plans to raise additional capital, including our ability to consummate the Private Placement Issuance, or take the other actions to address the doubt regarding our ability to continue as a going concern, may not be successful.

There can be no assurance that we would be able to obtain additional liquidity when needed or under acceptable terms, if at all.

The accompanying financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

The consolidated financial statements include the accounts of our wholly owned subsidiaries.

The 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 December 31, 2022, we had wholly owned subsidiaries in Singapore, Canada, the Netherlands, Japan, France, Italy, the United Kingdom, China, Germany and Norway.

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All intercompany transactions and balances have been eliminated in consolidation.

Certain prior period amounts in the consolidated balance sheet and statements of cash flows were reclassified to conform to 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.

Certain prior period amounts in the consolidated statements of cash flow were reclassified to conform to the current period presentation.

These reclassifications were immaterial and did not affect prior period total operating, investing or financing activities.

Use of Estimates

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GAAP requires management to make estimates and assumptions that affect the amounts reported in the 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.

We base our estimates on historical experience, the current economic environment 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 pandemic.

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.

We assessed certain accounting matters that generally require consideration of forecasted financial information, including the impact of COVID-19 related supply chain shortages, the war in Ukraine, and inflation.

These accounting matters included but were not limited to inventory and related reserves and the carrying value of goodwill and other long-lived assets.

We also use significant judgment in determining the fair value of financial instruments, including debt and equity instruments.

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

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Assets and liabilities of non-U.S.

subsidiaries that use the local currency as their functional currency are translated into U.S.

subsidiaries that use their 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.

The adjustments resulting from the foreign currency translations are recorded in accumulated other comprehensive loss, a separate component of stockholders’ equity (deficit).

Revenue Recognition

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Product revenue is derived from the sale of instruments and consumables, including IFCs, assays and reagents.

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

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 product development agreements, license and royalty agreements, and grants.

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This generally occurs either when the product is shipped from one of our facilities or when it arrives at the customer’s facility, based on the contractual terms.

Customers generally do not have a unilateral right to return products after delivery.

Invoices are generally issued at shipment and generally become due in 30 to 60 days.

Customers do not have a unilateral right to return products after delivery.

Invoices are generally issued at shipment or in advance of service and become due in 30 to 60 days.

We sometimes perform shipping and handling activities after control of the product passes to the customer.

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We may also generate revenue from development or collaboration agreements that do not include upfront or milestone-based payments.

For these type of arrangements, we generally recognize revenue over time as the development services are provided.

For these types of arrangements, we generally recognize revenue over time as the development services are provided.

Other Revenue

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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, under which we received a $ 3.5 million payment in exchange for a perpetual license to certain Fluidigm intellectual property.

The settlement was accounted for as a multiple-element arrangement.

Accordingly, $ 3.1 million of the proceeds was recognized as license revenue and $ 0.4 million was offset against legal costs.

We receive grants from various entities to perform research and development activities over contractually defined periods.

Grant revenue is not accounted for under ASC 606 Revenue from Contracts with Customers, as the grant agreement is not with a customer.

Grant revenue is not accounted for under ASC 606 Revenue from Contracts with Customers, as the grant agreement is not with a custome r.

As there is no authoritative U.S.

GAAP guidance for grants awarded to for-profit entities, we have applied the guidance in ASC 958 Not-for-Profit Entities by analogy.

Revenue is generally recognized provided that the conditions under which the grants were provided have been met and any remaining performance obligations are perfunctory.

Product Warranties

We generally provide a one-year warranty on our instruments and establish a liability for the estimated cost of the obligation at the time the product is shipped.

We periodically review our warranty liability and record adjustments based on specific terms provided to customers and our overall historical experience with usage.

This expense is recorded as a component of cost of product revenue in the consolidated statements of operations.

R evenue is generally recognized provided that the conditions under which the grants were p rovided have been met and any remaining performance obligations are perfunctory.

Significant Judgments

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We consider all highly liquid financial instruments with maturities at the time of purchase of three months or less to be cash equivalents.

Cash and cash equivalents may consist of cash on deposit with banks, money market funds, and notes from government-sponsored agencies.

Short-term investments are comprised of notes from government-sponsored agencies that mature within one year.

Cash and cash equivalents may consist of cash on deposit with banks, and money market funds.

Short-term investments are comprised of U.S treasury securities that mature within one year.

All investments are recorded at estimated fair value.

Any unrealized gains and losses from investments are reported in accumulated other comprehensive loss, a separate component of stockholders’ equity.

Any unrealized gains and losses from investments are reported in accumulated other comprehensive loss, a separate component of stockholders’ equity (deficit).

We evaluate our investments to assess whether investments with unrealized loss positions are other-than-temporarily impaired.

An investment is considered to be other-than-temporarily impaired if the impairment is related to deterioration in credit risk or if it is likely that we will sell the securities before the recovery of their cost basis.

No investment has been assessed as other than temporarily impaired, and realized gains and losses were immaterial during the years presented.

No investment has been assessed as other than temporarily impaired.

The cost of securities sold, or the amount reclassified out of accumulated other comprehensive income into earnings is based on the specific-identification method.

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Cash equivalents and investments are financial instruments that potentially subject us to concentrations of risk.

Under our investment policy, we invest primarily in securities issued by the U.S.

The goals of our investment policy, in order of priority, are as follows:

Under our investment policy, we invest exclusively in securities issued by the U.S.

government or U.S.

government agencies, or in government money-market funds.

The goals of our investment policy, in order of priority, are to:

preserve capital, meet liquidity needs, and optimize returns.

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

No customer represented more than 10% of total revenue for 2021, 2020, or 2019, and no customer had an outstanding trade receivable balance that represented more than 10% of total billed accounts receivables at December 31, 2021, or 2020.

One genomics customer accounted for both 11 % of total revenue for the year ended December 31, 2022 and 16 % of outstanding net trade receivables at December 31, 2022.

No customer represented more than 10% of total revenue for 2021 and no customer represented more than 10% of outstanding net trade receivables at December 31, 2021.

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

We believe that other vendors would be able to provide similar components;

however, the qualification of such vendors may require start-up time.

however, the qualification of such vendors may require

start-up time.

In order to mitigate any adverse impacts from a disruption of supply, we attempt to maintain an adequate supply of critical limited-source components.

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We regularly review inventory for excess and obsolete products and components.

Significant judgment is required in determining provisions for slow-moving, excess, and obsolete inventories which are recorded when required to reduce inventory values to their estimated net realizable values based on product life cycle, development plans, product expiration, and quality issues

Property and Equipment, net

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and office furniture and fixtures, five years .

Depreciation expense for the years ended December 31, 2021, 2020, and 2019 was $ 2.8 million, $ 3.1 million, and $ 3.6 million, respectively.

Depreciation expense was $ 2.8 million in both 2022 and 2021.

We determine if an arrangement is a lease, or contains a lease, at the inception of the arrangement.

Operating leases are included in operating lease right-of-use (ROU) assets and operating lease liabilities in our consolidated balance sheets.

assets represent our right-to-use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a term similar to the lease arrangement at the commencement date.

Operating leases are reflected in operating lease right-of-use (ROU) assets and operating lease liabilities in our consolidated balance sheets.

ROU assets represent our right-to-use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating lease ROU assets, and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

Significant judgment is required in determining the incremental collateralized borrowing rate.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Lease expense is recognized on a straight-line basis over the lease term.

Sublease income from an operating lease is recognized on a straight-line basis over the sublease term.

See Note 10 Leases for additional information.

We elected the short-term lease recognition exemption for all leases that qualify.

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Business Combinations, Goodwill, Intangible Assets and Other Long-Lived Assets

We have completed acquisitions of businesses in the past and may acquire additional businesses or technologies in the future.

We have comp leted acquisitions of businesses in the past and may acquire additional businesses or technologies in the future.

The results of businesses acquired in a business combination are included in our consolidated financial statements from the date of acquisition.

We allocated the purchase price, which is the sum of the consideration provided in a business combination, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values.

We allocate the purchase price, which is the sum of the consideration provided in a business combination, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values.

Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies and estimates of future revenue.

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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.

Events or changes in circumstances that could affect the likelihood that we will be required to recognize an impairment charge include, but are not limited to, declines in our stock price or market capitalization, economic downturns and other macroeconomic events, including the current COVID-19 pandemic, declines in our market share or revenues, and an increase in our losses, rapid changes in technology, failure to achieve the benefits of capacity increases and utilization, significant litigation arising out of an acquisition, or other matters.

Any impairment charges could have a material adverse effect on our operating results and net asset value in the quarter in which we recognize the impairment charge.

In evaluating our goodwill and intangible assets with indefinite lives for indications of impairment, we first conduct an assessment of qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount.

If we determine that it is more likely than not that the fair value of our reporting unit is less than its carrying amount, we compare the fair value of our reporting unit to its carrying value.

If the fair value of our reporting unit exceeds its carrying value, goodwill is not considered impaired and no further analysis is required.

If the carrying value of the reporting unit exceeds its fair value, then an impairment loss equal to the difference would be recorded to goodwill.

We did no t recognize any impairment of goodwill for any of the periods presented herein.

Any impairment

charges could have a material adverse effect on our operating results and net asset value in the period in which we recognize the impairment charge.

In evaluating our goodwill and intangible assets with indefinite lives for indications of impairment, we first conduct an assessment of qualitative factors to determine whether it is more likely than not that the fair value of each of our reporting units is less than its carrying amount.

If we determine that it is more likely than not that the fair value of each of our reporting units is less than its carrying amount, we compare the fair value of each of our reporting units to its carrying value.

If the fair value of each of our reporting units exceeds its carrying value, goodwill is not considered impaired, and no further analysis is required.

If the carrying value of each of our reporting units exceeds its fair value, then an impairment loss equal to the difference would be recorded to goodwill.

We evaluate our long-lived assets, including finite-lived intangibles, for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

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If impairment is indicated, we estimate the asset’s fair value using future discounted cash flows associated with the use of the asset and adjust the carrying value of the asset accordingly.

We did no t recognize any impairment of intangibles for 2021 or 2020.

In 2019, we recognized an impairment charge of $ 0.4 million on patents and licenses that were not used in the current products and were not expected to be used in future product offerings.

The $ 25 million Bridge Loans (as described in Note 3) were recorded at fair value at inception in January 2022.

The Company elected to use the fair value option under Accounting Standards Codification (ASC) 825 Financial Instruments and recorded the change in fair value from inception to the April 4, 2022 closing date of the Private Placement Issuance (see Note 3), when the Bridge Loans automatically converted into shares of Series B Redeemable Preferred Stock, as a non-operating loss on Bridge Loans in the consolidated statement of operations.

Upon conversion, the carrying value of the Bridge Loans, including accrued interest to the date of the conversion was reclassified to Series B Redeemable Preferred Stock.

D ebt issuance costs were expensed as incurred.

Series B Redeemable Preferred Stock

The Pur chase Agreements (as described in Note 3) for the issuance of shares of Series B Redeemable Preferred Stock were accounted for as forward sales contracts at fair value in accordance with ASC 480 Distinguishing Liabilities from Equities.

The Series B Redeemable Preferred Stock was classified as mezzanine equity and recorded at fair value upon issuance, net of issuance costs, due to its redemption features that are outside of the Company’s control.

Mezzanine equity is presented separately on the consolidated balance sheets between liabilities and shareholders’ equity because it shares characteristics of both.

See Note 3 for additional information.

Restructuring and Other Related Costs

We record liabilities for costs associated with exit or disposal activities in the period in which the liability is incurred.

Costs for involuntary separation programs are recorded when management has approved the plan for separation, the employees are identified and made aware of the benefits they are entitled to, it is unlikely that the plan will change significantly, and if applicable, any required governmental notification is made.

Costs associated with benefits that are contingent on the employee continuing to provide service are recognized over the required service period.

We record costs to implement business improvement programs, including external consulting and legal expenses, as they are incurred.

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 NIH in July 2020 (collectively, the NIH Contract), has a total value of up to $ 34.0 million upon the achievement of certain milestones which were achieved and accepted by the NIH as of December 31, 2021.

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

Accounting for the NIH Contract does not fall under ASC 606, Revenue from Contracts with Customers, as 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 used for production capacity expansion meet the definition of grants related to assets as the primary purpose for the payments is to fund the purchase and construction of capital 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 occurred when either each milestone was accepted by NIH or management concluded the conditions of the grant were substantially met.

Deferred grant income related to production capacity expansion is being amortized over the period of depreciation for the related assets as a reduction of depreciation expense.

Grant income related to reimbursement of operating costs is recorded as a reduction of those expenses incurred to date.

Grant proceeds that exceed the cost of the capital expenditures and expenses expected to be incurred are recorded in other non-operating income.

Proceeds from the NIH Contract have been principally recorded as capital expenditures and to offset applicable operating costs.

The non-operating income recognized from the grant proceeds received in excess of the amounts spent for capital expenditures and operating expenses is reflected on the consolidated statement of operations as surplus funding from the NIH contract.

The NIH Contract met the definition of grants related to assets as the primary purpose for the payments was to fund the purchase and construction of capital assets to scale up production capacity.

We elected to record the grants received as deferred income in accordance with International Accounting Standards (IAS) 20.

Deferred grant income related to production capacity expansion is being amortized for the related assets as a reduction of depreciation expense.

Term Loan, net

On August 2, 2021, we entered into a Fourth Agreement to our Loan and Security Agreement (the Amendment) with Silicon Valley Bank.

The Amendment extended the maturity date of our $ 15.0 million Revolving Credit Facility by one year , to August 2, 2023, and provided for a term loan facility in an aggregate principal amount of up to $ 10.0 million (Term Loan Facility).

As of December 31, 2021, the Term Loan Facility was fully drawn.

Interest is payable monthly and principal balances are required to be repaid in 24 equal monthly installments beginning on August 1, 2023.

In addition, 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.

The final payment is being accreted to the carrying value of the term loan through the expected maturity of July 1, 2025 using the effective interest method.

Debt issuance costs were recorded as an offset to the carrying value of the loan and are amortized over the expected term using the effective interest method.

The carrying value of the term loan includes the outstanding principal amount and the cumulative accreted final payment, less unamortized debt issuance costs.

The term loan is recorded at its carrying value, which includes the outstanding principal amount and the cumulative accreted final payment, less unamortized debt issuance costs.

Amortization of the debt issuance costs and accretion of the final payment are reflected in interest expense.

Convertible Note s, net

In February 2014, we closed an underwritten public offering of $ 201.3 million aggregate principal amount of our 2.75 % Senior Convertible Notes due 2034 (2014 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 our 2.75 % Exchange Convertible Senior Notes due 2034 (2018 Notes).

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.

We recorded a loss of $ 9.0 million on the retirement of the 2018 Notes at conversion in the first quarter of 2019.

We determined the fair value of the 2018 Notes using valuation techniques that required us to make assumptions related to the implied discount rate.

In November 2019, we closed a private placement for $ 55.0 million aggregate principal amount of our 5.25 % Senior Convertible Notes due 2024 (2019 Notes).

The majority of the issuance proceeds were used to retire approximately $ 50.2 million of aggregate principal amount of our 2014 Notes.

We recorded a loss of $ 3.0 million on the extinguishment of the 2014 Notes in the fourth quarter of 2019.

This amount represented the difference between the fair value of the 2019 Notes used to extinguish the debt and the carrying value of the 2014 Notes, including unamortized debt issuance costs.

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.

The final payment is being accreted to the carrying value of the term loan through the expected maturity of July 1, 2025 using the effective interest method.

Debt issuance costs were recorded as an offset to the carrying value of the loan and are amortized over the expected term also using the effective interest method.

The total carrying value of the term loan is $ 10.3 million at December 31, 2022 and the principal debt repayments scheduled to be made in 2023 of $ 2.1 million are reported as current liabilities in the consolidated balance sheet.

Convertible Notes, net

We record the 2014 Notes and 2019 Notes (as described in Note 9) at their carrying values of $ 0.6 million and $ 54.0 million, respectively as at December 31, 2022, which includes their principal amounts plus accrued and unpaid interest.

Offering-related costs, including underwriting costs, on the 2014 Notes and 2019 Notes 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.

See Note 9 fo r a detailed discussion of the accounting treatment of the transactions and additional information.

Treasury Stock

We use the cost method to account for the repurchases of our common stock in accordance with ASC 505-30, Equity-Treasury Stock.

The direct costs associated with settled share repurchases, including trading commissions, are reported as treasury stock in the shareholders’ equity (deficit) section of our consolidated balance sheet.

Fair Value of Financial Instruments

Our financial instruments consist primarily of cash and cash equivalents, restricted cash, investments, accounts receivable, accounts payable, advances on our revolving credit agreement, a term loan and convertible notes.

Our financial instruments consist primarily of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, accounts payable, advances on our revolving credit agreement, term loan advances and convertible notes.

Our cash equivalents, restricted cash, accounts receivable, accounts payable and advances under our revolving credit agreement generally have short maturity or payment periods.

Accordingly, their carrying values approximated their fair values at December 31, 2022 and 2021.

The convertible notes are presented at their carrying value, with fair value disclosures made in Note 11.

As a basis for considering fair value, we follow a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Our short-term investments consist of U.S.

treasury securities that are classified as available-for-sale and reported at fair value on our balance sheet.

The convertible notes and term loan are presented at their net carrying values.

As a basis for computing fair value, we follow a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

observable inputs such as quoted prices in active markets;

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This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

Our cash equivalents, which include money market funds are classified as Level I because they are valued using quoted market prices.

Our term loan and our convertible notes, which are not regularly traded, are both classified as Level III since their values cannot be determined by using readily observable inputs or measures, such as market prices.

Significant judgment is needed in valuing Level III items.

Fair value of the term loan was estimated using a discounted cash flow approach and current market interest rate data for similar loans and fair values of the convertible debt were estimated using pricing models and risk-adjusted value ranges for the convertible notes.

Our cash equivalents, which include money market funds, and our short-term investments a re classified as Level I because they are valued using quoted market prices.

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 of 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.

Research and Development

We recognize research and development expenses in the period incurred.

Research and development expenses consist of personnel costs, independent contractor costs, prototype and materials expenses, allocated facilities and information technology expenses, and related overhead expenses.

Research and development (R&D) expenses generally consist of personnel costs, independent contractor costs, prototype and materials expenses, allocated facilities and information technology expenses, and related overhead expenses.

Advertising Costs

We expense advertising costs as incurred.

We incurred advertising costs of $ 3.4 million, $ 1.6 million and $ 3.4 million during 2021, 2020, and 2019, respectively.

We incurred advertising costs of $ 3.9 million and $ 3.4 million during 2022 and 2021, respectively.

Stock-Based Compensation

We recognize compensation costs for all stock-based awards, including stock options, RSUs, PSUs and stock purchased under our ESPP, based on the grant date fair value of the award.

We recognize compensation costs for all stock-based awards, including stock options, Restricted Share Units (RSUs), Performance Share Units (PSUs) and stock purchased under our Employee Share Purchase Plan (ESPP), based on the grant date fair value of the award.

We recognize stock-based compensation expense on a straight-line basis over the requisite service periods for non-performance-based awards.

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The risk-free interest rate is based on the U.S.

Treasury yield in effect at the time of grant for

zero coupon U.S.

Treasury yield in effect at the time of grant for zero coupon U.S.

Treasury notes with maturities approximately equal to each grant’s expected term.

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Any interest and penalties related to uncertain tax positions are reflected in the income tax provision.

Segment Reporting

We have historically operated as a single reportable segment, managed our business operations, and evaluated our financial performance on a consolidated basis until the third quarter of 2022.

During the third quarter of 2022, our Chief Executive Officer (CEO), who is our Chief Operating Decision Maker (CODM), instituted the practice of evaluating operating performance and making resource allocation decisions using two reportable segments:

mass cytometry and microfluidics.

In the fourth quarter of 2022, we began referring to these two segments as proteomics and genomics, respectively.

Each segment is identified by its unique portfolio of products.

We determine each segment’s loss from operations by subtracting direct expenses, including cost of product and service revenues, R&D expense and sales and marketing expense, from revenues.

Amortization, depreciation, and restructuring expense are included in each segment’s operating expenses.

Corporate costs, including general and administrative expenses for

functions shared by both operating segments such as executive management, human resources and finance, along with interest and taxes, are excluded from each segment’s results, which is consistent with how our CODM measures segment performance.

Comprehensive Loss

Comprehensive loss is comprised of net loss and other comprehensive income (loss).

Other comprehensive income (loss) consists of unrealized gains and losses on our investments and foreign currency translation adjustments.

Other comprehensive loss 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 consolidated statements of comprehensive loss.

Immaterial amounts of unrealized gains and losses are included in the consolidated statement of operations for the years ended December 31, 2022 and 2021.

The components of accumulated other comprehensive loss, net of tax, for the years ended December 31, 2022 and 2021 are as follows (in thousands):

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

Ending balance at December 31, 2019 $ ( 618 ) $ 36 $ ( 582 )

Change during the year 730 ( 36 ) 694

Foreign Currency Translation Adjustment Unrealized Loss on Investments Accumulated Other Comprehensive Loss

Ending balance at December 31, 2021 ( 907 ) — ( 907 )

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Ending balance at December 31, 2022 $ ( 1,394 ) $ ( 502 ) $ ( 1,896 )

Immaterial amounts of unrealized gains and losses have been reclassified into the consolidated statement of operations for the years ended December 31, 2021, 2020 and 2019.

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.

Restricted stock units, performance share units, and stock options to purchase our common stock are considered to be potentially dilutive common shares but have been excluded from the calculation of diluted net loss per share as their effect is anti-dilutive for all periods presented.

RSUs, PSUs, and stock options to purchase our common stock are considered to be potentially dilutive common shares but have been excluded from the calculation of diluted net loss per share as their effect is anti-dilutive for all periods presented.

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):

2021 2020 2019

Stock options, restricted stock units and performance stock awards 7,975 7,507 5,189

Stock options, RSUs, and performance stock awards 15,455 7,975

Series B Preferred Stock 75,164 —

2019 Convertible Notes 18,966 18,966

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Total 114,336 28,288

The 422,309 common shares we repurchased during the year ended December 31, 2022 have also been excluded from our earnings per share and diluted earnings per share calculations.

Recent Accounting Changes and Accounting Pronouncements

Adoption of New Accounting Guidance

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

Simplifying the Accounting for Income Taxes.

The amendments in this update improve consistent application of and simplify U.S.

GAAP for Topic 740 by clarifying and amending existing guidance for, among other items, intra-period allocation, reporting tax law changes and losses in interim periods, state and local taxes not fully based on income and recognition of deferred tax liability related to certain transactions.

There is also new guidance related to consolidated group reporting and tax impacts resulting from business combinations.

The new guidance is effective for fiscal years beginning after December 15, 2020.

The adoption of the new guidance did not have a significant impact on our financial results.

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):

In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 amendments in this update reduce 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 amendment to this ASU reduced 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 adoption of the new guidance is not expected to have a significant impact on our financial results.

We adopted ASU 2020-06 effective January 1, 2022.

The adoption of ASU 2020-06 did not have an impact on our 2014 Notes and 2019 Notes (each as defined in Note 9).

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 they 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:

The amendment was effective for annual periods beginning after December 15, 2021.

The amendment established financial disclosure requirements for business entities receiving government assistance that was accounted for by analogizing to a grant or contribution model due to the absence of specific GAAP guidance for such transactions.

Entities that receive this type of assistance are required to include the following information in the notes to their financial statements:

(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.

We are currently evaluating the impact the new standard will have on the disclosures included in our consolidated financial statements.

Business Combination

On January 17, 2020, we completed the acquisition of all of the outstanding shares of InstruNor AS, a privately held Norwegian company (InstruNor).

InstruNor is a provider of the only fully integrated sample preparation system for flow and mass cytometry.

The acquisition of InstruNor supports our entry into the sample preparation market for cytometry analysis and expands our capabilities to include fully automated sample preparation for flow and mass cytometry.

The purchase price of $ 7.2 million included approximately $ 5.2 million in cash and 485,451 shares of our common stock valued at the closing price on the effective date of $ 4.22 .

The acquisition was accounted for in accordance with ASC 805, Business Combinations.

The assets acquired and liabilities assumed were recorded at their estimated fair values at the InstruNor acquisition date.

Developed technology was valued using a discounted cash flow model for which the most sensitive assumption was revenue growth rate.

There were no measurement period adjustments recognized since the acquisition date.

Non-tax deductible goodwill of $ 2.2 million was calculated as the purchase price less the fair value of the net assets acquired as follows (in thousands):

Purchase price:

Cash consideration paid on closing to former equity holders $ 5,165

Non-cash consideration common shares 2,049

Total purchase price $ 7,214

Assets acquired:

Cash and cash equivalents $ 11

Accounts receivable 32

Other receivables 13

Inventories, net 153

Developed technology 5,380

Liabilities assumed:

Accounts payable 14

Other current liabilities 15

Deferred tax liability, net 566

Fair value of identifiable net assets acquired $ 4,994

Goodwill acquired on acquisition $ 2,220

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.

As of December 31, 2021, we have achieved the required milestones and have received the total NIH Contract value of $ 34.0 million.

Proceeds from the NIH Contract have been and will be 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 expected to be incurred are recorded in other non-operating income.

We adopted ASU 2021-10 effective January 1, 2022.

Recent Accounting Pronouncements

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) 112,500.00 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 price of $ 1,000.00 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 or the Series B Redeemable Preferred Stock) at a purchase price of $ 1,000.00 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).

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 called a meeting (Special Meeting) to ask our stockholders to consider, vote upon and approve (i) a proposal to amend our 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.

Upon closing, 225,000 shares of Series B Preferred Stock were issued in accordance with the Purchase Agreements and the Bridge Loans converted into 30,559 shares of Series B Preferred Stock, for a total of 255,559 shares of Series B Preferred Stock.

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.

Series B Redeemable Preferred Stock

Preferred stock is classified as debt, equity or mezzanine equity based on its redemption features.

Preferred stock with redemption features outside of the control of the issuer, such as contingent redemption features, is classified as mezzanine equity.

We recorded the Series B Preferred Stock classified as mezzanine equity at its fair value upon issuance, net of any issuance costs, on the consolidated balance sheet as of December 31, 2022 because it had features, such as change of control and liquidation preference, which are outside of the Company’s control.

Subsequent adjustment of the amount presented within mezzanine equity to its redemption amount is unnecessary as it is not probable that the instrument will become redeemable.

Upon closing, the value of the Bridge Loans and the Purchase Agreements, discussed in detail below, were reclassified and included in the carrying value of the Series B Redeemable Preferred Stock.

The carrying value of the Series B Redeemable Preferred Stock as of April 4, 2022 was $ 311.3 million and was unchanged as of December 31, 2022.

T he components of the carrying value of the Series B Redeemable Preferred Stock are as follows (in thousands):

December 31, 2022

Proceeds from Purchase Agreements $ 225,000

Proceeds from Bridge Loans 25,000

Change in fair value of Forward Purchase Agreements 60,081

Change in fair value of Bridge Loans 13,719

Less equity issuance costs ( 12,547 )

Total Series B Redeemable Preferred Stock $ 311,253

The Series B Preferred Stock Certificates of Designations contain several conversion rights, redemption features 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.

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 our 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).

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 were accounted for as forward sales contracts at fair value in accordance with ASC 480 Distinguishing Liabilities from Equities because the Series B Preferred Stock included certain contingent redemption features which created an obligation for the Company to repurchase its shares.

The fair value of the Series B Preferred Stock payable portion of the forward sales contracts was determined using a Monte Carlo Simulation (MCS), which relies on significant assumptions regarding the Company’s estimated yield and estimated term.

The MCS analysis used a random-walk process to simulate the value of our common stock and the resulting impact on the value of our Series B Preferred Stock, given the convertibility of the Series B Preferred Stock into cash or our common stock under several scenarios, as well as various provisions discussed above.

The fair value of the 225,000 shares of Series B Preferred Stock was determined to be $ 262.8 million as of March 31, 2022 and $ 285.1 million as of April 4, 2022.

The $ 22.3 million increase in the fair value of the Series B Preferred Stock from March 31, 2022 to April 4, 2022 was primarily due to the increase in our common stock price from $ 3.59 per share on March 31, 2022 to $ 3.99 per share on April 4, 2022, and it was included in the loss on forward sale of Series B Preferred Stock on the consolidated statement of operations as of December 31, 2022.

The $ 60.1 million loss on forward sales of Series B Preferred Stock for the twelve months ended December 31, 2022 reflected the increase in the share price of our common stock from $ 2.84 per share at the inception of the contracts to $ 3.99 per share as of April 4, 2022 and the value of the various conversion rights and key provisions discussed above.

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 a rate of 10 % per annum, (ii) from and including March 1, 2022 to but excluding June 1, 2022, at a rate of 12 % per annum, (iii) from and including June 1, 2022 to but excluding September 1, 2022, at a rate of 14 % per annum, and (iv) from and including September 1, 2022 and thereafter, at a rate of 16 % per annum.

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 closing of the Private Placement Issuance, 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 $ 1,000.00 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 Purcha se 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 $1,000.00 of the Conversion Amount, subject to the cap set forth in the Bridge Loan Agreements.

Applying the guidance in ASC 825 Financial Instruments, we elected to record the Bridge Loans at their fair value.

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, discussed above, based on the underlying Series B Preferred Stock into which the Bridge Loans were convertible.

The change in fair value of the Bridge Loans from inception to conversion on April 4, 2022 is included as a non-operating loss on Bridge Loans in the consolidated statement of operations.

The loss on Bridge Loans was $ 13.7 million for the twelve months ended December 31, 2022.

The loss was attributable to the increase in our share price from the inception of the Bridge Loans to the April 4, 2022 closing date.

Upon conversion, the carrying value of the Bridge Loans was reclassified to Series B Redeemable Preferred Stock.

In addition, as required under the fair value option, issuance costs associated with the Bridge Loans of $ 0.2 million were recognized in general and administrative expenses in the first quarter of 2022.

In September 2020, we executed a definitive contract with the National Institutes of Health (NIH), which amended the letter contract we entered into with NIH in July 2020 (collectively, the NIH Contract), under the NIH Rapid Acceleration of Diagnostics (RADx) program to support the expansion of our production capacity and throughput capabilities for COVID-19 test products that use our genomics technology.

We completed the required milestones in 2021 and received the total NIH Contract value of $ 34.0 million as of December 31, 2021.

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.

The non-operating income recognized from the grant proceeds received in excess of the amounts spent for capital expenditures and operating expenses incurred is reflected on the consolidated statement of operations as surplus funding from the NIH contract.

The following tables summarize the activity under the NIH Contract through December 31, 2022 and 2021 (in thousands):

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Construction-in-progress — 3,909

Cumulative amounts applied against depreciation expense ( 703 ) —

Cumulative amounts applied against depreciation expense for assets placed in service ( 4,194 ) ( 703 )

Carrying value of property and equipment, net 18,003 20,096

Estimated future operating costs, excluding depreciation — 2,912

Estimated future capital expenditures — 1,555

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Total deferred grant income $ 18,003 $ 21,651

D eferred grant income, current is included in other accrued liabilities on the balance sheets at December 31, 2021 and 2020 and represents amounts expected to be applied against costs over the next twelve months.

Deferred grant, non-current includes depreciation expense on capital expenditure amounts which will be amortized in later periods.

At December 31, 2020, deferred grant income included amounts expected to be applied against 2021 operating costs as well as future depreciation.

At December 31, 2021, deferred grant income includes amounts related to future depreciation on capital expenditures placed or to be placed in service.

We expect to spend $ 22.4 million on capital expenditures associated with the NIH Contract.

We have incurred $ 20.8 million of capital expenditures through December 31, 2021, of which assets valued at $ 16.9 million have been placed in service, while the remaining $ 3.9 million is included in construction-in-progress (See Note 8).

We expect to place the remaining equipment in service in the first half of 2022.

Development Agreement

Effective March 31, 2020, we signed an OEM Supply and Development Agreement (Development Agreement) with a customer.

Under the Development Agreement, Fluidigm developed products based on its 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 $ 2.4 million and $ 8.8 million of development revenue from this agreement for the years ended December 31, 2021 and 2020, respectively.

Disaggregation of Revenue

The following table presents our revenue for the year ended December 31, 2021, 2020, and 2019, respectively, based on geographic area and by source (in thousands):

Year Ended December 31,

2021 2020 2019

Geographic Markets:

Americas $ 63,877 $ 74,586 $ 47,016

EMEA 42,722 37,776 40,024

Asia-Pacific 23,982 25,782 30,203

Total $ 130,581 $ 138,144 $ 117,243

The current portion of deferred grant income on our consolidated balance sheets represents the amounts expected to be offset against depreciation expense over the next twelve months.

The non-current portion of deferred grant income includes amounts expected to be offset against depreciation expense in later periods.

We spent a total of $ 22.2 million on cap ital expenditures associated with the NIH Contract.

In the third quarter of 2022 , the capacity expansion project was completed, and all of the related assets were placed in service.

In 2022, we recognized $ 0.2 million of non-operating income associated with the contract, bringing the cumulative total of such income under the NIH Contract to $ 7.3 million.

Business Combination

On January 17, 2020, we completed the acquisition of all of the outstanding shares of InstruNor AS, a privately held Norwegian company (InstruNor).

The purchase price of $ 7.2 million included approximately $ 5.2 million of cash and 485,451 shares of our common stock valued at $ 4.22 per share, the closing price of our stock on the acquisition date.

The acquisition was accounted for in accordance with ASC 805, Business Combinations.

The assets acquired and liabilities assumed were recorded at their estimated fair values.

The acquired assets included $ 5.4 million of identified intangibles representing the value of InstruNor’s developed technology and $ 2.2 million of goodwill.

During the second quarter of 2022, a $ 3.5 million imp airment charge was recorded to write-off the unamortized portion of the developed technology intangible because we discontinued the sale of products that utilized the technology.

Revenue and Geographic Area

Disaggregation of Revenue by Product Type and Geographic Area

The following tables present our revenue for the years ended December 31, 2022 and 2021, respectively, based on product type and the geographic location of our customers’ facilities (in thousands):

Year Ended December 31,

2021 2020 2019

Product revenue:

Instruments $ 25,664 $ 42,498

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Service revenue 23,712 25,917

Total product and service revenue 96,166 126,293

Development revenue 818 2,559

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Total other revenue 964 1,729

Total revenue $ 97,948 $ 130,581

Year Ended December 31,

Americas $ 43,982 $ 63,877

EMEA 33,136 42,722

Asia-Pacific 20,830 23,982

Total revenue $ 97,948 $ 130,581

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

Revenue from customers in the United States represented $ 41.0 million, or 42 %, of total revenues for the year ended December 31, 2022, and $ 60.2 million, or 46 %, of total revenues for the year ended December 31, 2021.

Revenue from customers in China represented $ 11.3 million, or 11 %, of total revenues for the year ended December 31, 2022, and less than 10% of total revenues for the year ended December 31, 2021.With the exception of China in 2022, no foreign country or jurisdiction had revenue in excess of 10% of our total revenue during the years ended December 31, 2022, and 2021.

One genomics customer accounted for 11 % of our total revenue for the year ended December 31, 2022.

No single customer represented more than 10% of our total revenue for the fiscal year ended December 31, 2021.

Revenue from our five largest customers represented 19 % of total revenue for the year ended December 31, 2022 and 23 % of total revenue the year ended December 31, 2021.

Long-lived Assets by Geographical Area

We had long-lived assets consisting of property and equipment, net of accumulated depreciation, and operating lease ROU assets, net of accumulated amortization, in the following geographic areas for each year presented (in thousands):

United States $ 31,785 $ 34,497

Singapore 21,178 23,732

Canada 5,394 5,597

Other Asia-Pacific 875 804

Total $ 59,535 $ 65,153

Development Agreement

Effective March 31, 2020, we signed an OEM Supply and Development Agreement (Development Agreement) with a customer to develop products based on our genomics technology.

The Development Agreement provided for up-front and periodic milestone payments during its development stage, which was completed during the third quarter of 2021, and for on-going annual payments of $ 0.4 million for sustaining efforts.

During the years ended December 31, 2022 and 2021, we recognized revenue under the Development Agreement of $ 0.8 million and $ 2.4 million, respectively.

Unfulfilled Performance Obligations

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At December 31, 2022, we reported $ 14.6 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 December 31, 2021 (in thousands):

The following table summarizes the years in which we expect to recognize revenue from our instrument service contracts that were partially completed on December 31, 2022 (in thousands):

Fiscal Year Expected Revenue (1)

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(1) Expected revenue includes both billed amounts included in deferred revenue and unbilled amounts that are not reflected in our 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 to not disclose information about unsatisfied performance obligations for service contracts with an expected term of one year or less.

Purchase orders for instrument service contracts can generally be canceled without penalty before the service period begins.

We apply the practical expedient that permits us to forgo disclosing information about unsatisfied performance obligations associated with service contracts with an expected term of one year or less.

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 recognize d $ 2.2 million (Eu ro 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.

In connection with our acquisition of DVS Sciences Inc.

(DVS) in February 2014, we recorded $ 104.1 million of goodwill and $ 112.0 million of intangibles associated with the acquired technology.

In the first quarter of 2020, we recorded $ 2.2 million (Eu ro 2.0 million) of goodwill and $ 5.4 million (Euro 4.9 million) of developed technology intangibles from the InstruNor acquisition (see Note 5).

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.

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 each of our reporting units or intangible assets is less than their carrying value.

If indicators of impairment are identified, a quantitative impairment test is performed.

During the first quarter of fiscal 2020, we assessed whether the current and potential future impact of the COVID-19 pandemic represented an event which necessitated an impairment review.

No impairment was recorded as a result of the quantitative assessment performed.

In addition, the Company performed its annual impairment assessment as of December 31, 2021 and 2020 and there were no indicators of impairment identified.

During the second quarter of 2022, we discontinued the sale of products that utilized the developed technology acquired from InstruNor and recorded a $ 3.5 million impairment charge to write-off the unamortized portion of the related intangible asset.

On August 31, 2022, we began reporting under two operating segments, which were also determined to be our reporting units for goodwill impairment testing.

Immediately prior to the change, we performed a qualitative fair value assessment on our former reporting unit and concluded it was more likely than not the carrying value was less than its fair value.

After changing to two operating segments, we performed quantitative impairment tests on the goodwill we allocated to each reporting unit and our significant long-lived assets and concluded there was no impairment.

After experiencing a significant decline in our share price during September 2022, we conducted quantitative goodwill impairment testing at the reporting unit level as of September 30, 2022, and it was determined there was no impairment.

The Company assessed goodwill for impairment again when it performed its annual testing at the end of the fourth quarter of 2022.

A qualitative approach was employed, and it was determined there was no impairment as of December 31, 2022.

The Company did not recognize any impairment of goodwill, long-lived assets or intangible assets in 2021.

The changes in the carrying value of goodwill by segment are as follows ($ in thousands):

Proteomics Genomics Total

Balance as of December 31, 2021 $ 85,855 $ 20,524 $ 106,379

Foreign currency translation ( 103 ) ( 25 ) ( 128 )

Balance as of December 31, 2022 $ 85,752 $ 20,499 $ 106,251

Intangible assets also include other patents and licenses, which are included in other non-current assets.

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December 31, 2022

Gross Amount Accumulated Amortization Net Weighted-Average Amortization Period

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

Developed technology $ 117,194 $ ( 104,594 ) $ 12,600 10.0 years

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Patents and licenses $ 11,257 $ ( 10,000 ) $ 1,257 7.0 years

Total amortization expense for the years ended December 31, 2021, December 31, 2020, and December 31, 2019 was $ 12.7 million, $ 12.8 million and $ 12.2 million, respectively.

Based on the carrying value of intangible assets, net, as of December 31, 2021, the annual amortization expense is expected to be as follows (in thousands):

Total amortization expense was $ 12.2 million and $ 12.7 million for the years ended December 31, 2022 and December 31, 2021, respectively.

The $ 3.5 million impairment charge for the InstruNor developed technology intangible asset was recorded in research and development expense in 2022 and it is reflected in accumulated amortization in the above table.

Based on the net carrying value of our intangible assets at December 31, 2022, we expect our annual amortization expense to be as follows (in thousands):

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

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2024 1,400 7 1,407

2024 2,088 7 2,095

2025 688 — 688

2026 688 — 688

Thereafter 687 — 687

Total $ 12,600 $ 578 $ 13,178

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Total cash, cash equivalents, and restricted cash $ 82,324 $ 29,467

Short-term restricted cash of approximately $ 16 th ousand 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 consolidated balance sheets as of December 31, 2021 and 2020.

Restricted cash of $ 1.0 million is included in other non-current assets while the remainder of the restricted cash is included in prepaid expenses and other current assets in the consolidated balance sheets as of December 31, 2022 and 2021.

Inventories, net

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Property and equipment, net consisted of the following as of December 31, 2022 and 2021 (in thousands):

Computer equipment and software $ 5,759 $ 4,240

Laboratory and manufacturing equipment $ 33,329 $ 30,260

Leasehold improvements 12,234 12,095

Computer equipment and software 5,793 5,759

Office furniture and fixtures 1,713 2,074

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Property and equipment, net $ 25,652 $ 28,034

The majority of the amounts included in construction-in-progress are related to the NIH Contract (see Note 4).

The majority of the amounts included in construction-in-progress in 2021 were related to the NIH Contract (see Note 4).

Accrued Compensation and Related Benefits

Accrued compensation and related benefits consisted of the following as of December 31, 2021 and 2020 (in thousands):

Accrued compensation and related benefits, which are included in current liabilities on the consolidated balance sheets consisted of the following as of December 31, 2022 and 2021 (in thousand s):

Year Ended December 31,

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Accrued payroll taxes and other 1,193 1,411

Accrued severance and retention payments 775 107

Accrued restructuring 3,220 —

Accrued compensation and related benefits $ 9,153 $ 4,920

Activity for our warranty accrual for the years ended December 31, 2021 and 2020, which is included in other accrued liabilities, is summarized below (in thousands):

Year Ended December 31,

Beginning balance $ 1,663 $ 1,390

Accrual for current period warranties 418 1,028

Warranty costs incurred ( 911 ) ( 755 )

Ending balance $ 1,170 $ 1,663

2014 Senior Convertible Notes (2014 Notes)

In February 2014, we closed an underwritten public offering of $ 201.3 million aggregate principal amount of our 2014 Notes.

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

The effective interest rate on the 2014 Notes, reflecting the impact of debt discounts and issuance costs, is approximately 3.0 %.

Refer to Note 16 for additional information on restructuring.

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):

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 ( 953 ) ( 1,408 )

Net carrying value of 2019 Notes $ 54,047 $ 53,592

Net carrying value of all Notes $ 54,615 $ 54,160

2014 Notes and 2019 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, as discussed below.

The effective interest rate on the 2014 Notes, reflecting the impact of debt discounts and issuance costs, is approximately 3.0 % per annum.

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, 2021, 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.

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

As of December 31, 2022, there was $ 0.6 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 aggregate principal amount of 2014 Notes outstanding.

The 2018 Notes accrued interest at a rate of 2.75 %, payable semi-annually.

The 2018 Notes were scheduled to mature on February 1, 2034, unless earlier converted, redeemed, or repurchased in accordance with the terms of the indenture governing the 2018 Notes.

In the first quarter of 2019, $ 150.0 million of the 2018 Notes were converted into 19.5 million shares of our common stock and the notes were retired.

We recognized a loss of $ 9.0 million on the conversion of 2018 Notes, which was included in loss on extinguishment of debt in 2019.

This amount represents the difference between the fair value of the bonds converted and the carrying value of the bonds at the time of conversion.

2019 Senior Convertible Notes (2019 Notes)

In November 2019, we issued $ 55.0 million aggregate principal amount of 2019 Notes.

I n 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.

We recognized a loss of $ 3.0 million on the exchange of the 2014 Notes for the 2019 Notes.

The loss on extinguishment of debt was calculated as the difference between the reacquisition price (i.e., the fair value of the principal amount of 2019 Notes) and the net carrying value of the 2014 Notes exchanged.

$ 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 the 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.

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On or after December 1, 2021 to December 1, 2022, if the price of the Company’s common stock has equaled or exceeded 150 % of the Conversion Price 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 the Company, determined in accordance with the terms of the indenture.

On or after December 1, 2022, if the price of the Company’s 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 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 debt issuance costs are amortized over the expected term of the 2019 Notes using the effective interest method through the maturity date of December 1, 2024.

The effective rate on the 2019 Notes is 6.2 %.

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

2.75 % 2014 Notes due 2034

Principal amount $ 578 $ 1,079

Unamortized debt discount ( 8 ) ( 16 )

Unamortized debt issuance cost ( 2 ) ( 4 )

Net carrying value of 2014 Notes $ 568 $ 1,059

5.25 % 2019 Notes due 2024

The effective rate on the 2019 Notes is 6.2 % per annum.

Revolving Credit Facility and Term Loan, net

The carrying values of our term loan and advances under the Revolving Credit Facility are as follows (in thousands):

Principal amount $ 10,000 $ 10,000

End of term fee accretion 296 79

Unamortized debt issuance cost ( 19 ) ( 30 )

Net carrying value of 2019 Notes $ 53,592 $ 53,165

Net carrying value of all Notes $ 54,160 $ 54,224

Revolving Credit Facility and Term Loan, net

Net carrying value of term loan 10,277 10,049

term loan, current 2,083 —

Term loan, non-current $ 8,194 $ 10,049

Revolving Credit Facility

Carrying value of advances under revolving credit agreement $ — $ 6,838

Revolving Credit Facility

On August 2, 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.

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The Credit Facility is 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 %.

The Credit Facility also includes a financial

covenant that requires us to maintain a minimum Adjusted Quick Ratio of at least 1.25 to 1.00 and a liquidity requirement of greater than $ 20.0 million, which are both defined in our agreement.

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 % per annum.

Interest on any outstanding advances 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 Revolving Credit Facility include an annual commitment fee of $ 112,500 and a quarterly unused line fee based on the Borrowing Base.

As of December 31, 2021, the Borrowing Base of the Revolving Credit Facility was $ 9.4 million, of which we had borrowed $ 6.8 million, leaving $ 2.5 million available.

As of December 31, 2021 the Term Loan Facility was fully drawn.

The interest rate on the Term Loan Facility is the greater of 4 % or a floating per annum rate equal to three quarters of one percentage points ( 0.75 %) above the prime rate.

As of December 31, 2022, there were no borrowings under the Revolving Credit Facility and the total availability was $ 9.2 million.

On March 10, 2023, Silicon Valley Bank was announced as closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation has been appointed as a receiver.

As a result, we no longer expect to be able to draw on the Revolving Credit Facility.

Term Loan, net

As of December 31, 2022 our Term Loan Facility was fully drawn and the carrying value of the loan was $ 10.3 million.

The interest rate on the Term Loan Facility is the greater of 4 % per annum or a floating per annum rate equal to three quarters of one percentage points ( 0.75 %) above the prime rate.

Interest on any outstanding term loan advances is due and payable monthly.

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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 December 31, 2021.

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):

Principal amount $ 10,000 $ —

End of term fee accretion 79 —

Unamortized debt issuance cost ( 30 ) —

Net carrying value of term loan $ 10,049 $ —

Credit Facility

Borrowing Base $ 9,368 $ 15,000

Carrying value of advances under revolving credit agreement $ 6,838 $ —

The $ 2.1 million current portion of the term loan reflected on the December 31, 2022 consolidated balance sheet represents principal debt repayments scheduled to be made in 2023.The effective interest rate on the Term Loan Facility, reflecting the impact of debt issuance costs, the $ 0.7 million end-of-term fee and expected timing of principal repayment was 9.3 % per annum as of December 31, 2022.

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.

Existing leases have remaining terms ranging from less than one year to seven years .

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

In August 2022, we entered into an agreement to sublease approximately 25 % of our corporate headquarters location in South San Francisco, California.

We expect to recognize $ 4.8 million of sublease income over the 39 -month lease term, which commenced in October 2022.

Supplemental balance sheet information related to leases was as follows as of December 31, 2022 and 2021 (in thousands, except for discount rate and lease term):

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Weighted average discount rate per annum 11.8 % 11.7 %

The following table presents the components of lease expense for the year-ended December 31, 2021 and 2020, respectively (in thousands):

The following table presents the components of our net lease expense for the years-ended December 31, 2022 and 2021, respectively (in thousands):

($ in thousands) Twelve months ended December 31, 2022 Twelve months ended December 31, 2021

Operating lease cost (including variable costs) $ 10,917 $ 10,918

Variable costs including non-lease component $ 2,853 $ 2,336

Variable costs (including non-lease components) $ 2,930 $ 2,853

Supplemental information:

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Operating cash flows from operating leases $ 7,540 $ 7,568

Future minimum lease payments under commenced non-cancelable operating leases are as of December 31, 2021 as follows (in thousands):

Fiscal Year Minimum Lease Payments for Operating Leases

Future minimum lease payments and sublease income as of December 31, 2022 under commenced non-cancelable operating leases are as follows (in thousands):

Fiscal Year Minimum Lease Payments for Operating Leases Sublease Income

2023 $ 7,805 $ ( 1,533 )

2024 7,808 ( 1,587 )

2025 7,918 ( 1,642 )

Thereafter 17,580 —

Total future minimum payments $ 63,429

Total future minimum payments (receipts) $ 56,172 $ ( 4,762 )

imputed interest ( 18,409 )

Total $ 40,601

Total operating lease liabilities $ 37,763

On February 28, 2023, we signed another agreement to sublease approximately 25 % of our corporate headquarters location in South San Francisco, California for a period of 77 months.

We expect to recognize $ 9.1 million of sublease income over the lease term commencing on December 1, 2023.

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):

The following tables summarize our cash, restricted cash and available-for-sale securities that were measured at fair value by significant investment category within the fair value hierarchy as at December 31, 2022 and 2021 (in thousands):

December 31, 2022

Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cash and Cash Equivalents Cash- Restricted

Cash and money market funds $ 28,451 $ — $ — $ 28,451 $ 28,451 $ —

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

Cash-unrestricted $ 27,415 $ — $ — $ 27,415 $ 27,415 $ — $ —

Cash-restricted 1,015 — — 1,015 — — 1,015

Total cash, cash equivalents and restricted cash $ 29,467 $ — $ — $ 29,467 $ 28,451 $ 1,016

Total cash $ 28,430 $ — $ — $ 28,430 $ 27,415 $ — $ 1,015

Available-for-sale:

Money market funds $ 53,894 $ — $ — $ 53,894 $ 53,894 $ — $ —

treasury securities 84,977 — ( 502 ) 84,475 — 84,475 —

Total available-for-sale $ 138,871 $ — $ ( 502 ) $ 138,369 $ 53,894 $ 84,475 $ —

Total $ 167,301 $ — $ ( 502 ) $ 166,799 $ 81,309 $ 84,475 $ 1,015

December 31, 2021

Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cash and Cash Equivalents Cash-Restricted

Cash and money market funds $ 68,520 $ — $ — $ 68,520 $ 68,520 $ —

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

Cash-unrestricted $ 23,448 $ — $ — $ 23,448 $ 23,448 $ — $ —

Cash-restricted 1,016 — — 1,016 — — 1,016

Total cash, cash equivalents and restricted cash $ 69,536 $ — $ — $ 69,536 $ 68,520 $ 1,016

Cash and cash equivalents are Level I measurements.

Total cash $ 24,464 $ — $ — $ 24,464 $ 23,448 $ — $ 1,016

Available-for-sale:

Money market funds $ 5,003 $ — $ — $ 5,003 $ 5,003 $ — $ —

treasury securities — — — — — — —

Total available-for-sale $ 5,003 $ — $ — $ 5,003 $ 5,003 $ — $ —

Total $ 29,467 $ — $ — $ 29,467 $ 28,451 $ — $ 1,016

There were no transfers between Level I and Level II measurements, and no changes in the valuation techniques used during the years ended December 31, 2022, and 2021.

All of the money market and U.S.

Treasury investments mature on or before May 31, 2023.

Our convertible notes are not regularly traded.

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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 a 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.

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 flow model and current market interest rate data for similar loans.

The advances under the revolving credit

agreement typically have short repayment periods and their carrying values approximate their fair values due to their short-term duration.

The following table summarizes the par value, carrying value and the estimated fair value of our debt at December 31, 2022 and 2021, respectively (in thousands):

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Advances under revolving credit agreement $ — $ — $ — $ 6,838 $ 6,838 $ 6,838

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 $ 50.0 million, 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

In January 2020, we completed the acquisition of all of the outstanding shares of InstruNor (see Note 3).

The purchase price was approximately $ 7.2 million, consisting of $ 5.2 million in cash and 485,451 shares of our common stock.

No adjustments were made to the initial purchase price allocation.

Total debt $ 65,578 $ 64,892 $ 58,726 $ 72,416 $ 71,047 $ 99,432

Assets Measured at Fair Value on a Nonrecurring Basis

Dur ing the third quarter of 2022, the Company changed its reporting structure and organized itself under two operating segments, which were determined to be reporting units for goodwill impairment testing.

Goodwill was allocated to each reporting unit and tested for impairment on August 31, 2022 along with our significant long-lived assets.

Following a significant decline in the price of the Company’s stock during September 2022, goodwill was tested for imp airment again on September 30, 2022.

Impairment testing requires significant judgment as it involves selecting an appropriate valuation method, identifying reporting units, assigning assets and liabilities to the reporting units, and estimating future cash flows, revenue growth rates, terminal values and discount rates.

These fair value measurements fall in Level III of the fair value hierarchy.

We estimated the fair value of proteomics developed technology intangible asset using a discounted cash flow (DCF) analysis We believe the most significant unobservable input (Level III) used in the analysis was the estimated remaining service life of eleven years.

T he fair value of our reporting units was estimated using an approach that combined both a DCF analysis and a guideline public company analysis, weighted 80 % and 20 %, respectively.

We believe t he most significant unobservable inputs used in the analysis were as follows:

Proteomics Genomics

Unobservable inputs:

Weighted average cost of capital (WACC) 20.2 % 16.8 %

Compound annual growth rate (CAGR) for revenue (2022 to 2027 forecast) 20.4 % 6.7 %

Terminal value multiple (using 2027 revenue forecast) 3.5 2.8

Control premium 30 % 30 %

Mezzanine Equity and Shareholders’ Equity (Deficit)

Stock Repurchase Program

On November 28, 2022, we announced that our board of directors had authorized the repurchase of up to $ 20.0 million shares of the Company’s common stock, in the open market or in negotiated transactions, through December 31, 2023.

The repurchases are expected to be funded by cash on hand.

We repurchased a total of 422,309 shares of common stock under the program at a total cost of $ 0.6 million, or an average of $ 1.33 per share in 2022.

As of December 31, 2022, the Company had a remaining authorization to repurchase up to $ 19.4 million shares under this program.

Repurchases may be suspended or discontinued at any time at the Company’s discretion.

Private Placement Issuance

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 and we issued 255,559 shares of Series B Preferred Stock, which are classified as mezzanine equity on the consolidated balance sheet as of December 31, 2022.

In connection with the closing, we adopted the 2022 Inducement Equity Incentive Plan (2022 Inducement Plan) with an initial reserve for issuance of approximately 9.5 million shares.

Common Shares Reserved

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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

2022 Inducement Equity Incentive Plan 6,148 1,371 1,918

2011 Equity Incentive Plan 1,572 6,650 1,966

2017 Inducement Award Plan 159 5 —

DVS Sciences Inc.

2010 Equity Incentive Plan 3 — —

2017 Inducement Award Plan 159 76 —

2017 Employee Stock Purchase Plan — — 2,050

7,882 8,026 5,934

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.

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 awar ds under our stock-based plans.

Included in the securities to be issued upon release of RSUs and PSUs are the maximum number of shares that could be issued for PSU awards, which can vest at 0 %- 200 % of the number of awards granted.

Benefit 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, RSUs and performance-based awar ds under our stock-based plans.

Our board of directors determines the number of awards to grant and also sets vesting criteria.

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

Incentive stock options and non-statutory stock options granted under the 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.

Stock options granted under our 2022 Inducement Plan and 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.

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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 January 2011, our board of directors adopted the 2011 Plan under which incentive stock options, non-statutory stock options, RSUs, stock appreciation rights, 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 in the number of shares reserved for issuance under the 2011 Plan.

In May 2020, our board of directors authorized, and in June 2020, our stockholders approved, an increase of 1.4 million in the number of 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 in the number of shares reserved for issuance under the 2011 Plan.

2022 Inducement Equity Incentive Plan

As discussed in Note 12, we adopted the 2022 Inducement Plan in April 2022 and reserved 9.5 million shares of common stock for the issuance of equity-based awards, including non-statutory stock options, RSUs, restricted stock, stock appreciation rights, performance shares and PSUs.

In accordance with Nasdaq listing rules, equity awards issued under the 2022 Inducement Plan are restricted to individuals who are not already employees or directors of the Company.

The terms and conditions of the 2022 Inducement Plan are substantially similar to those of the 2011 Plan.

Valuation and Expense Information

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Year Ended December 31,

2021 2020 2019

Stock options

Weighted average expected volatility 91.8 % 94.0 %

Weighted average expected term 4.2 years 3.8 years 4.3 years

Weighted average expected term 4.3 years 4.2 years

Weighted average risk-free interest rate 2.6 % 0.6 %

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Balance at December 31, 2022 7,120 $ 2.58

RSU granted 3,295 $ 5.23

RSU released ( 2,225 ) $ 5.02

RSU forfeited ( 791 ) $ 4.66

Balance at December 31, 2021 5,141 $ 5.18

The total intrinsic value of RSUs vested and released during the year ended December 31, 2021, 2020 and 2019 were approximately $ 11.2 million , $ 8.0 million and $ 5.8 million, respectively.

The total intrinsic value of RSUs vested and released was $ 12.1 million and $ 11.2 million during the years ended December 31, 2022, and 2021, respectively.

The intrinsic value of vested and released RSUs is calculated by multiplying the fair market value of our common stock on the vesting date by the number of shares vested.

December 31, 2021, the unrecognized compensation costs related to outstanding unvested RSUs under our equity incentive plans were $ 22.5 million .

As of December 31, 2022, the unrecognized compensation costs related to outstanding unvested RSUs under our equity incentive plans were $ 14.8 million .

We expect to recognize those costs over a weighted average period of 2.7 years.

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Options exercised ( 31 ) $ 3.25 $ 10

Option forfeited ( 409 ) $ 9.22

Balance at December 31, 2020 1,635 $ 7.33 6.2 $ 834

Options granted 92 $ 5.56

Options exercised ( 37 ) $ 5.62 $ 25

Options forfeited ( 1,494 ) $ 4.56

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_________________________

(1) Aggregate intrinsic value as of December 31, 2021 was calculated as the difference between the closing price per share of our common stock on the last trading day of 2021, which was $ 3.92 , and the exercise price of the options, multiplied by the number of in-the-money options.

(1) Aggregate intrinsic value was calculated as the difference between the closing price per share of our common stock on the last trading day of 2022, which was $ 1.17 , and the exercise price of the options, multiplied by the number of in-the-money options.

As of December 31, 2022, the unrecognized compensation costs related to outstanding unvested options under our equity incentive plans were $ 13.9 million.

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Performance-based Awards:

Performance Stock Units with Market Condition

We have granted performance stock units to certain executive officers and senior level employees.

The number of performance stock units 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 performance stock units 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 for the period 2018 to 2020, PSUs awarded in 2018 vested in 2021 at a rate of 118.6 % of the target.

The performance adjustment in the table below reflects the impact of the above-target performance.

PSUs with Market Condition

We have granted PSUs to certain executive officers and senior level employees.

The number of PSUs ultimately earned under these awards is calculated by comparing the Total Shareholder Return (TSR) of our common stock over the applicable three year period against the TSR of a defined group of peer companies.

The Company’s relative performance against its peer group determines the payout, which can range from 0 % to 200 % of the base award.

Number of Units (in 000s) Weighted-Average

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PSU granted 396 $ 9.60

PSU released — —

PSU forfeited ( 9 ) $ 10.09

Balance at December 31, 2019 547 $ 15.09

PSU granted 509 $ 4.82

Performance adjustment for 2018 awards 21 $ 10.09

PSU released ( 133 ) $ 10.09

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As of December 31, 2022, the unrecognized compensation costs related to these awards were $ 0.2 million.

We expect to recognize those costs over a weighted average period of 1.8 years.

The PSU awards above include 0.3 million of PSUs awarded in 2019.

Based on the performance of our stock relative to our defined group of peer companies for the period 2019 to 2021, these awards did not meet the minimum target and the shares returned to the 2011 Equity Plan pool in early 2022.

Performance Stock Units with Performance Conditions

During 2019, we granted performance stock units to a certain employee.

The number of performance stock units that ultimately vest under these awards is dependent on the employee achieving certain discrete operational milestones on or before predetermined measurement dates, the latest of which was December 31, 2021.

As of December 31, 2021, there were approximately 29 thousand units of these awards outstanding with a weighted-average grant date fair value of $ 6.46 per unit.

The operational milestones were not met and the awards were cancelled in early 2022.

2017 Employee Stock Purchase Plan (ESPP)

We expect to recognize those costs over a weighted average period of 1 year.

The TSR target for the 2019-2021 performance period was not met.

Accordingly, 340,670 shares were returned to the 2011 Equity Incentive Plan pool in 2022.

The performance target for the 2021-2022 performance period was also not met and an additional 401,082 sh ares will be returned to the pool in early 2023.

PSUs with Performance Conditions

During 2019, we granted PSUs to a certain employee.

The number of PSUs that ultimately vested under these awards was dependent on the employee achieving certain discrete operational milestones on or before predetermined measurement dates, the latest of which was December 31, 2021.

As of December 31, 2021, there were approximately 29,000 PSUs outstanding with a weighted-average grant date fair value of $ 6.46 per unit.

In early 2022, the awards were forfeited since the operational milestones were not met.

Our ESPP offers U.S.

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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.

Employee stock purchases under this plan are limited to $ 25,000 per calendar year.

Shares are sold to employees under the ESPP for 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

Employee Benefit Savings Plan

We sponsor a 401(k) savings plan for our employees in the United States that stipulates that eligible employees may elect to contribute to the plan, subject to certain limitations, up to the lesser of 90 % of eligible compensation or the maximum amount allowed by the U.S.

Internal Revenue Service.

In 2019 and onward, the employee match formula was 100 % up to $ 3,000 annually.

Employer matching contributions to the 401(k) plan were $ 0.6 million per year for each of the years presented in this report.

Compensation Expense

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

For the Year Ended December 31,

2021 2020 2019

Restricted stock units, stock options and performance share units $ 15,470 $ 13,428 $ 10,555

RSUs, stock options and PSUs $ 14,530 $ 15,470

Employee stock purchase plan 350 631

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Year Ended December 31,

2021 2020 2019

Domestic $ ( 174,041 ) $ ( 56,291 )

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Loss before income taxes $ ( 192,928 ) $ ( 63,660 )

Significant components of our benefit for income taxes are as follows (in thousands):

Significant components of our benefit from income taxes are as follows (in thousands):

Year Ended December 31,

2021 2020 2019

Federal $ — $ —

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Total deferred benefit 3,322 4,319

Total benefit for income taxes $ 4,423 $ 1,081 $ 1,915

Total benefit from income taxes $ 2,830 $ 4,423

Reconciliation of income taxes at the statutory rate to the benefit from income taxes recorded in the statements of operations is as follows:

Year Ended December 31,

2021 2020 2019

Tax benefit at federal statutory rate 21.0 % 21.0 %

State tax expense, net of federal benefit 0.8 2.8

Foreign tax benefit (expense) 4.7 ( 0.9 ) ( 0.1 )

Foreign tax benefit 0.8 4.7

NOL carryforwards expiring unutilized ( 22.8 ) ( 2.9 )

Change in valuation allowance 17.1 ( 15.5 )

Federal research and development credit 0.7 1.1 0.7

Federal R&D credit 0.2 0.7

Unrecognized tax benefit 0.9 ( 0.1 )

Non-deductible interest/premium ( 0.3 ) ( 1.0 )

Global Intangible Low-Tax Income (GILTI) — ( 3.9 ) ( 5.6 )

Net operating loss expiration ( 2.9 ) ( 3.3 ) —

Non-deductible loss on Forward Sale of Preferred Stock and Bridge Loans ( 8.0 ) —

R&D tax credits expiring unutilized ( 5.2 ) —

Executive stock-based compensation ( 0.8 ) ( 1.3 )

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Effective tax rate 1.5 % 6.9 %

At December 31, 2017, we changed our permanent reinvestment assertion and will not permanently reinvest our foreign earnings outside the United States.

The cash generated from some of our foreign subsidiaries may be used domestically to fund operations.

Any domestic, foreign withholding tax and state taxes that may be due upon future repatriation of earnings is not expected to be significant.

Significant components of our deferred tax assets and liabilities are as follows (in thousands):

Deferred tax assets:

Net operating loss carryforwards $ 115,739 $ 104,785

Net operating loss carryforward $ 85,182 $ 115,739

Reserves and accruals 3,943 3,473

Depreciation and amortization 563 1,931

Capitalized R&D costs 3,840 —

Tax credit carryforwards 14,456 20,480

Stock-based compensation 2,064 2,871

Right-of-use lease liability 9,322 9,451

Right-of-use lease liabilities 8,663 9,322

Total gross deferred tax assets 118,711 153,816

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Fixed assets and intangibles ( 3,913 ) ( 8,416 )

Right-of-use asset ( 8,459 ) ( 8,694 )

Right-of-use assets ( 7,729 ) ( 8,459 )

Total deferred tax liabilities ( 11,642 ) ( 16,875 )

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Net deferred tax liability $ ( 824 ) $ ( 4,146 )

We evaluate a number of factors to determine the realizability of our deferred tax assets.

Recognition of 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.

The net deferred tax assets have been partially offset by a valuation allowance because we have incurred losses in the U.S.

since our inception.

The valuation allowance increased by $ 9.9

million during 2021 and $ 1.1 million during 2020.

The changes in valuation allowance during 2021 and 2020 are mainly due to taxable losses and an increase in tax attributes.

We are in the process of updating our Section 382 Study through December 31, 2022 and anticipate that an ownership change occurred on April 4, 2022 due to the issuance of preferred equity.

We are anticipating that as a result of this ownership change a portion of our net operating loss (NOL) carryforwards and all of our R&D credits will expire unutilized.

We establish a valuation allowance for deferred tax assets if we determine it is more likely than not the related tax benefit will not be realized.

We rely on several factors when assessing the realizability of deferred tax assets, including historical financial results, our ability to recover net operating loss carry-forwards, the projected future operating results, and our ability to use tax planning strategies.

The valuation allowances of $ 107.9 million and $ 141.1 million as of December 31, 2022 and 2021, respectively, primarily relate to temporary tax differences, net operating losses and research and development credits generated in the current and prior years.

We believe it is more likely than not that U.S.

federal and state deferred tax assets relating to temporary differences, net operating losses and research and development credits are not realizable.

As such, full valuation allowances have been applied against U.S.

federal and state deferred tax assets.

A reconciliation of the beginning and ending amount of the valuation allowance for the years ended December 31, 2021, 2020, and 2019 is as follows (in thousands):

federal and state, Canada and Norway deferred tax assets relating to temporary differences, net operating losses and research and development credits are not realizable.

As such, full valuation allowances have been applied against the deferred tax assets relating to jurisdictions of the U.S.

federal and state, Canada and Norway.

A reconciliation of the beginning and ending amounts of the valuation allowance for the years ended December 31, 2022 and 2021 is as follows (in thousands):

Valuation Allowance

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December 31, 2022 $ 107,893

Charges to earnings —

Charges to other accounts 9,861

December 31, 2021 $ 141,087

As of December 31, 2022, we had net operating loss carryforwards for U.S.

federal income tax purposes of $ 508.2 million, of which $ 1.7 million expire in 2022, and U.S.

federal research and development tax credits of $ 10.0 million, of which $ 0.4 million expire in 2022 and the rest through 2041.

As of December 31, 2021, we had net operating loss carryforwards for state income tax purposes of $ 196.6 million, of which $ 0.4 million expire in 2022 and the rest through 2041, and California research and development tax credits of $ 13.3 million, which do not expire.

As of December 31, 2021, we had foreign net loss carryforwards of $ 3.4 million which can mostly be carried forward indefinitely.

Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions.

The annual limitation may result in the expiration of net operating losses and credits before utilization.

In 2021, we continued the Section 382 analysis as historically performed through December 31, 2021 and, based on the information that was available to us, we do not believe that an ownership change occurred during the current year.

federal income tax purposes of $ 351.7 million, of which $ 19.3 million will expire in 2023, and U.S.

federal research and development tax credits of $ 0.3 million, which begin expiring in 2042.

As of December 31, 2022, we had net operating loss carryforwards for state income tax purposes of $ 206.3 million, which will expire through 2041, and California research and development tax credits of $ 14.0 million, which do not expire.

As of December 31, 2022, we had foreign net loss carryforwards of $ 6.1 million which will begin to expire in 2043, and foreign tax credit carryforwards of $ 5.9 million which begin to expire in 2025.

The aggregate changes in the balance of our gross unrecognized tax benefits during 2022, and 2021 were as follows (in thousands):

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Increases in balances related to tax positions during a prior period 154

Increases in balances related to tax positions taken during current period 441

Decreases in balances related to tax positions taken during prior period ( 144 )

December 31, 2020 $ 8,886

Increases in balances related to tax positions during a prior period 25

Increases in balances related to tax positions taken during current period 325

Decreases in balances related to tax positions taken during current period —

Decreases in balances related to tax positions taken during prior period ( 1,697 )

December 31, 2022 $ 6,972

Accrued interest and penalties related to unrecognized tax benefits were included in the income tax provision and are immaterial as of December 31, 2021 and 2020.

The uncertain taxes payable are recorded as a long-term liability on the balance sheet.

During 2021, we decreased our balances related to tax positions in the prior period to reflect a payment of $ 0.7 million related to our uncertain tax position in Singapore.

We received a final determination from the tax authorities in October 2021 and paid the amounts accrued.

As of December 31, 2021, there were $ 0.2 million of unrecognized tax benefits that, if recognized, would affect our effective tax rate.

As of December 31, 2022, there was approximately $ 0.1 million of unrecognized tax benefits that, if recognized, would reduce our effective tax rate.

We do not anticipate that our existing unrecognized tax benefits will significantly increase or decrease within the next 12 months.

In accordance with U.S.

GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes related to GILTI as a current period expense when incurred, or (2) factoring such amounts into the measurement of deferred taxes.

The Company has treated GILTI related taxes as a current period expense when incurred in the consolidated financial statements.

We file income tax returns in the United States, various states, and certain foreign jurisdictions.

As a result of net operating loss carryforwards, all of our tax years are open to federal and state examination in the United States.

Accrued interest and penalties related to unrecognized tax benefits was included in the income tax provision.

The amount was immaterial as of December 31, 2022.

During 2021, the unrecognized tax benefit for Singapore was settled, decreasing the unrecognized tax benefit by $ 0.7 million

We file income tax returns in the United States, its various states, and in certain foreign jurisdictions.

As a consequence of having operating loss carryforwards, all of our tax years are open to federal and state examination in the United States.

Tax years from 2012 are open to examination in various foreign countries.

Employee Benefit Plans

Internal Revenue Service.

In 2015, we implemented a match formula of 100 % up to $ 2,000 annually, following a 4-year vesting schedule.

In 2019, the match was increased to up to $ 3,000 annually.

Employer matching contributions to the 401(k) plan were $ 0.6 million for the years ended December 31, 2021, 2020, and 2019.

Information About Geographic Areas

We operate in one reporting segment that creates, manufactures, and markets a range of products and services, including instruments, consumables, reagents and software that are used by researchers and clinical labs worldwide.

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 an y 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 years ended December 31, 2021, 2020 and 2019 is included in Note 6 to the consolidated financial statements.

Revenue from customers in the United States represented $ 60.2 million, or 46 %, of total revenues for the year ended December 31, 2021.

Revenue from domestic customers represented $ 72.0 million, or 52 %, of total revenues for the year ended December 31, 2020 and $ 43.4 million, or 37 %, for the year ended December 31, 2019.

Revenue from customers in China were less than 10 % of total revenues for the year ended December 31, 2021 and 2020.

Revenue from customers in China represented $ 15.4 million, or 13 %, of total revenues for the year ended December 31, 2019.

With the exception of China, no other foreign country or jurisdiction had revenue in excess of 10% of our total revenue during the years 2021, 2020 and 2019.

No individual customer represented more than 10% of our t otal revenues for the fiscal years ended December 31, 2021, 2020, and 2019.

Revenues from our five largest customers were 23 % for the both the years ended December 31, 2021 and 2020, and 17 % for 2019.

United States $ 34,497 $ 35,188

Singapore 23,732 12,195

Canada 5,597 6,456

Asia-Pacific 804 1,048

Segment Reporting

Prior to the third quarter of 2022, we operated as a single reportable segment, managed our business operations, and evaluated our financial performance on a consolidated basis.

During the third quarter of 2022, our CEO, who is our CODM instituted the practice of evaluating operating performance and making resource allocation decisions using two reportable segments:

mass cytometry and microfluidics.

In the fourth quarter of 2022, we began referring to these two segments as proteomics and genomics, respectively.

Each segment is identified by its unique portfolio of products.

Proteomics includes our instruments, consumables, software, and services based upon technologies used in the identification of proteins.

includes our instruments, consumables, software, and services based upon technologies used in the identification of genes (DNA, RNA) and their functions.

We determine each segment’s loss from operations by subtracting direct expenses, including cost of product and service revenues, R&D expense and sales and marketing expense, from revenues.

Amortization, depreciation, and restructuring expense are included in each segment’s operating expenses.

Corporate costs, including general and administrative expenses for functions shared by both operating segments such as executive management, human resources and finance, along with interest and taxes, are excluded from each segment’s results, which is consistent with how our CODM measures segment performance.

We do not prepare, or report segmented balance sheet information as our CODM does not use the information to assess segment operating performance.

The segments adhere to the same accounting policies as the Company as a whole.

Segment reporting for historical periods has been included in this report to ensure comparability with the current year.

Our business segment information for the years ended December 31, 2022 and 2021 as follows (in thousands):

Year Ended December 31,

Proteomics $ 52,502 $ 67,657

Genomics 45,446 62,924

Total revenue $ 97,948 $ 130,581

Loss from operations:

Proteomics $ ( 28,751 ) $ ( 10,917 )

Genomics ( 26,885 ) ( 10,198 )

Corporate expenses ( 60,569 ) ( 46,344 )

Total loss from operations $ ( 116,205 ) $ ( 67,459 )

Depreciation & amortization:

Proteomics $ 4,344 $ 1,073

Genomics 448 456

Corporate 1,431 1,690

Total depreciation & amortization $ 6,223 $ 3,219

Proteomics depreciation and amortization expense for the twelve months ended December 31, 2022 includes a $ 3.5 million impairment charge to write-off the unamortized balance of the developed technology intangible asset acquired from InstruNor in 2020.

Restructuring and Other Related Costs

In August 2022, we announced a restructuring plan, including a reduction in force, to improve operational efficiency, achieve cost savings and align our Company’s workforce to the future needs of the business.

In addition to the reduction in force, we are reducing leased office space, optimizing our manufacturing footprint, and streamlining support functions.

We are employing a more disciplined cost management culture throughout our organization, investing in training, and plan to take advantage of more advanced technologies including upgrading our enterprise resource planning (ERP) system.

We record restructuring and other related costs as incurred.

These items are classified within cost of product and service revenue, R&D expenses, and selling, general and administrative expenses in our consolidated statements of operations.

We recognized $ 4.2 million of restructuring expense and $ 1.2 million of other related costs for the twelve months ended December 31, 2022.

We expect substantially all cash payments associated with remaining restructuring activities and termination benefits recorded in 2022 will be paid during 2023.

We expect to complete all restructuring actions commenced during 2022 by the end of 2023 and to incur additional charges of up to $ 4.0 million related primarily to employee severance and facility exit costs in 2023.

These estimates are subject to a number of assumptions, and actual results may differ.

A summary of the changes in our restructuring and other related liabilities for the twelve months ended December 31, 2022 appears below (in thousands):

Balance at December 31, 2021 Twelve Months Ended December 31, 2022 Balance at December 31, 2022

Liabilities Charges Payments Liabilities (1)

Restructuring:

Severance and employee-related benefits $ — $ 4,232 $ ( 1,012 ) $ 3,220

Other related costs:

Legal and consulting expenses — 1,176 ( 1,157 ) 19

Total $ — $ 5,408 $ ( 2,169 ) $ 3,239

The increase in long-lived assets in Singapore is attributable to capital expenditures funded by the NIH Contract (see Note 4).

(1) Restructuring liabilities are recorded in accrued compensation and related benefits on the consolidated balance sheet.

Liabilities related to other related costs are recorded in other accrued liabilities on the consolidated balance sheet.

Restructuring and other related costs were classified in the consolidated statement of operations as follows for the twelve months ended December 31, 2022 (in thousands):

Twelve Months Ended December 31,

Restructuring:

Cost of product and service $ 63

Research and development 1,116

Selling, general and administrative 3,053

Total restructuring 4,232

Other related costs:

Selling, general and administrative 1,176

Total other related costs 1,176

Total restructuring and other related costs $ 5,408

The Company’s restructuring and other related costs by segment and corporate were as follows for the twelve months ended December 31, 2022 (in thousands):

Twelve Months Ended December 31,

Restructuring:

Proteomics $ 1,708

Genomics 1,065

Corporate 1,459

Total restructuring 4,232

Other related costs :

Corporate 1,176

Total other related costs 1,176

Total restructuring and other related costs $ 5,408

Commitments and Contingencies

In the normal course of business, we enter into various contractual and legally binding purchase commitments.

As of December 31, 2021, these commitments were approximately $ 22.0 million.

As of December 31, 2022, our open commitments totaled $ 13.5 million.

Capital expenditure commitments as of December 31, 2022 were immaterial.

We have entered into several license and patent agreements.

Under these agreements, we pay annual license maintenance fees, non-refundable license issuance fees, and royalties as a percentage of net sales for the sale or sublicense of products using the licensed technology.

Future payments related to these license agreements have not been included in the contractual obligations table above as the period of time over which the future license payments will be required to be made, and the amount of such payments, are indeterminable.

Future payments related to these license agreements have not been included in the open commitments above, as the period of time over which the future license payments will be required to be made, and the amount of such payments, are indeterminable.

We do not expect the license payments to be material in any particular year.

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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.

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.

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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.

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

District Court for the Northern District of California (Reena Saintjermain, et al.

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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.

The plaintiff has 30 days following the Court’s entry of judgment to file an appeal.

We believe the claims alleged in the complaint lack merit and, should an appeal be filed, we intend to defend this action vigorously.

On March 15, 2022, the lead plaintiff filed a notice of appeal of the District Court’s decision.

Following t he Circuit Court appellate hearing on February 6, 2023, the Circuit Court granted defendants’ motion to dismiss on February 21, 2023 .

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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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.

We have not recorded any such liabilities.

If the potential loss from any claim or legal proceeding is considered probable and a range of possible loss can be estimated, we accrue a liability for the estimated loss.

We have not recorded any such liabilities in any of the periods presented.

Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict.

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Subsequent Event

On January 23, 2022, we entered into (i) a Loan Agreement (the Casdin 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 Loan Agreement, and together with the Casdin 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 provides for a $ 12.5 million term loan to us (each, a Bridge Loan and collectively, the Bridge Loans).

Subject to approval by our stockholders, upon the issuance of the shares of Series B Preferred Stock (as defined below) pursuant to the Purchase Agreements (as defined below), the Bridge Loans will be automatically converted into shares of Series B-1 Preferred Stock (as defined below) or Series B-2 Preferred Stock (as defined below), as applicable, in accordance with the terms of the Bridge Loan Agreements.

The Bridge Loans were fully drawn on January 24, 2022.

The proceeds of the Bridge Loans may be used for working capital and general corporate purposes.

Also on January 23, 2022, we entered into separate Series B Convertible Preferred Stock Purchase Agreements (the Purchase Agreements) with each of the Purchasers pursuant to which, among other things, 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 will issue and sell an aggregate of $ 225 million of convertible preferred stock, consisting of:

(i) 112,500 shares of our Series B-1 Convertible Preferred Stock, par value $ 0.001 per share (the Series B-1 Preferred Stock), at a purchase price of $ 1,000.00 per share to Casdin, and (ii) 112,500 shares of our 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 $ 1,000.00 per share to Viking (clauses (i) and (ii), 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 Series B Preferred Stock to be purchased by Casdin and Viking pursuant to the Purchase Agreements is in addition to any Series B Preferred Stock to be issued upon conversion of outstanding amounts under the Bridge Loan Agreements.

The proceeds of the Preferred Equity Transactions will be used by us for expenses related to the Preferred Equity Transactions, as well as working capital, general corporate purposes and merger and acquisition opportunities that we may identify from time to time.

In connection with the Private Placement Issuance, we will change our name to “Standard BioTools Inc.” and Dr.

Michael Egholm will be appointed as the Company’s President and Chief Executive Officer and as a member of our Board of Directors (the Board), each occurring upon the closing of the transactions contemplated by the Purchase Agreements (Closing).

Egholm will succeed Chris Linthwaite, who will continue as our Chief Executive Officer until the earlier of the Closing or May 15, 2022.

The Closing is subject to customary closing conditions for a transaction of this nature, including approval by our stockholders of the issuance of the Series B Preferred Stock in connection with the Private Placement Issuance.

Each Private Placement Issuance is also conditioned on the substantially contemporaneous consummation of the other Private Placement Issuance.

Our Board has called a special meeting to be held on March 25, 2022 (the Special Meeting) to ask our stockholders to consider, vote upon and approve (i) a proposal to amend our 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, (the Common Stock) 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 our name to Standard BioTools Inc.

(together, the Charter Amendment Proposal);

and (ii) to approve 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 (clauses (A) through (C), the Private Placement Issuance Proposal).

The Private Placement Issuance Proposal is conditioned on the approval of the Charter Amendment Proposal.

The Charter Amendment Proposal is conditioned on the approval of the Private Placement Issuance Proposal.

If both proposals do not receive the requisite vote for approval, neither the Charter Amendment Proposal nor the Private Placement Issuance Proposal will take effect.

The parties have agreed that they will not be obligated to close the Private Placement Issuance if the Charter Amendment Proposal has not been approved at the Special Meeting.

If the Charter Amendment Proposal and the Private Placement Issuance Proposal are not approved by our stockholders at the Special Meeting or the Purchase Agreements are otherwise terminated, then the Bridge Loans will become convertible, at each lender’s option, into Common Stock at an initial conversion rate of 352.1126 shares of Common Stock per $1,000 of conversion amount, subject to the cap set forth in the Bridge Loan Agreements.

The conversion rate is subject to customary adjustments as set forth in the Bridge Loan Agreements.

The Bridge Loans bear 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 accrues daily and is payable in kind by adding the accrued interest to the outstanding principal amount on the last date of each month.

The Bridge Loans mature on the 91st calendar day after the latest maturity date of the loans borrowed under our Loan and Security Agreement, dated as of August 2, 2018, with Silicon Valley Bank, and the principal, together with accrued and unpaid interest, is due on the maturity date.

On February 28, 2023, we signed a lease agreement to sublease approximately 25 % of our corporate headquarters location in South San Francisco for a period of 77 months.

We expect to recognize $ 9.1 million of sublease income over the lease term commencing on December 1, 2023.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data