What changed in this filing

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Item 1. Financial Statements

2023-05-09 compared with 2022-11-09 · 334 added, 538 removed, 358 unchanged (71% of the section changed)

1 unchanged sentence

STANDARD BIOTOOLS INC.

(formerly known as FLUIDIGM CORPORATION)

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

September 30, December 31,

(Dollars in thousands, except per share amounts)

March 31, December 31,

Current assets:

1 unchanged sentence

Short-term investments 40,874 84,475

Accounts receivable (net of allowances of $ 594 and $ 356 at September 30, 2022 and December 31, 2021, respectively)

Accounts receivable (net of allowances of $ 318 and $ 592 at March 31, 2023 and December 31, 2022, respectively)

14,504 17,280

8 unchanged sentences

Total assets $ 371,654 $ 390,310

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT

Current liabilities:

5 unchanged sentences

Other accrued liabilities 6,878 6,175

Advances under revolving credit agreement, current — 6,838

Term loan, current 3,333 2,083

9 unchanged sentences

Commitments and contingencies ( Note 15 )

Mezzanine equity:

Redeemable preferred stock:

$ 0.001 par value;

256 and no shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively;

aggregate liquidation preference of $ 255,559 and $ — as of September 30, 2022 and December 31, 2021, respectively

Stockholders’ equity (deficit):

256 shares authorized, issued and outstanding at March 31, 2023 and December 31, 2022;

aggregate liquidation preference of $ 255,559 at March 31, 2023 and December 31, 2022

311,253 311,253

Stockholders’ deficit:

Preferred stock:

$ 0.001 par value, 9,744 and 10,000 shares authorized at September 30, 2022 and December 31, 2021, respectively;

no shares issued and outstanding at either September 30, 2022 or December 31, 2021

$ 0.001 par value, 9,744 shares authorized at March 31, 2023 and December 31, 2022;

no shares issued and outstanding at March 31, 2023 and December 31, 2022

Common stock:

$ 0.001 par value, 400,000 and 200,000 shares authorized at September 30, 2022 and December 31, 2021, respectively;

79,246 and 76,919 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

$ 0.001 par value, 400,000 shares authorized at March 31, 2023 and December 31, 2022;

80,324 and 79,904 shares issued at March 31, 2023 and December 31, 2022, respectively;

78,652 and 79,482 shares outstanding at March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 850,063 847,008

1 unchanged sentence

Accumulated deficit ( 942,939 ) ( 926,096 )

Total stockholders’ equity (deficit) ( 62,747 ) 94,596

Total liabilities, mezzanine equity and stockholders’ equity (deficit) $ 414,915 $ 275,214

Treasury stock at cost:

1,672 and 422 shares at March 31, 2023 and December 31, 2022, respectively

( 3,029 ) ( 563 )

Total stockholders’ deficit ( 97,153 ) ( 81,467 )

Total liabilities, mezzanine equity and stockholders’ deficit $ 371,654 $ 390,310

See accompanying notes

STANDARD BIOTOOLS INC.

(formerly known as FLUIDIGM CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

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

2022 2021 2022 2021

Three Months Ended March 31,

Product revenue $ 17,438 $ 20,004

12 unchanged sentences

Loss on Bridge Loans — ( 10,655 )

Surplus funding from NIH Contract 153 5,000 153 5,000

Other income (expense), net ( 216 ) 315 ( 272 ) 534

Other income, net 1,130 118

Loss before income taxes ( 16,580 ) ( 76,862 )

Income tax benefit 713 1,422 2,900 3,609

Income tax benefit (expense) ( 263 ) 574

Net loss $ ( 16,843 ) $ ( 76,288 )

3 unchanged sentences

STANDARD BIOTOOLS INC.

(formerly known as FLUIDIGM CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

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

2022 2021 2022 2021

Three Months Ended March 31,

Net loss $ ( 16,843 ) $ ( 76,288 )

Other comprehensive loss, net of tax:

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment 170 ( 150 )

Net change in unrealized loss on investments ( 238 ) — ( 949 ) —

Other comprehensive loss, net of tax ( 356 ) ( 446 ) ( 1,702 ) ( 842 )

Net change in unrealized gain on investments 398 —

Other comprehensive income (loss), net of tax 568 ( 150 )

Comprehensive loss $ ( 16,275 ) $ ( 76,438 )

1 unchanged sentence

STANDARD BIOTOOLS INC.

(formerly known as FLUIDIGM CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

1 unchanged sentence

Common Stock Additional

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Total

Capital Accum.

Loss Treasury Stock Total

Stockholders’

Equity (Deficit)

Shares Amount

Shares Amount Accum.

Deficit Shares Amount

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

Issuance of restricted stock, net of shares withheld for taxes, and other 420 — ( 93 ) — — — — ( 93 )

Issuance of common stock from option exercises 2 — 2 — — 2

Stock-based compensation expense — — 3,148 — — — — 3,148

Repurchase of common stock — — — — — ( 1,250 ) ( 2,466 ) ( 2,466 )

Net loss — — — — ( 16,843 ) — — ( 16,843 )

Other comprehensive loss, net of tax — — — ( 150 ) — ( 150 )

Other comprehensive income, net of tax — — — 568 — — — 568

Balance as of March 31, 2023 80,324 $ 80 $ 850,063 $ ( 1,328 ) $ ( 942,939 ) ( 1,672 ) $ ( 3,029 ) $ ( 97,153 )

Issuance of restricted stock, net of shares withheld for taxes, and other 1,119 1 ( 89 ) — — ( 88 )

Issuance of common stock under ESPP 309 1 496 — — 497

Issuance of common stock from option exercises 27 — 96 — — 96

Stock-based compensation expense — — 4,663 — — 4,663

Net loss — — — — ( 63,539 ) ( 63,539 )

Other comprehensive loss, net of tax — — — ( 1,196 ) — ( 1,196 )

Balance as of June 30, 2022 78,654 $ 79 $ 840,545 $ ( 2,253 ) $ ( 875,825 ) $ ( 37,454 )

Issuance of restricted stock, net of shares withheld for taxes, and other 592 — ( 5 ) — — ( 5 )

Stock-based compensation expense — — 4,494 — — 4,494

Net loss — — — — ( 29,426 ) ( 29,426 )

Other comprehensive loss, net of tax — — — ( 356 ) — ( 356 )

Balance as of September 30, 2022 79,246 $ 79 $ 845,034 $ ( 2,609 ) $ ( 905,251 ) $ ( 62,747 )

Common Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Accumulated

Deficit Total

Capital Accum.

Loss Treasury Stock Total

Stockholders’

Shares Amount

Equity (Deficit)

Shares Amount Accum.

Deficit Shares Amount

Balance as of December 31, 2021 76,919 $ 77 $ 831,424 $ ( 907 ) $ ( 735,998 ) — $ — $ 94,596

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Balance as of March 31, 2022 77,199 $ 77 $ 835,379 $ ( 1,057 ) $ ( 812,286 ) — $ — $ 22,113

Issuance of restricted stock, net of shares withheld for taxes, and other 1,028 1 ( 1,028 ) — — ( 1,027 )

Issuance of common stock under ESPP 139 — 685 — — 685

Issuance of common stock from option exercises 36 — 209 — — 209

Stock-based compensation expense — — 3,741 — — 3,741

Net loss — — — — ( 17,143 ) ( 17,143 )

Other comprehensive loss, net of tax — — — 47 — 47

Balance as of June 30, 2021 76,166 $ 76 $ 822,383 $ ( 284 ) $ ( 712,725 ) $ 109,450

Issuance of restricted stock, net of shares withheld for taxes, and other 318 — ( 143 ) — — ( 143 )

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

Stock-based compensation expense — — 4,320 — — 4,320

Net loss — — — — ( 13,843 ) ( 13,843 )

Other comprehensive loss, net of tax — — — ( 446 ) — ( 446 )

Balance as of September 30, 2021 76,485 $ 76 $ 826,559 $ ( 730 ) $ ( 726,568 ) $ 99,337

See accompanying notes

STANDARD BIOTOOLS INC.

(formerly known as FLUIDIGM CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities

7 unchanged sentences

Provision for excess and obsolete inventory 350 851

Impairment of InstruNor developed technology intangible 3,526 —

Amortization of debt discounts, premiums and issuance costs 204 211

2 unchanged sentences

Accounts receivable, net 3,027 2,917

Inventories ( 7,810 ) ( 7,467 )

Inventories, net ( 1,087 ) ( 3,558 )

Prepaid expenses and other assets 955 ( 38 )

5 unchanged sentences

Investing activities

Purchases of investments ( 137,302 ) —

Proceeds from NIH Contract — 2,000

Proceeds from maturities of investments 12,000 —

Purchases of short-term investments ( 6,836 ) —

Proceeds from sales and maturities of investments 51,000 —

Purchases of property and equipment ( 1,010 ) ( 868 )

Net cash used in investing activities ( 128,372 ) ( 10,801 )

Net cash provided by (used in) investing activities 43,154 ( 868 )

Financing activities

Proceeds from bridge loans — 25,000

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

Proceeds from term loan — 10,000

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

Repayment of long-term debt — ( 501 )

Payment of debt and equity issuance costs ( 12,547 ) ( 35 )

Proceeds from exercise of stock options 97 208

Proceeds from ESPP stock issuance 497 685

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

Repurchase of common stock ( 2,466 ) —

Payments for taxes related to net share settlement of equity awards and other ( 92 ) ( 87 )

Net cash provided by financing activities 231,028 8,662

Net cash provided by (used in) financing activities ( 2,558 ) 18,075

Effect of foreign exchange rate fluctuations on cash and cash equivalents 23 ( 85 )

Net increase (decrease) in cash, cash equivalents and restricted cash 31,748 ( 39,211 )

Net increase in cash, cash equivalents and restricted cash 32,134 1,532

Cash, cash equivalents and restricted cash at beginning of period 82,324 29,467

7 unchanged sentences

STANDARD BIOTOOLS INC.

(formerly known as FLUIDIGM CORPORATION)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

Description of Business

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 provide reliable and repeatable insights in health and disease using our proprietary mass cytometry and microfluidics technologies that help transform scientific discoveries into better patient outcomes.

Standard BioTools works with leading academic, government, pharmaceutical, biotechnology, plant and animal research, and clinical laboratories worldwide, focusing on the most pressing needs in translational and clinical research, including oncology, immunology, and immunotherapy.

The Company, formerly known as Fluidigm Corporation, changed its name to Standard BioTools Inc.

in April 2022, in connection with 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 unaudited condensed consolidated financial statements have been prepared in conformity with U.S.

March 31, 2023

Basis of Presentation and Organization

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of Standard Biotools Inc.

(together with its wholly owned subsidiaries, Standard Biotools, the Company, we, our, or us) 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 September 30, 2022, we had wholly owned subsidiaries in Singapore, Canada, the Netherlands, Japan, France, Italy, the United Kingdom, China, Germany and Norway.

As of March 31, 2023, we had wholly owned subsidiaries in Singapore, Canada, the Netherlands, Japan, France, Italy, the United Kingdom, China, Germany and Norway.

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

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dollar as its functional currency.

All intercompany transactions and balances have been eliminated upon consolidation.

In the audited financial statements and the related notes for the year ended December 31, 2021 included in our annual report on Form 10-K, filed with the U.S.

Securities and Exchange Commission (SEC) on March 8, 2022, we disclosed that we had performed an assessment to determine whether there were conditions or events, considered in the aggregate, that raised substantial doubt about our ability to continue as a going concern for at least the twelve-month period following the date the financial statements were issued.

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

We subsequently closed the $ 225 million Preferred Equity Financing (as defined in Note 3).

The completion of this financing eliminated the doubt about the Company’s ability to continue as a going concern.

We believe our current levels of cash, cash equivalents, and short-term investments along with the funding available under the Revolving Credit Facility will be sufficient to support the operations of our business for at least the next 12 months.

See Note 3 for further discussion.

Certain prior period amounts in the condensed consolidated financial statements were reclassified to conform with the current period presentation.

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

Unaudited Interim Financial Information

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

All intercompany transactions and balances have been eliminated in consolidation.

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

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

The condensed consolidated results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of results to be expected for the full year or for any other year or interim period.

The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2021 included in our annual report on Form 10-K, filed with the SEC on March 8, 2022.

The condensed consolidated results of operations for the three months ended March 31, 2023 are not necessarily indicative of results to be expected for the full year or for any other year or interim period.

The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2022 included in our Annual Report on Form 10-K, filed with the Security Exchange Commission (SEC) on March 14, 2023.

Use of Estimates

The preparation of financial statements in accordance with U.S.

GAAP requires management to make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.

We base these 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 impact of COVID-19-related supply chain shortages, the war in Ukraine, and inflation.

Assets and liabilities that rely on forecasted financial information to determine their carrying value include, but are not limited to, inventory, its related reserves, goodwill and other long-lived assets and liabilities.

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

GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.

We base our estimates on historical experience, 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.

We assessed certain accounting matters that generally require consideration of forecasted financial information, including the impact of geopolitical factors, including the war in Ukraine;

and the possibility of a global economic recession.

These accounting matters included but were not limited to inventory and related reserves;

the carrying value of goodwill and other long-lived assets;

and the potential outcome of uncertain tax positions that have been recognized in our consolidated financial statements or tax returns.

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

Foreign Currency

Assets and liabilities of non-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 $ 25 million Bridge Loans (as defined in Note 3) were recorded at fair value in January 2022 when the loans were issued.

The Company elected to use the fair value option as of the issuance date that was available under Accounting Standards Codification (ASC) 825 Financial Instruments.

The change in fair value of the Bridge Loans from inception to the April 4, 2022 closing date of the Private Placement Issuance is recorded as a non-operating loss on Bridge Loans in the condensed consolidated statement of operations.

The Bridge Loans were reported as a non-current liability on the condensed consolidated balance sheet until their conversion.

Upon conversion, the carrying value of the Bridge Loans was reclassified to Series B Redeemable Preferred Stock (as defined in Note 3).

We had accrued interest daily on the outstanding principal amount of the Bridge Loans until they were converted, which was capitalized while the debt issuance costs were expensed when incurred.

Private Placement Issuance

See Note 3 for a detailed discussion of the transactions, including the accounting treatment, and additional information.

Restructuring

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

Severance and other employee termination costs are primarily recorded when the actions become probable and estimable.

Costs for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits are recognized ratably over the future service period.

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

Segment Reporting

We have historically operated as a single reportable segment and managed our business operations and evaluated our financial performance on a consolidated basis.

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 will begin 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, research and development (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.

See Note 14 for additional information.

Series B Redeemable Preferred Stock

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

The Series B Preferred Stock was treated as mezzanine equity and recorded at its fair value upon issuance, net of issuance costs due to its redemption features, such as change of control and liquidation preference, which are outside of the Company’s control.

Subsequent remeasurement of the Series B Redeemable Preferred Stock amount presented within mezzanine equity to its redemption amount is not required since it is not probable that the instrument will become redeemable.

Mezzanine equity which has characteristics of both liabilities and shareholders’ equity (deficit) is presented separately on the condensed consolidated balance sheets between these items because it has some characteristics of both.

See Note 3 for additional information.

Comprehensive Loss

Comprehensive loss is comprised of net loss and other comprehensive loss.

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

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

The components of accumulated other comprehensive loss, net of tax, for the three and nine months ended September 30, 2022 are as follows (in thousands):

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

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

Other comprehensive loss ( 150 ) — ( 150 )

Ending balance at March 31, 2022 $ ( 1,057 ) $ — $ ( 1,057 )

Other comprehensive loss ( 485 ) ( 711 ) ( 1,196 )

Ending balance at June 30, 2022 $ ( 1,542 ) $ ( 711 ) $ ( 2,253 )

Other comprehensive loss ( 118 ) ( 238 ) ( 356 )

Ending balance at September 30, 2022 $ ( 1,660 ) $ ( 949 ) $ ( 2,609 )

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

Recent Accounting Changes, Recently Adopted Accounting Guidance, and New Accounti ng Pronouncements

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.

The following potentially dilutive common shares were excluded from the computation (in thousands):

Nine Months Ended September 30,

Stock options, restricted stock units and performance awards 14,253 8,234

Restricted share units (RSUs), performance stock awards (PSUs), and 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 (in thousands) were excluded from the computations of diluted net loss per share for the periods presented because including them would have been anti-dilutive:

Three Months Ended March 31,

RSUs, PSUs, and stock options 14,624 7,988

Bridge Loans — 8,979

Series B Preferred Stock 75,164 66,176

3 unchanged sentences

Total 113,505 103,894

Potentially dilutive securities in the above table include the impact of the Series B Preferred Stock defined and discussed in Note 3.

Recent Accounting Changes and Accounti ng Pronouncements

Adoption of New Accounting Guidance

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

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

We 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 8).

In November 2021, the FASB issued ASU 2021-10 Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance.

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

The amendment establishes financial disclosure requirements for business entities that receive government assistance that the entities account for by analogizing to a grant or contribution model because there is no specific authoritative guidance under U.S.

GAAP that applies to the transaction.

Entities that receive this type of assistance should include the following information in their annual report:

(1) the nature of the transaction, (2) the significant terms and conditions, (3) the accounting treatment, (4) the line items on the balance sheet and income statement that are affected along with (5) the respective amounts that have been recorded.

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

The adoption of ASU 2021-10 did not have a material impact on our financial statements.

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 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 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 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 as mezzanine equity at its fair value upon issuance, net of any issuance costs, on the condensed consolidated balance sheet as of September 30, 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 September 30, 2022.

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

September 30, 2022

Proceeds from Purchase Agreements $ 225,000

Proceeds from Bridge Loans 25,000

Loss on Forward Purchase Agreements 60,081

Loss on 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).

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 included in the loss on forward sale of Series B Preferred Stock on the condensed consolidated statement of operations for the three months ended June 30, 2022.

The loss 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.

The $ 60.1 million loss on forward sales of Series B Preferred Stock for the nine months ended September 30, 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 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 condensed consolidated statement of operations.

The loss on Bridge Loans was $ 13.7 million for the nine months ended September 30, 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 microfluidics technology.

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

Proceeds from the NIH Contract have been used primarily for capital expenditures to expand production capacity and, to a lesser extent, to offset applicable operating costs.

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 condensed consolidated statement of operations as surplus funding from the NIH contract.

The following table summarizes the activity under the NIH Contract as of September 30, 2022 and December 31, 2021 (in thousands):

September 30, 2022 December 31, 2021

Cash receipts from milestones achieved $ 34,016 $ 34,016

Cumulative amounts applied against operating costs (excluding depreciation) ( 4,526 ) ( 4,522 )

Cumulative amounts applied against depreciation expense for assets placed in service ( 3,276 ) ( 703 )

Cumulative amounts recognized as non-operating income ( 7,293 ) ( 7,140 )

Total deferred grant income $ 18,921 $ 21,651

Assets placed in service, gross $ 22,197 $ 16,890

Construction-in-progress — 3,909

Cumulative amounts applied against depreciation expense for assets placed in service ( 3,276 ) ( 703 )

Carrying value of property and equipment, net 18,921 20,096

Estimated future capital expenditures — 1,555

Total deferred grant income $ 18,921 $ 21,651

Deferred grant income, current $ 3,656 $ 3,535

Deferred grant income, non-current 15,265 18,116

Total deferred grant income $ 18,921 $ 21,651

The current portion of deferred grant income on our condensed consolidated balance sheet 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.

As of September 30, 2022, the capacity expansion project has been completed and all of the related assets have been placed in service.

During the three months ended September 30, 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.

Disaggregation of Revenue

The following tables present our revenue based upon the geographic location of our customers’ facilities, and by segment, for the three and nine months ended September 30, 2022 and 2021 (in thousands):

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

2022 2021 2022 2021

Americas $ 11,119 $ 13,013 $ 33,482 $ 47,656

EMEA 8,074 10,108 22,352 28,470

Asia-Pacific 6,453 5,383 15,093 16,190

Total revenue $ 25,646 $ 28,504 $ 70,927 $ 92,316

Three Months Ended September 30, 2022 Three Months Ended September 30, 2021

Mass Cytometry Microfluidics Total Mass Cytometry Microfluidics Total

Revenue and Geographic Area

Disaggregation of Revenue by Product Type and Geographic Area

The following tables present our revenue based upon product type and the geographic regions of our customers’ facilities (in thousands):

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

Proteomics Genomics Total Proteomics Genomics Total

Instruments $ 4,499 $ 1,424 $ 5,923 $ 4,370 $ 3,153 $ 7,523

Consumables 5,548 5,967 11,515 4,766 7,715 12,481

Product revenue 10,047 7,391 17,438 9,136 10,868 20,004

Service revenue 5,153 1,728 6,881 4,394 1,750 6,144

Product and service revenue 15,200 9,119 24,319 13,530 12,618 26,148

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Total revenue $ 15,200 $ 9,919 $ 25,119 $ 13,780 $ 12,724 $ 26,504

Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021

Mass Cytometry Microfluidics Total Mass Cytometry Microfluidics Total

Product and service revenue $ 37,914 $ 31,428 $ 69,342 $ 46,498 $ 41,723 $ 88,221

Other revenue 850 735 1,585 — 4,095 4,095

Three Months Ended March 31,

Americas $ 11,662 $ 12,930

Europe, Middle East and Africa (EMEA) 7,837 8,609

Asia-Pacific 5,620 4,965

Total revenue $ 25,119 $ 26,504

Revenue from customers in the United States represented $ 10.6 million and $ 12.0 million, or 41 % and 42 % of total revenue, respectively, for the three months ended September 30, 2022 and 2021.

For the nine months ended September 30, 2022 and 2021, respectively, revenue from domestic customers totaled $ 31.2 million and $ 45.6 million, or 44 % and 49 % of total revenue.

Revenue from customers in China and Sweden totaled $ 3.2 million and $ 2.7 million, or 12 % and 11 % of total revenue, respectively, for the three months ended September 30, 2022.

For the three months ended September 30, 2021, revenue from customers in China totaled $ 3.2 million, or 11 % or total revenue.

For the nine months ended September 30, 2022 and 2021, revenue from customers in China totaled $ 7.7 million and $ 8.7 million, or 11 % and 9 % of total revenue, respectively.

With the exception of China and Sweden, no foreign country had revenue in excess of 10% of total revenue during any periods presented in this report.

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

One microfluidics customer accounted for 15 % and 10 % of our total revenues for the three and nine months ended September 30, 2022.

No single customer represented more than 10% of total revenue for the same periods in 2021.

Revenue from our five largest customers represented 28 % and 21 % of total revenue for the three months ended September 30, 2022, and 2021, respectively.

For the nine months ended September 30, 2022 and 2021, revenue from our five largest customers represented 19 %, and 22 % of total revenue, respectively.

Refer to Note 14 Segment Reporting for additional information.

Revenue from customers in the United States represented $ 11.2 million and $ 11.8 million, or 45 % of total revenue for the three months ended March 31, 2023 and 2022, respectively.

Revenue from customers in China totaled $ 3.4 million and $ 2.8 million, or 14 % and 11 % of total revenue for the three months ended March 31, 2023 and 2022, respectively.

Except for China, no foreign country represented more than 10% of our total revenue during the periods presented in this report.

No single customer represented more than 10% of our total revenue for the three months ended March 31, 2023 and 2022.

Revenue from our five largest customers represented 22 % and 21 % of total revenue for the three months ended March 31, 2023 and 2022, respectively.

Refer to Note 1 3 for additional information on revenue by reporting segment.

Unfulfilled Performance Obligations

We reported $ 17.9 million of deferred revenue on our December 31, 2021 consolidated balance sheet.

During the nine months ended September 30, 2022, $ 9.5 million of the opening balance was recognized as revenue and $ 7.4 million of net additional advance payments were received from customers, primarily associated with instrument service contracts.

At September 30, 2022, we reported $ 15.8 million of deferred revenue.

We expect to recognize revenue from unfulfilled performance obligations associated with service contracts that were partially completed as of September 30, 2022 in the following periods (in thousands):

The condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 included total deferred revenue of $ 15.5 million and $ 14.6 million, respectively.

During the three months ended March 31, 2023, $ 3.6 million of the opening deferred revenue balance was recognized as revenue and $ 4.5 million of net additional advance payments, primarily for instrument services contracts, were received from customers.

We expect to recognize revenue from unfulfilled performance obligations associated with service contracts that were partially completed as of March 31, 2023 in the following periods (in thousands):

Fiscal Year Expected Revenue (1)

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Total $ 23,725

(1) Expected revenue includes both billed amounts included in deferred revenue and $ 5.4 million of unbilled amounts that are not reflected in our condensed consolidated financial statements and are subject to change if our customers decide to cancel or modify their contracts.

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

We apply the practical expedient that permits us not to disclose information about unsatisfied performance obligations for service contracts with an expected term of one year or less.

Customer Concentration

One customer accounted for $ 2.7 million, or 15 %, of our trade accounts receivable, net as of September 30, 2022 .

No customer had an outstanding trade accounts receivable balance that represented more than 10% of net trade receivables as of December 31, 2021.

(1) Expected revenue includes both billed amounts included in deferred revenue and unbilled amounts that are not reflected in our condensed consolidated financial statements and are subject to change if our customers decide to cancel or modify their contracts.

Purchase orders for instrument service contracts can generally be canceled before the service period begins.

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.

Goodwill and Intangible Assets, net

In connection with our acquisition of DVS Sciences, Inc.

(DVS) in February 2014, we recognized $ 104.1 million of goodwill and $ 112.0 million of long-lived intangible assets associated with DVS’ developed technology.

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

Goodwill and long-lived intangible assets are tested for impairment either annually during the fourth quarter of the fiscal year or whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable.

To test for impairment, a qualitative assessment is initially performed.

The qualitative evaluation includes assessing significant events and circumstances such as our current operating results, assumptions about our future performance, strategic initiatives and overall economic factors, including the ongoing global COVID-19 pandemic, in order to determine if potential indicators of impairment exist.

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

As a result of our operating and reporting segment change and the significant decline in our share price during the three months ended September 30, 2022, we performed quantitative impairment tests for goodwill and our long-lived intangibles as of August 31, 2022 and as of September 30, 2022 and concluded that no impairment charge was necessary.

In determining the fair value of our two operating segments, significant assumptions including forecasted cash flows (revenue growth rates), discount rates, earnings multiples and an implied control premium were utilized.

As these assumptions are inherently judgmental and subject to uncertainty, future impairments that cannot be reasonably estimated, but could be material, may occur.

Intangible assets include patents and licenses, which are included in other non-current assets on our condensed consolidated balance sheet.

Intangibl e assets, net, were as follows (in thousands):

September 30, 2022

In connection with our acquisition of DVS Sciences, In c.

in February 2014, we recorded $ 104.1 million of goodwill and $ 112.0 million of intangible assets associated with the acquired technology.

Also, in the first quarter of 2020, we recorded $ 2.2 million of goodwill and $ 5.4 million of developed technology intangibles from the InstruNor AS acquisition.

Goodwill and intangible assets with indefinite lives are not subject to amortization but are tested for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying amount of these assets may not be recoverable.

Qualitative assessment includes assessing significant events and circumstances such as our current results, assumptions regarding our future performance, strategic initiatives and overall economic factors, including the impact of rising inflation and the possibility of a global recession, to determine the existence of potential indicators of impairment.

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

There have been no indicators of impairment of goodwill, long-lived assets or intangible assets during the three months ended March 31, 2023.

Intangible assets with finite lives include developed technology, patents and licenses.

In the condensed consolidated balance sheets, developed technology is reported separately while patents and licenses are reported in other non-current assets.

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

March 31, 2023

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

5 unchanged sentences

Patents and licenses $ 11,247 $ ( 10,669 ) $ 578 7.0 years

Total amortization expense was $ 2.9 million and $ 3.1 million for the three months ended September 30, 2022 and 2021, respectively.

Total amortization expense for the nine months ended September 30, 2022 and 2021 was $ 9.2 million and $ 9.5 million, respectively.

A $ 3.5 million impairment charge on InstruNor’s developed technology intangible asset was recorded in research and development expense in the second quarter of 2022 and is reflected in accumulated amortization in the above table.

Based on the carrying value of intangible assets as of September 30, 2022, our estimated future amortization expense is as follows (in thousands):

Total amortization expense of our intangible assets was $ 3.0 million and $ 3.1 million for the three months ended March 31, 2023 and 2022, respectively .

Based on the carrying value of intangible assets as of March 31, 2023, we expect our estimated future amortization expense to be as follows (in thousands):

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

1 unchanged sentence

2024 1,400 7 1,407

2024 1,400 6 1,406

Total $ 9,800 $ 410 $ 10,210

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Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands):

September 30, 2022 December 31, 2021

Cash, cash equivalents and restricted cash consisted of the following (in thousands):

March 31, 2023 December 31, 2022

Cash and cash equivalents $ 113,663 $ 81,309

1 unchanged sentence

Total cash, cash equivalents and restricted cash $ 114,458 $ 82,324

Restricted cash of $ 1.0 million is included in other non-current assets while the remainder of restricted cash is included in prepaid expenses and other current assets on the September 30, 2022 and December 31, 2021 condensed consolidated balance sheets.

Restricted cash is included in other non-current assets in the condensed consolidated balance sheets.

Inventories, net

Inventories, net consisted of the follo wing as of September 30, 2022 and December 31, 2021 (in thousands):

September 30, 2022 December 31, 2021

Inventories, net consisted of the follo wing (in thousands):

March 31, 2023 December 31, 2022

Raw materials $ 16,016 $ 16,866

1 unchanged sentence

Finished goods 13,428 15,245

Total inventory, gross 30,275 33,056

Allowance for excess and obsolete inventory ( 7,762 ) ( 11,583 )

Total inventories, net $ 22,513 $ 21,473

Property and Equipment, net

Property and equipment, net consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands):

September 30, 2022 December 31, 2021

Property and equipment, net consisted of the following (in thousands):

March 31, 2023 December 31, 2022

Laboratory and manufacturing equipment $ 33,808 $ 33,329

7 unchanged sentences

Accrued Compensation and Related Benefits

Accrued compensation and related benefits, which are included in current liabilities on the condensed consolidated balance sheets consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands):

September 30, 2022 December 31, 2021

Accrued compensation and related benefits, which are included in current liabilities on the condensed consolidated balance sheets consisted of the following (in thousands):

March 31, 2023 December 31, 2022

Accrued incentive compensation $ 1,798 $ 1,170

4 unchanged sentences

Accrued compensation and related benefits $ 8,430 $ 9,153

Refer to Note 15 for additional information on restructuring.

Accrued warranty is included in current other accrued liabilities on our condensed consolidated balance sheets.

Activity for our warranty accrual for the nine months ended September 30, 2022 and 2021 is summarized below (in thousands):

Nine Months Ended September 30,

Beginning balance $ 1,170 $ 1,663

Accrual for current period warranties 241 554

Warranty costs incurred ( 875 ) ( 713 )

Ending balance $ 536 $ 1,504

Refer to Note 14 for addit ional information on restructuring.

Deferred Grant Income

In September 2020, we executed a contract with the National Institutes of Health (NIH) under their Rapid Acceleration of Diagnostics program to support the expansion of our production capacity and throughput capabilities for COVID-19 test products that use our genomics technology.

Under the now-completed contract, we received $ 34.0 million of funding from the NIH and used $ 22.2 million for capital expenditures on expansion of production capacity.

The amortization of the deferred income, which is offset against depreciation, was $ 0.9 million and $ 0.8 million for the three months ended March 31, 2023 and March 31, 2022, respectively.

Cumulative amounts applied against depreciation expense for these assets placed in service were $ 5.1 million and $ 4.2 million as of March 31, 2023 and December 31, 2022, respectively, and the carrying values of these assets were $ 17.1 million and $ 18.0 million, respectively, as of these same dates.

The current portion of deferred grant income on our condensed consolidated balance sheets represents 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.

The current and non-current portions of deferred grant income were as follows (in thousands):

March 31, 2023 December 31, 2022

Deferred grant income, current $ 3,637 $ 3,644

Deferred grant income, non-current 13,452 14,359

Total deferred grant income $ 17,089 $ 18,003

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):

September 30, 2022 December 31, 2021

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

March 31, 2023 December 31, 2022

2.75 % 2014 Notes due 2034

8 unchanged sentences

Net carrying value of all Notes $ 54,733 $ 54,615

2014 Senior Convertible Notes (2014 Notes)

In February 2014, we closed an underwritten public offering of 2014 Notes.

2 unchanged sentences

The 2014 Notes will mature on February 1, 2034, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2014 Notes.

Holders may require us to repurchase all or a portion of their 2014 Notes on each of February 6, 2024 and February 6, 2029, at a repurchase price in cash equal to 100 % of the principal amount of the 2014 Notes plus accrued and unpaid interest.

As provided by the indenture governing the 2014 Notes, in February 2021, holders of $ 0.5 million of the 2014 Notes required us to repurchase their notes at 100 % of the principal amount plus accrued and unpaid interest.

As of September 30, 2022, there was $ 0.6 million aggregate principal of the 2014 Notes outstanding.

2019 Senior Convertible Notes (2019 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.

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

Net proceeds of the 2019 Notes issuance were $ 52.7 million, after deductions for commissions and other debt issuance costs.

$ 51.8 million of the proceeds of the 2019 Notes were used to retire $ 50.2 million aggregate principal amount of our 2014 Notes, leaving $ 1.1 million of aggregate principal value of 2014 Notes then outstanding.

The 2019 Notes bear interest at 5.25 % per annum, payable semiannually on June 1 and December 1 of each year.

Net proceeds from the 2019 Notes issuance of $ 52.7 million, after deductions for commissions and other debt issuance costs were used to retire all but $ 1.1 million of the aggregate principal value of the 2014 Notes then outstanding.

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, leaving $ 0.6 million aggregate principal outstanding at March 31, 2023.

The 2019 Notes bear interest at 5.25 % per annum, payable semiannually on June 1 and December 1 of each year, beginning on June 1, 2020.

The 2019 Notes will mature on December 1, 2024, unless earlier repurchased or converted pursuant to their terms.

2 unchanged sentences

The conversion rate is subject to adjustment upon the occurrence of certain specified events.

Those certain specified events include voluntary conversion of the 2019 Notes prior to our exercise of the Issuer’s Conversion Option (as defined below) or in connection with a make-whole fundamental change, entitling the holders, under certain circumstances, to a make-whole premium in the form of an increase in the conversion rate determined by reference to a make-whole table set forth in the indenture governing the 2019 Notes.

Those certain specified events include voluntary conversion of the 2019 Notes prior to our exercise of the Issuer’s Conversion Option or in connection with a make-whole fundamental change, entitling the holders, under certain circumstances, to a make-whole premium in the form of an increase in the conversion rate determined by reference to a make-whole table set forth in the indenture governing the 2019 Notes.

The conversion rate will not be adjusted for any accrued and unpaid interest.

The 2019 Notes will also be convertible at our option upon certain conditions in accordance with the terms of the indenture governing the 2019 Notes.

On or after December 1, 2021 to December 1, 2022, if the volume-weighted average price of our common stock has equaled or exceeded 150 % of the Conversion Price (as defined in the indenture governing the 2019 Notes) 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 our common stock, determined in accordance with the terms of the indenture governing the 2019 Notes.

On or after December 1, 2022, if the volume-weighted average price of our common stock has equaled or exceeded 130 % of the Conversion Price then in effect for a specified number of days, we may, at our option, elect to

convert the 2019 Notes in whole but not in part into shares of our common sto ck, deter mined in accordance with the terms of the indenture governing the 2019 Notes.

On or after December 1, 2022, if the volume-weighted average 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’s common sto ck, deter mined in accordance with the terms of the indenture governing the 2019 Notes.

Offering-related costs for the 2019 Notes were capitalized as debt issuance costs and are recorded as an offset to the carrying value of the 2019 Notes.

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

Revolving Credit Facility and Term Loan, net

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

September 30, 2022 December 31, 2021

Revolving Credit Facility and Term Loan Facility, net

Revolving Credit Facility

On August 2, 2018, we entered into a revolving credit facility with Silicon Valley Bank (SVB) (as amended, the Revolving Credit Facility) in an aggregate principal amount of up to the lesser of (i) $ 15.0 million or (ii) the sum of (a) 85 % of our eligible receivables and (b) 50 % of our eligible inventory, in each case, subject to certain limitations (Borrowing Base), provided that the amount of eligible inventory that may be counted towards the Borrowing Base shall be subject to a cap as set forth in the Revolving Credit Facility.

On August 2, 2021, we amended our Revolving Credit Facility to extend the maturity date to August 2, 2023 and to provide for a new $ 10.0 million Term Loan Facility (the Term Loan Facility and, together with the Revolving Credit Facility, the Credit Facility).

The 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 of at least 1.25 to 1.00 and a liquidity requirement of greater than $ 20 million, which are both defined in the Credit Facility.

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

As of March 31, 2023, there were no borrowings under the Revolving Credit Facility and the total amount available was $ 7.1 million.

On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation was appointed as receiver.

On March 27, 2023, First Citizens Bank & Trust Company (First Citizens Bank) assumed all of SVB’s deposits and loans.

SVB now operates as a division of First Citizens Bank.

Term Loan Facility, net

As of March 31, 2023, the 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 4.0 % per annum or a floating per annum rate equal to the prime rate plus 0.75 %.

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

In addition to the monthly interest payments, a final payment equal to 6.5 % of the original principal amount of each advance is due the earlier of the maturity date or the date the advance is repaid.

Principal balances are required to be repaid in 24 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 8.4 % per annum as of March 31, 2023.

The stated maturity of the Term Loan Facility is July 1, 2025.

However, if the principal amount of our convertible debt exceeds $ 0.6 million as of June 1, 2024 or if the maturity date of our 2019 Notes has not been extended beyond January 1, 2026 by June 1, 2024, then the maturity date of the Term Loan Facility will be June 1, 2024.

The carrying value of our term loan was as follows (in thousands):

March 31, 2023 December 31, 2022

Term Loan Facility

Principal amount $ 10,000 $ 10,000

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Term loan, non-current $ 7,001 $ 8,194

Revolving Credit Facility

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

In August 2018, we entered into a revolving credit facility with Silicon Valley Bank (as amended, the Revolving Credit Facility) in an aggregate principal amount of up to the lesser of (i) $ 15.0 million (Maximum Amount) or (ii) the sum of (a) 85 % of our eligible receivables and (b) 50 % of our eligible inventory, in each case, subject to certain limitations (Borrowing Base), provided that the amount of eligible inventory that may be counted towards the Borrowing Base shall be subject to a cap as set forth in the Revolving Credit Facility.

On August 2, 2021, we amended our Revolving Credit Facility to extend the maturity date to August 2, 2023 and to provide for a new $ 10.0 million term loan facility (the Term Loan Facility and, together with the Revolving Credit Facility, the Credit Facility).

The stated maturity of the Term Loan Facility is July 1, 2025.

However, if the principal amount of our convertible debt exceeds $ 0.6 million as of June 1, 2024 or if the maturity of our 2019 Notes has not been extended beyond January 1, 2026 by June 1, 2024, then the maturity date of the Term Loan Facility will be June 1, 2024.

The Credit Facility is 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 Credit Facility) 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 % per annum.

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

Fees for the Revolving Credit Facility include an annual commitment fee of $ 112,500 and a quarterly unused line fee of 0.75 % per annum based on the availability amount.

Total availability un der the Revolving Credit Facility as of September 30, 2022 was $ 12.5 million .

There were no borrowings outstanding under the Revolving Credit Facility at September 30, 2022.

As of September 30, 2022, the Term Loan Facility was fully drawn.

The interest rate on the Term Loan Facility is the greater of 4.0 % or a floating per annum rate equal to three quarters of one percentage point ( 0.75 %) above the prime rate.

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

In addition to the monthly interest payments, a final payment equal to 6.5 % of the original principal amount of each advance is due on the earlier of the maturity date or the date the advance is repaid.

Principal balances are required to be repaid in twenty-four equal installments beginning on August 1, 2023.

The $0.8 million current portion of the term loan reflected on the September 30, 2022 condensed consolidated balance sheet represents principal debt repayments scheduled to be made in the third quarter of 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 8.2 % per annum as of September 30, 2022.

On January 23, 2022, we entered into separate loan agreements (the Bridge Loan Agreements) with Casdin Private Growth Equity Fund II, L.P.

and Casdin Partners Master Fund, L.P.

(collectively, Casdin) and Viking Global Opportunities Illiquid Investments Sub-Master LP and Viking Global Opportunities Drawdown (Aggregator) LP (collectively, Viking).

Under the Bridge Loan Agreements, Casdin and Viking (collectively the Lenders) each provided to the Company a $ 12.5 million term

loan (collectively, the Bridge Loans).

The Bridge Loans were fully drawn on January 24, 2022, and automatically converted into Series B Preferred Stock upon the subsequent closing of the Private Placement, as more fully discussed below in Note 9.

Prior to their conversion, the Bridge Loans bore interest at (i) a rate of 10 % per annum from the effective date of the Bridge Loan Agreements to February 28, 2022, and (ii) a rate of 12 % per annum from March 1, 2022 to the closing of the Private Placement on April 4, 2022.

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.

The $ 10.7 million change in fair value of the Bridge Loans from $ 25.0 million at inception to $ 35.7 million as of March 31, 2022, including the portion attributable to accrued interest, was reflected as a non-operating unrealized loss on the Bridge Loans in the accompanying condensed consolidated statements of operations.

The loss was primarily due to the increase in our common stock price from $ 2.84 per share at inception of the Bridge Loans to $ 3.59 per share on March 31, 2022.

Upon conversion as of April 4, 2022, the change in the fair value from inception was $ 13.7 million and the carrying value of the Bridge Loans of $ 38.7 million was reclassified to Series B Redeemable Preferred Stock.

We have operating leases for buildings, equipment and vehicles.

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

Some leases contain options to extend the lease, typically for periods of 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 for a period of 39 months.

We expect to recognize $ 4.7 million of sublease income over the lease term commencing in October 2022.

Supplemental balance sheet information related to our leases as of September 30, 2022 and December 31, 2021 is as follows (in thousands, except for discount rate and lease term):

September 30, 2022 December 31, 2021

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 space in South San Francisco, California for a period of 39 months.

We expect to recognize $ 4.7 million of sublease income over the lease term that commenced in October 2022.

On February 28, 2023, we signed a second agreement to sublease an additional 25 % of our corporate headquarters for a period of 77 months.

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

Sublease income is reported in the condensed consolidated statements of operations as a reduction in selling, general and administrative expenses.

Supplemental balance sheet information related to our leases was as follows (dollars in thousands):

March 31, 2023 December 31, 2022

Operating lease right-of-use buildings $ 43,311 $ 43,500

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Fair Value of Financial Instruments

The following tables summarize our cash, cash equivalents, restricted cash, and available-for-sale securities by significant investment category within the fair value hierarchy as of September 30, 2022 and December 31, 2021 (in thousands):

September 30, 2022

Cash, Cash Equivalents, and Short-Term Investments

The following tables summarize our cash, cash equivalents, restricted cash, and available-for-sale securities by significant investment category within the fair value hierarchy (in thousands):

March 31, 2023

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

Cash and money market funds $ 60,200 $ — $ 60,200 $ 60,200 $ — $ —

Cash-unrestricted $ 17,041 $ — $ 17,041 $ 17,041 $ — $ —

Cash-restricted 795 — 795 — — 795

Total cash, cash equivalents and restricted cash $ 61,215 $ — $ 61,215 $ 60,200 $ — $ 1,015

Total cash $ 17,836 $ — $ 17,836 $ 17,041 $ — $ 795

Available-for-sale:

Money market funds $ 96,622 $ — $ 96,622 $ 96,622 $ — $ —

treasury securities 40,978 ( 104 ) 40,874 — 40,874 —

Total available for sale 137,600 ( 104 ) 137,496 96,622 40,874 —

Total $ 155,436 $ ( 104 ) $ 155,332 $ 113,663 $ 40,874 $ 795

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

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

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

Cash and cash equivalents are Level I measurements.

There were no changes in the valuation techniques used during the nine months ended September 30, 2022.

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

There were no transfers between Level I and II measurements and no changes in the valuation techniques used during the three months ended March 31, 2023.

The money market and U.S.

treasury investments mature on or before July 6, 2023.

The 2014 Notes and 2019 Notes are not regularly traded.

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

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

The estimated fair value of our term loan also represents a Level III valuation since the value cannot be determined by using readily observable inputs or measures, such as market prices.

The fair value of our term loan was estimated using a discounted cash flows approach and current market interest rate data for similar loans.

The following table summarizes the par value, carrying value and estimated fair value of our debt as of September 30, 2022 and December 31, 2021 (in thousands):

September 30, 2022 December 31, 2021

The estimated fair value of the Term Loan Facility 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 Facility was estimated using a discounted cash flow model and current market interest rate data for similar loans.

Advances under the Revolving Credit Facility typically have short repayment periods and their carrying values approximate their fair values due to their short-term duration.

The Company had no advances under the Revolving Credit Facility as of March 31, 2023 or December 31, 2022.

The following table summarizes the par value, carrying value and estimated fair value of our debt (in thousands):

March 31, 2023 December 31, 2022

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

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Total Notes $ 55,578 $ 54,733 $ 56,386 $ 55,578 $ 54,615 $ 48,906

Term loan, net $ 10,000 $ 10,219 $ 9,336 $ 10,000 $ 10,049 $ 10,113

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

Term Loan Facility, Net $ 10,000 $ 10,334 $ 10,055 $ 10,000 $ 10,277 $ 9,820

Total debt $ 65,578 $ 65,067 $ 66,441 $ 65,578 $ 64,892 $ 58,726

Assets Measured at Fair Value on a Nonrecurring Basis

During the third quarter of 2022, the Company changed its reporting structure and reorganized itself under two reporting units.

This transition from one to two units required us to assign a portion of goodwill to each reporting unit using a relative fair value approach and then test the goodwill for impairment by comparing each unit’s fair value to its respective carrying value.

The fair value of a reporting unit refers to the amount received when an entire operating unit is sold in an orderly transaction between market participants.

We estimated the fair value of our two reporting units using a discounted cash flow (DCF) approach which utilized Level 3 unobservable inputs.

Our DCF model relied on assumptions regarding forecasted cash flows (revenue growth rates), discount rates, earnings multiples and an implied control premium.

We prepared separate DCF valuations as of August 31, 2022 and September 30, 2022 and concluded that no impairment charge was necessary.

Shareholders’ Equity

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.

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.

Following stockholder approval of the Charter Amendment Proposal and the Private Placement Issuance Proposal, our name was changed to Standard BioTools Inc.

Shortly after the closing of the Private Placement Issuance, we also changed the trading symbol for our common stock on the Nasdaq Global Select Market to LAB.

Upon the closing of the Private Placement Issuance, Dr.

Michael Egholm was appointed as our President and Chief Executive Officer and as a member of the Board of Directors.

Mezzanine Equity

Series B Redeemable Preferred Stock

On January 23, 2022, we entered into the Bridge Loan Agreements, as more fully discussed in Note 6.

Also, on that date, we entered into separate Series B Convertible Preferred Stock Purchase Agreements (the Purchase Agreements) with the Lenders.

Under the terms and conditions of the Purchase Agreements, we issued and sold an aggregate of $ 225 million of convertible preferred stock, consisting of:

(i) 112,500 shares of the Company’s Series B-1 Convertible Preferred Stock, par value $ 0.001 per share (the Series B-1 Preferred Stock), at a purchase price of $ 1,000 per share;

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 per share (together with the issuance of shares of Series B Preferred Stock in connection with the conversion of the Bridge Loans, the Private Placement).

The Private Placement closed on April 4, 2022 (the Closing Date).

The Purchase Agreements 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 that created an obligation for the Company to repurchase its shares.

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

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 on the Closing Date.

The $ 37.8 million and $ 60.1 million increase in the fair value of the Series B Preferred Stock from the date of the Purchase Agreements to March 31, 2022 and the Closing Date, respectively, was primarily due to the increase in our common stock price during the same period and the various conversion rights and key provisions discussed below.

The increase in fair value was included as a non-operating loss on the forward sale of Series B Preferred Stock on the condensed consolidated statements of operations.

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 as mezzanine equity at its fair value upon issuance, net of any issuance costs, on the condensed consolidated balance sheets 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 above, 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 .

T he components of the carrying value of the Series B Preferred Stock as of March 31, 2023 and December 31, 2022 were as follows (in thousands):

Proceeds from Purchase Agreements $ 225,000

Proceeds from Bridge Loans 25,000

Change in fair value of Forward Purchase Agreements 60,081

Change in the fair value of Bridge Loans 13,719

Less equity issuance costs ( 12,547 )

Total Series B Redeemable Preferred Stock $ 311,253

The holders of Series B Preferred Stock are entitled to participate in all dividends declared on our common stock on an as-converted basis.

The Series B Preferred Stock contains 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 at any time into a number of shares of common stock equal to the Conversion Rate, 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 Date of the Private Placement, if the last reported sale price of the Company’s common stock is greater than 250 % of the Conversion Price as of such time for at least 20 consecutive trading days, we may elect to convert all the outstanding shares of Series B Preferred Stock into shares of common stock.

Issuer Redemption Provision

After the seventh anniversary of the Closing Date of the Private Placement, subject to certain conditions, we may, at our option, redeem 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 amount that must be paid by the Company in a corporate liquidation (the Liquidation Preference).

Change of Control Provisions

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.

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 (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 (without regard to any limitations on conversion contained therein).

Shareholders’ Deficit

Stock Repurchase Program

On November 23, 2022, our board of directors authorized the repurchase of up to $ 20.0 million in shares of the Company’s common stock in the open market or in negotiated transactions through December 31, 2023.

We repurchased a total of 1,250,484 shares of common stock under the program at a cost of $ 2.5 million, excluding commission fees, for an average of $ 1.97 per share for the three months ended March 31, 2023.

Cumulative repurchases under the program amount to 1,672,793 shares at a total cost of $ 3.0 million.

T he Company had a remaining authorization to repurchase up to approximately $ 17.0 million in shares under this program as of March 31, 2023.

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

Private Placement

In connection with the closing of the Private Placement, our stockholders approved o n April 1, 2022, an increase in the number of shares of common stock, par value $ 0.001 per share, that we are authorized to issue from 200.0 million shares to 400.0 million shares.

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

The Series B Preferred Stock issued in connection with the Private Placement contains several rights and other key provisions that may result in the conversion of the Series B Preferred Stock to our common stock, as more fully discussed in No te 9 .

Common Shares Reserved

As of September 30, 2022, we had reserved shares of common stock for future issuance under equity compensation plans as foll ows:

In thousands Securities To Be Issued Upon Exercise Of Options Securities To Be Issued Upon Release Of Restricted Stock and Performance Stock Units at Maximum Number Of Remaining Securities Available For Future Issuance

As of March 31, 2023, we had reserved shares of common stock for future issuance under equity compensation plans as foll ows (in thousands):

Securities To Be Issued Upon Exercise Of Options Securities To Be Issued Upon Release Of Restricted Stock and Performance Share Units at Maximum Number Of Remaining Securities Available For Future Issuance

2022 Inducement Equity Incentive Plan 6,795 1,496 1,146

5 unchanged sentences

8,007 6,669 6,745

Included in the number of securities to be issued upon release of restricted stock units (RSUs) and performance stock units (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.

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, RSUs and performance-based awards under our equity incentive plans.

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

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 PSUs under our stock-based incentive plans.

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

In general, RSUs vest on a quarterly basis over a period of four years from the date of grant at a rate of 25 % on the first anniversary of the grant date and ratably each quarter over the remaining 12 quarters, or ratably over 16 quarters, subject to the employees’ continued employment.

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

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.

Stock options granted under our 2022 Inducement Plan and 2011 Equity Incentive Plan (the 2011 Plan) have a term of no more than ten years from the date of grant and an exercise price of at least 100 % of the fair market value of the underlying common stock on the date of grant.

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

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

For performance-based share awards, our board of directors sets the performance objectives and other vesting provisions in determining the number of shares or value of performance units and performance shares that will be paid out.

Such payout will be a function of the extent to which performance objectives or other vesting provisions have been achieved.

For PSUs, our board of directors sets the performance objectives and other vesting provisions in determining the number of shares or value of performance units and performance shares that will be paid out.

Such payouts will be a function of the extent to which performance objectives or other vesting provisions have been achieved.

2011 Equity Incentive Plan

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In April 2021, our board of directors authorized, and in May 2021, our stockholders approved, an additional increase of 4.1 million shares reserved for issuance under the 2011 Plan.

Our ESPP offers U.S.

and some non-U.S.

employees the right to purchase shares of our common stock.

Our ESPP program has a six-month offering period, with a new period commencing on the first trading day on or after May 31 and November 30 of each year.

Employees are eligible to participate through payroll deductions of up to 10 % of their compensation.

Employee stock purchases under this plan are limited to $ 25,000 for any 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.

2022 Inducement Equity Incentive Plan

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

Plan Activity

Activity under the various plans was as follows:

7 unchanged sentences

RSU forfeited ( 349 ) $ 2.19

Balance at September 30, 2022 5,195 $ 4.02

As of September 30, 2022, the unrecognized compensation costs related to outstanding unvested RSUs under our equity incentive plans were $ 17.1 million.

Balance at March 31, 2023 6,565 $ 2.56

As of March 31, 2023, the unrecognized compensation costs related to outstanding unvested RSUs under our equity incentive plans were $ 13.5 million.

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

Stock Options

Options (000s) Weighted-Average

Options (in 000s) Weighted-Average

Exercise Price

4 unchanged sentences

Options granted 947 $ 2.05 $ —

Options exercised ( 31 ) $ 3.25 $ 10

Options forfeited ( 822 ) $ 6.72 $ —

Balance at September 30, 2022 8,345 $ 4.44 8.7 $ —

Vested at September 30, 2022 1,898 $ 6.20 6.0 $ —

Unvested awards at September 30, 2022 6,447 $ 3.92 9.5 $ —

(1) Aggregate intrinsic value as of September 30, 2022 was calculated as the difference between the closing price per share of our common stock on the last trading day of September 30, 2022, which was $ 1.10 , and the exercise price of the options, multiplied by the number of in-the-money options.

The majority of the options granted during 2022 were under the 2022 Inducement Plan and awarded to new members of our management team.

As of September 30, 2022, the unrecognized compensation costs related to outstanding unvested options under our equity incentive plans were $ 15.0 million.

Balance at March 31, 2023 8,007 $ 3.92 8.9 $ 28

Vested at March 31, 2023 741 $ 5.92 6.2 $ 19

Unvested awards at March 31, 2023 7,266 $ 3.71 9.1 $ 9

(1) Aggregate intrinsic value as of March 31, 2023 was calculated as the difference between the closing price per share of our common stock on the last trading day of March, which was $ 1.95 , and the exercise price of the options, multiplied by the number of in-the-money options.

As of March 31, 2023, the unrecognized compensation costs related to outstanding unvested options under our equity incentive plans were $ 14.2 million.

We expect to recognize those costs over a weighted average period of 3.3 years.

Performance Stock Units:

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

The number of PSUs ultimately earned under these awards is calculated based on the Total Shareholder Return (TSR) of our common stock as compared to the TSR of a defined group of peer companies during the applicable three-year performance period.

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

Based on the performance of our stock relative to our defined group of peer companies, none of the PSUs awarded in 2019 for the 2019-2021 measurement period were vested.

The performance adjustment in the table below reflects that no shares were issued upon vesting of the 2019 PSU awards.

Performance-based Awards

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 awards

Activity under the TSR-based PSUs was as follows:

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Balance at December 31, 2022 453 $ 4.81

PSU granted — $ —

Performance adjustment for 2020 awards ( 401 ) $ 4.19

PSU released — $ —

PSU forfeited ( 156 ) $ 8.17

Balance at September 30, 2022 713 $ 6.38

As of September 30, 2022, the unrecognized compensation costs related to these awards were $ 1.3 million.

Balance at March 31, 2023 52 $ 9.60

As of March 31, 2023, the unrecognized compensation costs related to these awards were $ 0.2 million.

We expect to recognize those costs over a weighted average period of 0.8 years.

2017 Employee Stock Purchase Plan (ESPP)

Our ESPP offers U.S.

and some non-U.S.

employees the right to purchase shares of our common stock.

Our ESPP program has a six-month offering period, with a new period commencing on the first trading day on or after May 31 and November 30 of each year.

Employees are eligible to participate through payroll deductions of up to 10 % of their compensation.

Employees may not purchase more than $ 25 thousand of stock for any calendar year.

The purchase price at which shares are sold under the ESPP is 85 % of the lower of the fair market value of a share of our common stock on the first day of the offering period or the last day of the offering period.

Stock-based Compensation Expense

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

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

2022 2021 2022 2021

Restricted stock units, stock options and performance stock units $ 4,417 $ 4,190 $ 12,929 $ 11,229

Three Months Ended March 31,

RSUs, stock options and PSUs $ 3,060 $ 3,942

Employee stock purchase plan 88 100

Total stock-based compensation $ 3,148 $ 4,042

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

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

Our quarterly provision for income taxes also includes discrete items, such as changes in valuation allowances or adjustments upon finalization of tax returns as well as infrequently occurring items, if any, such as the effects of changes in tax laws or rates, in the interim period in which they occur.

We recorded a tax benefit of $ 0.7 million and $ 1.4 million for the three months ended September 30, 2022 and 2021, respe ctively.

Higher profits in our foreign subsidiaries during the quarter ended September 30, 2022 compared to the quarter ended September 30, 2021 resulted in a lower tax benefit for our foreign operations.

For the nine months ended September 30, 2022 and 2021, we recorded a tax benefit of $ 2.9 million and $ 3.6 million, respectively.

The effective tax rates were 1.7 % and 6.8 % for the nine months ended September 30, 2022 and 2021, respectively.

The effective tax rates decreased due to higher pre-tax losses for the three and nine months ended September 30, 2022 compared to the same periods in 2021.

Our tax benefit for the periods presented in this report differs from the 21% U.S.

Federal statutory rate principally because we maintain a valuation allowance for our domestic deferred tax assets, which primarily consist of net operating loss carryforwards.

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

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

Domestic deferred tax assets have been offset by valuation allowances.

Any release of valuation allowances could have the effect of decreasing the income tax provision in the period the valuation allowance is released.

We continue to assess the likelihood that we will be able to recover our deferred tax assets, including those for which a valuation allowance is recorded.

There can be no assurance that we will generate profits in the future periods enabling us to fully realize our deferred

The timing of recording a valuation allowance or the reversal of such valuation allowance is subject to objective and subjective factors that cannot be readily predicted in advance.

We recorded an income tax expense of $ 0.3 million in the three months ended March 31, 2023 and an income tax benefit of $ 0.6 million for the three months ended March 31, 2022 .

The increase in our tax provision reflects the effect of our foreign operations, which reported pre-tax income in the first quarter of 2023 and pre-tax loss in the first quarter of 2022.

The effective tax rate (benefit) was 1.6 % in the three months ended March 31, 2023 compared to ( 0.7 %) in the three months ended March 31, 2022.

The Company’s effective tax rates for both periods differ from the 21% U.S.

Federal statutory tax rate primarily due to valuation allowances recorded against deferred tax assets on domestic losses and the tax rate differences between the U.S.

and foreign countries.

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

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

For the nine months ended September 30, 2022 and 2021, respectively, we did not recognize any material interest or penalties related to uncertain tax positions.

For the three months ended March 31, 2023 and 2022, we did not recognize any material interest or penalties related to uncertain tax positions.

Segment Reporting

We have historically operated as a single reportable segment and 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 will begin referring to these two segments as proteomics and genomics, respectively.

In 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:

proteomics and genomics (also known as mass cytometry and microfluidics, 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.

In conjunction with our change in segment reporting, we allocated goodwill to each operating segment using a relative fair value approach and performed trigger-based impairment testing on the goodwill and our long-lived intangible assets.

We conducted the tests as we considered the change in operating segments to be a triggering event.

The tests were performed as of August 31, 2022, and no impairment was identified.

Following the significant decline in the price of our common stock during the month of September, we performed the trigger-based impairment tests again as of September 30, 2022.

No impairment was identified.

Goodwill was tested at the reporting unit level, while our long-lived intangible assets were tested at the asset group level.

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

Genomics 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, research and development expense, and sales and marketing expense, from revenues.

Amortization, depreciation, and restructuring expenses 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 evaluates 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 that the Company adheres to as a whole.

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

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

Our business segment information for the three and nine months ended September 30, 2022 and 2021 a ppears below (in thousands):

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

2022 2021 2022 2021

Mass cytometry $ 14,566 $ 15,837 $ 38,764 $ 46,498

Microfluidics 11,080 12,667 32,163 45,818

Our business segment information was as follows (in thousands):

Three Months Ended March 31,

Proteomics $ 15,200 $ 13,780

Genomics 9,919 12,724

Total revenue $ 25,119 $ 26,504

Loss from operations

Mass cytometry $ ( 4,851 ) $ ( 3,574 ) $ ( 22,929 ) $ ( 12,080 )

Microfluidics ( 8,552 ) ( 4,819 ) ( 24,612 ) ( 8,483 )

Proteomics $ ( 5,673 ) $ ( 5,350 )

Genomics ( 230 ) ( 5,482 )

Corporate expenses ( 10,690 ) ( 16,671 )

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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 currently expect cash expenses related to the reduction in force and sublease activities, consisting primarily of severance and termination benefits, commissions and related costs, to be in the range of $ 3 million to $ 5 million.

We expect to recognize the restructuring costs over the remainder of 2022 and 2023.

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

We recognized $ 1.3 million of restructuring expense and $ 1.0 million of other related costs for both the three and nine months ended September 30, 2022.

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 condensed consolidated statements of operations.

A summary of the changes in our restructuring and other related liabilities for the three and nine months ended September 30, 2022 appears below (in thousands):

Balance at December 31, 2021 Three and Nine Months Ended September 30, 2022 Balance at September 30, 2022

We recognized $ 0.3 million of restructuring expense and $ 0.1 million of other related costs for the three months ended March 31, 2023.

We expect to complete all restructuring actions by the end of 2023 and to incur additional charges up to $ 2.0 million related primarily to employee severance and facility exit costs for the remainder of 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 three months ended March 31, 2023 was as follows (in thousands):

Balance at December 31, 2022 Three Months Ended March 31, 2023 Balance at March 31, 2023

Liabilities Charges Payments Liabilities (1)

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Total $ 3,239 $ 357 $ ( 1,779 ) $ 1,817

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

Other related costs are recorded in other accrued liabilities on the condensed consolidated balance sheet.

We expect to fund these liabilities using our cash reserves.

Restructuring and other related costs were classified in the condensed consolidated statement of operations as follows for the three and nine months ended September 30, 2022 (in thousands):

Three and Nine Months Ended September 30,

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

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

Restructuring and other related costs were classified in the condensed consolidated statements of operations as follows (in thousands):

Three Months Ended March 31,

Restructuring:

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Total restructuring and other related costs $ 357

The Company’s restructuring and other related costs by segment were as follows for the three and nine months ended September 30, 2022 (in thousands):

Three and Nine Months Ended September 30,

The Company’s restructuring and other related costs by segment and corporate were as follows (in thousands):

Three Months Ended March 31,

Restructuring:

Mass cytometry $ 428

Microfluidics 499

Proteomics $ 225

Total restructuring 294

Other related costs :

Corporate expenses 1,318

Total other related costs 63

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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 now-former Chief Executive Officer and our 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.

Fluidigm Corporation, et al).

The Court appointed a lead plaintiff and lead counsel in December 2020, and an amended complaint was filed on February 19, 2021.

The complaint, as amended, seeks unspecified damages on behalf of a purported class of persons and entities who acquired our common stock between February 7, 2019 and November 5, 2019 and alleges securities laws violations based on statements and alleged omissions made by the Company during such period.

The Company filed a motion to dismiss the complaint on April 5,

2021 and, on August 4, 2021, the Court granted defendants’ motion to dismiss with leave to amend.

A second amended complaint was filed on September 14, 2021.

The Company filed a motion to dismiss the second amended complaint on October 29, 2021 and, on February 14, 2022, the Court granted defendants’ motion and dismissed the second amended complaint with prejudice.

The plaintiff has appealed the decision, and the appeal remains pending before the U.S.

Court of Appeals for the Ninth Circuit.

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

On February 14, 2022, the Court granted defendants’ motion to dismiss the second amended complaint with prejudice.

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

Following a hearing before t he Ninth Circuit Court of Appeals, the dismissal was affirmed 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.

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.

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements