3 unchanged sentences
Our actual results could differ materially from those discussed in the forward-looking statements.
−Removed: See “Special Note Regarding Forward-Looking Statements.” Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Risk Factors.”
+Added: See “Special Note Regarding Forward-Looking Statements.” Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Risk Factors.” Results of operations for the fiscal year ended December 31, 2019 can be referenced on our 2020 Annual Report on Form 10-K filed with the SEC on March 5, 2021.
We are a life sciences company that has developed next generation, ultra-sensitive digital immunoassay platforms that advance precision health for life sciences research and diagnostics.
Our platforms are based on our proprietary digital “Simoa” detection technology.
−Removed: Our Simoa bead-based and planar array platforms enable customers to reliably detect protein biomarkers in extremely low concentrations in blood, serum and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies, and also allow researchers to define and validate the function of novel protein biomarkers that are only present in very low concentrations and have been discovered using technologies such as mass spectrometry.
+Added: Our Simoa bead-based and planar array platforms enable customers to reliably detect protein biomarkers in extremely low concentrations in blood, serum and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies, and also allow researchers to define and validate the function of novel protein biomarkers that are only present in very low concentrations.
These capabilities provide our customers with insight into the role of protein biomarkers in human health that has not been possible with other existing technologies and enable researchers to unlock unique insights into the continuum between health and disease.
We believe this greater insight will enable the development of novel therapies and diagnostics and facilitate a paradigm shift in healthcare from an emphasis on treatment to a focus on earlier detection, monitoring, prognosis and, ultimately, prevention.
−Removed: We are currently focusing on protein detection, which we believe is an area of significant unmet need and where we have significant competitive advantages.
−Removed: However, in addition to enabling new applications and insights in protein analysis, our Simoa platforms have also demonstrated applicability across other testing applications, including detection of nucleic acids and small molecules.
−Removed: We currently sell most of our products for life science research, primarily to laboratories associated with academic and governmental research institutions, as well as pharmaceutical, biotechnology and contract research companies, through a direct sales force and support organizations in North America and Europe, and through distributors or sales agents in other select markets, including Australia, Brazil, China, Czech Republic, India, Israel, Japan, Lebanon, Mexico, Qatar, Saudi Arabia, Singapore, South Korea and Taiwan.
Our instruments are designed to be used either with assays fully developed by us, including all antibodies and supplies required to run the tests, or with “homebrew” kits where we supply some of the components required for testing, and the customer supplies the remaining required elements.
Accordingly, our installed instruments generate a recurring revenue stream.
−Removed: We believe that our recurring consumable revenue is driven by our customers’ ability to extract more valuable data using our platform and to process a large number of samples quickly with little hands-on preparation.
+Added: As the installed base of the Simoa instruments increases, total consumables revenue overall is expected to increase.
+Added: We believe that consumables revenue should be subject to less period-to-period fluctuation than our instrument sales revenue, and will become an increasingly important contributor to our overall revenue.
We commercially launched our first immunoassay platform, the Simoa HD-1, in January 2014.
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The HD-X has been designed to deliver significant productivity and operational efficiency improvements, as well as greater user flexibility.
−Removed: We began shipping and installing HD-X instruments at customer locations in 2019.
−Removed: As the installed base of the Simoa instruments increases, total consumables revenue overall is expected to increase.
−Removed: We believe that consumables revenue should be subject to less period-to-period fluctuation than our instrument sales revenue, and will become an increasingly important contributor to our overall revenue.
+Added: We began shipping and installing HD-X instruments at customer locations in 2019, and by the end of 2021, approximately 68% of the HD instrument installed base was HD-X instruments.
On January 30, 2018, we acquired Aushon for $3.2 million in cash, with an additional payment of $0.8 million made in July 2018, six months after the acquisition date.
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On August 1, 2019, we completed our acquisition of Uman for an aggregate purchase price of $21.2 million, comprised of (i) $15.7 million in cash plus (ii) 191,152 shares of our common stock (representing $5.5 million based on the closing prices of our common stock on the Nasdaq Global Market on July 1, 2019 and August 1, 2019, the dates of issuance).
−Removed: The acquisition closed with respect to 95% of the outstanding shares of capital stock of Uman on July 1, 2019 and with respect to the remaining 5% of the outstanding shares of capital stock of Uman on August 1, 2019.
−Removed: Uman supplies neurofilament light (Nf-L) antibodies and ELISA kits, which are widely recognized by researchers and biopharmaceutical and diagnostics companies world-wide as the premier solution for the detection of Nf-L to advance the development of therapeutics and diagnostics for neurodegenerative conditions.
+Added: Uman supplies neurofilament light (Nf-L) antibodies and ELISA kits, which are widely recognized by
+Added: researchers and biopharmaceutical and diagnostics companies world-wide as the premier solution for the detection of Nf-L to advance the development of therapeutics and diagnostics for neurodegenerative conditions.
+Added: We also provide contract research services for customers through our CLIA-certified Accelerator Laboratory.
+Added: The Accelerator Laboratory provides customers with access to Simoa technology, and supports multiple projects and services, including sample testing, homebrew assay development and custom assay development.
+Added: To date, we have completed over 1,700 projects for approximately 400 customers from all over the world using our Simoa platforms.
+Added: We sell our instruments, consumables and services to the life science, pharmaceutical and diagnostics industries through a direct sales force and support organizations in North America and Europe, and through distributors or sales agents in other select markets, including Australia, Brazil, China, Czech Republic, India, Hong Kong, Israel, Japan, New Zealand, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan, and UAE.
+Added: In addition, Uman sells Nf-L antibodies and Nf-L ELISA kits directly, and in conjunction with us and another distributor worldwide.
+Added: We have an extensive base of customers in world class academic and governmental research institutions, as well as pharmaceutical, biotechnology and contract research companies.
On September 29, 2020, we entered the Abbott License Agreement with Abbott.
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During the first and second quarters of 2020, we implemented a resiliency plan focused on the health and safety of our employees and maintaining continuity of our operations.
−Removed: We have seen an impact on instrument revenue due to limitations on our ability to access certain customer sites and complete instrument installations, as well as an impact on consumables revenue from interruptions in certain customer laboratories.
−Removed: We expect these COVID-19 related challenges to continue until these customers return to normal operations.
−Removed: In view of the pandemic, we have adjusted our operations to expand capacity in our Accelerator Laboratory to support customers whose operations have been disrupted and to sustain clinical trials.
−Removed: We also determined that our cytokine assay technology provides researchers with important and differentiated tools to study disease progression, cytokine release syndrome, and patient-treatment response in the fight against COVID-19, and began developing a SARS- CoV-2 semi-quantitative IgG assay and a SARS-CoV-2 antigen detection assay, and prototyping a high-definition multiplex SARS-CoV-2 serology assay.
+Added: We saw an impact on instrument revenue due to limitations on our ability to access certain customer sites and complete instrument installations, as well as an impact on consumables revenue from interruptions in certain customer laboratories through the first quarter of 2021.
+Added: As customers began returning to normal operations in the second quarter of 2021, we have seen less of an impact related to COVID-19 related shutdowns.
+Added: However, we expect COVID-19 related challenges to continue for the foreseeable future and potentially increase if variants result in new shutdowns.
+Added: In view of the COVID-19 pandemic, in 2020, we adjusted our operations to expand capacity in our Accelerator Laboratory to support customers whose operations have been disrupted and to sustain clinical trials.
+Added: We also determined that our cytokine assay technology could provide researchers with important and differentiated tools to study disease progression, cytokine release syndrome, and patient-treatment response in the fight against COVID-19, and began developing a SARS-CoV-2 semi-quantitative IgG assay and a SARS-CoV-2 antigen detection assay, and prototyping a high-definition multiplex SARS-CoV-2 serology assay.
In December 2020, the FDA issued an EUA for our Simoa Semi-Quantitative SARS-CoV-2 IgG Antibody Test, and in January 2021, the FDA issued an EUA for our Simoa SARS-CoV-2 N Protein Antigen Test, each of which is run on our HD-X instrument.
−Removed: We currently intend to pursue authorization for additional sample types, including nasal swabs, saliva, and capillary dried blood obtained from a fingerstick.
−Removed: Preliminary clinical research studies suggest the viral antigen may be readily detectable in asymptomatic and pre-symptomatic patients, and we are exploring extending the test to screening applications, home-based sample collection and pooling to enable larger scale testing.
+Added: In September 2021, the FDA expanded the EUA for our Simoa SARS-CoV-2 N Protein Antigen Test to include testing with nasal swabs and saliva and for asymptomatic serial testing with nasal swab samples.
+Added: We are exploring extending the test to home-based sample collection and pooling to enable larger scale testing.
In September 2020, we entered into WP2 with the NIH under the RADx program.
−Removed: This contract, which has a total award value of $18.2 million, is intended to accelerate the continued development, scale-up and deployment of our novel SARS-CoV-2 antigen test.
−Removed: Initial early feasibility of this test was funded in part through WP1 we were granted in June 2020.
+Added: This contract, which has a total award value of up to $18.2 million, is intended to accelerate the continued development, scale-up and deployment of our novel SARS-CoV-2 antigen test.
+Added: Initial early feasibility of this test was funded in part through the RADx WP1 award we were granted in June 2020.
WP2 supports clinical validation of the test in support of the EUA submissions with the FDA, and provides funding to expand assay kit manufacturing capacity and commercial deployment readiness.
−Removed: Contract funding is subject to achievement of pre-defined milestones and the contract period runs through September 2021.
+Added: Contract funding was subject to the achievement of pre-defined milestones and the contract period ran through September 2021, with one milestone extended to March 31, 2022.
+Added: As of December 31, 2021, we had received $17.7 million out of the full $18.2 million under WP2.
The COVID-19 situation remains dynamic, and there remains significant uncertainty as to the length and severity of the pandemic, the actions that may be taken by government authorities, the impact to the business of our customers and suppliers, the long-term economic implications and other factors identified in “Part I, Item 1A, Risk Factors” of this Annual Report on Form 10-K.
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Cost of goods sold for services consists of salaries and other personnel costs, royalties, stock-based compensation and facility costs associated with operating the Accelerator Laboratory on behalf of customers, in addition to costs related to warranties and other costs of servicing equipment at customer sites.
−Removed: Additionally, we incur costs related to cost of goods sold under the NIH RADx program.
Cost of collaboration revenue consists of royalty expense due to third parties from revenue generated by collaboration or license deals.
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Our research and development efforts have focused primarily on the tasks required to support development and commercialization of new and existing products.
−Removed: We believe that our continued investment in research and development is essential to our long-term competitive position and expect these expenses to increase in future periods.
+Added: We believe that our continued investment in research and development is essential to our long-term
+Added: competitive position and expect these expenses to increase in future periods.
Additionally, costs incurred related to grant revenue are recorded as research and development expenses.
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We expect selling, general and administrative expenses to increase in future periods as the number of sales, technical support and marketing and administrative personnel grows and we continue to introduce new products, broaden our customer base and grow our business.
−Removed: We also expect to incur additional expenses as a public company, including expenses related to compliance with the rules and regulations of the SEC and the Nasdaq Stock Market, additional insurance expenses, and expenses related to investor relations activities and other administrative and professional services.
+Added: We also expect to incur additional public company expenses, including expenses related to compliance with the rules and regulations of the SEC and the Nasdaq Stock Market, additional insurance expenses, and expenses related to investor relations activities and other administrative and professional services.
Critical Accounting Policies, Significant Judgments and Estimates
−Removed: Our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K are prepared in accordance with accounting principles generally accepted in the United States.
+Added: Our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K are prepared in accordance with accounting principles generally accepted in the United States (U.S.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures.
6 unchanged sentences
Accordingly, these are the policies we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations.
−Removed: Our significant accounting
−Removed: policies are more fully described in “Significant Accounting Policies” (Note 2) in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
+Added: Our significant accounting policies are more fully described in “Significant Accounting Policies” (Note 2) in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Revenue Recognition
1 unchanged sentence
The amount of revenue recognized reflects consideration that we expect to be entitled to receive in exchange for these goods and services, incentives and taxes collected from customers, that are subsequently remitted to governmental authorities.
−Removed: We adopted ASC 606 on January 1, 2019, using the modified retrospective method for all contracts not completed as of the date of adoption.
−Removed: The reported results for 2020 and 2019 reflect the application of ASC 606 guidance.
Product Revenue
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Contract research services are provided through our Accelerator Laboratory and generally consist of fixed fee contracts.
−Removed: Revenues from contract research services are recognized at a point in time when we complete and deliver our research report on each individually completed study, or over time if the contractual provisions allow for the collection of transaction consideration for costs incurred plus a reasonable margin through the period of performance of the services.
+Added: Revenues from contract research services are
+Added: recognized at a point in time when we complete and deliver our research report on each individually completed study, or over time if the contractual provisions allow for the collection of transaction consideration for costs incurred plus a reasonable margin through the period of performance of the services.
Revenues from service-type warranties are recognized ratably over the contract service period.
1 unchanged sentence
Collaboration and License Revenue
−Removed: We may enter into agreements to license the intellectual property and know-how associated with its instruments in exchange for license fees and future royalties (as described below).
+Added: We may enter into agreements to license the intellectual property and know-how associated with our instruments in exchange for license fees and future royalties (as described below).
The license agreements provide the licensee with a right to use the intellectual property with the license fee revenues recognized at a point in time as the underlying license is considered functional intellectual property.
6 unchanged sentences
When disaggregating revenue, we considered all of the economic factors that may affect revenues.
−Removed: The following tables disaggregate our revenue from contracts with customers by revenue type:
+Added: The following tables disaggregate our revenue from contracts with customers based on their location by revenue type:
December 31, 2021
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ASC 606 provides for an exception to estimating the variable consideration for sales- and usage-based royalties related to the license of intellectual property, such that the sales- or usage-based royalty will be recognized in the period the underlying transaction occurs.
−Removed: We have recorded sales- or usage-based royalty revenue for the year ended December 31, 2020 and 2019 related to the intellectual property licensed by Uman.
−Removed: We recognize revenues from sales-
−Removed: or usage based royalty revenue at the later of when the sales or usage occurs;
+Added: We have recorded sales- or usage-based royalty revenue for the years ended December 31, 2021, 2020 and 2019 related to the intellectual property licensed by Uman.
+Added: We recognize revenues from sales- or usage based royalty revenue at the later of when the sales or usage occurs;
and the satisfaction or partial satisfaction of the performance obligation to which the royalty has been allocated.
The aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied or are partially satisfied as of December 31, 2021 is $7.5 million.
−Removed: Of the performance obligations not yet satisfied or are partially satisfied, $5.4 million is expected to be recognized as revenue in the next 12 months, with the remainder to be recognized within the 24 months thereafter.
+Added: Of the performance obligations not yet satisfied or that are partially satisfied, $6.4 million is expected to be recognized as revenue in the next 12 months, with the remainder to be recognized within the 24 months thereafter.
The $7.5 million principally consists of amounts billed for undelivered services related to initial and extended service-type warranties and research services, as well as $0.5 million related to undelivered licenses of intellectual property for a diagnostics company.
−Removed: During the year ended December 31, 2020, we recognized $1.2 million of previously deferred revenue as a result of entering into a license agreement with a diagnostics company (see Note 13).
We have classified the balance of capitalized costs to obtain a contract as a component of prepaid expenses and other current assets as of December 31, 2021 and classified the expense as a component of cost of goods sold and selling, general and administrative expense over the estimated life of the contract.
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We exclude from the transaction price any amounts collected from customers related to sales and other similar taxes.
+Added: We have elected to account for the shipping and handling as an activity to fulfill the
+Added: promise to transfer the product, and therefore will not evaluate whether shipping and handling activities are promised services to its customers.
When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component.
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None of our contracts contained a significant financing component for the years ended December 31, 2021, 2020, and 2019.
−Removed: We have elected to account for the shipping and handling as an activity to fulfill the promise to transfer the product, and therefore will not evaluate whether shipping and handling activities are promised services to its customers.
Grant Revenue
8 unchanged sentences
We determined it was appropriate to account for each monetary grant amount under the appropriate accounting treatment outlined in IAS 20.
−Removed: Under IAS 20, grants related to assets shall be presented in the consolidated balance sheets either by recognizing the grant as deferred income (which is recognized in the consolidated statements of operations on a systematic basis over the useful life of the asset), or by deducting the grant in calculating the carrying amount of the asset (which is recognized in the consolidated statements of operations over the life of the depreciable asset as a reduced
−Removed: depreciation expense).
+Added: Under IAS 20, grants related to assets shall be presented in the consolidated balance sheets either by recognizing the grant as deferred income (which is recognized in the consolidated statements of operations on a systematic basis over the useful life of the asset), or by deducting the grant in calculating the carrying amount of the asset (which is recognized in the consolidated statements of operations over the life of the depreciable asset as a reduced depreciation expense).
Both methods are acceptable under IAS 20.
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During the year ended December 31, 2020 we recognized $2.0 million of grant revenue and incurred $1.0 million in research and development expense related to WP1.
−Removed: WP1 is complete as of December 31, 2020.
+Added: WP1 was completed as of December 31, 2020.
On September 29, 2020, we entered into WP2 with the NIH under its RADx program.
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The contract provides funding to expand assay kit manufacturing capacity and commercial deployment readiness.
−Removed: Release of the $18.2 million of funding under WP2 is based on the achievement of certain milestones, and there is no assurance that we can meet all the milestones on a timely basis, if at all.
−Removed: If we do not meet all the milestones, we will not be able access the full $18.2 million in funding under the contract.
+Added: Release of the $18.2 million of funding under WP2 is based on the achievement of certain milestones.
+Added: Contract funding was subject to achievement of these pre-defined milestones and the contract period ran through September 2021, with one milestone extended to March 31, 2022.
+Added: As of December 31, 2021, we had received $17.7 million out of the full $18.2 million under WP2 .
During the year ended December 31, 2021, we recognized $5.2 million in grant revenue and incurred $3.4 million in research and development expense related to WP2.
−Removed: The following table summarizes the activity under WP2 as of December 31, 2020 (in thousands):
+Added: During the year ended December 31, 2020, we recognized $4.4 million in grant revenue and incurred $2.6 million in research and development expense related to WP2.
+Added: The following table summarizes the cumulative activity under WP2 as of December 31, 2021 and 2020 (in thousands):
+Added: December 31, 2021
+Added: December 31, 2020
Total grant revenue from research and development activities
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ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values.
−Removed: Stock-based compensation awards have historically consisted of stock options and restricted stock.
+Added: Stock-based compensation awards have historically consisted of stock options and restricted stock units.
Prior to the adoption of Accounting Standards Update (ASU) No.
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There were no material non-employee awards outstanding during the years ended December 31, 2021, 2020, and 2019.
−Removed: We estimate the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model.
+Added: We recognize forfeitures as they occur.
+Added: We estimate the grant date fair value, and the resulting stock-based compensation expense, using a Black-Scholes option-pricing model.
The grant date fair value of the stock-based awards is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards.
−Removed: The fair value of stock options granted to employees and non-employees is estimated on the grant date using the Black-Scholes option-pricing model, based on the assumptions noted in the following table:
+Added: The fair value of stock options granted to employees and non-employees is estimated on the grant date using a Black-Scholes option-pricing model, based on the assumptions noted in the following table:
Year Ended December 31,
5 unchanged sentences
43.9% - 49.2%
−Removed: 32.4% - 36.8%
−Removed: Using the Black-Scholes option-pricing model, the weighted-average grant date fair value of options granted for the years ended December 31, 2020, 2019, and 2018 was $12.66, $9.09, and $7.19 per share, respectively.
+Added: Weighted-average grant date fair value
Expected volatility was calculated based on proportional weighting of reported volatility data for a representative group of guideline publicly traded companies for which historical information was available, as well as our stock.
1 unchanged sentence
Treasury yield curve in effect at the time of grant, commensurate with the expected life assumption.
−Removed: We estimate the expected life of options granted to employees utilizing the simplified method which calculates the expected life of an option as the average of the time to vesting and contractual life of the options.
+Added: We estimate the expected life of options granted to employees utilizing the simplified method which calculates the expected life of an option as the average of the time to vesting and
+Added: contractual life of the options.
The expected life is applied to the stock option grant group as a whole, as we do not expect substantially different exercise or post-vesting termination behavior among our employee population.
2 unchanged sentences
The expected dividend yield is assumed to be zero as we have never paid dividends and have no current plans to pay any dividends on common stock.
−Removed: For the years ended December 31, 2020, 2019, and 2018 stock-based compensation expense was $10.1 million, $6.4 million, and $4.9 million, respectively.
+Added: We determined the fair value of each share of common stock underlying share-based awards based on the closing price of our common stock as reported by Nasdaq on the date of grant.
The table below summarizes the stock-based compensation expense recognized in our statements of operations by classification (in thousands):
4 unchanged sentences
General and administrative
+Added: Total stock-based compensation
As of December 31, 2021, we had $35.8 million of total unrecognized stock-based compensation costs which we expect to recognize over a weighted-average period of 2.9 years.
−Removed: Prior to our initial public offering (IPO) in December 2017, the fair value of our common stock underlying our stock options was estimated on each grant date by our board of directors.
−Removed: In order to determine the fair value of our common stock underlying granted stock options, our board of directors considered, among other things, the most recent valuations of our common stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.
−Removed: Given the absence of a public trading market for our common stock, our board of directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair value of our common stock, including (1) our business, financial condition and results of operations, including related industry
−Removed: trends affecting our operations;
−Removed: (2) our forecasted operating performance and projected future cash flows discounted to present value using our estimated weighted average cost of capital;
−Removed: (3) the illiquid nature of our common stock;
−Removed: (4) liquidation preferences and other rights and privileges of our preferred stock over our common stock;
−Removed: (5) likeliness and estimated timing of the potential option to have our stock become publicly traded;
−Removed: (6) market multiples of our most comparable public peers;
−Removed: (7) recently completed equity financing transactions;
−Removed: and (8) market conditions affecting our industry.
−Removed: Since the completion of our IPO, we have determined the fair value of each common share underlying share-based awards based on the closing price of our common shares as reported by Nasdaq on the date of grant.
Results of Operations
Comparison of the Years Ended December 31, 2021 and December 31, 2020 (dollars in thousands):
+Added: Year Ended December 31,
+Added: Increase (Decrease)
Product revenue
11 unchanged sentences
Selling, general, and administrative
−Removed: Total operating expense
+Added: Total operating expenses
Loss from operations
−Removed: Interest income (expense), net
−Removed: Other expense, net
+Added: Interest expense, net
+Added: Other income (expense), net
Loss before income taxes
1 unchanged sentence
Revenue increased by $24.2 million, or 28%, to $110.6 million for the year ended December 31, 2021 as compared to $86.4 million for the year ended December 31, 2020.
+Added: Product revenue increased 84% to $81.1 million for the year ended December 31, 2021, as compared to $44.0 million in the same period in 2020.
+Added: P roduct revenue consisted of sales of instruments totaling $26.0 million and sales of consumables and other products totaling $55.1 million for the year ended December 31, 2021.
Product revenue consisted of sales of instruments totaling $16.6 million and sales of consumables and other products of $27.4 million for the year ended December 31, 2020.
−Removed: Product revenue consisted of sales of instruments totaling $14.9 million and sales of consumables and other products totaling $25.6 million for the year ended December 31, 2019.
−Removed: Average sales prices of instruments and consumables did not change materially for the year ended December 31, 2020 as compared with the year ended December 31, 2019.
−Removed: The increase in product revenue of $3.5 million was due to the sale of more instruments for the year ended December 31, 2020 and increased sales of consumables.
−Removed: The installed base of instruments increased from December 31, 2019 to December 31, 2020, and as these additional instruments were used by customers, the consumables sales increased.
−Removed: The increase in service and other revenue of $8.1 million was primarily due to increased services performed in our Accelerator Laboratory;
−Removed: more customers use these services, and existing customers use these services more frequently.
−Removed: In addition, an increase in purchased warranties contributed to the service and other revenue increase.
−Removed: Collaboration and license revenue for the year ended December 31, 2020 of $11.8 million was related to entering into
−Removed: the Abbott License Agreement, and from existing contracts related to licensing technology and intellectual property.
−Removed: Collaboration and license revenue for the year ended December 31, 2019 of $0.2 million was related to licensing technology and intellectual property.
−Removed: Grant revenue of $6.4 million for the year ended December 31, 2020 consisted of revenue related to WP1 and WP2.
−Removed: We did not have any grant revenue during the year ended December 31, 2019.
−Removed: Cost of Goods Sold and Services
+Added: The increase in product revenue was primarily due to the increased ability to install instruments as customer sites reopened from COVID-19 related shutdowns that impacted results in the same period in 2020.
+Added: In addition, as the installed base of instruments increased year over year, consumable sales increased.
+Added: The decrease in service and other revenue of $0.5 million was primarily due to our open headcount within our services personnel.
+Added: We had $0.6 million and $11.8 million in collaboration and license revenue during the year ended December 31, 2021 and 2020, respectively, related to licensing technology and intellectual property.
+Added: We had $11.2 million in collaboration and license revenue during the year ended December 31, 2020, primarily related to entering into the Abbott License Agreement.
+Added: Grant revenue of $5.2 million and $6.4 million consisted of revenue related to WP2 recognized during the year ended December 31, 2021, and revenue related to WP2 and WP1 recognized during the year ended December 31, 2020, respectively.
+Added: Cost of Goods Sold, Services, and Licenses
Cost of product revenue increased by $8.2 million, or 32%, to $34.1 million for the year ended December 31, 2021 as compared to $26.0 million for the year ended December 31, 2020.
−Removed: The increase was primarily due to our product revenue increase, as well as a full year of costs incurred from the amortization of the Uman acquisition-related inventory valuation adjustment and acquired intangibles for the year ended December 31, 2020, as compared to only six months of these costs during the year ended December 31, 2019.
−Removed: Cost of service revenue increased to $11.2 million for the year ended December 31, 2020 from $9.0 million for the year ended December 31, 2019.
−Removed: The increase was primarily due to higher utilization of the Accelerator Laboratory, plus increased personnel costs from the build out of our field service and Accelerator organization.
−Removed: Cost of collaboration and license revenue of $1.0 million resulted from the licensing of certain technology and intellectual property to Abbott during the year ended December 31, 2020 .
−Removed: No cost of collaboration and license revenue was incurred during the year ended December 31, 2019.
−Removed: Overall cost of goods sold and services as a percentage of revenue decreased to 44% of total revenue for the year ended December 31, 2020 as compared to 53% for the year ended December 31, 2019, primarily as a result of the significant increase in collaboration and license revenue.
+Added: The increase was primarily due to our increase in volume of our product revenue.
+Added: Cost of service revenue increased by $3.4 million, or 31%, to $14.7 million for the year ended December 31, 2021, as compared to $11.2 million for the year ended December 31, 2020, primarily due to increased personnel costs from the build out of our field service organization.
+Added: Cost of collaboration and license revenue of $1.0 million for the year ended December 31, 2020 resulted from the licensing of certain technology and intellectual property to Abbott.
+Added: Overall cost of goods sold and services as a percentage of revenue was consistent at 44% of total revenue for the years ended December 31, 2021 and 2020, respectively.
Research and Development Expense
Research and development expense increased by $7.8 million, or 39%, to $28.0 million for the year ended December 31, 2021, as compared to $20.2 million for the year ended December 31, 2020.
−Removed: The increase was primarily due to compensation, development, materials, and other expenses related to work under WP1 and WP2 incurred during the year ended December 31, 2020.
+Added: The increase was primarily due to increased headcount as we build our organization to support growth and invest in process improvements.
Selling, General and Administrative Expense
Selling, general and administrative expense increased by $32.7 million, or 55%, to $92.3 million for the year ended December 31, 2021 as compared to $59.6 million for the year ended December 31, 2020.
−Removed: The increase was primarily due to headcount additions in various departments as we build out our organization to support growth.
−Removed: Interest Income (Expense), Net and Other Expense, Net
−Removed: Interest income (expense), net and other expense, net decreased by $0.9 million for the year ended December 31, 2020 as compared to the same period in 2019, primarily due to the unfavorable impact of COVID-19 on the interest rates of our cash equivalents during the year ended December 31, 2020.
+Added: The increase was primarily due to higher personnel costs from increased headcount and other spending increases in various departments as we build out our organization to support growth and invest in process improvements.
+Added: Interest Expense
+Added: Interest expense, net decreased by $0.1 million for the year ended December 31, 2021 as compared to the same period in 2020, primarily due to the unfavorable impact of interest rates on our cash equivalents for the year ended December 31, 2021, as compared to the year ended December 31, 2020.
+Added: Other Income (Expense), Net
+Added: Other income (expense), net increased by $1.3 million for the year ended December 31, 2021 as compared to the same period in 2020, primarily due to other income of $2.1 million related to an employee retention tax credit established under the Coronavirus Aid, Relief and Economic Securities Act, offset by other expense due to unfavorable foreign currency exchange rates during the year ended December 31, 2021.
Income Tax Benefit
−Removed: Income tax benefit was $0.4 million for the year ended December 31, 2020 as compared to $0.2 million for the same period in 2019.
−Removed: The change is primarily due to the increase in the tax benefit recorded on the operating results of our foreign subsidiaries.
−Removed: Comparison of the Years Ended December 31, 2019 and December 31, 2018 (dollars in thousands):
−Removed: Product revenue
−Removed: Service and other revenue
−Removed: Collaboration and license revenue
−Removed: Grant revenue
−Removed: Total revenue
−Removed: Cost of goods sold:
−Removed: Cost of product revenue
−Removed: Cost of service revenue
−Removed: Total costs of goods sold, services, and licenses
−Removed: Operating expenses:
−Removed: Research and development
−Removed: Selling, general, and administrative
−Removed: Total operating expense
−Removed: Loss from operations
−Removed: Interest income, net
−Removed: Other expense, net
−Removed: Loss before income taxes
−Removed: Income tax benefit (provision)
−Removed: Revenue increased by $19.1 million, or 51%, to $56.7 million for the year ended December 31, 2019 as compared to $37.6 million for the year ended December 31, 2018.
−Removed: Product revenue consisted of sales of instruments totaling $14.9 million and sales of consumables and other products of $25.6 million for the year ended December 31, 2019.
−Removed: Product revenue consisted of sales of instruments totaling $9.6 million and sales of consumables and other products totaling $13.8 million for the year ended December 31, 2018.
−Removed: Average sales prices of instruments and consumables did not change materially for the year ended December 31, 2019 as compared with the year ended December 31, 2018.
−Removed: The increase in product revenue of $17.1 million was primarily due to the sale of more instruments for the year ended December 31, 2019 and increased sales of consumables.
−Removed: The installed base of instruments increased from December 31, 2018 to December 31, 2019, and as these additional instruments were used by customers, the consumables sales increased.
−Removed: The increase in service and other revenue of $3.9 million was primarily due to increased services performed in our Accelerator Laboratory;
−Removed: more customers use these services, and existing customers use these services more frequently.
−Removed: In addition, an increase in purchased warranties contributed to the service and other revenue increase.
−Removed: Collaboration and license revenue for the year ended December 31, 2019 of $0.2 million was related to licensing technology and intellectual property.
−Removed: Collaboration and license revenue for the year ended December 31, 2018 of $2.2 million was related to the termination of the collaboration arrangement with bioMérieux.
−Removed: Cost of Goods Sold and Services
−Removed: Cost of product revenue increased by $8.2 million, or 64%, to $20.9 million for the year ended December 31, 2019 as compared to $12.7 million for the year ended December 31, 2018.
−Removed: The increase was primarily due to an increase in sales of consumables and instruments, along with costs incurred from the amortization of the Uman acquisition-related inventory valuation adjustment and acquired intangibles.
−Removed: Cost of service revenue increased to $9.0 million for the year ended December 31, 2019 from $7.0 million for the year ended December 31, 2018.
−Removed: The increase was primarily due to higher utilization of the Accelerator Laboratory, plus increased personnel costs from the build out of our field service and Accelerator organization.
−Removed: Overall cost of goods sold and services as a percentage of revenue increased slightly to 53% of total revenue for the year ended December 31, 2019 as compared to 52% for the year ended
−Removed: December 31, 2018, primarily as a result of the impact of the collaboration arrangement with bioMérieux during the year ended December 31, 2018 and the impact of the Uman acquisition-related charges during the year ended December 31, 2019.
−Removed: Research and Development Expense
−Removed: Research and development expense increased slightly by $0.4 million, or 2%, to $16.2 million for the year ended December 31, 2019 as compared to $15.8 million for the year ended December 31, 2018.
−Removed: The increase was primarily due to the development of the SP-X and HD-X and increased headcount in research and development.
−Removed: Selling, General and Administrative Expense
−Removed: Selling, general and administrative expense increased by $18.6 million, or 55%, to $52.2 million for the year ended December 31, 2019 as compared to $33.7 million for the year ended December 31, 2018.
−Removed: The increase was primarily due to headcount additions in various departments as we build out our organization to support future growth, public company costs, the lease for the new headquarters, and stock-based compensation expense.
−Removed: In addition, we incurred approximately $1.9 million in costs associated with the acquisition of Uman during the year ended December 31, 2019.
−Removed: Interest Income, Net and Other Expense, Net
−Removed: Interest income, net and other expense, net increased by $0.6 million for the year ended December 31, 2019 as compared to the same period in 2018, primarily due to the interest income earned on cash equivalents, which increased due to our “at-the-market” and underwritten public offerings completed during 2019.
−Removed: Income Tax Benefit (Provision)
−Removed: Income tax benefit was $0.2 million for the year ended December 31, 2019 as compared to a provision of less than $0.1 million for the same period in 2018.
−Removed: The increase is primarily due to certain state and international taxes in 2019, which we did not have in the prior year.
+Added: Income tax benefit was less than $0.1 million for the year ended December 31, 2021, as compared to $0.4 million tax for the same period in 2020.
+Added: The change is primarily due to the decrease in the tax benefit recorded on the operating results of our foreign subsidiaries.
Liquidity and Capital Resources
Since our inception, we have incurred annual net losses and negative cash flows from operations.
−Removed: We incurred net losses of $31.5 million, $40.8 million and $31.5 million and used $23.4 million, $26.2 million and $28.7 million of cash from our operating activities for the years ended December 31, 2020, 2019, and 2018, respectively.
+Added: We used $47.9 million, $23.4 million and $26.2 million of cash for our operating activities for the years ended December 31, 2021, 2020, and 2019, respectively.
+Added: The significant increase in our cash used for operating activities for the year ended December 31, 2021, as compared to December 31, 2020, was principally driven by our increased net loss for the 2021 period.
As of December 31, 2021, we had an accumulated deficit of $305.5 million.
−Removed: As of December 2020, we had cash and cash equivalents of $181.6 million and no additional amounts were available to borrow under our debt facility.
−Removed: On February 3, 2021, we received approximately $269.6 million in net proceeds related to an underwritten public offering.
+Added: As of December 2021, we had cash and cash equivalents of $396.5 million.
Sources of Liquidity
1 unchanged sentence
Equity Offerings
−Removed: In December 2017, we completed our IPO in which we sold 4,916,480 shares of common stock at an initial public offering price of $15.00 per share.
−Removed: The aggregate net proceeds received by us from the offering, net of
−Removed: underwriting discounts and commissions and offering expenses, were $65.6 million.
−Removed: Prior to the IPO, we had raised capital through the sale of redeemable convertible preferred stock in private placement transactions.
On March 19, 2019, we entered into a Sales Agreement for an “at-the-market offering” arrangement with Cowen and Company, LLC (Cowen), which allowed us to issue and sell shares of common stock pursuant to a shelf registration statement for total gross sales proceeds of up to $50.0 million from time to time through Cowen, acting as our agent.
10 unchanged sentences
Loan Facility with Hercules
−Removed: On April 14, 2014, we executed a Loan Agreement with Hercules, as subsequently amended, most recently in April 2019.
−Removed: The Loan Agreement provided a total debt facility of $10.0 million, which is secured by substantially all of our assets.
−Removed: At closing, we borrowed $5.0 million in principal and had the ability to draw the additional $5.0 million over the period from November 1, 2014 to March 31, 2015.
+Added: On April 14, 2014, we executed a loan agreement with Hercules Capital, Inc.
+Added: (Hercules), as subsequently amended most recently in April 2019.
The interest rate on this term loan was variable based on a calculation of 8% plus the prime rate less 5.25%, with a minimum interest rate of 8%.
Interest was to be paid monthly beginning the month following the borrowing date.
−Removed: Principal payments were scheduled to begin on September 1, 2015, unless we achieved certain milestones which would have extended this date to December 1, 2015 or March 1, 2016.
−Removed: In connection with the execution of the Loan Agreement, we issued Hercules a warrant to purchase up to 173,428 shares of our Series C Preferred Stock at an exercise price of $3.3299 per share.
−Removed: Upon closing of the IPO, this warrant was automatically converted into a warrant to purchase up to 53,960 shares of our common stock at an exercise price of $10.70 per share.
−Removed: In August 2018, we signed Amendment 5 to the Loan Agreement, which extended the interest only payment period through March 1, 2020 and also extended the loan maturity date to March 1, 2020.
−Removed: We accounted for the August 2018 amendment as a modification pursuant to ASC 470-50 and determined that no material change occurred as a result of the modification.
−Removed: In addition, the amendment deferred the payment of principal until the maturity date.
−Removed: We paid $0.1 million in end of term payments related to Amendment 5 during the year ended December 31, 2020.
−Removed: In October 2018, we signed Amendment 6 to the Loan Agreement, which amended the Loan Agreement's collateral clause to exclude the $1 million certificate of deposit associated with the lease on our new headquarters in Billerica, Massachusetts.
−Removed: The Loan Agreement and amendments contain end of term payments and are recorded in the debt accounts.
−Removed: We paid $0.5 million in end of term payments related to Amendment 6 during the year ended December 31, 2018.
−Removed: On April 15, 2019, we entered into Amendment 7 to the Loan Agreement, which extended the interest only payment period through July 1, 2021 and also extended the loan maturity date to October 1, 2021.
−Removed: We are required to
−Removed: pay the loan principal in five equal monthly installments starting July 1, 2021 with the final principal payment to be made on October 1, 2021.
−Removed: On July 2, 2019, 66,041 warrants were exercised by Hercules on a net, non-cash, basis.
−Removed: Per the terms of the warrant agreement, we issued 45,690 shares of common stock as a result of the net exercise.
−Removed: The Loan Agreement and amendments contain end of term payments and are recorded in the debt accounts.
−Removed: No end of term payments were paid in the year ended December 31, 2019.
−Removed: We paid $0.1 million in end of term payments related to Amendment 5 during the year ended December 31, 2020.
−Removed: The Loan Agreement contains negative covenants restricting our activities, including limitations on dispositions, mergers or acquisitions, incurring indebtedness or liens, paying dividends or making investments and certain other business transactions.
−Removed: There are no financial covenants associated with the Loan Agreement.
−Removed: The obligations under the Loan Agreement are subject to acceleration upon the occurrence of specified events of default, including a material adverse change in our business, operations or financial or other condition, which is subjective in nature.
−Removed: We have determined that the risk of subjective acceleration under the material adverse events clause is not probable and therefore have classified the outstanding principal in current and long-term liabilities based on scheduled principal payments.
−Removed: Debt principal repayments, including the end of term fees, due as of December 31, 2020 are (in thousands):
−Removed: Years ending December 31,
+Added: Under the amended agreement, we were required to pay the loan principal in four equal installments starting July 1, 2021, with the final principal payment and end of term charge to be made on October 1, 2021.
+Added: On October 1, 2021, we made the final principal payment, including end of term fees, of $2.0 million related to the loan agreement.
+Added: As of December 31, 2021, there were no additional amounts available to borrow under the loan facility.
Uman Acquisition
7 unchanged sentences
Net cash used in investing activities
−Removed: Net cash provided by (used in) financing activities
−Removed: Net increase (decrease) in cash and cash equivalents
+Added: Net cash provided by financing activities
+Added: Net increase in cash and cash equivalents
Net Cash Used in Operating Activities
4 unchanged sentences
Net cash used in operating activities primarily consisted of net loss of $57.7 million offset by non-cash charges of $16.0 million of stock-based compensation expense and $4.9 million of depreciation and amortization expense.
−Removed: Cash used as a result of changes in operating assets and liabilities of $7.5 million was primarily due to an increase in an increase in accounts
−Removed: receivable of $6.2 million, an increase in inventory of $5.1 million, and an increase in prepaid expenses and other assets of $3.9 million, offset by a decrease in accrued compensation and benefits and other accrued expenses of $6.2 million.
−Removed: Net cash used in operating activities was $26.2 million during the year ended December 31, 2019.
−Removed: Net cash used in operating activities primarily consisted of net loss of $40.8 million offset by non-cash charges of $6.4 million of stock-based compensation expense, $3.0 million of depreciation and amortization expense, and $0.6 of inventory valuation adjustment amortization.
−Removed: Cash provided as a result of changes in operating assets and liabilities of $4.4 million was primarily due to a $9.8 million increase in other non-current liabilities related to our lease, offset by an increase in accounts receivable of $3.4 million, and an increase in inventory of $3.4 million.
+Added: Cash used as a result of changes in operating assets and liabilities of $12.2 million was primarily due to an increase in inventory of $8.1 million and an increase in accounts receivable of $6.9 million, offset by an increase in accounts payable, accrued compensation and benefits and other accrued expenses of $3.5 million, all driven by growth and our investments in process improvements.
Net cash used in operating activities was $23.4 million during the year ended December 31, 2020.
−Removed: Net cash used in operating activities primarily consisted of net loss of $31.5 million, a decrease of $1.9 million in deferred revenue and an increase of $1.6 million in inventory, primarily offset by non-cash stock compensation expense of $4.9 million and an increase of $1.3 million in accounts payable.
+Added: Net cash used in operating activities primarily consisted of net loss of $31.5 million offset by non-cash charges of $10.1 million of stock-based compensation expense and $4.3 million of depreciation and amortization expense.
+Added: Cash used as a result of changes in operating assets and liabilities of $8.0 million was primarily due to an increase in an increase in accounts receivable of $6.7 million, an increase in inventory of $5.1 million, and an increase in prepaid expenses and other assets of $3.9 million, offset by a decrease in accrued compensation and benefits and other accrued expenses of $6.2 million.
Net Cash Used in Investing Activities
1 unchanged sentence
We expect to continue to incur additional costs for capital expenditures related to these efforts in future periods.
+Added: We used $6.3 million of cash during the year ended December 31, 2021, consisting of $13.6 million for the purchase of property and equipment, offset by $7.3 million in grant proceeds related to assets acquired under WP2.
We used $0.6 million of cash in investing activities during the year ended December 31, 2020, consisting of $3.9 million in additions to property and equipment, offset by $3.3 million in grant proceeds related to assets acquired under WP2.
−Removed: We used $25.4 million of cash in investing activities during the year ended December 31, 2019.
−Removed: The significant increase was related to the cash portion of the Uman acquisition, as well as the leasehold improvements for our headquarters, which is a component of our lease agreement.
−Removed: We used $5.5 million of cash in investing activities during the year ended December 31, 2018 consisting of cash paid in the acquisition of Aushon, net of cash acquired, and for purchases of capital equipment to support our infrastructure.
−Removed: Net Cash Provided by (Used in) Financing Activities
+Added: Net Cash Provided by Financing Activities
Historically, we have financed our operations principally through private placements of our convertible preferred stock and borrowings from credit facilities, the sale of shares of our common stock in our IPO or other offerings and revenues from our commercial operations.
+Added: Financing activities provided $270.8 million of cash during the year ended December 31, 2021, primarily from $269.7 million in net proceeds from our underwritten public offering during the first quarter of 2021.
Financing activities provided $96.2 million of cash during the year ended December 31, 2020, primarily from net proceeds of our underwritten public offering during the third quarter of 2020.
−Removed: Financing activities provided $116.2 million of cash during the year ended December 31, 2019, primarily from proceeds of our “at-the-market” offering during the second quarter of 2019 and our underwritten public offering during the third quarter of 2019.
−Removed: We used $0.1 million cash in financing activities during the year ended December 31, 2018, which primarily was from payments on debt of $1.9 million offset by cash generated by the exercise of stock options.
Capital Resources
1 unchanged sentence
We also expect that our operating expenses will increase as we continue to increase our marketing efforts to drive adoption of our commercial products.
−Removed: Additionally, as a public company, we have incurred
−Removed: and will continue to incur significant audit, legal and other expenses that we did not incur as a private company.
Our liquidity requirements have historically consisted, and we expect that they will continue to consist, of sales and marketing expenses, research and development expenses, working capital, debt service and general corporate expenses.
−Removed: We believe cash generated from commercial sales, our current cash and cash equivalents, and interest income we earn on these balances will be sufficient to meet our anticipated operating cash requirements for at least the next 12 months.
+Added: We believe cash generated from commercial sales along with our current cash and cash equivalents will be sufficient to meet our anticipated operating cash requirements for at least the next 12 months.
In the future, we expect our operating and capital expenditures to increase as we increase headcount, expand our sales and marketing activities and grow our customer base.
2 unchanged sentences
Our future funding requirements will depend on many factors, including:
−Removed: ● market acceptance of our products;
+Added: ● market acceptance of our products and services;
● the cost and timing of establishing additional sales, marketing and distribution capabilities;
14 unchanged sentences
The registration statement does not limit the amount of securities that may be issued thereunder.
−Removed: Our ability to issue securities is subject to market conditions and other factors.
+Added: Our ability to issue securities is subject to market
+Added: conditions and other factors.
This registration statement will expire on November 6, 2023, three years after its date of effectiveness.
−Removed: Off-Balance Sheet Arrangements
−Removed: We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.
Contractual Obligations, Commitments and Contingencies
−Removed: The following table summarizes our contractual obligations as of December 31, 2020 (in thousands):
−Removed: Payments due by period
−Removed: (in thousands)
−Removed: Contractual Obligations:(1)
−Removed: Operating lease obligations
−Removed: Principal payments and end of term fees on the term loan
−Removed: (1) See “Development and Supply Agreement” for additional contractual obligations.
−Removed: We also have ongoing obligations related to license agreements which contain immaterial minimum annual payments that are credited against the actual royalty expense.
−Removed: Purchase orders or contracts for the purchase of supplies and other goods and services are not included in the table above.
−Removed: We are not able to determine the aggregate amount of such purchase orders that represent contractual obligations, as purchase orders may represent authorizations to purchase rather than binding agreements.
−Removed: Our purchase orders are based on our current procurement or development needs and are fulfilled by our vendors within short time horizons.
−Removed: Loan Facility with Hercules
−Removed: On April 14, 2014, we executed a Loan Agreement with Hercules, as subsequently amended, most recently in April 2019.
−Removed: The Loan Agreement provided a total debt facility of $10.0 million, which is secured by substantially all of our assets.
−Removed: At closing, we borrowed $5.0 million in principal and had the ability to draw the additional $5.0 million over the period from November 1, 2014 to March 31, 2015.
−Removed: The interest rate on this term loan was variable based on a calculation of 8% plus the prime rate less 5.25%, with a minimum interest rate of 8%.
−Removed: Interest was to be paid monthly beginning the month following the borrowing date.
−Removed: Principal payments were scheduled to begin on September 1, 2015, unless we achieved certain milestones which would have extended this date to December 1, 2015 or March 1, 2016.
−Removed: In connection with the execution of the Loan Agreement, we issued Hercules a warrant to purchase up to 173,428 shares of our Series C Preferred Stock at an exercise price of $3.3299 per share.
−Removed: Upon closing of the IPO, this warrant was automatically converted into a warrant to purchase up to 53,960 shares of our common stock at an exercise price of $10.70 per share.
−Removed: On January 1, 2020, we adopted ASC Topic 842 – Leases (ASC 842) using the optional transition method allowing entities to recognize a cumulative effect adjustment to the opening balance sheet without restating comparative prior periods presented.
−Removed: ASC 842 requires a lessee to recognize assets and liabilities on the balance sheet for most leases and changes many key definitions, including the definition of a lease.
−Removed: Lessees will continue to differentiate between finance leases and operating, and classification will impact expense recognition.
−Removed: We elected the following practical expedients for all lease asset classes, which must be elected as a package and applied consistently to all of its leases at the transition date:
−Removed: i) we did not reassess whether any expired or existing contracts are or contain leases;
−Removed: ii) we did not reassess the lease classification for any expired or existing leases (that is, all existing leases that were classified as operating leases in accordance with ASC 840, Leases (ASC 840), are classified as operating leases);
−Removed: and iii) we did not reassess initial direct costs for any existing leases.
−Removed: At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the facts and circumstances present in the arrangement.
−Removed: Leases with a term greater than one year are recognized on the
−Removed: balance sheet as right-of-use (ROU) assets and short-term and long-term lease liabilities, as applicable.
−Removed: We have elected the practical expedient not to recognize leases on the balance sheet with a term of twelve months or less.
−Removed: Our leases consist of office and lab space and office equipment.
−Removed: All of our leases are classified as operating, and options to renew a lease are only included in the lease term to the extent those options are reasonably certain to be exercised.
−Removed: Additionally, we elected to apply the practical expedient not to separate lease and nonlease components for all leases.
−Removed: Operating lease liabilities and their corresponding ROU assets are initially recorded based on the present value of lease payments over the expected remaining lease term.
−Removed: The rate implicit in lease contracts is typically not readily determinable and, as a result, we utilize its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which we could borrow on a collateralized basis the amount of the lease payments, for a similar term, in a similar economic environment.
−Removed: To estimate its incremental borrowing rate, a credit rating applicable to us is estimated using a synthetic credit rating analysis since we do not currently have a rating agency-based credit rating.
−Removed: The adoption of ASC 842 resulted in the recognition of operating lease ROU assets and operating lease liabilities of $12.2 million and $22.8 million, respectively, on our consolidated balance sheet, with the difference between the ROU asset and lease liability primarily attributable to unamortized lease incentives and deferred rent related to the lease for our corporate headquarters at 900 Middlesex Turnpike in Billerica, Massachusetts (the 900 Middlesex Turnpike Lease).
+Added: Lease Obligations
We currently lease approximately 91,600 square feet of office, laboratory, and manufacturing space at our headquarters in Billerica, Massachusetts.
−Removed: The premises covered by this lease serves as our principal office and laboratory space effective the second quarter of 2019.
−Removed: The initial term of the lease is 11 years and five months beginning on April 1, 2019, and we have the option to extend the lease for two additional five-year periods.
−Removed: We previously leased approximately 30,655 square feet of office, laboratory, and manufacturing space as our headquarters in Lexington, Massachusetts, which was to expire on June 30, 2020;
−Removed: however in November 2018, we agreed to terminate the lease with the lessor effective May 2019.
−Removed: The termination of the lease was connected to us signing the new lease in October 2018 for our new headquarters in Billerica.
−Removed: In addition, pursuant to our acquisition of Aushon in January 2018, we assumed a lease of approximately 21,500 square feet of office, laboratory, and manufacturing space in Billerica, Massachusetts, under a lease that was to expire on February 28, 2021;
−Removed: however, in August 2018, we exercised an option to terminate the lease effective as of September 1, 2019.
−Removed: We paid a termination fee of $75,000 in February 2019 in consideration for the early termination.
+Added: In addition, in the first quarter of 2022, we executed a lease for 85,800 square feet of office and laboratory space in Bedford, Massachusetts.
+Added: The premises covered by these leases serves as our principal office and laboratory space effective the second quarter of 2019.
+Added: The initial term of the Billerica lease is eleven years and five months beginning on April 1, 2019, and we have the option to extend the lease for two additional five-year periods.
+Added: The initial term of the Bedford lease is eight years and nine months beginning on the earlier of our occupancy, or May 1, 2022.
In addition, our subsidiary, Uman, leases a total of approximately 6,500 square feet of office, laboratory, manufacturing and storage space in Umeå, Sweden.
−Removed: These leases expire at various dates between May 31, 2020 and February 28, 2023.
−Removed: Development and Supply Agreement
−Removed: We do not have significant agreements, with the exception of the supply agreement with STRATEC for the purchase of supplies or other goods specifying minimum quantities or set prices that exceed our expected requirements for the next three to six months.
−Removed: STRATEC manufactured our HD-1 instrument and manufactures the HD-X that we commercialized in the second half of 2019.
−Removed: In 2013, we entered into the Supply Agreement with STRATEC which requires us to purchase a minimum number of commercial units over a seven-year period ending in May 2021.
−Removed: We could be obligated to pay a fee based on the shortfall of commercial units purchased compared to the required number.
−Removed: Based on the commercial units purchased as of December 31, 2020, we have satisfied our required minimum purchase amount per the supply agreement.
−Removed: Also, if we terminate the Supply Agreement under certain circumstances and do not purchase up to a required number of commercial units, we would be required to issue warrants to purchase 93,341 shares of common stock at $0.003214 per share.
−Removed: We believe that we will not issue such warrants and therefore have not recorded any amounts related to the potential equity consideration.
−Removed: In August 2011, we entered into the Development Agreement with STRATEC, pursuant to which STRATEC undertook the development of the HD-1 for manufacture and sale to us or a partner whom we designate.
−Removed: During the year ended December 31, 2016, the Development Agreement was amended to modify the deliverables related to the final milestone, to agree on instrument design changes to be implemented, and to reduce the minimum purchase commitment in the Supply Agreement.
−Removed: Additionally, the parties agreed on additional development services for a total fee of $1.5 million, which was payable when development is completed and of which $0.9 million was paid in 2018 and $0.6 million was paid in 2019.
−Removed: The total amount included the final milestone payment that was due under the terms of the original agreement.
+Added: These leases expire at various dates through February 28, 2023.
+Added: The following table summarizes our operating lease obligations (in thousands):
+Added: As of December 31, 2021
We generally expect to ship all instrument and consumable orders received in a given period with the exception of orders received near the end of a fiscal quarter;
1 unchanged sentence
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.