What changed in this filing

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Item 9A. Controls and Procedures

2023-03-06 compared with 2022-03-01 · 484 added, 504 removed, 645 unchanged (61% of the section changed)

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Disclosure Controls and Procedures

We have established disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), to allow timely decisions regarding required disclosures.

We have established disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), to allow timely decisions regarding required disclosures.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2021.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at a reasonable assurance level as of December 31, 2022, due to the material weaknesses described below in Management’s Report on Internal Control over Financial Reporting.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as this term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as this term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

All internal control systems, no matter how well designed, have inherent limitations.

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Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on our evaluation under the framework set forth in Internal Control-Integrated Framework , our management concluded that our internal control over financial reporting was effective at the reasonable assurance level as of December 31, 2021.

The Company’s independent registered public accounting firm, Ernst & Young LLP, has also issued an audit report on the Company’s internal controls over financial reporting, which is included elsewhere in this Annual Report on Form 10-K.

Based on our evaluation under the framework set forth in Internal Control-Integrated Framework, our management concluded that our internal control over financial reporting was not effective at the reasonable assurance level as of December 31, 2022, due to the material weaknesses described below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

Based on the evaluation described above, our management concluded that control deficiencies existed as of December 31, 2022, and that these control deficiencies constituted material weaknesses in our internal control over financial reporting.

The material weaknesses related to the operating effectiveness of our internal control associated with (i) the accounting for inventory, including excess and obsolescence reserves, (ii) the accounting for salary and commissions expense, (iii) the financial statement close process, including financial reporting, share-based compensation and non-recurring transactions such as impairment of assets and accounting for leases, and (iv) the accounting for property and equipment, net.

The primary cause of these control deficiencies is that we did not maintain a sufficient number of qualified personnel with requisite expertise in key accounting and finance functions, including following the implementation of the Restructuring Plan in the second half of 2022.

In addition, our reliance on a significant number of end user computing tools requires additional procedures to verify the completeness and accuracy of information used within our analyses.

There were no material misstatements as a result of the material weaknesses discussed above.

If not remediated, or if we identify further material weaknesses in our internal control, our failure to establish and maintain effective

disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our consolidated financial statements or a failure to meet our reporting and financial obligations.

The Company’s independent registered public accounting firm, Ernst & Young LLP, has also issued an audit report on the Company’s internal control over financial reporting, which is included elsewhere in this Annual Report on Form 10-K.

Management’s Plan to Remediate the Material Weaknesses

Management, with oversight from the Audit Committee of our Board of Directors, is taking steps to remediate the control deficiencies which resulted in the material weaknesses described above by implementing changes to our internal control over financial reporting.

Our plans for remediation include, but are not limited to, the efforts summarized below, which have been or are in the process of being implemented:

● we have hired, and will continue to hire, additional personnel (including those with public company experience) who have the appropriate level of expertise in the areas of accounting, financial reporting, and internal controls commensurate with the volume and complexity of our reporting requirements;

● we have engaged accounting advisory consultants to provide additional depth and breadth in our period end close, technical accounting, and financial reporting capabilities until we have filled vacancies with qualified personnel;

● we will engage a third-party service provider to perform an assessment of our internal control design and related documentation;

● we have engaged a third-party consultant to assess our current enterprise resource planning system and identify opportunities to enhance our use of the system through automating certain controls and processes;

● we have engaged an accounting advisory consultant to conduct additional trainings on a regular basis related to internal control over financial reporting to our team members including, but not limited to, finance and accounting personnel.

We are also developing a plan to manage, on an ongoing basis, the impact of personnel turnover in the areas of accounting and financial reporting by broadening the understanding and knowledge of a larger group of personnel who can thereby work to support our operations during periods of reduced staffing.

We expect to continue our efforts to remediate the material weaknesses as described above through fiscal year 2023.

We believe that the implementation of the above steps will allow us to address the deficient controls within our internal control environment, which will facilitate the remediation of the material weaknesses.

As we continue to evaluate and work to improve our internal control over financial reporting, we will take additional measures to address control deficiencies and we may modify certain of the remediation measures described above.

Following our design and implementation of our remediation efforts, we will need to demonstrate their operating effectiveness.

We will not be able to consider the material weaknesses remediated until the applicable remedial controls operate for a sufficient period of time and our management has concluded, through testing, that our controls are operating effectively.

Changes in Internal Control over Financial Reporting

An evaluation was also performed under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of any change in our internal controls over financial reporting that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to affect, our internal controls over financial reporting.

There has been no change in our internal controls over financial reporting during the fiscal quarter ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Other than related to the changes outlined above to remediate the material weaknesses described above, there have been no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

In our opinion, Quanterix Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Quanterix Corporation as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, cash flows and stockholders’ equity for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(2) and our report dated March 1, 2022 expressed an unqualified opinion thereon.

In our opinion, because of the effect of the material weaknesses described below on the achievement of the objectives of the control criteria, Quanterix Corporation (the Company) has not maintained effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weaknesses have been identified and included in management’s assessment.

Management has identified material weaknesses in internal controls related to (i) the accounting for inventory, including excess and obsolescence reserves, (ii) the accounting for salary and commissions expense, (iii) the financial statement close process, including financial reporting, share-based compensation and non-recurring transactions such as impairment of assets and accounting for leases, and (iv) the accounting for property and equipment, net.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022, and December 31, 2021, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes.

These material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the 2022 consolidated financial statements, and this report does not affect our report dated March 6, 2023, which expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting.

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

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A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(2) provide reasonable assurance that transactions are recorded

as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

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(2) Financial Statement Schedules

Schedule II – Valuations and Qualifying Accounts

Beginning of Period

(in thousands)

to Costs and Expenses

(in thousands)

End of Period

(in thousands)

Allowance for credit losses:

Year ended December 31, 2021

Year ended December 31, 2020

Year ended December 31, 2019

Financial statement schedules have been omitted since they either are not required, not applicable, or the information is otherwise included.

The following is a list of exhibits filed as part of this Annual Report on Form 10-K:

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Form of Common Stock Certificate

Fourth Amended and Restated Registration Rights Agreement, dated as of June 2, 2017, by and among the Registrant and the investors named therein

2007 Stock Option and Grant Plan, as amended

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2017 Employee, Director and Consultant Equity Incentive Plan

Form of Stock Option Agreement under the 2017 Employee, Director and Consultant Equity Incentive Plan

Exhibit Number

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Form or Schedule

Form of Stock Option Agreement under the 2017 Employee, Director and Consultant Equity Incentive Plan

Form of Restricted Stock Agreement under the 2017 Employee, Director and Consultant Equity Incentive Plan

Form of Restricted Stock Unit Agreement under the 2017 Employee, Director and Consultant Equity Incentive Plan

Employment Agreement, dated January 1, 2015, by and between the Registrant and E.

Amended and Restated Employment Agreement, dated April 25, 2022, between the Registrant and E.

Kevin Hrusovsky

Separation Agreement, effective as of August 8, 2022, between the Registrant and E.

Kevin Hrusovsky

Employment Agreement, dated June 22, 2021, between the Registrant and Michael Doyle

Employment Agreement, dated May 10, 2021, between the Registrant and Dr.

Amended and Restated Employment Agreement, dated April 25, 2022, between the Registrant and Dr.

Masoud Toloue

Letter Agreement, dated May 31, 2019, by and between the Registrant and John Fry

Letter Agreement, dated August 8, 2014, by and between the Registrant and Mark T.

Roskey, Ph.D.

Letter Agreement, effective as February 5, 2018, by and between the Registrant and Dawn Mattoon

Employment Agreement, dated March 28, 2022, between the Registrant and Dan Pikora

Exclusive License Agreement, dated June 18, 2007, between the Registrant and Tufts University, as amended on April 29, 2013

Second Amendment, dated August 22, 2017, to the Exclusive License Agreement between the Registrant and Tufts University

Third Amendment, dated September 25, 2020, to the Exclusive License Agreement between the Registrant and Tufts University

Exhibit Number

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Form or Schedule

Third Amendment, dated September 25, 2020, to the Exclusive License Agreement between the Registrant and Tufts University

Supply and Manufacturing Agreement, dated September 14, 2011, between the Registrant and STRATEC Biomedical AG

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Lease Agreement by and between the Registrant and XChange Owner LLC, dated January 28, 2022 .

Amended and Restated 2018 Non-Employee Director Compensation Policy

Subsidiaries of Registrant

Consent of Ernst & Young LLP

Exhibit Number

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Form or Schedule

Non-Exclusive License Agreement, dated September 29, 2020, by and between Abbott Laboratories and the Registrant.

Separation Agreement dated November 11, 2021 by and between the Registrant and William Geist.

Amended and Restated 2018 Non-Employee Director Compensation Policy

Subsidiaries of Registrant

Consent of Ernst & Young LLP

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Redacted portions have been filed separately with the SEC.

Certain confidential portions of this exhibit have been omitted and replaced with “[***]”.

Such identified information has been excluded from this exhibit because it is (i) not material and (ii) would likely cause competitive harm to the company if disclosed.

Portions of this document (indicated by “[***]”) have been omitted because such information is not material and is the type of information that the Registrant treats as private or confidential.

FORM 10-K SUMMARY

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March 6, 2023

KEVIN HRUSOVSKY

Kevin Hrusovsky

Chairman and Chief Executive Officer

/s/ MASOUD TOLOUE, PH.D.

Masoud Toloue, Ph.

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

KEVIN HRUSOVSKY

Chairman and Chief Executive Officer and Director (principal executive officer)

/s/ MASOUD TOLOUE, PH.D.

President and Chief Executive Officer and Director (Principal Executive Officer)

March 6, 2023

Kevin Hrusovsky

Masoud Toloue, Ph.

/s/ MICHAEL A.

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(Principal Financial Officer and Principal Accounting Officer)

March 1, 2022

/s/ Martin D.

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March 6, 2023

Madaus, Ph.D.

March 6, 2023

/s/ LAURIE J.

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Quanterix Corporation (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, cash flows and stockholders' equity for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(2) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Quanterix Corporation (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, cash flows and stockholders' equity for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 1, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 6, 2023 expressed an adverse opinion thereon.

Basis for Opinion

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Description of the Matter

As discussed in Note 2 to the consolidated financial statements, the Company analyzes its inventory levels at each reporting date to identify inventory that is in excess of expected future demand.

As of December 31, 2022, the Company had recognized inventory of $16.8 million.

As discussed in Note 2 to the consolidated financial statements, the Company analyzes its inventory levels at each reporting date to identify inventory that is in excess of expected sales requirements.

In the event that the Company identifies excess inventory, the Company recognizes a reduction in the carrying value of inventory.

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How We Addressed the Matter in Our Audit

To audit the Company’s valuation of inventory, we performed audit procedures that included, among others, performing inquiries of management and testing the completeness and accuracy of the underlying data used in the estimation of future demand.

To evaluate the Company’s estimate of future demand, we independently assessed the sensitivity and impact of reasonably possible changes in forecasted demand and the impact on the Company’s calculation of excess inventory.

We evaluated inventory levels compared to forecasted demand, historical sales and specific product considerations.

We performed inquiries with appropriate non-financial personnel, including supply chain employees, regarding obsolete or discontinued inventory items and other factors to corroborate management's assertions regarding qualitative judgments about discontinued, slow moving and obsolete inventories.

We also evaluated management's ability to accurately forecast demand by comparing actual demand to management's prior estimates.

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Accrued compensation and benefits

Other accrued expenses (including $ 0 and $ 1,377 to related parties as of December 31, 2021 and December 31, 2020, respectively)

Other accrued expenses

Deferred revenue (including $ 69 and $ 54 with related parties as of December 31, 2022 and December 31, 2021, respectively)

Current portion of long term debt

Short term lease liabilities

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Long term lease liabilities

Deferred tax liabilities

Other non-current liabilities

Total liabilities

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Common stock, $ 0.001 par value:

Authorized— 120,000,000 shares as of December 31, 2021 and December 31, 2020;

issued and outstanding — 36,768,035 and 31,796,544 shares as of December 31, 2021 and December 31, 2020, respectively

Authorized shares:

120,000,000 at December 31, 2022 and December 31, 2021, respectively;

Issued and outstanding :

37,279,994 shares and 36,768,035 shares at December 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

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Total liabilities and stockholders’ equity

See accompanying notes.

The accompanying notes are an integral part of these financial statements.

Quanterix Corporation

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Operating expenses:

Research and development (including related party activity of $ 565 , $ 235 , and $ 152 for the years ended December 31, 2021, 2020, and 2019, respectively)

Research and Development Expense (including related party activity of $ 696 , $ 565 , and $ 235 for the years ended December 31, 2022, 2021, and 2020 respectively)

Selling, general and administrative (including related party activity of $ 41 , $ 89 , and $ 37 for the years ended December 31, 2022, 2021, and 2020 respectively)

Other lease costs

Restructuring

Goodwill impairment

Impairment expense

Total operating expenses

Loss from operations

Interest (expense) income, net

Other income (expense), net

Interest income (expense), net

Other (expense) income, net

Loss before income taxes

Income tax benefit

Income tax (expense) benefit

Net loss per share, basic and diluted

Weighted-average common shares outstanding, basic and diluted

See accompanying notes.

The accompanying notes are an integral part of these financial statements.

Quanterix Corporation

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Years Ended December 31,

Other comprehensive (loss) income:

Cumulative translation adjustment

Total other comprehensive (loss) income

Other comprehensive loss:

Foreign currency translation adjustment

Total other comprehensive loss

Comprehensive loss

See accompanying notes.

The accompanying notes are an integral part of these financial statements.

Quanterix Corporation

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Inventory step-up amortization

Credit loss expense on accounts receivable

Reduction in the carrying amounts of right-of-use assets

Credit (income) loss expense on accounts receivable

Unrealized losses (gains) on foreign currency transactions

Non-cash lease expense

Stock-based compensation expense

Goodwill impairment

Impairment of long-lived assets

Non-cash interest expense

Deferred taxes

Loss on disposal of fixed assets

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Accrued compensation and benefits, other accrued expenses and other current liabilities

Contract acquisition costs

Operating lease liabilities

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Purchases of property and equipment

Acquisitions, net of cash acquired

Proceeds from RADx grant on assets purchased

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Proceeds from stock options exercised

Sale of common stock in at-the-market offering, net

Sale of common stock in underwritten public offering, net

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Cash paid for interest

Cash paid for taxes

Noncash transactions:

Purchases of property and equipment included in accounts payable and other accrued expenses

Purchase of property and equipment included in other non-current liabilities

Common stock issued in connection with the acquisition of UmanDiagnostics AB

Right-of-use asset obtained in exchange for lease liabilities

Reconciliation of cash, cash equivalents, and restricted cash:

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Total cash, cash equivalents, and restricted cash

See accompanying notes.

The accompanying notes are an integral part of these financial statements.

Quanterix Corporation

Consolidated Statements of Stockholders’ Equity

(amounts in thousands, except share data)

comprehensive

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Balance at December 31, 2019

Cumulative effect of adoption of Accounting Standards Codification Topic 606

Exercise of common stock warrants

Exercise of common stock options and vesting of restricted stock

Sale of common stock in "at-the-market"

offering, net

Issuance of capital shares:

−Exercised stock options

−Restricted units converted

−ESPP stock purchase

Sale of common stock in underwritten public offering, net

Issuance of shares for the acquisition of UmanDiagnostics AB

Stock-based compensation expense

Employee stock purchase plan

Accumulated other comprehensive income

Cumulative translation adjustment

Balance at December 31, 2020

Exercise of common stock options and vesting of restricted stock

Sale of common stock in underwritten public offering, net

Issuance of capital shares:

−Exercised warrants

−Exercised stock options

−Restricted units converted

−ESPP stock purchase

−Issuance of common stock

Sale of common stock in underwritten public offering, net

Stock-based compensation expense

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Balance at December 31, 2021

Exercise of common stock warrants

Exercise of common stock options and vesting of restricted stock

Issuance of common stock

Sale of common stock in underwritten public offering, net

Issuance of capital shares:

−Exercised stock options

−Restricted units converted

−ESPP stock purchase

−Issuance of common stock

Stock-based compensation expense

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Balance at December 31, 2022

See accompanying notes.

The accompanying notes are an integral part of these financial statements.

Quanterix Corporation

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The Company's customers are primarily in the research use only market, which includes academic and governmental research institutions, the research and development laboratories of pharmaceutical manufacturers, contract research organizations, and specialty research laboratories.

The Company acquired UmanDiagnostics AB (Uman), a Swedish company located in Umeå, Sweden, in August 2019.

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.

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.

With the acquisition of Uman, the Company has secured a long-term source of supply for a critical technology.

“At-the-market offering”

On March 19, 2019, the Company entered into a Sales Agreement (the Sales Agreement) with Cowen and Company, LLC (Cowen) with respect to an “at-the-market” offering program under which the Company could offer and sell, from time to time at its sole discretion, shares of its common stock, par value $ 0.001 per share, having an aggregate offering price of up to $ 50.0 million through Cowen as its sales agent.

On June 5, 2019, the Company issued approximately 2.2 million shares of common stock at an average stock price of $ 22.73 per share pursuant to the terms of the Sales Agreement.

The “at-the-market” offering resulted in gross proceeds of $ 49.7 million.

The Company incurred $ 1.7 million in issuance costs associated with the “at-the-market” offering, resulting in net proceeds to the Company of $ 48.0 million.

On August 6, 2020, the Company delivered written notice to Cowen to terminate the Sales Agreement, which termination the parties agreed to make immediately effective.

Underwritten public offering

On August 8, 2019, the Company entered into an underwriting agreement with J.P.

Morgan Securities LLC (J.P.

Morgan) and SVB Securities LLC (f/k/a SVB Leerink) (Leerink), as representatives of the several underwriters, relating to an underwritten public offering of approximately 2.7 million shares of the Company’s common stock, par value $ 0.001 per share.

The underwritten public offering resulted in gross proceeds of $ 69.0 million.

The Company incurred $ 4.5 million in issuance costs associated with the underwritten public offering, resulting in net proceeds to the Company of $ 64.5 million.

On August 6, 2020, the Company entered into an underwriting agreement with Leerink and Cowen and Company, LLC (Cowen), as representatives of the several underwriters, relating to an underwritten public offering of approximately 3.0 million shares of the Company’s common stock, par value $ 0.001 per share.

The Company’s wholly owned subsidiary UmanDiagnostics AB (Uman), a Swedish company located in Umeå, Sweden, 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.

Underwritten public offerings

On August 6, 2020, the Company entered into an underwriting agreement with SVB Leerink LLC and Cowen and Company, LLC (Cowen), as representatives of the several underwriters, relating to an underwritten public offering of approximately 3.0 million shares of the Company’s common stock, par value $ 0.001 per share.

The underwritten public offering resulted in gross proceeds of $ 97.6 million.

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On February 3, 2021, the Company entered into an underwriting agreement with Goldman Sachs & Co.

LLC (Goldman Sachs), Leerink, and Cowen, as representatives of the several underwriters, relating to an underwritten public offering of approximately 4.1 million shares of the Company’s common stock, par value $ 0.001 per share.

LLC, Leerink, and Cowen, as representatives of the several underwriters, relating to an underwritten public offering of approximately 4.1 million shares of the Company’s common stock, par value $ 0.001 per share.

The underwritten public offering resulted in gross proceeds of $ 287.5 million.

The Company incurred $ 17.8 million in issuance costs associated with the underwritten public offering, resulting in net proceeds to the Company of $ 269.7 million.

The Company has recognized annual losses from operations since inception and has an accumulated deficit of $ 305.5 million at December 31, 2021 and the Company incurred a net loss of $ 57.7 million, $31.5 million, and $40.8 million for the years ended December 31, 2021, 2020, and 2019, respectively.

At December 31, 2021, the Company had $ 396.5 million of unrestricted cash and cash equivalents.

The Company expects the current cash balance will be sufficient to fund operations for a period of at least one year from the date the consolidated financial statements are issued.

The Company has recognized annual losses from operations since inception and has an accumulated deficit of $ 402.2 million as of December 31, 2022.

The Company incurred net losses of $ 96.7 million, $ 57.7 million, and $ 31.5 million for the years ended December 31, 2022, 2021, and 2020, respectively.

The Company had $ 338.7 million and $ 396.5 million of unrestricted cash and cash equivalents for the years ended December 31, 2022 and 2021, respectively.

The Company expects that its cash and cash equivalents, as of December 31, 2022, will be sufficient to fund its operations for a period of at least one year from the date the consolidated financial statements are issued.

There can be no assurances, however, that no additional funding will be required or that additional funding will be available on terms acceptable to the Company, or at all.

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In making those estimates and assumptions, the Company bases its estimates on historical experience and on various other assumptions believed to be reasonable.

The Company’s significant estimates included in the preparation of the consolidated financial statements are related to revenue recognition, fair value of assets acquired and liabilities assumed in acquisitions, and valuation of inventory.

The Company’s significant estimates included in the preparation of the consolidated financial statements are related to revenue recognition and valuation of inventory.

Actual results could differ from those estimates.

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The Company and the Company's chief operating decision-maker reviews the Company's operations and manages its business as a single operating segment.

Revenue recognition

The Company recognizes revenue when a customer obtains control of a promised good or service.

The amount of revenue recognized reflects consideration that the Company expects 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.

The Company adopted Accounting Standards Codification (ASC) Topic 606 Revenue from Contracts with Customers (ASC 606), on January 1, 2019, using the modified retrospective method for all contracts not completed as of the date of adoption.

The reported results for 2021, 2020, and 2019 reflect the application of ASC 606 guidance.

The Company recorded an adjustment to the accumulated deficit of $ 0.4 million as of January 1, 2019 for the cumulative effect primarily related to the deferral of sales commissions.

In accordance with the reporting requirements of ASC 606, the disclosure of the impact on the Company’s consolidated statement of operations, as a result of adopting the provisions of ASC 606, was as follows (in thousands):

For the Year Ended December 31, 2019

Under ASC 606

Product revenue

Service revenue

Costs of goods sold and services

Selling general and administrative expenses

The Company’s customers primarily consist of entities engaged in the life sciences research market that pursue the discovery and development of new drugs for a variety of neurologic, cardiovascular, oncologic and other protein biomarkers associated with diseases.

The Company’s customer base includes several of the largest biopharmaceutical companies, academic research organizations and distributors who serve certain geographic markets.

Product revenue

The Company’s products are composed of analyzer instruments, assay kits and other consumables such as reagents.

Products are sold directly to biopharmaceutical and academic research organizations or are sold through distributors in EMEA and Asia Pacific regions.

The sales of instruments are generally accompanied by an initial year of implied service-type warranties and may be bundled with assays and other consumables and may also include other items such as training and installation of the instrument and/or an extended service warranty.

Revenues from the sale of products are recognized at a point in time when the Company transfers control of the product to the customer, which is upon installation for instruments sold to direct customers, and based upon shipping terms for assay kits and other consumables.

Revenue for instruments sold to distributors is generally recognized based upon shipping terms (either upon shipment or delivery).

Service and other revenue

Service revenues are composed of contract research services, initial implied one-year service-type warranties, extended services contracts and other services such as training.

Contract research services are provided through the Company’s Accelerator Laboratory and generally consist of fixed fee contracts.

Revenues from contract research services are recognized at a point in time when the Company completes and delivers its 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.

Revenues from other services are immaterial.

Collaboration and license revenue

The Company 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).

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.

The Company has recognized revenues from sales- or usage based royalties related to the Company’s licensing technology and intellectual property.

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.

The Company has 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.

The Company recognizes 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.

Payment terms

The Company’s payment terms vary by the type and location of customer and the products or services offered.

Payment from customers is generally required in a term ranging from 30 to 45 days from date of shipment or satisfaction of the performance obligation with no discounts for early payment.

Occasionally the Company provides extended payment terms or financing arrangements to customers.

Disaggregated revenue

When disaggregating revenue, the Company considered all of the economic factors that may affect its revenues.

The following tables disaggregate the Company's revenue from contracts with customers based on their location by revenue type:

December 31, 2021

(in thousands)

Product revenues:

Consumable and other products

Service and other revenues:

Service-type warranties

Research services

Other services

Collaboration and license revenue:

Collaboration and license revenue

December 31, 2020

(in thousands)

Product revenues:

Consumable and other products

Service and other revenues:

Service-type warranties

Research services

Other services

Collaboration and license revenue:

Collaboration and license revenue

December 31, 2019

(in thousands)

Product revenues:

Consumable and other products

Service and other revenues:

Service-type warranties

Research services

Other services

Collaboration and license revenue:

Collaboration and license revenue

The Company’s contracts with customers may include promises to transfer multiple products and services to a customer.

The Company combines any performance obligations that are immaterial with one or more other performance obligations that are material to the contract.

For arrangements with multiple performance obligations, the Company allocates the contract transaction price, including discounts, to each performance obligation based on its relative standalone selling price.

Judgment is required to determine the standalone selling price for each distinct performance obligation.

The Company determines standalone selling prices based on prices charged to customers in observable transactions, and uses a range of amounts to estimate standalone selling prices for each performance obligation.

The Company may have more than one range of standalone selling price for certain products and services based on the pricing for different customer classes.

Variable consideration in the Company’s contracts primarily relates to (i) sales- and usage-based royalties related to the license of intellectual property in collaboration and license contracts and (ii) certain non-fixed fee research services contracts.

The aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied or that are partially satisfied as of December 31, 2021 is $ 7.5 million.

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.

Changes in deferred revenue from contracts with customers were as follows (in thousands):

Year Ended December 31, 2021

Balance at December 31, 2020

Deferral of revenue

Recognition of deferred revenue

Balance at December 31, 2021

Costs to obtain a contract

The Company’s sales commissions are generally based on revenues of the Company.

The Company has determined that certain commissions paid under its sales incentive programs meet the requirements to be capitalized as they are incremental and would not have occurred absent a customer contract.

The changes in the balance of costs to obtain a contract are as follows (in thousands):

Year Ended December 31, 2021

Balance at December 31, 2020

Deferral of costs to obtain a contract

Recognition of costs to obtain a contract

Balance at December 31, 2021

The Company has 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 classifies the expense as a component of cost of goods sold and selling, general and administrative expense over the estimated life of the contract.

The Company considers potential impairment in these amounts each period.

ASC 606 provides entities with certain practical expedients and accounting policy elections to minimize the cost and burden of adoption.

The Company will exclude from its transaction price any amounts collected from customers related to sales and other similar taxes.

The Company has elected to account for 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.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with original expected length of one year or less and (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed.

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.

The Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less.

None of the Company’s contracts contained a significant financing component for the years ended December 31, 2021, 2020 and 2019.

Grant revenue

The Company recognizes grant revenue as it performs services under the arrangement when the funding is committed.

Revenues and related research and development expenses are presented gross in the consolidated statements of operations as the Company has determined it is the primary obligor under the arrangement relative to the research and development services.

Accounting for grants does not fall under ASC 606, as the grantor will not benefit directly from the Company’s expansion or product development.

As there is no authoritative guidance under U.S.

GAAP on accounting for government assistance to for-profit business entities, the Company has accounted for grants by analogy to International Accounting Standards (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance (IAS 20).

Grants to the Company contain both monetary amounts granted related to assets and monetary amounts granted related to income, which are grants other than those related to assets.

The grants related to assets are for the expansion and increase of manufacturing capacity.

The grants related to income are for additional research and development, as well as other non-asset related scale up costs.

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.

The Company has elected to record grants related to assets as a deduction in calculating the carrying value of the asset.

Under IAS 20, grants related to income are presented as part of the consolidated statements of operations, either separately or under a general heading.

Both methods are acceptable under IAS 20.

The Company has elected to record

grants related to income separately on the consolidated statements of operations as grant revenue.

The related expenses are recorded within operating expenses.

On June 22, 2020, the Company entered into a workplan 1 award (WP1) with the National Institute of Health (NIH), under the Rapid Acceleration of Diagnostics (RADx) program to assess the feasibility of a novel SARS-CoV-2 antigen detection test using the Company’s Simoa technology.

WP1 was complete as of December 31, 2020.

On September 29, 2020, the Company entered into WP2 with the NIH under its RADx program.

The contract, which has a total award value of $ 18.2 million, accelerates the continued development, scale-up, and deployment of the novel SARS-CoV-2 antigen detection test using the Company’s Simoa technology.

The contract provides funding to expand assay kit manufacturing capacity and commercial deployment readiness.

Release of the $ 18.2 million of funding under WP2 is based on the achievement of certain milestones.

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.

As of December 31, 2021, the Company had received $ 17.7 million out of the full $ 18.2 million under WP2 .

During the year ended December 31, 2021, the Company recognized $ 5.2 million in grant revenue and incurred $ 3.4 million in research and development expense related to WP2.

During the year ended December 31, 2020, the Company recognized $ 4.4 million in grant revenue and incurred $ 2.6 million in research and development expense related to WP2.

The following table summarizes the cumulative activity under WP2 as of December 31, 2021 and December 31, 2020 (in thousands):

December 31, 2021

December 31, 2020

Total grant revenue from research and development activities

Total proceeds used for assets

Total deferred proceeds for assets

Total deferred grant revenue

Total recognized

Total amount accrued

Total cash received

Total proceeds received

Total proceeds reasonably assured

Total WP2 grant amount

Business combinations

Under the acquisition method of accounting, the Company generally recognizes the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition.

The fair values recognized, defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants, are based on estimates and assumptions determined by management.

The excess consideration over the aggregate value of acquired tangible and intangible assets, net of liabilities recognized, is recorded as goodwill.

These valuations require significant estimates and assumptions, especially with respect to intangible assets.

The Company typically uses the discounted cash flow method to value acquired intangible assets.

This method requires significant management judgment to forecast future operating results and establish residual growth rates and discount factors.

The estimates used to value and amortize intangible assets are consistent with the plans and estimates that are used to manage the business and are based on available historical information.

If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, the Company could experience impairment charges.

In addition, the Company has estimated the

economic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense.

If estimates of the economic lives change, depreciation or amortization expenses could be accelerated or slowed.

Cost of revenue

Cost of product revenue consists of raw materials, parts costs and associated freight, shipping and handling costs, contract manufacturer costs, personnel costs, yield loss, in-license payments and royalties, stock-based compensation, other direct costs and overhead.

Cost of service and other revenue consists of personnel, facility costs associated with operating the Accelerator Laboratory on behalf of the customers, costs related to instrument maintenance and servicing equipment at customer sites, other direct and overhead.

Cost of goods sold for products consists of HD-X, HD-1, and SR-X instrument costs from the manufacturer and related reagents and other consumables.

Cost of goods sold for SP-X consists of costs based on the internal assembly of this item.

Raw material part costs;

inbound freight, shipping and handling costs associated with purchased goods;

contract manufacturer costs;

personnel costs;

overhead and other direct costs related to those sales are classified as cost of goods sold for products.

Cost of service and other revenue consists of raw materials, personnel costs, royalties as well as overhead and other direct 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.

Cost of license revenue consists of license fees that are the direct results of cash payments received related to license agreements.

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Selling, general, and administrative expenses

Selling, general, and administrative expenses are primarily composed of compensation and benefits associated with sales and marketing, finance, human resources, and other administrative personnel, outside marketing, advertising, allocated facilities costs, legal expenses, and other general and administrative costs.

Selling, general and administrative expenses consist primarily of personnel costs for the Company’s sales and marketing, finance, legal, human resources and general management, costs associated with shipping and handling for product sales, other general and administrative costs, as well as professional services costs, such as marketing, advertising, legal and accounting services in addition to allocated overhead costs that include facility and other overhead costs.

The classification of shipping and handling costs for product sales as selling, general, and administrative expenses varies from company to company with some companies recording these as selling, general and administrative expenses and others recording such expenses within costs of goods sold for products.

To the extent the classification of these shipping and handling costs differs from the reporting approach used by other companies, the Company’s gross margins may not be comparable with those reported by such other companies.

Shipping and handling costs for product sales included within selling, general and administrative expenses were $ 7.2 million, $ 6.9 million and $ 4.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Net loss per share

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For purposes of the diluted net loss per share calculations, unvested restricted common stock, restricted stock units, common stock options, and warrants are considered to be potentially dilutive securities, but are excluded from the diluted net loss per share because their effect would be anti-dilutive and therefore basic and diluted net loss per share were the same for all periods presented.

The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because to do so would be anti-dilutive (in common stock equivalent shares):

Year Ended December 31,

Unvested restricted common stock and restricted stock units

Outstanding stock options

Outstanding common stock warrants

Cash and cash equivalents

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Restricted cash and deposits

Restricted cash primarily represents collateral for a letter of credit issued as security for the lease for the Company’s headquarters in Billerica, Massachusetts, and additional space in Bedford, Massachusetts, and to secure the Company’s corporate credit card program.

Company’s corporate credit card program.

The restricted cash is long term in nature as the Company will not have access to the funds until more than one year from December 31, 2022.

Allowance for credit losses

The Company is exposed to credit losses primarily through sales of products and services.

The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of customers’ trade accounts receivable.

Due to the short-term nature of such receivables, the estimated accounts receivable that may not be collected is based on aging of the accounts receivable balances.

Customers are assessed for credit worthiness upfront through a credit review, which includes assessment based on the Company’s analysis of customers’ financial statements when a credit rating is not available.

The Company evaluates contract terms and conditions, country, and political risk, and may require prepayment to mitigate risk of loss.

Specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default.

The Company monitors changes to the receivables balance on a timely basis, and balances are written off as they are determined to be uncollectable after all collection efforts have been exhausted.

Inventory is stated at the lower of cost or market on a first-in, first-out (FIFO) basis.

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Expenditures for maintenance and repairs are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.

The Company reviews its property and equipment whenever events or changes in circumstances indicate that the carrying value of certain assets might not be recoverable and recognizes an impairment

loss when it is probable that an asset’s realizable value is less than the carrying value.

To date, no such impairment losses have been recorded.

The Company reviews its property and equipment whenever events or changes in circumstances indicate that the carrying value of certain assets might not be recoverable and recognizes an impairment loss when it is probable that an asset’s realizable value is less than the carrying value.

The Company recorded impairment expenses during the year-end December 31, 2022.

Refer to Note 7 for additional details.

Depreciation is calculated based upon the following estimated useful lives of the assets:

4 unchanged sentences

Shorter of the useful life of the asset or the remaining term of the lease

The Company accounts for leases in accordance with ASC Topic 842, Leases (ASC 842), which was adopted on January 1, 2020, using the optional transition method allowing entities to recognize a cumulative effect adjustment to the opening balance sheet without restating comparative prior periods presented.

At adoption the Company elected the package of practical expedients which was applied consistently to all of its leases at the transition date:

i) the Company did not reassess whether any expired or existing contracts are or contain leases;

ii) the Company 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);

and iii) the Company did not reassess initial direct costs for any existing leases.

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.

The Company accounts for leases in accordance with ASC Topic 842, Leases (ASC 842), which was adopted on January 1, 2020.

ASC 842 requires a lessee to recognize assets and liabilities on the balance sheet for most leases.

Lessees are differentiated between finance leases and operating leases, and classification impacts expense recognition.

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Software development costs

The Company develops and modifies software related to the operation of the instrument.

The Company develops and modifies software related to the operation of some of its instruments.

Software development costs are expensed as incurred until the point the Company establishes technological feasibility.

Based on the Company’s product development process, technological feasibility is established upon the completion of a working model.

the Company’s product development process, technological feasibility is established upon the completion of a working model.

The Company does not incur material costs between the completion of the working model and the point at which the product is ready for release.

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Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances.

Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

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The carrying amount reflected on the balance sheets for cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities approximated their fair values, due to the short-term nature of these instruments.

The carrying value of the long-term debt approximates its fair value as the debt arrangement is based on interest rates the Company believes it could obtain for borrowings with similar terms.

Fair value measurements are as follows (in thousands):

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Financial assets

Cash equivalents

Cash equivalents - money market funds

Quoted prices

2 unchanged sentences

Financial assets

Cash equivalents

Cash equivalents - money market funds

The Company provides a one-year warranty and maintenance service related to its instruments and sells extended warranty contracts for additional periods.

1 unchanged sentence

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns.

Under this method,

deferred tax assets and liabilities are determined based on differences between the consolidated financial statement carrying amounts and the tax bases of the assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse.

Under this method, deferred tax assets and liabilities are determined based on differences between the consolidated financial statement carrying amounts and the tax bases of the assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse.

A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

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Customers outside the United States represented 41 % and 39 % of the Company’s gross trade accounts receivable balance as of December 31, 2022, and 2021, respectively.

As of December 31, 2021, one customer represented 18 % of the Company’s aggregate accounts receivable.

As of December 31, 2020, one customer represented 19 % of the Company’s aggregate accounts receivable.

During the years ended December 31, 2021 and 2019, no individual customer represented 10 % of the Company’s total revenue.

During the year ended December 31, 2020, one company represented 13 % of the Company’s total revenue.

For the year ended December 31, 2022, one customer of approximately $ 13.7 million revenue accounted for 13 % of the Company’s total revenue.

For the year ended December 31, 2021, no customers individually accounted for more than 10 % of the Company’s total revenue.

Stock-based compensation

The Company accounts for stock-based compensation awards in accordance with ASC 718, Compensation—Stock Compensation (ASC 718).

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.

Stock-based compensation awards have historically consisted of stock options and restricted stock.

Prior to the adoption of Accounting Standards Update (ASU) No.

2018-07, Compensation - Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07), the measurement date for non-employee awards was generally the date the services were completed, resulting in financial reporting period adjustments to stock-based compensation during the vesting period for changes in the fair value of the awards.

The Company adopted ASU 2018-07 on January 1, 2020.

After the adoption of ASU 2018-07, the measurement date for non-employee awards is the date of grant without changes in the fair value of the award.

The Company generally recognizes stock-based payments to employees and non-employees based on their grant date fair values.

Stock-based compensation awards have historically consisted of stock

options and restricted stock units.

Stock-based compensation costs for employees are recognized as expense over the requisite service period, which is generally the vesting period of the respective awards.

Stock-based compensation costs for non-employees are recognized as expense over the vesting period on a straight-line basis.

2 unchanged sentences

The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the 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.

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:

11 unchanged sentences

Weighted-average grant date fair value

Expected volatility was calculated based a proportional weighting of reported volatility data for a representative group of guideline publicly traded companies for which historical information was available, as well as the Company’s stock.

The Company uses its historical volatility and implied volatility as a basis to estimate expected volatility in the Company’s valuation of stock options.

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

2 unchanged sentences

The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among its employee population.

The Company uses the simplified method due to the lack of historical exercise data and the plain nature of the stock options.

The Company used the simplified method due to the lack of historical exercise data and the plain nature of the stock options.

The Company uses the remaining contractual term for the expected term of non-employee awards.

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2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which is intended to simplify various areas related to ASC 740, Income Taxes (ASC 740).

ASU 2019-12 removes certain exceptions for performing intra period tax allocations and calculating income taxes in interim periods.

12 removes certain exceptions for performing intra period tax allocations and calculating income taxes in interim periods.

The guidance also simplifies the accounting for transactions that result in a step-up in the tax basis of goodwill and the effect of enacted changes in tax laws or rates in interim periods.

1 unchanged sentence

The adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements.

The Company recognizes revenue when a customer obtains control of a promised good or service.

The amount of revenue recognized reflects consideration that the Company expects 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.

The Company’s customer base includes several of the largest biopharmaceutical companies, academic research organizations and distributors who serve certain geographic markets.

Product revenue

The Company’s products are composed of analyzer instruments, assay kits and other consumables such as reagents.

Products are sold directly to biopharmaceutical and academic research organizations or are sold through distributors in EMEA and Asia Pacific regions.

Revenues from the sale of products are recognized at a point in time when the Company transfers control of the product to the customer, which is generally upon installation for instruments sold to direct customers, and based upon shipping terms for assay kits and other consumables.

Revenue for instruments sold to distributors is generally recognized based upon shipping terms (either upon shipment or delivery).

Service and other revenue

Service revenues are composed of contract research services, initial implied one-year service-type warranties, extended services contracts and other services such as training.

Contract research services are provided through the Company’s Accelerator Laboratory and generally consist of fixed fee contracts.

Revenues from service-type warranties are recognized ratably over the contract service period.

For contract research services recognized over time, the Company uses the output method to measure the progress toward the complete satisfaction of the performance obligations.

Revenues from other services are immaterial.

During the first quarter of 2022, the Company entered into a Master Collaboration Agreement with Eli Lilly and Company (Lilly) establishing a framework for future projects focused on the development of Simoa immunoassays (the Lilly Collaboration Agreement).

The Company also entered into a Statement of Work under the Lilly Collaboration Agreement to perform assay research and development services within the field of Alzheimer’s disease.

In connection with the Lilly Collaboration Agreement, the Company received a non-refundable up-front payment of $ 5.0 million during the first quarter of 2022, and under the Statement of Work received $ 1.5 million per calendar quarter during 2022, beginning with the first quarter of 2022.

The revenue has been recognized over a one-year period.

The Lilly Collaboration Agreement automatically renews on a quarterly basis unless Lilly provides 100 days ’ termination notice.

Concurrent with the execution of the Lilly Collaboration Agreement, the Company entered into a Technology License Agreement (the Lilly License) under which Lilly granted to the Company a non-exclusive license to Lilly’s proprietary P-tau217 antibody technology for potential near-term use in research use only products and services and future in vitro diagnostics applications within the field of Alzheimer’s disease.

In consideration of the license, the Company paid an upfront fee, is required to make milestone payments based on the achievement of predetermined regulatory and commercial events, and will pay a royalty on net sales of licensed products.

The Company concluded that the Lilly Collaboration Agreement (including the Statement of Work) and the Lilly License represented a single contract with a customer and we are accounting for the agreements as service revenue recognized over time as the services are delivered.

The transaction price for the Lilly Collaboration Agreement is $ 10.9 million.

Contingent amounts due to Lilly, under the Lilly License, represent variable consideration payable to a customer and will be recognized as reductions to service revenue up to the amount of the transaction price recognized, when probable.

The Company is utilizing an input method to measure the delivery of services by calculating costs incurred at each period end relative to total costs expected to be incurred.

During the year ended December 31, 2022, the Company recognized approximately $ 10.9 million of revenue from the Lilly Collaboration Agreement.

Collaboration and license revenue

The Company may enter into agreements to license the intellectual property and know-how associated with its instruments and certain antibodies in exchange for license fees and future royalties (as described below).

Payment terms

The Company’s payment terms vary by the type and location of the customer and the products or services offered.

Payment from customers is generally required in a term ranging from 30 to 45 days from date of shipment or satisfaction of the performance obligation.

The Company does not provide financing arrangements to its customers.

Disaggregated revenue

When disaggregating revenue, the Company considered all of the economic factors that may affect its revenues.

The following tables disaggregate the Company’s revenue from contracts with customers by revenue type (in thousands):

December 31, 2022

(in thousands)

North America

Product revenues:

Consumable and other products

Service and other revenues:

Service-type warranties

Research services

Other services

Collaboration and license revenue:

Collaboration and license revenue

December 31, 2021

(in thousands)

North America

Product revenues:

Consumable and other products

Service and other revenues:

Service-type warranties

Research services

Other services

Collaboration and license revenue:

Collaboration and license revenue

December 31, 2020

(in thousands)

North America

Product revenues:

Consumable and other products

Service and other revenues:

Service-type warranties

Research services

Other services

Collaboration and license revenue:

Collaboration and license revenue

The Company’s contracts with customers may include promises to transfer multiple products and services to a customer.

The Company combines any performance obligations that are immaterial with one or more other performance obligations that are material to the contract.

Judgment is required to determine the standalone selling price for each distinct performance obligation.

The Company determines standalone selling prices based on prices charged to customers in observable transactions and uses a range of amounts to estimate standalone selling prices for each performance obligation.

The Company may have more than one range of standalone selling price for certain products and services based on the pricing for different customer classes.

Accounting Standard Codification (ASC) Topic 606, Revenue from Contracts with Customers (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- and usage-based royalty will be recognized in the period the underlying transaction occurs.

The Company recognizes revenue from sales- and usage-based royalty revenue at the later of when the sale or usage occurs and the satisfaction or partial satisfaction of the performance obligation to which the royalty has been allocated.

Changes in deferred revenue from contracts with customers were as follows (in thousands):

Year Ended December 31, 2022

Balance at December 31, 2021

Deferral of revenue

Recognition of deferred revenue

Balance at December 31, 2022

The aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied or that are partially satisfied as of December 31, 2022 is $ 10.1 million.

Of the performance obligations not yet satisfied or that are partially satisfied, $ 8.6 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 $ 10.1 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.

For further discussion, refer to Note 5.

Costs to obtain a contract

The Company’s sales commissions are generally based on bookings of the Company.

The change in the balance of costs to obtain a contract are as follows (in thousands):

Balance at January 1

Deferral of costs to obtain a contract

Recognition of costs to obtain a contract

Balance at December 31

The Company has classified the balance of capitalized costs to obtain a contract as a component of prepaid expenses and other current assets and will subsequently amortize the expense as a component of cost of goods sold and selling, general, and administrative expense over the estimated life of the contract.

The Company considers potential impairment in these amounts each period.

ASC 606 provides entities with certain practical expedients and accounting policy elections to minimize the cost and burden of adoption.

The Company will exclude from its transaction price any amounts collected from customers related to sales and other similar taxes.

None of the Company’s contracts contained a significant financing component as of December 31, 2022, and 2021, respectively.

The Company has 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

The Company recognizes grant revenue as the Company performs services under the arrangement when the funding is committed.

Accounting for grants does not fall under ASC 606, as the grantor will not benefit directly from the Company’s expansion or product development.

As there is no authoritative guidance under U.S.

GAAP on accounting for grants to for profit business entities from government entities, the Company has accounted for grants obtained with the National Institute of Health (NIH) under its Rapid Acceleration of Diagnostics (RADx) program by analogy to International Accounting Standards Topic 20, Accounting for Government Grants and Disclosure of Government Assistance (IAS 20) The Company accounts for grants from the Alzheimer’s Drug Discovery Foundation (ADDF) under ASC Topic 958, Not for-Profit Entities (ASC 958).

Both methods are acceptable under IAS 20.

The Company has elected to record grants related to assets as a deduction in calculating the carrying value of the asset.

Under IAS 20, grants related to income are presented as part of the consolidated statements of operations, either separately or under a general heading.

Both methods are acceptable under IAS 20.

The Company has elected to record grants related to income separately on the consolidated statements of operations as grant revenue.

The related expenses are recorded within operating expenses.

Under ASC 958, grants related to income are presented as part of the consolidated statements of operations, either separately or under a general heading.

Both methods are acceptable under ASC 958.

The Company has elected to record grants related to income separately on the consolidated statements of operations as grant revenue.

The related expenses are recorded within operating expenses.

On September 29, 2020, the Company entered into WP2 with the NIH under its RADx program.

The contract, which had a total award value of $ 18.2 million, accelerated the continued development, scale-up, and deployment of the novel SARS-CoV-2 antigen detection test using the Company’s Simoa technology.

The contract provided funding to expand assay kit manufacturing capacity and commercial deployment readiness.

Release of the $ 18.2 million of funding under WP2 was based on the achievement of certain milestones.

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.

The Company has received the full $ 18.2 million under WP2.

During the year ended December 31, 2022, the Company recognized no grant revenue and incurred no research and development expense related to WP2.

During the year ended December 31, 2021, the Company recognized $ 5.2 million in grant revenue and incurred $ 3.4 million in research and development expense related to WP2.

During the year ended December 31, 2020, the Company recognized $ 4.4 million in grant revenue and incurred $ 2.6 million in research and development expense related to WP2.

The RADx Grant contains both monetary amounts granted related to assets and monetary amounts granted related to income, which are grants other than those related to assets.

The grants related to assets are for the expansion and increase of manufacturing capacity.

The grants related to income are for additional research and development, as well as other non-asset related scale up costs.

The following table summarizes the cumulative activity under the RADx Grant (in thousands):

December 31, 2022

December 31, 2021

December 31, 2020

Total grant revenue from research and development activities

Total proceeds used for assets

Total deferred proceeds for assets

Total deferred grant revenue

Total recognized

Total amount accrued

Total cash received

Total proceeds received

Total proceeds reasonably assured

Total RADx Grant amount

On March 24, 2022, the Company entered into a contract with the Alzheimer’s Drug Discovery Foundation (ADDF) (the ADDF Grant).

ADDF is a charitable venture philanthropy entity that has granted the Company funding in support of certain activities for the development of an in vitro diagnostic (IVD) test for early detection of Alzheimer's disease.

The ADDF Grant, which has a total funding value of $ 2.3 million, restricts the Company’s use of the granted funds to be used solely for activities related to the Alzheimer’s diagnostic test development project.

Contract funding is subject to achievement of these pre-defined milestones and the contract period runs through June 2024.

The Company recognizes revenue over time as the related services are performed.

As of December 31, 2022, the Company had received $ 1.3 million of the total funding value of $ 2.3 million under the ADDF Grant.

During the year ended December 31, 2022, the Company recognized $ 0.6 million in grant revenue and incurred $ 0.6 million in research and development expense related to the ADDF Grant.

No such activities occurred in the years ended December 31, 2021 and 2020.

Allowance for credit losses

The Company is exposed to credit losses primarily through sales of products and services.

Due to the short-term nature of such receivables, the estimated accounts receivable that may not be collected is based on aging of the accounts receivable balances.

The Company evaluates contract terms and conditions, country, and political risk, and may require prepayment to mitigate risk of loss.

Specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default.

The Company monitors changes to the receivables balance on a timely basis, and balances are written off as they are determined to be uncollectable after all collection efforts have been exhausted.

Activity related to the allowance for credit losses was as follows (in thousands):

Balance at January 1

Provision charges

Balance at December 31

Collaboration and license arrangements

The Company has entered into certain licenses with other companies for use of the Company’s technology.

These licenses have royalty components which the Company earns and recognizes as collaboration and license revenue throughout the year.

As of December 31, 2022 and 2021, the Company had $ 0.5 million of deferred revenue related to ongoing negotiations with a diagnostics company.

Abbott Laboratories

On September 29, 2020, the Company entered into a Non-Exclusive License Agreement (the Abbott License Agreement) with Abbott.

Pursuant to the terms of the Abbott License Agreement, the Company granted Abbott a non-exclusive, worldwide, royalty-bearing license, without the right to sublicense, under the Company’s bead-based single molecule detection patents (Licensed Patents) in the field of in vitro diagnostics.

Abbott has paid the Company an initial license fee of $ 10.0 million in connection with the execution of the Abbott License Agreement, which was recognized as license revenue for the year ended December 31, 2020.

Abbott has also agreed to pay the Company milestone fees subject to the achievement by Abbott of certain development, regulatory and commercialization milestones and low single-digit royalties on net sales of licensed products.

The Abbott License Agreement includes customary representations and warranties, covenants and indemnification obligations for a transaction of this nature.

The Abbot License Agreement became effective upon signing and will continue until expiration of the last-to-expire Licensed Patent, or the agreement is earlier terminated.

Under the terms of the Abbott License Agreement, the Company and Abbott each have the right to terminate the agreement for uncured material breach by, or insolvency of, the other party.

Abbott may also terminate the Abbott License Agreement at any time without cause upon 60 days ’ notice.

During the years ended December 31, 2022 and 2021, the Company recognized no revenue, respectively, within collaboration and license revenue related to the initial license fee under the Abbott License Agreement.

Inventory consists of the following (in thousands):

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As of December 31, 2021, the laboratory and manufacturing equipment balance includes $ 3.9 million of cost and $ 1.5 million of accumulated depreciation related to these instruments.

For the year ended December 31, 2022, the Company recorded $ 4.3 million of impairment expense to leasehold improvements and other assets associated with the Bedford, Massachusetts leased office and laboratory space not being utilized by the Company.

The Company decided not to utilize the space as part of the Restructuring Plan and intends to sublease the vacant space to recover a portion of the total cost.

The Company’s decision to not utilize, and sublease, the leased asset triggered an impairment event.

The impairment testing deemed all assets associated with the leased assets as one asset group.

The impairment analysis evaluated the present value of net cash flows under the original lease and the estimated cash flows under the sublease to identify the impairment amount.

The impairment assessment considered all industry and economic factors such as rental rates, interest rates and recent real estate activities to estimate the net cash flows analysis and impairment amount.

The Company recorded $ 1.1 million of impairment expense to Computers and software for the year ended December 31, 2022.

A change in the scope of the intended use of these assets was considered to be the triggering event for the impairment assessment and expense.

No such impairment expenses were recognized for the years ended December 31, 2021 and 2020.

Other accrued expenses

1 unchanged sentence

As of December 31,

Accrued inventory purchases

Accrued property and equipment purchases

Accrued royalties

Accrued professional services

Accrued development costs

Accrued tax liabilities

Accrued other

Professional and outside services

Tax liabilities

Total accrued expenses

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Total loss before income taxes

The following table summarizes income tax benefit (in thousands):

The following table summarizes income tax (expense) benefit (in thousands):

Year Ended December 31,

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Total deferred income tax benefit

Total income tax benefit

Total income tax (expense) benefit

A reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

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Change in valuation allowance

Impairment of goodwill

Effective income tax rate

The effective income tax rate of differs from the U.S.

The effective income tax rate differs from the U.S.

federal statutory rate of 21.0 % primarily as a result of the valuation allowance maintained against the Company’s net deferred tax assets.

During 2019, the Company acquired Uman, a Swedish entity.

The Company analyzed the transaction from an income tax perspective and found that there was no tax deductible goodwill or other identifiable intangible assets related to the transaction.

Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting and the amounts used for income tax purposes.

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Stock-based compensation

Capitalized R&D Costs

Lease liability

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Other deferred tax liabilities

Net deferred tax liabilities

Net deferred tax (liability) asset

The Company’s change in its valuation allowance account with respect to the deferred tax asset is as follows (in thousands):

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Balance, end of year

The valuation allowance increased during the year ended December 31, 2021 as compared to the year ended December 31, 2020, primarily as a result of the U.S.

operating losses incurred, stock-based compensation windfall benefits and research and development tax credit carryforwards generated during the year.

The valuation allowance increased during the year ended December 31, 2022 primarily as a result of the U.S.

operating losses incurred and research and development tax credit carryforwards generated during the year.

In determining the need for a valuation allowance, the Company has given consideration to the cumulative book income and loss positions of each of its entities as well as its worldwide cumulative book loss position.

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As of December 31, 2022, the Company had U.S.

federal tax credit carryforwards of approximately $ 5.1 million that expire at various dates

through 2041.

federal tax credit carryforwards of approximately $ 5.8 million that expire at various dates through 2042.

As of December 31, 2022, the Company had U.S.

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federal and state taxable income and taxes may be subject to significant limitations.

The Coronavirus Aid, Relief and Economic Security Act (the CARES Act) was enacted in the United States on March 27, 2020.

The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19.

While the CARES Act provides extensive tax changes in response to the COVID-19 pandemic, the provisions do not have a significant impact on the Company’s financial results.

In July 2021, the Company filed for a $ 2.1 million refund under the CARES Act relating to an employee retention credit (ERC).

The ERC is a refundable payroll tax credit.

The Company expects receipt of the ERC refund during the first half of 2022, and this amount is included in prepaid expenses and other current assets on the consolidated balance sheet as of December 31, 2021.

The Company accounts for uncertain tax positions using a more likely than not threshold for recognizing uncertain tax positions.

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At December 31, 2022, the Company is generally no longer subject to examination by taxing authorities in the United States for years prior to 2019.

However, NOLs and credits in the United States may be subject to adjustments by taxing authorities in future years in which they are utilized.

However, NOLs and tax credits in the United States may be subject to adjustments by taxing authorities in future years in which they are utilized.

The Company’s foreign subsidiaries remain open to examination by taxing authorities from 2013 onward.

As of December 31, 2022, the Company’s foreign subsidiaries had immaterial undistributed earnings and the tax payable on the earnings that are indefinitely reinvested would be immaterial.

Stockholders’ equity

Stock-Based Compensation

Stock-based compensation

Stock-based compensation expense for all stock awards consists of the following (in thousands):

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In June 2007, the Company adopted the 2007 Stock Option and Grant Plan (the 2007 Plan), under which it could grant incentive stock options, non-qualified options, restricted stock, and stock grants.

In connection with the completion of the IPO, the Company terminated the 2007 Plan.

As of December 31, 2021, 709,772 shares were outstanding.

No shares were available for future grant under the 2007 Plan.

In connection with the completion of the Company’s IPO, the Company terminated the 2007 Plan.

As of December 31, 2022, 207,464 shares were outstanding under the 2007 Plan, and no shares are available for future grant under the 2007 Plan.

In December 2017, the Company adopted the 2017 Employee, Director and Consultant Equity Incentive Plan (the 2017 Plan), under which it may grant incentive stock options, non-qualified stock options, restricted stock, and other stock-based awards.

1 unchanged sentence

As of December 31, 2022, 3,168,278 shares were outstanding and there were 1,847,643 shares available for grant under the 2017 Plan.

In addition, the 2017 Plan contains an "evergreen"

provision, which allows for an annual increase in the number of shares of common stock available for issuance under the 2017 Plan on the first day of each fiscal year during the period beginning in fiscal year 2019 and ending in fiscal year 2027.

In addition, the 2017 Plan contains an “evergreen” provision, which allows for an annual increase in the number of shares of common stock available for issuance under the 2017 Plan on the first day of each fiscal year during the period beginning in fiscal year 2019 and ending in fiscal year 2027.

The annual increase in the number of shares shall be equal to the lowest of:

4 % of the number of shares of common stock outstanding as of such date;

and an amount determined by the Company’s Board of Directors or Compensation Committee.

On January 3, 2022, the number of shares of common stock available for issuance under the 2017 plan was automatically increased by 1,469,428 shares.

(i) 4 % of the number of shares of common stock outstanding as of such date and (ii) an amount determined by the Company’s Board of Directors or Compensation Committee.

On January 3, 2023, the number of shares of common stock available for issuance under the 2017 plan was increased by 1,488,696 shares in accordance with the 2017 Plan’s evergreen provision.

In December 2017, the Company adopted the 2017 Employee Stock Purchase Plan (the 2017 ESPP).

As December 31, 2019, the 2017 ESPP allowed for the issuance of up to 612,572 shares of common stock.

As of December 31, 2019, the 2017 ESPP allowed for the issuance of up to 612,572 shares of common stock.

As of December 31, 2022, 1,447,467 shares were available for grant under the 2017 ESPP.

In addition, the 2017 ESPP contains an "evergreen"

provision, which allows for an increase on the first day of each fiscal year beginning with fiscal year 2018.

In addition, the 2017 ESPP contains an “evergreen” provision, which allows for an increase on the first day of each fiscal year beginning with fiscal year 2018.

The increase in the number of shares shall be equal to the lowest of:

1 % of the number of shares of common stock outstanding on the last day of the immediately preceding fiscal year or an amount determined by the Company’s Board of Directors or Compensation Committee.

The number of shares available for grant under the 2017 ESPP increased by 367,357 shares on January 3, 2022 due to this provision.

(i) 1 % of the number of shares of common stock outstanding on the last day of the immediately preceding fiscal year and (ii) an amount determined by the Company’s Board of Directors or Compensation Committee.

On January 3, 2023, the number of shares of common stock available for issuance under the 2017 ESPP was increased by 372,174 shares in accordance with the 2017 ESPP’s evergreen provision.

The 2017 ESPP provides for six-month option periods commencing on March 1 and ending August 31 and commencing September 1 and ending February 28 of each calendar year.

The following table summarizes the Company’s outstanding warrants:

Exercise Price

As of December 31, 2020

As of December 31, 2021

Stock options

Under the 2007 and 2017 Plans, stock options may not be granted with exercise prices of less than fair market value on the date of the grant.

Under the 2017 Plan, stock options may not be granted with exercise prices of less than fair market value on the date of the grant.

Options generally vest ratably over a four-year period with 25 % vesting on the first anniversary and the remaining 75 % vesting ratably on a monthly basis over the remaining three years .

2 unchanged sentences

Weighted-average

Remaining contractual

intrinsic value

Aggregate intrinsic value

exercise price

2 unchanged sentences

Outstanding at December 31, 2021

( 1,280,825 )

Outstanding at December 31, 2022

1 unchanged sentence

Vested and expected to vest at December 31, 2022

Restricted stock awards

In January 2015, the Company issued 781,060 shares of restricted common stock to an executive of the Company under the 2007 Plan.

The majority of these shares were issued subject to a four-year vesting schedule with 25 % vesting on the first anniversary and the remaining vesting 75 % ratably on a monthly basis over the remaining three years , while another portion was issued subject to performance-based vesting.

The vesting of performance-based awards is dependent upon achievement of specified financial targets of the Company.

The majority of the performance criteria were achieved during the years ended December 31, 2016 and 2015 and the remaining unvested awards with performance conditions are not material.

No restricted stock awards were granted during the years ended December 31, 2021, 2020, or 2019.

As of December 31, 2021, the Company had 39,803 shares of unvested restricted common stock with a weighted average grant date fair value of $ 3.12 per share.

Restricted stock units

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Expected to convert at December 31, 2022

The Company is a lessee under leases of offices, lab spaces, and certain office equipment.

Some of the Company’s leases include options to extend the lease, and these options are included in the lease term to the extent they are reasonably certain to be exercised.

900 Middlesex Turnpike Lease

The Company’s primary lease is the 900 Middlesex Turnpike Lease.

On October 2, 2018, the Company entered into a 137 -month operating lease for the Company’s new headquarters in Billerica, Massachusetts.

The lease is for approximately 92,000 square feet of office and laboratory space and commenced on April 1, 2019.

The lease contains a period of free rent and escalating monthly rent payments.

As part of the lease, the Company was required to enter into a $ 1.0 million Letter of Credit drawable by the lessor under specifically outlined conditions, which will be subsequently reduced throughout the lease term.

Pursuant to a work letter entered into in connection with the 900 Middlesex Turnpike Lease, the landlord contributed an aggregate of $ 8.2 million toward the cost of construction and tenant improvements for the building.

Under the lease, the Company has the option to extend the lease for two successive five-year terms, and the renewal options are not reasonably certain to be exercised.

In applying the ASC 842 transition guidance, the 900 Middlesex Turnpike Lease remained classified as an operating lease and the Company recorded ROU assets of $ 12.2 million and lease liability of $ 22.7 million on the effective date.

The difference between the ROU and the lease liability was driven by the Company derecognizing deferred rent of $ 3.0 million and the lease obligation incentive of $ 7.6 million.

The Company is recognizing rent expense on a straight-line basis throughout the remaining term of the leases.

48 Tvistevägen

The Company has multiple leases at 48 Tvistevägen Umeå, Sweden for laboratory spaces, manufacturing spaces, and office space (the Uman leases).

All of these Uman leases have been assessed as operating leases.

In applying the ASC 842 transition guidance, the Uman leases remained classified as operating leases and the Company recorded ROU assets of less than $ 0.1 million and lease liability of less than $ 0.1 million on the effective date.

The Company is recognizing rent expense on a straight-line basis throughout the remaining term of the leases.

Earnings (Loss) Per Share

The following table presents the computation of basic and diluted earnings per share:

Year Ended December 31,

(in thousands, except share and per share data)

Net loss attributable to Quanterix Corporation

Weighted average shares of common stock outstanding, basic and diluted

Net loss per share attributable to Quanterix Corporation, basic and diluted

In periods when the Company is in a net loss position, dilutive securities are excluded from the computation of diluted earnings per share because their inclusion would have an anti-dilutive effect.

Thus, basic net loss per share is the same as diluted net loss per share.

The following common share equivalents have been excluded from the calculation of diluted net loss per share:

Year Ended December 31,

Unvested restricted common stock and restricted stock units

Outstanding stock options

Outstanding common stock warrants

Bedford Lease

On January 28, 2022, the Company executed a lease for 85,800 square feet of office and laboratory space in Bedford, Massachusetts.

The lease commencement date was February 1, 2022, when the Company gained access to the underlying facilities.

The Company has negotiated a tenant improvement allowance with the landlord which will offset a portion of the Company’s construction costs.

The Company has assessed whether improvements made to the premises are landlord-owned or company-owned, with payments made by the Company for landlord-owned assets accounted for as lease incentives.

The initial term of the lease’s payment schedule is eight years and nine months beginning on May 1, 2022.

The Company has the option to extend the lease for two additional five-year periods.

In applying the ASC 842 transition guidance, the Bedford Lease has been assessed as an operating lease and the Company recorded ROU assets of $ 18.2 million and lease liability of $ 23.7 million on the effective date.

The difference between the ROU and the lease liability was driven by the lease obligation incentive of $ 5.5 million.

As part of the Restructuring Plan, the Company decided not to utilize these facilities as part of its own operations and intends to sublease the vacant space to recover a portion of the total cost.

The Company’s decision to not utilize, and sublease, the leased asset triggered an impairment event.

The impairment testing deemed all assets associated with the leased assets as one asset group.

The impairment analysis evaluated the present value of net cash flows under the original lease and the estimated cash flows under the sublease to identify the impairment amount.

For the year ended December 31, 2022, the Company recorded an impairment of $ 12.0 million to the right-of-use assets related to the Bedford facilities.

No such impairment expenses were recognized for the years ended December 31, 2021 and 2020.

Summary of all lease costs recognized under ASC 842

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases:

Total operating lease costs were $ 8.9 million, which includes $ 3.4 million of short term and variable lease costs for the year ended December 31, 2022.

Total operating lease costs were $ 5.4 million and $ 4.8 million for the years ended December 31, 2021 and 2020, respectively.

The fixed lease costs were $ 5.5 million, $ 5.4 million and $ 4.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Short-term lease costs and variable lease costs incurred by the Company for the years ended December 31, 2021 and 2020 were considered immaterial.

Refer to table below for additional information related to operating leases under ASC 842:

Year Ended December 31,

Operating leases (in thousands)

Lease costs (1)

Operating lease costs

Total lease cost

Other information

Operating cash flows used for operating leases

Supplemental balance sheet information:

Weighted average remaining lease term (years)

Weighted average discount rate

(1) Short-term lease costs and variable lease costs incurred by the Company for the year ended December 31, 2021 were considered immaterial.

Rent expense is calculated on a straight-line basis over the term of the lease.

Rent expense recognized under all leases was $ 5.4 million, $ 4.8 million, and $ 3.3 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Note that the Company adopted ASC 842 effective January 1, 2020 using the required modified retrospective approach and utilizing the effective date as its date of initial application.

Therefore, the amount disclosed pertaining to the year ended December 31, 2019 is presented under previous accounting guidance and is not comparable to the amounts recorded in the 2021 and 2020 periods under ASC 842.

Supplemental cash flow information:

Operating cash flows used for operating leases

Future minimum commitments under ASC 842 under the Company’s operating leases in effect at December 31, 2022 were as follows:

2 unchanged sentences

Total lease payments

imputed interest

imputed interest and lease incentive reimbursements

Total operating lease liabilities

Commitments and contingencies

Purchase Commitments

During the year ended December 31, 2022, the Company entered into a supply agreement (the Stratec Supply Agreement) with Stratec Consumables GmBH (Stratec) to order discs used in manufacturing the Simoa HD-X instrument.

As part of the Stratec Supply Agreement, the Company agreed to purchase a total of 375,000 discs to be shipped at various points starting in 2022 and continuing through 2024 at an agreed purchase price per disc.

In 2022, under the Stratec Supply Agreement, Stratec shipped 75,000 discs to the Company.

The Company recorded cost of product revenue related to this shipment of $ 0.5 million for the year ended December 31, 2022.

No such activities existed for the years ended December 31, 2021 and 2020.

Additionally, per the Stratec Supply Agreement, during the years ended December 31, 2023 and 2024, Stratec is required to ship 220,000 and 80,000 discs, respectively, to the Company.

In the years ending December 31, 2023 and 2024, the Company expects to record cost of product revenue of $ 1.6 million and $ 0.6 million, respectively, related to those shipments.

As of December 31, 2022, the Company also has $ 0.9 million of open purchase orders with Stratec.

Other Purchase Commitments

The Company purchases substantial amounts of raw materials for manufacturing operations under annual and multi-year agreements, some of which have minimum quantity requirements.

Additionally, the Company enters into annual agreements for other parts of its operations.

The Company has total purchase commitments for the year ended December 31, 2022, of $ 3.1 million, most of which the Company expects to incur in the year ending December 31, 2023.

License Agreements

4 unchanged sentences

The Company is committed to pay license and maintenance fees, prior to commercialization, in addition to low single digit royalties on direct sales and services and a royalty on sublicense income.

During the years ended December 31, 2021, 2020, and 2019, the Company recorded royalty expense of $ 1.6 million, $ 1.1 million and $ 1.0 million, respectively, in cost of product revenue on the consolidated statements of operations.

During the year ended December 31, 2020, the Company incurred $ 1.0 million in cost of collaboration and license revenue owed to Tufts related to sublicensing certain technology and intellectual property to Abbott Laboratories (Abbott) (see Note 13).

Other licenses

During the year ended December 31, 2012, the Company entered into a license agreement for certain intellectual property with a third party.

The non-exclusive, non-sublicensable third party’s license provides the Company access to certain patents specifically for protein detection and shall be in effect until the expiration of the last licensed patent.

In consideration for these rights, the Company committed to certain license fees, milestone payments, minimum annual royalties and a mid-single digit royalty.

The Company is required to make mid-single digit royalty payments on net sales of products and services which utilize the licensed technology.

The Company must pay the greater of calculated royalties on net sales or an annual minimum royalty of $ 50 thousand.

In September 2019, all remaining patents related to the intellectual property expired and the license agreement terminated.

As this agreement was terminated in 2019, the Company recorded no royalty expense during the years ended December 31, 2021 and 2020.

During the year ended December 31, 2019, the Company recorded royalty expense of $ 0.8 million in cost of product revenue on the consolidated statements of operations.

During the years ended December 31, 2022, 2021, and 2020, the Company recorded royalty expense of $ 1.4 million, $ 1.6 million and $ 1.1 million, respectively, related to Tufts.

This royalty expense is recorded in cost of product revenue on the consolidated statements of operations.

Legal contingencies

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The Company accrues for contingent liabilities to the extent that the liability is probable and estimable.

Restructuring and Other Charges

Following a strategic review and assessment of the Company’s operations and cost structure, on August 8, 2022, the Company announced a plan of restructuring and strategic re-alignment (the Restructuring Plan).

As part of the Restructuring Plan, the Company began an assay redevelopment program with the ultimate objective of improving its ability to manufacture and deliver high-quality assays at scale.

In accordance with the Restructuring Plan, the Company implemented a workforce reduction, which was substantially completed by the end of the third quarter of 2022.

The Company recorded charges during the year ended December 31, 2022, consisting of one-time termination benefits for employee severance, benefits and related costs, all of which were cash expenditures.

The following shows the number of positions by function and by location eliminated in connection with the Restructuring Plan:

North America

Cost of goods sold

Research and development

Selling, general and administrative

Total headcount

As part of the Restructuring Plan, the Company also performed an assessment of impairment for long-lived assets, including right-of-use assets, and recorded an impairment charge of $ 17.4 million.

The impairment expense includes $ 16.3 million associated with the right-of-use and property and equipment at the Bedford facilities and $ 1.1 million for software costs related to projects that have been rationalized as part of the Restructuring Plan.

Refer to Note 7 and Note 12 for further information.

The following table presents the restructuring reserve and provision activity for the year ended December 31, 2022 (in thousands):

Severance and Employee Benefit Costs

Other Restructuring Charges

Balance at January 1, 2022

Cash payments

Foreign exchange

Balance at December 31, 2022

No such restructuring activities existed for the years ended December 31, 2021 and 2020.

Notes payable

2 unchanged sentences

As of December 31, 2021, there were no additional amounts available to borrow under the debt facility.

The interest rate on this term loan is variable based on the greater of 8 % or 8 % plus the prime rate less 5.25 %.

Interest is paid monthly beginning the month following the borrowing date.

The interest rate on the term loan was variable based on the greater of 8 % or 8 % plus the prime rate less 5.25 %.

Interest was paid monthly beginning the month following the borrowing date.

At loan inception and in connection with the amendments, the Company issued the lender warrants to purchase shares of stock.

The loan agreement also contains prepayment penalties and an end of term charge.

Fees incurred upon execution of the agreements, and the fair value of warrants on the date of grant were accounted for as a reduction in the book value of debt and accreted through interest expense, using the effective interest rate method, over the term of the debt.

The loan agreement also contained prepayment penalties and an end of term charge.

Fees incurred upon execution of the agreements, and the fair value of warrants on

the date of grant were accounted for as a reduction in the book value of debt and accreted through interest expense, using the effective interest rate method, over the term of the debt.

Under the amended agreement, the Company was required to pay the loan principal in four equal installments starting July 1, 2021, with the final payment and end of term charge to be made on October 1, 2021.

On October 1, 2021, the Company made the final principal payment, including end of term fees, of $ 2.0 million related to the loan agreement.

“At-the-market offering”

On March 19, 2019, the Company entered into the Sales Agreement with Cowen with respect to an “at-the-market” offering program under which the Company could offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $ 50.0 million through Cowen as its sales agent.

On June 5, 2019, the Company issued approximately 2.2 million shares of common stock at an average stock price of $ 22.73 per share pursuant to the terms of the Sales Agreement.

The “at-the-market” offering resulted in gross proceeds of $ 49.7 million.

The Company incurred $ 1.7 million in issuance costs associated with the “at-the-market” offering, resulting in net proceeds to the Company of $ 48.0 million.

On August 6, 2020, the Company delivered written notice to Cowen to terminate the Sales Agreement, which termination the parties agreed to make immediately effective.

Underwritten public offerings

On August 8, 2019, the Company entered into an underwriting agreement with J.P.

Morgan and Leerink, as representatives of the several underwriters, relating to an underwritten public offering of approximately 2.7 million shares of the Company’s common stock, par value $ 0.001 per share.

The underwritten public offering resulted in gross proceeds of $ 69.0 million.

The Company incurred $ 4.5 million in issuance costs associated with the underwritten public offering, resulting in net proceeds to the Company of $ 64.5 million.

On August 6, 2020, the Company entered into an underwriting agreement with Leerink and Cowen, as representatives of the several underwriters, relating to an underwritten public offering of approximately 3.0 million shares of the Company’s common stock, par value $ 0.001 per share.

The underwritten public offering resulted in gross proceeds of $ 97.6 million.

The Company incurred $ 6.2 million in issuance costs associated with the underwritten public offering, resulting in net proceeds to the Company of $ 91.4 million.

On February 3, 2021, the Company entered into an underwriting agreement with Goldman Sachs, Leerink, and Cowen, as representatives of the several underwriters, relating to an underwritten public offering of approximately 4.1 million shares of the Company’s common stock, par value $ 0.001 per share.

The underwritten public

offering resulted in gross proceeds of $ 287.5 million.

The Company incurred $ 17.8 million in issuance costs associated with the underwritten public offering, resulting in net proceeds to the Company of $ 269.7 million.

Collaboration and license arrangements

The Company has entered into certain licenses with other companies for use of the Company’s technology.

These licenses have royalty components which the Company earns and recognizes as collaboration and license revenue throughout the year.

The Company recognized revenue of less than $ 0.1 million for the years ended December 31, 2021, 2020, and 2019 associated with these licenses.

During the year ended December 31, 2020, the Company recognized $ 1.2 million of previously deferred revenue as a result of entering into a license agreement with a diagnostics company.

As of December 31, 2021 and 2020, the Company had $ 0.5 million of deferred revenue related to ongoing negotiations with a diagnostics company.

Abbott Laboratories

On September 29, 2020, the Company entered into a Non-Exclusive License Agreement (the Abbott License Agreement) with Abbott.

The Abbott License Agreement includes customary representations and warranties, covenants and indemnification obligations for a transaction of this nature.

The Abbot License Agreement became effective upon signing and will continue until expiration of the last-to-expire Licensed Patent, or the agreement is earlier terminated.

Under the terms of the Abbott License Agreement, the Company and Abbott each have the right to terminate the agreement for uncured material breach by, or insolvency of, the other party.

Abbott may also terminate the Abbott License Agreement at any time without cause upon 60 days ’ notice.

During the year ended December 31, 2021 and 2020, the Company recognized no revenue and $ 10.0 million, respectively, within collaboration and license revenue related to the initial license fee under the Abbott License Agreement.

The Company has not executed any subsequent loan agreements and there were no outstanding loan balances during the year ended December 31, 2022.

Employee benefit plans

2 unchanged sentences

During the years ended December 31, 2022, 2021, and 2020, the Company made contributions of $ 1.2 million, $ 1.1 million, and $ 0.7 million, respectively.

Business combinations

UmanDiagnostics AB

On August 1, 2019, the Company completed its 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 common stock (representing $ 5.5 million based on the closing prices of the Company’s common stock on the Nasdaq Global Market on July 1, 2019 and August 1, 2019, the dates of issuance).

The acquisition of Uman 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.

Uman supplies 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.

With the acquisition of Uman, the Company has secured a long-term source of supply for a critical technology.

This acquisition was considered a business acquisition for accounting purposes.

The Company has accounted for the acquisition of Uman as a purchase of a business under U.S.

Under the acquisition method of accounting, the assets and liabilities of Uman are recorded as of the acquisition date of July 1, 2019, at their respective fair values, and consolidated with those of the Company.

Purchase consideration in excess of the amounts recognized for the net assets acquired was recognized as goodwill and is not expected to be tax deductible in any taxing jurisdiction.

The following table summarizes the acquisition accounting, net of $ 1.2 million in cash and cash equivalents acquired (in thousands):

Purchase price:

Cash and stock paid

Cash and cash equivalents acquired

Purchase price, net

Assets (liabilities) acquired:

Accounts receivable

Prepaids and other current assets

Property and equipment

Accounts payable

Accrued expense and other current liabilities

Deferred tax liabilities

Revenue and net income related to Uman’s operations were $ 1.8 million and $ 0.1 million, respectively for the year ended December 31, 2021, and is included in the Company’s consolidated statement of operations.

Revenue and net loss related to Uman’s operations were $ 1.5 million and $ 0.1 million, respectively, for the year ended December 31, 2020, and is included in the Company’s consolidated statement of operations.

Revenue and net income related to Uman’s operations were $ 1.1 million and less than $ 0.1 million, respectively, for the six months following the July 1, 2019 acquisition date, and is included in the Company’s consolidated statements of operations for the year ended December 31, 2019.

The following unaudited pro forma information presents the condensed consolidated results of operations of the Company and Uman for the year ended December 31, 2019, as if the acquisition of Uman had been completed on January 1, 2018.

These pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments that reflect pro forma results of operations, such as increased amortization for the fair value of acquired intangible assets, increased cost of sales related to the inventory valuation adjustment, and adjustments relating to the tax effect of combining the Company and Uman businesses.

The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings which may result from the consolidation of the operations of the Company and Uman.

Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of the results of operations that actually would have been achieved had the acquisition occurred as of January 1, 2018, nor are they intended to represent or be indicative of future results of operations (in thousands):

December 31, 2019

Revenue (unaudited)

Pre-tax loss (unaudited)

During the year ended December 31, 2021 and 2020, the Company incurred no costs associated with the acquisition of Uman.

During the year ended December 31, 2019, the Company incurred $ 1.9 million in costs associated with the acquisition of Uman.

Costs associated with the acquisition of Uman are recorded as selling, general, and administrative expenses within the consolidated statements of operations.

Goodwill and intangible assets

During the third quarter of 2022, the Company identified certain indicators of impairment, including the significant decline in the Company’s stock price, actions taken under the Restructuring Plan and the reduction of forecasted sales and profitability.

As a result, the Company performed an interim goodwill impairment test.

It was determined that the Company’s goodwill was impaired as the carrying amount of the Company’s sole reporting unit exceeded the estimated fair value.

The Company concluded that the entire goodwill balance was impaired and recognized a non-cash impairment charge during the third quarter of 2022.

The changes in the carrying amount of goodwill are as follows (in thousands):

Balance as of December 31, 2021

Cumulative translation adjustment

Impairment losses

Foreign exchange adjustments

Balance as of December 31, 2022

Acquired intangible assets consist of the following (dollars in thousands):

Acquired intangible assets, principally originating from the acquisition of Uman, consist of the following (dollars in thousands):

December 31, 2022

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As described in Note 13, in June 2007, the Company entered into a license agreement for certain intellectual property with Tufts.

Tufts is a related party to the Company due to Tufts’ equity ownership in the Company and because a board member of the Company’s Board of Directors was affiliated with Tufts.

During the years ended December 31, 2021, 2020, and 2019, the Company recorded royalty expense of $ 1.6 million, $ 1.1 million, and $ 1.0 million, respectively, in cost of product revenue on the consolidated statements of operations.

During the year ended December 31, 2020, the Company also incurred $ 1.0 million in cost of collaboration and license revenue owed to Tufts related to sublicensing certain technology and intellectual property to Abbott.

During the year ended December 31, 2017, Harvard University became a related party because a member of the Company’s Board of Directors is affiliated with Harvard University.

Revenue recorded from sales to Harvard University was $ 0.2 million, $ 0.1 million, and $ 0.1 million for the years ended December 31, 2021, 2020, and 2019, respectively.

On November 28, 2018, the Company entered into a sponsor agreement with Powering Precision Health (PPH), a 501(c)(6) not-for-profit entity of which an executive of the Company is a board member, through December 31, 2018.

The agreement committed a maximum of $ 120,000 in funds and services to be provided to PPH for the term of the agreement.

On November 14, 2019, the Company entered into the first amendment to the PPH sponsorship agreement.

The agreement amended the $ 120,000 annual committed maximum amount to $ 200,000 for the annual committed amount.

The agreement is terminable by either party and does not bind the Company to beyond the term of the agreement.

For the years ended December 31, 2021 and 2020, the Company did not make any contributions.

For the year ended December 31, 2019, the Company had total contributions of $ 0.1 million.

Subsequent events

On January 28, 2022, the Company entered into a multi-year lease agreement for approximately 53,000 square feet of new principal office space and approximately 32,770 square feet of new laboratory space in Bedford, Massachusetts.

The initial lease term is eight years and nine months beginning on the earlier of the Company occupancy, or May 1, 2022.

The Company was required to provide an initial security deposit of $ 0.9 million, which was provided in a form of a letter of credit to the landlord during 2021, and is included in the Company’s restricted cash balance as of December 31, 2021.

The security deposit is scheduled to be reduced to $ 0.5 million after 60 months .

Tufts is a related party to the Company due to Tufts’ equity ownership in the Company and because one of the Company’s directors was affiliated with Tufts.

During the years ended December 31, 2022, 2021, and 2020, the Company recorded royalty expense of $ 1.4 million, $ 1.6 million and $ 1.1 million, respectively, related to Tufts.

This royalty expense is recorded in cost of product revenue on the consolidated statements of operations.

One of the Company’s directors is affiliated with Harvard University and Mass General Brigham.

Revenue recorded from sales to Harvard University and its affiliates and to Mass General Brigham and its affiliates totaled $ 0.7 million, $ 0.2 million, $ 0.1 million for the years ended December 31, 2022, 2021, and 2020 respectively.

The Company recorded cost of goods sold of $ 0.1 million for the year ended December 31, 2022 related to Harvard University and its affiliates and to Mass General Brigham and its affiliates, with immaterial cost of goods sold recorded for years ended December 31, 2021 and 2020.

The Company also incurred research and development expenses of $ 0.6 million with Harvard University and its affiliates for the year ended December 31, 2022, with immaterial research and development expenses incurred for years ended December 31, 2021 and 2020.

The Company had $ 0.1 million and $ 0.2 million in accounts receivable from Harvard University and its affiliates and Mass General Brigham and its affiliates at December 31, 2022 and 2021, respectively.

Deferred revenue from Harvard University and its affiliates and Mass General Brigham and its affiliates was $ 0.1 million at both December 31, 2022 and 2021.

On May 26, 2022, the Company entered into an agreement (the UltraDx Agreement) with UltraDx Limited (UltraDx), a new company formed by ARCH Venture Partners (ARCH).

Under the UltraDx Agreement, the Company

will supply HD-X instruments (both fully assembled and disassembled) as well as assays and assay components to UltraDx, and UltraDx has the non-exclusive right to seek Chinese regulatory approval of and to commercialize the HD-X instrument and related assays in the Chinese neurological in vitro diagnostic market.

The Company has determined that UltraDx is a related party because one of the Company’s directors is affiliated with ARCH and UltraDx.

Under the terms of the UltraDx Agreement, the Company shipped a total of ten fully assembled and disassembled HD-X instruments to UltraDx on June 30, 2022 at a purchase price of approximately $ 1.9 million.

The Company recognized revenue on these shipments upon receipt of payment during the year ended December 31, 2022.

No such activities occurred in the years ended December 31, 2021 and 2020.

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

What changed 10-K

Item 9A. Controls and Procedures