What changed in this filing

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Item 9A. Controls and Procedures

2024-02-29 compared with 2023-03-06 · 856 added, 757 removed, 372 unchanged (81% of the section changed)

8 unchanged sentences

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

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 not effective at the reasonable assurance level as of December 31, 2022, due to the material weaknesses described below.

In Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, we identified four material weaknesses in our internal control over financial reporting, relating to the operating effectiveness of our internal controls associated with:

(i) the accounting for inventory, including excess and obsolescence reserves (the “Inventory MW”), (ii) the accounting for salaries and commissions expense (the “Compensation MW”), (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 (the “Financial Statement Close Process MW”), and (iv) the accounting for property and equipment, net (the “Property and Equipment MW”).

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.

Remediation of Previously-Identified Material Weaknesses

During 2023, we took a number of actions and incurred expenses of approximately $4.2 million, including the efforts outlined below, designed to improve our internal control over financial reporting to remediate the material weaknesses identified above.

These efforts included:

● hired additional personnel with public company experience who have the appropriate level of expertise in the respective areas of accounting, SEC financial reporting, and associated internal controls commensurate with the type, volume, and complexity of our accounting operations and reporting requirements, including a Corporate Controller and an Assistant Controller;

● continued to supplement our team with advisory consultants to provide additional depth and breadth in our period-end closes, technical accounting, financial reporting capabilities, and internal controls compliance;

● implemented recommendations from a third-party service provider we engaged to perform an assessment of our internal control design and operation and provide us recommendations to enhance the effectiveness of such controls;

● 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, for which development of system enhancements were made and continue to be underway;

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

Based on the efforts above and after demonstrating the operating effectiveness of the related internal controls for a sufficient period of time, management has concluded that the Financial Statement Close Process MW and Compensation MW were remediated as of December 31, 2023.

Evaluation of Controls and Procedures

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, 2023, 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, as well as the actions outlined above, while our management concluded that the Financial Statement Close Process MW and Compensation MW were remediated as of December 31, 2023, management concluded that our internal control over financing reporting was not effective at the reasonable assurance level as of December 31, 2023 due to the material weaknesses described below.

Our management concluded that control deficiencies existed as of December 31, 2023, and that these control deficiencies constituted material weaknesses in our internal control over financial reporting.

Specifically, management concluded that a portion of the Inventory MW related to the valuation of our inventory, including excess and obsolescence reserves (the “Inventory Valuation MW”) and the Property and Equipment MW continued to exist as of December 31, 2023.

The primary cause of the Inventory Valuation MW is our reliance on manual processes to verify the completeness and accuracy of information used in our inventory valuation outputs, and the adequacy and documentation of reviews over these outputs.

For the Property and Equipment MW, while the related internal controls were implemented and effective as of December 31, 2023, they were not in all cases in place for a sufficient period of time to demonstrate operating effectiveness as of December 31, 2023.

We have not identified any 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.

Continuing Remediation Efforts

Management, with oversight from the Audit Committee of our Board of Directors, is taking steps to remediate the control deficiencies that resulted in the Inventory Valuation MW and Property and Equipment MW 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.

● we have engaged accounting advisory consultants to implement new software systems to automate manual key inventory valuation processes and outputs;

● we will strengthen, document, and implement additional compensating controls;

● we will continue to focus on effectively operating controls that did not have a sufficient period of time to demonstrate operating effectiveness as of December 31, 2023;

● we will continue to evaluate, enhance, and add personnel in the finance organization with a focus on the requisite experience in the areas of accounting, SEC financial reporting, and associated internal controls.

We expect to continue our efforts to remediate the Inventory Valuation MW and Property and Equipment MW as described above through fiscal year 2024.

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.

We will not be able to consider the Inventory Valuation MW and Property and Equipment MW 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

7 unchanged sentences

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.

Management has identified material weaknesses in internal controls related to (i) the accounting for inventory valuation, including excess and obsolescence reserves, and (ii) 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, 2023 and December 31, 2022, 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, 2023, 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.

These material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and this report does not affect our report dated February 29, 2024, which expressed an unqualified opinion thereon.

Basis for Opinion

10 unchanged sentences

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.

3 unchanged sentences

Boston, Massachusetts

March 6, 2023

February 29, 2024

OTHER INFORMATION

Not applicable.

Securities Trading Plans of Directors and Executive Officers

During the three months ended December 31, 2023, none of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K).

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item 10 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

DIRECTORS, EXECUTIVE OFFICERS AND C ORPORATE GOVERNANCE

The information required by this Item will be set forth in our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2023 and is incorporated into this Annual Report on Form 10-K by reference.

EXECUTIVE COMPENSATION

The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item 12 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND R ELATED STOCKHOLDER MATTERS

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item 13 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

PRINCIPAL ACCOUNTANT FEES AND SERVICE S

Our independent registered public accounting firm is Ernst & Young LLP, New York, NY, (PCAOB ID 42).

The other information required by this Item will be set forth in our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2023 and is incorporated into this Annual Report on Form 10-K by reference.

EXHIBITS AND F INANCIAL STATEMENT SCHEDULES

(1) Financial Statements

16 unchanged sentences

Form of Restricted Stock Agreement under the 2007 Stock Option and Grant Plan, as amended

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

3 unchanged sentences

Form or Schedule

2017 Employee, Director and Consultant Equity Incentive Plan

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

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 August 3, 2023, between the Registrant and Vandana Sriram

Amended and Restated Employment Agreement, dated March 27, 2023, between the Registrant and Michael Doyle

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

1 unchanged sentence

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

3 unchanged sentences

Form or Schedule

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

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

1 unchanged sentence

STRATEC Development Services and Equity Participation Agreement, dated August 15, 2011, between the Registrant and STRATEC Biomedical Systems AG

Exhibit Number

Exhibit Description

Incorporated by

Reference herein from

Form or Schedule

First Amendment to STRATEC Development Services and Equity Participation Agreement and Second Amendment to Supply and Manufacturing Agreement, dated November 18, 2016, between the Registrant and STRATEC Biomedical AG

6 unchanged sentences

Consent of Ernst & Young LLP

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

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

Exhibit Number

3 unchanged sentences

Form or Schedule

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

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

Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Policy relating to recovery of erroneously awarded compensation

Inline XBRL Instance Document

9 unchanged sentences

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

FORM 10-K S UMMARY

Not applicable.

1 unchanged sentence

QUANTERIX CORPORATION

March 6, 2023

February 29, 2024

/s/ MASOUD TOLOUE, PH.D.

4 unchanged sentences

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

March 6, 2023

Masoud Toloue, Ph.

/s/ MICHAEL A.

February 29, 2024

Masoud Toloue, Ph.D.

/s/ VANDANA SRIRAM

Chief Financial Officer

March 6, 2023

February 29, 2024

Vandana Sriram

(Principal Financial Officer and Principal Accounting Officer)

1 unchanged sentence

MADAUS, PH.D.

March 6, 2023

February 29, 2024

Madaus, Ph.D.

March 6, 2023

February 29, 2024

/s/ WILLIAM DONNELLY

February 29, 2024

William Donnelly

February 29, 2024

/s/ LAURIE J.

March 6, 2023

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

February 29, 2024

QUANTERIX CORPORATION

Years ended December 31, 2022, 2021, and 2020

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Cash Flows

Consolidated Statements of Stockholders’ Equity

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Comprehensive Loss for the years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021

Notes to Consolidated Financial Statements

2 unchanged sentences

Opinion on the 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”).

We have audited the accompanying consolidated balance sheets of Quanterix Corporation (the Company) as of December 31, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, 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, 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.

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, 2023, 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 February 29, 2024 expressed an adverse opinion thereon.

Basis for Opinion

16 unchanged sentences

As of December 31, 2023, the Company had recognized inventory of $22.4 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.

As discussed in Note 2 to the consolidated financial statements, the Company analyzes its inventory levels at each reporting date for slow moving, excess or obsolete inventory and inventory expected to expire prior to being used.

In the event that the Company identifies adverse conditions, the carrying value of the inventory is reduced to its estimated net realizable value.

Auditing management’s valuation of inventory involved judgement in evaluating management’s analysis and significant assumptions related to projections of future demand which is dependent on market factors.

3 unchanged sentences

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 performed inquiries with appropriate non-financial personnel, including supply chain employees, regarding obsolete or discontinued inventory items and other factors as well as obtained supporting evidence 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.

2 unchanged sentences

Boston, Massachusetts

March 6, 2023

February 29, 2024

QUANTERIX CORPORATION

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share and per share data)

(amounts in thousands, except per share data)

December 31, 2023

2 unchanged sentences

Cash and cash equivalents

Accounts receivable (less allowance for credit losses of $ 118 and $ 419 as of December 31, 2022 and December 31, 2021, respectively;

including $ 89 and $ 200 due from related parties as of December 31, 2022 and December 31, 2021, respectively)

Marketable securities

Accounts receivable, net of allowance for expected credit losses

Prepaid expenses and other current assets

3 unchanged sentences

Intangible assets, net

Right-of-use assets

Operating lease right-of-use assets

Other non-current assets

1 unchanged sentence

Current liabilities:

Accounts payable (including $ 0 and $ 42 to related parties as of December 31, 2022 and December 31, 2021, respectively)

Accounts payable

Accrued compensation and benefits

Other accrued expenses

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

Short term lease liabilities

Other current liabilities

Accrued expenses and other current liabilities

Deferred revenue

Operating lease liabilities

Total current liabilities

Deferred revenue, net of current portion

Long term lease liabilities

Operating lease liabilities, net of current portion

Other non-current liabilities

2 unchanged sentences

Stockholders’ equity:

Common stock, $ 0.001 par value:

Authorized shares:

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

Common stock, $ 0.001 par value per share:

120,000 shares;

issued and outstanding :

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

38,014 and 37,280 shares at December 31, 2023 and 2022, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive loss

Accumulated deficit

1 unchanged sentence

Total liabilities and stockholders’ equity

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

The accompanying notes are an integral part of these Consolidated Financial Statements.

QUANTERIX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except share and per share data)

Product revenue (including related party activity of $ 2,634 , $ 505 , and $ 580 for the years ended December 31, 2022, 2021, and 2020, respectively)

Service and other revenue (including related party activity of $ 11 , $ 114 , and $ 202 for the years ended December 31, 2022, 2021, and 2020, respectively)

Collaboration revenue

(amounts in thousands, except per share data)

Year Ended December 31,

Product revenue

Service and other revenue

Collaboration and license revenue

Grant revenue

Total revenue

Costs of goods sold:

Cost of product revenue (including related party activity of $ 154 , $ 1,936 , and $ 205 for the years ended December 31, 2022, 2021, and 2020 respectively)

Cost of service and other revenue (including related party activity of $ 87 , $ 74 , and $ 52 for the years ended December 31, 2022, 2021, and 2020 respectively)

Cost of collaboration and license revenue (including related party activity of $ 0 , $ 0 , and $ 1,000 for the years ended December 31, 2022, 2021, and 2020 respectively)

Total costs of goods sold, services, and licenses

Total revenues

Costs of goods sold and services:

Cost of product revenue

Cost of service and other revenue

Total costs of goods sold and services

Operating expenses:

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)

Research and development

Selling, general and administrative

Other lease costs

Restructuring

Goodwill impairment

Impairment expense

Impairment and restructuring

Total operating expenses

1 unchanged sentence

Interest income (expense), net

Other (expense) income, net

Other income (expense), net

Loss before income taxes

Income tax (expense) benefit

Net loss per share, basic and diluted

Net loss per common share, basic and diluted

Weighted-average common shares outstanding, basic and diluted

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

The accompanying notes are an integral part of these Consolidated Financial Statements.

QUANTERIX CORPORATION

1 unchanged sentence

(amounts in thousands)

Years Ended December 31,

Other comprehensive loss:

Foreign currency translation adjustment

Total other comprehensive loss

Year Ended December 31,

Other comprehensive loss, net of tax:

Unrealized gains on marketable securities

Foreign currency translation

Total other comprehensive income (loss)

Comprehensive loss

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

The accompanying notes are an integral part of these Consolidated Financial Statements.

QUANTERIX CORPORATION

Consolidated Statements of C as h Flows

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(amounts in thousands)

Year ended December 31, 2023

Operating activities

Additional paid-in capital

Accumulated other comprehensive loss

Total shareholders' equity

Balance at December 31, 2022

Issuance of common stock under stock plans, including tax effects

Stock-based compensation expense

Unrealized gains on marketable securities, net of tax

Foreign currency translation

Balance at December 31, 2023

Year ended December 31, 2022

Additional paid-in capital

Accumulated other comprehensive loss

Total shareholders' equity

Balance at December 31, 2021

Issuance of common stock under stock plans, including tax effects

Stock-based compensation expense

Foreign currency translation

Balance at December 31, 2022

Year ended December 31, 2021

Additional paid-in capital

Accumulated other comprehensive loss

Total shareholders' equity

Balance at December 31, 2020

Issuance of common stock under stock plans, including tax effects

Sale of common stock in underwritten public offering, net

Stock-based compensation expense

Foreign currency translation

Balance at December 31, 2021

The accompanying notes are an integral part of these Consolidated Financial Statements.

QUANTERIX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

Year Ended December 31,

Cash flows from operating activities:

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

Depreciation and amortization expense

Inventory step-up amortization

Credit (income) loss expense on accounts receivable

Unrealized losses (gains) on foreign currency transactions

Non-cash lease expense

Credit losses (gains) on accounts receivable

Accretion of marketable securities

Operating lease right-of-use asset amortization

Stock-based compensation expense

Goodwill impairment

Impairment of long-lived assets

Non-cash interest expense

Deferred taxes

Loss on disposal of fixed assets

Changes in operating assets and liabilities:

Other operating activity

Changes in assets and liabilities:

Accounts receivable

Prepaid expenses and other assets

Prepaid expenses and other current assets

Other non-current assets

Accounts payable

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

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

Deferred revenue

Operating lease liabilities

Other non-current liabilities

Deferred revenue

Net cash used in operating activities

Investing activities

Cash flows from investing activities:

Purchases of marketable debt securities

Proceeds from marketable debt securities

Purchases of property and equipment

1 unchanged sentence

Net cash used in investing activities

Financing activities

Proceeds from stock options exercised

Cash flows from financing activities:

Proceeds from common stock issued under stock plans

Payments for employee taxes withheld on stock-based compensation awards

Sale of common stock in underwritten public offering, net

Proceeds from ESPP purchase

Payments on notes payable

Net cash provided by financing activities

Net increase in cash and cash equivalents

Effect of foreign currency exchange rate on cash

Cash, restricted cash, and cash equivalents at beginning of period

Cash, restricted cash, and cash equivalents at end of period

Supplemental cash flow information

Cash paid for interest

Net increase (decrease) in cash, cash equivalents, and restricted cash

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash at beginning of period

Cash, cash equivalents, and restricted cash at end of period

Supplemental disclosure of cash flow information:

Cash paid for taxes

Noncash transactions:

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

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

Reconciliation of cash, cash equivalents, and restricted cash:

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents, and restricted cash

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

stockholders’

income (loss)

Balance at December 31, 2019

Issuance of capital shares:

−Exercised stock options

−Restricted units converted

−ESPP stock purchase

Sale of common stock in underwritten public offering, net

Stock-based compensation expense

Cumulative translation adjustment

Balance at December 31, 2020

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

Cumulative translation adjustment

Balance at December 31, 2021

Issuance of capital shares:

−Exercised stock options

−Restricted units converted

−ESPP stock purchase

−Issuance of common stock

Stock-based compensation expense

Cumulative translation adjustment

Balance at December 31, 2022

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

Cash paid for interest

Purchases of property and equipment in accounts payable and accruals

Operating lease right-of-use assets obtained in exchange for lease liabilities

Non-cash consideration received under product sales agreement (Note 3, 6)

The accompanying notes are an integral part of these Consolidated Financial Statements.

QUANTERIX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Organization and operations

Quanterix Corporation (Nasdaq:

QTRX) (the Company) is a life sciences company that has developed next generation, ultra-sensitive digital immunoassay platforms that advance precision health for life sciences research and diagnostics.

The Company’s platforms are based on its proprietary digital “Simoa” detection technology.

The Company’s Simoa bead-based and planar array platforms enable customers to reliably detect protein biomarkers in extremely low concentrations in blood, serum and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies, and also allow researchers to define and validate the function of novel protein biomarkers that are only present in very low concentrations and have been discovered using technologies such as mass spectrometry.

These capabilities provide the Company’s customers with insight into the role of protein biomarkers in human health that has not been possible with other existing technologies and enable researchers to unlock unique insights into the continuum between health and disease.

The Company is currently focusing on protein detection, but the Company’s Simoa platforms have also demonstrated applicability across other testing applications, including detection of nucleic acids and small molecules.

The Company launched its first immunoassay platform, the Simoa HD-1, in 2014.

The HD-1 is a fully automated immunoassay bead-based platform with multiplexing and custom assay capability, and related assay test kits and consumable materials.

The Company launched a second bead-based immunoassay platform (SR-X) in the fourth quarter of 2017 with a more compact footprint than the Simoa HD-1 and less automation designed for lower volume requirements while still allowing multiplexing and custom assay capability.

The Company initiated an early-access program for its third instrument (SP-X) on the new Simoa planar array platform in January 2019, with the full commercial launch commencing in April 2019.

In July 2019, the Company launched the Simoa HD-X, an upgraded version of the Simoa HD-1 which replaces the HD-1.

The HD-X has been designed to deliver significant productivity and operational efficiency improvements, as well as greater user flexibility.

The Company began shipping and installing HD-X instruments at customer locations in the third quarter of 2019.

The Company also performs research services on behalf of customers to apply the Simoa technology to specific customer needs.

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’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.

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 & Co.

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.

Organization and Nature of Business

Quanterix Corporation (“Quanterix” or the “Company”) is a life sciences company that has developed next-generation, ultra-sensitive digital immunoassay platforms that advance life sciences research and diagnostics.

The Company’s platforms are based on its proprietary digital “Simoa” detection technology and enable customers to reliably detect protein biomarkers in ultra- low concentrations in blood, serum, and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies.

The ability of the Company’s Simoa platforms to detect proteins in the femtomolar range is enabling the development of novel therapies and diagnostics and has the potential to facilitate a paradigm shift in healthcare from an emphasis on treatment to a focus on earlier detection, monitoring, prognosis, and, ultimately, prevention.

The Company also provides contract research services for customers and Laboratory Developed Test (“LDT”) services through its CLIA-certified Accelerator Laboratory (the “Accelerator Laboratory”).

The Accelerator Laboratory provides customers with access to Simoa technology and supports multiple projects and services, including sample testing, homebrew assay development, custom assay development, and blood-based biomarker testing.

To date, the Company has completed over 2,200 projects for more than 480 customers from all over the world using its Simoa platforms.

The Company has recognized annual losses from operations since inception and has an accumulated deficit of $ 434.5 million as of December 31, 2023.

The Company incurred net losses of $ 32.3 million, $ 96.7 million, and $ 57.7 million for the years ended December 31, 2023, 2022, and 2021, 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.

As of December 31, 2023, the Company had cash and cash equivalents of $ 174.4 million and marketable securities of $ 146.9 million.

The Company expects that its current cash, cash equivalents, and marketable securities will be sufficient to fund its operations for a period of at least one year from the date the Consolidated Financial Statements are issued.

Significant Accounting Policies

Principles of consolidation

The consolidated financial statements have been prepared in accordance with U.S.

GAAP and include the accounts of Quanterix Corporation, and its wholly-owned subsidiaries.

All material intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation

The accompanying Consolidated Financial Statements and notes herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

GAAP”) and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”) regarding annual financial reporting on Form 10-K.

The Company’s fiscal year is the twelve-month period from January 1 through December 31, and all references to “2023,” “2022,” and “2021,” refer to the fiscal year unless otherwise noted.

Certain amounts in the prior years’ Consolidated Financial Statements have been reclassified to conform to the current year’s presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S.

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

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 and valuation of inventory.

The preparation of the Consolidated Financial Statements and Notes to Consolidated Financial Statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the Consolidated Financial Statements, and the reported amounts of revenues and expenses during each fiscal year.

Such estimates include, but are not limited to, revenue recognition, valuation of inventory, leases, valuation and impairment of long-lived assets, recoverability of deferred tax assets, and stock-based compensation expense.

The Company bases its estimates on historical experience, known trends, worldwide economic conditions, both general and specific to the life sciences industry, and other relevant factors it believes to be reasonable under the circumstances.

On an ongoing basis, management evaluates its estimates and changes in estimates are recorded in the period in which they become known.

Actual results could differ from those estimates.

Reclassifications

Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the current year’s presentation.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Quanterix and its wholly-owned subsidiaries.

All intercompany transactions have been eliminated in consolidation.

In accordance with Accounting Standards Codification (“ASC”) 810 – Consolidation , the Company assesses the terms of its non-marketable equity investments in entities to determine if any meet the definition of a variable interest entity (“VIE”) and require consolidation into its Consolidated Financial Statements.

Refer to Note 19 − Variable Interest Entities for further discussion.

Foreign Currency

The functional currency of the Company’s subsidiaries is their respective local currencies.

These subsidiary financial statements are translated into U.S.

dollars using the period-end exchange rates for assets and liabilities, average exchange rates during the corresponding period for revenue and expenses, and historical rates for equity.

The effects of foreign currency translation adjustments are recorded in accumulated other comprehensive income (loss), a component of stockholders’ equity on the Consolidated Balance Sheets.

Foreign currency transaction gains (losses) are included in other income (expense), net on the Consolidated Statements of Operations.

Foreign exchange losses were not material during the year ended December 31, 2023, and were $ 0.8 million and $ 0.4 million during the years ended December 31, 2022 and 2021, respectively.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker, the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance.

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

Cost of revenue

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.

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker (“CODM”), in deciding how to allocate resources and assess performance.

The Company’s CODM is the chief executive officer, who reviews the Company's operations and manages its business as a single operating segment as of December 31, 2023.

Revenue from Contracts with Customers

The Company generates the majority of its revenues from contracts with customers and accounts for them pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606 - Revenue from Contracts with Customers (“ASC 606”).

Refer to the section titled “Grant Revenue” below for discussion the Company’s accounting policy for revenue generated from grant awards.

For contracts with customers, the Company recognizes revenue when a customer obtains control of promised products or services, for an amount that reflects the consideration expected to be received in exchange for those products or services.

The Company follows the five step revenue model prescribed by ASC 606 to determine revenue recognition:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price, including variable consideration, if any;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

Revenues are presented net of any sales, value added, or similar taxes collected from customers and remitted to the government.

The Company accounts for a contract when it has approval and commitment from both parties, the fees, payment terms and rights of the parties regarding the products or services to be transferred are identified, the contract has commercial substance, and it is probable that substantially all of the consideration for the products and services expected to be transferred is collectible.

The Company applies judgment in determining the customer’s ability and intention to pay for services expected to be transferred, which is based on factors including the customer’s payment history, management’s ability to mitigate exposure to credit risk (for example, requiring payment in advance of the transfer of products or services, or the ability to stop transferring promised products or services in the event a customer fails to pay consideration when due), and experience selling to similarly situated customers.

The Company’s contracts may include either a single promise (referred to as a performance obligation) to transfer a product or service, or a combination of multiple performance obligations to transfer products or services.

The Company evaluates the existence of multiple performance obligations within its contracts by using judgment to determine if (1) the customer can benefit from each contractual promise on its own or together with readily available resources and (2) the transfer of each contractual promise is separately identifiable from other promises in a contract.

When both criteria are met, each promise is accounted for as a separate performance obligation.

Additionally, the Company has elected the practical expedient under ASC 606 to account for shipping and handling as an activity to fulfill a promise to transfer a product, and therefore does not evaluate whether shipping and handling activities are promised services to its customers.

Contracts that include rights to additional products or services that are exercisable at a customer’s discretion are generally considered options.

The Company assesses if these options provide a material right to the customer and if so, the material right is considered a performance obligation.

The identification of material rights requires judgment to determine the value of the option to purchase additional products and services in relation to options that may be provided to, and prices paid by, customers in the normal course of business.

Material rights are recognized when exercised by a customer or upon expiration of the right.

The Company determines the transaction price of its contracts based on the amount of consideration it expects to be entitled to, which is generally equal to the contract amount.

In some cases, contracts contain variable consideration which primarily relates to (1) sales- and usage-based royalties related to the license of intellectual property in collaboration and license contracts and (2) contracts with minimum purchase commitments.

For sales and usage-based royalties, ASC 606 provides an exception to estimating variable consideration.

Under this exception, the Company recognizes revenues from sales- or usage-based royalty revenue at the later of when the sales or usage occurs or the satisfaction (or partial satisfaction) of the performance obligation to which the royalty has been allocated.

All other variable amounts are constrained to the minimum guaranteed contract amount so that a reversal of cumulative revenue does not occur in future periods.

Once there is no longer uncertainty over a variable amount, any incremental fees the Company is entitled to are allocated to the related performance obligation(s).

For contracts that contain multiple performance obligations, the Company allocates the transaction price among the performance obligations on a relative basis according to their standalone selling prices (“SSP”).

Determining the SSP for performance obligations requires judgment and is based on factors including prices charged to customers in observable transactions, internal pricing objectives and list prices, and pricing of similar products.

The Company uses a range of amounts to estimate SSP and has more than one range for certain products and services based on the geographic location of customers and sales channel.

Product Revenue

The Company’s product revenues are composed of instruments, assay kits, replacement parts, and other consumables such as reagents and antibodies.

Products are sold directly to customers and are also sold through distributors in EMEA and Asia Pacific regions.

Direct instrument sales include installation and an initial year of implied service-type warranties.

The Company has determined that the instrument and installation are a combined performance obligation as the customer cannot benefit from the instrument without the installation and no other vendors can provide the installation of the Company’s specialized instruments.

The implied service-type warranty is considered a separate performance obligation since a customer could benefit from it independently with readily available resources and is capable of being sold on its own.

Sales of instruments to distributors include a license to import and resell the instruments.

The Company has determined these distributor licenses are part of a combined performance obligation with the instrument as the distributor only benefits from the combination of the instrument and ability to resell it.

Instrument sales may also be bundled with assays and other consumables, training, and/or an extended service warranty, each of which is considered a separate performance obligation.

Product revenues for direct instrument sales to customers are recognized upon completion of the instrument’s installation.

For instrument sales to distributors, revenue is recognized based on the agreed upon shipping terms (either upon shipment or delivery) as that is when title passes to the customer.

Service Revenue

Service revenues are composed of contract research services, initial year of implied service-type warranties, extended services warranty contracts, repair services, 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 the point in time when the Company completes and delivers its research results 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.

For contract research services recognized over time, the Company uses the output method based on the number of completed results.

Revenues from other services are recognized at the point in time when the training or other services are delivered as the customer simultaneously receives and benefits from the services.

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

Collaboration and License Revenue

Collaboration and license revenues are composed of revenue associated with licensing to third parties the Company’s technology, intellectual property, and know-how associated with our instruments and for related services.

License arrangements consist of sales or usage-based fees and/or future royalties.

Revenues are recognized at the point in time the license is delivered as the underlying license is considered functional intellectual property.

Royalty revenues that are sales- or usage- based are recognized 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.

Contract Assets and Liabilities

Accounts Receivable and Allowance for Credit Losses

The Company is exposed to credit losses primarily through accounts receivable from sales of its products and services.

Accounts receivable includes amounts billed and currently due from customers.

Since the only condition for payment of the Company’s invoices is the passage of time, the Company records a receivable on the date the invoice is issued.

Also included in accounts receivable are unbilled amounts resulting from revenue exceeding the amount billed to the customer, where the right to payment is unconditional.

If the right to payment for services performed was conditional on something other than the passage of time, the unbilled amount would be recorded as a separate contract asset.

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

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 collection efforts have been exhausted.

Generally, the Company’s contracts are non-cancellable.

For contracts that are cancellable by the customer, the Company does not record a receivable when it issues an invoice.

The Company records accounts receivable on these contracts only up to the amount of revenue recognized but not yet collected.

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 30 to 45 days from date of shipment or satisfaction of the performance obligation.

The Company does not provide financing arrangements to its customers.

The Company refers to contract liabilities as deferred revenue on the Consolidated Balance Sheets.

For deferred revenue, the Company applies the practical expedient under ASC 606 that allows for the exclusion of (1) contracts with original expected length of one year or less and (2) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed from the amount of remaining performance obligations disclosed.

Costs to Obtain Contracts

The Company capitalizes commissions paid to its sales representatives and related fringe benefit costs that are incremental to obtaining customer contracts.

Capitalized commissions are recorded in prepaid expenses and other current assets and other non-current assets on the Consolidated Balance Sheets.

These commissions are amortized over the life of the contract and are recorded in cost of goods sold and selling, general and administrative expense on the Consolidated Statements of Operations.

The Company has elected the practical expedient allowing commissions with an amortization period of one year or less to be expensed as incurred.

Commissions associated with instrument sales are generally earned when installation is complete and title to the instrument has transferred.

Commissions associated with consumables sales are earned when title to the product transfers.

Commissions associated with warranty and extended service contracts are earned upon booking.

The Company provides an initial year of warranty and maintenance service related to its instruments sold directly to customers and sells extended warranty contracts for additional periods.

The Company defers revenue associated with these warranty services and recognizes them ratably over the service period.

Grant Revenue

Accounting for grants does not fall under ASC 606, as the grantor will not benefit directly from the Company’s expansion or product development, and no products or services are transferred to the grantor.

As there is no authoritative guidance under U.S.

GAAP on accounting for grants to for profit business entities from government entities, the Company accounts for grants by analogy to International Accounting Standards Topic 20, Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”) and ASC Topic 958, Not for-Profit Entities (“ASC 958”).

The decision to account for a grant under IAS 20 or ASC 958 is based on whether the grantor is a government entity.

The Company records grants related to assets as a deduction in calculating the carrying value of the asset, and to record grants related to income separately on the Consolidated Statements of Operations on a gross basis as grant revenue.

The related expenses are recorded on a gross basis within operating expenses.

These methods are elections an entity can make under both IAS 20 and ASC 958.

The Company recognizes grant revenue as the Company performs services under the arrangement when the funding is committed and as each grant’s activities are performed.

The timing of revenue recognition and receipt of funding varies by grant and can be independent from performance of the related activities, such as an upfront payment of the award value, or subsequent to the Company’s requests for reimbursement for already performed activities (subject to the approval of the granting organization).

Cost of Goods Sold and Services

Cost of Product Revenue

Cost of product revenue consists of manufacturing and assembly costs for instruments, related reagents, other consumables, contract manufacturer costs, personnel costs, royalties, overhead, and other direct costs related to product sales.

Raw material part costs include inbound freight, shipping and handling costs associated with purchased goods, contract manufacturer costs, personnel costs, royalties, overhead and other direct costs related to product sales.

Additionally included in cost of product revenue are royalty fees due to third parties from revenue generated by collaboration or license deals.

Cost of Service and Other Revenue

Cost of services and other revenue consists of direct costs associated with operating the Company’s Accelerator Laboratory on behalf of its customers, including raw materials, personnel costs, royalties, allocated overhead costs that include facility and other related costs, and other direct costs.

Additional costs include costs related to warranties, and other costs of servicing equipment at customer sites.

Research and Development Expenses

Research and development expenses, including personnel costs, allocated facility costs, lab supplies, outside services, contract laboratory costs are charged to research and development expense as incurred.

The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expense when the service has been performed or when the goods have been received.

Expenses incurred related to grant funded activities are recorded in research and development expense.

Research and development expense consists primarily of personnel costs, research supplies, third-party development costs for new products, materials for prototypes, quality assurance, and allocated overhead costs that include facility and other related costs.

The Company accounts for nonrefundable advance payments for products and services that will be used in future research and development activities as expense when the service has been performed or when the products have been received.

For arrangements in which the Company receives funding from third parties for research and development activities (excluding the government sponsored arrangements), the Company assesses whether the arrangement is within the scope of ASC 730 – Research and Development .

When the Company is entitled to receive reimbursements, does not have an obligation to repay, does not transfer products or services, and is the primary beneficiary of the activities, the Company records the reimbursable amounts as a reduction to research and development expense.

Amounts reimbursed in excess of the cost incurred by the Company are recorded within other income (expense), net on the Consolidated Statements of Operations.

Reimbursable amounts recorded as a reduction to research and development expenses were not material during the years ended December 31, 2023, 2022, and 2021.

Amounts reimbursed in excess of costs incurred by the Company related to activities funded by third parties were $ 0.4 million during the year ended December 31, 2023.

No reimbursable amounts were received during the years ended December 31, 2022, and 2021.

Selling, General and Administrative Expenses

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.

Selling, general and administrative expense consists primarily of personnel costs for our sales and marketing, finance, legal, human resources, and general management teams, 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, and allocated overhead costs that include facility and other related 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.

To the extent the classification of its 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.

Net Loss Per Share

Basic net loss per common share attributable to common stockholders is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares.

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.

Basic net loss per common share attributable to common stockholders is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding.

Diluted net loss per common share attributable to common stockholders is calculated under the treasury stock method by dividing the loss attributable to common stockholders by the diluted weighted-average number of common shares outstanding.

Diluted weighted-average shares outstanding reflect the dilutive effect, if any, of potential common shares issued, such as unvested common stock, unvested restricted stock units (“RSUs”), common stock options, and shares estimated to be purchased under the Company’s employee stock purchase plan (“ESPP”).

During periods when the Company is in a net loss position, these potential common shares are excluded from the diluted net loss per common share attributable to common stockholders because their effect would be anti-dilutive.

Accordingly, basic and diluted net loss per common share attributable to common stockholders were the same for all periods presented.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash deposits and short-term, highly liquid investments that are readily convertible into cash, with original maturities of three months or less.

Cash equivalents are carried at fair value based on quoted prices for identical assets.

Cash and cash equivalents consist of cash deposits and short-term, highly liquid marketable securities that are readily convertible into cash, with original maturities of three months or less.

Cash and cash equivalents consist of the following (in thousands):

Money market funds invested in U.S.

Treasury obligations

As of December 31,

Money market funds

Marketable securities

Total cash and cash equivalents

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.

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.

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

The Company analyzes its inventory levels on each reporting date and writes down inventory that is expected to expire prior to being sold and inventory in excess of expected sales requirements.

In the event that the Company identifies these conditions exist in its inventory, the carrying value is reduced to its estimated net realizable value.

Restricted Cash

The following table summarizes the period ending cash and cash equivalents as presented on the Consolidated Balance Sheets and the total cash, cash equivalents, and restricted cash as presented on the Consolidated Statements of Cash Flows (in thousands):

As of December 31,

Cash and cash equivalents

Restricted cash

Cash, cash equivalents, and restricted cash

Restricted cash consists of collateral for a letter of credit issued as security for two of the Company’s leased facilities and to secure the Company’s corporate credit card program.

The short-term or long-term classification is determined in accordance with the expiration of the underlying letter of credit and security.

Marketable Securities

The Company’s current portfolio of marketable securities is entirely debt securities and may at any time include commercial paper, U.S.

Treasuries, corporate notes and bonds, U.S.

Government agency bonds, certificates of deposit, and similar types of debt securities.

Marketable debt securities with original maturities of three months or less at the time of purchase are recorded in cash equivalents on the Consolidated Balance Sheets as they are considered highly liquid and readily convertible into cash.

All other marketable securities, including those with maturities beyond one year, are recorded as current assets on the Consolidated Balance Sheets based on their highly liquid nature and because such securities are available for use in current operations.

The Company classifies its marketable securities as either held to maturity, available-for-sale, or trading at the time of purchase and re-evaluates such classification at each balance sheet date.

All of the Company’s marketable securities are currently classified as available-for-sale as it may use them in current operations.

Available-for-sale securities are recorded at fair value (refer to Note 6 − Fair Value of Financial Instruments ).

Unrealized gains and losses (other than impairment or credit related losses) are recorded in accumulated other comprehensive income (loss), a component of stockholders’ equity on the Consolidated Balance Sheets.

Realized gains and losses are determined using the specific identification method and are recorded in other income (expense), net on the Consolidated Statements of Operations.

Quarterly, or more frequently if circumstances warrant, the Company monitors its marketable securities for impairment.

In the event a security’s fair value is less than its amortized cost basis, the Company evaluates whether an impairment exists and if the impairment is a result of credit loss or other factors.

For a security in an unrealized loss position, if the Company intends to sell the security in an unrealized loss position, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, an impairment loss equal to the difference between the security’s fair value and amortized cost basis is recorded in other income (expense), net.

Additionally, the Company determines if a credit loss exists by considering information about the collectability of the security, current market conditions, and the issuer’s financial condition.

If a decline in fair value is a result of a credit loss, an allowance for credit losses is recorded in other income (expense), net on the Consolidated Statement of Operations, limited to the portion attributed to the credit loss.

The Company has also elected the practical expedient to separately present accrued interest receivable from its marketable securities balance.

Such accrued interest is recorded in prepaid expenses and other current assets on the Consolidated Balance Sheets and is not included in the assessment and measurement of impairment of its marketable securities.

Inventory consists of instruments, assays, and the materials required to manufacture instruments and assays.

Inventory is stated at the lower of cost or net realizable value on a first-in, first-out (“FIFO”) basis and includes the cost of materials, labor, and manufacturing overhead.

The Company analyzes its inventory levels on each reporting date for slow-moving, excess, and obsolete inventory, and inventory expected to expire prior to being used.

These analyses require judgment and are based on factors including, but not limited to, recent historical activity, anticipated or forecasted demand for the Company’s products (developed through its planning and sales and marketing inputs, and market conditions).

If the Company identifies adverse conditions exist, the carrying value of the inventory is reduced to its estimated net realizable value by providing estimated reserves for excess or obsolete inventory.

The Company adjusts the reserves for excess or obsolete inventory and records additional inventory write downs based on unfavorable changes in estimated customer demand or actual market conditions that may differ from its projections.

Property and Equipment

Property and equipment, including leasehold improvements, are stated at cost and are depreciated, or amortized in the case of leasehold improvements, over their estimated useful lives using the straight-line method.

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.

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:

Property and equipment, including leasehold improvements, are stated at cost, net of accumulated depreciation.

These assets are depreciated over their estimated useful lives using the straight-line method.

Expenditures for maintenance and repairs are charged to expense as incurred, whereas significant expenditures that extend the useful lives of existing assets are capitalized as additions to property and equipment.

Depreciation is calculated based upon the following estimated useful lives:

Estimated Useful Life

Laboratory and manufacturing equipment

Computers and software

Office furniture and equipment

Computers and software

Leasehold improvements

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.

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.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the facts and circumstances present in the arrangement.

Leases with a term greater than one year are recognized on the balance sheet as right-of-use (ROU) assets and short-term and long-term lease liabilities, as applicable.

The Company does not recognize leases on the balance sheet with a term of twelve months or less.

The Company’s leases consist of office and lab space and office equipment.

All of the Company’s leases are classified as operating, and options to renew a lease are only included in the lease term to the extent those options are reasonably certain to be exercised.

Additionally, the Company does not separate lease and non-lease components for all leases.

Operating lease liabilities and their corresponding ROU assets are initially recorded based on the present value of lease payments over the expected remaining lease term.

The rate implicit in lease contracts is typically not readily determinable and, as a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments, for a similar term, in a similar economic environment.

To estimate its incremental borrowing rate, a credit rating applicable to the Company is estimated using a synthetic credit rating analysis since the Company does not currently have a rating agency-based credit rating.

Shorter of asset's life or remaining lease term

The Company enters into operating leases for office, laboratory, and manufacturing spaces, as well as office equipment, and determines whether an arrangement is a lease at inception of the arrangement.

The Company accounts for a lease when it has the right to control the leased asset for a period of time, while obtaining substantially all of the assets’ economic benefits.

Leases are recorded on the Consolidated Balance Sheets as operating lease right-of-use (“ROU”) assets and current or non-current operating lease liabilities, as applicable.

All of the Company’s leases are classified as operating leases.

Additionally, the Company does not separate lease and non-lease components.

Operating lease ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the future minimum lease payments over the lease term and any initial direct costs incurred.

Initial direct costs are incremental costs of a lease that would not have been incurred had the lease not been executed.

The discount rate used to determine the present value of the lease payments is the Company’s incremental borrowing rate on a collateralized basis for a similar term and amount, as generally an implicit rate in the lease is not readily determinable.

The Company’s lease agreements can contain lease and non-lease components.

The Company accounts for the lease and fixed payments for non-lease components as a single lease component under ASC 842– Leases , which increases the amount of the ROU assets and lease liabilities.

Most of the Company’s lease agreements also contain variable payments, primarily maintenance, utility, and other-related costs, which are expensed as incurred and not included in the measurement of the ROU assets and lease liabilities.

Some of the Company’s leases contain options to extend or terminate the lease.

When determining the lease term, these options are included in the measurement and recognition of the Company’s ROU assets and lease liabilities when it is reasonably certain that the Company will exercise the option(s).

The Company considers various economic factors when making this determination, including, but not limited to, the significance of leasehold improvements incurred in the leased space, the difficulty in replacing the asset, underlying contractual obligations, and specific characteristics unique to a particular lease.

Subsequent to

entering into a lease arrangement, the Company reassesses the certainty of exercising options to extend or terminate a lease.

When it becomes reasonably certain that the Company will exercise an option that was not included in the lease term, the Company accounts for the change in circumstances as a lease modification, which results in the remeasurement of the ROU asset and lease liability as of the modification date.

Leases with a term of 12 months or less upon commencement are not recorded on the Consolidated Balance Sheets and are recorded to expense on a straight-line basis over the lease term.

Impairment of Goodwill

The Company assesses goodwill for impairment at the reporting unit level annually and whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Such events or circumstances could include the occurrence of operating losses, a significant decline in earnings, or significant changes in or restructuring of the business.

The impairment test is first performed at the reporting unit level using a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying value.

If the reporting unit does not pass the qualitative assessment, the reporting unit’s carrying value is compared to its fair value, using estimates including forecasts of discounted future cash flows and peer market multiples.

An impairment charge is recorded equal to the excess of the reporting unit’s carrying value over its fair value.

Impairment of Long-Lived Assets

The Company’s long-lived assets consist of operating lease ROU assets, property and equipment, and intangible assets.

The Company reviews the carrying amount of its long-lived assets for impairment whenever events or circumstances indicate that the estimated useful lives may warrant revision, or that the carrying amount of the assets may not be fully recoverable.

To assess whether a long-lived asset or group of assets has been impaired, the estimated undiscounted and discounted future cash flows for the estimated remaining useful life or estimated lease term of the asset (or the primary asset in the asset group) are compared to their carrying values.

Significant judgment is required to estimate future cash flows, including, but not limited to, the expected use of the asset (group), historical customer retention rates, technology roadmaps, customer awareness, trademark and trade name history, contractual provisions that could limit or extend an asset's useful life, market data, discount rates, potential sublease opportunities including rent and rent escalation rates, time to sublease, and free rent periods.

To the extent that the future cash flows are less than the carrying value, the asset(s) are impaired and written down to its estimated fair value.

Software Development Costs

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.

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.

Therefore, software development costs are charged to the statement of operations as incurred as research and development expense.

The Company develops and modifies software related to the operation of some of its instruments and internal use software supporting the Company’s operations.

Certain costs incurred during the application development stage including external direct costs of services used in the development or internal personnel costs for employees directly associated with the development, are capitalized.

The Company begins depreciating these costs over the life of the related asset upon completion of a working model or when it is ready for its intended use.

Capitalized software development costs related to software owned or developed by the Company are recorded in property and equipment on the Consolidated Balance Sheets.

Capitalized software development costs related to software hosted by a vendor (i.e.

cloud computing) are recorded in prepaid expenses and other current assets, and other non-current assets on the Consolidated Balance Sheets.

Costs incurred during the preliminary project stage and post-configuration stages are expensed as incurred.

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurement (ASC 820), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs).

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.

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.

As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly;

Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

The carrying amount reflected in the Consolidated Balance Sheets for cash, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued compensation and benefits, and accrued expenses and other current liabilities approximate their fair values due to their short-term nature.

Additionally, the Company has certain financial assets that are required to be measured at fair value on a recurring basis including cash equivalents and marketable securities.

Pursuant to the accounting standards for fair value measurements, the fair values of these financial assets are classified as Level 1, 2, or 3 within the fair value hierarchy as follows:

Observable inputs based on unadjusted quoted prices in active markets for identical assets.

Inputs, other than Level 1 inputs, that are observable either directly or indirectly, such as quoted prices for similar assets, quoted prices in markets that are not active, other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets.

Unobservable inputs for which there is little or no market data and such inputs are significant to the fair value of the assets.

These inputs reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.

Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

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.

Fair value measurements are as follows (in thousands):

Quoted prices

Significant other

December 31, 2022

inputs (Level 2)

Financial assets

Cash equivalents - money market funds

Quoted prices

December 31, 2021

inputs (Level 2)

Financial assets

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.

The Company defers revenue associated with these services and recognizes them on a pro-rata basis over the period of service.

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.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Consolidated Financial Statements or tax returns.

Deferred tax assets and liabilities are determined based on differences between the carrying amount and the tax basis 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.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740 Income Taxes (ASC 740).

When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized.

The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

As of December 31, 2022 and 2021, the Company did not have any significant uncertain tax positions.

The Company accounts for uncertain tax positions using a more likely than not threshold for recognizing uncertain tax positions, in accordance with ASC 740 – Income Taxes .

The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity, and changes in facts or circumstances related to a tax position.

The Company evaluates uncertain tax positions on an ongoing basis and adjusts any liability recorded to reflect subsequent changes in the relevant facts surrounding the uncertain positions.

Amounts recorded for uncertain tax positions, including interest and penalties, are recorded in income tax (expense) benefit on the Consolidated Statement of Operations.

Credit, Product, and Supplier Concentrations and Off-Balance-Sheet Risk

The Company has no significant off-balance-sheet risk, such as foreign exchange contracts, option contracts, or other hedging arrangements.

Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash and cash equivalents and a cost method investment.

The Company places its cash and cash equivalents principally in depository accounts with a bank.

The Company is also subject to supply chain risks related to the outsourcing of the manufacturing of its instruments.

Although there are a limited number of manufacturers for instruments of this type, the Company believes that other suppliers could provide similar products on comparable terms.

Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash, cash equivalents, marketable securities, and accounts receivable.

The Company limits its risk exposure by having its cash, cash equivalents, and marketable securities held at large commercial banks.

Customers outside the United States represented 38 % and 41 % of the Company’s gross trade accounts receivable balance as of December 31, 2023 and 2022, respectively.

For the year ended December 31, 2023, one customer of approximately $ 14.0 million revenue accounted for greater than 10 % of the Company’s total revenue.

For the year ended December 31, 2022, one customer of approximately $ 13.7 million revenue accounted for greater than 10 % of the Company’s total revenue.

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

The Company is also subject to supply chain risks related to outsourced manufacturing of its instruments.

Although there are a limited number of manufacturers for its instruments, the Company believes that other suppliers could provide similar manufacturing on comparable terms.

A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would adversely affect operating results.

In addition to outsourcing the manufacturing of its instruments, the Company also purchases antibodies through a number of different suppliers.

In addition to outsourced manufacturing of its instruments, the Company also purchases antibodies through a number of different suppliers.

Although a disruption in service from any one of its antibody suppliers is possible, the Company believes that it would be able to find an adequate supply from alternative suppliers.

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.

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).

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.

There were no material non-employee awards outstanding during the years ended December 31, 2022, 2021, and 2020.

The Company recognizes forfeitures as they occur.

The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model.

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:

Year Ended December 31,

Risk-free interest rate

1.4 % - 4.1 %

0.4 % - 1.3 %

0.4 % - 1.7 %

Expected dividend yield

Expected term (in years)

Expected volatility

55.0 % - 70.8 %

49.2 % - 55.6 %

43.9 % - 49.2 %

Weighted-average grant date fair value

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.

Treasury yield curve in effect at the time of grant, commensurate with the expected term assumption.

The Company estimates the expected term of options granted to employees utilizing the simplified method which calculates the expected term of an option as the average of the time to vesting and contractual life of the options.

The Company measures and recognizes stock-based compensation expense by calculating the estimated fair value of stock options, RSUs, or purchase rights issued under the Company’s ESPP on the grant date.

The Company generally issues new common

shares upon exercise of options and vesting of RSUs.

Awards granted by the Company are routine in nature including new hire, annual, and promotion grants.

The fair value of stock options and purchase rights under the ESPP is estimated using the Black-Scholes option-pricing model.

The Black-Scholes model requires the Company to make assumptions about the expected or contractual term of the option or purchase right, the expected volatility, risk-free interest rates, and expected dividend yield.

The Company estimates the expected term of options granted to employees utilizing historical exercise data.

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 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.

The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on common stock.

During 2023, the expected volatility was based on the Company’s historical volatility.

Prior to 2023, the expected volatility was estimated based on both the Company’s volatility and the average volatility for comparable publicly traded companies over a period equal to the expected term of the related stock-based awards.

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

Treasury yield curve in effect at the time of grant, commensurate with the expected term.

The expected dividend yield is zero as the Company has never paid dividends and has no current plans to pay any dividends on common stock.

The fair value of RSUs is determined using the closing market price of the Company’s common stock on the grant date.

The Company recognizes stock-based compensation expense on a straight-line basis over the award’s requisite service period, which is the vesting period for stock options and RSUs, and the offering period for purchase rights under the ESPP.

The Company recognizes forfeitures as they occur.

The Company expenses the cost of advertising as incurred and records them in selling, general and administrative expense in the Consolidated Statements of Operations.

Advertising expense was $ 0.3 million, $ 0.3 million, and $ 0.5 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (FASB) established Topic 326 , Financial Instruments — Credit Losses:

Measurement of Credit Losses on Financial Instruments (ASC 326) by issuing ASU No.

2016-13 (ASU 2016-13), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available-for-sale debt securities.

The Company early adopted ASU 2016-13 on January 1, 2021 using the modified retrospective approach.

The Company’s consolidated financial statements for prior-year periods have not been revised and are reflective of the credit loss requirements which were in effect for that period.

The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No.

2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15) .

This ASU addresses the accounting for implementation, setup and other upfront costs paid by a customer in a cloud computing or hosting arrangement.

The guidance aligns the accounting treatment of these costs incurred in a hosting arrangement treated as a service contract with the requirements for capitalization and amortization costs to develop or obtain internal-use software.

The Company adopted ASU 2018-15 on January 1, 2021 using the prospective method.

The adoption of ASU 2018-15 did not have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No.

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).

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.

The Company early adopted ASU 2019-12 on January 1, 2021.

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 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 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 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.

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).

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.

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.

Recent Accounting Standards To Be Adopted

In June 2022, the FASB issued ASC Update No.

2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions .

This update clarifies the guidance in Topic 820 related to measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, as well as introduces new disclosure requirements for these types of equity securities.

The new standard will be effective for the Company on January 1, 2024.

The adoption of this standard is not expected to have a material impact on the Company’s financial position or results of operations.

In November 2023, the FASB issued ASC Update No.

2023-07, Segment Reporting (Topic 280):

Improvement to Reportable Segment Disclosures.

This update enhances reportable segment disclosure requirements by requiring public entities to provide disclosures of significant segment expenses and other segment items, as well as disclosures about a reportable segment’s profit or loss and assets that are currently required annually in interim periods.

The new standard will be effective for the Company’s annual financial statements for the period beginning on January 1, 2024.

The adoption of this standard is not expected to have a material impact on the Company’s disclosures.

In December 2023, the FASB issued ASC Update No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This update enhances income tax disclosure requirements by requiring public entities to provide additional information in its tax rate reconciliation and additional disclosures about income taxes paid.

The update is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance and the amendments in this update should be applied prospectively, but entities have the option to apply it retrospectively.

The Company is currently evaluating the impact that the standard will have on its Consolidated Financial Statements.

Revenue and Related Matters

Revenue from Contracts with Customers

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

The Company’s customer base includes pharmaceutical, biotechnology, contract research organizations, academic, and government institutions.

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

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

The following tables disaggregate the Company’s revenue from contracts with customers by geography, based on the location products and services are consumed, and revenue type (in thousands):

Year Ended December 31, 2023

(in thousands)

North America

Product revenues:

Product revenue:

Consumable and other products

Service and other revenues:

Service revenue:

Service-type warranties

2 unchanged sentences

Collaboration and license revenue:

Collaboration and license revenue

December 31, 2021

Year Ended December 31, 2022

(in thousands)

North America

Product revenues:

Product revenue:

Consumable and other products

4 unchanged sentences

Collaboration and license revenue:

Collaboration and license revenue

December 31, 2020

Year Ended December 31, 2021

(in thousands)

North America

Product revenues:

Product revenue:

Consumable and other products

Service and other revenues:

Service and other revenue:

Service-type warranties

2 unchanged sentences

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.

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.

UltraDx Product Sales Agreement

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

Under the UltraDx Agreement, the Company agreed to supply UltraDx with HD-X instruments (both fully assembled and disassembled), assays and assay components, and granted a co-exclusive license to manufacture, seek Chinese regulatory approval of (including performance of any necessary research and development activities), and commercialize, HD-X instruments assembled in China and related assays in the Chinese in vitro diagnostic (“IVD”) market.

Refer to Note 16 − Related Party Transactions for a discussion of the related party relationships between Quanterix and these entities.

The Company determined that the instruments, components, and licenses formed a single, combined performance obligation.

The consideration due to the Company included (1) cash proceeds of $ 1.9 million, which was received and recognized as revenue in the third quarter of 2022 when the instruments, components, and licenses were delivered to and paid for by UltraDx, and (2) contingent, non-cash consideration in the form of ordinary shares of UltraDx with a deemed fair value of $ 1.0 million.

The issuance of the shares was contingent on UltraDx completing a preferred share financing under the terms and conditions in the UltraDx Agreement.

Given the uncertainty of the completion of the preferred share financing, the Company concluded that the non-cash consideration related to the ordinary shares was variable consideration that was fully constrained at contract inception.

In the second quarter of 2023, UltraDx completed the qualified preferred share financing and issued to the Company one million ordinary shares.

Refer to Note 6 − Fair Value of Financial Instruments for the Company’s disclosures related to determining the fair value of the shares received.

Also refer to Note 19 − Variable Interest Entities for additional information on the Company’s investment in UltraDx as a result of the share issuance.

During the year ended December 31, 2023, the Company recognized $ 1.8 million of revenue from UltraDx, which includes the one-time revenue from the receipt of the UltraDx shares in the second quarter of 2023.

During the year ended December 31, 2022, the Company recognized $ 1.9 million of revenue from UltraDx.

Eli Lilly and Company Service Revenue Agreements

On February 25, 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, which was recognized over a one-year period.

In addition, under the statement of work, the Company receives $ 1.5 million per calendar quarter, which began in the first quarter of 2022.

The statement of work automatically renews on a quarterly basis until Lilly provides a termination notice in accordance with the terms of the Lilly Collaboration Agreement.

As of December 31, 2023, the Lilly Collaboration Agreement and the statement of work were still in effect.

Concurrent with the execution of the Lilly Collaboration Agreement, the Company entered into a Technology License Agreement (the “Lilly License”) under which Lilly granted the Company a non-exclusive license to Lilly’s proprietary p-Tau 217 antibody technology for use in research use only products and services and future IVD applications within the field of Alzheimer’s disease.

In consideration of the Lilly 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 royalties on net sales of licensed products.

The Company recognized revenue from the Lilly Collaboration Agreement of $ 6.0 million during the year ended December 31, 2023, and $ 10.9 million during the year ended December 31, 2022.

Contract Assets

There were no contract assets as of December 31, 2023.

Deferred Revenue

During the years ended December 31, 2023 and 2022, the Company recognized $ 7.7 million and $ 5.5 million of revenue, respectively, related to its deferred revenue balance at January 1 of each such period.

Remaining Performance Obligations

As of December 31, 2023, the aggregate amount of transaction prices allocated to performance obligations that were not yet satisfied, or were partially satisfied, was $ 10.7 million.

Of the performance obligations not yet satisfied or partially satisfied, $ 9.5 million is expected to be recognized as revenue in the next 12 months , with the remainder expected to be recognized thereafter.

The $ 10.7 million primarily consists of amounts billed for undelivered services related to initial and extended service-type warranties and research services.

Costs to Obtain a Contract

The Company’s sales commissions are generally based on bookings 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 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

Changes in costs to obtain a contract were as follows (in thousands):

Balance at December 31 of prior year

Capitalization 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 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.

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

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 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.

The Company evaluates potential impairment of these amounts at each balance sheet date, and no related impairments were recorded during the years ended December 31, 2023, 2022, and 2021, respectively.

Grant Revenue

The Company recognizes grant revenue as the Company 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 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).

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.

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.

All of the Company's grant revenue is generated within North America.

Grant revenue for the years ended December 31, 2023, 2022, and 2021 was $ 1.2 million, $ 0.6 million, and $ 5.2 million, respectively.

On September 21, 2022, the Company and the National Institutes of Health (the “NIH”), an agency of the U.S.

Department of Health and Human Services, entered into a contract (the “NIH Grant”) with a total award value of $ 1.7 million.

The NIH granted the Company funding in support of the development of certain point-of-care diagnostic technologies through collaborative efforts.

Grant funding is to be used solely for activities related to the point-of-care diagnostic device development project and the contract period runs through August 2025.

Receipt of the award value occurs throughout the term of the contract period and after the Company submits for reimbursement of activities related to the grant.

As of December 31, 2023, the Company had received $ 0.6 million of the award value.

During the year ended December 31, 2023, grant revenue recognized and research and development expenses incurred were $ 0.7 million a nd $ 0.6 million, respectively .

During the year ended December 31, 2022, grant revenue recognized and research and development expenses incurred were not material.

On March 24, 2022, the Company and the Alzheimer’s Drug Discovery Foundation (the “ADDF”) entered into a contract (the “ADDF Grant”) with a total funding value of $ 2.3 million.

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

The ADDF Grant restricts the Company’s use of the granted funds solely for activities related to the Company’s Alzheimer’s diagnostic test development project and the contract period runs through June 2024.

Receipt of the contract funding was subject to achievement of pre-defined milestones, and as of December 31, 2023, the Company had received the total funding value of $ 2.3 million.

During the year ended December 31, 2023, grant revenue recognized and research and development expenses incurred was $ 0.5 million a nd $ 0.5 million, respectively .

During the year ended December 31, 2022, grant revenue recognized and research and development expenses incurred was $ 0.6 million and $ 0.6 million, respectively.

As of December 31, 2023, the Company had $ 1.1 million of deferred revenue related to the ADDF Grant.

On September 29, 2020, the Company entered into a contract with the NIH under its Rapid Acceleration of Diagnostics (“RADx”) program (the “RADx Grant”), with a total award value of $ 18.2 million.

The RADx Grant was to accelerate the continued development, scale-up, and deployment of the novel SARS-CoV-2 antigen detection test using the Company’s Simoa technology.

Grant funding was used to expand assay kit manufacturing capacity and commercial deployment readiness, and the contract ran through the final milestone on May 31, 2022.

Receipt of the award value occurred throughout the term of the contract period and after the Company submitted for reimbursement of activities related to the grant.

During the first half of 2022, the Company received $ 0.5 million which represented the final and total funding value of the $ 18.2 million award.

During the years ended December 31, 2023 and 2022, the Company recognized no grant revenue and incurred no research and development expenses.

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 expenses.

As of December 31, 2023, the Company had no future obligations under the RADx Grant.

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.

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

Balance at January 1

Provision charges

The change in the allowance for credit losses on accounts receivable is summarized as follows (in thousands):

Balance at December 31 of prior year

Provision for expected credit losses

Write-offs and recoveries collected

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):

Marketable Securities

The amortized cost, gross unrealized gains, gross unrealized losses, and fair value of the Company’s marketable securities by major security type were as follows (in thousands):

As of December 31, 2023

Amortized cost

Unrealized Gains

Unrealized Losses

Commercial paper

Government agency bonds

Corporate bonds

Total marketable securities

Marketable securities are reported in the following Consolidated Balance Sheets captions:

Cash and cash equivalents

Marketable securities

Total marketable securities

The Company did no t have any marketable securities as of December 31, 2022.

The following table shows the fair value and gross unrealized losses of the Company’s available-for-sale securities with unrealized losses that are not deemed to be other-than-temporary, aggregated by major security type and length of time that the individual securities have been in a continuous unrealized loss position (in thousands):

Less Than 12 Months

As of December 31, 2023

Unrealized Losses

Commercial paper

Government agency bonds

Corporate bonds

The Company did not have any individual securities in a continuous loss position for greater than 12 months, and there were no individual securities that were in a significant unrealized loss position as of December 31, 2023.

For marketable securities in an unrealized loss position, the Company does not intend to sell them before recovery of their amortized cost bases, it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost bases, and the unrealized losses are not credit related.

Accordingly, the Company has not recorded any impairment losses or a credit loss allowance.

The Company did not sell any marketable securities or record any realized gains or losses for the year ended December 31, 2023.

At December 31, 2023, the Company had $ 1.0 million of accrued interest receivable on its marketable securities.

The following table summarizes the contractual maturities of the Company’s marketable securities (in thousands):

As of December 31, 2023

Amortized cost

Due within one year

Due in one to two years

Fair Value of Financial Instruments

Recurring Fair Value Measurements

The following tables present the Company’s fair value hierarchy for its financial assets that are measured at fair value on a recurring basis (in thousands):

As of December 31, 2023

Financial assets:

Cash equivalents:

Money market funds

Commercial paper

Total cash equivalents

Marketable securities:

Commercial paper

Government agency bonds

Corporate bonds

Total marketable securities

Total financial assets

As of December 31, 2022

Financial assets:

Money market funds (1)

Total financial assets

(1) Included in cash and cash equivalents on the Consolidated Balance Sheets.

(2) Marketable securities are initially valued at their purchase price and subsequently fair valued at the end of each reporting period utilizing third party pricing services or other observable data.

The pricing services utilize industry standard valuation methods, including both income and market-based approaches and observable market inputs to determine the fair value.

These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates, and other industry and economic events.

Nonrecurring Fair Value Measurements

The Company has several non-marketable equity investments in entities that are evaluated under the VIE guidance (refer to Note 19 - Variable Interest Entities for further discussion).

Pursuant to ASC 321 – Investments – Equity Securities , the Company uses the measurement alternative for equity investments without readily determinable fair values and recognizes its non-marketable equity investments at cost, less any impairment, and adjusted for any observable price changes in orderly transactions.

On June 26, 2023, the Company received ordinary shares in UltraDx (refer to Note 3 − Revenue and Related Matters ) which were valued at $ 1.0 million upon receipt, primarily using the third-party purchase price of similar interests issued during UltraDx’s financing event that closed in the second quarter of 2023.

As UltraDx is a recently formed, privately held entity, there was minimal market activity or other financial information available to determine the fair value of UltraDx’s shares and therefore this investment is considered a Level 3 financial asset.

Changes in the inputs and assumptions used to determine the fair value would have resulted in a higher or lower fair value measurement.

During the year ended December 31, 2023, the Company recorded $ 0.5 million in adjustments to the fair value of its non-marketable equity investments.

As of December 31, 2023 and December 31, 2022, the carrying value of the Company’s Level 3 financial assets was $ 0.8 million and $ 0.3 million, respectively, and is included in other non-current assets on the Consolidated Balance Sheets.

Other Fair Value Disclosures

During the years ended December 31, 2023 and 2022, the Company did not transfer financial assets between levels of the fair value hierarchy.

Additionally, there have been no changes to the valuation techniques for Level 2 or Level 3 financial assets.

Inventory, net of inventory reserves, consisted of the following (in thousands):

As of December 31,

Raw materials

1 unchanged sentence

Finished goods

Inventory comprises commercial instruments, assays, and the materials required to manufacture assays.

Total inventory

Property and Equipment

Property and equipment consists of the following (in thousands):

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

As of December 31,

6 unchanged sentences

The Company incurred depreciation expense of $ 4.7 million, $ 3.5 million, and $ 2.8 million for the years ended December 31, 2023, 2022, and 2021, respectively.

The Company has instruments included in laboratory and manufacturing equipment, which are used internally by the Company.

As of December 31, 2022, the laboratory and manufacturing equipment balance includes $ 7.5 million of cost and $ 3.2 million of accumulated depreciation related to these instruments.

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

Other accrued expenses consist of the following (in thousands):

Substantially all of the Company’s property and equipment is located in North America.

During the year ended December 31, 2023, the Company had $0.8 million of disposals related to equipment no longer being used by the Company.

There were no material disposals during the years ended December 31, 2022, and 2021.

For the years ended December 31, 2023, and 2022, the Company recorded impairments related to leasehold improvements associated with two leased facilities not being used.

Refer to Note 14 − Leases for further discussion.

There were no material impairments relating to property and equipment during the year ended December 31, 2021.

As of December 31, 2023, the Company capitalized $ 1.1 million of software development costs, all of which are included in the computers and software category above.

Amounts capitalized as of December 31, 2022 and 2021 were no t material.

Depreciation of capitalized software costs for the years ended December 31, 2023, 2022, and 2021 was no t material.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

As of December 31,

Professional and outside services

Tax liabilities

Total accrued expenses

Accrued professional services

Accrued royalties

Accrued tax liabilities

Other accrued expenses

Total accrued expenses and other current liabilities

Stock-Based Compensation

Stock-Based Compensation Plans

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, RSUs, and other stock-based awards.

As of December 31, 2017, the 2017 Plan allowed for the issuance of (1) up to 1.0 million shares of common stock and (2) up to 2.5 million shares of common stock represented by awards granted under the 2007 Stock Option and Grant Plan (which was terminated upon completion of the Company’s initial public offering) that were forfeited, expired, or cancelled without delivery of shares or which result in the forfeiture of shares of common stock back to the Company on or after the date the 2017 Plan became effective.

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 2019 and ending in 2027.

The annual increase is equal to the lowest of (1) 4 % of the number of shares of common stock outstanding as of such date and (2) an amount determined by the Company’s Board of Directors or Compensation Committee.

As of December 31, 2023, 4.0 million shares were outstanding and there were 2.0 million shares available for grant under the 2017 Plan.

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

As of December 31, 2019, the 2017 ESPP allowed for the issuance of up to 0.6 million shares of common stock.

The 2017 ESPP contains an “evergreen” provision, which allows for an increase in the number of shares under the plan on the first day of each fiscal year beginning with 2018 and ending in 2027.

The increase is equal to the lowest of:

(1) 1 % of the number of shares of common stock outstanding on the last day of the immediately preceding fiscal year and (2) an amount determined by the Company’s Board of Directors or Compensation Committee.

As of December 31, 2023, 1.7 million shares were available for grant under the 2017 ESPP.

The 2017 ESPP provides for six-month offering periods commencing and ending on March 1 through August 31, and September 1 through February 28.

During the years ended December 31, 2023, 2022, and 2021, employees purchased 121 thousand, 57 thousand, and 29 thousand shares, respectively, of the Company’s common stock pursuant to the 2017 ESPP.

Stock Options

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 .

These options expire ten years after the grant date.

Stock option activity for the year ended December 31, 2023 is presented below (in thousands, except per share and contractual life amounts):

Weighted-average

Weighted-average remaining contractual

Number of options

exercise price per share

life (in years)

intrinsic value

Outstanding at December 31, 2022

Forfeited/expired

Outstanding at December 31, 2023

Exercisable at December 31, 2023

Vested and expected to vest at December 31, 2023

The total intrinsic value of stock options exercised was $ 1.9 million in 2023, $ 3.4 million in 2022, and $ 24.3 million in 2021.

Restricted Stock Units

RSUs represent the right to receive shares of common stock upon meeting specified vesting requirements.

Shares are delivered to the grantee upon vesting, less shares for the payment of withholding taxes.

RSU activity for the year ended December 31, 2023 is presented below (in thousands, except per share amounts):

Weighted-average grant

Number of shares

date fair value per share

Unvested as of December 31, 2022

Unvested as of December 31, 2023

Expected to convert at December 31, 2023

The weighted average grant-date fair value per share of awards granted was $ 15.90 in 2023, $ 18.32 in 2022, and $ 58.20 in 2021.The total fair value of shares that vested was $ 10.4 million in 2023, $ 9.8 million in 2022 and $ 7.3 million in 2021.

Stock-Based Compensation Expense

Stock-based compensation expense was recorded in the following categories on the Consolidated Statements of Operations (in thousands):

Year Ended December 31,

Cost of product revenue

Cost of service and other revenue

Research and development

Selling, general and administrative

Total stock-based compensation

As of December 31, 2023, there was $ 35.4 million of total unrecognized stock-based compensation expense related to unvested RSUs and stock options, which is expected to be recognized over the remaining weighted-average vesting period of 2.7 years.

The fair value of the Company’s stock options granted and purchase rights to the ESPP were estimated using the Black-Scholes valuation model with the following assumptions:

Year Ended December 31,

Stock Options:

Risk-free interest rate

3.5 % - 4.7 %

1.4 % - 4.1 %

0.4 % - 1.3 %

Expected dividend yield

Expected term (in years)

Expected volatility

71.1 % - 83.1 %

55.0 % - 70.8 %

49.2 % - 55.6 %

Weighted-average grant date fair value per share

Employee Stock Purchase Plan:

Risk-free interest rate

5.2 % - 5.5 %

0.7 % - 3.9 %

Expected dividend yield

Expected term (in years)

Expected volatility

72.8 % - 82.5 %

51.9 % - 117.3 %

46.3 % - 59.8 %

Weighted-average grant date fair value per share

Net Loss Per Share

The following table presents the computation of basic and diluted net loss per share (in thousands, except per share data):

Year Ended December 31,

Weighted average common shares outstanding, basic and diluted

Net loss per share, basic and diluted

As the Company was in a net loss position, the following common share equivalents (calculated on a weighted average basis) were excluded from the calculation of diluted net loss per share (in thousands):

Year Ended December 31,

Stock options

Common stock and RSUs

Estimated ESPP purchases

Total dilutive shares

The following table presents the components of loss before income taxes (in thousands):

12 unchanged sentences

Federal statutory income tax rate

Foreign tax rate differential

Non-deductible executive compensation

State taxes, net of federal benefit

Share-based compensation

Stock-based compensation

Permanent items

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Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands):

As of December 31,

Deferred tax assets:

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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):

Balance, beginning of year

The Company records deferred tax liabilities in other non-current liabilities on the Consolidated Balance Sheets.

The Company’s change in its valuation allowance account related to deferred tax assets was as follows (in thousands):

Balance at December 31 of prior year

Change in valuation allowance

Balance, end of year

Balance at December 31

The valuation allowance increased during the year ended December 31, 2023 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.

operating losses incurred.

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

The Company has assessed, on a jurisdictional basis, the available means of recovering deferred tax assets, including the ability to carryback net operating losses (“NOLs”), the existence of reversing taxable temporary differences, the availability of tax planning strategies, and forecasted future taxable income.

At December 31, 2022, the Company maintains a full valuation allowance against its worldwide net deferred tax assets.

At December 31, 2023, the Company maintained a full valuation allowance against its worldwide net deferred tax assets, as it concluded that it was more likely than not that the deferred assets will not be utilized.

As of December 31, 2023, the Company had U.S.

federal NOLs of approximately $ 309.7 million.

federal net operating losses (“NOLs”) of approximately $ 313.4 million.

federal NOLs generated through December 31, 2017 of approximately $ 108.5 million expire at various dates through 2037, and U.S.

federal NOLs generated in the tax years beginning after December 31, 2017 of approximately $ 201.2 million do not expire.

As of December 31, 2022, the Company had $ 207.4 million of state NOLs, approximately $ 197.4 million expire at various dates through 2042, and certain state NOLs of approximately $ 10.0 million do not expire.

federal NOLs generated after December 31, 2017 of approximately $ 204.9 million do not expire.

As of December 31, 2023, the Company had U.S.

federal tax credit carryforwards of approximately $ 6.7 million that expire at various dates through 2043.

As of December 31, 2023, the Company had $ 214.9 million of state NOLs, approximately $ 204.3 million of which expire at various dates through 2042, and approximately $ 10.6 million of which do not expire.

As of December 31, 2023, the Company had U.S.

1 unchanged sentence

Under Sections 382 and 383 of the U.S.

Internal Revenue Code, if a corporation undergoes an ownership change, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes, such as research tax credits, to offset its post-change income and taxes may be limited.

In general, an ownership change generally occurs if there is a cumulative change in its ownership by 5 % stockholders that exceeds 50 percentage points over a rolling three-year period.

Internal Revenue Code, if a corporation undergoes an ownership change, the corporation’s ability to use its pre-ownership change NOLs and other pre-ownership change tax attributes, such as research tax credits, to offset its post-change income and taxes may be limited.

In general, an ownership change occurs if there is a cumulative change in an entity’s ownership by 5% stockholders that exceeds 50 percentage points over a rolling three-year period.

Similar rules may apply under U.S.

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The Company may have experienced an ownership change in the past and may experience ownership changes in the future as a result of future transactions in its share capital, some of which may be outside of the control of the Company.

As a result, if the Company earns net taxable income, its ability to use its pre-change NOLs, or other pre-change tax attributes, to offset U.S.

As a result, if the Company earns net taxable income, its ability to use its pre-ownership change NOLs, or other pre-ownership change tax attributes, to offset U.S.

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

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

The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position.

The Company evaluates uncertain tax positions on an ongoing basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions.

The Company accounts for interest and penalties related to uncertain tax positions as a component of its benefit (provision) for income taxes.

For the years ended December 31, 2022, 2021, and 2020, the Company had no tax reserves accrued for uncertain tax positions and there were no accrued interest or penalties in the consolidated statements of operations.

For the years ended December 31, 2023, 2022, and 2021, the Company had no tax reserves accrued for uncertain tax positions.

The Company is subject to taxation in the United States as well as the Netherlands, Sweden, and China.

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As of December 31, 2023, the Company’s foreign subsidiaries had immaterial undistributed earnings and the tax payable on the earnings that are indefinitely reinvested would be immaterial.

Stock-Based Compensation

Stock-based compensation

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

Cost of product revenue

Cost of service and other revenue

Research and development

Selling, general, and administrative

Total stock-based compensation

At December 31, 2022, there was $ 33.9 million of total unrecognized compensation cost related to unvested stock options and restricted stock units which is expected to be recognized over the remaining weighted-average vesting period of 2.9 years.

Stock-based compensation plans

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 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.

As of December 31, 2017, the 2017 Plan allowed for the issuance of up to 1,042,314 shares of common stock plus up to 2,490,290 shares of common stock represented by awards granted under the 2007 Plan that are forfeited, expired, or are cancelled without delivery of shares or which result in the forfeiture of shares of common stock back to the Company on or after the date the 2017 Plan became effective.

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.

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

(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 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.

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

(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.

Stock options

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 .

These options expire ten years after the grant date.

Option activity is as follows:

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 (Refer to Note 17 – Restructuring) , and a reduction of forecasted sales and profitability.

As a result, the Company performed a goodwill impairment test and determined the carrying amount of the Company’s sole reporting unit exceeded its estimated fair value.

The Company concluded that its entire goodwill balance was impaired and recognized an $ 8.2 million impairment charge during the third quarter of 2022.

As of December 31, 2023 and December 31, 2022, the Company had no remaining goodwill balance.

Acquired intangible assets consisted of the following (in thousands, except useful life and weighted average life amounts):

As of December 31, 2023

Gross Carrying

Weighted Average

Aggregate intrinsic value

exercise price

Life (in years)

(in thousands)

Outstanding at December 31, 2021

( 1,280,825 )

Outstanding at December 31, 2022

Exercisable at December 31, 2022

Vested and expected to vest at December 31, 2022

Restricted stock units

Restricted stock units (RSUs) represent the right to receive shares of common stock upon meeting specified vesting requirements.

A summary of RSU activity is as follows:

Weighted-average

Life Remaining (in years)

Developed technology

Customer relationships

Non-compete agreements

As of December 31, 2022

Gross Carrying

Weighted Average

grant date fair

remaining contractual

intrinsic value

value per share

Life (in years)

(in thousands)

Unvested RSUs as of December 31, 2021

Unvested RSUs as of December 31, 2022

Expected to convert at December 31, 2022

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.

Life Remaining (in years)

Developed technology

Customer relationships

Non-compete agreements

The Company recorded amortization expense of $ 1.6 million, $ 1.8 million, and $ 2.0 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Amortization of know-how is recorded in cost of goods sold;

amortization of developed technology is recorded in research and development expenses;

and amortization of customer relationships, non-compete agreements and trade names are recorded in selling, general and administrative expenses on the Consolidated Statements of Operations.

Future estimated amortization expense is as follows (amounts in thousands):

As of December 31, 2023

Total amortization expense

As part of the Restructuring Plan in the third quarter of 2022 (refer to Note 17 − Restructuring ), the Company decided not to use two leased facilities in its operations and intends to sublease the vacant space to recover a portion of the total lease costs.

The Company’s decision to not use the leased facilities triggered an impairment assessment and the related ROU assets and leasehold improvements became their own asset group.

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

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

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:

During 2023, the Company continued to reassess the remaining ROU assets and leasehold improvements associated with the leased facilities that remained vacant.

The above assessments resulted in the Company recording an impairment charge of $ 1.3 million and $ 16.3 million during the years ended December 31, 2023 and 2022, respectively, which was recorded in impairment and restructuring on the Consolidated Statements of Operations.

For the years ended December 31, 2023 and 2022, impairment charges included $ 1.1 million and $ 12.0 million impairment of ROU assets, respectively.

For the related leasehold improvements, during the year ended December 31, 2023, impairment charges were no t material and for the year ended December 31, 2022 impairment charges were $ 4.3 million.

After recording impairments for the year ended December 31, 2023 and 2022, the carrying value of ROU assets and related leasehold improvements for facilities not being used were $ 10.1 million and $ 12.8 million, respectively.

There were no ROU asset or leasehold improvement impairments recorded in 2021.

The components of the lease costs and supplemental cash flow information relating to the Company's leases were as follows (in thousands):

Year Ended December 31,

Operating leases (in thousands)

Supplemental balance sheet information:

Weighted average remaining lease term (years)

Weighted average discount rate

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:

Maturity of lease liabilities (in thousands)

Operating lease cost

Short-term and variable lease cost

Total lease cost

Year Ended December 31,

Cash paid for amounts included in the measurement of operating lease liabilities

Operating ROU assets obtained in exchange for lease obligations

Weighted average remaining lease term - operating leases (years)

Weighted average discount rate - operating leases

The undiscounted future lease payments for non-cancelable operating leases were as follows (in thousands):

Maturity of lease liabilities

As of December 31, 2023

Total lease payments

imputed interest and lease incentive reimbursements

imputed interest

Total operating lease liabilities

Operating lease balances presented on the Consolidated Balance Sheets were as follows (in thousands):

As of December 31, 2023

Operating lease ROU assets

Operating lease liabilities

Operating lease liabilities, net of current portion

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.

During 2022, the Company and STRATEC Consumables GmbH (“STRATEC”) entered into an amendment to the supply agreement with STRATEC (as amended, the “STRATEC Supply Agreement”), related to the supply of discs used in Simoa bead-based instruments.

As part of the STRATEC Supply Agreement, the Company agreed to purchase a total of 515 thousand discs to be shipped at various points starting in 2022 and continuing through 2024 at an agreed purchase price per disc.

The total purchase commitment under the STRATEC Supply Agreement is $ 3.7 million, of which $ 2.1 million has been paid, and $ 1.0 million is due within one year from December 31, 2023.

In 2023 and 2022, STRATEC shipped 218 thousand and 75 thousand discs, respectively, to the Company.

The Company recorded cost of product revenue related to these shipments of $ 1.6 million and $ 0.5 million for the years ended December 31, 2023 and 2022, respectively.

During 2024, STRATEC is required to ship 222 thousand discs to the Company.

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.

The Company’s other non-cancellable purchase commitments primarily consist of purchases of raw materials for manufacturing operations under annual and multi-year agreements, some of which have minimum quantity requirements.

The Company’s total purchase commitments under these agreements as of December 31, 2023 was $ 3.1 million, most of which the Company expects to incur in the year ending December 31, 2024.

License Agreements

Harvard University

In August 2022, the Company and Harvard University (“Harvard”) entered into an exclusive license agreement (the “Harvard License Agreement”) for certain intellectual property owned by Harvard.

Pursuant to the Harvard License Agreement, the Company paid an upfront fee of $ 0.6 million, which was recorded in research and development expenses on the Consolidated Statements of Operations.

Under this license, the Company is required to pay Harvard low single-digit royalties on net sales of products and services using the licensed technology, as well as a portion of its applicable sublicense revenues.

The Company incurred no royalty expense under the Harvard License Agreement for the years ended December 31, 2023 and 2022.

Refer to Note 16 − Related Party Transactions for a discussion of a related party relationship with Harvard.

Tufts University

In June 2007, the Company entered into a license agreement (the License Agreement) for certain intellectual property with Tufts University (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.

The License Agreement, which was subsequently amended, is exclusive and sub-licensable, and will continue in effect on a country by country basis as long as there is a valid claim of a licensed patent in a country.

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, 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.

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), refer to Note 5 for additional details.

In June 2007, the Company and Tufts University (“Tufts”) entered into a license agreement (the “Tufts License Agreement”) for certain intellectual property owned by Tufts.

The Tufts License Agreement, which was subsequently amended, is exclusive and sub-licensable, and will continue in effect on a country by country basis as long as there is a valid claim of a licensed patent in a country.

The Company is contractually obligated to pay license and maintenance fees that are creditable against royalties, in addition to low single-digit royalties on direct sales and services, and a royalty on sublicense income.

The Company incurred royalty expenses related to the Tufts License Agreement of $ 1.7 million, $ 1.4 million, and $ 1.6 million, during the years ended December 31, 2023, 2022, and 2021, respectively, which was recorded in cost of product revenue on the Consolidated Statements of Operations.

Refer to Note 16 − Related Party Transactions for a discussion of a related party relationship with Tufts.

Legal Contingencies

The Company is subject to claims in the ordinary course of business;

however, the Company is not currently a party to any pending or threatened litigation, the outcome of which would be expected to have a material adverse effect on its financial condition or the results of its operations.

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).

The Company accrues for contingent liabilities when losses are probable and estimable.

If an estimate of a probable loss is a range and no amount within the range is more likely than any other amount in the range, the Company accrues the minimum amount of the range.

Related Party Transactions

In June 2007, the Company entered into the Tufts License Agreement for certain intellectual property owned by Tufts (refer to Note 15 − Commitments and Contingencies ).

A member of the Company’s Board of Directors was previously affiliated with Tufts.

This Board member continues to receive compensation from Tufts on a formulaic basis based on royalties and license payments the Company makes to Tufts.

At December 31, 2023 and 2022, open payable balances to Tufts were not material.

In August 2022, the Company entered into the Harvard License Agreement for certain intellectual property owned by Harvard (refer to Note 15 − Commitments and Contingencies ).

Harvard is obligated to pay a portion of the payments received from the Company under the Harvard License Agreement to a member of the Company’s Board of Directors.

A member of the Company’s Board of Directors is also affiliated with Harvard and Mass General Brigham.

Revenue recorded from sales of products and services to Harvard and its affiliates and to Mass General Brigham and its affiliates totaled $ 1.3 million and $ 0.7 million for the years ended December 31, 2023 and 2022, respectively, and was not material for the year ended December 31, 2021.

product revenue and operating expenses with Harvard and its affiliates and Mass General Brigham and its affiliates was $ 0.3 million for the year ended December 31, 2023, and was not material for the years ended December 31, 2022 and 2021.

At December 31, 2023 and 2022, open payables to and receivable balances from Harvard and Mass General Brigham were not material.

As discussed in Note 3 − Revenue and Related Matters , on May 26, 2022, the Company and UltraDx, a company formed by ARCH, entered into the UltraDx Agreement to supply certain instruments and to grant certain licenses.

At contract inception, the Company determined that UltraDx was a related party because a member of the Company’s Board of Directors was affiliated with ARCH and UltraDx.

As of June 7, 2023, this individual was no longer a member of the Company’s Board of Directors.

Cost of product revenue with UltraDx was $ 0.3 million for the year ended December 31, 2023 and $ 0.7 million for the year ended December 31, 2022.

At December 31, 2023 and 2022, there were no open payable balances to UltraDx and open receivable balances from UltraDx were not material.

Restructuring

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.

The Restructuring Plan aligned the Company’s investments to best serve the needs of its customers, focused the Company’s innovation efforts on key platforms, and provided a foundation for the Company’s entry into translational pharma and clinical markets.

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 Restructuring Plan included the elimination of 119 positions and other cost-saving measures.

During the year ended December 31, 2022, the Company incurred approximately $ 3.8 million of expenses related to the Restructuring Plan, which represents the total amount expected to be incurred and the amount incurred to date.

These costs were recorded in impairment and restructuring on the Consolidated Statements of Operations and were substantially for cash payments of severance and employee benefits, $ 3.5 million of which was paid by December 31, 2022.

As a result of the Restructuring Plan, the Company performed an impairment assessment of its goodwill, long-lived assets, including ROU assets and related leasehold improvements, and intangibles.

The assessments resulted in the Company recording an impairment charge of $ 25.6 million during the year ended December 31, 2022, which was recorded in impairment and restructuring on the Consolidated Statements of Operations.

The impairment charge included (1) $ 8.2 million of goodwill (refer to Note 13 − Goodwill and Intangible Assets ), (2) $ 16.3 million associated with the ROU assets and related leasehold improvements at two leased facilities not being used (refer to Note 14 − Leases ), and (3) $ 1.1 million for software costs related to projects that were rationalized as part of the Restructuring Plan or the related exit and disposal costs.

During the year ended December 31, 2023, the Company recorded an additional impairment of $ 1.3 million associated with the ROU asset and related leasehold improvements at the leased facilities not being used (refer to Note 14 − Leases )

The following table presents the restructuring reserve and provision activity for the year ended December 31, 2023 (in thousands):

Severance and Employee Benefit Costs

Other Restructuring Charges

Balance at January 1, 2022

Balance at December 31, 2022

Accrual adjustments

Cash payments

Foreign exchange

Foreign currency translation

Balance at December 31, 2023

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

Notes payable

Loan agreement

On April 14, 2014, the Company executed a loan agreement with a lender, as subsequently amended.

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

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 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.

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

The Company did not have any restructuring activities related to the Restructuring Plan during the year ended December 31, 2023.

Employee Benefit Plans

The Company sponsors a 401(k) savings plan for employees.

The Company may make discretionary contributions for each 401(k) plan year.

The Company sponsors a 401(k) savings plan for employees and may make discretionary contributions.

During the years ended December 31, 2023, 2022, and 2021, the Company made contributions of $ 0.8 million, $ 1.2 million, and $ 1.1 million, respectively.

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

Impairment losses

Foreign exchange adjustments

Balance as of December 31, 2022

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

December 31, 2022

Gross Carrying

Weighted Average

Life (in years)

Life R emaining (in years)

Developed technology

Customer relationships

Non-compete agreements

December 31, 2021

Gross Carrying

Weighted Average

Life (in years)

Life R emaining (in years)

Developed technology

Customer relationships

Non-compete agreements

The Company recorded amortization expense of $ 1.8 million, $ 2.0 million, and $ 2.1 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Amortization of developed technology is recorded within research and development expenses, amortization of customer relationships is recorded within selling, general, and administrative expenses, amortization of trade names is recorded within selling, general, and administrative expenses, amortization of non-compete agreements is recorded within selling, general, and administrative expenses, and amortization of know-how is recorded within cost of goods sold.

Future estimated amortization expense of acquired intangible assets as of December 31, 2022 is as follows (amounts in thousands):

As of December 31, 2022

Total amortization expense

Related party transactions

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 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.

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, refer to 5 for additional details.

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.

Variable Interest Entities

The Company enters into relationships with, or has investments in, other entities that may be VIEs.

The Company assesses the criteria in ASC 810 – Consolidation to determine if any of these entities meet the definition of a VIE and require consolidation into its financial statements.

The Company’s analysis determines whether it has a controlling financial interest and also identifies the primary beneficiary of a VIE as the enterprise that has both (1) the power to direct activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity.

As discussed in Note 3 − Revenue and Related Matters , during the second quarter of 2023 the Company received one million ordinary shares of UltraDx under the UltraDx Agreement.

Primarily due to having less than a 5 % ownership interest in UltraDx, the Company concluded that it does not have the power to direct activities impacting UltraDx’s economic performance and therefore the Company is not the primary beneficiary of the VIE.

Based on the Company’s assessments, it does not have any controlling financial interests in any VIEs, and therefore did not consolidate any VIEs into its Consolidated Financial Statements during the years ended December 31, 2023 and 2022.

As of December 31, 2023 and 2022, the carrying value of the Company’s investments in VIEs was $ 0.8 million and $ 0.3 million, respectively, which were recorded in other non-current assets on the Consolidated Balance Sheets.

Refer to Note 6 − Fair Value of Financial Instruments for the Company’s related valuation disclosures.

Maximum exposure to losses related to these VIEs is limited to their carrying value and the Company does not have any future funding commitments to these VIEs.

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