What changed in this filing

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Item 1. Financial Statements

2021-11-05 compared with 2021-08-06 · 103 added, 69 removed, 416 unchanged (29% of the section changed)

3 unchanged sentences

(In thousands)

September 30,

2021 December 31,

15 unchanged sentences

Current liabilities:

Accrued contingent liabilities $ 29,496 $ 44,173

Accounts payable $ 17,037 $ 4,709

3 unchanged sentences

Operating lease liabilities 4,464 5,936

Accrued contingent liabilities — 44,173

Total current liabilities 100,375 118,126

17 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

4 unchanged sentences

Research and development 54,582 30,143 149,867 83,670

In-process research and development — 40,637 — 40,637

Selling, general and administrative 62,076 51,549 187,683 146,352

5 unchanged sentences

Interest expense ( 219 ) ( 397 ) ( 649 ) ( 1,365 )

Other income (expense), net 521 ( 144 ) ( 208 ) ( 240 )

Other (expense) income, net ( 599 ) 361 ( 807 ) 121

Loss on extinguishment of debt — — — ( 1,521 )

Total other income (expense) 370 ( 325 ) ( 530 ) ( 1,286 )

Total other expense ( 769 ) ( 8 ) ( 1,299 ) ( 1,294 )

Loss before provision for income taxes ( 16,648 ) ( 65,263 ) ( 37,722 ) ( 125,853 )

18 unchanged sentences

Balance as of December 31, 2020 108,485,909 $ 2 $ 1,544,218 $ ( 805,098 ) $ ( 50 ) $ 739,072

Issuance of Class A common stock upon exercise of stock options 1,102,618 — 8,546 — — 8,546

Issuance of Class A common stock related to equity awards 1,102,618 — 8,546 — — 8,546

Vesting of shares subject to repurchase, including early exercised options — — 42 — — 42

3 unchanged sentences

Balance as of March 31, 2021 109,588,527 2 1,569,059 ( 816,649 ) 48 752,460

Issuance of Class A common stock upon exercise of stock options 1,151,392 — 16,194 — — 16,194

Issuance of Class A common stock related to equity awards 1,151,392 — 16,194 — — 16,194

Vesting of shares subject to repurchase, including early exercised options — — 42 — — 42

3 unchanged sentences

Balance as of June 30, 2021 110,739,919 2 1,612,227 ( 827,701 ) 58 784,586

Issuance of Class A common stock related to equity awards 797,529 — 6,682 — — 6,682

Vesting of shares subject to repurchase, including early exercised options — — 38 — — 38

Stock-based compensation — — 25,950 — — 25,950

Net loss — — — ( 17,171 ) — ( 17,171 )

Other comprehensive income — — — — 136 136

Balance as of September 30, 2021 111,537,448 $ 2 $ 1,644,897 $ ( 844,872 ) $ 194 $ 800,221

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

10x Genomics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

Common Stock Additional Paid-in

2 unchanged sentences

Comprehensive

Income (Loss) Total

Stockholders’

1 unchanged sentence

Balance as of December 31, 2019 96,241,596 $ 2 $ 682,494 $ ( 262,367 ) $ ( 46 ) $ 420,083

Issuance of Class A common stock upon exercise of stock options 1,903,612 — 3,283 — — 3,283

Issuance of Class A common stock related to equity awards 1,903,612 — 3,283 — — 3,283

Vesting of shares subject to repurchase, including early exercised options — — 122 — — 122

3 unchanged sentences

Balance as of March 31, 2020 98,145,208 2 692,617 ( 283,510 ) ( 41 ) 409,068

Issuance of Class A common stock upon exercise of stock options 2,113,974 — 8,051 — — 8,051

Issuance of Class A common stock related to equity awards 2,113,974 — 8,051 — — 8,051

Vesting of shares subject to repurchase, including early exercised options — — 42 — — 42

3 unchanged sentences

Balance as of June 30, 2020 100,259,182 2 714,630 ( 323,677 ) 314 391,269

Sale of Class A common stock 4,600,000 — 482,279 — — 482,279

Issuance of Class A common stock related to equity awards 740,794 — 3,920 — — 3,920

Vesting of shares subject to repurchase, including early exercised options — — 42 — — 42

Stock-based compensation — — 13,784 — — 13,784

Net loss — — — ( 65,848 ) — ( 65,848 )

Other comprehensive loss — — — — ( 366 ) ( 366 )

Balance as of September 30, 2020 105,599,976 $ 2 $ 1,214,655 $ ( 389,525 ) $ ( 52 ) $ 825,080

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

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities:

Net loss $ ( 39,774 ) $ ( 127,158 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

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

Depreciation and amortization 15,337 10,094

18 unchanged sentences

Investing activities:

Acquisition of intangible assets — ( 801 )

Acquisition of business, net of cash acquired ( 5,451 ) —

4 unchanged sentences

Payments on term loans — ( 31,256 )

Proceeds from issuance of common stock from follow-on public offering, net of issuance costs — 483,047

Issuance of common stock from exercise of stock options and employee stock purchase plan purchases 31,422 15,255

Net cash provided by (used in) financing activities 19,711 ( 25,768 )

Net cash provided by financing activities 26,394 461,200

Effect of exchange rates on changes in cash, cash equivalents, and restricted cash 316 ( 144 )

Net decrease in cash, cash equivalents, and restricted cash ( 39,936 ) ( 72,803 )

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 79,579 ) 357,205

Cash, cash equivalents, and restricted cash at beginning of period 688,644 476,493

6 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Noncash investing and financing activities:

2 unchanged sentences

Contingent consideration payable from business acquisition $ 1,536 $ —

Deferred offering costs in accounts payable and accrued expenses and other current liabilities $ — $ 768

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

22 unchanged sentences

Cash and cash equivalents are comprised of money market funds and cash which are classified as Level 1 in the fair value hierarchy.

As of June 30, 2021 and December 31, 2020, the Company held $ 547.9 million and $ 600.9 million in money market funds, respectively, with no unrealized gains or losses.

As of September 30, 2021 and December 31, 2020, the Company held $ 548.0 million and $ 600.9 million in money market funds, respectively, with no unrealized gains or losses.

Revenue Recognition

18 unchanged sentences

Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period, adjusted for outstanding shares that are subject to repurchase.

For the calculation of diluted net loss per share, basic net loss per share is adjusted by the effect of dilutive securities, including convertible preferred stock and awards under the Company’s equity compensation plans.

For the calculation of diluted net loss per share, basic net loss per share is adjusted by the effect of dilutive securities including awards under the Company’s equity compensation plans.

Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding.

5 unchanged sentences

The acquisition was accounted for using the acquisition method of accounting, with Tetramer Shop treated as the acquiree.

The acquired assets and liabilities were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets.

The acquired assets, including identified intangible assets, and liabilities were recorded at their respective fair values with an amount recorded to goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets.

The fair values assigned to the assets acquired and liabilities assumed were based on management’s assumptions as of the reporting date.

Our condensed consolidated statements of income include the financial results of Tetramer Shop subsequent to the acquisition date.

Revenue related to Tetramer Shop since the acquisition date was included in our condensed consolidated statements of income and was not material.

The acquisition price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the acquisition date based upon their respective fair values.

The fair values assigned to assets acquired and liabilities assumed were based on management’s assumptions as of the reporting date.

10x Genomics, Inc.

31 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

September 30,

2021 December 31,

5 unchanged sentences

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

September 30,

2021 December 31,

10 unchanged sentences

Intangible assets, net, which are recorded within other assets in the condensed consolidated balance sheets, consisted of the following (dollars in thousands):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Remaining Useful Life in Years Gross

11 unchanged sentences

The estimated annual amortization of intangible assets for the next five years is shown below (in thousands):

2021 (excluding the six months ended June 30, 2021) $ 1,297

2021 (excluding the nine months ended September 30, 2021) $ 645

Thereafter 15,763

5 unchanged sentences

Accrued compensation and related benefits were comprised of the following as of the dates indicated (in thousands):

September 30,

2021 December 31,

9 unchanged sentences

Accrued expenses and other current liabilities were comprised of the following as of the dates indicated (in thousands):

September 30,

2021 December 31,

13 unchanged sentences

Changes in the reserve for product warranties were as follows for the periods indicated (in thousands):

2021 December 31,

Nine Months Ended September 30, 2021 Year Ended December 31, 2020

Beginning of period $ 399 $ 467

2 unchanged sentences

End of period $ 824 $ 399

Revenue and Deferred Revenue

As of June 30, 2021, the aggregate amount of remaining performance obligations related to separately sold extended warranty service agreements, or allocated amounts for extended warranty service agreements bundled with sales of Chromium

10x Genomics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

instruments, was $ 6.9 million, of which approximately 73 % is expected to be recognized to revenue in the next 12 months, with the remainder thereafter.

The contract liabilities of $ 6.9 million and $ 6.2 million as of June 30, 2021 and December 31, 2020, respectively, consisted of deferred revenue related to extended warranty service agreements, and as of June 30, 2021, the short-term portion was $ 5.1 million.

Revenue recorded during the three and six months ended June 30, 2021 included $ 1.1 million and $ 2.5 million, respectively, of previously deferred revenue that was included in contract liabilities as of December 31, 2020.

Revenue and Deferred Revenue

As of September 30, 2021, the aggregate amount of remaining performance obligations related to separately sold extended warranty service agreements, or allocated amounts for extended warranty service agreements bundled with sales of Chromium instruments, was $ 7.3 million, of which approximately $ 5.4 million is expected to be recognized to revenue in the next 12 months, with the remainder thereafter.

The contract liabilities of $ 7.3 million and $ 6.2 million as of September 30, 2021 and December 31, 2020, respectively, consisted of deferred revenue related to extended warranty service agreements.

Revenue recorded during the three and nine months ended September 30, 2021 included $ 0.9 million and $ 3.4 million, respectively, of previously deferred revenue that was included in contract liabilities as of December 31, 2020.

Revenue recorded during the three and nine months ended September 30, 2020 included $ 0.7 million and $ 2.8 million, respectively, of previously deferred revenue that was included in contract liabilities as of December 31, 2019.

The following table represents revenue by source for the periods indicated (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

4 unchanged sentences

Total revenue $ 125,297 $ 71,817 $ 346,960 $ 186,627

Revenue for the United States, which is included in North America in the table above, was 52 % and 45 % of consolidated revenue for the three months ended June 30, 2021 and 2020, respectively, and 55 % and 50 % of consolidated revenue for the six months ended June 30, 2021 and 2020, respectively.

Revenue for the United States, which is included in North America in the table above, was 55 % and 57 % of consolidated revenue for the three months ended September 30, 2021 and 2020, respectively, and 53 % and 53 % of consolidated revenue for the nine months ended September 30, 2021 and 2020, respectively.

In September 2016, the Company entered into a Second Amended and Restated Loan and Security Agreement with Silicon Valley Bank (as amended and restated in February 2018 and as further amended, restated or supplemented from time to time, the “Loan and Security Agreement”), which included a term loan and revolving line of credit.

6 unchanged sentences

As of June 18, 2020, there were no balances outstanding under the revolving line of credit.

10x Genomics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Commitments and Contingencies

4 unchanged sentences

The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities.

10x Genomics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2021, the Company incurred $ 2.6 million and $ 5.2 million, respectively, of operating lease costs and $ 0.3 million and $ 0.4 million, respectively, of variable lease costs.

For the three and six months ended June 30, 2020, the Company incurred $ 2.1 million and $ 4.0 million, respectively, of operating lease costs and $ 0.1 million and $ 0.2 million, respectively, of variable lease costs.

For the three and nine months ended September 30, 2021, the Company incurred $ 2.6 million and $ 7.9 million, respectively, of operating lease costs and $ 0.1 million and $ 0.5 million, respectively, of variable lease costs.

For the three and nine months ended September 30, 2020, the Company incurred $ 2.1 million and $ 6.1 million, respectively, of operating lease costs and $ 19 thousand and $ 0.2 million, respectively, of variable lease costs.

The variable lease cost is comprised primarily of the Company’s proportionate share of operating expenses, property taxes and insurance and is classified as lease cost due to the Company’s election to not separate lease and non-lease components.

Cash paid for amounts included in the measurement of operating lease liabilities for the six months ended June 30, 2021 and 2020 was $ 4.7 million and $ 3.1 million and were included in net cash used in operating activities in the Company’s condensed consolidated statements of cash flows.

Future lease payments related to the Company’s operating lease liabilities as of June 30, 2021 is as follows (in thousands):

Cash paid for amounts included in the measurement of operating lease liabilities for the nine months ended September 30, 2021 and 2020 was $ 4.6 million and $ 5.1 million and were included in net cash used in operating activities in the Company’s condensed consolidated statements of cash flows.

Future net lease payments related to the Company’s operating lease liabilities as of September 30, 2021 is as follows (in thousands):

Operating Leases

2021 (excluding the six months ended June 30, 2021) $ 1,262

2021 (excluding the nine months ended September 30, 2021) $ 464

Thereafter 59,746

4 unchanged sentences

Operating lease liabilities, noncurrent $ 75,735

The following table summarizes additional information related to operating leases as of June 30, 2021:

June 30, 2021 December 31, 2020

The following table summarizes additional information related to operating leases as of September 30, 2021:

September 30, 2021 December 31, 2020

Weighted-average remaining lease term 7.6 years 8.4 years

2 unchanged sentences

The Company intends to utilize the leased space of approximately 145,000 square feet to accommodate its future growth requirements.

The MLA consists of various lease components expected to commence on various dates between 2021 and 2023 and is expected to terminate on June 30, 2033 with total lease payments over the lease term expected to amount to approximately $ 60.8 million, net of a tenant improvement allowance of approximately $ 10.0 million to be received in the second half of 2021.

Certain lease components of the MLA commenced on January 1, 2021.

The total undiscounted lease payments for the lease components commencing during the remaining portion of fiscal year 2021 is $ 15.5 million with a weighted average lease term of 12 years.

Approximately, $ 2.6 million of this allowance has been received as of September 30, 2021.

Certain lease components of the MLA commenced on January 1, 2021 and July 1, 2021.

Total undiscounted payments for leases commencing in fiscal years 2022 and 2023 will be $ 21.0 million and $ 14.0 million, respectively, with weighted-average expected lease terms of 12 years for 2022 and 11 years for 2023.

10x Genomics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

On April 30, 2021, the Company entered into a lease agreement to lease office building space of approximately 22,000 square feet in Stockholm, Sweden to accommodate its future growth requirements.

The Company expects the lease term to commence in January 2022 for a five-year term and expects total lease payments over the lease term to amount to approximately $ 5.7 million.

The tables above do not include payments, lease term, or discount rates relating to any leases or lease components that have not yet commenced as of June 30, 2021.

The tables above do not include payments, lease term, or discount rates relating to any leases or lease components that have not yet commenced as of September 30, 2021.

The Company will determine the classification for each lease component at the individual component's commencement date.

All leases and lease components that have not yet commenced are expected to be classified as operating leases.

10x Genomics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Lease payments for leases not yet commenced as of September 30, 2021 is as follows (in thousands):

Lease payments for leases not yet Commenced

2021 (excluding the six months ended June 30, 2021) $ —

2021 (excluding the nine months ended September 30, 2021) $ —

Thereafter 28,270

3 unchanged sentences

Bio-Rad Laboratories, Inc.

(“Bio-Rad”) and the Company were previously engaged in litigation and other proceedings relating to substantially all of the Company’s Chromium products, including the Company’s legacy GEM products and Next GEM products and multiple Bio-Rad products, around the world (the "Bio-Rad Actions").

On July 26, 2021, the Company entered into a Settlement and Patent Cross License Agreement (the “Agreement”) with Bio-Rad resolving all outstanding litigation and other proceedings between the two companies across all jurisdictions around the world and dismissing all infringement claims with prejudice.

Pursuant to the terms of the Agreement, Bio-Rad and the Company granted each other a non-exclusive, worldwide, royalty-bearing license to develop products and services related to single cell analysis.

On July 26, 2021, the Company entered into a Settlement and Patent Cross License Agreement (the “Bio-Rad Agreement”) with Bio-Rad resolving all outstanding litigation and other proceedings between the two companies across all jurisdictions around the world and dismissing all infringement claims with prejudice.

Pursuant to the terms of the Bio-Rad Agreement, Bio-Rad and the Company granted each other a non-exclusive, worldwide, royalty-bearing license to develop products and services related to single cell analysis.

The cross license excludes spatial and In Situ products.

It also excludes digital PCR products in the case of 10x.

The term of the Agreement is for the life of the licensed patents.

The term of the Bio-Rad Agreement is for the life of the licensed patents.

The Company and Bio-Rad have agreed not to sue each other on licensed products and licensed services on other patents owned or exclusively licensed by each company.

1 unchanged sentence

Each company shall pay to the other royalties from licensed products and licensed services through 2030.

The Company previously accrued $ 44.8 million in royalties and interest between November 14, 2018 and March 31, 2021 related to sales of the Company’s GEM products as a result of the litigation with Bio-Rad.

Pursuant to the Agreement, the Company shall pay Bio-Rad $ 29.4 million in royalties and interest related to the sales of such GEM products between November 14, 2018 and March 31, 2021.

As a result, in connection with the Agreement the Company reversed $ 15.4 million in accrued royalties and interest to the Company's financial statements in the second quarter of 2021.

Pursuant to the Agreement, the Company paid Bio-Rad $ 29.4 million in royalties and interest related to the sales of such GEM products between November 14, 2018 and March 31, 2021.

As a result, in connection with the Agreement the Company reversed $ 15.4 million in accrued royalties and interest as a reduction in cost of goods sold and operating expenses in the second quarter of 2021.

The Nanostring Action

1 unchanged sentence

("Nanostring") in the U.S.

District Court for the District of Delaware alleging that Nanostring's GeoMx Digital Spatial Profiler and associated instruments and reagents infringe U.S.

District Court for the District of Delaware alleging that Nanostring's GeoMx Digital Spatial Profiler and associated instruments and reagents

10x Genomics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

infringe U.S.

10,472,669, 10,662,467, 10,961,566, 10,983,113, and 10,996,219.

2 unchanged sentences

On July 1, 2021, Nanostring filed a motion to dismiss.

Briefing is in progress and no hearing has been scheduled.

Discovery has not yet commenced and no case schedule has been set.

Briefing is complete and a hearing has been scheduled for November 17, 2021.

Discovery has just commenced;

no case schedule has been set.

For further discussion of the risks relating to intellectual property and our pending litigation, see the section titled “Risk Factors—Risks related to litigation and our intellectual property” under Item 1A below.

10x Genomics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Capital Stock

As of June 30, 2021, the number of shares of Class A common stock and Class B common stock issued and outstanding was 90,458,454 and 20,281,465 , respectively.

During the three months ended June 30, 2021 and 2020, 2,250,000 and 13,630,921 , respectively, and during the six months ended June 30, 2021 and 2020, 2,400,000 and 45,404,934 , respectively, shares of Class B common stock, respectively, were converted to shares of Class A common stock upon the election of the holders of such shares.

As of September 30, 2021, the number of shares of Class A common stock and Class B common stock issued and outstanding was 91,255,983 and 20,281,465 , respectively.

During the three months ended September 30, 2020 and during the nine months ended September 30, 2021 and 2020, 2,153,783 , 2,400,000 and 47,558,717 shares of Class B common stock, respectively, were converted to shares of Class A common stock upon the election of the holders of such shares.

No conversions of Class B common stock to Class A common stock occurred during the three months ended September 30, 2021.

Equity Incentive Plans

3 unchanged sentences

Shares purchased under the ESPP are subject to a one-year holding period following the purchase date.

During the three months ended June 30, 2021 and 2020, 30,868 and 118,218 shares of Class A common stock, respectively, were issued under the ESPP.

As of June 30, 2021, there were 2,890,264 shares available for issuance in connection under the ESPP.

During the nine months ended September 30, 2021 and 2020, 30,980 and 118,218 shares of Class A common stock, respectively, were issued under the ESPP.

No shares of Class A common stock were issued under the ESPP during the three months ended September 30, 2021 or 2020.

As of September 30, 2021, there were 2,888,340 shares available for issuance in connection under the ESPP.

Stock-based Compensation

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

4 unchanged sentences

Restricted Stock Units

Restricted stock unit activity for the six months ended June 30, 2021 is as follows:

Restricted stock unit activity for the nine months ended September 30, 2021 is as follows:

Restricted Stock

5 unchanged sentences

Cancelled ( 71,651 ) 118.67

Outstanding as of June 30, 2021 1,340,188 $ 135.24

Outstanding as of September 30, 2021 1,314,157 $ 139.00

10x Genomics, Inc.

1 unchanged sentence

Stock Options

Stock option activity for the six months ended June 30, 2021 is as follows:

Stock option activity for the nine months ended September 30, 2021 is as follows:

Stock Options Weighted-Average

4 unchanged sentences

Cancelled ( 263,911 ) 25.00

Outstanding as of June 30, 2021 10,042,162 $ 26.15

Outstanding as of September 30, 2021 9,206,850 $ 27.61

Net Loss Per Share

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

5 unchanged sentences

Total 10,811,669 13,720,262 10,811,669 13,720,262

Subsequent Events

On July 26, 2021, the Company entered into a Settlement and Patent Cross License Agreement with Bio-Rad resolving all outstanding litigation and other proceedings between the two companies across all jurisdictions around the world and dismissing all infringement claims with prejudice.

See Note 6 to condensed consolidated financial statements, Commitments and Contingencies, The 2021 Bio-Rad Settlement And Patent Cross License Agreement, for further details.

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

What changed 10-Q

Item 1. Financial Statements