What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-03-22 compared with 2021-03-16 · 274 added, 267 removed, 662 unchanged (45% of the section changed)

1 unchanged sentence

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that the information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives.

6 unchanged sentences

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgement in evaluating the cost-benefit relationship of possible controls and procedures.

Management's Report on Internal Control over Financial Reporting

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

Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Our internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the

financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect all misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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

As of December 31, 2021, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.

Based on this assessment, our management concluded that, as of December 31, 2021, our internal control over financial reporting was effective based on those criteria.

Attestation Report of the Registered Public Accounting Firm

3 unchanged sentences

Other Information.

Appointment of Chief Operating Officer

On March 13, 2021, our board of directors appointed of Mark Hazeltine, age 47, as our Chief Operating Officer, effective as of March 15, 2021.

Mark Hazeltine has served in various positions of increasing responsibility since joining Exagen in March 2015, including general manager.

Hazeltine received his Bachelor of Business Administration degree from the University of San Diego and Master of Business Administration degree from the Marshall School of Business at the University of Southern California.

Additional information regarding Mr.

Hazeltine's background, business and experience will appear in our Definitive Proxy Statement on Schedule 14A, to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K, under the heading's "Executive Officers."

Pursuant to the terms of Mr.

Hazeltine's offer letter, as amended effective as of March 15, 2021 in connection with his promotion, Mr.

Hazeltine will receive an annual base salary of $375,950 and will be eligible to receive an annual incentive bonus at an initial target for calendar year 2021 of 45% of his annual base salary.

The offer letter with Mr.

Hazeltine provides for an indefinite term and for at-will employment.

Hazeltine is also entitled to participate in all employee benefit plans, programs and arrangements maintained by the company and made available to employees generally.

There are no family relationships between Mr.

Hazeltine and any of our directors or executive officers that are required to be disclosed pursuant to Item 401(d) of Regulation S-K.

In addition, there are no transactions between us and Mr.

Hazeltine, or any member of Mr.

Hazeltine's immediate family, that are required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Executive Change in Control Severance Plan

On March 15, 2021, the Compensation Committee of our board of directors adopted the Exagen Inc.

Executive Change in Control Severance Plan, or the Severance Plan.

The Severance Plan provides for the payment of cash severance and other benefits to our executives, including Fortunato Ron Rocca (President and Chief Executive Officer), Kamal Adawi (Chief Financial Officer and Corporate Secretary) and Mark Hazeltine (Chief Operating Officer), in the event of a qualifying termination of employment with us in connection with a change in control.

Under the Severance Plan, in the event of a termination of an executive’s employment by us without “cause” or by the executive for “good reason”, in either case, on or within twelve months following a “change in control”, the executive will be eligible to receive the following payments and benefits:

• a cash payment equal to 100% (or, for Mr.

Rocca, 125%) of the sum of (i) the executive’s then-current annual base salary, plus (ii) the executive’s target cash performance bonus for the year in which the termination occurs, to be paid in a lump sum on the 30 th day following the executive’s termination;

• a cash payment equal to the executive’s pro-rated cash performance bonus (based on actual performance) for the year in which the termination occurs;

• Company-subsidized COBRA premium payments for the executive and his or her covered dependents for up to 12 (or, for Mr.

Rocca, 15) months;

• full accelerated vesting of all outstanding equity awards of our company that vest solely based on the passage of time.

The executive’s right to receive the severance payments and benefits described above is subject to the executive’s delivery and, as applicable, non-revocation of a general release of claims in our favor and the executive’s continued compliance with any applicable restrictive covenants.

In addition, in the event that any payment under the Severance Plan, together with any other amounts paid to the executive by us, would subject the executive to an excise tax under Section 4999 of the Internal Revenue Code, such payments will be reduced to the extent that such reduction would produce a better net after-tax result for the executive.

The foregoing description of the Severance Plan is qualified in its entirety by reference to the full text of the Severance Plan, a copy of which is filed as Exhibit 10.46 to this Annual Report on Form 10-K and is incorporated herein by reference.

Not applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Directors, Executive Officers and Corporate Governance.

The information required by this item is incorporated herein by reference to our Proxy Statement with respect to our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report on Form 10-K.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to our officers, directors and employees, which is available on our website at www.exagen.com.

The Code of Business Conduct and Ethics contains general guidelines for conducting the business of our company consistent with the highest standards of business ethics and is intended to qualify as a “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and Item 406 of Regulation S-K.

In addition, we intend to promptly disclose (1) the nature of any amendment to our Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions and (2) the nature of any waiver, including an implicit waiver, from a provision of our code of ethics that is granted to one of these specified officers, the name of such person who is granted the waiver and the date of the waiver on our website in the future.

Executive Compensation.

5 unchanged sentences

Principal Accountant Fees and Services.

Our independent public accounting firm is BDO USA, LLP, San Diego, California, PCAOB ID # 243 .

8 unchanged sentences

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Balance Sheets as of December 31, 2021 and 2020

Statements of Operations for the Years Ended December 31, 2021 and 2020

Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity for the Years Ended December 31, 2020 and 2019

Statements of Stockholders' Equity for the Years Ended December 31, 2021 and 2020

Statements of Cash Flows for the Years Ended December 31, 2021 and 2020

5 unchanged sentences

We have audited the accompanying balance sheets of Exagen Inc.

(“the Company”) as of December 31, 2020 and 2019, the related statements of operations, redeemable convertible preferred stock and stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

(“the Company”) as of December 31, 2021 and 2020, the related statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

61 unchanged sentences

Interest expense ( 2,625 ) ( 2,565 )

Change in fair value of financial instruments — 267

Other income, net 16 984

Loss before income taxes ( 26,676 ) ( 16,766 )

Income tax benefit (expense) 79 ( 25 )

Income tax (expense) benefit ( 175 ) 79

Net loss $ ( 26,851 ) $ ( 16,687 )

Accretion of redeemable convertible preferred stock — ( 4,640 )

Deemed dividend recorded in connection with financing transactions — ( 13,601 )

Net loss attributable to common stockholders (Note 2) $ ( 16,687 ) $ ( 30,279 )

Net loss per share, basic and diluted (Note 2) $ ( 1.68 ) $ ( 1.32 )

1 unchanged sentence

The accompanying notes are an integral part of these financial statements

Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity

Statements of Stockholders' Equity

(in thousands, except share and per share amounts)

Preferred Stock Common Stock Additional

Common Stock Additional

Capital Accumulated

1 unchanged sentence

Stockholders'

Shares Amount Shares Amount

Shares Amount

Balances at December 31, 2019 12,560,990 $ 13 $ 220,248 $ ( 164,602 ) $ 55,659

Accretion of redeemable convertible preferred stock — 4,640 — — ( 4,640 ) — ( 4,640 )

Exercise of stock options 47,549 — 13 — 13

Issuance of stock under Employee Stock Purchase Plan 11,649 — 142 — 142

Stock-based compensation — — 2,694 — 2,694

Issuance of Series G redeemable convertible preferred stock for aggregate proceeds of $ 0.078 per share, net of issuance costs of $ 124 (Note 7)

148,928,337 11,492 — — — — —

Issuance of Series H redeemable convertible preferred stock for aggregate proceeds of $ 0.047 per share, net of issuance costs of $ 318 (Note 7)

233,446,519 3,941 — — 6,741 — 6,741

Deemed dividend recognized on beneficial conversion features of Series H redeemable convertible preferred stock (Note 7) — 6,741 — — ( 6,741 ) — ( 6,741 )

Deemed dividend from conversion of Series G to Series H redeemable convertible preferred stock (Note 7) 97,592,739 6,860 — — ( 6,860 ) ( 6,860 )

Conversion of preferred stock to common stock in connection with initial public offering (Note 7) ( 1,012,573,679 ) ( 138,906 ) 7,816,643 8 138,898 — 138,906

Issuance of common stock in initial public offering, net of underwriting discount, commissions and issuance costs (Note 8) — — 4,140,000 4 50,440 — 50,444

Net exercise of common and preferred stock warrants — — 539,794 1 510 — 511

Reclassification of redeemable convertible preferred stock warrant liabilities as equity — — — — 726 — 726

Exercise of common stock warrants 32,120 — 18 — 18

Net loss — — — ( 16,687 ) ( 16,687 )

Balances at December 31, 2020 12,652,308 13 223,115 ( 181,289 ) 41,839

Issuance of stock in public offering, net of issuance costs of $ 4,435

4,255,000 4 64,705 — 64,709

Retirement of common stock in exchange for common stock warrant ( 804,951 ) ( 1 ) ( 12,774 ) — ( 12,775 )

Issuance of common stock warrant in exchange for retirement of common stock — — 12,775 — 12,775

Exercise of stock options 11,950 — 89 — 89

14 unchanged sentences

Non-cash interest expense

Revaluation of warrant liabilities — ( 267 )

Deferred income taxes 148 ( 106 )

Loss on disposal of assets — 20

Stock-based compensation 4,728 2,694

8 unchanged sentences

Purchases of property and equipment ( 2,370 ) ( 455 )

Proceeds from sale of property and equipment — 300

Purchase of other assets ( 50 ) —

Net cash used in investing activities ( 2,420 ) ( 455 )

Cash flows from financing activities:

Proceeds from sale of common stock upon exercise of stock options 13 4

Proceeds from exercise of stock options 89 13

Proceeds from common stock issued under Employee Stock Purchase Plan 390 142

3 unchanged sentences

Repayment of Paycheck Protection Program loan — ( 2,865 )

Proceeds from initial public offering, net of issuance costs and offering costs — 50,444

Proceeds from issuance of Series G redeemable convertible preferred stock, net of issuance costs — 7,742

Proceeds from issuance of Series H redeemable convertible preferred stock, net of issuance costs — 10,682

Proceeds from the issuance of common stock in public offering, gross 69,144 —

Payment of issuance costs related to public offering ( 4,407 ) —

Payments of deferred offering costs ( 40 ) ( 21 )

Net cash (used in) provided by financing activities ( 97 ) 68,734

Net cash provided by (used in) financing activities 64,683 ( 97 )

Net change in cash, cash equivalents and restricted cash 41,994 ( 14,636 )

4 unchanged sentences

Supplemental disclosure of non-cash items:

Accretion to redemption value of redeemable convertible preferred stock $ — $ 4,640

Equipment purchased under capital lease obligations $ 1,111 $ 260

Costs incurred, but not paid, in connection with capital expenditures $ 685 $ 553

Conversion of redeemable convertible preferred stock $ — $ 138,906

Net exercise of common and preferred stock warrants $ — $ 511

Deferred offering costs included in accounts payable and accrued and other current liabilities $ — $ 40

Reclassification of redeemable convertible preferred stock warrant liabilities as equity $ — $ 726

Deemed dividend recognized for beneficial conversion features of Series H redeemable convertible preferred stock $ — $ 6,741

Deemed dividend from conversion of Series G to Series H redeemable convertible preferred stock $ — $ 6,860

Conversion of Series G to Series H redeemable convertible preferred stock $ — $ 11,875

Deferred offering costs reclassified to equity $ 28 $ —

The accompanying notes are an integral part of these financial statements

5 unchanged sentences

At December 31, 2021, the Company had cash and cash equivalents of $ 99.4 million and had an accumulated deficit of $ 208.1 million.

Since inception, the Company has financed its operations primarily through private placements of preferred securities, the sale of common stock through its initial public offering (IPO) and debt financing arrangements.

Since inception, the Company has financed its operations primarily through a combination of equity financings of common stock and private placements of preferred securities, debt financing arrangements, and revenue from sales of the Company's products.

Based on the Company's current business plan, management believes that its existing capital resources will be sufficient to fund the Company's obligations for at least twelve months following the issuance of these financial statements.

9 unchanged sentences

Actual results could materially differ from those estimates.

Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to revenue recognition, the fair value of financial instruments measured at fair value, the recoverability of its long-lived assets (including goodwill), net deferred tax assets (and related valuation allowance), and for periods prior to the IPO, the fair value of the Company's common stock and redeemable convertible preferred stock.

Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to revenue recognition, the fair value of financial instruments measured at fair value, the recoverability of its long-lived assets (including goodwill) and net deferred tax assets (and related valuation allowance).

The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate.

5 unchanged sentences

Significant payors and customers are those which represent more than 10% of the Company's total revenue or accounts receivable balance at each respective balance sheet date.

For each significant payor and customers, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows:

For each significant payor and customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows:

Years Ended December 31,

Medicare 19 % 20 %

Janssen (SIMPONI ® )

Blue Shield 11 % 12 %

Medicare Advantage 13 % 11 %

United Healthcare * 11 %

Blue Shield 12 % 11 %

Janssen (SIMPONI ® )

* Less than 10%.

Accounts Receivable

Janssen (SIMPONI ® )

Blue Shield 19 % 11 %

United Healthcare 18 % *

Janssen (SIMPONI ® )

* Less than 10%.

13 unchanged sentences

(1) Includes hospitals, other laboratories, etc.

(2) Includes patient self-pay that is immaterial .

(2) Includes patient self-pay .

Fair Value Measurements

The carrying value of the Company's cash and cash equivalents approximate fair value due to the short-term nature of these items.

Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the Company's long-term borrowings approximates its fair value, which is considered a Level 2 input.

The estimated fair value of the Company's long-term borrowings are determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues.

The recorded value of the Company's

long-term borrowings approximates the current fair value as the interest rate and other terms are that which are currently available to the Company.

Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

5 unchanged sentences

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Prior to the IPO, the Company's redeemable convertible preferred stock warrant liabilities were measured at fair value on a recurring basis and were classified as Level 3 liabilities.

The Company recorded subsequent adjustments to reflect the increase or decrease in estimated fair value at each reporting date in current period earnings.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly-liquid investments purchased with a remaining maturity date upon acquisition of three months or less to be cash equivalents and are stated at cost, which approximates fair value.

In 2016, the Company entered into an arrangement with a financial institution with which it has an existing banking relationship whereby in exchange for the issuance of corporate credit cards, the Company agreed to obtain a $ 0.1 million certificate of deposit with this financial institution as collateral for the balances borrowed on these credit cards.

The Company has an arrangement with a financial institution with which it has an existing banking relationship whereby in exchange for the issuance of corporate credit cards, the Company agreed to obtain a $ 0.1 million certificate of deposit with this financial institution as collateral for the balances borrowed on these credit cards.

The Company has classified the value of this certificate of deposit (including all interest earned thereon) within other assets in the accompanying balance sheets.

10 unchanged sentences

Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized.

When assets are retired or otherwise disposed of, the cost and

accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in other income or expense in the statements of operations in the period realized.

When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in other income or expense in the statements of operations in the period realized.

Long-lived Assets

9 unchanged sentences

otherwise, an impairment loss is recorded.

There was no indication of impairment of goodwill for any periods presented.

No impairment was recognized for any of the periods presented.

Clinical Studies

1 unchanged sentence

These arrangements typically require the Company to pay a fee to a third-party scientific investigator (usually a physician or research institution) for each subject enrolled in a clinical study, and the Company accrues expenses associated with these efforts as subjects are enrolled in each study.

Payments made prior to the completion of clinical study services are capitalized until the services are rendered.

Expenses associated with clinical study activities are recorded in research and development expenses in the accompanying statement of operations.

Redeemable Convertible Preferred Stock

Prior to the completion of the IPO, the Company had multiple classes of redeemable convertible preferred stock, all of which were classified as temporary equity in the accompanying balance sheet as the redemption of the shares were outside of the Company's control.

Redeemable convertible preferred stock which was redeemable on or after a certain date at the option of the holder was accreted to its redemption value from the date of issuance to the earliest redemption date.

In connection with the completion of the IPO in September 2019, all outstanding shares of redeemable convertible preferred stock were automatically converted into an aggregate of 7,816,643 shares of common stock, excluding warrant conversions.

Redeemable Convertible Preferred Stock Warrants

Prior to the completion of the IPO, the Company accounted for its redeemable convertible preferred stock warrants as liabilities based upon the characteristics and provisions of each instrument.

The redeemable convertible preferred stock warrants were recorded at their fair value on the date of issuance and were revalued on each subsequent balance sheet date, with fair value changes recognized as increases or reductions in the statements of operations.

Upon the completion of the IPO, all remaining outstanding warrants to purchase shares of redeemable convertible preferred stock were automatically converted into warrants to purchase shares of common stock.

As such, the warrants no longer require liability accounting and the then fair value of the warrant liability was reclassified into stockholders’ equity.

The Company performed the final remeasurement of the warrant liabilities as of the IPO closing date.

See Note 7 for the amounts associated with the fair value measurements and Note 8 for further discussion on the remaining warrants.

Revenue Recognition

2 unchanged sentences

The healthcare professionals who order the Company's testing products and to whom test results are reported are generally not responsible for payment for these products.

The parties that pay for these services (the Payors) consist of healthcare insurers, government payors (primarily Medicare and Medicaid), client payors (i.e., hospitals, other laboratories, etc.), and patient self-pay.

The parties that pay for these services (each, a payors) consist of healthcare insurers, government payors (primarily Medicare and Medicaid), client payors (i.e., hospitals, other laboratories, etc.), and patient self-pay.

The Company's service is a single performance obligation that is completed upon the delivery of test results to the prescribing physician which triggers revenue recognition.

3 unchanged sentences

The Company follows a standard process, which considers historical denial and collection experience, insurance reimbursement policies and other factors, to estimate allowances and implicit price concessions, recording adjustments in the current period as changes in estimates occur.

Further adjustments to the allowances, based on actual receipts, is recorded upon settlement.

Further adjustments to the allowances, based on actual receipts, are recorded upon settlement.

The transaction price is estimated using an expected value method on a portfolio basis.

3 unchanged sentences

Contracts do not contain significant financing components based on the typical period of time between performance of services and collection of consideration.

Revenue recognized during the years ended December 31, 2021 and 2020 related to performance obligations satisfied in previous periods was approximately $ 0.7 million and $ 0.8 million, respectively, which relates to a change in estimate of the transaction price.

Janssen Promotion Agreement

In December 2018, the Company entered into a co-promotion agreement (the Janssen Agreement) with Janssen Biotech, Inc.

In December 2018, the Company entered into a co-promotion agreement (as amended from time to time, the Janssen Agreement) with Janssen Biotech, Inc.

(Janssen) to co-promote SIMPONI ® in the United States.

The Company is responsible for the costs associated with its salesforce over the course of such co-promotion.

Janssen is responsible for all other aspects of the commercialization of SIMPONI ® under the Janssen Agreement.

In exchange for the Company's sales and co-promotional services, the Company is entitled to a quarterly tiered promotion fee based on the incremental increase in total prescribed units of SIMPONI ® for that quarter over a predetermined baseline.

For the years ended December 31, 2020 and 2019, the tiered promotion fee ranged from $ 750 to $ 1,250 per prescription over a predetermined baseline.

Due in part to COVID-19, in June 2020, the Janssen Agreement was amended (June Amended Janssen Agreement).

In accordance with the June Amended Janssen Agreement, the predetermined average baseline for prescribed units for each remaining quarter in 2020 was adjusted and is subject to further adjustment, and for each of the third and fourth quarters of 2020, the Company received a minimum promotion fee of $ 0.3 million and the fee was capped at 5 % above the adjusted predetermined baseline.

In December 2020, the Janssen Agreement amended.

The Janssen Agreement, as amended in June 2020 and December 2020 is collectively referred to as the Amended Janssen Agreement.

In accordance with the Amended Janssen Agreement, the predetermined average baseline for prescribed units for the quarters ending December 31, 2020, March 31, 2021 and June 30, 2021, was adjusted to approximately 28,750 prescribed units per quarter, subject to adjustment under certain circumstances.

For the first and second quarters of 2021, the Company will be entitled to an amended tiered promotion fee ranging from $ 500 to $ 1,000 per prescription based on the incremental increase in total prescribed units.

Pursuant to the Amended Janssen Agreement, for the first and second quarters of 2021, the Company will receive a minimum promotion fee of $ 0.3 million and the fee will be capped at 10 % above the adjusted predetermined baseline.

The Company continued to receive a minimum promotion fee of $ 0.3 million and the fee was capped at 5 % above the adjusted predetermined baseline for the quarter ended December 31, 2020.

The quarterly tiered promotion fee for the remaining term of the Janssen Promotion Agreement beginning with the quarter ended September 30, 2021 will revert to the terms set forth in the Janssen Agreement prior to amendment, with no minimum promotion fee and no cap on predetermined baseline units.

In addition, during the term of the Janssen Agreement, the Company is restricted from promoting any other biologic or Janus kinase inhibitor, or JAK inhibitor, used for treatment of indications covered by the agreement without first obtaining Janssen's written consent.

The Janssen Agreement expires on December 31, 2021, unless extended by the Company for an additional 12 months upon 180 days written notice prior to the end of the current term.

If the Company elects to extend the term, the predetermined baseline for 2022 will be subject to future agreement by the Company and Janssen.

Janssen may terminate the Amended Janssen Agreement at any time for any reason upon 30 days' notice to the Company, and the Company may terminate the Amended Janssen Agreement for any reason at the end of any calendar quarter upon 30 days' notice to Janssen.

Either party may terminate the Amended Janssen Agreement in the event of the other party's default of any of its material obligations under the agreement if such default remains uncured for a specified period of time following receipt of written notice of such default.

The Company's obligations relating to sales and co-promotion services for SIMPONI ® is a series of single performance obligations since Janssen simultaneously receives and consumes benefits provided by the Company's sales and co-promotional services.

The method for measuring progress towards satisfying the performance obligations is based on prescribed units in excess of the contractual baseline at the contractual rate earned per unit since the agreement is cancelable.

In August 2021, the Company and Janssen mutually agreed to terminate the Janssen Agreement effective on August 31, 2021.

Pursuant to the Janssen Agreement, the Company was responsible for the costs associated with its sales force over the course of such co-promotion.

Janssen was responsible for all other aspects of the commercialization of SIMPONI ® under the Janssen Agreement.

In exchange for the Company's sales and co-promotional services, the Company was entitled to a quarterly tiered promotion fee based on the incremental increase in total prescribed units of SIMPONI ® for that quarter over a predetermined baseline.

For the year ended December 31, 2020, the tiered promotion fee ranged from $ 750 to $ 1,250 per prescription over a predetermined baseline.

Due in part to COVID-19, in June 2020, the Janssen Agreement was amended to adjust the predetermined average baseline for the third and fourth quarters of 2020.

The Janssen Agreement was further amended in June 2020 and December 2020 to adjust the predetermined average baseline for prescribed units for the quarters ending December 31, 2020 and March 31, 2021 and was subject to further adjustment under certain circumstances.

In June 2021, the Janssen Agreement was again amended to proportionally increase the baseline for prescribed units for the quarter ended June 30, 2021 to reflect the addition of certain geographies to the sales territories covered by the Janssen Agreement.

For the first and second quarters of 2021, the Company earned the minimum promotion fee of $ 0.3 million.

Upon the termination of the Janssen Agreement on August 31, 2021, the Company became entitled to receive an aggregate of $ 0.6 million in consideration, which was earned in the year ended December 31, 2021.

Pursuant to the terms of the termination, the Company is restricted from promoting any other biologic or Janus kinase inhibitor used for treatment of indications covered by the Janssen Agreement without first obtaining Janssen's written consent until May 31, 2022.

The Company's obligations relating to sales and co-promotion services for SIMPONI ® were a series of single performance obligations since Janssen simultaneously received and consumed benefits provided by the Company's sales and co-promotional services.

The method for measuring progress towards satisfying the performance obligations was based on prescribed units in excess of the contractual baseline at the contractual rate earned per unit since the Amended Janssen Agreement was cancelable.

The Company recognized co-promotion revenue of approximately $ 1.2 million and $ 5.1 million during the years ended December 31, 2021 and 2020, respectively.

6 unchanged sentences

Shipping and Handling Costs

Costs incurred for shipping and handling are included in costs of revenue in the accompanying statements of operations and totaled approximately $ 1.4 million for each of the years ended December 31, 2020 and 2019.

Costs incurred for shipping and handling are included in costs of revenue in the accompanying statements of operations and totaled approximately $ 2.1 million and $ 1.4 million, for the years ended December 31, 2021 and 2020, respectively.

Stock-Based Compensation

The Company recognizes compensation expense for all stock-based awards to employees and directors based on the grant-date estimated fair values over the requisite service period of the awards (usually the vesting period) on a straight-line basis.

The fair value of stock options and purchases under the employee stock purchase plan (ESPP) rights is determined using the Black-Scholes-Merton (BSM) option pricing model, which requires management to make certain assumptions regarding a number of complex and subjective variables.

straight-line basis.

The fair value of stock options and purchases under the Company's 2019 Employee Stock Purchase Plan (ESPP) rights is determined using the Black-Scholes-Merton (BSM) option pricing model, which requires management to make certain assumptions regarding a number of complex and subjective variables.

Equity award forfeitures are recorded as they occur.

1 unchanged sentence

The weighted-average expected term of options was calculated using the simplified method.

This decision was based on the lack of relevant historical data due to the Company's limited historical experience.

In addition, due to the Company's limited historical data, the estimated volatility incorporates the historical volatility over the expected term of the award of comparable companies whose share prices are publicly available.

The risk-free interest rate for periods within the contractual term of the option is based on the U.S.

1 unchanged sentence

The dividend yield was zero , as the Company has never declared or paid dividends and has no plans to do so in the foreseeable future.

Upon the effective date of the IPO, the Company began using the closing price of its common stock as the fair value of its common stock on the corresponding date.

Prior to the completion of the IPO in September 2019, due to the absence of a public market for the Company's common stock, it was necessary to estimate the fair value of the common stock underlying the Company's stock-based awards when performing fair value calculations using the BSM option pricing model.

The fair value of the common stock underlying the Company's stock-based awards was assessed on each grant date by the Company's board of directors (Board of Directors).

The fair value of each restricted stock unit is determined on the grant date using the closing price of the Company's common stock on the grant date and generally vest from the grant date in four equal annual installments subject to the holder's continued service with the Company.

The Company issues new shares to satisfy restricted stock units upon vesting.

The fair value of the Company's common stock is determined by using the closing price of its common stock on the corresponding date.

Comprehensive Loss

13 unchanged sentences

Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods.

Potentially dilutive common stock equivalents are comprised of redeemable convertible preferred stock, warrants for the purchase of redeemable convertible preferred and common stock, options outstanding under the Company's stock option plans and shares of the Company's common stock pursuant to Employee Stock Purchase Plan.

For the years ended December 31, 2020 and 2019, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as the inclusion of the potentially dilutive securities would be antidilutive.

The weighted-average number of shares in 2021 used to compute basic and diluted shares includes shares issuable upon the exercise of pre-funded warrants at a nominal price.

Potentially dilutive common stock equivalents are comprised of warrants for the purchase of common stock, options and restricted stock units outstanding under the Company's 2019 Incentive Award Plan (the 2019 Plan) and shares of the Company's common stock pursuant to the ESPP.

For the years ended December 31, 2021 and 2020,

there is no difference in the number of shares used to calculate basic and diluted shares outstanding as the inclusion of the potentially dilutive securities would be antidilutive.

Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares):

2 unchanged sentences

Common stock options 2,014,330 1,975,761

Restricted stock units 415,325 —

Employee stock purchase plan 20,193 11,640

1 unchanged sentence

Government Assistance Grant Income

Government assistance grants which are unconditional when received and intended to compensate for expenses incurred or replace lost revenue are recognized when those expenses are incurred or during the period that lost revenue is experienced, and are included in other income, net in the accompanying statements of operations.

Absent authoritative accounting standards, interpretive guidance issued and commonly applied by financial statement preparers allows for the selection of accounting policies amongst acceptable alternatives.

Based on the facts and circumstances of the government assistance received by the Company as discussed in Note 11, the Company determined it most appropriate to account for the transaction by analogy to International Accounting Standards 20 (IAS 20), Accounting for Government Grants and Disclosure of Government Assistance .

IAS 20 permits for the recognition in earnings either separately under a general heading such as other income, or as a reduction of the related expenses.

Segment Reporting

13 unchanged sentences

In June 2020, the FASB issued ASU 2020-05, which delays the adoption of ASU 2016-02 for non-public entities to fiscal years beginning after December 15, 2021, and interim periods beginning after December 15, 2022.

As an emerging growth company as defined in the JOBS Act, the Company has elected to delay adoption of this ASU until January 1, 2022.

As an emerging growth company as defined in the JOBS Act, the Company has elected to early adopt this ASU as of January 1, 2022.

Topic 842 mandates a modified retrospective transition method.

The Company intends to adopt the new lease standard using a cumulative effect to accumulated deficit and will elect the package of practical expedients, which among other things will allow the Company to carry forward its historical lease classification.

The Company is currently evaluating the impact of Topic 842 on its financial statements.

The Company is in the process of completing its evaluation of the effect that the adoption of this ASU will have on its financial statements.

The Company currently believes the most significant change will be

related to the recognition of a new right-of-use asset and lease liability at January 1, 2022 on the Company's balance sheet for its office and laboratory space operating leases.

Recently Adopted Accounting Standards

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes .

2 unchanged sentences

The effective date of this guidance for public companies is for fiscal years, and interim period within those fiscal years, beginning after December 15, 2020.

The Company does not anticipate the adoption will have a material impact on its financial statements.

Recently Adopted Accounting Standards

In August 2018, the FASB issued ASU No.

2018-13, Fair Value Measurement:

Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement , which adds and modifies certain disclosure requirements for fair value measurements.

Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation processes for Level 3 fair value measurements.

However, public companies will be required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income.

The narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption.

This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods, and early adoption is permitted.

The Company adopted this guidance on January 1, 2021, and the adoption did not have a material impact on its financial statements.

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

The update requires certain annual disclosures about transactions with a government that are accounted for by applying a grant or contribution model by analogy.

The amendments in this update are effective for fiscal years beginning after December 15, 2021.

Early application of the amendments is permitted.

The Company early adopted these disclosure requirements and applied them to its disclosure of the funding received as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in 2020.

Other Financial Information

18 unchanged sentences

At December 31, 2021 and December 31, 2020, the gross book value of assets under capital lease was $ 2.5 million and $ 1.2 million, respectively, and is classified in "Laboratory equipment" in the table above.

At December 31, 2021, $ 1.5 million relates to leasehold improvements in connection

with the conversion of the Company's warehouse space into additional clinical laboratory space and research and development facility space, which is expected to be placed in service in calendar year 2022.

Accrued and Other Current Liabilities

12 unchanged sentences

On December 7, 2018, the Company borrowed an additional $ 5.0 million under the 2017 Term Loan.

The 2017 Term Loan was subsequently amended in November 2019 and November 2021.

At December 31, 2021, no additional amounts remain available to borrow under the 2017 Term Loan.

In November 2019, the Company executed the First Amendment to the Loan and Security Agreement (the 2017 Loan Amendment).

In November 2021, the Company executed the Second Amendment to the Loan and Security Agreement (the 2017 Loan Amendment).

The interest rate on all borrowings under the 2017 Loan Amendment is 8.0 %, of which 2.0 % is paid in-kind in the form of additional term loans (PIK Loans) until December of 2024, after which interest accrues at an annual rate of 8.0 %.

6 unchanged sentences

The 2017 Loan Amendment requires a prepayment premium of 3 % of the aggregate outstanding principal.

The prepayment premium decreases by 1 % during each subsequent twelve-month period after November 19, 2020.

The Loan Amendment is collateralized by a first priority security interest on substantially all of the Company's assets, including intellectual property.

The prepayment premium decreases by 1 % on November 1, 2022, 2023 and 2024.

The 2017 Loan Amendment is collateralized by a first priority security interest in substantially all of the Company's assets, including intellectual property.

The affirmative covenants of the 2017 Loan Amendment require that the Company timely file taxes, maintain good standing and government compliance, maintain liability and other insurance, provide prompt notification of significant corporate events, and furnish audited financial statements within 150 days of fiscal year end without qualification as to the scope of the audit or as to going concern and without any other similar qualification.

The affirmative covenants require that the Company achieve a specified level of revenue, as measured quarterly on a rolling twelve-month basis, and commencing with the quarter ending December 31, 2022.

The consequences of failing to achieve the performance covenant may be cured if, within sixty days of failing to achieve the performance covenant, the Company issues additional equity securities or subordinated debt with net proceeds sufficient to fund any cash flow deficiency generated from operations, as defined.

The Company's revenues for the twelve-month ended September 30, 2020 were lower than the specified targets, as a result, the Company and Innovatus agreed on a new management plan and target to bring the Company back into compliance with the Loan Amendment.

The Loan Amendment requires that the Company maintain certain levels of minimum liquidity.

The Company is required to maintain an unrestricted cash balance of $ 2.0 million.

any cash flow deficiency generated from operations, as defined.

The 2017 Loan Amendment requires that the Company maintain certain levels of minimum liquidity and maintains an unrestricted cash balance of $ 2.0 million.

The negative covenants provide, among other things, that without the prior consent of Innovatus subject to certain exceptions, the Company may not dispose of certain assets, engage in certain business combinations or acquisitions, incur additional indebtedness or encumber any of the Company's property, pay dividends on the Company's capital stock or make prohibited investments.

11 unchanged sentences

Commitments and Contingencies

As of December 31, 2020, the Company leases office and laboratory space in Vista, California, under leases that expire in January 2026, with an option to extend a portion of the lease for an additional 5-year period.

In addition, the Company also leases additional office space in Vista, California, under a lease that expires in January 2026 with an option to extend the lease for an additional 5-year period.

As of December 31, 2021, the Company leases office and laboratory space in Vista, California, under leases that expire in April 2027, with an option to extend a portion of the lease for an additional 5-year period.

The Company also leases additional office space in Vista, California, under a lease that expires in April 2027 with an option to extend the lease for an additional 5-year period.

The Company's lease payments under each of these leases are subject to escalation clauses.

In addition, effective on August 23, 2021, the Company entered into a sub-lease agreement for an additional office space in Carlsbad, California.

The sub-lease commended in October 2021 and expires in April 2027.

Minimum annual lease payments under non-cancelable lease arrangements at December 31, 2021 are as follows (in thousands):

2 unchanged sentences

2022 $ 641 $ 1,337

2023 566 1,445

2024 313 1,489

2025 66 1,533

Thereafter — 539

9 unchanged sentences

The acquisition also included amounts that may be due under several licensing agreements.

All milestone payments other than one have been paid as of December 31, 2017.

The remaining milestone obligation is for an additional $ 2.0 million payment due to Prometheus Laboratories, Inc.

(Prometheus) for which the fair value was determined to be zero at December 31, 2020 and 2019.

In addition, the Company has ongoing royalty payment obligations on net sales of products which incorporate certain acquired technologies of 2.5 %.

Future royalties payable under these arrangements are limited to the lesser

of an aggregate of $ 1.2 million (including an upfront payment of $ 100,000 ) or the total royalties earned through January 1, 2024.

One such license agreement, the license agreement, dated September 13, 2007, between the Company and Prometheus Laboratories, Inc.

(the Prometheus License), was terminated by mutual agreement on September 28, 2021.

In consideration for terminating the Prometheus License, including with respect to the remaining potential milestone payments thereunder, the Company agreed to pay Prometheus Laboratories, Inc.

a fee of approximately $ 0.1 million and acquired the intellectual property previously licensed to the Company pursuant to the Prometheus Agreement.

The Company has ongoing royalty payment obligations of 2.5 % on net sales of products which incorporate certain acquired technologies.

Future royalties payable under these arrangements are limited to the lesser of (i) an aggregate of $ 1.2 million (including an upfront payment of $ 100,000 ) and (ii) the total royalties earned through January 1, 2024.

Licensing Agreements

The Company has licensed technology for use in its diagnostic tests.

In addition to the milestone payments required by these agreements as described above, individual license agreements generally provide for ongoing royalty payments on net sales of products which incorporate licensed technology, as defined, ranging from 2.0 % to 3.0 %.

In addition to the milestone payments required by these agreements as described above, individual license agreements generally provide for ongoing royalty payments ranging from 1.5 % to 7.0 % on net sales of products which incorporate licensed technology, as defined in such agreements.

Royalties are accrued when earned and recorded in costs of revenue in the accompanying statement of operations.

In May 2021, the Company entered into an exclusive license agreement with Allegheny Health Network Research Institute, or AHN, to obtain an exclusive license to AHN's patent rights in certain inventions, pursuant to which the Company paid AHN an initial license fee of $ 0.4 million.

In addition, under the terms of the exclusive license agreement, the Company is required to pay the greater of royalties in the low single digits on net sales of diagnostic tests using the assigned patents or a flat annual minimum royalty amount, pending approvals and commercialization.

In November 2021, the Company entered into an exclusive license agreement with Queen Mary University of London, or QMUL, to obtain an exclusive license to QMUL's patent rights in certain inventions, pursuant to which the Company is required to pay QMUL an initial license fee of $ 0.4 million.

The Company is obligated to make a one-time payment of $ 0.1 million relating to the first commercial sale of the licensed products.

In addition, after the first 18 months of commercial sales under the terms of the exclusive license agreement, the Company is required to

pay royalties in the high single-digits on net sales of testing products using the assigned patents, pending approvals and commercialization.

Supply Agreement

In September 2020, the Company entered into an amended supply agreement with one supplier for reagents which includes minimum annual purchase commitments of $ 4.1 million and $ 6.0 million for years ended December 31, 2021 and 2022, respectively, with a 15 % annual increase thereafter through the year ended December 31, 2025.

In December 2021, the Company entered into an amended supply agreement with one supplier for reagents which includes minimum annual purchase commitments of $ 3.7 million and $ 6.0 million for the years ended December 31, 2021 and 2022, respectively, with a 15 % annual increase thereafter for unconditional minimum purchase commitments through the year ended December 31, 2025.

Collaboration Obligations

In May 2021, the Company entered into a master research collaboration agreement with AHN, pursuant to which the Company is required to pay AHN a collaboration fee of $ 0.4 million for each year during the initial term of the agreement.

Collaboration expenses under the master research collaboration agreement were $ 0.3 million for the year ended December 31, 2021.

Collaboration expenses under the AHN collaboration are included in research and development expenses.

Contingencies

1 unchanged sentence

including subpoenas and other civil investigative demands, from governmental agencies, Medicare or Medicaid payors and managed care organizations reviewing billing practices or requesting comment on allegations of billing irregularities that are brought to their attention through billing audits or third parties.

The Company's exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made or of which of the Company believes to be immaterial.

The Company's exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made or that the Company believes to be immaterial.

The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

4 unchanged sentences

Total Level 1 Level 2 Level 3

Money market funds $ 34,507 $ 34,507 $ — $ —

Money market funds, included in cash and cash equivalents $ 95,761 $ 95,761 $ — $ —

December 31, 2020

Total Level 1 Level 2 Level 3

Money market funds $ 70,760 $ 70,760 $ — $ —

Money market funds, included in cash and cash equivalents $ 34,507 $ 34,507 $ — $ —

The fair value of the Company's money market funds is based on quoted market prices.

Redeemable Convertible Preferred Stock

Series G Financing

In January 2019, the Company entered into an agreement with new and certain existing preferred stockholders to issue shares of Series G redeemable convertible preferred stock in multiple separate closings at a per share price of $ 0.078 in each closing.

In conjunction with the issuance of the Series H redeemable convertible preferred stock,

each share of issued and outstanding Series G redeemable convertible preferred stock was converted into shares of Series H redeemable convertible preferred stock.

Series H Financing

In July 2019, the Company entered into an agreement with a new investor to issue shares of Series H redeemable convertible preferred stock at a per share price of $ 0.04712 .

The Company accounted for the difference between the effective conversion price of $ 0.04712 and the fair value of the underlying common stock at the commitment date as a beneficial conversion feature, which was immediately accreted as a deemed dividend.

As a result, the Company recognized a beneficial conversion feature in the amount of $ 6.7 million in the third quarter of 2019, that was recorded as additional paid-in capital (in the absence of retained earnings) in the accompanying statement of redeemable convertible preferred stock and stockholders’ equity.

Additionally, the Company concluded that the conversion of shares of Series G into shares of Series H redeemable convertible preferred stock in connection with the issuance of Series H redeemable convertible preferred stock represented an extinguishment of the Series G shares.

As a result, the Company recognized a deemed dividend for the extinguishment charge in the amount of $ 6.9 million in the third quarter of 2019, that was recorded as additional paid-in capital (in the absence of retained earnings) in the accompanying statement of redeemable convertible preferred stock and stockholders' equity.

Initial Public Offering

Upon completion of the Company's IPO in September 2019, an aggregate of 7,816,643 shares of common stock, excluding warrant conversion, were issued to the holders of the Company's Series A-3, Series B-3, Series C, Series D, Series E, Series F and Series H redeemable convertible preferred stockholders upon the automatic conversion of all shares of redeemable convertible preferred stock to common stock.

As a result, no shares of redeemable convertible preferred stock remained outstanding at December 31, 2020 and 2019.

Stockholders' Equity

Reverse Stock Split

On September 6, 2019, the Company effected a one-for-183.635 reverse stock split of its common stock (the Reverse Stock Split).

The par value and the authorized shares of the common stock were not adjusted as a result of the Reverse Stock Split.

All issued and outstanding common stock and the conversion ratio of the redeemable convertible preferred stock have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented in the accompanying financial statements and notes to the financial statements.

On September 23, 2019, the Company closed its IPO of 4,140,000 shares of its common stock at a price to the public of $ 14.00 per share, including the exercise in full by the underwriters of their option to purchase 540,000 additional shares of the Company's common stock.

Including the exercise of the option to purchase additional shares, the aggregate net proceeds to the Company from the offering was approximately $ 50.4 million, net of underwriting discounts, commissions and other offering expenses, for aggregate expenses of approximately $ 7.5 million.

In addition, an aggregate of 7,816,643 shares of common stock, excluding warrant conversions, were issued to the holders of the Company's Series A-3, Series B-3, Series C, Series D, Series E, Series F and Series H redeemable convertible preferred stockholders upon the automatic conversion of all shares of redeemable convertible preferred stock to common stock.

On November 10, 2020, the Company filed a registration statement on Form S-3 (the Shelf Registration Statement), covering the offering, from time to time, of up to $ 150.0 million of common stock, preferred stock, debt securities, warrants and units, which Shelf Registration Statement became effective on November 19, 2020.

On March 25, 2021, the Company completed a public offering of 4,255,000 shares of its common stock at a public offering price of $ 16.25 per share.

Net proceeds from the offering were approximately $ 64.7 million, after deducting underwriting discounts, commissions and other offering expenses of $ 4.4 million.

The shares were registered pursuant to the Company's Shelf Registration Statement discussed above.

Exchange Agreement

On June 22, 2021, the Company entered into an exchange agreement (the Exchange Agreement) with an Investor and its affiliates (the Exchanging Stockholders), pursuant to which the Company exchanged an aggregate of 804,951 shares of the Company's common stock owned by the Exchanging Stockholders for pre-funded warrants (the Exchange Warrants) to purchase an aggregate of 804,951 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $ 0.001 per share.

The Exchange Warrants do not expire and are exercisable at any time except that the Exchange Warrants cannot be exercised by the Exchanging Stockholders if, after giving effect thereto, the Exchanging Stockholders would beneficially own more than 4.99 % of the Company's common stock, which percentage may change at the Exchanging Stockholder's election to any other percentage upon 61 days' notice to the Company.

The Company recorded the retirement of common stock exchanged as a reduction of common shares outstanding and additional paid-in-capital at the fair value of the Exchange Warrants on the issuance date.

The Exchange Warrants are classified as equity and the fair value of the Exchange Warrants was recorded as an increase to additional paid-in-capital and is not subject to remeasurement.

The Company determined that the fair value of the Exchange Warrants is substantially similar to the fair value of the retired shares on the issuance date due to the negligible exercise price for the Exchange Warrants.

As of December 31, 2021, none of the Exchange Warrants have been exercised.

Outstanding Warrants

6 unchanged sentences

Common stock warrants 20,944 14.32 December 7, 2018 December 7, 2025

Common stock warrants (Exchange Warrants) 804,951 0.001 June 22, 2021 None

During the year ended December 31, 2021, warrants to purchase common stock were exercised resulting in the issuance of 17,719 shares of the Company's common stock and cash proceeds of an immaterial amount.

Stock Option Plan

In September 2019, the Company's Board of Directors adopted, and the Company's stockholders approved, the 2019 Incentive Award Plan (the 2019 Plan).

A total of (i) 2,011,832 shares of common stock plus (ii) shares subject to awards granted under the 2013 Plan on or before the effective date of the 2019 Plan became available for issuance under the 2019 Plan and was initially be reserved for issuance under the 2019 Plan.

Under the 2019 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries.

2019 Incentive Award Plan

In September 2019, the Company's Board of Directors adopted, and the Company's stockholders approved, the 2019 Plan.

Under the 2019 Plan, which expires in September 2029, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries.

The options generally expire ten years after the date of grant and are exercisable to the extent vested.

1 unchanged sentence

The 2019 Plan contains an "evergreen provision" that allows annual increases in the number of shares available for issuance on the first day of each calendar year through January 1, 2029 in an amount equal to the lesser of:

(i) 4 % of the outstanding capital stock on each December 31st, or (ii) such lesser amount determined by the Board of Directors.

(i) 4 % of the outstanding capital stock on each

December 31st, or (ii) such lesser amount determined by the Board of Directors.

As of December 31, 2021, 1,179,571 shares remained available for future awards.

Under the evergreen provision, on January 1, 2022, an additional 646,599 shares became available for issuance under the 2019 Plan.

Activity under the Company's stock option plans is set forth below:

2019 Employee Stock Purchase Plan

In September 2019, the Board of Directors adopted, and the Company's stockholders approved, the ESPP.

The ESPP became effective on the day the ESPP was adopted by the Company's Board of Directors.

The ESPP permits participants to purchase common stock through payroll deductions of up to 20 % of their eligible compensation.

The number of shares of common stock available for issuance under the ESPP will be annually increased on the first day of each calendar year during the term of the ESPP through January 1, 2029 in an amount equal to the lesser of (i) 1 % of the outstanding capital stock on each December 31st, or (ii) such lesser amount determined by the Board of Directors.

As of December 31, 2021, 327,516 shares of common stock remained available for issuance under the ESPP.

Under the evergreen provision, on January 1, 2022, an additional 161,649 shares became available for issuances under the ESPP.

Stock Options

Stock option activity under the Company's 2019 Plan is set forth below:

Options Weighted-

16 unchanged sentences

The fair value of the Company's common stock is $ 11.63 and $ 13.20 per share at December 31, 2021 and 2020, respectively.

The intrinsic value of options exercised for the years ended December 31, 2020 and 2019 was $ 1.0 million and an immaterial amount, respectively.

The intrinsic value of options exercised for the years ended December 31, 2021 and 2020 was $ 0.1 million and $ 1.0 million, respectively.

As of December 31, 2021, total unrecognized compensation cost related to option awards was $ 6.3 million, which is expected to be recognized over a remaining weighted-average vesting period of 2.0 years.

Restricted Stock Units

Restricted stock unit activity under the Company's 2019 Plan is set forth below:

Shares Weighted-

Grant Date Fair Value Aggregate

Outstanding, December 31, 2020

Awards granted 449,000 $ 16.51

Awards released — $ —

Awards canceled ( 33,675 ) $ 16.24

Outstanding, December 31, 2021

415,325 $ 16.54 $ 4,830

As of December 31, 2021, all of the outstanding restricted stock units are unvested.

As of December 31, 2021, total unrecognized compensation cost related to restricted stock units was $ 5.6 million, which is expected to be recognized over a remaining weighted-average vesting period of 3.3 years.

Stock-Based Compensation Expense

Stock Options

The fair value of employee stock options was estimated using the following assumptions to determine the fair value of stock options granted:

5 unchanged sentences

Employee Stock Purchase Plan

In September 2019, the Board of Directors adopted the Employee Stock Purchase Plan (the ESPP).

The ESPP became effective on the day the ESPP was adopted by the Company's Board of Directors.

The ESPP permits participants to purchase common stock through payroll deductions of up to 20 % of their eligible compensation.

A total of 120,000 shares of common stock was initially reserved for issuance under the ESPP.

In addition, the number of shares of common stock available for issuance under the ESPP will be annually increased on the first day of each fiscal year during the term of the ESPP, beginning with the 2020 calendar year through January 1, 2029 in an amount equal to the lesser of (i) 1 % of the outstanding capital stock on December 31st, or (ii) such lesser amount determined by the Board of Directors.

Under the evergreen provision, on January 1, 2021, an additional 126,523 shares became available for issuances under the ESPP.

Stock-based compensation expense for the ESPP was an immaterial amount for the year ended December 31, 2020.

The following assumptions were used to calculate the stock-based compensation for each stock purchase right granted under the ESPP:

1 unchanged sentence

Expected volatility 45 %- 60 %

58.0 %- 83.0 %

Risk-free interest rate 0.1 %

1 unchanged sentence

Expected term (in years) 0.5 0.5

Total non-cash stock-based compensation expense recorded related to options granted and stock purchase rights granted under the ESPP in the statement of operations is as follows (in thousands):

Stock-based compensation expense related to the ESPP for the years ended December 31, 2021 and 2020 was $ 0.2 million and less than $ 0.1 million, respectively.

As of December 31, 2021, total unrecognized compensation cost related to stock purchase rights granted under the ESPP was less than $ 0.1 million, which is expected to be recognized over a remaining weighted-average vesting period of 0.2 years.

Total non-cash stock-based compensation expense recorded related to options granted, restricted stock units granted and stock purchase rights granted under the ESPP in the statement of operations is as follows (in thousands):

Years Ended December 31,

3 unchanged sentences

Total $ 4,728 $ 2,694

As of December 31, 2020, total unrecognized compensation cost was $ 8.5 million, which is expected to be recognized over a remaining weighted-average vesting period of 2.8 years.

Common stock reserved for future issuance consists of the following at December 31, 2021:

1 unchanged sentence

Common stock option grants issued and outstanding 2,014,330

Common shares available for grant under the stock option plan 1,139,323

Common stock reserved for issuance upon vesting of outstanding restricted stock units 415,325

Common shares available for grant under the 2019 Plan 1,179,571

Common shares available for future issuance under ESPP 327,516

6 unchanged sentences

Total deferred 148 ( 106 )

(Benefit) provision for income tax $ ( 79 ) $ 25

Provision (benefit) for income tax $ 175 $ ( 79 )

The effective tax rate of our provision for income taxes differs from the federal statutory rate as follows:

2 unchanged sentences

State income taxes, net of federal tax benefits ( 3.8 ) % ( 3.9 ) %

Change in fair value of preferred stock liabilities — % ( 0.5 ) %

Research and development tax credits ( 1.2 ) % ( 0.5 ) %

Stock compensation 0.9 % 1.0 %

Non-deductible expenses 1.1 % 1.1 %

Change in valuation allowance 24.6 % 22.6 %

Limitation of net operating losses — % 59.8 %

Other — % 0.2 %

9 unchanged sentences

Basis differences in fixed and intangible assets — 117

Stock compensation 1,407 528

Total gross deferred tax assets 27,882 21,233

4 unchanged sentences

Indefinite lived assets ( 521 ) ( 459 )

Basis differences in fixed and intangible assets ( 175 ) —

Deferred tax liabilities, net ( 1,031 ) ( 795 )

Net deferred tax liabilities $ ( 307 ) $ ( 158 )

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2020 and 2019, which related primarily to increases in net operating loss carryforwards, accrued revenue and accruals and reserves were as follows (in thousands):

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2021 and 2020, which related primarily to increases in net operating loss (NOL) carryforwards, accrued revenue and accruals and reserves were as follows (in thousands):

Valuation allowance at the beginning of the year $ 20,596 $ 16,797

2 unchanged sentences

Valuation allowance at the end of the year $ 27,158 $ 20,596

At December 31, 2020 and 2019, the Company had federal net operating loss carryforwards of approximately $ 70.6 million and $ 60.7 million, respectively.

At December 31, 2020 and 2019, the Company had state net operating loss carryforwards of $ 48.9 million and $ 43.5 million, respectively.

At December 31, 2021 and 2020, the Company had federal NOL carryforwards of approximately $ 89.4 million and $ 70.6 million, respectively.

At December 31, 2021 and 2020, the Company had state NOL carryforwards of $ 61.0 million and $ 48.9 million, respectively.

Approximately $ 43.5 million of the federal tax loss carryforwards will begin to expire in 2022, unless previously utilized.

The federal net operating loss carryforwards generated in after December 31, 2017 of $ 27.1 million will carryforward indefinitely.

The federal NOL carryforwards generated in after December 31, 2017 of $ 45.9 million will carryforward indefinitely.

The Company’s state tax loss carryforwards will expire in 2032, unless previously utilized.

At December 31, 2019, the Company's deferred tax assets are primarily comprised of federal and state tax net operating loss carryforwards.

At December 31, 2019, the Company's deferred tax assets are primarily comprised of federal and state tax NOL carryforwards.

The Company completed a formal study through the year ended December 31, 2019 and determined ownership changes within the meaning of Internal Revenue Code (IRC), Section 382 had occurred in 2003, 2008, 2012, 2017 and 2019.

Based on the analysis, $ 61.8 million of the Company's tax attribute carryforwards through December 31, 2017 cannot be utilized under IRC Section 382.

The Company's ability to utilize net operating loss carryforwards generated after December 31, 2017 will not expire under the Tax Cuts and Jobs Act of 2017.

The Company's ability to utilize NOL carryforwards generated after December 31, 2017 will not expire under the Tax Cuts and Jobs Act of 2017.

The Company adjusted tax attribute carry forwards and deferred tax assets accordingly.

9 unchanged sentences

The Company does not believe that the balance of unrecognized tax benefits will materially change within the next twelve months.

Related Parties

The closings of the Series G financing and the Series H financing described in Note 7 were issued to existing holders of the Company's redeemable convertible preferred stock, including certain members of our Board of Directors.

The Company sponsors an employee savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Code.

1 unchanged sentence

Additionally, the Company may elect to make contributions into the savings plan at its sole discretion.

For the years ended December 31, 2020 and 2019, the Company made contributions to the Plan at 3 % of qualified employee compensation, which totaled approximately $ 0.5 million and $ 0.4 million, respectively.

For each of the years ended December 31, 2021 and 2020, the Company made contributions to the Plan at 3 % of qualified employee compensation, which totaled approximately $ 0.5 million.

Effective January 1, 2022, the Company will make contributions to the Plan at 4 % of qualified employee compensation.

During 2020, due to the worldwide COVID-19 pandemic, the Company experienced a reduction in patient test volumes, delays in patient enrollment in ongoing and planned clinical studies, and delays in the procurement of its testing supplies.

In response to the pandemic, the Company has curtailed non-essential employee travel, equipped employees with the ability to work remotely with the exception of clinical laboratory employees, and reduced marketing spend and employee headcount.

The reduction in headcount resulted in a restructuring charge for termination benefits of $ 0.3 million which has been paid as of December 31, 2020.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic.

The full extent to which the COVID-19 pandemic will directly or indirectly continue to impact the Company's business, results of operations and financial condition, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat COVID-19, including, the success of ongoing vaccination efforts, the emergence and prevalence of variant strains of COVID-19, the institution or reinstitution of shutdowns, "stay-at-home-orders" and other public health measures as well as the related economic impact of these matters on local, regional and international markets.

On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic.

The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021.

The CARES Act did not have a material impact on the Company's effective tax rate or income tax provision for the year ended December 31, 2020.

Under the Tax Cuts and Jobs Act (TCJA), NOLs generated post TCJA were allowed to be carried forward indefinitely but were only allowed to offset 80% of taxable income.

As a result of the CARES Act and the change to permit NOLs generated in taxable years 2018, 2019 and 2020 to offset 100% of taxable income, the Company released valuation allowance against its deferred tax assets in the amount of $ 0.1 million for the year ended December 31, 2020.

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law.

It provides additional COVID-19 focused relief and extends certain provisions of the CARES Act.

At this time, the Company does not believe that the Consolidated Appropriations Act, 2021 has a material impact on its financial statements.

The release of valuation allowance resulted in a discrete tax benefit of $ 0.1 million for the year ended December 31, 2020.

As of the year ended December 31, 2021, some tax benefits under the CARES Act have expired including the ability to use certain NOLs to offset 100% of taxable income.

Accordingly, the Company increased its valuation allowance that resulted in a tax expense of $ 0.1 million for the year ended December 31, 2021.

In April 2020, the Company received $ 0.7 million of funding under the CARES Act Provider Relief Fund, subject to the Company's agreement to comply with the Department of Health & Human Services' (HHS) standard terms and conditions.

The CARES Act Provider Relief Fund is a federal fund allocated for general distributions to Medicare facilities and providers impacted by the COVID-19 pandemic and is intended to support COVID-related expenses or lost revenue attributable to COVID-19.

The funding received is considered a government grant which is recognized when there is reasonable assurance that the grant will be received and that conditions attached to the grant have

For the year ended December 31, 2020, the Company recognized $ 0.7 million due to lost revenue attributable to COVID-19, which is reflected in other income, net, on its statements of operations.

On April 16, 2020, the Company entered into a promissory note with BOKF, NA dba Bank of Oklahoma, the lender, evidencing an unsecured loan pursuant to the U.S.

The funding received is considered a government grant which is recognized when there is reasonable assurance that the grant will be received and that conditions attached to the grant have been met.

The Company accepted the terms and conditions of the grant in May 2020.

For the year ended December 31, 2020, the Company recognized $ 0.7 million due to lost revenue attributable to COVID-19, which is reflected in other income, net, on its statements of operations and as an operating activity in the statement of cash flows.

On April 16, 2020, the Company entered into a promissory note (the Note) with BOKF, NA dba Bank of Oklahoma (BofO), the lender, evidencing an unsecured loan pursuant to the U.S.

Small Business Administration (SBA) Paycheck Protection Program (PPP) of the CARES Act of approximately $ 2.9 million (the PPP Loan).

1 unchanged sentence

On April 23, 2020, the SBA, in consultation with the Department of Treasury, issued new guidance that created uncertainty regarding the qualification requirements for the PPP Loan (the New Guidance).

In light of the New Guidance, on May 11, 2020, the Company paid off in full the principal and interest on the PPP Loan, resulting in the termination of the promissory note.

In light of the New Guidance, on May 11, 2020, the Company paid off in full the principal and interest on the PPP Loan, resulting in the termination of the Note.

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law.

It provides additional COVID-19 focused relief and extends certain provisions of the CARES Act.

The Consolidated Appropriations Act, 2021 did not have a material impact on the Company's financial statements.

Index to Exhibits

2 unchanged sentences

Exhibit Exhibit Filing Date Filed/Furnished Herewith

3.1 Form of Amended and Restated Certificate of Incorporation.

3.1 Amended and Restated Certificate of Incorporation.

8-K 001-39049 3.1 9/23/2019

3.2 Form of Amended Restated Bylaws.

3.2 Amended and Restated Bylaws.

8-K 001-39049 3.1 3/22/2021

1 unchanged sentence

S-1/A 333-233446 4.1 9/9/2019

4.2 Amended and Restated Investors’ Rights Agreement, dated July 12, 2019, by and among the Registrant and certain of its stockholders.

4.2 Amended and Restated Investors’ Rights Agreement, dated July 12, 2019, by and among the Company and certain of its stockholders.

S-1/A 333-233446 4.2 9/9/2019

4.3 Amendment to Convertible Promissory Notes and Warrants, dated January 19, 2016.

4.3 Amended and Restated Stockholders' Agreement, dated July 12, 2019, by and among the Company and certain of its stockholders.

S-1/A 333-233446 4.3 9/9/2019

4.4 Form of Warrant to Purchase Stock issued to Innovatus Life Sciences Lending Fund I, LP in connection with the Registrant's 2018 loan agreement.

4.4 Form of Common Stock Purchase Warrant issued to investors by the Company in connection with private placement financings.

S-1/A 333-233446 4.4 9/9/2019

4.5 Form of Common Stock Purchase Warrant to purchase common stock issued to investors by the Company in 2016.

S-1/A 333-233446 4.8 9/9/2019

4.6 Form of Warrant to Purchase Stock issued to Innovatus Life Sciences Lending Fund I, LP in connection with the Company's 2018 loan agreement.

S-1/A 333-233446 4.9 9/9/2019

4.7 Form of Exchange Warrant .

10-Q 001-39049 4.5 8/9/2021

10.1# Exagen Corporation 2002 Stock Option Plan, as amended, and form of option agreement thereunder.

11 unchanged sentences

2019 Incentive Award Plan.

10-K 001-39049 10.5 3/16/2021

10.6# Exagen Inc.

2 unchanged sentences

10.7† License Agreement, dated September 13, 2007, by and between Prometheus Laboratories Inc.

and the Registrant (as successor in interest to Proprius, Inc.).

and the Company (as successor in interest to Proprius, Inc.).

S-1/A 333-233446 10.6 9/9/2019

10.8† First Amendment to License Agreement, dated October 23, 2013, by and between Prometheus Laboratories Inc.

and the Registrant (as successor in interest to Cypress Bioscience, Inc.).

and the Company (as successor in interest to Cypress Bioscience, Inc.).

S-1/A 333-233446 10.7 9/9/2019

10.9 Letter Agreement, dated September 28, 2021, by and between the Company and Prometheus Laboratories Inc.

10-Q 001-39049 10.6 11/10/2021

10.10† Asset Purchase Agreement, dated October 8, 2010, by and between Cypress Bioscience, Inc., Proprius, Inc.

and the Registrant.

and the Company.

S-1/A 333-233446 10.11 9/9/2019

1 unchanged sentence

One to Asset Purchase Agreement, dated March 10, 2011, by and between Cypress Bioscience, Inc., Proprius, Inc.

and the Registrant.

and the Company.

S-1/A 333-233446 10.12 9/9/2019

1 unchanged sentence

Two to Asset Purchase Agreement, dated August 21, 2012, by and between Royalty Pharma Collection Trust, Proprius, Inc.

and the Registrant.

and the Company.

S-1/A 333-233446 10.13 9/9/2019

1 unchanged sentence

Three to Asset Purchase Agreement, dated February 6, 2013, by and between Royalty Pharma Collection Trust, Proprius, Inc.

and the Registrant.

and the Company.

S-1/A 333-233446 10.14 9/9/2019

1 unchanged sentence

Four to Asset Purchase Agreement, dated October 8, 2013, by and between Royalty Pharma Collection Trust, Proprius, Inc.

and the Registrant.

and the Company.

S-1/A 333-233446 10.15 9/9/2019

1 unchanged sentence

Five to Asset Purchase Agreement, dated January 26, 2016, by and between Royalty Pharma Collection Trust, Proprius, Inc.

and the Registrant.

and the Company.

S-1/A 333-233446 10.16 9/9/2019

1 unchanged sentence

Six to Asset Purchase Agreement, dated February 16, 2017, by and between Royalty Pharma Collection Trust, Proprius, Inc.

and the Registrant.

and the Company.

S-1/A 333-233446 10.17 9/9/2019

10.16† Amended and Restated Exclusive License Agreement, dated August 2, 2011, by and between the University of Pittsburgh—Of the Commonwealth System of Higher Education and the Registrant.

10.17† Amended and Restated Exclusive License Agreement, dated August 2, 2011, by and between the University of Pittsburgh-Of the Commonwealth System of Higher Education and the Company.

S-1/A 333-233446 10.18 9/9/2019

10.17† First Amendment to Amended and Restated Exclusive License Agreement, dated May 17, 2012, by and between the University of Pittsburgh—Of the Commonwealth System of Higher Education and the Registrant.

10.18† First Amendment to Amended and Restated Exclusive License Agreement, dated May 17, 2012, by and between the University of Pittsburgh-Of the Commonwealth System of Higher Education and the Company.

S-1/A 333-233446 10.19 9/9/2019

10.18† Second Amendment to Amended and Restated Exclusive License Agreement, dated September 30, 2013, by and between the University of Pittsburgh—Of the Commonwealth System of Higher Education and the Registrant.

10.19† Second Amendment to Amended and Restated Exclusive License Agreement, dated September 30, 2013, by and between the University of Pittsburgh-Of the Commonwealth System of Higher Education and the Company.

S-1/A 333-233446 10.20 9/9/2019

10.19 Third Amendment to Amended and Restated Exclusive License Agreement, dated June 24, 2016, by and between the University of Pittsburgh—Of the Commonwealth System of Higher Education and the Registrant.

10.20 Third Amendment to Amended and Restated Exclusive License Agreement, dated June 24, 2016, by and between the University of Pittsburgh-Of the Commonwealth System of Higher Education and the Company.

S-1/A 333-233446 10.21 9/9/2019

10.20† Exclusive License Agreement, dated September 30, 2013, by and between the University of Pittsburgh—Of the Commonwealth System of Higher Education and the Registrant.

10.21† Exclusive License Agreement, dated September 30, 2013, by and between the University of Pittsburgh-Of the Commonwealth System of Higher Education and the Company.

S-1/A 333-233446 10.22 9/9/2019

10.22† Exclusive License Agreement, dated September 5, 2011, by and between Thierry Dervieux, Ph.D.

and the Registrant.

and the Company.

S-1/A 333-233446 10.23 9/9/2019

10.23† Co-Promotion Agreement, dated December 10, 2018, by and between Janssen Biotech, Inc.

and the Registrant.

and the Company.

S-1/A 333-233446 10.24 9/9/2019

10.24† Amendment #1 to Co-Promotion Agreement, dated January 1, 2019 by and between Janssen Biotech, Inc.

and the Registrant.

and the Company.

10-Q 001-39049 10.1 7/28/2020

10.25† Amendment #2 to Co-Promotion Agreement, dated June 18, 2020 by and between Janssen Biotech, Inc.

and the Registrant.

and the Company.

10-Q 001-39049 10.2 7/28/2020

10.26† Amendment #3 to Co-Promotion Agreement, dated December 23, 2020 by and between Janssen Biotech, Inc.

and the Registrant.

10.26 Standard Industrial/Commercial Multi-Tenant Lease, dated January 13, 2012, by and between RGS Properties and the Registrant.

and the Company.

10-K 001-39049 10.25 3/16/2021

10.27† Amendment #4 to Co-Promotion Agreement, dated June 30, 2021 by and between Janssen Biotech, Inc.

and the Company.

10-Q 001-39049 10.1 8/9/2021

10.27 First Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated December 1, 2013, by and between RGS Properties and the Registrant.

10.28 Standard Industrial/Commercial Multi-Tenant Lease, dated January 13, 2012, by and between RGS Properties and the Company.

10-Q 001-39049 10.1 7/28/2020

10.28 Second Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated April 29, 2016, by and between RGS Properties and the Registrant.

10.29 First Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated December 1, 2013, by and between RGS Properties and the Company.

10-Q 001-39049 10.2 7/28/2020

10.30 Second Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated April 29, 2016, by and between RGS Properties and the Company.

10-K 001-39049 10.27 3/25/2020

10.29 Third Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated June 16, 2017, by and between RGS Properties and the Registrant.

10.31 Third Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated June 16, 2017, by and between RGS Properties and the Company.

10-K 001-39049 10.28 3/25/2020

10.30 Fourth Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated March 16, 2020, by and between RGS Properties and the Registrant.

10.32 Fourth Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated March 16, 2020, by and between RGS Properties and the Company.

10-K 001-39049 10.29 3/25/2020

10.31 Standard Industrial/Commercial Single-Tenant Lease, dated September 4, 2014, by and between Geiger Court, LLC and the Registrant.

10.33 Fifth Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated October 19, 2021, by and between RGS Properties and the Company.

10-Q 001-39049 10.3 11/10/2021

10.34 Standard Industrial/Commercial Single-Tenant Lease, dated September 4, 2014, by and between Geiger Court, LLC and the Company.

S-1/A 333-233446 10.31 9/9/2019

10.32 First Amendment to Standard Industrial/Commercial Single-Tenant Lease, dated August 2, 2017, by and between Geiger Court, LLC and the Registrant.

10.35 First Amendment to Standard Industrial/Commercial Single-Tenant Lease, dated August 2, 2017, by and between Geiger Court, LLC and the Company.

10-K 001-39049 10.31 3/25/2020

10.33 Extension of Lease to Standard Industrial/Commercial Single-Tenant Lease, dated March 12, 2020, by and between Liberty Vista and the Registrant.

10.36 Extension of Lease to Standard Industrial/Commercial Single-Tenant Lease, dated March 12, 2020, by and between Liberty Vista and the Company.

10-K 001-39049 10.32 3/25/2020

10.34 First Amendment to Standard Industrial/Commercial Single-Tenant Lease, dated January 6, 2021, by and between Liberty Vista and the Registrant.

10.35 Standard Industrial/Commercial Multi-Tenant Lease, dated March 17, 2020 by and between RGS Properties and the Registrant.

10.37 First Amendment to Standard Industrial/Commercial Single-Tenant Lease, dated January 6, 2021, by and between Liberty Vista and the Company.

10-K 001-39049 10.34 3/16/2021

10.36 Master Lease Agreement, dated February 1, 2018, by and between Celtic Commercial Finance, a division of MB Equipment Finance, LLC and the Registrant.

10.38 Second Amendment to Standard Industrial/Commercial Single-Tenant Lease, dated October 11, 2021, by and between Liberty Vista and the Company.

10-Q 001-39049 10.2 11/10/2021

10.39 Standard Industrial/Commercial Multi-Tenant Lease, dated March 17, 2020 by and between RGS Properties and the Company.

10-K 001-39049 10.33 3/25/2020

10.40 First Amendment to Standard Industrial/Commercial Multi-Tenant Lease, dated October 19, 2021, by and between RGS Properties and the Company.

10-Q 001-39049 10.4 11/10/2021

10.41† Sublease Agreement, dated August 19, 2021, by and between Plum Healthcare Group, LLC and the Company.

10-Q 001-39049 10.1 11/10/2021

10.42 Master Lease Agreement, dated February 1, 2018, by and between Celtic Commercial Finance, a division of MB Equipment Finance, LLC and the Company.

S-1/A 333-233446 10.32 9/9/2019

10.37 Loan and Security Agreement, dated September 7, 2017, by and between Innovatus Life Sciences Lending Fund I, LP and the Registrant.

10.43 Loan and Security Agreement, dated September 7, 2017, by and between Innovatus Life Sciences Lending Fund I, LP and the Company.

S-1/A 333-233446 10.33 9/9/2019

10.38 First Amendment to Loan and Security Agreement with Innovatus Life Sciences Lending I, LP dated November 19, 2019.

10.44 First Amendment to Loan and Security Agreement, dated November 19, 2019, by and between Innovatus Life Sciences Lending I, LP and the Company.

10-K 001-39049 10.36 3/25/2020

10.39 Acknowledgement Letter to Loan and Security Agreement, by and between Innovatus Life Sciences Lending Fund I, LP and the Registrant.

10.45 Acknowledgement Letter to Loan and Security Agreement, dated October 7, 2020, by and between Innovatus Life Sciences Lending Fund I, LP and the Company.

10-Q 001-39049 10.1 11/10/2020

10.46 Second Amendment to Loan and Security Agreement, dated November 1, 2021, by and among Innovatus Life Sciences Lending Fund I, LP, other lenders and the Company.

10-Q 001-39049 10.5 11/10/2021

10.47# Offer Letter, dated October 12, 2010, by and between Thierry Dervieux, Ph.D.

and the Registrant, as amended on September 9, 2011 and September 6, 2019.

and the Company, as amended on September 9, 2011 and September 6, 2019.

S-1/A 333-233446 10.34 9/9/2019

1 unchanged sentence

S-1/A 333-233446 10.35 9/9/2019

10.42# Offer Letter, dated October 7, 2011, by and between Fortunato Ron Rocca and the Registrant, as amended on September 4, 2019.

10.49# Offer Letter, dated October 7, 2011, by and between Fortunato Ron Rocca and the Company, as amended on September 4, 2019.

S-1/A 333-233446 10.36 9/9/2019

10.43# Offer Letter, dated May 16, 2017, by and between Kamal Adawi and the Registrant, as amended on September 4, 2019.

10.50# Offer Letter, dated May 16, 2017, by and between Kamal Adawi and the Company, as amended on September 4, 2019.

S-1/A 333-233446 10.37 9/9/2019

10.51# Offer Letter dated February 21, 2020, by and between Debra Zack, MD Ph.D.

and the Registrant.

and the Company.

10-K 001-39049 10.41 3/25/2020

2 unchanged sentences

10.53# Executive Change in Control Severance Plan.

10-K 001-39049 10.46 3/16/2021

23.1 Consent of Independent Registered Public Accounting Firm.

9 unchanged sentences

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.

104 The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2021, has been formatted in Inline XBRL.

* This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

16 unchanged sentences

/s/ Brian Birk Chairman of the Board of Directors March 22, 2022

/s/ Jeff Elliott Director March 16, 2021

/s/ Ana Hooker Director March 22, 2022

Johnson Director March 22, 2022

6 unchanged sentences

Robertson, Ph.D.

/s/ Frank Stokes Director March 22, 2022

/s/ James L.L.

1 unchanged sentence

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

What changed 10-K

Item 9A. Controls and Procedures