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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to           .

Commission File Number: 001-38319

QUANTERIX CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

20-8957988

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

900 Middlesex Turnpike

Billerica, MA

01821

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (617) 301-9400

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class:

    

Trading Symbol(s)

    

Name of each exchange on which registered:

Common Stock, $0.001 par value per share

QTRX

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes   No

As of November 1, 2021, the registrant had 36,648,018 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

TTABLE OF CONTENTS

Page

Special Note Regarding Forward-Looking Statements

3

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

4

Unaudited Condensed Consolidated Balance Sheets at September 30, 2021 and December 31, 2020

4

Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020

5

Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2021 and 2020

6

Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020

7

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020

8

Notes to Condensed Consolidated Financial Statements

9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3. Quantitative and Qualitative Disclosures About Market Risk

33

Item 4. Controls and Procedures

33

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

34

Item 1A. Risk Factors

34

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

34

Item 3. Defaults Upon Senior Securities

34

Item 4. Mine Safety Disclosures

34

Item 5. Other Information

34

Item 6. Exhibits

35

Signatures

36

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Table of Contents

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about our financial performance, and are subject to a number of risks, uncertainties and assumptions, including those described in this Quarterly Report on Form 10-Q and in “Part I, Item 1A, Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020 or other filings that we make with the Securities and Exchange Commission, or SEC. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, events or circumstances reflected in the forward-looking statements will be achieved or occur. You should read this Quarterly Report on Form 10-Q, and the documents that we reference herein and have filed with the SEC, with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to new information, actual results or to changes in our expectations, except as required by law.

Unless the context otherwise requires, the terms “Quanterix,” the “Company,” “we,” “us” and “our” in this Quarterly Report on Form 10-Q refer to Quanterix Corporation and its subsidiaries. “Quanterix,” “Simoa,” “Simoa HD-X,” “Simoa HD-1,” “SR-X,” “SP-X,” “HD-X Analyzer,” “HD-1 Analyzer” and our logo are our trademarks. All other service marks, trademarks and trade names appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

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Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Quanterix Corporation

Condensed Consolidated Balance Sheets

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

    

(Unaudited)

    

    

September 30, 2021

    

December 31, 2020

Assets

Current assets:

 

 

  

Cash and cash equivalents

$

410,747

$

181,584

Accounts receivable (less allowance for credit losses of $645 and $370 as of September 30, 2021 and December 31, 2020, respectively; including $170 and $172 due from related parties as of September 30, 2021 and December 31, 2020, respectively)

 

18,434

 

17,184

Inventory

 

22,794

 

14,856

Prepaid expenses and other current assets

 

7,454

 

5,981

Total current assets

459,429

 

219,605

Restricted cash

 

1,658

 

1,000

Property and equipment, net

 

16,466

 

13,912

Intangible assets, net

 

11,374

 

13,716

Goodwill

 

9,903

 

10,460

Right-of-use assets

11,626

11,995

Other non-current assets

 

384

 

357

Total assets

$

510,840

$

271,045

Liabilities and stockholders’ equity

 

  

 

  

Current liabilities:

 

  

 

  

Accounts payable (including $25 and $14 to related parties as of September 30, 2021 and December 31, 2020, respectively)

$

5,824

$

6,799

Accrued compensation and benefits

 

9,176

 

10,777

Other accrued expenses (including $19 and $1,377 to related parties as of September 30, 2021 and December 31, 2020, respectively)

 

5,875

 

4,845

Deferred revenue (including $56 and $90 with related parties as of September 30, 2021 and December 31, 2020, respectively)

 

5,743

 

5,421

Current portion of long term debt

 

1,993

 

7,673

Short term lease liabilities

1,374

1,234

Other current liabilities

1,205

3,054

Total current liabilities

 

31,190

 

39,803

Deferred revenue, net of current portion

 

929

 

577

Long term lease liabilities

20,845

21,891

Deferred tax liabilities

 

2,362

 

2,649

Total liabilities

 

55,326

 

64,920

Stockholders’ equity:

 

  

 

  

Common stock, $0.001 par value:

 

 

Authorized—120,000,000 shares as of September 30, 2021 and December 31, 2020; issued and outstanding — 36,574,132 and 31,796,544 shares as of September 30, 2021 and December 31, 2020, respectively

 

37

 

32

Additional paid-in capital

 

739,862

 

451,433

Accumulated other comprehensive income

1,051

2,434

Accumulated deficit

 

(285,436)

 

(247,774)

Total stockholders’ equity

 

455,514

 

206,125

Total liabilities and stockholders’ equity

$

510,840

$

271,045

See accompanying notes

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Table of Contents

Quanterix Corporation

Condensed Consolidated Statements of Operations

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

(Unaudited)

Three Months Ended September 30, 

Nine Months Ended September 30, 

    

2021

    

2020

    

2021

    

2020

Product revenue (including related party activity of $111 and $126 for the three months ended September 30, 2021 and 2020, respectively, and $354 and $398 for the nine months ended September 30, 2021 and 2020, respectively)

$

20,662

$

11,662

$

57,586

$

28,285

Service and other revenue (including related party activity of $17 and $26 for the three months ended September 30, 2021 and 2020, respectively, and $46 and $71 for the nine months ended September 30, 2021 and 2020, respectively)

 

5,898

 

6,552

 

17,955

 

18,631

Collaboration and license revenue

 

120

 

11,246

 

486

 

11,401

Grant revenue

1,009

1,929

4,242

1,929

Total revenue

 

27,689

 

31,389

 

80,269

 

60,246

Costs of goods sold:

 

 

  

Cost of product revenue (including related party activity of $295 and $39 for the three months ended September 30, 2021 and 2020, respectively, and $1,351 and $116 for the nine months ended September 30, 2021 and 2020, respectively)

 

8,639

 

6,387

 

24,233

 

17,989

Cost of service and other revenue (including related party activity of $16 and $0 for the three months ended September 30, 2021 and 2020, respectively, and $67 and $0 for the nine months ended September 30, 2021 and 2020, respectively)

 

3,806

 

2,896

 

10,569

 

8,125

Cost of collaboration and license revenue (including related party activity of $0 and $1,000 for the three months ended September 30, 2021 and 2020, respectively, and $0 and $1,000 for the nine months ended September 30, 2021 and 2020, respectively)

1,000

1,000

Total costs of goods sold, services, and licenses

 

12,445

 

10,283

 

34,802

 

27,114

Gross profit

15,244

21,106

45,467

33,132

Operating expenses:

 

 

  

Research and development (including related party activity of $454 and $95 for the three months ended September 30, 2021 and 2020, respectively, and $505 and $154 for the nine months ended September 30, 2021 and 2020, respectively)

 

6,807

 

5,377

 

20,244

 

13,957

Selling, general and administrative (including related party activity of $70 and $0 for the three months ended September 30, 2021 and 2020, respectively, and $93 and $23 for the nine months ended September 30, 2021 and 2020, respectively)

 

23,670

 

13,451

 

63,913

 

40,826

Total operating expenses

 

30,477

 

18,828

 

84,157

 

54,783

(Loss) income from operations

 

(15,233)

 

2,278

 

(38,690)

 

(21,651)

Interest expense, net

 

(90)

 

(160)

 

(418)

 

(107)

Other (expense) income, net

 

(305)

 

(26)

 

1,478

 

(204)

(Loss) income before income taxes

(15,628)

2,092

(37,630)

(21,962)

Income tax (expense) benefit

(33)

111

(32)

253

Net (loss) income

$

(15,661)

$

2,203

$

(37,662)

$

(21,709)

Net (loss) income per share, basic

$

(0.43)

$

0.07

$

(1.05)

$

(0.75)

Weighted-average common shares outstanding, basic

 

36,518,177

 

30,139,157

 

35,774,455

 

28,881,716

Net (loss) income per share, diluted

$

(0.43)

$

0.07

$

(1.05)

$

(0.75)

Weighted-average common shares outstanding, diluted

 

36,518,177

 

31,386,439

 

35,774,455

 

28,881,716

See accompanying notes

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Table of Contents

Quanterix Corporation

Condensed Consolidated Statements of Comprehensive (Loss) Income

(amounts in thousands)

(Unaudited)

Three Months Ended September 30, 

Nine Months Ended September 30, 

2021

    

2020

2021

    

2020

Net (loss) income

$

(15,661)

$

2,203

$

(37,662)

$

(21,709)

Other comprehensive (loss) income:

Cumulative translation adjustment

(527)

760

(1,383)

887

Total other comprehensive (loss) income

(527)

760

(1,383)

887

Comprehensive (loss) income

$

(16,188)

$

2,963

$

(39,045)

$

(20,822)

See accompanying notes

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Table of Contents

Quanterix Corporation

Condensed Consolidated Statements of Cash Flows

(amounts in thousands)

(Unaudited)

Nine Months Ended September 30, 

2021

    

2020

Operating activities

 

  

 

  

Net loss

$

(37,662)

$

(21,709)

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

 

 

  

Depreciation and amortization expense

 

3,566

 

3,187

Inventory step-up amortization

275

670

Credit loss expense on accounts receivable

286

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

364

204

Stock-based compensation expense

 

11,044

 

6,970

Non-cash interest expense

 

65

 

65

Loss on disposal of fixed assets

 

 

120

Changes in operating assets and liabilities:

 

 

Accounts receivable

 

(1,556)

 

(15,360)

Prepaid expenses and other assets

 

(1,395)

 

(5)

Inventory

 

(8,431)

 

(3,505)

Other non-current assets

 

(3)

 

182

Accounts payable

 

(972)

 

(187)

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

 

(2,737)

 

2,117

Contract acquisition costs

(123)

(99)

Operating lease liabilities

(902)

515

Other non-current liabilities

(108)

(177)

Deferred revenue

 

674

 

(1,007)

Net cash used in operating activities

(37,615)

(28,019)

Investing activities

 

  

 

  

Purchases of property and equipment

 

(11,163)

 

(2,149)

Proceeds from RADx grant on assets purchased

7,019

Net cash used in investing activities

(4,144)

(2,149)

Financing activities

 

  

 

  

Proceeds from stock options exercised

 

6,607

 

1,943

Sale of common stock in underwritten public offering, net

269,718

91,404

Proceeds from ESPP purchase

 

1,065

 

888

Payments on notes payable

 

(5,744)

 

(75)

Net cash provided by financing activities

271,646

94,160

Net increase in cash and cash equivalents

 

229,887

 

63,992

Effect of foreign currency exchange rate on cash

(66)

(11)

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

 

182,584

 

110,181

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

$

412,405

$

174,162

Supplemental cash flow information

 

  

 

  

Cash paid for interest

$

389

$

468

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

$

306

$

358

Reconciliation of cash, cash equivalents, and restricted cash:

Cash and cash equivalents

$

410,747

$

173,162

Restricted cash

$

1,658

$

1,000

Total cash, cash equivalents, and restricted cash

$

412,405

$

174,162

See accompanying notes

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Table of Contents

Quanterix Corporation

Condensed Consolidated Statements of Stockholders’ Equity

(amounts in thousands, except share data)

(Unaudited)

Accumulated

Additional

other

Total

Common

Common

paid-in

comprehensive

Accumulated

stockholders’

    

stock shares

    

stock value

    

capital

    

income (loss)

    

deficit

    

equity

Balance at June 30, 2021

 

36,454,369

$

37

$

734,170

$

1,578

$

(269,775)

 

$

466,010

Exercise of common stock options and vesting of restricted stock

 

107,951

1,138

 

1,138

ESPP stock purchase

11,812

546

546

Stock-based compensation expense

4,008

4,008

Cumulative translation adjustment

(527)

(527)

Net loss

(15,661)

(15,661)

Balance at September 30, 2021

 

36,574,132

 

$

37

 

$

739,862

 

$

1,051

$

(285,436)

 

$

455,514

Accumulated

Additional

other

Total

Common

Common

paid-in

comprehensive

Accumulated

stockholders’

    

stock shares

    

stock value

    

capital

    

income (loss)

    

deficit

    

equity

Balance at June 30, 2020

 

28,381,280

$

28

$

351,188

$

(26)

$

(240,156)

 

$

111,034

Exercise of common stock options and vesting of restricted stock

 

130,302

1

831

 

832

Sale of common stock in underwritten public offering, net

3,048,774

3

91,401

91,404

ESPP stock purchase

23,153

448

448

Stock-based compensation expense

2,360

2,360

Cumulative translation adjustment

760

760

Net income

2,203

2,203

Balance at September 30, 2020

 

31,583,509

 

$

32

 

$

446,228

 

$

734

$

(237,953)

 

$

209,041

Accumulated

Additional

other

Total

Common

Common

paid-in

comprehensive

Accumulated

stockholders’

    

stock shares

    

stock value

    

capital

    

income (loss)

    

deficit

    

equity

Balance at December 31, 2020

 

31,796,544

$

32

$

451,433

$

2,434

$

(247,774)

 

$

206,125

Exercise of common stock options, warrants, and vesting of restricted stock

 

641,409

1

6,606

 

6,607

Sale of common stock in underwritten public offering, net

4,107,142

4

269,714

269,718

ESPP stock purchase

29,037

1,065

 

1,065

Stock-based compensation expense

11,044

11,044

Cumulative translation adjustment

(1,383)

(1,383)

Net loss

(37,662)

(37,662)

Balance at September 30, 2021

 

36,574,132

 

$

37

 

$

739,862

 

$

1,051

$

(285,436)

 

$

455,514

Accumulated

Additional

other

Total

Common

Common

paid-in

comprehensive

Accumulated

stockholders’

    

stock shares

    

stock value

    

capital

    

income (loss)

    

deficit

    

equity

Balance at December 31, 2019

 

28,112,201

$

28

$

345,027

$

(153)

$

(216,244)

 

$

128,658

Exercise of common stock options and vesting of restricted stock

 

376,688

1

1,942

1,943

Sale of common stock in underwritten public offering, net

3,048,774

3

91,401

91,404

ESPP stock purchase

45,846

888

888

Stock-based compensation expense

6,970

6,970

Cumulative translation adjustment

887

887

Net loss

(21,709)

(21,709)

Balance at September 30, 2020

 

31,583,509

 

$

32

 

$

446,228

 

$

734

$

(237,953)

 

$

209,041

See accompanying notes

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Table of Contents

Quanterix Corporation

Notes to condensed consolidated financial statements

(Unaudited)

1. Organization and operations

Quanterix Corporation (Nasdaq: QTRX) (the Company) is a life sciences company that has developed next generation, ultra-sensitive digital immunoassay platforms that advance precision health for life sciences research and diagnostics. The Company's platforms are based on its proprietary digital "Simoa" detection technology. The Company's Simoa bead-based and planar array platforms enable customers to reliably detect protein biomarkers in extremely low concentrations in blood, serum and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies, and also allow researchers to define and validate the function of novel protein biomarkers that are only present in very low concentrations and have been discovered using technologies such as mass spectrometry. These capabilities provide the Company's customers with insight into the role of protein biomarkers in human health that has not been possible with other existing technologies and enable researchers to unlock unique insights into the continuum between health and disease. The Company is currently focusing on protein detection, which it believes is an area of significant unmet need and where it has significant competitive advantages. However, in addition to enabling new applications and insights in protein analysis, the Company’s Simoa platforms have also demonstrated applicability across other testing applications, including detection of nucleic acids and small molecules.

The Company launched its first immunoassay platform, the Simoa HD-1 (HD-1), in 2014. The HD-1 is a fully automated immunoassay bead-based platform with multiplexing and custom assay capability, and related assay test kits and consumable materials. In the fourth quarter of 2017, the Company launched a second bead-based immunoassay platform (SR-X) with a more compact footprint than the HD-1 and less automation designed for lower volume requirements while still allowing multiplexing and custom assay capability. The Company initiated an early-access program for its third instrument (SP-X) on the new Simoa planar array platform in January 2019, with the full commercial launch commencing in April 2019. In July 2019, the Company launched the Simoa HD-X, an upgraded version of the HD-1 and phased out the HD-1. The HD-X has been designed to deliver significant productivity and operational efficiency improvements, as well as greater user flexibility. The Company began shipping and installing HD-X instruments at customer locations in the third quarter of 2019. The Company also performs research services on behalf of customers to apply the Simoa technology to specific customer needs. The Company's customers are primarily in the research use only market, which includes academic and governmental research institutions, the research and development laboratories of pharmaceutical manufacturers, contract research organizations, and specialty research laboratories.

The Company acquired Aushon Biosystems, Inc. (Aushon) in January 2018. With the acquisition of Aushon, the Company acquired a CLIA certified laboratory, as well as Aushon's proprietary sensitive planar array detection technology. Leveraging its proprietary sophisticated Simoa image analysis and data analysis algorithms, the Company further refined this planar array technology to develop the SP-X instrument to provide the same Simoa sensitivity found in its bead-based platform.

The Company completed the acquisition of UmanDiagnostics AB (Uman), a Swedish company located in Umea, Sweden, in August 2019. Uman supplies neurofilament light (Nf-L) antibodies and ELISA kits, which are widely recognized by researchers and biopharmaceutical and diagnostics companies world-wide as the premier solution for the detection of Nf-L to advance the development of therapeutics and diagnostics for neurodegenerative conditions. With the acquisition of Uman, the Company has secured a long-term source of supply for a critical technology.

Underwritten public offerings

On August 6, 2020, the Company entered into an underwriting agreement with SVB Leerink LLC (Leerink) and Cowen and Company, LLC (Cowen), as representatives of the several underwriters, relating to an underwritten public offering of approximately 3.0 million shares of the Company’s common stock, par value $0.001 per share. The underwritten public offering resulted in gross proceeds of $97.6 million. The Company incurred $6.2 million in issuance costs associated with the underwritten public offering, resulting in net proceeds to the Company of $91.4 million.

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On February 3, 2021, the Company entered into an underwriting agreement with Goldman Sachs & Co. LLC, Leerink, and Cowen, as representatives of the several underwriters, relating to an underwritten public offering of approximately 4.1 million shares of the Company’s common stock, par value $0.001 per share. The underwritten public offering resulted in gross proceeds of $287.5 million. The Company incurred $17.8 million in issuance costs associated with the underwritten public offering, resulting in net proceeds to the Company of $269.7 million.

Basis of presentation

The interim condensed consolidated financial statements are unaudited. The unaudited condensed consolidated financial statements reflect, in the opinion of the Company’s management, all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of financial position, results of operations, comprehensive loss and cash flows for each period presented and have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 5, 2021 (the 2020 Annual Report on Form 10-K).

2. Significant accounting policies

Principles of consolidation

The condensed consolidated financial statements include the accounts of Quanterix Corporation and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. In making those estimates and assumptions, the Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. The Company’s significant estimates included in the preparation of the consolidated financial statements are related to revenue recognition, fair value of assets acquired and liabilities assumed in acquisitions, and valuation of inventory. Actual results could differ from those estimates.

Income taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on differences between the consolidated financial statement carrying amounts and the tax bases of the assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

 

The Company accounts for uncertain tax positions in accordance with the provisions of Accounting Standards Codification (ASC) 740, Income Taxes (ASC 740). When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of September 30, 2021, the Company did not have any significant uncertain tax positions.

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Table of Contents

Restricted cash

Restricted cash primarily represents collateral for a letter of credit issued as security for the lease for the Company’s headquarters in Billerica, Massachusetts, and to secure the Company’s corporate credit card program. The restricted cash is long term in nature as the Company will not have access to the funds until more than one year from September 30, 2021.

Recent accounting pronouncements

The Company is considered to be an “emerging growth company” (EGC) as defined in the Jumpstart Our Business Startups Act of 2012, as amended (JOBS Act). The JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Since the market value of the Company’s common stock that was held by non-affiliates exceeded $700 million as of June 30, 2021, the Company will cease to be an EGC as of December 31, 2021. As a result, starting in 2022, the Company will be required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

Recently Adopted

In June 2016, the Financial Accounting Standards Board (FASB) established Topic 326, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments (ASC 326) by issuing Accounting Standards Update (ASU) No. 2016-13 (ASU 2016-13), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available-for-sale debt securities. The Company early adopted ASU 2016-13 on January 1, 2021 using the modified retrospective approach. The Company’s consolidated financial statements for prior-year periods have not been revised and are reflective of the credit loss requirements which were in effect for that period. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15). This ASU addresses the accounting for implementation, setup and other upfront costs paid by a customer in a cloud computing or hosting arrangement. The guidance aligns the accounting treatment of these costs incurred in a hosting arrangement treated as a service contract with the requirements for capitalization and amortization costs to develop or obtain internal-use software. The Company adopted ASU 2018-15 on January 1, 2021 using the prospective method. The adoption of ASU 2018-15 did not have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which is intended to simplify various areas related to ASC 740, Income Taxes (ASC 740). ASU 2019-12 removes certain exceptions for performing intra period tax allocations and calculating income taxes in interim periods. The guidance also simplifies the accounting for transactions that result in a step-up in the tax basis of goodwill and the effect of enacted changes in tax laws or rates in interim periods. The Company early adopted ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements.

There have been no other material changes to the significant accounting policies and recent accounting pronouncements previously disclosed in the 2020 Annual Report on Form 10-K.

3. Revenue recognition

The Company recognizes revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects consideration that the Company expects to be entitled to receive in exchange for these

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goods and services, incentives and taxes collected from customers that are subsequently remitted to governmental authorities.

Customers

The Company’s customers primarily consist of entities engaged in the life sciences research market that pursue the discovery and development of new drugs for a variety of neurologic, cardiovascular, oncologic and other protein biomarkers associated with diseases. The Company’s customer base includes several of the largest biopharmaceutical companies, academic research organizations and distributors who serve certain geographic markets.

Product revenue

The Company’s products are composed of analyzer instruments, assay kits and other consumables such as reagents. Products are sold directly to biopharmaceutical and academic research organizations or are sold through distributors in EMEA and Asia Pacific regions. The sales of instruments are generally accompanied by an initial year of implied service-type warranties and may be bundled with assays and other consumables and may also include other items such as training and installation of the instrument and/or an extended service warranty. Revenues from the sale of products are recognized at a point in time when the Company transfers control of the product to the customer, which is upon installation for instruments sold to direct customers, and based upon shipping terms for assay kits and other consumables. Revenue for instruments sold to distributors is generally recognized based upon shipping terms (either upon shipment or delivery).

Service and other revenue

Service revenues are composed of contract research services, initial implied one-year service-type warranties, extended services contracts and other services such as training. Contract research services are provided through the Company’s Accelerator Laboratory and generally consist of fixed fee contracts. Revenues from contract research services are recognized at a point in time when the Company completes and delivers its research report on each individually completed study, or over time if the contractual provisions allow for the collection of transaction consideration for costs incurred plus a reasonable margin through the period of performance of the services. Revenues from service-type warranties are recognized ratably over the contract service period. For contract research services recognized over time, the Company uses the output method to measure the progress toward the complete satisfaction of the performance obligations. Revenues from other services are immaterial.

Collaboration and license revenue

The Company may enter into agreements to license the intellectual property and know-how associated with its instruments and certain antibodies in exchange for license fees and future royalties (as described below). The license agreements provide the licensee with a right to use the intellectual property with the license fee revenues recognized at a point in time as the underlying license is considered functional intellectual property.

Payment terms

The Company’s payment terms vary by the type and location of the customer and the products or services offered. Payment from customers is generally required in a term ranging from 30 to 45 days from date of shipment or satisfaction of the performance obligation. The Company does not provide financing arrangements to its customers.

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Disaggregated revenue

When disaggregating revenue, the Company considered all of the economic factors that may affect its revenues. The following tables disaggregate the Company's revenue from contracts with customers by revenue type (in thousands):

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2021

 NA

    

 EMEA

    

 Asia Pacific

    

 Total

    

 NA

    

 EMEA

    

 Asia Pacific

    

 Total

Product revenues

Instruments

$

3,492

$

1,644

$

1,338

 

$

6,474

 

$

9,370

$

6,107

$

3,796

$

19,273

Consumable and other products

8,915

4,483

790

 

14,188

 

24,638

11,227

2,448

38,313

Totals

$

12,407

 

$

6,127

 

$

2,128

 

$

20,662

 

$

34,008

 

$

17,334

 

$

6,244

 

$

57,586

Service and other revenues

Service-type warranties

$

1,112

$

556

$

66

$

1,734

 

$

3,181

$

1,452

$

179

$

4,812

Research services

2,998

604

50

3,652

 

9,285

2,095

89

 

11,469

Other services

465

47

512

 

1,271

403

1,674

Totals

$

4,575

$

1,207

$

116

$

5,898

$

13,737

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