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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 March 31, 2024

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)

(617) 301-9400

(Registrant’s telephone number, including area code)

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 May 2, 2024, the registrant had 38,270,088 shares of common stock outstanding.

Table of Contents

2

Table of Contents

TQUANTERIX CORPORATION

INDEX TO FORM 10-Q

Page

Note Regarding Forward-Looking Statements

4

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

5

Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023

5

Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023

6

Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2024 and 2023

7

Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2024 and 2023

8

Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023

9

Notes to Consolidated Financial Statements

10

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

23

Item 3. Quantitative and Qualitative Disclosures About Market Risk

30

Item 4. Controls and Procedures

30

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

32

Item 1A. Risk Factors

32

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

34

Item 3. Defaults Upon Senior Securities

34

Item 4. Mine Safety Disclosures

35

Item 5. Other Information

35

Item 6. Exhibits

36

Signatures

37

3

Table of Contents

Unless the context otherwise requires, the terms “Quanterix,” the Company,” “we,” “it,” “us,” and “our” in this Quarterly Report on Form 10-Q refer to Quanterix Corporation and its consolidated subsidiaries.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) 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, forward-looking statements can be identified 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 related to our financial performance, and are subject to a number of risks, uncertainties, and assumptions, including those further described elsewhere in this Quarterly Report on Form 10-Q, in the section titled “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 29, 2024, or in other filings that we make with the 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 us 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.

Readers should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in any forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in forward-looking statements will be achieved or occur. 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.

Readers should read this Quarterly Report on Form 10-Q and any documents referenced herein that we have filed with the SEC as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

Service Marks, Trademarks and Trade Names

“Quanterix,” “Simoa,” “Simoa HD-X,” “Simoa HD-1,” “SR-X,” “SP-X”, “HD-X”, “LucentAD,” “Lucent Diagnostics,” 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.

4

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

QUANTERIX CORPORATION

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except per share data)

March 31, 2024

    

December 31, 2023

ASSETS

Current assets:

 

  

Cash and cash equivalents

$

45,281

$

174,422

Marketable securities

256,640

146,902

Accounts receivable, net of allowance for expected credit losses

 

29,276

 

25,414

Inventory

 

26,015

 

22,365

Prepaid expenses and other current assets

 

9,551

 

9,291

Total current assets

366,763

 

378,394

Restricted cash

 

2,605

 

2,604

Property and equipment, net

 

17,492

 

17,926

Intangible assets, net

 

5,339

 

6,034

Operating lease right-of-use assets

17,748

18,251

Other non-current assets

 

1,802

 

1,802

Total assets

$

411,749

$

425,011

LIABILITIES AND STOCKHOLDERS' EQUITY

 

  

 

  

Current liabilities:

 

  

 

  

Accounts payable

$

3,914

$

5,048

Accrued compensation and benefits

 

6,706

 

13,659

Accrued expenses and other current liabilities

 

7,021

 

6,041

Deferred revenue

 

10,234

 

9,468

Operating lease liabilities

4,366

4,241

Total current liabilities

 

32,241

 

38,457

Deferred revenue, net of current portion

 

933

 

1,227

Operating lease liabilities, net of current portion

36,084

37,223

Other non-current liabilities

 

1,053

 

1,177

Total liabilities

70,311

78,084

Commitments and contingencies (Note 12)

Stockholders’ equity:

 

  

 

  

Common stock, $0.001 par value per share:

 

 

Authorized: 120,000 shares; issued and outstanding: 38,353 and 38,014 shares at March 31, 2024 and December 31, 2023, respectively

 

38

 

38

Additional paid-in capital

 

789,006

 

783,142

Accumulated other comprehensive loss

(3,038)

(1,757)

Accumulated deficit

 

(444,568)

 

(434,496)

Total stockholders’ equity

 

341,438

 

346,927

Total liabilities and stockholders’ equity

$

411,749

$

425,011

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

5

Table of Contents

QUANTERIX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share data)

Three Months Ended March 31, 

2024

    

2023

Revenues:

Product revenue

$

19,670

$

19,287

Service and other revenue

 

11,967

 

8,579

Collaboration and license revenue

 

155

 

368

Grant revenue

274

222

Total revenues

 

32,066

28,456

Costs of goods sold and services:

 

  

 

  

Cost of product revenue

 

7,145

 

7,033

Cost of service and other revenue

 

5,295

 

4,497

Total costs of goods sold and services

 

12,440

 

11,530

Gross profit

19,626

16,926

Operating expenses:

 

  

 

  

Research and development

 

6,675

 

4,720

Selling, general and administrative

 

25,993

 

20,850

Other lease costs

924

776

Total operating expenses

 

33,592

 

26,346

Loss from operations

 

(13,966)

 

(9,420)

Interest income

 

3,948

 

3,449

Other income, net

 

206

 

8

Loss before income taxes

(9,812)

(5,963)

Income tax expense

(260)

(140)

Net loss

$

(10,072)

$

(6,103)

Net loss per common share, basic and diluted

$

(0.26)

$

(0.16)

Weighted-average common shares outstanding, basic and diluted

 

38,126

 

37,327

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

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QUANTERIX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(amounts in thousands)

Three Months Ended March 31, 

2024

    

2023

Net loss

$

(10,072)

$

(6,103)

Other comprehensive loss, net of tax:

Unrealized losses on marketable securities

(607)

Foreign currency translation

(674)

42

Total other comprehensive income (loss)

(1,281)

42

Comprehensive loss

$

(11,353)

$

(6,061)

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

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QUANTERIX CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(amounts in thousands)

Three Months Ended March 31, 2024

Common Stock

Shares

    

Amount

    

Additional paid-in capital

    

Accumulated other comprehensive loss

    

Accumulated deficit

    

Total stockholders' equity

Balance at December 31, 2023

38,014

$

38

$

783,142

$

(1,757)

$

(434,496)

$

346,927

Issuance of common stock under stock plans, including tax effects

274

599

599

Stock-based compensation expense

5,265

5,265

Unrealized loss on marketable securities, net of tax

(607)

(607)

Foreign currency translation

(674)

(674)

Net loss

(10,072)

(10,072)

Balance at March 31, 2024

38,288

 

$

38

 

$

789,006

 

$

(3,038)

$

(444,568)

 

$

341,438

Three Months Ended March 31, 2023

Common Stock

Shares

    

Amount

    

Additional paid-in capital

    

Accumulated other comprehensive income (loss)

    

Accumulated deficit

    

Total stockholders' equity

Balance at December 31, 2022

37,280

$

37

$

763,688

$

(2,623)

$

(402,162)

$

358,940

Issuance of common stock under stock plans, including tax effects

144

551

551

Stock-based compensation expense

3,902

3,902

Foreign currency translation

42

42

Net loss

(6,103)

(6,103)

Balance at March 31, 2023

37,424

 

$

37

 

$

768,141

 

$

(2,581)

$

(408,265)

 

$

357,332

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

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QUANTERIX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

Three Months Ended March 31, 

2024

    

2023

Cash flows from operating activities:

 

  

 

  

Net loss

$

(10,072)

$

(6,103)

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

 

 

  

Depreciation and amortization expense

 

1,523

 

1,439

Credit losses on accounts receivable

176

178

Accretion of marketable securities

(1,657)

Operating lease right-of-use asset amortization

478

334

Stock-based compensation expense

 

5,265

 

3,902

Other operating activity

55

270

Changes in assets and liabilities:

 

 

Accounts receivable

 

(4,233)

 

(3,741)

Inventory

 

(3,670)

 

(89)

Prepaid expenses and other current assets

 

(254)

 

(422)

Other non-current assets

 

(21)

 

(33)

Accounts payable

 

(1,122)

 

(1,271)

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

 

(6,126)

 

(5,983)

Deferred revenue

 

472

 

2,041

Operating lease liabilities

(988)

179

Other non-current liabilities

10

(203)

Net cash used in operating activities

(20,164)

(9,502)

Cash flows from investing activities:

 

  

 

  

Purchases of marketable securities

(137,889)

Proceeds from maturities of marketable securities

29,200

Purchases of property and equipment

 

(506)

 

(136)

Net cash used in investing activities

(109,195)

(136)

Cash flows from financing activities:

 

  

 

  

Proceeds from common stock issued under stock plans

 

2,037

 

564

Payments for employee taxes withheld on stock-based compensation awards

(1,438)

(13)

Net cash provided by financing activities

599

551

Net decrease in cash, cash equivalents, and restricted cash

 

(128,760)

 

(9,087)

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

(380)

24

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

 

177,026

 

341,337

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

$

47,886

$

332,274

Supplemental disclosure of cash flow information:

Cash paid for taxes

$

175

$

246

Purchases of property and equipment in accounts payable and accrued expenses

$

222

$

147

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

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QUANTERIX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Organization and Nature of Business

Quanterix Corporation (“Quanterix” or the “Company”) is a life sciences company that has developed next generation, ultra-sensitive digital immunoassay platforms that advance life sciences research and diagnostics. The Company’s platforms are based on its proprietary digital “Simoa” detection technology and enable customers to reliably detect protein biomarkers in ultra-low concentrations in blood, serum, and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies. The ability of the Company’s Simoa platforms to detect proteins in the femtomolar range is enabling the development of novel therapies and diagnostics and has the potential to facilitate a paradigm shift in healthcare from an emphasis on treatment to a focus on earlier detection, monitoring, prognosis, and, ultimately, prevention.

The Company also provides contract research services for customers and Laboratory Developed Test (“LDT”) services through its CLIA-certified Accelerator Laboratory (the “Accelerator Laboratory”). The Accelerator Laboratory provides customers with access to its Simoa technology and its Lucent Diagnostics clinical testing services (launched in July 2023) and supports multiple projects and services, including sample testing, homebrew assay development, custom assay development, and blood-based biomarker testing. To date, the Company has completed over 2,300 projects for more than 480 customers from all over the world using its Simoa platforms.

Note 2. Significant Accounting Policies

Basis of Presentation

The accompanying Consolidated Financial Statements and Notes to Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting on Form 10-Q. Accordingly, certain information and disclosures required for complete financial statements prepared in accordance with U.S. GAAP are not included herein. The Consolidated Balance Sheet and related information as of December 31, 2023 included herein was derived from the audited Consolidated Financial Statements as of December 31, 2023, but does not include all disclosures required by U.S. GAAP on an annual reporting basis. Certain amounts in the prior years’ Consolidated Financial Statements have been reclassified to conform to the current year’s presentation.

These Consolidated Financial Statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 29, 2024. Since the date of that filing, there have been no changes or updates to the Company’s significant accounting policies, other than those described below.

In the opinion of management, the Consolidated Financial Statements and Notes to Consolidated Financial Statements contain all normal, recurring adjustments necessary for a fair statement of financial position, results of operations, comprehensive loss, and cash flows as of the dates and for the interim periods presented. The results of operations for the three months ended March 31, 2024 may not be indicative of the results for the full year ended December 31, 2024, or any other period.

The Company’s fiscal year is the twelve-month period from January 1 through December 31, and all references to “2024,” “2023,” and the like refer to the fiscal year unless otherwise noted.

Use of Estimates

The preparation of the Consolidated Financial Statements and Notes to Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts

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of assets and liabilities at the end of each fiscal period, and the reported amounts of revenues and expenses during each fiscal period. Such estimates include, but are not limited to, revenue recognition, valuation of inventory, leases, valuation and impairment of intangible and long-lived assets, recoverability of deferred tax assets, and stock-based compensation expense. The Company bases its estimates on historical experience, known trends, worldwide economic conditions, both general and specific to the life sciences industry, and other relevant factors it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates and changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Principles of Consolidation

The Consolidated Financial Statements and Notes to Consolidated Financial Statements include the accounts of Quanterix and its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation.

In accordance with Accounting Standards Codification (“ASC”) 810 – Consolidation, the Company assesses the terms of non-marketable equity investments in entities to determine if any meet the definition of a variable interest entity (“VIE”) and require consolidation into its Consolidated Financial Statements. Refer to Note 14 − Variable Interest Entities for further discussion.

Foreign Currency

The functional currency of the Company’s subsidiaries is their respective local currencies. These subsidiary financial statements are translated into U.S. dollars using the period-end exchange rates for assets and liabilities, average exchange rates during the corresponding period for revenue and expenses, and historical rates for equity. The effects of foreign currency translation adjustments are recorded in accumulated other comprehensive income (loss), a component of stockholders’ equity on the Consolidated Balance Sheets.

Foreign currency transaction gains (losses) are included in other income, net on the Consolidated Statements of Operations and were not material for the three months ended March 31, 2024 and 2023.

Restricted Cash

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

As of March 31, 

2024

    

2023

Cash and cash equivalents

$

45,281

$

329,354

Restricted cash

2,605

2,920

Cash, cash equivalents, and restricted cash

$

47,886

$

332,274

Restricted cash consists of collateral for a letter of credit issued as security for two of the Company’s leased facilities and to secure the Company’s corporate credit card program. The short-term or long-term classification is determined in accordance with the expiration of the underlying letter of credit and security.

Recently Adopted Accounting Pronouncements

In June 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). This update clarifies the guidance in Topic 820 related to measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, as well as introduces new disclosure requirements for these types of equity securities. The new standard became effective for the Company on January 1, 2024. The Company adopted this standard on a prospective basis and such adoption did not have a material impact on the Company’s Consolidated Financial Statements or related disclosures.

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Recent Accounting Standards to be Adopted

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The new standard enhances the disclosures of reportable segment information, primarily with regards to significant segment expenses, and applies to entities with a single reportable segment. The new standard is effective for the Company for annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adoption of the standard on its Consolidated Financial Statements disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new standard enhances income tax disclosure requirements by requiring specified categories and greater disaggregation within the tax rate reconciliation table, disclosure of income taxes paid by jurisdiction, and providing clarification on uncertain tax positions and related financial statement impacts. The new standard is effective for the Company for annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact of adoption of the standard on its Consolidated Financial Statements disclosures.

Note 3. Revenue and Related Matters

Revenue from Contracts with Customers

The Company’s customers primarily consist of entities engaged in life sciences research that pursue the discovery and development of new drugs for a variety of neurologic, oncologic, cardiovascular, infectious disease, and other protein biomarkers associated with diseases. The Company’s customer base includes pharmaceutical, biotechnology, contract research organizations, academic, and government institutions.

Disaggregated Revenue

When disaggregating revenue, the Company considers all of the economic factors that may affect its revenues. The following table disaggregates the Company’s revenue from contracts with customers by geography, based on the location products and services are consumed, and revenue type (in thousands):

Three Months Ended March 31, 2024

 

Three Months Ended March 31, 2023

North America

    

 EMEA

    

 Asia Pacific

    

 Total

North America

    

 EMEA

    

 Asia Pacific

    

 Total

Product revenue:

Instruments

$

408

$

1,269

$

869

$

2,546

$

2,144

$

1,981

$

1,135

 

$

5,260

Consumable and other products

10,242

4,041

2,841

17,124

7,457

4,940

1,630

 

14,027

Total

$

10,650

$

5,310

$

3,710

$

19,670

$

9,601

 

$

6,921

 

$

2,765

 

$

19,287

Service revenue:

Service-type warranties

$

1,637

$

852

$

194

$

2,683

$

1,557

$

706

$

135

 

$

2,398

Research services

5,762

2,802

127

 

8,691

5,190

234

115

 

5,539

Other services

318

248

27

593

381

257

4

 

642

Total

$

7,717

$

3,902

$

348

$

11,967

$

7,128

$

1,197

$

254

$

8,579

Collaboration and license revenue:

Total

$

67

$

88

$

$

155

$

368

$

$

$

368

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For the three months ended March 31, 2024, no customer accounted for more than 10% of the Company’s total revenues and for the three months ended March 31, 2023, one customer accounted for more than 10% of the Company’s total revenues. At March 31, 2024 and December 31, 2023, one customer accounted for more than 10% of the Company’s gross accounts receivable.

Eli Lilly and Company Service Revenue Agreements

On February 25, 2022, the Company entered into a Master Collaboration Agreement with Eli Lilly and Company (“Lilly”) establishing a framework for future projects focused on the development of Simoa immunoassays (the “Lilly Collaboration Agreement”). The Company also entered into a statement of work under the Lilly Collaboration Agreement to perform assay research and development services within the field of Alzheimer’s disease. Under the statement of work, the Company receives $1.5 million per calendar quarter, which began in the first quarter of 2022. The statement of work automatically renews on a quarterly basis until Lilly provides a termination notice in accordance with the terms of the Lilly Collaboration Agreement. As of March 31, 2024, the Lilly Collaboration Agreement and the statement of work were still in effect.

Concurrent with the execution of the Lilly Collaboration Agreement, the Company entered into a Technology License Agreement (the “Lilly License”) under which Lilly granted the Company a non-exclusive license to Lilly’s proprietary p-Tau 217 antibody technology for use in research use only products and services and future in vitro diagnostics (“IVD”) applications within the field of Alzheimer’s disease. In consideration of the Lilly License, the Company paid an upfront fee, is required to make milestone payments based on the achievement of predetermined regulatory and commercial events, and will pay royalties on net sales of licensed products.

The Company recognized $1.5 million of revenue from the Lilly Collaboration Agreement during the three months ended March 31, 2024 and 2023.

Contract Assets

There were no contract assets as of March 31, 2024 or December 31, 2023.

Deferred Revenue

During the three months ended March 31, 2024 and 2023, the Company recognized $2.7 million and $2.4 million of revenue, respectively, related to its deferred revenue balance at January 1 of each such period.

Remaining Performance Obligations

As of March 31, 2024, the aggregate amount of transaction prices allocated to performance obligations that were not yet satisfied, or were partially satisfied, was $11.2 million. Of this amount, $10.2 million is expected to be recognized as revenue in the next 12 months, with the remainder expected to be recognized thereafter. The $11.2 million primarily consists of amounts billed for undelivered services related to initial and extended service-type warranties and research services.

Costs to Obtain a Contract

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

2024

2023

Balance at December 31 of prior year

$

288

$

377

Capitalization of costs to obtain a contract

 

97

 

197

Recognition of costs to obtain a contract

 

(95)

 

(191)

Balance at March 31 

$

290

$

383

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The Company evaluates potential impairment of these amounts at each balance sheet date, and no related impairments were recorded during the three months ended March 31, 2024 and 2023.

Grant Revenue

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

NIH Grant

On September 21, 2022, the Company and the National Institutes of Health (the “NIH”), an agency of the U.S. Department of Health and Human Services, entered into a contract (the “NIH Grant”) with a total award value of $1.7 million. The NIH granted the Company funding in support of the development of certain point-of-care diagnostic technologies through collaborative efforts. Grant funding is to be used solely for activities related to the point-of-care diagnostic device development project and the contract period runs through August 2025. Receipt of the award value occurs throughout the term of the contract period and after the Company submits for reimbursement of activities related to the grant. As of March 31, 2024, the Company had received $0.8 million of the total award value.

During the three months ended March 31, 2024 and 2023, grant revenue recognized and research and development expenses incurred were not material.

ADDF Grant

On March 24, 2022, the Company and the Alzheimer’s Drug Discovery Foundation (the “ADDF”) entered into a contract (the “ADDF Grant”) with a total funding value of $2.3 million. The ADDF is a charitable venture philanthropy entity that granted the Company funding in support of certain activities for the development of an IVD test for early detection of Alzheimer's disease. The ADDF Grant restricts the Company’s use of the granted funds solely for activities related to the Company’s Alzheimer’s diagnostic test development project and the contract period runs through June 2024. Receipt of the contract funding was subject to achievement of pre-defined milestones, and as of December 31, 2023, the Company had received the total funding value of $2.3 million.

During the three months ended March 31, 2024 and 2023 grant revenue recognized and research and development expenses incurred were not material. As of March 31, 2024, the Company had $1.0 million of deferred revenue related to the ADDF Grant.

Note 4. Allowance for Credit Losses

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

2024

2023

Balance at December 31 of prior year

$

454

$

118

Provision for expected credit losses

176

178

Write-offs and recoveries collected

(103)

(74)

Balance at March 31 

$

527

$

222

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Note 5. Marketable Securities

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

As of March 31, 2024

Amortized Cost

    

Unrealized Gains

    

Unrealized Losses

    

Fair Value

Commercial paper

$

42,947

$

$

(40)

$

42,907

U.S. Treasuries

73,033

(23)

73,010

U.S. Government agency bonds

78,389

10

(149)

78,250

Corporate bonds

79,012

55

(136)

78,931

Total marketable securities

$

273,381

$

65

$

(348)

$

273,098

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

Cash and cash equivalents

$

16,458

Marketable securities

256,640

Total marketable securities

$

273,098

As of December 31, 2023

Amortized Cost

    

Unrealized Gains

    

Unrealized Losses

    

Fair Value

Commercial paper

$

53,482

$

23

$

(12)

$

53,493

U.S. Treasuries

4,896

1

4,897

U.S. Government agency bonds

28,366

39

(7)

28,398

Corporate bonds

66,726

289

(8)

67,007

Total marketable securities

$

153,470

$

352

$

(27)

$

153,795

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

Cash and cash equivalents

$

6,893

Marketable securities

146,902

Total marketable securities

$

153,795

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

Less Than 12 Months

As of March 31, 2024

Fair Value

    

Unrealized Losses

Commercial paper

$

38,497

$

(40)

U.S. Treasuries

73,010

(23)

U.S. Government agency bonds

69,825

(149)

Corporate bonds

48,629

(136)

Total

$

229,961

$

(348)

Less Than 12 Months

As of December 31, 2023

Fair Value

    

Unrealized Losses

Commercial paper

$

32,137

$

(12)

U.S. Government agency bonds

15,861

(7)

Corporate bonds

8,367

(8)

Total

$

56,365

$

(27)

The Company did not have any individual securities in a continuous loss position for greater than 12 months, and there were no individual securities that were in a significant unrealized loss position as of March 31, 2024. For marketable securities in an unrealized loss position, the Company does not intend to sell them before recovery of their amortized cost bases, it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost bases, and the unrealized losses are not credit related. Accordingly, the Company has not recorded any impairment losses or a credit loss allowance.

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The Company did not sell any marketable securities or record any realized gains or losses for the three months ended March 31, 2024. At March 31, 2024 and December 31, 2023, the Company had $1.2 million and $1.0 million, respectively, of accrued interest receivable on its marketable securities, which was recorded in prepaid expenses and other current assets on the Consolidated Balance Sheets.

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

As of March 31, 2024

As of December 31, 2023

Amortized Cost

Fair Value

Amortized Cost

Fair Value

Due within one year

$

209,554

$

209,378

$

95,188

$

95,232

Due in one to two years

63,827

63,720

58,282

58,563

Total

$

273,381

$

273,098

$

153,470

$

153,795

Note 6. Fair Value of Financial Instruments

Recurring Fair Value Measurements

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

As of March 31, 2024

Total

    

Quoted prices in active markets (Level 1)

    

Significant other observable inputs
(Level 2)

    

Significant unobservable inputs (Level 3)

Financial assets:

  

 

  

  

 

  

Cash equivalents: (1)

Money market funds

$

19,792

 

$

19,792

$

 

$

U.S. Treasuries

16,458

16,458

Total cash equivalents

36,250

19,792

16,458

Marketable securities:

Commercial paper

42,907

42,907

U.S. Treasuries

56,552

56,552

U.S. Government agency bonds

78,250

78,250

Corporate bonds

78,931

78,931

Total marketable securities

256,640

256,640

Total financial assets

$

292,890

$

19,792

$

273,098

$

As of December 31, 2023

Total

    

Quoted prices in active markets (Level 1)

    

Significant other observable inputs
(Level 2)

    

Significant unobservable inputs (Level 3)

Financial assets:

  

 

  

  

 

  

Cash equivalents: (1)

Money market funds

$

155,367

 

$

155,367

$

 

$

Commercial paper

1,996

1,996

U.S. Treasuries

4,897

4,897

Total cash equivalents

162,260

155,367

6,893

Marketable securities:

Commercial paper

51,498

51,498

U.S. Government agency bonds

28,398

28,398

Corporate bonds

67,006

67,006

Total marketable securities

146,902

146,902

Total financial assets

$

309,162

$

155,367

$

153,795

$

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

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Cash equivalents and marketable securities classified as Level 2 financial assets are initially valued at their purchase price and subsequently valued at the end of each reporting period utilizing third party pricing services or other observable data. The pricing services utilize industry standard valuation methods, including both income and market-based approaches, and observable market inputs to determine the fair value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates, and other industry and economic events.

Nonrecurring Fair Value Measurements

The Company has a non-marketable equity investment in an entity that is evaluated under the VIE guidance (refer to Note 14 - Variable Interest Entities for further discussion). Pursuant to ASC 321 – Investments – Equity Securities, the Company uses the measurement alternative for equity investments without readily determinable fair values and recognizes its non-marketable equity investment at cost, less any impairment, and adjusted for any observable price changes in orderly transactions. The Company’s investment is classified as a Level 3 financial asset. Changes in the inputs and assumptions used to determine the fair value would result in a higher or lower fair value measurement.

The Company’s non-marketable equity investment contains certain restrictions related to the sale or transfer of the securities. The restrictions are in place indefinitely and cannot lapse. No adjustment to the fair value was required as a result of adopting ASU 2022-03 on January 1, 2024.

During the three months ended March 31, 2024 and 2023, the Company did not record any fair value adjustments to its non-marketable equity investment and to date, the cumulative fair value adjustments have not been material. As of March 31, 2024 and December 31, 2023, the carrying value of the non-marketable equity investment was $0.8 million, and is recorded in other non-current assets on the Consolidated Balance Sheets.

Other Fair Value Disclosures

During the three months ended March 31, 2024 and 2023, the Company did not transfer financial assets between levels of the fair value hierarchy. Additionally, there have been no changes to the valuation techniques for Level 2 or Level 3 financial assets.

Note 7. Inventory

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

March 31, 2024

    

December 31, 2023

Raw materials

$

6,369

$

5,114

Work in process

 

7,371

 

4,466

Finished goods

 

12,275

 

12,785

Total inventory

$

26,015

$

22,365

Note 8. Accrued Expenses and Other Current Liabilities

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

March 31, 2024

    

December 31, 2023

Accrued professional services

$

1,947

$

1,596

Accrued royalties

1,631

1,689

Accrued tax liabilities

1,485

808

Other accrued expenses

 

1,958

 

1,948

Total accrued expenses and other current liabilities

$

7,021

$

6,041

17

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Note 9. Stock-Based Compensation

Stock Options

Stock option activity for the three months ended March 31, 2024 is presented below (in thousands, except per share and contractual life amounts):

Weighted-average

Weighted-average

remaining contractual

Aggregate

Number of options

    

exercise price per share

    

life (in years)

    

intrinsic value

Outstanding at December 31, 2023

2,774

 

$

19.62

7.9

$

26,941

Granted

1,179

22.74

Exercised

(104)