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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, 2021

☐	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 April 30, 2021, the registrant had 36,336,598 shares of common stock, $0.001 par value per share, outstanding.

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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 March 31, 2021 and December 31, 2020	4
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020	5
Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2021 and 2020	6
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	7
Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 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	27

Item 3. Quantitative and Qualitative Disclosures About Market Risk	35

Item 4. Controls and Procedures	35

PART II — OTHER INFORMATION

Item 1. Legal Proceedings	35

Item 1A. Risk Factors	35

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3. Defaults Upon Senior Securities	36

Item 4. Mine Safety Disclosures	36

Item 5. Other Information	36

Item 6. Exhibits	37

Signatures	38

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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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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Quanterix Corporation

Condensed Consolidated Balance Sheets

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



	March 31, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	442,672	$	181,584
Accounts receivable (less allowance for credit losses of $342 and $370 as of March 31, 2021 and December 31, 2020, respectively; including $137 and $172 due from related parties as of March 31, 2021 and December 31, 2020, respectively)		14,936		17,184
Inventory		17,044		14,856
Prepaid expenses and other current assets		7,791		5,981
Total current assets		482,443		219,605
Restricted cash		1,400		1,000
Property and equipment, net		14,183		13,912
Intangible assets, net		12,464		13,716
Goodwill		9,933		10,460
Right-of-use assets		11,870		11,995
Other non-current assets		373		357
Total assets	$	532,666	$	271,045
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable (including $6 and $14 to related parties as of March 31, 2021 and December 31, 2020, respectively)	$	6,503	$	6,799
Accrued compensation and benefits		7,015		10,777
Other accrued expenses (including $4 and $1,377 to related parties as of March 31, 2021 and December 31, 2020, respectively)		5,603		4,845
Deferred revenue (including $76 and $90 with related parties as of March 31, 2021 and December 31, 2020, respectively)		6,420		5,421
Current portion of long term debt		7,694		7,673
Short term lease liabilities		1,271		1,234
Other current liabilities		1,985		3,054
Total current liabilities		36,491		39,803
Deferred revenue, net of current portion		776		577
Long term lease liabilities		21,552		21,891
Other non-current liabilities		2,378		2,649
Total liabilities		61,197		64,920
Stockholders’ equity:
Common stock, $0.001 par value:
Authorized—120,000,000 shares as of March 31, 2021 and December 31, 2020; issued and outstanding — 36,294,928 and 31,796,544 shares as of March 31, 2021 and December 31, 2020, respectively		36		32
Additional paid-in capital		728,128		451,433
Accumulated other comprehensive income		1,183		2,434
Accumulated deficit		(257,878)		(247,774)
Total stockholders’ equity		471,469		206,125
Total liabilities and stockholders’ equity	$	532,666	$	271,045

See accompanying notes

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Quanterix Corporation

Condensed Consolidated Statements of Operations

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

(Unaudited)


	Three Months Ended March 31,
	2021		2020
Product revenue (including related party activity of $92 and $120 for the three months ended March 31, 2021 and 2020, respectively)	$	18,248	$	9,833
Service and other revenue (including related party activity of $24 for each of the three months ended March 31, 2021 and 2020)		6,409		5,762
Collaboration and license revenue		261		132
Grant revenue		2,291		—
Total revenue		27,209		15,727
Costs of goods sold:
Cost of product revenue (including related party activity of $570 and $63 for the three months ended March 31, 2021 and 2020, respectively)		7,480		6,186
Cost of services and other revenue (including related party activity of $17 and $0 for the three months ended March 31, 2021 and 2020, respectively)		3,380		2,728
Total costs of goods sold and services		10,860		8,914
Gross profit		16,349		6,813
Operating expenses:
Research and development (including related party activity of $8 and $0 for the three months ended March 31, 2021 and 2020, respectively)		6,683		4,268
Selling, general, and administrative (including related party activity of $14 and $0 for the three months ended March 31, 2021 and 2020, respectively)		19,455		14,273
Total operating expenses		26,138		18,541
Loss from operations		(9,789)		(11,728)
Interest (expense) income, net		(163)		161
Other expense, net		(194)		(167)
Loss before income taxes		(10,146)		(11,734)
Income tax benefit		42		124
Net loss	$	(10,104)	$	(11,610)
Net loss per share, basic and diluted	$	(0.29)	$	(0.41)
Weighted-average common shares outstanding, basic and diluted		34,434,931		28,179,132

See accompanying notes

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Quanterix Corporation

Condensed Consolidated Statements of Comprehensive Loss

(amounts in thousands)

(Unaudited)


	Three Months Ended March 31,
	2021		2020
Net loss	$	(10,104)	$	(11,610)
Other comprehensive loss:
Cumulative translation adjustment		(1,251)		(1,047)
Total other comprehensive loss		(1,251)		(1,047)
Comprehensive loss	$	(11,355)	$	(12,657)

See accompanying notes

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Quanterix Corporation

Condensed Consolidated Statements of Cash Flows

(amounts in thousands)

(Unaudited)


		Three Months Ended March 31,
	2021		2020
Operating activities
Net loss	$	(10,104)	$	(11,610)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		1,151		1,046
Inventory step-up amortization		164		438
Credit loss expense on accounts receivable		20		—
Reduction in the carrying amounts of right-of-use assets		128		—
Stock-based compensation expense		3,386		2,109
Non-cash interest expense		22		22
Loss on disposal of fixed assets		—		69
Changes in operating assets and liabilities:
Accounts receivable		2,227		(1,174)
Prepaid expenses and other assets		(1,744)		(495)
Inventory		(2,327)		(1,398)
Other non-current assets		(16)		32
Accounts payable		(2,109)		(1,145)
Accrued compensation and benefits, other accrued expenses and other current liabilities		(5,598)		(1,710)
Contract acquisition costs		(72)		(110)
Operating lease liabilities		(307)		253
Other non-current liabilities		(107)		(177)
Deferred revenue		1,197		671
Net cash used in operating activities		(14,089)		(13,179)
Investing activities
Purchases of property and equipment		(79)		(426)
Proceeds from RADx grant on assets purchased		2,514		—
Net cash provided by (used in) investing activities		2,435		(426)
Financing activities
Proceeds from stock options exercised		3,076		496
Sale of common stock in underwritten public offering, net		269,718		—
Proceeds from ESPP purchase		519		440
Payments on notes payable		—		(75)
Net cash provided by financing activities		273,313		861
Net increase (decrease) in cash and cash equivalents		261,659		(12,744)
Effect of foreign currency exchange rate on cash		(171)		(78)
Cash, restricted cash, and cash equivalents at beginning of period		182,584		110,181
Cash, restricted cash, and cash equivalents at end of period	$	444,072	$	97,359
Supplemental cash flow information
Cash paid for interest	$	154	$	155
Purchases of property and equipment included in accounts payable	$	3,341	$	102
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	442,672	$	96,359
Restricted cash	$	1,400	$	1,000
Total cash, cash equivalents, and restricted cash	$	444,072	$	97,359

See accompanying notes

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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 December 31, 2020	31,796,544	$	32	$	451,433	$	2,434	$	(247,774)	$	206,125
Exercise of common stock option and warrants and vesting of restricted stock	374,017		—		3,076		—		—		3,076
Sale of common stock in underwritten public offering, net	4,107,142		4		269,714		—		—		269,718
ESPP stock purchase	17,225		—		519		—		—		519
Stock-based compensation expense	—		—		3,386		—		—		3,386
Cumulative translation adjustment	—		—		—		(1,251)		—		(1,251)
Net loss	—		—		—		—		(10,104)		(10,104)
Balance at March 31, 2021	36,294,928	$	36	$	728,128	$	1,183	$	(257,878)	$	471,469

						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	108,548		—		496		—		—		496
ESPP stock purchase	22,693		—		440		—		—		440
Stock-based compensation expense	—		—		2,109		—		—		2,109
Cumulative translation adjustment	—		—		—		(1,047)		—		(1,047)
Net loss	—		—		—		—		(11,610)		(11,610)
Balance at March 31, 2020	28,243,442	$	28	$	348,072	$	(1,200)	$	(227,854)	$	119,046

See accompanying notes

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

The Company 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 Leerink and 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, SVB Leerink LLC, 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 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 Securities and Exchange Commission on March 5, 2021 (the 2020 Annual Report on Form 10-K). The consolidated financial information as of December 31, 2020 has been derived from the audited 2020 consolidated financial statements included in the 2020 Annual Report on Form 10-K.

2. Significant accounting policies

Principles of consolidation

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

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, valuation allowances recorded against deferred tax assets, and valuation of inventory. Actual results could differ from those estimates.

Foreign currency

The Company translates assets and liabilities of its foreign subsidiaries at rates in effect at the end of the reporting period. Revenues and expenses are translated at average rates in effect during the reporting period. Translation adjustments are included in accumulated other comprehensive income.

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.

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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 March 31, 2021 the Company did not have any significant uncertain tax positions.

Business combinations

Under the acquisition method of accounting, the Company generally recognizes the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair values assigned, defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants, are based on estimates and assumptions determined by management. The excess consideration over the aggregate value of tangible and intangible assets, net of liabilities assumed, is recorded as goodwill. These valuations require significant estimates and assumptions, especially with respect to intangible assets.

The Company typically uses the discounted cash flow method to value acquired intangible assets. This method requires significant management judgment to forecast future operating results and establish residual growth rates and discount factors. The estimates used to value and amortize intangible assets are consistent with the plans and estimates that are used to manage the business and are based on available historical information and industry estimates and averages. If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, the Company could experience impairment charges. In addition, the Company has estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense. If estimates of the economic lives change, depreciation or amortization expenses could be accelerated or slowed.

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 March 31, 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. The Company may remain an EGC until the last day of the fiscal year in which the fifth anniversary of the closing of the initial public offering occurs, although if the market value the Company’s common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time or if the Company has annual gross revenues of $1.07 billion or more in any fiscal year, the Company would cease to be an EGC as of December 31 of the applicable year. The Company also would cease to be an EGC if it issues more than $1 billion of non-convertible debt over a three-year period. The Company has elected to avail itself of this extended transition period and, as a result, the Company will not 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 so long as the Company remains an EGC.

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-

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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 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).

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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. 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.

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
	March 31, 2021
(in thousands)	NA		EMEA		Asia Pacific		Total
Product revenues
Instruments	$	3,756	$	2,833	$	372	$	6,961
Consumable and other products		6,911		3,493		883		11,287
Totals	$	10,667	$	6,326	$	1,255	$	18,248

Service and other revenues
Service-type warranties	$	971	$	438	$	62	$	1,471
Research services		3,558		728		12		4,298
Other services		456		184		—		640
Totals	$	4,985	$	1,350	$	74	$	6,409

Collaboration and license revenue
Collaboration and license revenue	$	187	$	74	$	—	$	261
Totals	$	187	$	74	$	—	$	261

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	Three Months Ended
	March 31, 2020
(in thousands)	NA		EMEA		Asia Pacific		Total
Product revenues
Instruments	$	1,753	$	726	$	1,209	$	3,688
Consumable and other products		2,924		2,704		517		6,145
Totals	$	4,677	$	3,430	$	1,726	$	9,833

Service and other revenues
Service-type warranties	$	748	$	379	$	52	$	1,179
Research services		3,667		82		538		4,287
Other services		231		60		5		296
Totals	$	4,646	$	521	$	595	$	5,762

Collaboration and license revenue
Collaboration and license revenue	$	122	$	10	$	—	$	132
Totals	$	122	$	10	$	—	$	132

The Company’s contracts with customers may include promises to transfer multiple products and services to a customer. The Company combines any performance obligations that are immaterial with one or more other performance obligations that are material to the contract. For arrangements with multiple performance obligations, the Company allocates the contract transaction price, including discounts, to each performance obligation based on its relative standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance obligation. The Company determines standalone selling prices based on prices charged to customers in observable transactions, and uses a range of amounts to estimate standalone selling prices for each performance obligation. The Company may have more than one range of standalone selling price for certain products and services based on the pricing for different customer classes.

Variable consideration in the Company’s contracts primarily relates to (i) sales- and usage-based royalties related to the license of intellectual property in collaboration and license contracts and (ii) certain non-fixed fee research services contracts. ASC 606 provides for an exception to estimating the variable consideration for sales- and usage-based royalties related to the license of intellectual property, such that the sales- and usage-based royalty will be recognized in the period the underlying transaction occurs. The Company recognizes revenue from sales- and usage-based royalty revenue at the later of when the sale or usage occurs and the satisfaction or partial satisfaction of the performance obligation to which the royalty has been allocated.

The aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied or are partially satisfied as of March 31, 2021 and 2020 is $7.2 million and $5.8 million, respectively. As of March 31, 2021, of the performance obligations not yet satisfied or partially satisfied, $6.4 million is expected to be recognized as revenue in the next 12 months, with the remainder to be recognized within the 24 months thereafter. The $6.4 million at March 31, 2021 principally consists of amounts billed for undelivered services related to initial and extended service-type warranties and research services, as well as $0.5 million related to undelivered licenses of intellectual property for a diagnostics company (see Note 13).

Changes in deferred revenue from contracts with customers were as follows (in thousands):


	Three Months Ended March 31, 2021
Balance at December 31, 2020	$	5,998
Deferral of revenue		2,669
Recognition of deferred revenue		(1,471)
Balance at March 31, 2021	$	7,196

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Costs to obtain a contract

The Company’s sales commissions are generally based on revenues of the Company. The Company has determined that certain commissions paid under its sales incentive programs meet the requirements to be capitalized as they are incremental and would not have occurred absent a customer contract. The change in the balance of costs to obtain a contract are as follows (in thousands):


	Three Months Ended March 31, 2021
Balance at December 31, 2020	$	248
Deferral of costs to obtain a contract		88
Recognition of costs to obtain a contract		(160)
Balance at March 31, 2021	$	176

The Company has classified the balance of capitalized costs to obtain a contract as a component of prepaid expenses and other current assets and classifies the expense as a component of cost of goods sold and selling, general, and administrative expense over the estimated life of the contract. The Company considers potential impairment in these amounts each period.

ASC 606 provides entities with certain practical expedients and accounting policy elections to minimize the cost and burden of adoption.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with original expected length of one year or less and (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed.

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

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. The Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of March 31, 2021 and 2020, respectively.

The Company has elected to account for the shipping and handling as an activity to fulfill the promise to transfer the product, and therefore will not evaluate whether shipping and handling activities are promised services to its customers.

Grant revenue

The Company recognizes grant revenue as it performs services under the arrangement when the funding is committed. Revenues and related research and development expenses are presented gross in the consolidated statements of operations as the Company has determined it is the primary obligor under the arrangement relative to the research and development services.

Accounting for grants does not fall under ASC 606, as the grantor will not benefit directly from the Company’s expansion or product development. As there is no authoritative guidance under U.S. GAAP on accounting for government assistance to for-profit business entities, the Company has accounted for grants by analogy to International Accounting Standards (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance (IAS 20).

Grants to the Company contain both monetary amounts granted related to assets and monetary amounts granted related to income, which are grants other than those related to assets. The grants related to assets are for the expansion

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and increase of manufacturing capacity. The grants related to income are for additional research and development, as well as other non-asset related scale up costs.

Under IAS 20, grants related to assets shall be presented in the consolidated balance sheets either by recognizing the grant as deferred income (which is recognized in the consolidated statements of operations on a systematic basis over the useful life of the asset), or by deducting the grant in calculating the carrying amount of the asset (which is recognized in the consolidated statements of operations over the life of the depreciable asset as a reduced depreciation expense). Both methods are acceptable under IAS 20. The Company has elected to record grants related to assets as a deduction in calculating the carrying value of the asset.

Under IAS 20, grants related to income are presented as part of the consolidated statements of operations, either separately or under a general heading. Both methods are acceptable under IAS 20. The Company has elected to record grants related to income separately on the consolidated statements of operations as grant revenue. The related expenses are recorded within operating expenses.

On June 22, 2020, the Company entered into a workplan 1 award (WP1) with the National Institute of Health (NIH), under the Rapid Acceleration of Diagnostics (RADx) program to assess the feasibility of a novel SARS-CoV-2 antigen detection test using the Company’s Simoa technology. WP1 was complete as of December 31, 2020.

On September 29, 2020, the Company entered into a workplan 2 award (WP2) with the NIH under its RADx program. WP2, which has a total award value of $18.2 million, accelerates the continued development, scale-up, and deployment of the novel SARS-CoV-2 antigen detection test using the Company’s Simoa technology. The contract provides funding to expand assay kit manufacturing capacity and commercial deployment readiness. Release of the $18.2 million of funding under WP2 is based on the achievement of certain milestones, and there is no assurance that the Company can meet all the milestones on a timely basis, if at all. If the Company does not meet all of the milestones, it will not be able access the full $18.2 million in funding under the contract. During the three months ended March 31, 2021 the Company recognized $2.3 million in grant revenue and incurred $1.8 million in research and development expense related to WP2.

The following table summarizes the activity under WP2 (in thousands):


	March 31, 2021		December 31, 2020

Total grant revenue from research and development activities	$	6,653	$	4,362
Total proceeds used for assets		4,622		826
Total deferred proceeds for assets		1,159		2,478
Total deferred grant revenue		500		304
Total recognized	$	12,934	$	7,970

Total recognized	$	12,934	$	7,970
Total amount accrued		(2,961)		(2,968)
Total cash received	$	9,973	$	5,002

Total proceeds received	$	9,973	$	5,002
Total proceeds reasonably assured		8,227		13,198
Total WP2 grant amount	$	18,200	$	18,200

4. Net loss per share

Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially

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dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, unvested restricted common stock, restricted stock units, stock options, and warrants are considered to be potentially dilutive securities, but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore basic and diluted net loss per share were the same for all periods presented.

The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because to do so would be anti-dilutive (in common stock equivalent shares):


	March 31,
	2021	2020
Unvested restricted common stock and restricted stock units	563,810	561,786
Outstanding stock options	2,428,268	2,840,525
Outstanding common stock warrants	—	10,000
Total	2,992,078	3,412,311

As of March 31, 2021 and 2020, the Company had an obligation to issue warrants to purchase an additional 93,341 shares of common stock to a vendor if a contract is terminated prior to a minimum purchase commitment being met. No amounts are presented in the table above for this obligation to issue a warrant as the issuance of the warrant is not considered probable.

5. Fair value of financial instruments

ASC Topic 820, Fair Value Measurement (ASC 820), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

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

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

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

Fair value measurements as of March 31, 2021 are as follows (in thousands):


			Quoted prices				Significant
			in active		Significant other		unobservable
			markets		observable		inputs
Description	Total		(Level 1)		inputs (Level 2)		(Level 3)
Financial assets
Cash equivalents	$	162,059	$	162,059	$	—	$	—
	$	162,059	$	162,059	$	—	$	—

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Fair value measurements as of December 31, 2020 are as follows (in thousands):


			Quoted prices				Significant
			in active		Significant other		unobservable
			markets		observable		inputs
Description	Total		(Level 1)		inputs (Level 2)		(Level 3)
Financial assets
Cash equivalents	$	162,048	$	162,048	$	—	$	—
	$	162,048	$	162,048	$	—	$	—

6. Inventory

Inventory consists of the following (in thousands):


	March 31,		December 31,
	2021		2020
Raw materials	$	5,608	$	5,265
Work in process		4,012		3,306
Finished goods		7,424		6,285
Total	$	17,044	$	14,856

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

7. Allowance for Credit Losses

The Company is exposed to credit losses primarily through sales of products and services. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of customers’ trade accounts receivable. Due to the short-term nature of such receivables, the estimated accounts receivable that may not be collected is based on aging of the accounts receivable balances.

Customers are assessed for credit worthiness upfront through a credit review, which includes assessment based on the Company’s analysis of their financial statements when a credit rating is not available. The Company evaluates contract terms and conditions, country, and political risk, and may require prepayment to mitigate risk of loss. Specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company monitors changes to the receivables balance on a timely basis, and balances are written off as they are determined to be uncollectable after all collection efforts have been exhausted.

As of March 31, 2021, the Company’s accounts receivable balance was $14.9 million, net of $0.3 million of allowance for credit losses. The following table provides a roll-forward of the allowance for credit losses for the three months ended March 31, 2021 that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected (in thousands):


Balance at January 1, 2021	$	370
Credit loss expense		20
Write-offs charged against allowances		(48)
Balance at March 31, 2021	$	342

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8. Other accrued expenses and other non-current liabilities

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


	March 31,		December 31,
	2021		2020
Accrued inventory purchases	$	878	$	527
Accrued property and equipment purchases		1,532		670
Accrued royalties		1,124		1,845
Accrued professional services		863		797
Accrued development costs		241		323
Accrued other		965		683
Total accrued expenses	$	5,603	$	4,845

Other non-current liabilities consist of the following (in thousands):


	March 31,		December 31,
	2021		2020
Deferred tax liabilities	$	2,378	$	2,649
Total other non-current liabilities	$	2,378	$	2,649

9. Warrants, stock-based compensation, stock options, restricted stock and restricted stock units

Warrants

On January 20, 2021, 10,000 warrants were exercised by a holder on a net, non-cash, basis. Per terms of the warrant agreement, the Company issued 7,347 shares of common stock with a value equal to the holder’s gain. The Company had no warrants outstanding as of March 31, 2021.

Stock-based compensation

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


	Three Months Ended March 31,
	2021		2020
Cost of product revenue	$	90	$	36
Cost of service and other revenue		110		68
Research and development		399		242
Selling, general, and administrative		2,787		1,763
Total	$