10-Q 1 ntra-20210930x10q.htm 10-Q
P10YP5Y2M19DP10YP5Y1M9DP10YP5Y2M19DP10Y9453800086223000P9MP2MNatera, Inc.Yesfalse0001604821--12-31Q3false2021truefalseDEfalsefalseNASDAQP36MP3Y7M28D1000000P3Y0001604821us-gaap:CommonStockMember2020-07-012020-09-300001604821us-gaap:CommonStockMember2020-01-012020-09-300001604821us-gaap:CommonStockMember2021-07-012021-09-300001604821us-gaap:CommonStockMember2021-01-012021-09-300001604821us-gaap:AccountingStandardsUpdate201613Member2019-12-310001604821us-gaap:RetainedEarningsMember2021-09-300001604821us-gaap:AdditionalPaidInCapitalMember2021-09-300001604821us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001604821us-gaap:RetainedEarningsMember2021-06-300001604821us-gaap:AdditionalPaidInCapitalMember2021-06-300001604821us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001604821us-gaap:RetainedEarningsMember2020-12-310001604821us-gaap:AdditionalPaidInCapitalMember2020-12-310001604821us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001604821us-gaap:RetainedEarningsMember2020-09-300001604821us-gaap:AdditionalPaidInCapitalMember2020-09-300001604821us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001604821us-gaap:RetainedEarningsMember2020-06-300001604821us-gaap:AdditionalPaidInCapitalMember2020-06-300001604821us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001604821us-gaap:RetainedEarningsMember2019-12-310001604821us-gaap:AdditionalPaidInCapitalMember2019-12-310001604821us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001604821srt:MinimumMemberus-gaap:EmployeeStockMember2021-01-012021-09-300001604821us-gaap:EmployeeStockMember2021-01-012021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMember2020-01-012020-12-310001604821ntra:NonEmployeeOptionsMember2021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-04-012021-06-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberntra:MonteCarloSimulationMember2021-04-012021-06-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberntra:MonteCarloSimulationMember2021-01-012021-03-310001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:ValuationTechniqueOptionPricingModelMember2020-07-012020-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:ValuationTechniqueOptionPricingModelMember2020-01-012020-03-310001604821ntra:EmployeeAndNonEmployeeOptionsMemberntra:MonteCarloSimulationMember2020-01-012020-03-310001604821ntra:EmployeeAndNonEmployeeOptionsMemberntra:MonteCarloSimulationMember2019-01-012019-03-310001604821ntra:EmployeeAndNonEmployeeOptionsMember2020-12-310001604821us-gaap:ValuationTechniqueOptionPricingModelMember2021-04-012021-06-300001604821us-gaap:MarketApproachValuationTechniqueMember2021-04-012021-06-300001604821ntra:MonteCarloSimulationMember2021-04-012021-06-300001604821us-gaap:MarketApproachValuationTechniqueMember2021-01-012021-03-310001604821ntra:MonteCarloSimulationMember2021-01-012021-03-310001604821us-gaap:MarketApproachValuationTechniqueMember2020-10-012020-12-310001604821ntra:MonteCarloSimulationMember2020-10-012020-12-310001604821us-gaap:ValuationTechniqueOptionPricingModelMember2020-07-012020-09-300001604821us-gaap:MarketApproachValuationTechniqueMember2020-07-012020-09-300001604821us-gaap:MarketApproachValuationTechniqueMember2020-04-012020-06-300001604821us-gaap:ValuationTechniqueOptionPricingModelMember2020-01-012020-03-310001604821us-gaap:MarketApproachValuationTechniqueMember2020-01-012020-03-310001604821ntra:MonteCarloSimulationMember2020-01-012020-03-310001604821ntra:MonteCarloSimulationMember2019-07-012019-09-300001604821us-gaap:MarketApproachValuationTechniqueMember2019-04-012019-06-300001604821ntra:MonteCarloSimulationMember2019-01-012019-03-310001604821srt:MaximumMemberntra:EmployeeAndNonEmployeeOptionsMember2021-07-012021-09-300001604821srt:MinimumMemberus-gaap:PerformanceSharesMember2021-01-012021-09-300001604821srt:MinimumMemberntra:EmployeeAndNonEmployeeOptionsMember2021-01-012021-09-300001604821srt:MaximumMemberntra:EmployeeAndNonEmployeeOptionsMember2021-01-012021-09-300001604821srt:MinimumMemberntra:EmployeeAndNonEmployeeOptionsMember2020-07-012020-09-300001604821srt:MaximumMemberntra:EmployeeAndNonEmployeeOptionsMember2020-07-012020-09-300001604821srt:MinimumMemberntra:EmployeeAndNonEmployeeOptionsMember2020-01-012020-09-300001604821srt:MaximumMemberntra:EmployeeAndNonEmployeeOptionsMember2020-01-012020-09-300001604821srt:MaximumMemberus-gaap:PerformanceSharesMember2021-01-012021-09-300001604821us-gaap:RestrictedStockUnitsRSUMember2021-09-300001604821us-gaap:RestrictedStockUnitsRSUMember2020-12-310001604821us-gaap:EmployeeStockMember2021-05-012021-06-300001604821us-gaap:RestrictedStockUnitsRSUMemberus-gaap:MarketApproachValuationTechniqueMember2021-04-012021-06-300001604821us-gaap:RestrictedStockUnitsRSUMemberus-gaap:MarketApproachValuationTechniqueMember2021-01-012021-03-310001604821us-gaap:RestrictedStockUnitsRSUMemberntra:MonteCarloSimulationMember2021-01-012021-03-310001604821us-gaap:RestrictedStockUnitsRSUMemberus-gaap:MarketApproachValuationTechniqueMember2020-10-012020-12-310001604821us-gaap:RestrictedStockUnitsRSUMemberntra:MonteCarloSimulationMember2020-10-012020-12-310001604821us-gaap:RestrictedStockUnitsRSUMemberus-gaap:MarketApproachValuationTechniqueMember2020-07-012020-09-300001604821us-gaap:RestrictedStockUnitsRSUMemberus-gaap:MarketApproachValuationTechniqueMember2020-04-012020-06-300001604821us-gaap:RestrictedStockUnitsRSUMemberus-gaap:MarketApproachValuationTechniqueMember2020-01-012020-03-310001604821us-gaap:RestrictedStockUnitsRSUMemberntra:MonteCarloSimulationMember2020-01-012020-03-310001604821us-gaap:RestrictedStockUnitsRSUMemberntra:MonteCarloSimulationMember2019-07-012019-09-300001604821us-gaap:RestrictedStockUnitsRSUMemberus-gaap:MarketApproachValuationTechniqueMember2019-04-012019-06-300001604821us-gaap:RestrictedStockUnitsRSUMemberntra:MonteCarloSimulationMember2019-01-012019-03-310001604821us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001604821ntra:AccountingStandardsUpdate202006Member2021-01-012021-09-300001604821ntra:QiagenMemberntra:VolumeRegulatoryAndCommercialMilestonesMember2018-12-310001604821ntra:QiagenMember2018-12-310001604821us-gaap:EMEAMember2021-07-012021-09-300001604821ntra:PatientsMember2021-07-012021-09-300001604821ntra:OtherGeographicAreasMember2021-07-012021-09-300001604821ntra:LaboratoryPartnersMember2021-07-012021-09-300001604821ntra:InsuranceCarriersMember2021-07-012021-09-300001604821ntra:AmericasExcludingUsMember2021-07-012021-09-300001604821country:US2021-07-012021-09-300001604821us-gaap:EMEAMember2021-01-012021-09-300001604821ntra:PatientsMember2021-01-012021-09-300001604821ntra:OtherGeographicAreasMember2021-01-012021-09-300001604821ntra:LaboratoryPartnersMember2021-01-012021-09-300001604821ntra:InsuranceCarriersMember2021-01-012021-09-300001604821ntra:AmericasExcludingUsMember2021-01-012021-09-300001604821country:US2021-01-012021-09-300001604821us-gaap:EMEAMember2020-07-012020-09-300001604821ntra:PatientsMember2020-07-012020-09-300001604821ntra:OtherGeographicAreasMember2020-07-012020-09-300001604821ntra:LaboratoryPartnersMember2020-07-012020-09-300001604821ntra:InsuranceCarriersMember2020-07-012020-09-300001604821ntra:AmericasExcludingUsMember2020-07-012020-09-300001604821country:US2020-07-012020-09-300001604821us-gaap:EMEAMember2020-01-012020-09-300001604821ntra:PatientsMember2020-01-012020-09-300001604821ntra:OtherGeographicAreasMember2020-01-012020-09-300001604821ntra:LaboratoryPartnersMember2020-01-012020-09-300001604821ntra:InsuranceCarriersMember2020-01-012020-09-300001604821ntra:AmericasExcludingUsMember2020-01-012020-09-300001604821country:US2020-01-012020-09-300001604821us-gaap:SecuredDebtMember2020-04-012020-04-300001604821ntra:OtherMaterialSupplierMember2021-09-300001604821ntra:InventoryMaterialPurchaseCommitmentMember2021-09-300001604821ntra:EarnoutsForIPDevelopmentWithThirdPartyMember2021-09-300001604821ntra:ApplicationServiceProviderMember2021-09-300001604821srt:MinimumMemberus-gaap:MachineryAndEquipmentMember2021-01-012021-09-300001604821srt:MaximumMemberus-gaap:MachineryAndEquipmentMember2021-01-012021-09-300001604821us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-01-012021-09-300001604821us-gaap:FurnitureAndFixturesMember2021-01-012021-09-300001604821us-gaap:ComputerEquipmentMember2021-01-012021-09-300001604821us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-09-300001604821us-gaap:MachineryAndEquipmentMember2021-09-300001604821us-gaap:LeaseholdImprovementsMember2021-09-300001604821us-gaap:FurnitureAndFixturesMember2021-09-300001604821us-gaap:ConstructionInProgressMember2021-09-300001604821us-gaap:ComputerEquipmentMember2021-09-300001604821us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2020-12-310001604821us-gaap:MachineryAndEquipmentMember2020-12-310001604821us-gaap:LeaseholdImprovementsMember2020-12-310001604821us-gaap:FurnitureAndFixturesMember2020-12-310001604821us-gaap:ConstructionInProgressMember2020-12-310001604821us-gaap:ComputerEquipmentMember2020-12-310001604821us-gaap:EmployeeStockMember2020-11-012021-04-300001604821us-gaap:PrivatePlacementMember2021-07-012021-07-310001604821us-gaap:PrivatePlacementMember2020-09-012020-09-300001604821us-gaap:PrivatePlacementMember2019-10-012019-10-310001604821us-gaap:PrivatePlacementMember2019-04-012019-04-300001604821us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001604821us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001604821us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001604821us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-3000016048212021-05-310001604821ntra:BgiGenomicsCoLtdMemberntra:SequencingServicesMember2019-09-300001604821ntra:BgiGenomicsCoLtdMemberntra:SequencingProductsMember2019-09-300001604821ntra:BgiGenomicsCoLtdMemberntra:SequencingProductsAndServicesMember2019-09-300001604821us-gaap:RetainedEarningsMember2021-07-012021-09-300001604821us-gaap:RetainedEarningsMember2020-07-012020-09-300001604821ntra:InvestmentsShortTermClassifiedMemberus-gaap:SecuritiesInvestmentMember2021-09-300001604821ntra:CashEquivalentClassifiedMemberus-gaap:SecuritiesInvestmentMember2021-09-300001604821ntra:InvestmentsShortTermClassifiedMemberus-gaap:SecuritiesInvestmentMember2020-12-310001604821ntra:CashEquivalentClassifiedMemberus-gaap:SecuritiesInvestmentMember2020-12-310001604821ntra:RavgenPatentCaseMember2020-06-012020-06-300001604821ntra:LineOfCreditUbsMember2015-09-300001604821ntra:LineOfCreditUbsMember2021-09-300001604821srt:MinimumMember2021-09-300001604821srt:MaximumMember2021-09-300001604821ntra:CorporateHeadquartersLeaseAmendmentMember2021-09-300001604821srt:ScenarioPreviouslyReportedMember2021-07-012021-09-300001604821srt:ScenarioPreviouslyReportedMember2021-01-012021-09-300001604821ntra:LineOfCreditUbsMember2021-01-012021-09-300001604821ntra:LineOfCreditUbsMember2020-07-012020-09-300001604821ntra:LineOfCreditUbsMember2020-01-012020-09-300001604821srt:RestatementAdjustmentMemberntra:AccountingStandardsUpdate202006Member2021-07-012021-09-300001604821srt:RestatementAdjustmentMemberntra:AccountingStandardsUpdate202006Member2021-01-012021-09-300001604821ntra:InivitaPatentCaseMember2021-01-012021-01-310001604821ntra:ArcherdxPatentCaseMember2020-09-012020-09-300001604821ntra:ProgenityPatentCaseMemberus-gaap:SettledLitigationMember2020-06-012020-06-300001604821ntra:ProgenityPatentCaseMemberus-gaap:PendingLitigationMember2020-06-012020-06-300001604821ntra:ProgenityPatentCaseMember2020-06-012020-06-300001604821ntra:EmployeeAndNonEmployeeOptionsMember2021-09-300001604821us-gaap:ConvertibleNotesPayableMember2020-04-300001604821ntra:TwentyTradingDaysPeriodMemberus-gaap:ConvertibleNotesPayableMember2020-04-012020-04-300001604821ntra:FiveDayConsecutiveTradingPeriodMemberus-gaap:ConvertibleNotesPayableMember2020-04-012020-04-300001604821ntra:LineOfCreditUbsMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-09-300001604821ntra:LicensingAndOtherMember2021-07-012021-09-300001604821ntra:LicensingAndOtherMember2021-01-012021-09-300001604821ntra:LicensingAndOtherMember2020-07-012020-09-300001604821ntra:LicensingAndOtherMember2020-01-012020-09-300001604821us-gaap:FairValueInputsLevel2Member2021-09-300001604821us-gaap:ProductMember2021-07-012021-09-300001604821us-gaap:ProductMember2021-01-012021-09-300001604821us-gaap:ProductMember2020-07-012020-09-300001604821us-gaap:ProductMember2020-01-012020-09-300001604821ntra:FoundationMedicineInc.Memberntra:MilestonePaymentsMember2021-09-300001604821ntra:FoundationMedicineInc.Member2021-09-300001604821ntra:BgiGenomicsCoLtdMember2021-09-300001604821ntra:BgiGenomicsCoLtdAndFoundationMedicineIncMemberntra:GeneticTestingServicesMember2021-01-012021-09-300001604821ntra:GeneticTestingServicesMember2021-01-012021-09-300001604821ntra:QiagenMemberntra:OtherLicensingAndOtherRevenueMember2021-03-310001604821us-gaap:CommonStockMember2021-09-300001604821us-gaap:PrivatePlacementMember2021-07-310001604821us-gaap:CommonStockMember2021-06-300001604821us-gaap:CommonStockMember2020-12-310001604821us-gaap:PrivatePlacementMember2020-09-300001604821us-gaap:CommonStockMember2020-09-300001604821us-gaap:CommonStockMember2020-06-300001604821us-gaap:CommonStockMember2019-12-310001604821us-gaap:PrivatePlacementMember2019-10-310001604821us-gaap:PrivatePlacementMember2019-04-300001604821us-gaap:ConvertibleNotesPayableMember2021-03-310001604821us-gaap:EmployeeStockMember2021-09-300001604821us-gaap:EmployeeStockMember2015-06-300001604821us-gaap:MoneyMarketFundsMember2021-09-300001604821us-gaap:MoneyMarketFundsMember2020-12-310001604821us-gaap:CorporateBondSecuritiesMember2021-09-300001604821us-gaap:USTreasurySecuritiesMember2021-09-300001604821us-gaap:SecuritiesInvestmentMember2021-09-300001604821us-gaap:MunicipalBondsMember2021-09-300001604821us-gaap:USTreasurySecuritiesMember2020-12-310001604821us-gaap:SecuritiesInvestmentMember2020-12-310001604821us-gaap:MunicipalBondsMember2020-12-310001604821us-gaap:CorporateBondSecuritiesMember2020-12-310001604821us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2021-09-300001604821us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2021-09-300001604821us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-09-300001604821us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-09-300001604821us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-09-300001604821us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2021-09-300001604821us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-09-300001604821us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2021-09-300001604821us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001604821us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001604821us-gaap:FairValueMeasurementsRecurringMember2021-09-300001604821us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2020-12-310001604821us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2020-12-310001604821us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2020-12-310001604821us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-310001604821us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2020-12-310001604821us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2020-12-310001604821us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-310001604821us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2020-12-310001604821us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001604821us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001604821us-gaap:FairValueMeasurementsRecurringMember2020-12-310001604821ntra:AreaReturnedInLeaseAmendmentMemberntra:SanCarlosCaliforniaSubleaseAmendmentMember2021-09-300001604821ntra:VancouverBritishColumbiaCanadaMember2021-09-300001604821ntra:TukwilaWashingtonLeaseMember2021-09-300001604821ntra:SouthSanFranciscoCaliforniaLeaseMember2021-09-300001604821ntra:CorporateHeadquartersLeaseMember2021-09-300001604821ntra:AustinTxLongTermLeaseMember2021-09-300001604821us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001604821us-gaap:ConvertibleNotesPayableMember2021-01-012021-09-300001604821ntra:EstimatedEarnoutSharesForAcquisitionMember2021-01-012021-09-300001604821ntra:EmployeeStockPurchasePlan2015Member2021-01-012021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMember2021-01-012021-09-300001604821us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-300001604821us-gaap:ConvertibleNotesPayableMember2020-01-012020-09-300001604821ntra:EmployeeStockPurchasePlan2015Member2020-01-012020-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMember2020-01-012020-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:CostOfSalesMember2021-07-012021-09-300001604821ntra:NonEmployeeOptionsMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300001604821ntra:NonEmployeeOptionsMemberus-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:CostOfSalesMember2021-07-012021-09-300001604821us-gaap:PerformanceSharesMember2021-07-012021-09-300001604821us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001604821ntra:NonEmployeeOptionsMember2021-07-012021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMember2021-07-012021-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:CostOfSalesMember2021-01-012021-09-300001604821ntra:NonEmployeeOptionsMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300001604821ntra:NonEmployeeOptionsMemberus-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:CostOfSalesMember2021-01-012021-09-300001604821us-gaap:PerformanceSharesMember2021-01-012021-09-300001604821us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001604821ntra:NonEmployeeOptionsMember2021-01-012021-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMember2021-01-012021-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-07-012020-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:CostOfSalesMember2020-07-012020-09-300001604821ntra:NonEmployeeOptionsMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-07-012020-09-300001604821ntra:NonEmployeeOptionsMemberus-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-07-012020-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:CostOfSalesMember2020-07-012020-09-300001604821us-gaap:PerformanceSharesMember2020-07-012020-09-300001604821us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001604821ntra:NonEmployeeOptionsMember2020-07-012020-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMember2020-07-012020-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300001604821us-gaap:EmployeeStockOptionMemberus-gaap:CostOfSalesMember2020-01-012020-09-300001604821ntra:NonEmployeeOptionsMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-09-300001604821ntra:NonEmployeeOptionsMemberus-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMemberus-gaap:CostOfSalesMember2020-01-012020-09-300001604821us-gaap:PerformanceSharesMember2020-01-012020-09-300001604821us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001604821ntra:NonEmployeeOptionsMember2020-01-012020-09-300001604821ntra:EmployeeAndNonEmployeeOptionsMember2020-01-012020-09-300001604821us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001604821us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001604821us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300001604821srt:RestatementAdjustmentMemberntra:AccountingStandardsUpdate202006Memberus-gaap:ConvertibleNotesPayableMember2020-12-310001604821srt:ScenarioPreviouslyReportedMemberus-gaap:ConvertibleNotesPayableMember2020-12-310001604821ntra:AccountingStandardsUpdate202006Memberus-gaap:ConvertibleNotesPayableMember2020-12-3100016048212021-06-3000016048212020-06-3000016048212020-09-3000016048212019-12-310001604821ntra:BgiGenomicsCoLtdMember2019-06-300001604821ntra:SanCarlosCaliforniaSubleaseMember2021-09-300001604821ntra:FoundationMedicineInc.Memberntra:MilestonePaymentsMember2021-07-012021-07-310001604821ntra:BgiGenomicsCoLtdMember2019-04-012019-06-300001604821ntra:FoundationMedicineInc.Memberntra:LicensingFeesAndPrepaidRevenueMember2019-01-012019-12-310001604821ntra:FoundationMedicineInc.Memberntra:DevelopmentalPerformanceMilestonesMember2019-01-012019-12-310001604821ntra:FoundationMedicineInc.Member2019-01-012019-12-310001604821ntra:QiagenMember2018-01-012018-12-3100016048212021-05-012021-05-310001604821ntra:VancouverBritishColumbiaCanadaMember2021-09-012021-09-300001604821ntra:SouthSanFranciscoCaliforniaLeaseMember2021-01-012021-09-300001604821ntra:CorporateHeadquartersLeaseAmendmentMember2021-01-012021-09-300001604821ntra:SecondSpaceSubleaseMember2021-01-012021-09-300001604821ntra:FirstSpaceSubleaseMember2021-01-012021-09-300001604821ntra:CorporateHeadquartersLeaseMember2021-01-012021-09-300001604821ntra:EarnoutsForIPDevelopmentWithThirdPartyMember2021-01-012021-09-300001604821us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-09-300001604821us-gaap:AccountsReceivableMemberus-gaap:CreditConcentrationRiskMember2021-01-012021-09-300001604821us-gaap:AccountsReceivableMemberus-gaap:CreditConcentrationRiskMember2020-01-012020-12-310001604821us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2020-01-012020-09-300001604821ntra:SanCarlosCaliforniaSubleaseAmendmentMember2021-01-012021-09-3000016048212021-07-012021-09-3000016048212020-07-012020-09-300001604821ntra:CaredxSPatentCaseMember2020-03-012020-03-310001604821ntra:CaredxSPatentCaseMember2021-09-282021-09-280001604821us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-07-012021-09-300001604821us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-09-300001604821us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-07-012020-09-300001604821us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-01-012020-09-300001604821us-gaap:ConvertibleNotesPayableMember2021-09-300001604821us-gaap:ConvertibleNotesPayableMember2020-04-012020-04-300001604821us-gaap:ConvertibleNotesPayableMember2021-03-312021-03-310001604821ntra:MayRedeemForCashAllOrAnyPortionOfConvertibleNotesAtCompanysOptionOnOrAfterMay2024Member2020-04-012020-04-300001604821us-gaap:RetainedEarningsMember2021-01-012021-09-300001604821us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001604821us-gaap:RetainedEarningsMember2020-01-012020-09-300001604821ntra:QiagenMemberntra:OtherLicensingAndOtherRevenueMember2021-01-012021-03-310001604821us-gaap:ConvertibleNotesPayableMember2021-07-012021-09-300001604821us-gaap:ConvertibleNotesPayableMember2021-01-012021-09-300001604821srt:MinimumMemberus-gaap:EmployeeStockMember2021-09-300001604821ntra:LaboratoryDistributionPartnersMemberus-gaap:ProductMembersrt:MinimumMember2021-01-012021-09-300001604821ntra:LaboratoryDistributionPartnersMemberus-gaap:ProductMembersrt:MaximumMember2021-01-012021-09-300001604821us-gaap:ProductMembersrt:MinimumMember2021-01-012021-09-300001604821us-gaap:ProductMembersrt:MaximumMember2021-01-012021-09-300001604821ntra:InProcessResearchDevelopmentAcquisitionAgreementMember2021-09-102021-09-100001604821ntra:FoundationMedicineInc.Memberntra:UpfrontLicensingFeesAndPrepaidRevenuesMember2019-08-310001604821ntra:FoundationMedicineInc.Memberntra:DevelopmentalRegulatoryAndCommercialMilestonesMember2019-08-310001604821ntra:QiagenMember2021-01-012021-09-300001604821ntra:BgiGenomicsCoLtdMember2019-02-012019-02-2800016048212021-09-3000016048212020-12-3100016048212020-01-012020-09-3000016048212021-11-0100016048212021-01-012021-09-30utr:sqftntra:subsidiaryiso4217:USDxbrli:sharesntra:positionntra:segmentxbrli:sharesiso4217:USDxbrli:purentra:Dntra:patentntra:lawsuitntra:customerntra:Milestonentra:item

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2021

OR

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

For the transition period from                       to                      

Commission file number: 001-37478

NATERA, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

01-0894487

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

13011 McCallen Pass

Building A Suite 100
Austin, TX

78753

(Address of Principal Executive Offices)

(Zip Code)

(650249-9090

(Registrant’s Telephone Number, Including Area Code)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

NTRA

The Nasdaq Stock Market LLC (Nasdaq Global Select 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

Accelerated filer

Non-accelerated filer

  

Smaller reporting company

Emerging growth company

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

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

As of November 1, 2021, the number of outstanding shares of the registrant’s common stock, par value $0.0001 per share, was 94,594,816.

Natera, Inc.

FORM 10-Q FOR THE QUARTER ENDED September 30, 2021

TABLE OF CONTENTS

    

Page

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Part I — Financial Information

 

Item 1. Financial Statements (unaudited)

5

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

5

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine months Ended September 30, 2021 and 2020

6

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

7

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

9

Notes to Unaudited Interim Condensed Consolidated Financial Statements

10

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

39

Item 3. Quantitative and Qualitative Disclosures About Market Risk

50

Item 4. Controls and Procedures

50

Part II — Other Information

Item 1. Legal Proceedings

51

Item 1A. Risk Factors

52

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

52

Item 3. Defaults Upon Senior Securities

52

Item 4. Mine Safety Disclosures

52

Item 5. Other Information

52

Item 6. Exhibits

53

Signatures

54

2

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements, including in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Forward-looking statements include information concerning our future results of operations and financial position, strategy and plans, and our expectations for future operations. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as "anticipate," "believe," "continue," "could," "design," "estimate," "expect,"  "intend," "may," "plan," "potential," "predict," "seek," "should," "will," "would" or the negative version of these words and similar expressions.

These forward-looking statements include, but are not limited to, statements concerning the following:

our expectation that, for the foreseeable future, a significant portion of our revenues will be derived from sales of Panorama and Horizon;
our ability to increase demand for Panorama and Horizon, including our expectation that Panorama will be adopted for broader use in average-risk pregnancies and for the screening of microdeletions;
our expectation that Panorama will be adopted for broader use in average-risk pregnancies and for the screening of microdeletions and that third-party payer reimbursement will be available for these applications, including our expectations regarding the results of our SNP based Microdeletion and Aneuploidy RegisTry, or SMART, Study and our expectations that the results from such study may support broader use and reimbursement for the use of Panorama in average risk pregnancies and for microdeletions;
the extent and duration of the impact of the COVID-19 pandemic on our business, results of operations, stock price, or overall financial condition;
our expectations of the reliability, accuracy, and performance of our tests, as well as expectations of the benefits of our tests to patients, providers, and payers;
our ability to successfully develop additional revenue opportunities and expand our product offerings to include new tests;
our efforts to successfully develop and commercialize our oncology and organ health products;
the effect of improvements in our cost of goods sold;
our estimates of the total addressable markets for our current and potential product offerings;
our ability and expectations regarding obtaining, maintaining and expanding third-party payer coverage of, and reimbursement for, our tests;
the effect of changes in the way we account for our revenue;
the scope of protection we establish and maintain for, and developments or disputes concerning, our intellectual property or other proprietary rights;
our ability to successfully compete in the markets we serve;
our reliance on collaborators such as medical institutions, contract laboratories, laboratory partners, and other third parties;
our ability to operate our laboratory facility and meet expected demand, and to successfully scale our operations;
our reliance on a limited number of suppliers, including sole source suppliers, which may impact our ability to maintain a continued supply of laboratory instruments and materials and to run our tests;
our expectations of the rate of adoption of Panorama, Horizon and of any of our other current or future tests by laboratories, clinics, clinicians, payers, and patients;
our ability to complete clinical studies and publish compelling clinical data in peer-reviewed medical publications regarding Panorama and any of our future tests, including our SMART study and our ongoing and planned trials in oncology and transplant rejection;
our reliance on our partners to market and offer our tests in the United States and in international markets;
our expectations regarding acquisitions, dispositions and other strategic transactions;
our expectations regarding the conversion of our outstanding 2.25% convertible senior notes due 2027 in the aggregate principal amount of $287.5 million and our ability to make debt service payments under the Convertible Notes if such Convertible Notes are not converted;
our ability to fund our working capital requirements;
the factors that may impact our financial results;

3

anticipated trends and challenges in our business and the markets in which we operate;
whether we will elect to exercise the option we have to acquire certain assets of a third party and, if exercised, whether that acquisition will be consummated and meet our expectations; and
our compliance with federal, state, and foreign regulatory requirements.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those discussed in Part II, Item 1A, “Risk Factors” in in this report and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on February 26, 2021. Given these uncertainties, you should not place undue reliance on these forward-looking statements. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. You should read this report completely and with the understanding that our actual future results may be materially different from what we expect.

Also, forward-looking statements represent our beliefs and assumptions only as of the date of this report. Any forward-looking statement made by us in this report speaks only as of the date on which it is made. Except as required by law, we disclaim any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

As used in this quarterly report on Form 10-Q, the terms “Natera,” “Registrant,” “Company,” “we,” “us,” and “our” mean Natera, Inc. and its subsidiaries unless the context indicates otherwise.

4

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Natera, Inc.

Condensed Consolidated Balance Sheets

(in thousands except par value and per share amounts)

September 30, 

    

December 31, 

    

2021

    

2020

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

95,103

$

48,668

Restricted cash

 

228

187

Short-term investments

928,596

688,606

Accounts receivable, net of allowance of $2,965 in 2021 and $3,080 in 2020

 

110,416

78,565

Inventory

 

28,022

20,031

Prepaid expenses and other current assets, net

 

28,858

26,606

Total current assets

 

1,191,223

 

862,663

Property and equipment, net

 

59,293

33,348

Operating lease right-of-use assets

47,656

21,399

Other assets

 

13,202

14,743

Total assets

$

1,311,374

$

932,153

Liabilities and Stockholders’ Equity

 

 

Current liabilities:

 

 

 

 

Accounts payable

$

8,181

$

8,096

Accrued compensation

 

35,331

30,371

Other accrued liabilities

 

96,486

60,407

Deferred revenue, current portion

 

9,667

50,125

Short-term debt financing

50,049

50,054

Total current liabilities

 

199,714

 

199,053

Long-term debt financing

 

280,085

202,493

Deferred revenue, long-term portion

22,706

22,805

Operating lease liabilities, long-term portion

48,388

21,246

Other long-term liabilities

1,464

320

Total liabilities

 

552,357

 

445,917

Commitments and contingencies (Note 8)

 

 

Stockholders’ equity:

 

Common stock, $0.0001 par value: 750,000 shares authorized at both September 30, 2021 and December 31, 2020, respectively; 94,538 and 86,223 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

 

10

9

Additional paid in capital

 

2,011,788

1,411,286

Accumulated deficit

 

(1,254,272)

(929,318)

Accumulated other comprehensive gain

1,491

4,259

Total stockholders’ equity

 

759,017

 

486,236

Total liabilities and stockholders’ equity

$

1,311,374

$

932,153

See accompanying notes to the unaudited interim condensed consolidated financial statements.

5

Natera, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except per share data)

Three months ended

Nine months ended

September 30, 

September 30, 

    

2021

2020

2021

2020

Revenues

Product revenues

$

150,651

$

93,286

$

406,265

$

260,746

Licensing and other revenues

7,465

4,857

46,193

17,881

Total revenues

158,116

98,143

452,458

278,627

Cost and expenses

Cost of product revenues

76,838

46,873

211,387

131,124

Cost of licensing and other revenues

4,533

4,948

12,909

12,614

Research and development

98,457

26,421

192,397

67,651

Selling, general and administrative

128,485

75,678

364,273

209,547

Total cost and expenses

308,313

153,920

780,966

420,936

Loss from operations

(150,197)

(55,777)

(328,508)

(142,309)

Interest expense

(2,078)

(4,270)

(6,226)

(10,772)

Interest and other income, net

1,274

1,749

4,230

5,661

Loss on debt extinguishment

(5,848)

Loss before income taxes

(151,001)

(58,298)

(330,504)

(153,268)

Income tax expense

(272)

(25)

(648)

(63)

Net loss

$

(151,273)

$

(58,323)

$

(331,152)

$

(153,331)

Unrealized gain (loss) on available-for-sale securities, net of tax

(950)

(600)

(2,768)

4,251

Comprehensive loss

$

(152,223)

$

(58,923)

$

(333,920)

$

(149,080)

Net loss per share (Note 12):

Basic and diluted

$

(1.63)

$

(0.72)

$

(3.72)

$

(1.93)

Weighted-average number of shares used in computing basic and diluted net loss per share:

Basic and diluted

92,558

80,908

89,130

79,430

See accompanying notes to the unaudited interim condensed consolidated financial statements.

6

Natera, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(in thousands)

Three months ended September 30, 2020

Common Stock

Additional
Paid-in

Accumulated Other Comprehensive

Accumulated

Total
Stockholders'

    

  

Shares

    

Amount

    

Capital

    

Income

Deficit

    

Equity

Balance as of June 30, 2020

79,717

$

8

$

1,093,072

$

5,770

$

(794,583)

$

304,267

Issuance of common stock upon exercise of stock options

498

4,974

4,974

Issuance of common stock for public offering, net

4,792

1

270,649

270,650

Vesting of restricted stock

274

Stock-based compensation

15,032

15,032

Unrealized gain on available-for sale securities

(600)

(600)

Net loss

(58,323)

(58,323)

Balance as of September 30, 2020

85,281

$

9

$

1,383,727

$

5,170

$

(852,906)

$

536,000

Nine months ended September 30, 2020

Common Stock

Additional
Paid-in

Accumulated Other Comprehensive

Accumulated

Total
Stockholders'

    

  

Shares

    

Amount

    

Capital

    

Income

Deficit

    

Equity

Balance as of December 31, 2019

78,005

$

8

$

976,955

$

919

$

(699,171)

$

278,711

Issuance of common stock upon exercise of stock options

1,534

15,782

15,782

Issuance of common stock under employee stock purchase plan

97

3,062

3,062

Equity component of Convertible Notes, net

82,873

82,873

Issuance of common stock for public offering, net

4,792

1

270,649

 —

 —

270,650

Vesting of restricted stock

853

Stock-based compensation

 —

 —

34,406

 —

 —

34,406

Unrealized gain on available-for sale securities

 —

4,251

4,251

Cumulative-effect adjustment upon adoption of ASU 2016-13

 —

 —

 —

 —

(404)

(404)

Net loss

(153,331)

(153,331)

Balance as of September 30, 2020

85,281

$

9

$

1,383,727

$

5,170

$

(852,906)

$

536,000

7

Three months ended September 30, 2021

Common Stock

Additional
Paid-in

Accumulated Other Comprehensive

Accumulated

Total
Stockholders'

Shares

    

Amount

    

Capital

    

Income

Deficit

    

Equity

Balance as of June 30, 2021

88,498

$

9

$

1,399,659

$

2,441

$

(1,102,999)

$

299,110

Issuance of common stock upon exercise of stock options

268

3,945

3,945

Issuance of common stock for public offering, net

5,176

1

550,821

 —

 —

550,822

Issuance of common stock for IPR&D acquisition

276

30,901

 —

 —

30,901

Vesting of restricted stock units

320

 —

3

 —

 —

3

Stock-based compensation

 —

 —

26,459

 —

 —

26,459

Unrealized loss on available-for sale securities

 —

 —

 —

(950)

 —

(950)

Net loss

(151,273)

(151,273)

Balance as of September 30, 2021

94,538

$

10

$

2,011,788

$

1,491

$

(1,254,272)

$

759,017

Nine months ended September 30, 2021

Common Stock

Additional
Paid-in

Accumulated Other Comprehensive

Accumulated

Total
Stockholders'

Shares

    

Amount

    

Capital

    

Income

Deficit

    

Equity

Balance as of December 31, 2020

86,223

$

9

$

1,411,286

$

4,259

$

(929,318)

$

486,236

Issuance of common stock upon exercise of stock options

1,051

10,774

10,774

Issuance of common stock under employee stock purchase plan

106

6,085

6,085

Issuance of common stock for public offering, net

5,175

1

550,821

550,822

Issuance of common stock for IPR&D acquisition

276

30,901

30,901

Vesting of restricted stock

1,707

Stock-based compensation

84,797

84,797

Unrealized loss on available-for sale securities

(2,768)

(2,768)

Cumulative-effect adjustment upon adoption of ASU 2016-13

(82,876)

6,198

(76,678)

Net loss

(331,152)

(331,152)

Balance as of September 30, 2021

94,538

$

10

$

2,011,788

$

1,491

$

(1,254,272)

$

759,017

See accompanying notes to the unaudited interim condensed consolidated financial statements.

8

Natera, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended

September 30, 

    

2021

    

2020

(in thousands)

Operating activities

 

 

Net loss

 

$

(331,152)

$

(153,331)

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

Depreciation and amortization

 

8,259

6,215

Expensed in-process research and development

35,604

Premium amortization and discount accretion on investment securities

5,707

3,333

(Gain) loss on investments

(58)

Stock-based compensation

 

84,797

34,406

Non-cash lease expense

8,106

5,819

Amortization of debt discount and issuance cost

917

149

Inventory reserve adjustments

726

(180)

Other non-cash benefits (charges)

 

133

(135)

Provision for credit losses

380

1,445

Loss on Debt Extinguishment

5,848

Accretion of Convertible Note

4,514

Changes in operating assets and liabilities:

Accounts receivable

 

(32,232)

(17,940)

Inventory

 

(8,717)

(7,803)

Prepaid expenses and other current assets

 

(7,851)

(7,288)

Other assets

 

(550)

97

Accounts payable

 

183

(1,613)

Accrued compensation

 

4,960

6,362

Other accrued liabilities

 

34,845

16,362

Deferred revenue

 

(40,557)

(5,470)

Cash used in operating activities

 

(236,500)

 

(109,210)

Investing activities

Purchases of investments

(674,372)

(479,037)

Proceeds from sale of investments

77,563

11,500

Proceeds from maturity of investments

348,410

247,315

Purchases of property and equipment, net

 

(32,027)

(12,073)

Cash paid for acquisition of an asset

(4,271)

Cash used in investing activities

 

(284,697)

 

(232,295)

Financing activities

 

 

 

Proceeds from exercise of stock options

10,774

15,782

Proceeds from issuance of common stock under employee stock purchase plan

6,085

3,062

Proceeds from Convertible Note, net of issuance costs

278,316

Loan payment

(78,757)

Proceeds from public offering, net of issuance cost

550,814

270,650

Cash provided by financing activities

 

567,673

 

489,053

Net increase in cash, cash equivalents and restricted cash

 

46,476

 

147,548

Cash, cash equivalents and restricted cash, beginning of period

 

48,855

 

61,981

Cash, cash equivalents and restricted cash, end of period

 

$

95,331

 

$

209,529

Supplemental disclosure of cash flow information:

Cash paid for interest

$

3,690

$

3,137

 

 

 

 

Non-cash investing and financing activities:

Purchases of property and equipment in accounts payable and accruals

$

4,957

$