Company Quick10K Filing
Quanterix
Price21.72 EPS-1
Shares28 P/E-16
MCap607 P/FCF-28
Net Debt-107 EBIT-39
TEV501 TEV/EBIT-13
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-03-13
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-18
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-06-30 Filed 2018-08-10
10-Q 2018-03-31 Filed 2018-05-15
10-K 2017-12-31 Filed 2018-03-19
8-K 2020-05-05
8-K 2020-03-09
8-K 2020-01-15
8-K 2019-11-06
8-K 2019-08-08
8-K 2019-08-06
8-K 2019-07-29
8-K 2019-07-25
8-K 2019-07-01
8-K 2019-06-26
8-K 2019-06-04
8-K 2019-05-09
8-K 2019-04-15
8-K 2019-03-27
8-K 2019-03-19
8-K 2019-03-07
8-K 2018-11-12
8-K 2018-11-01
8-K 2018-10-02
8-K 2018-09-06
8-K 2018-08-29
8-K 2018-08-08
8-K 2018-06-13
8-K 2018-05-09
8-K 2018-03-14
8-K 2018-01-10

QTRX 10Q Quarterly Report

Part I — Financial Information
Item 1. Financial Statements
Item 2. Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II — Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 qtrx-20200331ex311f8dcb4.htm
EX-31.2 qtrx-20200331ex312db36c7.htm
EX-32.1 qtrx-20200331ex32136b1f9.htm

Quanterix Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
180144108723602016201720182020
Assets, Equity
1593-3-9-152016201720182020
Rev, G Profit, Net Income
70523416-2-202016201720182020
Ops, Inv, Fin

10-Q 1 qtrx-20200331x10q.htm 10-Q qtrx_Current_Folio_10Q_Taxonomy2019

 

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, 2020

OR

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

For the transition period from            to           .

Commission File Number: 001‑38319


QUANTERIX CORPORATION

(Exact name of registrant as specified in its charter)


 

 

 

Delaware

 

20‑8957988

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)

 

 

 

900 Middlesex Turnpike

 

 

Billerica, MA

 

01821

(Address of principal executive offices)

 

(Zip Code)

 

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


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

 

 

 

 

 

Title of each class:

    

Trading Symbol(s)

    

Name of each exchange on which registered:

Common Stock, $0.001 par value per share

 

QTRX

 

The Nasdaq Global Market

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

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

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

 

 

 

 

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

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

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

 

As of May 1, 2020, the registrant had 28,310,994 shares of common stock, $0.001 par value per share, outstanding.

 

 

 

TTABLE OF CONTENTS

 

 

 

Page

 

 

 

 

 

 

Special Note Regarding Forward-Looking Statements 

 

 

 

 

PART I — FINANCIAL INFORMATION 

 

 

 

Item 1. Financial Statements 

4

Unaudited Condensed Consolidated Balance Sheets at March 31, 2020 and December 31, 2019 

4

Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019 

5

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2020 and 2019 

6

Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019 

7

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2020 and 2019 

8

Notes to Condensed Consolidated Financial Statements 

9

 

 

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

29

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk 

38

 

 

Item 4. Controls and Procedures 

38

 

 

PART II — OTHER INFORMATION 

 

 

 

Item 1. Legal Proceedings 

39

 

 

Item 1A. Risk Factors 

39

 

 

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

39

 

 

Item 3. Defaults Upon Senior Securities 

39

 

 

Item 4. Mine Safety Disclosures 

39

 

 

Item 5. Other Information 

39

 

 

Item 6. Exhibits 

40

 

 

Signatures 

41

 

 

2

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, 2019 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.

 

 

3

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Quanterix Corporation

Condensed Consolidated Balance Sheets

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

 

 

 

 

 

 

 

 

    

(Unaudited)

    

 

 

    

March 31, 2020

    

December 31, 2019

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

  

Cash and cash equivalents

 

$

96,359

 

$

109,155

Accounts receivable (less reserve for doubtful accounts of $277 and $162 as of March 31, 2020 and December 31, 2019, respectively; including $91 and $186 from related parties as of March 31, 2020 and December 31, 2019, respectively)

 

 

12,065

 

 

10,906

Inventory

 

 

11,392

 

 

10,463

Prepaid expenses and other current assets

 

 

2,722

 

 

2,137

Total current assets

 

 

122,538

 

 

132,661

Restricted cash

 

 

1,000

 

 

1,026

Property and equipment, net

 

 

11,992

 

 

12,047

Intangible assets, net

 

 

13,115

 

 

14,307

Goodwill

 

 

8,914

 

 

9,353

Right-of-use assets

 

 

12,221

 

 

 —

Other non-current assets

 

 

525

 

 

557

Total assets

 

$

170,305

 

$

169,951

Liabilities and stockholders’ equity

 

 

  

 

 

  

Current liabilities:

 

 

  

 

 

  

Accounts payable (including $29 and $36 to related parties as of March 31, 2020 and December 31, 2019, respectively)

 

$

4,723

 

$

5,777

Accrued compensation and benefits

 

 

4,292

 

 

6,570

Other accrued expenses (including $232 and $0 to related parties as of March 31, 2020 and December 31, 2019, respectively)

 

 

3,068

 

 

2,498

Deferred revenue (including $36 and $55 with related parties as of March 31, 2020 and December 31, 2019, respectively)

 

 

5,438

 

 

4,697

Current portion of long term debt

 

 

 —

 

 

75

Short term lease liabilities

 

 

305

 

 

 —

Other current liabilities

 

 

184

 

 

216

Total current liabilities

 

 

18,010

 

 

19,833

Deferred revenue, net of current portion

 

 

396

 

 

466

Long term debt, net of current portion

 

 

7,608

 

 

7,587

Long term lease liabilities

 

 

22,741

 

 

 —

Other non-current liabilities

 

 

2,504

 

 

13,407

Total liabilities

 

 

51,259

 

 

41,293

Commitments and contingencies (Note 11)

 

 

  

 

 

  

Stockholders’ equity:

 

 

  

 

 

  

Common stock, $0.001 par value:

 

 

 

 

 

 

Authorized—120,000,000 shares as of March 31, 2020 and December 31, 2019; issued and outstanding — 28,243,442 and 28,112,201 shares as of March 31, 2020 and December 31, 2019, respectively

 

 

28

 

 

28

Additional paid-in capital

 

 

348,072

 

 

345,027

Accumulated other comprehensive loss

 

 

(1,200)

 

 

(153)

Accumulated deficit

 

 

(227,854)

 

 

(216,244)

Total stockholders’ equity

 

 

119,046

 

 

128,658

Total liabilities and stockholders’ equity

 

$

170,305

 

$

169,951

 

See accompanying notes

4

Quanterix Corporation

Condensed Consolidated Statements of Operations

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

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 

 

 

    

2020

    

2019

 

Product revenue (including related party activity of $120 and $80 for the three months ended March 31, 2020 and 2019, respectively)

 

$

9,833

 

$

9,547

 

Service and other revenue (including related party activity of $24 and $23 for the three months ended March 31, 2020 and 2019, respectively)

 

 

5,762

 

 

2,790

 

Collaboration and license revenue

 

 

132

 

 

 —

 

Total revenue

 

 

15,727

 

 

12,337

 

Costs of goods sold:

 

 

 

 

 

  

 

Cost of product revenue (including related party activity of $63 and $35 for the three months ended March 31, 2020 and 2019, respectively)

 

 

6,186

 

 

4,248

 

Cost of services and other revenue

 

 

2,728

 

 

2,082

 

Total costs of goods sold and services

 

 

8,914

 

 

6,330

 

Gross profit

 

 

6,813

 

 

6,007

 

Operating expenses:

 

 

 

 

 

  

 

Research and development

 

 

4,268

 

 

3,852

 

Selling, general and administrative

 

 

14,273

 

 

11,512

 

Total operating expenses

 

 

18,541

 

 

15,364

 

Loss from operations

 

 

(11,728)

 

 

(9,357)

 

Interest income (expense), net

 

 

161

 

 

21

 

Other income (expense), net

 

 

(167)

 

 

(47)

 

Loss before income taxes

 

 

(11,734)

 

 

(9,383)

 

Income tax benefit (provision)

 

 

124

 

 

(22)

 

Net loss

 

$

(11,610)

 

$

(9,405)

 

Net loss per share, basic and diluted

 

$

(0.41)

 

$

(0.42)

 

Weighted-average common shares outstanding, basic and diluted

 

 

28,179,132

 

 

22,422,960

 

 

See accompanying notes

5

Quanterix Corporation

Condensed Consolidated Statements of Comprehensive Loss

(amounts in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 

 

 

2020

    

2019

Net loss

 

$

(11,610)

 

$

(9,405)

Other comprehensive loss:

 

 

 

 

 

 

Cumulative translation adjustment

 

 

(1,047)

 

 

 —

Total other comprehensive loss

 

 

(1,047)

 

 

 —

Comprehensive loss

 

$

(12,657)

 

$

(9,405)

 

 

 

 

 

 

 

 

See accompanying notes

 

 

6

 

Quanterix Corporation

Condensed Consolidated Statements of Cash Flows

(amounts in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31, 

 

 

2020

    

2019

Operating activities

 

 

  

 

 

  

Net loss

 

$

(11,610)

 

$

(9,405)

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

 

 

 

 

 

  

Depreciation and amortization expense

 

 

1,046

 

 

409

Inventory step-up amortization

 

 

438

 

 

 —

Stock-based compensation expense

 

 

2,109

 

 

1,284

Non-cash interest expense

 

 

22

 

 

24

Loss on disposal of fixed assets

 

 

69

 

 

 —

Changes in operating assets and liabilities:

 

 

 

 

 

  

Accounts receivable

 

 

(1,174)

 

 

(465)

Prepaid expenses and other assets

 

 

(495)

 

 

142

Inventory

 

 

(1,398)

 

 

(1,798)

Other non-current assets

 

 

32

 

 

 3

Accounts payable

 

 

(1,145)

 

 

(1,321)

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

 

 

(1,710)

 

 

(327)

Contract acquisition costs

 

 

(110)

 

 

(25)

Operating lease liabilities

 

 

253

 

 

 —

Other non-current liabilities

 

 

(177)

 

 

6,082

Deferred revenue

 

 

671

 

 

45

Net cash used in operating activities

 

 

(13,179)

 

 

(5,352)

Investing activities

 

 

  

 

 

  

Purchases of property and equipment

 

 

(426)

 

 

(5,917)

Net cash used in investing activities

 

 

(426)

 

 

(5,917)

Financing activities

 

 

  

 

 

  

Proceeds from stock options exercised

 

 

496

 

 

503

Proceeds from ESPP purchase

 

 

440

 

 

328

Payments on notes payable

 

 

(75)

 

 

 —

Net cash provided by financing activities

 

 

861

 

 

831

Net decrease in cash and cash equivalents

 

 

(12,744)

 

 

(10,438)

Effect of foreign currency exchange rate on cash

 

 

(78)

 

 

 —

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

 

 

110,181

 

 

45,429

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

 

$

97,359

 

$

34,991

Supplemental cash flow information

 

 

  

 

 

  

Cash paid for interest

 

$

155

 

$

160

Purchases of property and equipment included in accounts payable

 

$

102

 

$

11

Reconciliation of cash, cash equivalents, and restricted cash:

 

 

 

 

 

 

Cash and cash equivalents

 

$

96,359

 

$

33,972

Restricted cash

 

$

1,000

 

$

1,019

Total cash, cash equivalents, and restricted cash

 

$

97,359

 

$

34,991

 

See accompanying notes

 

 

7

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

    

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

other

 

 

 

 

Total

 

 

Common

 

Common

 

paid-in

 

comprehensive

 

Accumulated

 

stockholders’

 

    

stock shares

    

stock value

    

capital

    

loss

 

deficit

    

equity

Balance at December 31, 2018

 

22,369,036

 

$

22

 

$

216,931

 

$

 —

 

$

(175,888)

 

$

41,065

Cumulative-effect adjustment for the adoption of ASC 606

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

440

 

 

440

Exercise of common stock options and vesting of restricted stock

 

102,361

 

 

 1

 

 

502

 

 

 —

 

 

 —

 

 

503

ESPP stock purchase

 

20,050

 

 

 —

 

 

328

 

 

 —

 

 

 —

 

 

328

Stock-based compensation expense

 

 —

 

 

 —

 

 

1,284

 

 

 —

 

 

 —

 

 

1,284

Net loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(9,405)

 

 

(9,405)

Balance at March 31, 2019

 

22,491,447

 

$

23

 

$

219,045

 

$

 —

 

$

(184,853)

 

$

34,215

 

See accompanying notes

 

8

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, ahead of its original fourth quarter expectation.  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. The acquisition closed with respect to 95% of the outstanding shares of capital stock of Uman on July 1, 2019 and with respect to the remaining 5% of the outstanding shares of capital stock of Uman on August 1, 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.

 

“At-the-market offering”

 

On March 19, 2019, the Company entered into a Sales Agreement (the Sales Agreement) with Cowen and Company, LLC (Cowen) with respect to an “at-the-market” offering program under which the Company may offer and

9

sell, from time to time at its sole discretion, shares of its common stock, par value $0.001 per share, having an aggregate offering price of up to $50.0 million through Cowen as its sales agent.

 

On June 5, 2019, the Company issued approximately 2.2 million shares of common stock at an average stock price of $22.73 per share pursuant to the terms of the Sales Agreement. The “at-the-market” offering resulted in gross proceeds of $49.7 million. The Company incurred $1.7 million in issuance costs associated with the “at-the-market” offering, resulting in net proceeds to the Company of $48.0 million.

 

Underwritten public offering

 

On August 8, 2019, the Company entered into an underwriting agreement with J.P. Morgan Securities LLC and SVB Leerink LLC, as representatives of the several underwriters, relating to an underwritten public offering of approximately 2.7 million shares of the Company’s common stock, par value $0.001 per share. The underwritten public offering resulted in gross proceeds of $69.0 million. The Company incurred $4.5 million in issuance costs associated with the underwritten public offering, resulting in net proceeds to the Company of $64.5 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, 2019 filed with the Securities and Exchange Commission on March 13, 2020 (the 2019 Annual Report on Form 10-K). The consolidated financial information as of December 31, 2019 has been derived from the audited 2019 consolidated financial statements included in the 2019 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 equity instruments and notes receivable, fair value of assets acquired and liabilities assumed in acquisitions, valuation allowances recorded against deferred tax assets, right-of-use assets and lease liabilities, and stock‑based compensation. Actual results could differ from those estimates.

Foreign Currency

10

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 loss.

Income taxes

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

 

The Company accounts for uncertain tax positions in accordance with the provisions of Accounting Standards Codification (ASC) 740, Income Taxes (ASC 740). When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of March 31, 2020 the Company did not have any significant uncertain tax positions.

 

Business combinations

Under the acquisition method of accounting, the Company allocates the fair value of the total consideration transferred to 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 fair 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. 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, 2020.

Recent accounting pronouncements

The Company is considered to be an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (JOBS Act). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to avail itself of this extended transition period and, as a result, the

11

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 emerging growth company.

Recently Adopted

In February 2016, the Financial Accounting Standards Board (FASB) established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. An optional transition approach is required under ASU 2018-11, applying the new standard to all leases existing at the date of initial application.

 

On January 1, 2020, the Company adopted ASU No. 2016-02, Leases (Topic 842), (ASC 842), using the optional transition method allowing entities to recognize a cumulative effect adjustment to the opening balance sheet without restating comparative prior periods presented. ASC 842 requires a lessee to recognize assets and liabilities on the balance sheet for most leases and changes many key definitions, including the definition of a lease. Lessees will continue to differentiate between finance leases and operating, and classification will impact expense recognition.

 

The Company elected the following practical expedients for all lease asset classes, which must be elected as a package and applied consistently to all of its leases at the transition date: i) the Company did not reassess whether any expired or existing contracts are or contain leases; ii) the Company did not reassess the lease classification for any expired or existing leases (that is, all existing leases that were classified as operating leases in accordance with ASC 840, Leases (ASC 840), are classified as operating leases); and iii) the Company did not reassess initial direct costs for any existing leases.

 

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and short-term and long-term lease liabilities, as applicable. The Company has elected the practical expedient not to recognize leases on the balance with a term of twelve months or less. The Company’s leases consist of office and lab space and office equipment. All of the Company’s leases are classified as operating, and options to renew a lease are only included in the lease term to the extent those options are reasonably certain to be exercised. Additionally, the Company elected to apply the practical expedient not to separate lease and nonlease components for all leases.

 

Operating lease liabilities and their corresponding ROU assets are initially recorded based on the present value of lease payments over the expected remaining lease term. The rate implicit in lease contracts is typically not readily determinable, and as a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments, for a similar term, in a similar economic environment. To estimate its incremental borrowing rate, a credit rating applicable to the Company is estimated using a synthetic credit rating analysis since the Company does not currently have a rating agency-based credit rating.

 

The adoption of ASC 842 resulted in the recognition of operating lease ROU assets and operating lease liabilities of $12.2 million and $22.8 million, respectively, on the Company’s condensed consolidated balance sheet, with the difference between the ROU asset and lease liability primarily attributable to unamortized lease incentives and deferred rent related to its lease for its corporate headquarters at 900 Middlesex Turnpike in Billerica, Massachusetts (the “900 Middlesex Turnpike Lease”).

 

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 from the goodwill impairment test. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be

12

considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company adopted this ASU on January 1, 2020 with no material effect to its financial statements.

In August 2018, the FASB issued ASU No. 2018‑13, “Fair Value Measurement (Topic 820), Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. This ASU removed the following disclosure requirements: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (2) the policy for timing of transfers between levels; and (3) the valuation processes for Level 3 fair value measurements. Additionally, this update added the following disclosure requirements: (1) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and (2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. ASU 2018‑13 will be effective for fiscal years beginning after December 15, 2019 with early adoption permitted. The Company adopted this ASU on January 1, 2020 with no material effect to its financial statements.

Not Yet Adopted

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available-for-sale debt securities. The standard is effective for the Company beginning in the first quarter of 2021, with early adoption permitted. The Company is currently evaluating the expected impact of ASU 2016-13 on its financial statements.

 

There have been no other material changes to the significant accounting policies and recent accounting pronouncements previously disclosed in the 2019 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.

The Company adopted Topic 606, Revenue from Contracts with Customers (ASC 606) on January 1, 2019, using the modified retrospective method for all contracts not completed as of the date of adoption.

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.

13

Product revenue

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

Service and other revenue

Service revenues are composed of contract research services, initial implied one-year service-type warranties, extended services contracts and other services such as training. Contract research services are provided through the Company’s Accelerator Laboratory and generally consist of fixed fee contracts. Revenues from contract research services are recognized at a point in time when the Company completes and delivers its research report on each individually completed study, or over time if the contractual provisions allow for the collection of transaction consideration for costs incurred plus a reasonable margin through the period of performance of the services. Revenues from service-type warranties are recognized ratably over the contract service period. 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 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. The Company recognized revenues from a sales- or usage- based royalties related to the licensing of the Company’s technology and intellectual property.

Payment terms

The Company’s payment terms vary by the type and location of 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.

14

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, 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31, 2019

(in thousands)

    

 NA

    

 EMEA

    

 Asia Pacific

    

 Total

Product revenues

 

 

 

 

 

 

 

 

 

 

 

 

Instruments

 

$

1,397

 

$

1,145

 

$

874

 

$

3,416

Consumable and other products

 

 

3,619

 

 

2,088

 

 

424

 

 

6,131

Totals 

 

$

5,016

 

$

3,233

 

$

1,298

 

$

9,547

 

 

 

 

 

 

 

 

 

 

 

 

 

Service and other revenues

 

 

 

 

 

 

 

 

 

 

 

 

Service-type warranties

 

$

689

 

$

234

 

$

37

 

$

960

Research services

 

 

1,504

 

 

 —

 

 

 —

 

 

1,504

Other services

 

 

201

 

 

108

 

 

17

 

 

326

Totals

 

$

2,394

 

$

342

 

$

54

 

$

2,790

 

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenue

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenue

 

$

 —

 

$

 —

 

$

 —

 

$

 —

Totals 

 

$

 —

 

$

 —

 

$

 —

 

$

 —

 

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- or usage-based royalty will be recognized in

15

the period the underlying transaction occurs. The Company has recorded sales- or usage-based royalty revenue for the three months ended March 31, 2020 related to the intellectual property licensed by the Company. The Company recognizes revenue from sales- or 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, 2020 and 2019 is $5.8 million and $5.9 million, respectively. As of March 31, 2020, of the performance obligations not yet satisfied or partially satisfied, $5.4 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 $5.8 million at March 31, 2020 principally consists of amounts billed for undelivered services related to initial and extended service-type warranties and research services, as well as $1.7 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, 2020

Balance at December 31, 2019

 

$

5,163

Deferral of revenue

 

 

1,850

Recognition of deferred revenue

 

 

(1,179)

Balance at March 31, 2020

 

$

5,834

 

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, 2020

Balance at December 31, 2019

 

$

335

Deferral of costs to obtain a contract

 

 

94

Recognition of costs to obtain a contract

 

 

(203)

Balance at March 31, 2020

 

$

226

 

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

16

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, 2020 and 2019, 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.

 

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 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, 

 

 

    

2020

    

2019

 

Unvested restricted common stock and restricted stock units

 

561,786

 

419,716

 

Outstanding stock options

 

2,840,525

 

2,802,343

 

Outstanding warrants

 

10,000

 

76,041

 

Total

 

3,412,311

 

3,298,100

 

 

As of March 31, 2020 and 2019, 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.

17

Fair value measurements as of March 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

 

$

91,916

 

$

91,916

 

$

 —

 

$

 —

Note receivable

 

 

150

 

 

 —

 

 

 —

 

 

150

 

 

$

92,066

 

$

91,916

 

$

 —

 

$

150

 

Fair value measurements as of December 31, 2019 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

 

$

109,155

 

$

109,155

 

$

 —

 

$

 —

Note receivable

 

 

150

 

 

 —

 

 

 —

 

 

150

 

 

$

109,305

 

$

109,155

 

 

 —

 

$

150

 

 

6. Inventory

Inventory consists of the following (in thousands):

 

 

 

 

 

 

 

 

 

March 31, 

 

December 31, 

 

    

2020

    

2019

Raw materials

 

$

5,128

 

$

4,717

Work in process

 

 

2,619

 

 

2,573

Finished goods

 

 

3,645

 

 

3,173

Total

 

$

11,392

 

$

10,463

 

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

 

7. Investments

During the third quarter of 2016, the Company purchased a minority interest in preferred stock in a privately held company for $0.3 million. During the third quarter of 2018, the Company was issued a convertible note by a privately held company having a principal amount of $0.2 million.

The preferred stock investment is recorded on a cost basis in other non-current assets on the accompanying balance sheets as the Company does not have a controlling interest, does not have the ability to exercise significant influence over the privately held company, and the fair value of the equity investment is not readily determinable. The Company performs an impairment analysis at each reporting period to determine if there is any readily available fair value information that would indicate an impairment. The Company has determined there was no impairment during the three months ended March 31, 2020 or in any prior period.

The convertible note is held as an available-for-sale investment, which is carried at fair market value, with the unrealized gains and losses included in the determination of comprehensive income and reporting stockholders equity. When determining the estimated fair value of the convertible notes, the Company used a commonly accepted valuation methodology.

 

Equity investments that do not result in consolidation and are not accounted for under the equity method are measured at fair value, with any changes in fair value recognized in net income. For any such investments that do not

18

have readily determinable fair values, the Company elects the measurement alternative to measure the investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

 

 

8. Other accrued expenses and other non-current liabilities

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

 

 

 

 

 

 

 

 

 

March 31, 

 

December 31, 

 

    

2020