The next dialogue and evaluation of our monetary situation and outcomes of
operations ought to be learn along side our consolidated monetary
statements and associated notes included elsewhere on this Annual Report on
Type 10-Okay. Along with historic consolidated monetary info, the
following dialogue incorporates forward-looking statements that mirror our plans,
estimates and beliefs. Our precise outcomes may differ materially from these
mentioned within the forward-looking statements. See "Particular Notice Relating to
Ahead-Trying Statements." Elements that would trigger or contribute to those
variations embrace these mentioned beneath and elsewhere on this Annual Report on
Type 10-Okay, significantly in "Danger Elements."

Overview

We're a life sciences firm that has developed subsequent era,
ultra-sensitive digital immunoassay platforms that advance precision well being for
life sciences analysis and diagnostics. Our platforms are primarily based on our
proprietary digital "Simoa" detection expertise. Our Simoa bead-based and
planar array platforms allow prospects to reliably detect protein biomarkers in
extraordinarily low concentrations in blood, serum and different fluids that, in lots of
circumstances, are undetectable utilizing typical, analog immunoassay applied sciences, and
additionally enable researchers to outline and validate the operate of novel protein
biomarkers which can be solely current in very low concentrations and have been
found utilizing applied sciences reminiscent of mass spectrometry. These capabilities
present our prospects with perception into the position of protein biomarkers in human
well being that has not been attainable with different current applied sciences and allow
researchers to unlock distinctive insights into the continuum between well being and
illness. We consider this larger perception will allow the event of novel
therapies and diagnostics and facilitate a paradigm shift in healthcare from an
emphasis on remedy to a deal with earlier detection, monitoring, prognosis
and, in the end, prevention. We're at the moment specializing in protein detection,
which we consider is an space of serious unmet want and the place now we have
important aggressive benefits. Nonetheless, along with enabling new
functions and insights in protein evaluation, our Simoa platforms have additionally
demonstrated applicability throughout different testing functions, together with
detection of nucleic acids and small molecules.



We at the moment promote most of our merchandise for all times science analysis, primarily to
laboratories related to tutorial and governmental analysis establishments, as
nicely as pharmaceutical, biotechnology and contract analysis firms, by means of a
direct gross sales drive and help organizations in North America and Europe, and
by means of distributors or gross sales brokers in different choose markets, together with
Australia, Brazil, China, Czech Republic, India, Israel, Japan, Lebanon, Mexico,
Qatar, Saudi Arabia, Singapore, South Korea and Taiwan.



Our devices are designed for use both with assays totally developed by
us, together with all antibodies and provides required to run the exams, or with
"homebrew" kits the place we provide a few of the elements required for testing, and
the client provides the remaining required components. Accordingly, our
put in devices generate a recurring income stream. We consider that our
recurring consumable income is pushed by our prospects' means to extract extra
precious knowledge utilizing our platform and to course of numerous samples
shortly with little hands-on preparation.



We commercially launched our first immunoassay platform, the Simoa HD-1, in
January 2014. The HD-1 is predicated on our bead-based expertise, and assays run on
the HD-1 are totally automated. We initiated business launch of the SR-X
instrument in December 2017. The SR-X makes use of the identical Simoa bead-based
expertise and assay kits because the HD-1 in a compact benchtop type with a decrease
value level, extra versatile assay preparation, and a wider vary of functions.
In July 2019, we launched the Simoa HD-X, an upgraded model of the Simoa HD-1,
which replaces the HD-1. The HD-X has been designed to ship important
productiveness and operational effectivity enhancements, in addition to larger person
flexibility. We started delivery and putting in HD-X devices at buyer
areas in 2019. Because the put in base of the Simoa devices will increase,
complete consumables income total is predicted to extend. We consider that
consumables income ought to be topic to much less period-to-period fluctuation than
our instrument gross sales income, and can develop into an more and more vital
contributor to our total income.



                                       76

  Desk of Contents

On January 30, 2018, we acquired Aushon for $3.2 million in money, with an
extra cost of $0.8 million made in July 2018, six months after the
acquisition date. With the acquisition of Aushon, we acquired a CLIA licensed
laboratory, in addition to Aushon's proprietary delicate planar array detection
expertise. Leveraging our proprietary refined Simoa picture evaluation and
knowledge evaluation algorithms, we additional refined this planar array expertise to
develop the SP-X instrument to supply the identical Simoa sensitivity present in our
Simoa bead-based platform. We initiated an early-access program for the SP-X
instrument in January 2019, with the total business launch commenced in
April 2019.



On August 1, 2019, we accomplished our acquisition of Uman for an mixture
buy value of $21.2 million, comprised of (i) $15.7 million in money plus
(ii) 191,152 shares of our widespread inventory (representing $5.5 million primarily based on the
closing costs of our widespread inventory on the Nasdaq International Market on July 1, 2019
and August 1, 2019, the dates of issuance). The acquisition closed with respect
to 95% of the excellent shares of capital inventory of Uman on July 1, 2019 and
with respect to the remaining 5% of the excellent shares of capital inventory of
Uman on August 1, 2019. Uman provides neurofilament gentle (Nf-L) antibodies and
ELISA kits, that are well known by researchers and biopharmaceutical and
diagnostics firms world-wide because the premier answer for the detection of
Nf-L to advance the event of therapeutics and diagnostics for
neurodegenerative situations.

On September 29, 2020, we entered the Abbott License Settlement with Abbott.
Pursuant to the phrases of the Abbott License Settlement, we granted Abbott a
non-exclusive, worldwide, royalty-bearing license, with out the best to
sublicense, below our bead-based single molecule detection patents within the subject
of IVD. Abbott paid an preliminary license payment of $10.0 million in reference to
the execution of the Abbott License Settlement, which was acknowledged as license
income for the yr ended December 31, 2020. Abbott has additionally agreed to pay us
milestone charges topic to the achievement by Abbott of sure growth,
regulatory and commercialization milestones and low single digit royalties on
web gross sales of licensed merchandise.

We're topic to ongoing uncertainty regarding the COVID-19 pandemic,
together with its size and severity and its impact on our enterprise. Throughout the
first and second quarters of 2020, we carried out a resiliency plan centered on
the well being and security of our staff and sustaining continuity of our
operations. We have now seen an affect on instrument income as a consequence of limitations on
our means to entry sure buyer websites and full instrument
installations, in addition to an affect on consumables income from interruptions in
sure buyer laboratories. We count on these COVID-19 associated challenges to
proceed till these prospects return to regular operations.

In view of the pandemic, now we have adjusted our operations to broaden capability in
our Accelerator Laboratory to help prospects whose operations have been
disrupted and to maintain medical trials. We additionally decided that our cytokine
assay expertise offers researchers with vital and differentiated instruments to
research illness development, cytokine launch syndrome, and patient-treatment
response within the combat in opposition to COVID-19, and started creating a SARS- CoV-2
semi-quantitative IgG assay and a SARS-CoV-2 antigen detection assay, and
prototyping a high-definition multiplex SARS-CoV-2 serology assay. In December
2020, the FDA issued an EUA for our Simoa Semi-Quantitative SARS-CoV-2 IgG
Antibody Check, and in January 2021, the FDA issued an EUA for our Simoa
SARS-CoV-2 N Protein Antigen Check, every of which is run on our HD-X instrument.
We at the moment intend to pursue authorization for extra pattern varieties,
together with nasal swabs, saliva, and capillary dried blood obtained from a
fingerstick. Preliminary medical analysis research recommend the viral antigen could
be readily detectable in asymptomatic and pre-symptomatic sufferers, and we're
exploring extending the check to screening functions, home-based pattern
assortment and pooling to allow bigger scale testing.

In September 2020, we entered into WP2 with the NIH below the RADx program. This
contract, which has a complete award worth of $18.2 million, is meant to
speed up the continued growth, scale-up and deployment of our novel
SARS-CoV-2 antigen check. Preliminary early feasibility of this check was funded in
half by means of WP1 we have been granted in June 2020. WP2 helps medical validation
of the check in help of the EUA submissions with the FDA, and offers funding
to broaden assay package manufacturing capability and business deployment
readiness. Contract funding is topic to achievement of pre-defined milestones
and the contract interval runs by means of September 2021.



                                       77

  Desk of Contents

The COVID-19 scenario stays dynamic and there stays important uncertainty
as to the size and severity of the pandemic, the actions that could be taken by
authorities authorities, the affect to the enterprise of our prospects and
suppliers, the long-term financial implications and different components recognized in
"Half I, Merchandise 1A, Danger Elements" of this Annual Report on Type 10-Okay. We'll
proceed to guage the character and extent of the affect to our enterprise,
monetary situation, and working outcomes.



As of December 31, 2020, we had money and money equivalents of $181.6 million.
Since inception, now we have incurred annual web losses. Our web loss was
$31.5 million, $40.8 million, and $31.5 million for the years ended December 31,
2020, 2019, and 2018, respectively. As of December 31, 2020, we had an
amassed deficit of $247.8 million and stockholders' fairness of $206.1
million. We count on to proceed to incur important bills and working
losses not less than by means of the following 24 months. We count on our bills will improve
considerably as we:


? broaden our gross sales and advertising and marketing efforts to additional market our merchandise;

? strategically purchase firms or applied sciences that may be complementary

our enterprise;

broaden our analysis and growth efforts to enhance our current merchandise

? and develop and launch new merchandise, particularly if one in all our merchandise is

thought of by the FDA to be medical units or in any other case topic to

FDA regulation;

request PMA or 510 (okay) clearance from the FDA for our current or new merchandise

? merchandise if or after we resolve to market merchandise meant for prevention,

prognosis or remedy of a illness or different situation;

? rent extra employees and proceed to extend our workforce;

? enter into collaboration agreements, the place relevant, or license different merchandise and

applied sciences;

? add operational, monetary and administration info techniques; and

? proceed to incur elevated prices because of working as a public firm.



                                       78

  Desk of Contents

Overview of economic transactions

Returned

Underneath Monetary Accounting Requirements Board (FASB) Accounting Requirements
Codification (ASC) Matter 606 - Income from Contracts with Clients (ASC 606),
an entity acknowledges income when its buyer obtains management of promised items
or providers, in an quantity that displays the consideration that the entity
expects to obtain in alternate for these items or providers. To find out income
recognition for preparations that an entity determines are throughout the scope of
ASC 606, the entity performs the next 5 steps: (i) determine the
contract(s) with a buyer; (ii) determine the efficiency obligations within the
contract; (iii) decide the transaction value, together with variable
consideration, if any; (iv) allocate the transaction value to the efficiency
obligations within the contract; and (v) acknowledge income when (or as) the entity
satisfies a efficiency obligation. We solely apply the five-step mannequin to
contracts when it's possible that the entity will acquire the consideration to
which it's entitled in alternate for the products or providers it transfers to the
buyer.

As soon as a contract is decided to be throughout the scope of ASC 606, we assess the
items or providers promised inside every contract and decide these which can be
efficiency obligations. Preparations that embrace rights to extra items or
providers which can be exercisable at a buyer's discretion are usually
thought of choices. We assess if these choices present a cloth proper to the
buyer and in that case, they're thought of efficiency obligations. The
identification of fabric rights requires judgments associated to the
willpower of the worth of the underlying license relative to the choice
train value, together with assumptions about technical feasibility and the
likelihood of creating a candidate that might be topic to the choice
rights. The train of a cloth proper is accounted for as a contract
modification for accounting functions.

The transaction value is then decided and allotted to the recognized
efficiency obligations in proportion to their standalone promoting costs (SSP)
on a relative SSP foundation. SSP is decided at contract inception and isn't
up to date to mirror modifications between contract inception and when the efficiency
obligations are happy. Figuring out the SSP for efficiency obligations
requires important judgment. In creating the SSP for a efficiency
obligation, we take into account relevant market situations and related
entity-specific components, together with components that have been contemplated in negotiating
the settlement with the client and estimated prices. We validate the SSP for
efficiency obligations by evaluating whether or not modifications in the important thing assumptions
used to find out the SSP may have a big impact on the allocation of
association consideration between a number of efficiency obligations.

We generate product income primarily from gross sales of our HD-X, HD-1, SR-X, and
SP-X devices and associated reagents and different consumables. We at the moment promote
our merchandise for RUO functions and our prospects are primarily laboratories
related to tutorial and governmental analysis establishments, in addition to
pharmaceutical, biotechnology and contract analysis firms. Gross sales of our
consumables have persistently elevated as a consequence of an rising variety of
devices being put in within the subject, all of which require sure of our
consumables to run prospects' particular exams. Consumable income consists of
gross sales of full assays that are developed internally by us, plus gross sales of
"homebrew" kits which include all the weather essential to run exams with the
exception of the particular antibodies utilized that are individually supplied by
the client.

Service and different income consists of testing providers supplied by us in our
Accelerator Laboratory on behalf of sure analysis prospects, along with
guarantee and different service-based income. Providers supplied in our Accelerator
Laboratory embrace pattern testing, homebrew assay growth and customized assay
growth.

Collaboration and licensing revenues encompass revenues related to the licensing of our expertise to 3rd events and for related providers.

Grants acquired by us that don't require the switch of products or providers to a
buyer are accounted for by analogy to Worldwide Accounting Requirements
(IAS) 20, Accounting for Authorities Grants and Disclosure of Authorities
Help (IAS 20). Underneath IAS 20, we acknowledge income because the matching expense
or asset is incurred or capitalized.



                                       79

  Desk of Contents

Value of merchandise, providers and revenues from the collaboration

Value of products offered for merchandise consists of HD-X, HD-1, and SR-X instrument
prices from the producer. Value of products offered for SP-X consists of prices primarily based
on the inner meeting of this merchandise. Uncooked materials half prices, related
freight, delivery and dealing with prices, contract producer prices, salaries,
personnel prices, royalties, stock-based compensation, overhead and different direct
prices associated to these gross sales are categorised as price of products offered for merchandise.

Value of products offered for providers consists of salaries and different personnel prices,
royalties, stock-based compensation and facility prices related to working
the Accelerator Laboratory on behalf of shoppers, along with prices associated
to warranties and different prices of servicing gear at buyer websites.
Moreover, we incur prices associated to price of products offered below the NIH RADx
program.

The price of collaboration income is made up of royalty charges owed to 3rd events from income generated by the collaboration or license agreements.

Analysis and growth prices

Analysis and growth bills encompass salaries and different personnel prices,
stock-based compensation, analysis provides, third-party growth prices for
new merchandise, supplies for prototypes, and allotted overhead prices that
embrace facility and different overhead prices. We have now made substantial investments
in analysis and growth since our inception, and plan to proceed to make
substantial investments sooner or later. Our analysis and growth efforts have
centered totally on the duties required to help growth and
commercialization of recent and current merchandise. We consider that our continued
funding in analysis and growth is important to our long-term aggressive
place and count on these bills to extend in future durations. Moreover,
prices incurred associated to grant income are recorded as analysis and growth
bills.

Promoting, normal and administrative bills

Promoting, normal and administrative bills consist primarily of salaries and
different personnel prices, and stock-based compensation for our gross sales and advertising and marketing,
finance, authorized, human assets and normal administration, in addition to skilled
providers, reminiscent of authorized and accounting providers. We count on promoting, normal and
administrative bills to extend in future durations because the variety of gross sales,
technical help and advertising and marketing and administrative personnel grows and we
proceed to introduce new merchandise, broaden our buyer base and develop our
enterprise. We additionally count on to incur extra bills as a public firm,
together with bills associated to compliance with the foundations and rules of the
SEC and the Nasdaq Inventory Market, extra insurance coverage bills, and bills
associated to investor relations actions and different administrative and
skilled providers.

Important accounting insurance policies, important judgments and estimates

Our consolidated monetary statements and the associated notes included elsewhere
on this Annual Report on Type 10-Okay are ready in accordance with accounting
rules usually accepted in the USA. The preparation of those
consolidated monetary statements requires us to make estimates and assumptions
that have an effect on the reported quantities of property, liabilities, income, prices and
bills and associated disclosures. We base our estimates on historic expertise
and on varied different assumptions that we consider to be affordable below the
circumstances. Adjustments in accounting estimates could happen from interval to interval.
Accordingly, precise outcomes may differ considerably from the estimates made
by our administration. We consider our estimates and assumptions on an ongoing
foundation. To the extent that there are materials variations between these estimates
and precise outcomes, our future monetary assertion presentation, monetary
situation, outcomes of operations and money flows will likely be affected.

We consider that the next important accounting insurance policies contain a larger
diploma of judgment and complexity than our different important accounting
insurance policies. Accordingly, these are the insurance policies we consider are probably the most important
to understanding and evaluating our consolidated monetary situation and outcomes
of operations. Our important accounting

                                       80

Contents

insurance policies are extra totally described in "Important Accounting Insurance policies" (Notice 2)
within the notes to our consolidated monetary statements included elsewhere in
this
Annual Report on Type 10-Okay.

Income Recognition
We acknowledge income when a buyer obtains management of a promised good or
service. The quantity of income acknowledged displays consideration that we count on
to be entitled to obtain in alternate for these items and providers, incentives
and taxes collected from prospects, which can be subsequently remitted to
governmental authorities.

We adopted ASC 606 on January 1, 2019, utilizing the modified retrospective methodology
for all contracts not accomplished as of the date of adoption. The reported outcomes
for 2020 and 2019 mirror the appliance of ASC 606 steering.

Product income

Our merchandise are composed of analyzer devices, assay kits and different
consumables reminiscent of reagents. Merchandise are offered on to biopharmaceutical
and tutorial analysis organizations or are offered by means of distributors in EMEA and
Asia Pacific areas. The gross sales of devices are usually accompanied by an
preliminary yr of implied service-type warranties and could also be bundled with assays
and different consumables and may additionally embrace different gadgets reminiscent of coaching and
set up of the instrument and/or an prolonged service guarantee. Revenues
from the sale of merchandise are acknowledged at a time limit after we switch
management of the product to the client, which is upon set up for
devices offered to direct prospects, and primarily based upon delivery phrases for assay
kits and different consumables. Income for devices offered to distributors is
usually acknowledged primarily based upon delivery phrases (both upon cargo or
supply).

Providers and different earnings

Service revenues are composed of contract analysis providers, preliminary implied
one-year service-type warranties, prolonged providers contracts and different providers
reminiscent of coaching. Contract analysis providers are supplied by means of our
Accelerator Laboratory and usually encompass mounted payment contracts. Revenues
from contract analysis providers are acknowledged at a time limit after we
full and ship our analysis report on every individually accomplished research,
or over time if the contractual provisions enable for the gathering of
transaction consideration for prices incurred plus an inexpensive margin by means of
the interval of efficiency of the providers. Revenues from service-type warranties
are acknowledged ratably over the contract service interval. Revenues from different
providers are immaterial.

Collaboration and license revenues

We could enter into agreements to license the mental property and know-how
related to its devices in alternate for license charges and future
royalties (as described beneath). The license agreements present the licensee with
a proper to make use of the mental property with the license payment revenues
acknowledged at a time limit because the underlying license is taken into account practical
mental property. We have now acknowledged revenues from a sales- or utilization primarily based
royalties associated to our licensing expertise and mental property.

Fee phrases

Our cost phrases differ by the kind and site of buyer and the merchandise or
providers supplied. Fee from prospects is usually required in a time period ranging
from 30 to 45 days from date of cargo or satisfaction of the efficiency
obligation with no reductions for early cost. Sometimes we do present
prolonged cost phrases or financing preparations to prospects.

Disaggregated earnings

When disaggregating income, we thought of the entire financial components that will
have an effect on revenues. The next tables disaggregate our income from contracts
with prospects by income sort:

                                       81

  Desk of Contents


                                                         Yr Ended
                                                      December 31, 2020
(in 1000's)                          NA         EMEA        Asia Pacific       Complete
Product revenues
Devices                          $  8,680$  4,332    $         3,594    $ 16,606
Consumable and different merchandise          14,305      10,854              2,252      27,411
Totals                               $ 22,985$ 15,186    $         5,846    $ 44,017

Service and different revenues
Service-type warranties              $  3,171$  1,543    $           207    $  4,921
Analysis providers                      15,011       2,225                737      17,973
Different providers                            700         435                100       1,235
Totals                               $ 18,882$  4,203    $         1,044    $ 24,129

Collaboration and license income
Collaboration and license income    $ 11,685$    124    $            
-    $ 11,809
Totals                               $ 11,685$    124    $             -    $ 11,809





                                                         Yr Ended
                                                      December 31, 2019
(in 1000's)                          NA         EMEA        Asia Pacific       Complete
Product revenues
Devices                          $  6,250$  5,243    $         3,393    $ 14,886
Consumable and different merchandise          14,148       9,674              1,783      25,605
Totals                               $ 20,398$ 14,917    $         5,176    $ 40,491

Service and different revenues
Service-type warranties              $  3,139$  1,323    $           171    $  4,633
Analysis providers                       8,845         704                456      10,005
Different providers                            825         565                 31       1,421
Totals                               $ 12,809$  2,592    $           658    $ 16,059

Collaboration and license income
Collaboration and license income    $    167$     17    $            
-    $    184
Totals                               $    167$     17    $             -    $    184




Our contracts with prospects could embrace guarantees to switch a number of merchandise
and providers to a buyer. In accordance with ASC 606, we mix any
efficiency obligations which can be immaterial with a number of different efficiency
obligations which can be materials to the contract. For preparations with a number of
efficiency obligations, we allocate the contract transaction value, together with
reductions, to every efficiency obligation primarily based on its relative standalone
promoting value. Judgment is required to find out the standalone promoting value
for every distinct efficiency obligation. We decide standalone promoting costs
primarily based on costs charged to prospects in observable transactions, and use a spread
of quantities to estimate standalone promoting costs for every efficiency
obligation. We could have a couple of vary of standalone promoting value for
sure services and products primarily based on the pricing for various buyer
courses.

Variable consideration in our contracts primarily pertains to (i) sales- and
usage-based royalties associated to the license of mental property in
collaboration and license contracts and (ii) sure non-fixed payment analysis
providers contracts. ASC 606 offers for an exception to estimating the variable
consideration for sales- and usage-based royalties associated to the license of
mental property, such that the sales- or usage-based royalty will likely be
acknowledged within the interval the underlying transaction happens. We have now recorded
sales- or usage-based royalty income for the yr ended December 31, 2020 and
2019 associated to the mental property licensed by Uman. We acknowledge
revenues from sales-

                                       82

  Desk of Contents

or utilization primarily based royalty income on the later of when the gross sales or utilization happens;
and the satisfaction or partial satisfaction of the efficiency obligation to
which the royalty has been allotted.

The combination quantity of transaction value that's allotted to efficiency
obligations that haven't but been happy or are partially happy as of
December 31, 2020 is $6.0 million. Of the efficiency obligations not but
happy or are partially happy, $5.4 million is predicted to be acknowledged
as income within the subsequent 12 months, with the rest to be acknowledged throughout the
24 months thereafter. The $5.4 million principally consists of quantities billed
for undelivered providers associated to preliminary and prolonged service-type warranties
and analysis providers, in addition to $0.5 million associated to undelivered licenses
of mental property for a diagnostics firm. Throughout the yr ended
December 31, 2020, we acknowledged $1.2 million of beforehand deferred income as
a results of getting into right into a license settlement with a diagnostics firm (see
Notice 13).

We have now categorised the steadiness of capitalized prices to acquire a contract as a
element of pay as you go bills and different present property as of December 31, 2020
and categorised the expense as a element of price of products offered and promoting,
normal and administrative expense over the estimated lifetime of the contract. We
take into account potential impairment in these quantities every interval.



ASC 606 offers entities with sure sensible expedients and accounting coverage decisions to attenuate the fee and burden of adoption.

We exclude from the transaction value all quantities collected from prospects associated to gross sales and different related taxes.

When figuring out the transaction value of a contract, an adjustment is made if
cost from a buyer happens both considerably earlier than or considerably
after efficiency, leading to a big financing element. We don't
assess whether or not a big financing element exists if the interval between
after we carry out our obligations below the contract and when the client pays is
one yr or much less. None of our contracts contained a big financing
element for the years ended December 31, 2020 and 2019.

We have now chosen to account for delivery and dealing with as an exercise to meet the promise to switch the product, and due to this fact we won’t assess whether or not the delivery and dealing with actions are promised providers to our prospects.



Grant Income



We acknowledge grant income as we carry out providers below the association when the
funding is dedicated. Revenues and associated analysis and growth bills are
offered gross within the consolidated statements of operations as now we have
decided we're the first obligor below the association relative to the
analysis and growth providers.



Accounting for grants doesn’t fall below ASC 606 because the licensor won’t immediately profit from our enlargement or product growth. As there aren’t any authoritative pointers below we GAAP on accounting for subsidies to for-profit enterprise entities, now we have acknowledged subsidies by analogy with IAS 20.



Our grants include each financial quantities granted associated to property and financial
quantities granted associated to earnings, that are grants aside from these associated to
property. The grants associated to property are for the enlargement and improve of
manufacturing capability. The grants associated to earnings are for extra analysis
and growth, in addition to different non-asset associated scale up prices. We
decided it was acceptable to account for every financial grant quantity below
the suitable accounting remedy outlined in IAS 20.



Underneath IAS 20, grants associated to property shall be offered within the consolidated
steadiness sheets both by recognizing the grant as deferred earnings (which is
acknowledged within the consolidated statements of operations on a scientific foundation
over the helpful lifetime of the asset), or by deducting the grant in calculating the
carrying quantity of the asset (which is acknowledged within the consolidated statements
of operations over the lifetime of the depreciable asset as a lowered

                                       83

Contents

depreciation expense). Each strategies are acceptable below IAS 20. We have now elected
to document grants associated to property as a deduction in calculating the carrying
worth of the asset.



Underneath IAS 20, grants associated to earnings are offered as a part of the consolidated
statements of operations, both individually or below a normal heading. Each
strategies are acceptable below IAS 20. We have now elected to document grants associated to
earnings individually on the consolidated statements of operations as grant income.
The associated bills are recorded inside working bills and never deducted.



On June 22, 2020, we entered into WP1 below the NIH's RADx program to evaluate the
feasibility of a novel SARS-CoV-2 antigen detection check utilizing our Simoa
expertise. Throughout the yr ended December 31, 2020 we acknowledged $2.0 million
of grant income and incurred $1.0 million in analysis and growth expense
associated to WP1. WP1 is full as of December 31, 2020.



On September 29, 2020, we entered into WP2 with the NIH below its RADx program.
The contract, which has a complete award worth of $18.2 million, accelerates the
continued growth, scale-up, and deployment of the novel SARS-CoV-2 antigen
detection check utilizing our Simoa expertise. The contract offers funding to
broaden assay package manufacturing capability and business deployment readiness.
Launch of the $18.2 million of funding below WP2 is predicated on the achievement of
sure milestones, and there's no assurance that we will meet all of the
milestones on a well timed foundation, if in any respect. If we don't meet all of the milestones,
we won't be able entry the total $18.2 million in funding below the contract.
Throughout the yr ended December 31, 2020 we acknowledged $4.4 million in grant
income and incurred $2.6 million in analysis and growth expense associated to
WP2.


The next desk summarizes the exercise below WP2 at December 31, 2020
(in 1000’s):

Complete grant income from analysis and growth actions $ 4,362
Complete proceeds used for property

                                     826
Complete deferred proceeds for property                               2,478
Complete deferred grant income                                       304
Complete acknowledged                                             $   7,970

Complete acknowledged                                             $   7,970
Complete quantity accrued                                           (2,968)
Complete money acquired                                          $   5,002

Complete proceeds acquired                                      $   5,002
Complete proceeds fairly assured                               13,198
Complete WP2 grant quantity                                       $  18,200




Inventory-Based mostly Compensation


We account for stock-based compensation awards in accordance with ASC 718,
Compensation-Inventory Compensation (ASC 718). ASC 718 requires all stock-based
funds to staff, together with grants of worker inventory choices, to be
acknowledged within the assertion of operations primarily based on their honest values.
Inventory-based compensation awards have traditionally consisted of inventory choices and
restricted inventory. Previous to the adoption of Accounting Requirements Replace (ASU) No.
2018-07, Compensation - Inventory Compensation (Matter 718): Enhancements to
Nonemployee Share-Based mostly Fee Accounting (ASU 2018-07), the measurement date
for non-employee awards was usually the date the providers have been accomplished,
leading to monetary reporting interval changes to stock-based compensation
through the vesting interval for modifications within the honest worth of the awards. We
adopted ASU 2018-07 on January 1, 2020. After the adoption of ASU 2018-07, the
measurement date for non-employee awards is the date of grant with out modifications in
the honest worth of the award. Inventory-based compensation prices for non-employees
are acknowledged as expense over the vesting interval on a straight-line foundation.
There have been no materials non-employee awards excellent through the years ended
December 31, 2020, 2019, and 2018.

                                       84

Contents

We estimate the grant date honest worth, and the ensuing stock-based
compensation expense, utilizing the Black-Scholes option-pricing mannequin. The grant
date honest worth of the stock-based awards is usually acknowledged on a
straight-line foundation over the requisite service interval, which is usually the
vesting interval of the respective awards.

The honest worth of inventory choices granted to staff and non-employees is estimated on the grant date utilizing the Black-Scholes choice pricing mannequin, on the premise of the assumptions set out within the following desk:



                                        Yr Ended December 31,
                                2020             2019              2018
Danger-free rate of interest      0.4% - 1.7%      1.4% - 2.6%      2.6% - 3.0%
Anticipated dividend yield         None             None              None
Anticipated time period (in years)         6.0              6.0              5.9
Anticipated volatility         43.9% - 49.2%    33.5% - 39.7%    32.4% - 36.8%




Utilizing the Black-Scholes option-pricing mannequin, the weighted-average grant date
honest worth of choices granted for the years ended December 31, 2020, 2019, and
2018 was $12.66, $9.09, and $7.19 per share, respectively. Anticipated volatility
was calculated primarily based on proportional weighting of reported volatility knowledge for a
consultant group of guideline publicly traded firms for which historic
info was out there, in addition to our inventory. The chance-free rate of interest is
primarily based on the U.S.Treasury yield curve in impact on the time of grant,
commensurate with the anticipated life assumption. We estimate the anticipated lifetime of
choices granted to staff using the simplified methodology which calculates
the anticipated lifetime of an choice as the typical of the time to vesting and
contractual lifetime of the choices. The anticipated life is utilized to the inventory
choice grant group as an entire, as we don't count on considerably totally different
train or post-vesting termination conduct amongst our worker inhabitants. We
use the simplified methodology because of the lack of historic train knowledge and the
plain nature of the inventory choices. We use the remaining contractual time period for the
anticipated lifetime of non-employee awards. The anticipated dividend yield is assumed to
be zero as now we have by no means paid dividends and don't have any present plans to pay any
dividends on widespread inventory.

For the previous years December 31, 2020, 2019 and 2018, stock-based compensation expense was $ 10.1 million, $ 6.4 million, and $ 4.9 million, respectively.

The desk beneath summarizes the stock-based compensation expense acknowledged in our earnings statements by classification (in 1000’s):




                                        Yr Ended December 31,
                                       2020        2019       2018
Value of product income              $     189$    86$    55
Value of service and different income          311        238        173
Analysis and growth                 1,129        718        513
Basic and administrative               8,470      5,346      4,143
Complete                                $  10,099$ 6,388$ 4,884




As of December 31, 2020, we had $21.3 million of complete unrecognized stock-based
compensation prices which we count on to acknowledge over a weighted-average interval
of 4.7 years.

Previous to our preliminary public providing (IPO) in December 2017, the honest worth of
our widespread inventory underlying our inventory choices was estimated on every grant date
by our board of administrators. With a purpose to decide the honest worth of our widespread
inventory underlying granted inventory choices, our board of administrators thought of, amongst
different issues, the latest valuations of our widespread inventory ready by an
unrelated third-party valuation agency in accordance with the steering supplied by
the American Institute of Licensed Public Accountants Observe Information, Valuation
of Privately-Held-Firm Fairness Securities Issued as Compensation.

Given the absence of a public buying and selling marketplace for our widespread inventory, our board of
administrators exercised affordable judgment and regarded quite a few goal and
subjective components to find out the very best estimate of the honest worth of our
widespread inventory, together with (1) our enterprise, monetary situation and outcomes of
operations, together with associated business

                                       85

Contents

traits affecting our operations; (2) our forecasted working efficiency and
projected future money flows discounted to current worth utilizing our estimated
weighted common price of capital; (3) the illiquid nature of our widespread inventory;
(4) liquidation preferences and different rights and privileges of our most popular
inventory over our widespread inventory; (5) likeliness and estimated timing of the
potential choice to have our inventory develop into publicly traded; (6) market multiples
of our most comparable public friends; (7) just lately accomplished fairness financing
transactions; and (8) market situations affecting our business.

Since finishing our IPO, now we have decided the honest worth of every widespread share underlying the share-based awards primarily based on the closing value of our widespread shares as reported by Nasdaq on the grant date.

Outcomes of operations

Comparability of the Years Ended December 31, 2020 and December 31, 2019 ({dollars}
in 1000's):




                                      Yr Ended                     Yr Ended
                                     December 31,        % of       December 31,        % of         $           %
                                         2020          income          2019          income      change      change
Product income                     $        44,017       52 %     $        40,491       72 %     $  3,526        9 %
Service and different income                    24,129       28 %              16,059       28 %        8,070       50 %
Collaboration and license
income                                      11,809       14 %                 184        - %       11,625    6,318 %
Grant income                                 6,422        6 %                   -        - %        6,422      100 %
Complete income                                86,377      100 %              56,734      100 %       29,643       52 %
Value of products offered:
Value of product income                      25,950       30 %              20,900       37 %        5,050       24 %
Value of service income                      11,245       13 %               8,998       16 %        2,247       25 %
Value of collaboration and
license income                               1,000        1 %                   -        - %        1,000      100 %
Complete prices of products offered,
providers, and licenses                       38,195       44 %              29,898       53 %        8,297       28 %
Gross revenue                                 48,182       56 %              26,836       47 %       21,346       80 %
Working bills:
Analysis and growth                     20,174       23 %              16,190       29 %        3,984       25 %
Promoting, normal, and
administrative                               59,592       69 %              52,246       92 %        7,346       14 %
Complete working expense                      79,766       92 %              68,436      121 %       11,330       17 %
Loss from operations                       (31,584)     (37) %            (41,600)     (73) %       10,016       24 %
Curiosity earnings (expense), web                (273)        - %                 627        1 %  `     (900)    (144) %
Different expense, web                             (49)        - %                (10)        - %         (39)    (390) %
Loss earlier than earnings taxes                   (31,906)     (37) %            (40,983)     (72) %        9,077       22 %
Earnings tax profit                              376        - %                 187        - %          189      101 %
Internet loss                            $      (31,530)     (37) %     $      (40,796)     (72) %     $  9,266       23 %




Income

Income elevated by $29.6 million, or 52%, to $86.4 million for the yr ended
December 31, 2020 as in comparison with $56.7 million for the yr ended December 31,
2019. Product income consisted of gross sales of devices totaling $16.6 million
and gross sales of consumables and different merchandise of $27.4 million for the yr ended
December 31, 2020. Product income consisted of gross sales of devices totaling
$14.9 million and gross sales of consumables and different merchandise totaling $25.6 million
for the yr ended December 31, 2019. Common gross sales costs of devices and
consumables didn't change materially for the yr ended December 31, 2020 as
in contrast with the yr ended December 31, 2019. The rise in product income
of $3.5 million was because of the sale of extra devices for the yr ended
December 31, 2020 and elevated gross sales of consumables. The put in base of
devices elevated from December 31, 2019 to December 31, 2020, and as these
extra devices have been utilized by prospects, the consumables gross sales elevated.
The rise in service and different income of $8.1 million was primarily as a consequence of
elevated providers carried out in our Accelerator Laboratory; extra prospects use
these providers, and current prospects use these providers extra steadily. In
addition, a rise in bought warranties contributed to the service and
different income improve. Collaboration and license income for the yr ended
December 31, 2020 of $11.8 million was associated to getting into into

                                       86

Contents

the Abbott License Settlement, and from current contracts associated to licensing
expertise and mental property. Collaboration and license income for the
yr ended December 31, 2019 of $0.2 million was associated to licensing expertise
and mental property. Grant income of $6.4 million for the yr ended
December 31, 2020 consisted of income associated to WP1 and WP2. We didn't have
any grant income through the yr ended December 31, 2019.

Value of products offered and providers

Value of product income elevated by $5.1 million, or 24%, to $26.0 million for
the yr ended December 31, 2020 as in comparison with $20.9 million for the yr ended
December 31, 2019. The rise was primarily as a consequence of our product income
improve, in addition to a full yr of prices incurred from the amortization of the
Uman acquisition-related stock valuation adjustment and bought intangibles
for the yr ended December 31, 2020, as in comparison with solely six months of those
prices through the yr ended December 31, 2019. Value of service income elevated
to $11.2 million for the yr ended December 31, 2020 from $9.0 million for
the yr ended December 31, 2019. The rise was primarily as a consequence of greater
utilization of the Accelerator Laboratory, plus elevated personnel prices from
the construct out of our subject service and Accelerator group. Value of
collaboration and license income of $1.0 million resulted from the licensing of
sure expertise and mental property to Abbott through the yr ended
December 31, 2020. No price of collaboration and license income was incurred
through the yr ended December 31, 2019. Total price of products offered and providers
as a share of income decreased to 44% of complete income for the yr ended
December 31, 2020 as in comparison with 53% for the yr ended December 31, 2019,
primarily because of the numerous improve in collaboration and license
income.

Analysis and growth prices

Analysis and growth expense elevated by $4.0 million, or 25%, to
$20.2 million for the yr ended December 31, 2020 as in comparison with $16.2 million
for the yr ended December 31, 2019. The rise was primarily as a consequence of
compensation, growth, supplies, and different bills associated to work below
WP1 and WP2 incurred through the yr ended December 31, 2020.

Promoting, normal and administrative bills

Promoting, normal and administrative expense elevated by $7.3 million, or 14%,
to $59.6 million for the yr ended December 31, 2020 as in comparison with
$52.2 million for the yr ended December 31, 2019. The rise was primarily
as a consequence of headcount additions in varied departments as we construct out our
group to help development.

Curiosity earnings (expenses), web and different expenses, web

Curiosity earnings (expense), web and different expense, web decreased by $0.9 million
for the yr ended December 31, 2020 as in comparison with the identical interval in 2019,
primarily because of the unfavorable affect of COVID-19 on the rates of interest of our
money equivalents through the yr ended December 31, 2020.

Earnings tax profit

Earnings tax profit was $0.4 million for the yr ended December 31, 2020 as
in comparison with $0.2 million for a similar interval in 2019. The change is primarily
because of the improve within the tax profit recorded on the working outcomes of
our
international subsidiaries.



                                       87

  Desk of Contents

Comparability of the Years Ended December 31, 2019 and December 31, 2018 ({dollars}
in 1000's):




                                       Yr Ended                     Yr Ended
                                      December 31,        % of       December 31,        % of          $            %
                                          2019          income          2018          income       change      change
Product income                      $        40,491       72 %     $        23,365       62 %     $   17,126       73 %
Service and different income                     16,059       28 %              12,117       32 %          3,942       33 %
Collaboration and license income                184        - %            
  2,150        6 %        (1,966)     (91) %
Grant income                                      -        - %                   -        - %              -        - %
Complete income                                 56,734      100 %              37,632      100 %         19,102       51 %
Value of products offered:
Value of product income                       20,900       37 %              12,729       34 %          8,171       64 %
Value of service income                        8,998       16 %               6,955       18 %          2,043       29 %
Complete prices of products offered,
providers, and licenses                        29,898       53 %              19,684       52 %         10,214       52 %
Gross revenue                                  26,836       47 %              17,948       48 %          8,888       50 %
Working bills:
Analysis and growth                      16,190       29 %              15,805       42 %            385        2 %
Promoting, normal, and
administrative                                52,246       92 %              33,693       90 %         18,553       55 %
Complete working expense                       68,436      121 %              49,498      132 %         18,938       38 %
Loss from operations                        (41,600)     (73) %            (31,550)     (84) %       (10,050)     (32) %
Curiosity earnings, web                             627        - %                  46        - %  `         581    1,263 %
Different expense, web                              (10)        - %                 (7)        - %            (3)     (43) %
Loss earlier than earnings taxes                    (40,983)     (72) %            (31,511)     (84) %        (9,472)     (30) %
Earnings tax profit (provision)                   187        - %            
   (25)        - %            212      848 %
Internet loss                             $      (40,796)     (72) %     $      (31,536)     (84) %     $  (9,260)     (29) %




Income

Income elevated by $19.1 million, or 51%, to $56.7 million for the yr ended
December 31, 2019 as in comparison with $37.6 million for the yr ended December 31,
2018. Product income consisted of gross sales of devices totaling $14.9 million
and gross sales of consumables and different merchandise of $25.6 million for the yr ended
December 31, 2019. Product income consisted of gross sales of devices totaling
$9.6 million and gross sales of consumables and different merchandise totaling $13.8 million
for the yr ended December 31, 2018. Common gross sales costs of devices and
consumables didn't change materially for the yr ended December 31, 2019 as
in contrast with the yr ended December 31, 2018. The rise in product income
of $17.1 million was primarily because of the sale of extra devices for the yr
ended December 31, 2019 and elevated gross sales of consumables. The put in base
of devices elevated from December 31, 2018 to December 31, 2019, and as
these extra devices have been utilized by prospects, the consumables gross sales
elevated. The rise in service and different income of $3.9 million was
primarily as a consequence of elevated providers carried out in our Accelerator Laboratory;
extra prospects use these providers, and current prospects use these providers
extra steadily. As well as, a rise in bought warranties contributed to
the service and different income improve. Collaboration and license income for
the yr ended December 31, 2019 of $0.2 million was associated to licensing
expertise and mental property. Collaboration and license income for the
yr ended December 31, 2018 of $2.2 million was associated to the termination of
the collaboration association with bioMérieux.

Value of products offered and providers

Value of product income elevated by $8.2 million, or 64%, to $20.9 million for
the yr ended December 31, 2019 as in comparison with $12.7 million for the yr ended
December 31, 2018. The rise was primarily as a consequence of a rise in gross sales of
consumables and devices, together with prices incurred from the amortization of
the Uman acquisition-related stock valuation adjustment and bought
intangibles. Value of service income elevated to $9.0 million for the yr
ended December 31, 2019 from $7.0 million for the yr ended December 31, 2018.
The rise was primarily as a consequence of greater utilization of the Accelerator
Laboratory, plus elevated personnel prices from the construct out of our subject
service and Accelerator group. Total price of products offered and providers as
a share of income elevated barely to 53% of complete income for the yr
ended December 31, 2019 as in comparison with 52% for the yr ended

                                       88

Contents

December 31, 2018, primarily because of the affect of the collaboration
association with bioMérieux through the yr ended December 31, 2018 and the
affect of the Uman acquisition-related expenses through the yr ended December
31, 2019.

Analysis and growth prices

Analysis and growth expense elevated barely by $0.4 million, or 2%, to
$16.2 million for the yr ended December 31, 2019 as in comparison with $15.8 million
for the yr ended December 31, 2018. The rise was primarily because of the
growth of the SP-X and HD-X and elevated headcount in analysis and
growth.

Promoting, normal and administrative bills

Promoting, normal and administrative expense elevated by $18.6 million, or 55%,
to $52.2 million for the yr ended December 31, 2019 as in comparison with
$33.7 million for the yr ended December 31, 2018. The rise was primarily
as a consequence of headcount additions in varied departments as we construct out our
group to help future development, public firm prices, the lease for the
new headquarters, and stock-based compensation expense. As well as, we incurred
roughly $1.9 million in prices related to the acquisition of Uman
through the yr ended December 31, 2019.

Curiosity earnings, web and different expenses, web

Curiosity earnings, web and different expense, web elevated by $0.6 million for
the yr ended December 31, 2019 as in comparison with the identical interval in 2018,
primarily because of the curiosity earnings earned on money equivalents, which elevated
as a consequence of our "at-the-market" and underwritten public choices accomplished throughout
2019.

Tax profit (provision)

Earnings tax profit was $0.2 million for the yr ended December 31, 2019 as
in comparison with a provision of lower than $0.1 million for a similar interval in 2018.
The rise is primarily as a consequence of sure state and worldwide taxes in 2019,
which we didn't have within the prior yr.

Liquidity and capital assets

Since our inception, now we have incurred annual web losses and detrimental money flows
from operations. We incurred web losses of $31.5 million, $40.8 million and
$31.5 million and used $23.4 million, $26.2 million and $28.7 million of money
from our working actions for the years ended December 31, 2020, 2019, and
2018, respectively. As of December 31, 2020, we had an amassed deficit of
$247.8 million.

From December 2020, we had money and money equivalents of $ 181.6 million and no extra quantities have been out there to borrow below our borrowing facility.

Positive February 3, 2021, we acquired roughly $ 269.6 million in web proceeds linked to a subscribed public provide.

Sources of liquidity

Up to now, now we have funded our operations primarily by means of fairness investments, borrowings on credit score services and earnings from our enterprise actions.

Inventory presents

In December 2017, we accomplished our IPO throughout which we offered 4,916,480 widespread shares at an preliminary public providing value of $ 15.00 per share. The combination web proceeds we acquired from the providing, web of

                                       89

Contents

subscription reductions and commissions and providing prices have been
$ 65.6 million. Previous to the IPO, we had raised capital by means of the sale of convertible most popular shares redeemable by means of personal placement transactions.

On March 19, 2019, we entered right into a Gross sales Settlement for an "at-the-market
providing" association with Cowen and Firm, LLC (Cowen), which allowed us to
difficulty and promote shares of widespread inventory pursuant to a shelf registration assertion
for complete product sales proceeds of as much as $50.0 million once in a while by means of
Cowen, performing as our agent. Throughout the yr ended December 31, 2019, we offered an
mixture of two,186,163 shares of widespread inventory pursuant to this settlement
leading to $49.7 million in gross proceeds and $48.0 million in web proceeds.
On August 6, 2020, we delivered written discover to Cowen to terminate the Gross sales
Settlement, which termination the events agreed to make instantly efficient.

On August 8, 2019, we entered into an underwriting settlement with J.P. Morgan
Securities LLC and SVB Leerink LLC, or Leerink, as representatives of the
a number of underwriters, regarding an underwritten public providing of two,732,673
shares of widespread inventory at a public providing value of $25.25 per share. We
acquired $69.0 million in gross proceeds and $64.5 million in web proceeds.

On August 6, 2020, we entered into an underwriting settlement with Leerink and
Cowen, as representatives of the a number of underwriters, regarding an
underwritten public providing of three,048,774 shares of widespread inventory at a public
providing value of $32.00 per share. We acquired $97.6 million in gross proceeds
and $91.4 million in web proceeds.

On February 3, 2021, we entered into an underwriting settlement with Goldman
Sachs & Co. LLC, Leerink and Cowen, as representatives of the a number of
underwriters, regarding an underwritten public providing of 4,107,142 shares of
widespread inventory at a public providing value of $70.00 per share. We acquired $287.5
million in gross proceeds and roughly $269.6 million in web proceeds.

Mortgage Facility with Hercules



On April 14, 2014, we executed a Mortgage Settlement with Hercules, as subsequently
amended, most just lately in April 2019. The Mortgage Settlement supplied a complete debt
facility of $10.0 million, which is secured by considerably all of our property.
At closing, we borrowed $5.0 million in principal and had the flexibility to attract
the extra $5.0 million over the interval from November 1, 2014 to March 31,
2015. The rate of interest on this time period mortgage was variable primarily based on a calculation of
8% plus the prime price much less 5.25%, with a minimal rate of interest of 8%. Curiosity
was to be paid month-to-month starting the month following the borrowing date.
Principal funds have been scheduled to start on September 1, 2015, except we
achieved sure milestones which might have prolonged this date to December 1,
2015 or March 1, 2016. In reference to the execution of the Mortgage Settlement,
we issued Hercules a warrant to buy as much as 173,428 shares of our Sequence C
Most popular Inventory at an train value of $3.3299 per share. Upon closing of the
IPO, this warrant was robotically transformed right into a warrant to buy as much as
53,960 shares of our widespread inventory at an train value of $10.70 per share.

In August 2018, we signed Modification 5 to the Mortgage Settlement, which prolonged the
curiosity solely cost interval by means of March 1, 2020 and likewise prolonged the mortgage
maturity date to March 1, 2020. We accounted for the August 2018 modification as a
modification pursuant to ASC 470-50 and decided that no materials change
occurred because of the modification. As well as, the modification deferred
the cost of principal till the maturity date. We paid $0.1 million in finish of
time period funds associated to Modification 5 through the yr ended December 31, 2020.

In October 2018, we signed Modification 6 to the Mortgage Settlement, which amended the
Mortgage Settlement's collateral clause to exclude the $1 million certificates of
deposit related to the lease on our new headquarters in Billerica,
Massachusetts. The Mortgage Settlement and amendments include finish of time period funds
and are recorded within the debt accounts. We paid $0.5 million in finish of time period
funds associated to Modification 6 through the yr ended December 31, 2018.

Positive April 15, 2019, we concluded Modification 7 to the mortgage settlement, which prolonged the interval of curiosity solely cost till July 1, 2021 and likewise prolonged the maturity date of the mortgage to October 1, 2021. We’re required to

                                       90

Contents

pay the principal of the mortgage in 5 equal month-to-month installments from the July 1, 2021
the ultimate principal cost to be made on October 1, 2021.

On July 2, 2019, 66,041 warrants have been exercised by Hercules on a web, non-cash,
foundation. Per the phrases of the warrant settlement, we issued 45,690 shares of widespread
inventory because of the online train. The Mortgage Settlement and amendments include
finish of time period funds and are recorded within the debt accounts. No finish of time period
funds have been paid within the yr ended December 31, 2019. We paid $0.1 million in
finish of time period funds associated to Modification 5 through the yr ended December 31,
2020.

The Mortgage Settlement incorporates detrimental covenants limiting our actions,
together with limitations on inclinations, mergers or acquisitions, incurring
indebtedness or liens, paying dividends or making investments and sure different
enterprise transactions. There aren't any monetary covenants related to the Mortgage
Settlement. The obligations below the Mortgage Settlement are topic to acceleration
upon the prevalence of specified occasions of default, together with a cloth hostile
change in our enterprise, operations or monetary or different situation, which is
subjective in nature. We have now decided that the chance of subjective
acceleration below the fabric hostile occasions clause shouldn't be possible and
due to this fact have categorised the excellent principal in present and long-term
liabilities primarily based on scheduled principal funds.

Principal repayments of the debt, together with end-of-term charges, due on
December 31, 2020 are (in 1000’s):



Years ending December 31,
2021                          $ 7,738$ 7,738




Uman Acquisition



In August 2019, we accomplished the acquisition of Uman, wherein we paid $15.7
million in money to the shareholders of Uman. We funded this cost by means of our
current money balances. As well as, we issued $5.5 million in inventory in
reference to the acquisition of Uman. The acquisition closed with respect to 95%
of the excellent shares of capital inventory of Uman on July 1, 2019 and with
respect to the remaining 5% of the excellent shares of capital inventory of Uman
on August 1, 2019.



Money Flows

The next desk presents our money flows for every interval offered (in
1000's):




                                                              Yr Ended December 31,
                                                           2020          2019         2018
Internet money utilized in working actions                   $ (23,365)$ (26,187)$ (28,721)
Internet money utilized in investing actions                        (626)      (25,376)      (5,454)
Internet money supplied by (utilized in) financing actions         96,236       116,197         (78)
Internet improve (lower) in money and money equivalents    $   72,245$   64,634$ (34,253)

Internet money used in working actions

We derive money flows from operations primarily from the sale of our merchandise and
providers. Our money flows from working actions are additionally considerably
influenced by our use of money for working bills to help the expansion of
our enterprise. We have now traditionally skilled detrimental money flows from
working actions as now we have developed our expertise, expanded our enterprise
and constructed our infrastructure and this will likely proceed sooner or later.

Internet money utilized in working actions was $23.4 million through the yr ended
December 31, 2020. Internet money utilized in working actions primarily consisted of
web lack of $31.5 million offset by non-cash expenses of $10.1 million of
stock-based compensation expense and $4.3 million of depreciation and
amortization expense. Money used because of modifications in working property and
liabilities of $7.5 million was primarily as a consequence of a rise in a rise
in
accounts

                                       91

  Desk of Contents

receivable of $6.2 million, a rise in stock of $5.1 million, and an
improve in pay as you go bills and different property of $3.9 million, offset by a
lower in accrued compensation and advantages and different accrued bills of $6.2
million.

Internet money utilized in working actions was $26.2 million through the yr ended
December 31, 2019. Internet money utilized in working actions primarily consisted of
web lack of $40.8 million offset by non-cash expenses of $6.4 million of
stock-based compensation expense, $3.0 million of depreciation and amortization
expense, and $0.6 of stock valuation adjustment amortization. Money supplied
because of modifications in working property and liabilities of $4.4 million was
primarily as a consequence of a $9.8 million improve in different non-current liabilities
associated to our lease, offset by a rise in accounts receivable of $3.4
million, and a rise in stock of $3.4 million.

Internet money utilized in working actions was $28.7 million through the yr ended
December 31, 2018. Internet money utilized in working actions primarily consisted of
web lack of $31.5 million, a lower of $1.9 million in deferred income and an
improve of $1.6 million in stock, primarily offset by non-cash inventory
compensation expense of $4.9 million and a rise of $1.3 million in accounts
payable.

Internet money used in funding actions

Traditionally, our main investing actions have consisted of capital expenditures for the acquisition of capital gear to help our increasing infrastructure and workforce. We count on to proceed to incur extra prices for the capital expenditures related to these efforts in future durations.

We used $ 0.6 million of money in investing actions through the yr ended
December 31, 2020 composed of $ 3.9 million additions to property, plant and gear, offset by $ 3.3 million within the proceeds of the grant linked to the property acquired below WP2.

We used $ 25.4 million of money in investing actions through the yr ended
December 31, 2019. The numerous improve was associated to the money portion of the Uman acquisition, in addition to leasehold enhancements to our head workplace, which is a part of our lease.

We used $ 5.5 million of money in investing actions through the yr ended
December 31, 2018 consisting of money paid on the acquisition of Aushon, web of money acquired, and purchases of capital items to help our infrastructure.

Internet money supplied by (utilized in) financing actions

Traditionally, now we have funded our operations primarily by means of personal placements of our convertible most popular shares and borrowings from credit score services, the sale of shares of our widespread shares as a part of our IPO or different choices and earnings. of our enterprise actions.

Fundraising actions supplied $ 96.2 million of money through the closed monetary yr
December 31, 2020, primarily from the online proceeds of our public providing through the third quarter of 2020.

Fundraising actions supplied $ 116.2 million of money through the closed monetary yr
December 31, 2019, primarily from the proceeds of our “to market” providing through the second quarter of 2019 and of our public providing subscribed through the third quarter of 2019.

We used $ 0.1 million money circulate from financing actions through the yr ended
December 31, 2018, which got here primarily from funds on the debt of $ 1.9 million
offset by the money generated by the train of inventory choices.

Capital assets

We have now not achieved profitability on an annual foundation since our inception, and
we count on to proceed to incur web losses sooner or later. We additionally count on that our
working bills will improve as we proceed to extend our advertising and marketing
efforts to drive adoption of our business merchandise. Moreover, as a public
firm, now we have incurred

                                       92

  Desk of Contents
and can proceed to incur important audit, authorized and different bills that we
didn't incur as a personal firm. Our liquidity necessities have traditionally
consisted, and we count on that they may proceed to consist, of gross sales and
advertising and marketing bills, analysis and growth bills, working capital, debt
service and normal company bills.

We consider money generated from business gross sales, our present money and money
equivalents, and curiosity earnings we earn on these balances will likely be ample to
meet our anticipated working money necessities for not less than the following 12
months. Sooner or later, we count on our working and capital expenditures to
improve as we improve headcount, broaden our gross sales and advertising and marketing actions and
develop our buyer base. Our estimates of the time period by means of which our
monetary assets will likely be ample to help our operations and the prices to
help analysis and growth and our gross sales and advertising and marketing actions are
forward-looking statements and contain dangers and uncertainties and precise
outcomes may differ materially and negatively because of quite a few components,
together with the components mentioned in Merchandise 1A, "Danger Elements" of this Annual Report
on Type 10-Okay. We have now primarily based our estimates on assumptions that will show to be
improper and we may make the most of our out there capital assets earlier than we
at the moment count on. Our future funding necessities will rely upon many components,
together with:

? market acceptance of our merchandise;

? the fee and timing of creating gross sales, advertising and marketing and

distribution capacities;

? the price of our analysis and growth actions;

? our means to conclude collaborations sooner or later and the success of the whole lot

such collaborations;

? the fee and timing of potential regulatory authorizations or approvals that could be

obligatory sooner or later for our merchandise; and

? the impact of competing technological and market developments.




We can not guarantee you that we will get hold of extra funds on
acceptable phrases, or in any respect. If we elevate extra funds by issuing fairness or
equity-linked securities, our stockholders could expertise dilution. Future debt
financing, if out there, could contain covenants limiting our operations or our
means to incur extra debt. Any debt or fairness financing that we elevate could
include phrases that aren't favorable to us or our stockholders. If we elevate
extra funds by means of collaboration and licensing preparations with third
events, it might be essential to relinquish some rights to our applied sciences or
our merchandise, or grant licenses on phrases that aren't favorable to us. If we do
not have or aren't in a position to get hold of ample funds, we could need to delay
growth or commercialization of our merchandise. We additionally could have to scale back
advertising and marketing, buyer help or different assets dedicated to our merchandise or stop
operations.

If the situations for elevating capital are favorable, we could search to finance
future money wants by means of public or personal fairness or debt choices or different
financings. On November 6, 2020, we filed an robotically efficient shelf
registration assertion with the SEC. Every issuance of securities below the shelf
registration assertion would require the submitting of a prospectus complement
figuring out the quantity and phrases of securities to be issued. The registration
assertion doesn't restrict the quantity of securities that could be issued thereunder.
Our means to difficulty securities is topic to market situations and different
components. This registration assertion will expire on November 6, 2023, three
years after its date of effectiveness.

Off-balance sheet preparations

Throughout the durations offered, now we have not had, and we don’t at the moment have, off-balance sheet preparations, as outlined within the relevant part. SECOND guidelines.

                                       93

Contents

Contractual obligations, commitments and contingencies

The next desk summarizes our contractual obligations as of December 31,
2020 (in 1000's):




                                                               Funds due by interval
                                                          2022        2024          2026
                                                        by means of     by means of         and
(in 1000's)                                2021        2023        2025       thereafter      Complete
Contractual Obligations:(1)
Working lease obligations                 $  3,388$  6,981$  7,212$     18,548$ 36,129
Principal funds and finish of time period charges
on the time period mortgage                               7,738           -          
-               -       7,738
Complete                                       $ 11,126$  6,981$  7,212$     18,548$ 43,867

(1) See “Improvement and provide contract” for extra contractual info

obligations.


We even have ongoing obligations associated to license agreements which include
immaterial minimal annual funds which can be credited in opposition to the precise royalty
expense.



Buy orders or contracts for the acquisition of provides and different items and
providers aren't included within the desk above. We aren't in a position to decide the
mixture quantity of such buy orders that characterize contractual obligations,
as buy orders could characterize authorizations to buy fairly than binding
agreements. Our buy orders are primarily based on our present procurement or
growth wants and are fulfilled by our distributors inside quick time horizons.

Mortgage Facility with Hercules



On April 14, 2014, we executed a Mortgage Settlement with Hercules, as subsequently
amended, most just lately in April 2019. The Mortgage Settlement supplied a complete debt
facility of $10.0 million, which is secured by considerably all of our property.
At closing, we borrowed $5.0 million in principal and had the flexibility to attract
the extra $5.0 million over the interval from November 1, 2014 to March 31,
2015. The rate of interest on this time period mortgage was variable primarily based on a calculation of
8% plus the prime price much less 5.25%, with a minimal rate of interest of 8%. Curiosity
was to be paid month-to-month starting the month following the borrowing date.
Principal funds have been scheduled to start on September 1, 2015, except we
achieved sure milestones which might have prolonged this date to December 1,
2015 or March 1, 2016. In reference to the execution of the Mortgage Settlement,
we issued Hercules a warrant to buy as much as 173,428 shares of our Sequence C
Most popular Inventory at an train value of $3.3299 per share. Upon closing of the
IPO, this warrant was robotically transformed right into a warrant to buy as much as
53,960 shares of our widespread inventory at an train value of $10.70 per share.

Leases

On January 1, 2020, we adopted ASC Matter 842 - Leases (ASC 842) utilizing the
optionally available transition methodology permitting entities to acknowledge a cumulative impact
adjustment to the opening steadiness sheet with out restating comparative prior
durations offered. ASC 842 requires a lessee to acknowledge property and liabilities
on the steadiness sheet for many leases and modifications many key definitions, together with
the definition of a lease. Lessees will proceed to distinguish between
finance leases and working, and classification will affect expense
recognition.

We elected the next sensible expedients for all lease asset courses, which
have to be elected as a bundle and utilized persistently to all of its leases at
the transition date: i) we didn't reassess whether or not any expired or current
contracts are or include leases; ii) we didn't reassess the lease
classification for any expired or current leases (that's, all current leases
that have been categorised as working leases in accordance with ASC 840, Leases (ASC
840), are categorised as working leases); and iii) we didn't reassess preliminary
direct prices for any current leases.

At the beginning of an settlement, we decide whether or not the settlement is or incorporates a rental settlement primarily based on the info and circumstances current within the settlement. Leases of a couple of yr are acknowledged

                                       94

Contents

steadiness sheet as right-of-use (ROU) property and short-term and long-term lease
liabilities, as relevant. We have now elected the sensible expedient to not
acknowledge leases on the steadiness sheet with a time period of twelve months or much less. Our
leases encompass workplace and lab area and workplace gear. All of our leases
are categorised as working, and choices to resume a lease are solely included in
the lease time period to the extent these choices are fairly sure to be
exercised. Moreover, we elected to use the sensible expedient to not
separate lease and nonlease elements for all leases.

Working lease liabilities and their corresponding ROU property are initially
recorded primarily based on the current worth of lease funds over the anticipated
remaining lease time period. The speed implicit in lease contracts is usually not
readily determinable and, because of this, we make the most of its incremental borrowing price
to low cost lease funds, which displays the mounted price at which we may
borrow on a collateralized foundation the quantity of the lease funds, for the same
time period, in the same financial atmosphere. To estimate its incremental borrowing
price, a credit standing relevant to us is estimated utilizing an artificial credit score
score evaluation since we don't at the moment have a score agency-based credit score
score.

The adoption of ASC 842 resulted within the recognition of working lease ROU
property and working lease liabilities of $12.2 million and $22.8 million,
respectively, on our consolidated steadiness sheet, with the distinction between the
ROU asset and lease legal responsibility primarily attributable to unamortized lease
incentives and deferred hire associated to the lease for our company headquarters
at 900 Middlesex Turnpike in Billerica, Massachusetts (the 900 Middlesex
Turnpike Lease).

We at the moment lease roughly 91,600 sq. toes of workplace, laboratory, and
manufacturing area at our headquarters in Billerica, Massachusetts. The
premises coated by this lease serves as our principal workplace and laboratory
area efficient the second quarter of 2019. The preliminary time period of the lease is
11 years and 5 months starting on April 1, 2019, and now we have the choice to
lengthen the lease for 2 extra five-year durations.

We beforehand leased roughly 30,655 sq. toes of workplace, laboratory, and
manufacturing area as our headquarters in Lexington, Massachusetts, which was
to run out on June 30, 2020; nevertheless in November 2018, we agreed to terminate the
lease with the lessor efficient Could 2019. The termination of the lease was
linked to us signing the brand new lease in October 2018 for our new headquarters
in Billerica. As well as, pursuant to our acquisition of Aushon in
January 2018, we assumed a lease of roughly 21,500 sq. toes of workplace,
laboratory, and manufacturing area in Billerica, Massachusetts, below a lease
that was to run out on February 28, 2021; nevertheless, in August 2018, we exercised
an choice to terminate the lease efficient as of September 1, 2019. We paid a
termination payment of $75,000 in February 2019 in consideration for the early
termination.



As well as, our subsidiary, Uman, leases a complete of roughly 6,500 sq.
toes of workplace, laboratory, manufacturing and cupboard space in Umeå, Sweden.
These leases expire at varied dates between Could 31, 2020 and February 28, 2023.



Improvement and provide settlement

We would not have important agreements, except the availability
settlement with STRATEC for the acquisition of provides or different items specifying
minimal portions or set costs that exceed our anticipated necessities for the
subsequent three to 6 months. STRATEC manufactured our HD-1 instrument and
manufactures the HD-X that we commercialized within the second half of 2019. In
2013, we entered into the Provide Settlement with STRATEC which requires us to
buy a minimal variety of business models over a seven-year interval ending in
Could 2021. We may very well be obligated to pay a payment primarily based on the shortfall of
business models bought in comparison with the required quantity. Based mostly on the
business models bought as of December 31, 2020, now we have happy our
required minimal buy quantity per the availability settlement.

Additionally, if we terminate the Provide Settlement below sure circumstances and do
not buy as much as a required variety of business models, we might be required
to difficulty warrants to buy 93,341 shares of widespread inventory at $0.003214 per
share. We consider that we'll not difficulty such warrants and due to this fact haven't
recorded any quantities associated to the potential fairness consideration.

                                       95

Contents

In August 2011, we entered into the Improvement Settlement with STRATEC, pursuant
to which STRATEC undertook the event of the HD-1 for manufacture and sale
to us or a companion whom we designate. Throughout the yr ended December 31, 2016,
the Improvement Settlement was amended to change the deliverables associated to the
ultimate milestone, to agree on instrument design modifications to be carried out, and to
cut back the minimal buy dedication within the Provide Settlement. Moreover,
the events agreed on extra growth providers for a complete payment of
$1.5 million, which was payable when growth is accomplished and of which
$0.9 million was paid in 2018 and $0.6 million was paid in 2019. The full
quantity included the ultimate milestone cost that was due below the phrases of
the
authentic settlement.

Backlog

We usually plan to ship all orders for devices and consumables acquired throughout a given interval, except orders acquired close to the tip of a fiscal quarter; and due to this fact our backlog on the finish of any interval is usually insignificant.

© Edgar On-line, supply Previews



Supply hyperlink