SEC Filing | Standard BioTools Inc.

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lab-20230630

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 June 30, 2023

☐ 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: 001-34180

STANDARD BIOTOOLS INC.

(Exact name of registrant as specified in its charter)

Delaware

77-0513190

State or other jurisdiction of incorporation or organization

I.R.S. Employer Identification No.

2 Tower Place, Suite 2000

South San Francisco, CA

94080

Address of principal executive offices

Zip Code

Registrant’s telephone number, including area code: (650) 266-6000

_____________________________________________

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	LAB	The Nasdaq Global Select Market

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 August 3, 2023, there were 78,964,770 shares of the registrant’s common stock, $0.001 par value per share, outstanding.

STANDARD BIOTOOLS INC.

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	1

	Condensed Consolidated Balance Sheets as of June 30 , 2023 and December 31, 2022	1

	Condensed Consolidated Statements of Operations for the three and six months ended June 30 , 2023 and 2022	3

	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 3 0 , 2023 and 2022	4

	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2023 and 2022	5

	Condensed Consolidated Statements of Cash Flows for three and six months ended June 30, 2023 and 2022	6

	Notes to Condensed Consolidated Financial Statements:	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	29

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 3.	Defaults Upon Senior Securities	31

Item 4.	Mine Safety Disclosures	31

Item 5.	Other Information	31

Item 6.	Exhibits	32


EXHIBIT LIST		32

SIGNATURES		34

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

STANDARD BIOTOOLS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

(Unaudited)


	June 30,		December 31,
	2023		2022
ASSETS
Current assets:
Cash and cash equivalents	$	142,304	$	81,309
Short-term investments	—		84,475
Accounts receivable (net of allowances of $331 and $592 at June 30, 2023 and December 31, 2022, respectively)	15,119		17,280

Inventories, net	22,080		21,473
Prepaid expenses and other current assets	3,567		4,278
Total current assets	183,070		208,815

Property and equipment, net	24,522		25,652
Operating lease right-of-use asset, net	32,194		33,883
Other non-current assets	2,754		3,109
Developed technology, net	7,000		12,600
Goodwill	106,287		106,251
Total assets	$	355,827	$	390,310
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	6,089	$	7,914
Accrued compensation and related benefits	9,765		9,153
Operating lease liabilities, current	3,912		3,682
Deferred revenue, current	11,685		10,792
Deferred grant income, current	3,630		3,644
Other accrued liabilities	7,176		6,175

Term loan, current	4,583		2,083
Total current liabilities	46,840		43,443

Convertible notes, net	54,853		54,615
Term loan, non-current	5,809		8,194
Deferred tax liability	1,049		1,055
Operating lease liabilities, non-current	32,231		34,081
Deferred revenue, non-current	3,790		3,816
Deferred grant income, non-current	12,546		14,359

Other non-current liabilities	843		961
Total liabilities	157,961		160,524
Commitments and contingencies (Note 7)
Mezzanine equity:
Redeemable preferred stock: $0.001 par value; 256 shares authorized, issued and outstanding at June 30, 2023 and December 31, 2022; aggregate liquidation preference of $255,559 at June 30, 2023 and December 31, 2022	311,253		311,253
Stockholders’ deficit:


Preferred stock: $0.001 par value, 9,744 shares authorized at June 30, 2023 and December 31, 2022; no shares issued and outstanding at June 30, 2023 and December 31, 2022	—		—
Common stock: $0.001 par value, 400,000 shares authorized at June 30, 2023 and December 31, 2022; 82,002 and 79,904 shares issued at June 30, 2023 and December 31, 2022, respectively; 79,121 and 79,482 shares outstanding at June 30, 2023 and December 31, 2022, respectively	81		80
Additional paid-in capital	853,466		847,008
Accumulated other comprehensive loss	(1,551)		(1,896)
Accumulated deficit	(959,979)		(926,096)
Treasury stock at cost: 2,881 and 422 shares at June 30, 2023 and December 31, 2022, respectively	(5,404)		(563)
Total stockholders’ deficit	(113,387)		(81,467)
Total liabilities, mezzanine equity and stockholders’ deficit	$	355,827	$	390,310

See accompanying notes

STANDARD BIOTOOLS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue:
Product revenue	$	21,665	$	12,219	$	39,103	$	32,223
Service revenue	5,821		5,806		12,702		11,950

Other revenue	180		752		980		1,108
Total revenue	27,666		18,777		52,785		45,281
Cost of revenue:
Cost of product revenue	11,883		12,738		21,873		25,077
Cost of service revenue	2,181		1,612		4,973		3,540
Total cost of revenue	14,064		14,350		26,846		28,617
Gross profit	13,602		4,427		25,939		16,664
Operating expenses:
Research and development	6,184		12,606		12,669		21,471
Selling, general and administrative	22,600		30,084		43,895		59,569
Restructuring and related charges	2,267		300		3,417		1,690
Total operating expenses	31,051		42,990		59,981		82,730
Loss from operations	(17,449)		(38,563)		(34,042)		(66,066)
Interest expense	(1,129)		(1,062)		(2,246)		(2,092)
Loss on forward sale of Series B Preferred Stock	—		(22,289)		—		(60,081)
Loss on Bridge Loans	—		(3,064)		—		(13,719)
Other income (expense), net	1,839		(174)		2,969		(56)
Loss before income taxes	(16,739)		(65,152)		(33,319)		(142,014)
Income tax benefit (expense)	(301)		1,613		(564)		2,187
Net loss	$	(17,040)	$	(63,539)	$	(33,883)	$	(139,827)
Net loss per share, basic and diluted	$	(0.22)	$	(0.82)	$	(0.43)	$	(1.81)
Shares used in computing net loss per share, basic and diluted	78,669		77,821		78,873		77,430

See accompanying notes

STANDARD BIOTOOLS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net loss	$	(17,040)	$	(63,539)	$	(33,883)	$	(139,827)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(327)		(485)		(157)		(635)
Net change in unrealized gain (loss) on investments	104		(711)		502		(711)
Other comprehensive income (loss), net of tax	(223)		(1,196)		345		(1,346)
Comprehensive loss	$	(17,263)	$	(64,735)	$	(33,538)	$	(141,173)

See accompanying notes

STANDARD BIOTOOLS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accum. Other Comp. Loss				Treasury Stock			Total Stockholders’ Equity (Deficit)
	Shares	Amount						Accum. Deficit		Shares	Amount
Balance as of December 31, 2022	79,904	$	80	$	847,008	$	(1,896)	$	(926,096)	(422)	$	(563)	$	(81,467)
Issuance of restricted stock, net of shares withheld for taxes, and other	420	—		(93)		—		—		—	—		(93)

Stock-based compensation expense	—	—		3,148		—		—		—	—		3,148
Repurchase of common stock	—	—		—		—		—		(1,250)	(2,466)		(2,466)
Net loss	—	—		—		—		(16,843)		—	—		(16,843)
Other comprehensive income, net of tax	—	—		—		568		—		—	—		568
Balance as of March 31, 2023	80,324	$	80	$	850,063	$	(1,328)	$	(942,939)	(1,672)	$	(3,029)	$	(97,153)
Issuance of restricted stock, net of shares withheld for taxes, and other	1,410	1		(37)		—		—		—	—		(36)
Issuance of common stock under ESPP	268	—		326		—		—		—	—		326
Stock-based compensation expense	—	—		3,114		—		—		—	—		3,114
Repurchase of common stock	—	—		—		—		—		(1,209)	(2,375)		(2,375)
Net loss	—	—		—		—		(17,040)		—	—		(17,040)
Other comprehensive loss net of tax	—	—		—		(223)		—		—	—		(223)
Balance as of June 30, 2023	82,002	$	81	$	853,466	$	(1,551)	$	(959,979)	(2,881)	$	(5,404)	$	(113,387)







	Common Stock			Additional Paid-in Capital		Accum. Other Comp. Loss				Treasury Stock			Total Stockholders’ Equity (Deficit)
	Shares	Amount						Accum. Deficit		Shares	Amount
Balance as of December 31, 2021	76,919	$	77	$	831,424	$	(907)	$	(735,998)	—	$	—	$	94,596
Issuance of restricted stock, net of shares withheld for taxes, and other	278	—		(89)		—		—		—	—		(89)
Issuance of common stock from option exercises	2			2									2
Stock-based compensation expense	—	—		4,042		—		—		—	—		4,042
Net loss	—	—		—		—		(76,288)		—	—		(76,288)
Other comprehensive loss, net of tax	—	—		—		(150)		—		—	—		(150)
Balance as of March 31, 2022	77,199	$	77	$	835,379	$	(1,057)	$	(812,286)	—	$	—	$	22,113
Issuance of restricted stock, net of shares withheld for taxes, and other	1,119	1		(89)		—		—		—	—		(88)
Issuance of common stock under ESPP	309	1		496		—		—		—	—		497
Issuance of common stock from option exercises	27	—		96		—		—		—	—		96
Stock-based compensation expense	—	—		4,663		—		—		—	—		4,663
Net loss	—	—		—		—		(63,539)		—	—		(63,539)
Other comprehensive loss, net of tax	—	—		—		(1,196)		—		—	—		(1,196)
Balance as of June 30, 2022	78,654	$	79	$	840,545	$	(2,253)	$	(875,825)	—	$	—	$	(37,454)

See accompanying notes

STANDARD BIOTOOLS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2023		2022
Operating activities
Net loss	$	(33,883)	$	(139,827)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on forward sale of Series B Preferred Stock	—		60,081
Loss on bridge loans	—		13,719
Stock-based compensation expense	6,262		8,705
Amortization of developed technology	5,600		5,928
Depreciation and amortization	1,688		1,878
Provision for excess and obsolete inventory	572		4,597
Impairment of InstruNor developed technology intangible	—		3,526
Amortization of debt discounts, premiums and issuance costs	410		423
Other non-cash items	(168)		176
Changes in assets and liabilities:
Accounts receivable, net	2,238		7,277
Inventories, net	(1,939)		(6,484)
Prepaid expenses and other assets	426		(1,304)
Accounts payable	(1,774)		(1,712)
Accrued compensation and related benefits	659		3,598
Deferred revenue	937		(1,557)
Other liabilities	1,158		(4,602)
Net cash used in operating activities	(17,814)		(45,578)
Investing activities
Purchases of short-term investments	(6,836)		(137,302)

Proceeds from sales and maturities of investments	91,964		—
Purchases of property and equipment	(1,848)		(1,806)
Net cash provided by (used in) investing activities	83,280		(139,108)
Financing activities
Proceeds from bridge loans	—		25,000
Proceeds from issuance of Series B Preferred Stock	—		225,000

Repayment of advances under revolving credit facility	—		(6,838)
Payment of equity issuance costs	—		(12,547)
Repurchase of common stock	(4,841)		—



Proceeds from ESPP stock issuance	326		497
Payments for taxes related to net share settlement of equity awards and other	(127)		(79)


Net cash provided by (used in) financing activities	(4,642)		231,033
Effect of foreign exchange rate fluctuations on cash and cash equivalents	(49)		(437)
Net increase in cash, cash equivalents and restricted cash	60,775		45,910
Cash, cash equivalents and restricted cash at beginning of period	82,324		29,467
Cash, cash equivalents and restricted cash at end of period	$	143,099	$	75,377

Supplemental disclosures of cash flow information
Cash paid for interest	$	1,919	$	1,679
Cash paid for income taxes, net of refunds	$	512	$	638
Non-cash right-of-use assets and lease liabilities	$	211	$	—


Asset retirement obligations	$	740	$	717

See accompanying notes

STANDARD BIOTOOLS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

1. Organization and Basis of Presentation

Standard BioTools Inc. (Standard BioTools or the Company), formerly known as Fluidigm Corporation, is a Delaware corporation headquartered in South San Francisco, California.

The Company has an established portfolio of essential, standardized next-generation technologies that help biomedical researchers develop medicines faster and better. As a leading solutions provider, the Company endeavors to provide reliable and repeatable insights in health and disease using its proprietary mass cytometry and microfluidics technologies that help transform scientific discoveries into better patient outcomes. Standard BioTools works with leading academic, government, pharmaceutical, biotechnology, plant and animal research, and clinical laboratories worldwide, focusing on the most pressing needs in translational and clinical research, including oncology, immunology, and immunotherapy.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP). As of June 30, 2023, the Company had wholly owned subsidiaries in Singapore, Canada, the Netherlands, Japan, France, Italy, the United Kingdom, China, Germany and Norway. All subsidiaries, except for Singapore, use their local currency as their functional currency. The Singapore subsidiary uses the U.S. dollar as its functional currency. All intercompany transactions and balances have been eliminated in consolidation.

These interim condensed consolidated financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented.

The year-end condensed consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. The condensed consolidated results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of results to be expected for the full year or for any other year or interim period. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2022 included in the Annual Report on Form 10-K, filed with the Security Exchange Commission (SEC) on March 14, 2023.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, the current economic environment and on various other assumptions believed to be reasonable, which together form the basis for making judgments about the carrying values of assets and liabilities. These accounting matters included but were not limited to inventory and related reserves; the carrying value of goodwill and other long-lived assets; and the potential outcome of uncertain tax positions that have been recognized in the Company’s consolidated financial statements or tax returns. The Company also uses significant judgment in determining the fair value of financial instruments, including debt and equity instruments. Actual results could differ materially from these estimates and could have a material adverse effect on the Company’s condensed consolidated financial statements.

Recent Accounting Pronouncements

From time to time, new accounting standards are issued by the Financial Accounting Standards Board or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

Reclassification

Certain amounts in the condensed consolidated financial statements have been reclassified from their original presentation to conform to current year presentation.

2. Net Loss Per Share

The Company’s basic and diluted net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding for the period. Restricted share units (RSUs), performance stock awards (PSUs), and options to purchase the Company’s common stock are considered to be potentially dilutive common shares.

The following potentially dilutive common shares (in thousands) were excluded from the computations of diluted net loss per share for the periods presented because including them would have been anti-dilutive:


	Six Months Ended June 30,
	2023	2022
RSUs, PSUs, and stock options	14,366	14,955

Series B Preferred Stock	75,164	75,164
2019 Notes(1)	18,966	18,966

2014 Notes	10	10
Total	108,506	109,095

(1) The conversion rate is subject to adjustment upon the occurrence of certain specified events, including voluntary conversion of the 2019 Notes prior to the Company’s exercise of the Issuer’s Conversion Option or in connection with a make-whole fundamental change, entitling the holders, under certain circumstances, to a make-whole premium in the form of an increase in the conversion rate determined based on the effective date and current price of the Company’s common stock, subject to a minimum and maximum price per share. The maximum number of additional shares of common stock that may be issued under the make-whole premium is 4,741,374 shares. Refer to Note 6 for additional information on the 2019 Notes.

3. Revenue and Geographic Area

Disaggregation of Revenue by Product Type and Geographic Area

The following tables present revenue based upon product type and the geographic regions of the Company’s customers’ facilities (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Instruments	$	11,587	$	2,661	$	17,510	$	10,184
Consumables	10,078		9,558		21,593		22,039
Total product revenue	21,665		12,219		39,103		32,223
Service revenue	5,821		5,806		12,702		11,950
Product and service revenue	27,486		18,025		51,805		44,173
Other revenue	180		752		980		1,108
Total revenue	$	27,666	$	18,777	$	52,785	$	45,281


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

Americas	$	10,448	$	9,433	$	22,110	$	22,363
Europe, Middle East and Africa (EMEA)	11,436		5,669		19,273		14,278
Asia-Pacific	5,782		3,675		11,402		8,640
Total revenue	$	27,666	$	18,777	$	52,785	$	45,281

Except for China, which represented $4.2 million and $7.4 million of the total revenue for the three and six months ended June 30, 2023, respectively, no foreign country represented more than 10% of the Company’s total revenue during the periods presented in this report. Refer to Note 13 for additional information on revenue by reporting segment.

Unfulfilled Performance Obligations

The condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022 included total deferred revenue of $15.5 million and $14.6 million, respectively. During the six months ended June 30, 2023, $6.8 million of the opening deferred revenue balance was recognized as revenue and $7.7 million of net additional advance payments, primarily for instrument service contracts, were received from customers.

The Company expects to recognize revenue from unfulfilled performance obligations associated with service contracts that were partially completed as of June 30, 2023 in the following periods (in thousands):


Fiscal Year	Expected Revenue (1)
2023 remainder of the year	$	9,089
2024	8,453
2025	4,101
Thereafter	1,982
Total	$	23,625

_______

(1) Expected revenue includes both billed amounts included in deferred revenue and unbilled amounts that are not reflected in the Company’s condensed consolidated financial statements and are subject to change if the Company’s customers decide to cancel or modify their contracts. Purchase orders for instrument service contracts can generally be canceled before the service period begins.

The Company also has unsatisfied performance obligations for service contracts with an expected term of one year or less not included in the amounts above.

4. Goodwill and Intangible Assets, net

In connection with the Company’s acquisition of DVS Sciences, Inc. in February 2014, the Company recorded $104.1 million of goodwill and $112.0 million of intangible assets associated with the acquired technology. Also, in the first quarter of 2020, the Company recorded $2.2 million of goodwill and $5.4 million of developed technology intangibles from the Company’s acquisition of InstruNor AS (InstruNor).

Goodwill and intangible assets with indefinite lives are not subject to amortization but are tested for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying amount of these assets may not be recoverable. Qualitative assessment includes assessing significant events and circumstances such as the Company’s current results, assumptions regarding future performance, strategic initiatives and overall economic factors, including the impact of rising inflation and the possibility of a global recession, to determine the existence of potential indicators of impairment. If indicators of impairment are identified, a quantitative impairment test is performed. There have been no indicators of impairment of goodwill, long-lived assets or intangible assets during the six months ended June 30, 2023. In June 2022, the decision was made to discontinue further development on the product lines supported by the InstruNor developed technology and an impairment charge of $3.5 million, representing the remaining carrying value of the intangible asset, was recorded in research and development expense.

Intangible assets with finite lives include developed technology, patents and licenses. In the condensed consolidated balance sheets, developed technology is reported separately while patents and licenses are reported in other non-current assets. Intangible assets, net, were as follows (in thousands):


	June 30, 2023
		Gross Amount		Accumulated Amortization and Impairment		Net		Weighted-Average Amortization Period
Developed technology		$	117,281	$	(110,281)	$	7,000	10.0 years
Patents and licenses		$	11,250	$	(11,008)	$	242	7.0 years



	December 31, 2022
	Gross Amount		Accumulated Amortization		Net		Weighted-Average Amortization Period
Developed technology	$	117,194	$	(104,594)	$	12,600	10.0 years
Patents and licenses	$	11,247	$	(10,669)	$	578	7.0 years

Total amortization expense of our intangible assets was $3.0 million and $3.2 million for the three months ended June 30, 2023 and 2022, respectively. Total amortization expense for the six months ended June 30, 2023 and 2022 was $5.9 million and $6.3 million, respectively. The $3.5 million impairment charge resulting in the write-off of InstruNor’s developed technology intangible is reflected in the accumulated amortization balance shown in the above table.

Based on the carrying value of intangible assets as of June 30, 2023, the Company expects estimated future amortization expense to be as follows (in thousands):


Fiscal Year	Developed Technology Amortization Expense		Patents and Licenses Amortization Expense		Total
2023 remainder of the year	$	5,600	$	235	$	5,835
2024	1,400		7		1,407




Total	$	7,000	$	242	$	7,242

5. Balance Sheet Details

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consisted of the following (in thousands):


	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	142,304	$	81,309
Restricted cash	795		1,015
Total cash, cash equivalents and restricted cash	$	143,099	$	82,324

Restricted cash is included in other non-current assets in the condensed consolidated balance sheets.

Inventories, net

Inventories, net consisted of the following (in thousands):


	June 30, 2023		December 31, 2022
Raw materials	$	16,876	$	16,866
Work-in-process	447		945
Finished goods	12,427		15,245
Total inventory, gross	29,750		33,056
Allowance for excess and obsolete inventory	(7,670)		(11,583)
Total inventories, net	$	22,080	$	21,473

Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):


	June 30, 2023		December 31, 2022
Laboratory and manufacturing equipment	$	33,856	$	33,329
Leasehold improvements	12,595		12,234
Computer equipment and software	6,043		5,793
Office furniture and fixtures	1,777		1,713
Property and equipment, gross	54,271		53,069
Less accumulated depreciation and amortization	(32,038)		(29,029)
Construction-in-progress	2,289		1,612
Property and equipment, net	$	24,522	$	25,652

Accrued Compensation and Related Benefits

Accrued compensation and related benefits, which are included in current liabilities on the condensed consolidated balance sheets consisted of the following (in thousands):


	June 30, 2023		December 31, 2022
Accrued incentive compensation	$	3,694	$	1,170
Accrued vacation	2,873		2,795
Accrued payroll taxes and other	1,276		1,174

Accrued restructuring	1,922		4,014
Accrued compensation and related benefits	$	9,765	$	9,153

Refer to Note 14 for additional information on restructuring.

Deferred Grant Income

In September 2020, the Company executed a contract with the National Institutes of Health (NIH) under NIH’s Rapid Acceleration of Diagnostics program to support the expansion of the Company’s production capacity for its COVID-19 test products. Under the now-completed contract, the Company received $34.0 million of funding from the NIH and used $22.2 million on capital expenditures for their Singapore manufacturing facility. The amortization of the deferred income, which is offset against depreciation, was $0.9 million and $0.8 million for the three months ended June 30, 2023 and June 30, 2022, respectively, and $1.8 million and $1.7 million for the six months ended June 30, 2023 and June 30, 2022, respectively Cumulative amounts applied against depreciation expense for these assets placed in service were $6.0 million and $4.2 million as of June 30, 2023 and December 31, 2022, respectively, and the carrying values of these assets were $16.2 million and $18.0 million, respectively, as of these same dates.

The current portion of deferred grant income on the Company’s condensed consolidated balance sheets represents amounts expected to be offset against depreciation expense over the next twelve months. The non-current portion of deferred grant income includes amounts expected to be offset against depreciation expense in later periods.

6. Debt

Total debt consists of the following (in thousands):


	June 30, 2023		December 31, 2022










Convertible notes:
2014 Notes	$	568	568
2019 Notes	54,285		54,047
Total convertible notes, net	54,853		54,615
Term loan, non-current	5,809		8,194
Term loan, current	4,583		2,083
Total debt	$	65,245	$	64,892

Convertible Notes

In February 2014, the Company closed an underwritten public offering of 2014 Senior Convertible Notes (2014 Notes), which will mature on February 1, 2034, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2014 Notes. Holders may require the Company to repurchase all or a portion of their 2014 Notes on each of February 6, 2024 and February 6, 2029, at a repurchase price in cash equal to 100% of the principal amount of the 2014 Notes plus accrued and unpaid interest.

In November 2019, the Company issued $55.0 million aggregate principal amount of 2019 Senior Convertible Notes (2019 Notes). Net proceeds from the 2019 Notes issuance of $52.7 million, after deductions for commissions and other debt issuance costs were used to retire all but $1.1 million of the aggregate principal value of the 2014 Notes then outstanding. The 2019 Notes bear interest at 5.25% per annum, payable semiannually on June 1 and December 1 of each year. The 2019 Notes will mature on December 1, 2024, unless earlier repurchased or converted pursuant to their terms. The 2019 Notes will be convertible at the option of the holder at any point prior to the close of business on the second scheduled trading day preceding the maturity date. The initial conversion rate of the 2019 Notes is 344.8276 shares of the Company’s common stock per $1,000 principal amount of 2019 Notes (which is equivalent to an initial conversion price of approximately $2.90 per share). The conversion rate is subject to adjustment upon the occurrence of certain specified events. Those certain specified events include voluntary conversion of the 2019 Notes prior to the Company’s exercise of the Issuer’s Conversion Option (as defined therein) or in connection with a make-whole fundamental change, entitling the holders, under certain circumstances, to a make-whole premium in the form of an increase in the conversion rate determined by reference to a make-whole table set forth in the indenture governing the 2019 Notes. The conversion rate will not be adjusted for any accrued and unpaid interest. The 2019 Notes are convertible at the Company’s option in whole but not in part into shares of the Company’s common stock upon certain conditions if the volume-weighted average price of the Company’s common stock has equaled or exceeded 130% of the Conversion Price then in effect for a specified number of days.

Offering-related costs related to both notes were capitalized as debt issuance costs and are recorded as an offset to the carrying value of the 2019 Notes.

Revolving Credit Facility

On August 2, 2018, the Company entered into a revolving credit facility with Silicon Valley Bank (SVB) (as amended, the Revolving Credit Facility) in an aggregate principal amount of up to the lesser of (i) $15.0 million or (ii) the sum of (a) 85% of eligible receivables and (b) 50% of eligible inventory, in each case, subject to certain limitations (Borrowing Base), provided that the amount of eligible inventory that may be counted towards the Borrowing Base shall be subject to a cap as set forth in the Revolving Credit Facility. The Credit Facility was collateralized by substantially all the Company’s property, other than intellectual property and contains certain financial covenants and expired on August 2, 2023. As of June 30, 2023, the Company was in compliance with all financial covenants. There were no borrowings under the Revolving Credit Facility and the total amount available was $7.1 million.

On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation was appointed as receiver. On March 27, 2023, First Citizens Bank & Trust Company (First Citizens Bank) assumed all of SVB’s deposits and loans. SVB now operates as a division of First Citizens Bank.

Term Loan Facility, net

On August 2, 2021, we amended our Revolving Credit Facility to, amongst other things, provide for a new $10.0 million term loan facility (the Term Loan Facility). As of June 30, 2023, the Term Loan Facility was fully drawn with an outstanding

principal balance of $10.0 million and a carrying value of $10.4 million. The interest rate on the Term Loan Facility is the greater of 4.0% per annum or a floating per annum rate equal to the prime rate plus 0.75%. Interest on any outstanding term loan advances is due and payable monthly. In addition to the monthly interest payments, a final payment equal to 6.5% of the original principal amount of each advance is due the earlier of the maturity date or the date the advance is repaid. Principal balances are required to be repaid in 24 equal installments beginning on August 1, 2023. The stated maturity of the Term Loan Facility is July 1, 2025. However, if the principal amount of the Company’s convertible debt exceeds $0.6 million as of June 1, 2024 or if the maturity date of the 2019 Notes has not been extended beyond January 1, 2026 by June 1, 2024, then the maturity date of the Term Loan Facility will be June 1, 2024.

Bridge Loans

On January 23, 2022, the Company entered into separate loan agreements (collectively, the Bridge Loan Agreements) with various investors for a $25.0 million term loan (collectively, the Bridge Loans). The Bridge Loans were fully drawn on January 24, 2022, and automatically converted into Series B Preferred Stock upon the subsequent closing of the Private Placement (as defined below) on April 4, 2022 (the Closing Date).

Applying the guidance in ASC 825 Financial Instruments, the Company elected to record the Bridge Loans at their fair value using a probability‐weighted expected return method for the valuation analysis of the Bridge Loans. This resulted in a $13.7 million change in fair value of the Bridge Loans from $25.0 million at inception to $38.7 million as of the Closing Date, including the portion attributable to accrued interest, which is reflected as a non-operating unrealized loss on the Bridge Loans in the accompanying condensed consolidated statements of operations for the six months ended June 30, 2022. See Note 9 for further detail.

7. Commitments and Contingencies

Leases

The Company has operating leases for buildings and vehicles, which includes a facility lease for its headquarters consisting of four floors. The Company’s facility lease has an expiration date of April 30, 2030 and contains an option to extend the lease, for up to five years, along with termination options. The Company is utilizing one floor (19th floor) for its corporate operations with all expense for this floor included within selling, general and administrative expense on the Company’s condensed consolidated statement of operations for the three and six months ended June 30, 2023 and 2022.

As part of the Company’s restructuring plan discussed further in Note 14, in August 2022, the Company entered into an agreement to sublease approximately 25% of its corporate headquarters space (18th floor) in South San Francisco, California for a period of 39 months. As of June 30, 2023, 30 months were remaining on the sublease. The Company expects to recognize $4.7 million of sublease income over the lease term that commenced in October 2022. In addition, on February 28, 2023, the Company signed a second agreement to sublease an additional 25% of its corporate headquarters (21st floor) for a period of 77 months. The Company expects to recognize additional sublease income of $9.1 million over the lease term, commencing on December 1, 2023.

Rent expense, net of sublease income, is reported within restructuring and related charges for the three and six months ended June 30, 2023 in the condensed consolidated statements of operations. The Company is currently in the process of fully vacating and potentially subleasing an additional floor (20th floor).

Indemnification

From time to time, the Company has entered into indemnification provisions under certain of its agreements in the ordinary course of business, typically with business partners, customers, and suppliers. Pursuant to these agreements, the Company may indemnify, hold harmless, and agree to reimburse the indemnified parties on a case-by-case basis for losses suffered or incurred by the indemnified parties in connection with any patent or other intellectual property infringement claim by any third party with respect to the Company’s products. The term of these indemnification provisions is generally perpetual from the time of the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is typically not limited to a specific amount. In addition, the Company has entered into indemnification agreements with its officers, directors, and certain other employees. With certain exceptions, these agreements provide for indemnification for related expenses including, among others, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding.

Litigation

From time to time, the Company may be subject to various legal proceedings and claims arising in the ordinary course of business. These include disputes and lawsuits related to intellectual property, mergers and acquisitions, licensing, contract law, tax, regulatory, distribution arrangements, employee relations and other matters. Periodically, the Company reviews the status of each matter and assess its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and a range of possible loss can be estimated, the Company accrues a liability for the estimated loss. The Company has not recorded any such liabilities in any of the periods presented. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based only on the best information available at the time. As additional information becomes available, the Company continues to reassess the potential liability related to pending claims and litigation and may revise estimates.

8. Fair Value of Financial Instruments

Fair Value of Financial Instruments

The following tables summarize the Company’s financial instruments by significant investment category measured at fair value on a recurring basis within the fair value hierarchy (in thousands):


			Fair Value Measurements At Reporting Date Using
	Total		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of June 30, 2023

Cash and cash equivalents:
Money market funds	$	120,975	$	120,975	$	—	$	—
Total cash and cash equivalents	$	120,975	$	120,975	$	—	$	—

			Fair Value Measurements At Reporting Date Using
	Total		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of December 31, 2022
Cash and cash equivalents:
Money market funds	$	53,894	$	53,894	$	—	$	—
Total cash and cash equivalents	$	53,894	$	53,894	$	—	$	—

Short-term investments:
U.S. treasury securities	$	84,475	$	84,475	$	—	$	—
Total short-term investments	$	84,475	$	84,475	$	—	$	—
Total assets measured at fair value	$	138,369	$	138,369	$	—	$	—

There were no transfers within the hierarchy and no changes in the valuation techniques used during the six months ended June 30, 2023.

The following table summarizes available-for-sale securities (in thousands):


				As of June 30, 2023
	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value

Cash and cash equivalents:
Money market funds		$	120,975	$	—	$	—	$	120,975
Total cash and cash equivalents		$	120,975	$	—	$	—	$	120,975

				As of December 31, 2022
	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Cash and cash equivalents:
Money market funds		$	53,894	$	—	$	—	$	53,894
Total cash and cash equivalents		$	53,894	$	—	$	—	$	53,894

Short-term investments:
U.S. treasury securities	1 or less	$	84,977	$	—	$	(502)	$	84,475
Total short-term investments		$	84,977	$	—	$	(502)	$	84,475

Total available-for-sale securities		$	138,871	$	—	$	(502)	$	138,369

As of June 30, 2023, the Company had no allowance for credit losses as it did not hold any financial instruments other than money market funds.

Debt

The 2014 Notes and 2019 Notes (collectively, the Convertible Notes) are not regularly traded. The estimated fair values for these securities represent Level III valuations since a fair value for these securities cannot be determined by using readily observable inputs or measures, such as market prices. Fair values were estimated using pricing models and risk-adjusted value ranges.

The estimated fair value of the Term Loan Facility also represents a Level III valuation since the value cannot be determined by using readily observable inputs or measures, such as market prices. The fair value of our Term Loan Facility was estimated using a discounted cash flow model and current market interest rate data for similar loans.

The carrying amounts of our lines of Term Loan Facility approximates fair value as interest rates applied to the underlying debt are adjusted quarterly to market interest rates. The carrying value of the Convertible Notes approximates fair value as the interest rate and terms are reflective of the rate the Company could obtain on debt with similar terms and conditions.

9. Mezzanine Equity

Series B Redeemable Preferred Stock

On January 23, 2022, the Company entered into separate Series B Convertible Preferred Stock Purchase Agreements (collectively, the Purchase Agreements) with Casdin Private Growth Equity Fund II, L.P. and Casdin Partners Master Fund, L.P., (collectively, Casdin) and Viking Global Opportunities Illiquid Investments Sub Master LP and Viking Global Opportunities Drawdown LP (collectively, Viking, and collectively with Casdin, the Lenders), whereby the Company issued and sold an aggregate of $225 million of convertible preferred stock, consisting of: (i) 112,500 shares of the Company’s Series B-1 Convertible Preferred Stock, par value $0.001 per share (the Series B-1 Preferred Stock), at a purchase price of $1,000 per share; and (ii) 112,500 shares of the Company’s Series B-2 Convertible Preferred Stock, par value $0.001 per share (the Series B-2 Preferred Stock, and together with the Series B-1 Preferred Stock, the Series B Preferred Stock or the Series B Redeemable Preferred Stock) at a purchase price of $1,000 per share (together with the issuance of shares of Series B Preferred Stock in connection with the conversion of the Bridge Loans, the Private Placement). On the Closing Date, 225,000 shares of Series B Preferred Stock were issued in accordance with the Purchase Agreements and the Bridge Loans converted into 30,559 shares of Series B Preferred Stock, for a total of 255,559 shares of Series B Preferred Stock. The Company recorded the Series B

Preferred Stock as mezzanine equity at its fair value upon issuance, net of any issuance costs, on the condensed consolidated balance sheets as it has features, such as change of control and liquidation preference, which are outside of the Company’s control.

The Purchase Agreements were accounted for as forward sales contracts at fair value in accordance with the authoritative accounting guidance as the Series B Preferred Stock included certain contingent redemption features that created an obligation for the Company to repurchase its shares. The fair value of the payable portion of the forward sales contracts was determined using a Monte Carlo Simulation, which relies on significant assumptions regarding the estimated yield and term of the Series B Preferred Stock.

The components of the carrying value of the Series B Preferred Stock as of June 30, 2023 and December 31, 2022 were as follows (in thousands):



Proceeds from Purchase Agreements	$	225,000
Proceeds from Bridge Loans	25,000
Change in fair value of Forward Purchase Agreements	60,081
Change in the fair value of Bridge Loans	13,719
Less equity issuance costs	(12,547)
Total Series B Redeemable Preferred Stock	$	311,253

The Series B Preferred Stock ranks senior to our common stock with respect to dividend rights, redemption rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The holders of Series B Preferred Stock are entitled to participate in all dividends declared on our common stock on an as-converted basis.

10. Shareholders’ Deficit

Stock Repurchase Program

On November 23, 2022, the Company’s board of directors authorized the repurchase of up to $20.0 million in shares of the Company’s common stock in the open market or in negotiated transactions through December 31, 2023. The Company repurchased a total of 1,208,200 shares of common stock under the program at a cost of $2.4 million, excluding commission fees, for an average of $1.97 per share for the three months ended June 30, 2023. Cumulative repurchases under the program amount to 2,880,993 shares at a total cost of $5.4 million. The Company had a remaining authorization to repurchase up to approximately $14.6 million in shares under this program as of June 30, 2023. Repurchases may be suspended or discontinued at any time at the Company’s discretion.

Common Shares Reserved

As of June 30, 2023, the Company had reserved shares of common stock for future issuance under equity compensation plans as follows (in thousands):


	Securities To Be Issued Upon Exercise Of Options	Securities To Be Issued Upon Release Of Restricted Stock	Number Of Remaining Securities Available For Future Issuance

2022 Inducement Equity Incentive Plan	7,595	1,350	147
2011 Equity Incentive Plan	1,351	4,008	8,148
2017 Inducement Award Plan	60	2	—
2017 Employee Stock Purchase Plan	—	—	1,782
	9,006	5,360	10,077

11. Stock-based Compensation

Restricted Stock Units


	Number of Units (in thousands)	Weighted-Average Grant Date Fair Value per Unit
Balance at December 31, 2022	7,120	$	2.58
RSU granted	696	$	2.01
RSU released	(1,849)	$	2.84
RSU forfeited	(607)	$	2.36
Balance at June 30, 2023	5,360	$	2.45

As of June 30, 2023, the unrecognized compensation costs related to outstanding unvested RSUs under the Company’s equity incentive plans were $11.3 million. The Company expects to recognize those costs over a weighted-average period of 2.5 years.

Stock Options


	Number of Options (in thousands)	Weighted-Average Exercise Price per Option		Weighted- Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (1) (in thousands)
Balance at December 31, 2022	7,882	$	4.43	7.9	$	—
Options granted	1,959	$	2.61		$	—

Options cancelled	(835)	$	6.88		$	—
Balance at June 30, 2023	9,006	$	3.81	8.8	$	102
Vested at June 30, 2023	2,826	$	4.36	8.2	$	22
Unvested awards at June 30, 2023	6,180	$	3.56	9.1	$	80

_______

(1)Aggregate intrinsic value as of June 30, 2023 was calculated as the difference between the closing price per share of the Company’s common stock on the last trading day of June, which was $1.93, and the exercise price of the options, multiplied by the number of in-the-money options.

As of June 30, 2023, the unrecognized compensation costs related to outstanding unvested options under the Company’s equity incentive plans were $13.9 million. The Company expects to recognize those costs over a weighted-average period of 2.7 years.

Performance-based Awards

The Company has granted PSUs to certain executive officers and senior level employees. The number of PSUs ultimately earned under these awards is calculated by comparing the Total Shareholder Return (TSR) of the Company’s common stock over the applicable three-year period against the TSR of a defined group of peer companies. The Company’s relative performance against its peer group determines the payout, which can range from 0% to 200% of the base awards.

Activity under the TSR-based PSUs was as follows:


	Number of Units (in thousands)	Weighted-Average Grant Date Fair Value per Unit
Balance at December 31, 2022	453	$	4.81
PSU granted	—	$	—
PSU released	(52)	$	9.6
Performance adjustment for 2020 awards	(401)	$	4.19
Balance at June 30, 2023	—	$	—

Stock-based Compensation Expense

Stock-based compensation expense is reported in our condensed consolidated statement of operations as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of product revenue	$	107	$	163	$	460	$	305
Research and development expense	366		705		782		1,404
Selling, general and administrative expense	2,641		3,795		5,020		6,996
Total stock-based compensation expense	$	3,114	$	4,663	$	6,262	$	8,705

12. Income Taxes

The Company’s quarterly provision for income taxes is based on an estimated annual effective income tax rate. The quarterly provision for income taxes also includes discrete items, such as changes in valuation allowances or adjustments upon finalization of tax returns as well as infrequently occurring items, if any, such as the effects of changes in tax laws or rates, in the interim period in which they occur.

The Company recorded an income tax expense of $0.3 million and an income tax benefit of $1.6 million in the three months ended June 30, 2023 and June 30, 2022, respectively. The Company recorded an income tax expense of $0.6 million and an income tax benefit of $2.2 million in the six months ended June 30, 2023 and June 30, 2022, respectively. The increase in our tax provision reflects the effect of our foreign operations, which reported pre-tax income in the first half of 2023 and pre-tax loss in the first half of 2022.

The Company’s effective tax rates for both periods differ from the 21% U.S. Federal statutory tax rate primarily due to valuation allowances recorded against deferred tax assets on domestic losses and the tax rate differences between the U.S. and foreign countries. The Company maintains a valuation allowance against its U.S. deferred tax assets as the Company believes it is more likely than not the deferred tax assets will not be realized.

13. Segment Reporting

In the third quarter of 2022, the Company’s Chief Executive Officer (CEO), who is the Chief Operating Decision Maker (CODM), instituted the practice of evaluating operating performance and making resource allocation decisions using two reportable segments: proteomics and genomics. Each segment is identified by its unique portfolio of products. Proteomics includes the Company’s instruments, consumables, software, and services based upon technologies used in the identification of proteins. Genomics includes the Company’s instruments, consumables, software, and services based upon technologies used in the identification of genes (DNA, RNA) and its functions.

The Company determines each segment’s loss from operations by subtracting direct expenses, including cost of product and service revenues, research and development expense, and sales and marketing expense, from revenues. Amortization, depreciation, and restructuring expenses are included in each segment’s operating expenses. Corporate costs, including general and administrative expenses for functions shared by both operating segments such as executive management, human resources,

and finance, along with interest and taxes, are excluded from each segment’s results, which is consistent with how the Company’s CODM evaluates segment performance.

The Company does not prepare or report segmented balance sheet information as its CODM does not use the information to assess segment operating performance. The segments adhere to the same accounting policies that the Company adheres to as a whole. Segment reporting for historical periods has been included in this report to ensure comparability with the current year.

The Company’s business segment information was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue:
Proteomics	$	18,088	$	10,418	$	33,288	$	24,198
Genomics	9,578		8,359		19,497		21,083
Total revenue	$	27,666	$	18,777	$	52,785	$	45,281






Loss from operations
Proteomics	$	(3,710)	$	(12,350)	$	(9,191)	$	(17,699)
Genomics	(437)		(10,177)		(260)		(15,658)
Corporate expenses	(11,035)		(15,736)		(21,174)		(31,019)
Restructuring and related charges	(2,267)		(300)		(3,417)		(1,690)
Total loss from operations	$	(17,449)	$	(38,563)	$	(34,042)	$	(66,066)

14. Restructuring and Related Charges

Beginning with the appointment of the Company’s new management team in April 2022 and as further announced in August 2022, the Company has implemented a restructuring plan, including a reduction in force, to improve operational efficiency, achieve cost savings and align the Company’s workforce to the future needs of the business. In addition to the reduction in force, the Company is reducing leased office space, optimizing its manufacturing footprint, and streamlining support functions. The Company is developing a more disciplined cost management culture throughout its organization by investing in training and advanced information systems.

The Company records restructuring and related charges as incurred. These items are classified within restructuring and related charges in the condensed consolidated statements of operations for the three and six months ended June 30, 2023, and primarily include severance costs as well as facility costs (net of sublease income) for leased space in South San Francisco that the Company has vacated as part of the restructuring plan. The Company recognized restructuring and related charges of $2.3 million and $0.3 million for the three months ended June 30, 2023 and 2022, respectively, and $3.4 million and $1.7 million for the six months ended June 30, 2023 and 2022, respectively.

The Company expects to fully relieve the liability for restructuring charges primarily related to employee severance by the end of 2023. Ongoing restructuring charges will continue to be incurred for facility related costs through the termination of the facility leases. These estimates are subject to a number of assumptions, and actual results may differ.

The following table summarizes the change in the Company’s restructuring and other related liabilities for the six months ended June 30, 2023 (in thousands):


	Severance and other employee-related benefits(1)		Facility Costs		Legal and consulting expenses(2)	Total
Balance at December 31, 2022	$	4,014	$	—	$