10-Q

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

or

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

For the transition period from___ to___

Commission file number: 001-39388

PhenomeX Inc.

(Exact name of registrant as specified in its charter)

Delaware	35-2415390
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5858 Horton Street, Suite 320

Emeryville, California 94608

(Address of principal executive offices) (Zip code)

(510) 858-2855

(Registrant’s telephone number, including area code)

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

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $0.00005 par value	CELL	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 July 31, 2023, 99,296,604 shares of the registrant’s common stock, $0.00005 par value per share, were outstanding.

PHENOMEX INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023

Table of Contents

		Page(s)
Part I.	Financial Information	1
Item 1.	Condensed Consolidated 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	2
	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2023 and 2022	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022	4
	Condensed Consolidated Statements of Cash Flows for the 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	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48
Item 4.	Controls and Procedures	48
Part II.	Other Information	49
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5	Other Information	52
Item 6.	Exhibits	53
	Signatures	54

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited).

PhenomeX Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30, 2023		December 31, 2022
(In thousands, except share and per share data)
Assets
Current assets:
Cash and cash equivalents	$	30,964	$	86,522
Short-term marketable securities	—		46,252
Trade accounts receivable, net	14,375		18,534
Inventory	41,455		18,861
Prepaid expenses and other current assets	7,992		6,783
Total current assets	94,786		176,952
Restricted cash	93		—
Property and equipment, net	32,710		23,847
Operating lease right-of-use assets	26,224		23,326
Intangible assets, net	22,499		—
Other assets	2,020		1,969
Total assets	$	178,332	$	226,094
Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable	$	18,631	$	10,092
Accrued expenses and other current liabilities	13,946		21,340
Current portion of long-term debt	—		4,966
Deferred revenue	9,648		9,092
Total current liabilities	42,225		45,490
Long-term debt	—		14,860
Deferred revenue, net of current portion	876		963
Lease liability, long-term	23,950		22,726
Total liabilities	67,051		84,039
Commitments and contingencies (Note 17)
Stockholders’ equity:
Common stock, $0.00005 par value. Authorized 300,000,000 shares on June 30, 2023 and December 31, 2022; issued and outstanding 99,113,089 and 72,169,052 shares on June 30, 2023 and December 31, 2022, respectively	5		4
Additional paid-in capital	546,538		503,708
Accumulated deficit	(435,312)		(361,648)
Accumulated other comprehensive income (loss)	50		(9)
Total stockholders’ equity	111,281		142,055
Total liabilities and stockholders’ equity	$	178,332	$	226,094

See accompanying notes to these condensed consolidated financial statements.

1

PhenomeX Inc.

Condensed Consolidated Statements of Operations (Unaudited)

	Three months ended June 30,				Six months ended June 30,
(In thousands, except share and per share data)	2023		2022		2023		2022
Revenue:
Product revenue	$	10,304	$	9,468	$	18,682	$	19,242
Service and other revenue	3,758		9,682		13,896		20,114
Total revenue	14,062		19,150		32,578		39,356
Cost of sales:
Product cost of sales	7,089		2,614		11,001		5,309
Service cost of sales	930		3,610		2,106		7,294
Total cost of sales	8,019		6,224		13,107		12,603
Gross profit	6,043		12,926		19,471		26,753
Operating expenses:
Research and development	9,342		18,178		17,763		35,751
Selling, general and administrative	26,258		20,295		52,805		37,822
Restructuring	1,093		—		2,383		—
Loss on impairment of goodwill	16,557		—		16,557		—
Total operating expenses	53,250		38,473		89,508		73,573
Loss from operations	(47,207)		(25,547)		(70,037)		(46,820)
Other income (expense):
Interest expense	(1,632)		(227)		(2,016)		(451)
Interest income	694		53		1,521		87
Other income (expense), net	(2,049)		(22)		(3,061)		35
Loss before income taxes	(50,194)		(25,743)		(73,593)		(47,149)
Provision for income taxes	51		4		71		24
Net loss	$	(50,245)	$	(25,747)	$	(73,664)	$	(47,173)
Net loss attributable to common stockholders per share, basic and diluted	$	(0.51)	$	(0.38)	$	(0.84)	$	(0.70)
Weighted-average shares used in calculating net loss per share, basic and diluted	98,900,780		67,985,664		87,394,201		67,842,372

See accompanying notes to these condensed consolidated financial statements.

2

PhenomeX Inc.

Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

	Three months ended June 30,				Six months ended June 30,
(In thousands)	2023		2022		2023		2022
Net loss	$	(50,245)	$	(25,747)	$	(73,664)	$	(47,173)
Other comprehensive income (loss):
Foreign currency translation adjustments	53		—		50		—
Unrealized gain on marketable securities, net of tax	—		(19)		9		(19)
Other comprehensive income (loss):	53		(19)		59		(19)
Comprehensive loss	$	(50,192)	$	(25,766)	$	(73,605)	$	(47,192)

See accompanying notes to these condensed consolidated financial statements.

3

PhenomeX Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

	Three Months Ended June 30, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(In thousands, except share data)	Shares	Amount
Balances on March 31, 2023	98,744,915	$	5	$	542,805	$	(385,067)	$	(3)	$	157,740
Shares issued in connection with:
Exercise of stock options	55,875	—		35		—		—		35
Vesting of restricted stock units	312,299	—		—		—		—		—
Stock-based compensation	—	—		3,698		—		—		3,698
Foreign currency translation adjustments	—	—		—		—		53		53
Net loss	—	—		—		(50,245)		—		(50,245)
Balances on June 30, 2023	99,113,089	$	5	$	546,538	$	(435,312)	$	50	$	111,281
	Three Months Ended June 30, 2022
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(In thousands, except share data)	Shares	Amount
Balances on March 31, 2022	67,820,115	$	4	$	478,231	$	(285,034)	$	—	$	193,201
Shares issued in connection with:
Exercise of stock options	181,013	—		354		—		—		354
Vesting of restricted stock units	272,804	—		—		—		—		—
Stock-based compensation	—	—		6,627		—		—		6,627
Unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		(19)		(19)
Net loss	—	—		—		(25,747)		—		(25,747)
Balances on June 30, 2022	68,273,932	$	4	$	485,212	$	(310,781)	$	(19)	$	174,416

4

	Six Months Ended June 30, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(In thousands, except share data)	Shares	Amount
Balances on December 31, 2022	72,169,052	$	4	$	503,708	$	(361,648)	$	(9)	$	142,055
Common stock issued for IsoPlexis Merger	24,945,611	1		31,929		—		—		31,930
Fair value of vested IsoPlexis options attributable to pre-merger service	—	—		306		—		—		306
Fair value of IsoPlexis Warrant at Acquisition Date	—	—		170		—		—		170
Shares issued in connection with:
Exercise of stock options	134,234	—		64		—		—		64
Vesting of restricted stock units	597,428	—		—		—		—		—
Employee stock purchase plan	121,863	—		166		—		—		166
Restricted Stock Units issued for 2022 Bonuses (1)	1,144,901	—		2,107		—		—		2,107
Stock-based compensation	—	—		8,088		—		—		8,088
Unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		9		9
Foreign currency translation adjustments	—	—		—		—		50		50
Net loss	—	—		—		(73,664)		—		(73,664)
Balances on June 30, 2023	99,113,089	$	5	$	546,538	$	(435,312)	$	50	$	111,281
	Six Months Ended June 30, 2022
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(In thousands, except share data)	Shares	Amount
Balances on December 31, 2021	67,595,535	$	4	$	471,820	$	(263,608)	$	—	$	208,216
Shares issued in connection with:	—
Exercise of stock options	262,667	—		766		—		—		766
Vesting of restricted stock units	300,384	—		—		—		—		—
Employee stock purchase plan	115,346			610				—		610
Stock-based compensation	—	—		12,016		—		—		12,016
Unrealized gain (loss) on marketable securities, net of tax	—	—		—		—		(19)		(19)
Net loss	—	—		—		(47,173)		—		(47,173)
Balances on June 30, 2022	68,273,932	$	4	$	485,212	$	(310,781)	$	(19)	$	174,416

See accompanying notes to these condensed consolidated financial statements.

(1) Annual bonuses for certain employees related to fiscal year 2022 were not paid in cash and instead the Company issued fully vested restricted stock units on March 3, 2023 with a grant date fair value of $1.84 per share. The associated expense was recorded in 2022, the period in which the bonus was earned.

5

PhenomeX Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six months ended June 30,
(In thousands)	2023		2022
Cash flows from operating activities:
Net loss	$	(73,664)	$	(47,173)
Adjustments to reconcile net loss to cash used in operating activities:
Loss on impairment of goodwill	16,557		—
Depreciation and amortization	6,202		4,431
Stock-based compensation	8,119		11,958
Restricted stock units issued for 2022 Bonuses	2,107		—
Amortization of operating lease right-of-use assets	2,076		1,538
Non-cash interest and other expense related to debt and note receivable agreements	63		32
Provision for excess and obsolete inventory	1,899		479
Provision for doubtful accounts	208		—
Loss on debt extinguishment	1,230		—
Loss on disposal and impairment of property and equipment	306		27
Realized loss on marketable securities	6		—
Other non-cash	(927)		271
Changes in operating assets and liabilities:
Trade accounts receivable	7,025		12,128
Inventory	(4,120)		(1,539)
Prepaid expenses, other current assets and other assets	3,449		1,340
Trade accounts payable	7,724		1,000
Deferred revenue	(929)		(4,400)
Accrued expenses and other current liabilities	(14,664)		(585)
Operating lease liabilities	(2,084)		(95)
Net cash used in operating activities	(39,417)		(20,588)
Cash flows from investing activities:
Purchase of property and equipment	(457)		(6,758)
Purchase of marketable securities	(2,451)		(9,372)
Proceeds from sales of marketable securities	36,749		—
Proceeds from maturities of marketable securities	12,400		—
Asset acquisition	(264)		—
Acquisitions, net of cash acquired	(40,285)		—
Net cash provided by (used in) investing activities	5,692		(16,130)
Cash flows from financing activities:
Repayment of term loan	(90,000)		—
Payment of term loan prepayment fees	(770)
Proceeds from issuance of term loan	70,000		—
Payment of debt issuance costs	(1,200)		—
Proceeds from issuance of common stock upon exercise of stock options	64		766
Proceeds from issuance of common stock under employee stock purchase plan	166		610
Net cash (used in) provided by financing activities	(21,740)		1,376
Net increase (decrease) in cash and cash equivalents and restricted cash	(55,465)		(35,342)
Cash, cash equivalents and restricted cash at beginning of period	86,522		178,366
Cash, cash equivalents and restricted cash at end of period	$	31,057	$	143,024

See accompanying notes to these condensed consolidated financial statements.

6

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(1)The Company and Basis of Presentation

Description of Business

PhenomeX Inc. (the “Company” or “PhenomeX”) is a functional cell biology company that provides live cell biology research tools which deliver deep insights into cellular function and new perspectives on phenomes.

PhenomeX and its consolidated subsidiaries are hereinafter referred to as the “Company.” The Company’s headquarters are in Emeryville, California.

Basis of Presentation

On December 21, 2022, Berkeley Lights, Inc. (“Berkeley Lights”) entered into an Agreement and Plan of Merger (“Merger Agreement”) with Iceland Merger Sub Inc., a wholly owned subsidiary of Berkeley Lights (“Merger Sub”) and IsoPlexis Corporation (“IsoPlexis”). Pursuant to the Merger Agreement on March 21, 2023 (“Acquisition Date”), Merger Sub was merged with IsoPlexis, with IsoPlexis surviving the merger as a wholly owned subsidiary of Berkeley Lights (“IsoPlexis Merger”). The newly combined company has been renamed PhenomeX. The historical financial statements of PhenomeX for periods prior to the IsoPlexis Merger are the historical financial statements of Berkeley Lights.

The accompanying unaudited condensed consolidated financial statements (“condensed consolidated financial statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates.

Liquidity

The Company has experienced losses from its operations since its inception and has relied primarily on equity and debt financing to fund its operations to date. For the three and six months ended June 30, 2023, the Company had a consolidated net loss of $50.2 million and $73.7 million, respectively, and as of June 30, 2023 had an accumulated deficit of $435.3 million. Cash and cash equivalents (including marketable securities classified as cash equivalents) were $31.0 million as of June 30, 2023.

On June 30, 2023, the Company repaid in full all outstanding indebtedness under the Second Amended and Restated Loan and Security Agreement (“Second Amended Loan Agreement”) dated as of March 21, 2023, among, inter alios, the Company, IsoPlexis Corporation, a Delaware corporation and East West Bank, a California banking corporation (“EWB”), and upon such repayment, the Second Amended Loan Agreement and all related guarantees and loan documents were terminated and have no further force and effect. The Company entered into the Second Amended Loan Agreement with EWB on March 21, 2023 to increase the Company’s and EWB’s term loan amount of $20.0 million by $50.0 million to an aggregate outstanding principal of $70.0 million. The proceeds were used to repay $52.5 million of indebtedness (including prepayment premium and interest) held by IsoPlexis on the acquisition date. Under the terms of the Second Amended Loan Agreement, the Company was required to maintain cash and cash equivalents of no less than $70.0 million in the aggregate at all times in a deposit account with EWB that is assigned to EWB. Because such cash was restricted and unavailable for use in financing operations, management elected to prepay the outstanding balance. As of June 30, 2023, the

7

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Company has not entered into any further financing arrangements. See Note 12 for additional information on our Second Amended Loan Agreement with EWB.

These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after these financial statements are issued. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustment that might result if the Company is unable to continue as a going concern.

Management’s intent is to implement plans that will allow the Company to continue as a going concern. The Company intends to improve operating cash flow by increasing its revenue and lowering its operational costs. New commercial leadership, geographic expansion, and a refined product roadmap are expected to drive revenue growth, and significant cost synergies as a result of the IsoPlexis Merger and are expected to lower operating expenses. Cost synergies are expected to be accomplished by eliminating duplicative costs associated with maintaining the infrastructure needed by public companies, complementary research and development (“R&D”) capabilities, marketing resources and sales operations, and manufacturing, supply chain, logistics and operations synergies. In addition, the Company has launched a process to explore, review and evaluate a range of potential strategic alternatives focused on addressing capital requirements and maximizing stockholder value. While management is focused on these efforts, there can be no assurance that the Company will be successful in doing so.

(2)Summary of Significant Accounting Policies

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission.

Updates to those policies are below, including updates related to the IsoPlexis Merger.

Cash, cash equivalents and restricted cash

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

The Company records cash and cash equivalents as restricted when it is unable to freely use such cash and cash equivalents for general operating purposes. As of June 30, 2023, restricted cash consisted of $0.1 million related to a letter of credit with an international customer.

The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the Company’s condensed consolidated balance sheets to the totals presented on the condensed consolidated statements of cash flows (in thousands):

	June 30, 2023		December 31, 2022
Cash	$	28,060	$	63,596
Cash equivalents	2,904		22,926
Restricted cash	93		—
Total cash, cash equivalents and restricted cash as presented on the condensed consolidated statements of cash flows	$	31,057	$	86,522

8

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Accounts Receivables and Allowance for Credit Losses

Trade accounts receivable are recorded at the invoiced amount as a result of the transaction with customers. The Company maintains allowances for credit losses for uncollectible accounts receivable. The Company estimates anticipated losses from doubtful accounts based on days past due, historical collection history, and other factors. Write-offs are recorded at the time all collection efforts have been exhausted. The Company reviews its allowance for doubtful accounts on a quarterly basis.

Inventory

Inventories are recorded at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Inventory that is obsolete or in excess of forecasted usage is written down to its estimated net realizable value based on assumptions about future demand and market conditions. Inventory write-downs are charged to cost of goods sold and establish a new cost basis for the inventory. Costs included in inventories are raw materials, labor, supplies, allocable depreciation of manufacturing facilities, equipment and overhead.

Stock-based compensation

The Company maintains the 2020 Incentive Award Plan (“2020 Plan”), an incentive compensation plan under which stock options, restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) are granted to employees, non-employee consultants and directors.

Stock-based compensation expense is calculated based on the grant date fair value of the award. The Company determines the fair value of RSUs and RSAs based on the closing price of the Company’s common stock as reported by Nasdaq on the date of the grant.

The Company estimates the fair value of the majority of stock option awards on the grant date using the Black-Scholes option-pricing model. For option awards that include a goal tied to the Company share price (i.e., a market condition), the Company uses a Monte Carlo simulation to estimate the fair value.

The fair value of stock options, RSUs and RSAs with only a service condition is recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are recognized as they occur.

Stock options and RSUs that include a service condition and a performance condition are considered expected to vest when the performance condition is probable of being met. Compensation expense associated with performance awards that are determined to be probable of achievement is recognized over the requisite service period on a tranche-by-tranche basis.

For performance stock options and RSUs not initially assessed as probable of achievement, the Company records a cumulative adjustment to compensation expense in the period the Company changes its determination that a performance condition becomes probable of being achieved. The Company ceases recognition of compensation expense in any periods where the Company determines the attainment of a performance condition is no longer probable. If the performance goals are determined to be improbable, any previously recognized compensation expense is reversed.

The fair value of stock options with a market condition is recognized over the requisite service period for each tranche of the award and is recognized regardless of whether (or to what extent) the market condition is ultimately achieved.

9

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Business Combinations

The Company records tangible and intangible assets acquired and liabilities assumed in a business combination using the purchase method of accounting. The excess of the purchase consideration over the fair value of net assets acquired is recorded as goodwill. The allocation of purchase consideration in a business combination requires the Company to make significant estimates and assumptions. Such estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the Acquisition Date, the Company may record adjustments to the fair value of the tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or the final determination of the fair value, whichever comes first, any subsequent adjustments are recorded to the consolidated statement of operations. Transaction costs associated with business combinations are expensed as they are incurred.

Goodwill and Intangible Assets

Goodwill represents the excess of the consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination. Intangible assets are measured at their respective fair values as of the Acquisition Date and may be subject to adjustment within the measurement period, which may be up to one year from the Acquisition Date. The Company does not amortize goodwill rather; goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Such triggering events potentially warranting an annual or interim goodwill impairment assessment include, among other factors, declines in historical or projected revenue, operating income or cash flows, and sustained decreases in the Company’s stock price or market capitalization.

To determine whether goodwill is impaired, the Company performs a quantitative impairment test whereby the Company estimates the fair values of its single reporting unit using a combination of an income and market approach. To determine the fair value, the Company is required to make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include the valuation methodology itself, as well as inputs to the valuation model. The Company utilizes a combination of an income and market approach to assess the fair value of the reporting unit. The income approach considers the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate and projected future economic and market conditions while the guideline public company market approach considers marketplace earnings multiples from within a peer public company group. These assumptions require significant judgement.

To the extent the carrying amount of goodwill exceeds the implied goodwill, the difference is the amount of the goodwill impairment. The Company also completes a reconciliation between the implied equity valuation prepared and the Company’s market capitalization. The majority of the inputs used in the discounted cash flow model are unobservable and thus are considered to be Level 3 inputs. The inputs for the market capitalization calculation are considered Level 1 inputs.

During the six months ended June 30, 2023, the Company experienced a decline in its market capitalization as a result of a sustained decrease in the Company’s stock price. This sustained decrease was considered to represent a triggering event requiring management to perform a quantitative goodwill impairment test as of June 30, 2023. As a result of the impairment test, the Company fully impaired its goodwill and recorded a loss on impairment of goodwill of $16.6 million. Refer to Note 8 for further information regarding Goodwill and Intangible Assets.

Intangible assets with finite useful lives are amortized over their estimated useful lives, generally on a straight-line basis, and are reviewed for impairment when facts or circumstances indicate that the carrying value of these assets may not be recoverable. As discussed above, during the six months ended June 30, 2023, the Company experienced a decline in market capitalization resulting from a sustained decrease in stock price and also recorded a $16.6 million loss on impairment of goodwill. Management considered these events to be triggering events and

10

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

reviewed its single long-lived asset group (including its intangible assets) for impairment. Because the sum of future undiscounted cash flows for the asset group exceeded the carrying value of the asset group, management concluded the assets were recoverable and no impairment charge was recorded.

The Company does not have any indefinite-lived intangible assets as of June 30, 2023.

Long-Lived Assets

Long-lived assets, including property, plant and equipment and finite-lived intangible assets, are amortized over their estimated useful lives, generally on a straight line basis, and are reviewed for impairment whenever facts or circumstances indicate that the carrying value of an asset may not be recoverable. Should there be an indication of impairment, the Company first tests for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset group to the carrying amount of that asset group. If the carrying amount of the asset group is not recoverable on an undiscounted cash flow basis, the Company is then required to estimate the fair value of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.

During the six months ended June 30, 2023, the Company experienced a decline in its market capitalization as a result of a sustained decrease in the Company’s stock price. This sustained decrease was considered to represent a triggering event requiring management to perform a quantitative impairment test of its long-lived assets as of June 30, 2023. Because the sum of future estimated undiscounted cash flows for the Company’s single asset group exceeded its carrying value, the Company concluded there was no impairment as of June 30, 2023. Refer to Note 8, Goodwill and Other Intangible Assets, and Note 10, Property and Equipment, Net, for further information.

Foreign currency translation and transactions

The Company assesses the functional currency of each of its international subsidiaries. For subsidiaries where the functional currency is the U.S. dollar, gains or losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the U.S. dollar are included in “Other income (expense), net” in the condensed consolidated statement of operations.

For subsidiaries where the functional currency is the local currency, the translation of foreign currencies into U.S. dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet dates and revenue and expense accounts using the average exchange rate during each period. The gains and losses resulting from the translation are included in accumulated other comprehensive loss in stockholders’ equity and are excluded from net loss. The portions of intercompany accounts receivable and accounts payable that are intended for settlement are translated at exchange rates in effect at the balance sheet date.

Research and development state tax credits

R&D tax credits exchanged for cash pursuant to the Connecticut R&D Tax Credit Exchange Program, which permits a qualified small business engaged in R&D activities within Connecticut to exchange its unused R&D tax credits for a cash amount equal to 65% of the value of exchanged credits, are recorded as a receivable and other income in the year the R&D tax credits relate to, as it is reasonably assured that the R&D tax credits will be received, based upon the Company’s history of filing for and receiving the tax credits. R&D tax credits receivable where cash is expected to be received by the Company more than one year after the balance sheet date are classified as noncurrent in the consolidated balance sheets. The Company has recorded $0.2 million of R&D tax credits receivable as of June 30, 2023.

11

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Warrants

On March 21, 2023, and in connection with the closing of the IsoPlexis Merger, PhenomeX, IsoPlexis and Perceptive Credit Holdings III, LP (“Perceptive”) executed a warrant certificate to purchase shares of PhenomeX stock (“Warrant Certificate”). The Company accounts for these common stock warrants as equity classified instruments in accordance with ASC 480, Distinguishing Liabilities from Equity.

(3)Marketable Securities

The Company may invest in available-for-sale marketable debt securities generally consisting of commercial paper and U.S. government securities with contractual maturities due within one year. Marketable securities with a maturity of three months or less when purchased are considered to be cash equivalents.

The following tables summarize the amortized costs and carrying value of the Company’s available-for-sale securities, by balance sheet classification and major security type, as of June 30, 2023 and December 31, 2022 (in thousands):

Marketable Securities reported as Cash Equivalents

	June 30, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Money market funds	$	2,904	$	—	$	—	$	2,904
Total	$	2,904	$	—	$	—	$	2,904

	December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Money market funds	$	2,354	$	—	$	—	$	2,354
Commercial paper	16,606		—		(4)		16,602
U.S. agency securities	3,969		1		—		3,970
U.S. government securities	—		—		—		—
Total	$	22,929	$	1	$	(4)	$	22,926

Marketable Securities reported as Short-term Marketable Securities

As of June 30, 2023, the Company did not hold any short-term marketable securities. Realized gains/losses from the sale of short-term marketable securities during the three and six months ended June 30, 2023 were immaterial.

Short-term marketable securities on December 31, 2022 were as follows (in thousands):

12

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Commercial paper	$	22,158	$	1	$	(11)	$	22,148
U.S. agency securities	4,941		1		—		4,942
U.S. government securities	19,159		5		(2)		19,162
Total	$	46,258	$	7	$	(13)	$	46,252

At each reporting date, the Company performs an evaluation of impairment to determine if any unrealized losses are the result of credit losses. Impairment is assessed at the individual security level. Unrealized losses on available-for-sale debt securities as of December 31, 2022 were not significant and were primarily market driven due to changes in interest rates, and not due to increased credit risk associated with specific securities. Accordingly, the Company did not record an allowance for credit losses on these short-term investments as of December 31, 2022.

See Note 9 for information about the fair value of the Company’s short-term marketable securities.

(4)Significant Risks and Uncertainties Including Business and Credit Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, short-term available-for-sale debt securities and trade receivables. The Company invests its excess cash in money market funds and short-term available-for-sale debt securities with the primary objective of facilitating liquidity and capital preservation. The Company has established guidelines relative to credit ratings, diversification and maturities that seek to maintain safety and liquidity. Deposits in financial institutions may exceed the amounts of insurance provided on such deposits. To date, the Company has not experienced any material realized losses on its deposits of cash, cash equivalents and marketable securities.

The Company controls credit risk through credit approvals and monitoring procedures. The Company performs periodic credit evaluations of its customers and generally does not require collateral. Accounts receivable are recorded net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of specific customer accounts and the aging of the related invoices and represents the Company’s best estimate of expected credit losses in its existing trade accounts receivable. As of June 30, 2023, the Company recorded an allowance for doubtful accounts of $0.2 million. As of December 31, 2022, the Company had not recorded any material allowance for doubtful accounts.

For the three months ended June 30, 2023, three customers accounted for 12%, 11% and 10% of revenue. For the six months ended June 30, 2023, one customer accounted for 22% of revenue. For the three months ended June 30, 2022, three customers accounted for 20%, 11% and 10% of revenue. For the six months ended June 30, 2022, three customers accounted for 16%, 11% and 10% of revenue.

As of June 30, 2023, two customers comprised 16% and 10% of accounts receivable. As of December 31, 2022, two customers accounted for 24% and 11% of accounts receivable.

13

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(5)Business Combinations

IsoPlexis Merger

On March 21, 2023, the Company completed the IsoPlexis Merger. Under the terms of the Merger Agreement, IsoPlexis shareholders received, for each share of IsoPlexis stock, 0.612 shares of Berkeley Lights common stock (which was automatically converted into shares of PhenomeX common stock).

Consideration Transferred

The Acquisition Date fair value of consideration transferred in the IsoPlexis Merger totaled $84.9 million, summarized as follows (in thousands):

Fair value of PhenomeX common stock issued to IsoPlexis stockholders (1)	$	31,930
Repayment of IsoPlexis debt (2)	52,482
Fair value of vested IsoPlexis options attributable to pre-merger service (3)	306
Fair value of IsoPlexis Warrant at Acquisition Date (4)	170
Total purchase consideration	$	84,888

(1) Represents the fair value of PhenomeX common stock issued to IsoPlexis stockholders pursuant to the Merger Agreement. The fair value is based on 24,945,611 shares of PhenomeX common stock at $1.28 per share on March 21, 2023 issued to IsoPlexis stockholders. IsoPlexis stockholders received 0.612 shares of PhenomeX stock for each IsoPlexis share they held.

(2) Includes $50 million in principal repayment to retire debt of IsoPlexis, as required by change in control provisions of the debt, as well as prepayment penalties and accrued interest.

(3) Represents the fair value on March 21, 2023 of IsoPlexis options assumed by PhenomeX attributable to pre-combination service (see Note 13 for additional information).

(4) Represents the fair value of the IsoPlexis warrant assumed by PhenomeX at March 21, 2023 (see Note 13 for additional information).

Fair Value of Assets Acquired and Liabilities Assumed

The Company accounted for the IsoPlexis Merger as a business combination. The identifiable assets acquired and liabilities assumed are recorded at their fair values as of the Acquisition Date and are consolidated into the Company’s financial statements. The assignment of fair market value requires significant judgments regarding the estimates and assumptions used to value the acquired assets and liabilities assumed. In determining the fair values of the assets acquired and liabilities assumed, the Company utilized the cost, income and market approaches from the perspective of a market participant.

The following table summarizes the fair values for each major class of assets acquired and liabilities assumed at the Acquisition Date (in thousands). The Company used third party valuation professionals to aid in the determination of the estimated fair value of certain assets acquired and liabilities assumed. As of the date of this Quarterly Report, the allocation of the acquisition purchase price to the intangible assets acquired and the resulting goodwill has not been finalized. Management’s analysis of these items has not yet been completed because of the inherent complexities of estimating fair values of acquired patented technologies, customer relationships and trade names and trademarks. The fair value of the remaining assets acquired and liabilities assumed were determined by management based on its consideration of all currently available information and the allocation of consideration to these items can be considered final. Notwithstanding the above, as described in Note 8, Goodwill and Intangible Assets, management determined that there were indicators of asset impairment during the quarterly period ended June 30, 2023, and assessed the carrying values of the Company’s long-lived assets and goodwill.

14

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

During the three months ended June 30, 2023, the Company recorded a $4.3 million increase to goodwill related to changes in estimates pertaining to the fair value of inventory and property and equipment. Of the $4.3 million increase to goodwill, approximately $2.2 million represents a correction of the opening balance sheet to reduce the fair value of acquired inventory.

Cash and cash equivalents	$	12,197
Accounts receivable	3,075
Inventories	22,612
Prepaid expenses and other current assets	4,190
Property and equipment, net	11,562
Intangible assets	22,900
Goodwill	16,557
Operating lease right-of-use assets	4,975
Other assets	526
Total assets acquired	98,594
Accounts payable	2,359
Accrued expenses and other current liabilities	4,912
Deferred revenue	1,399
Operating lease obligations	5,036
Total liabilities assumed	13,706
Total consideration transferred	$	84,888

Acquired Receivables

The fair value of accounts receivable acquired was $3.1 million.

Inventory

The fair value of inventory acquired was initially estimated to be $27.3 million. During the three months ended June 30, 2022, the initial estimate of fair value of inventory acquired in the opening balance sheet was decreased to $22.6 million (which included a step up from the acquired cost basis of $4.1 million) as a result of a correction of $2.2 million and a measurement period adjustment of $2.5 million.

Intangible Assets and Goodwill

Intangible assets include $11.7 million of patented technology, $7.7 million of customer relationships and $3.5 million of IsoPlexis trade names and trademarks. The intangible assets will be amortized over their respective useful lives which range from eight to fourteen years. Goodwill with a provisional assigned value of $16.6 million represents the excess of the consideration transferred over the estimated fair values of assets and liabilities assumed. None of the goodwill resulting from the IsoPlexis Merger is deductible for tax purposes. Refer to Note 8, Goodwill and Intangible Assets, for further information.

Transaction Costs

The Company recognized transaction costs associated with the IsoPlexis Merger of $3.5 million for the six months ended June 30, 2023, plus $2.8 million which was recognized in the fourth quarter of 2022. These costs are primarily related to professional services and are recorded in selling, general, and administrative expenses in the Company’s condensed consolidated statement of operations.

15

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Supplemental Pro Forma Information

The following unaudited pro forma financial information gives effect to the IsoPlexis Merger as if it had been completed on January 1, 2022. The unaudited pro forma information was prepared in accordance with the requirements of ASC 805, which is a different basis than pro forma information prepared under Article 11 of Regulation S-X (“Article 11”). As such, they are not directly comparable with historical results for stand-alone Berkeley Lights prior to March 21, 2023 or our previously provided pro forma financials prepared in accordance with Article 11. The pro forma adjustments are based on historical reported transactions by the respective companies and do not include any anticipated synergies or other expected benefits of the acquisition.

(in thousands)	Three months ended June 30, 2023		Three months ended June 30, 2022		Six months ended June 30, 2023		Six months ended June 30, 2022
Total revenue	$	14,062	$	23,155	$	34,232	$	48,272
Net loss	$	(50,245)	$	(51,404)	$	(116,708)	$	(101,822)

Pro forma adjustments consisted of:

•Amortization/Depreciation- Tangible and intangible assets are assumed to be recorded at their assigned fair values as of January 1, 2022. Historical depreciation and amortization for IsoPlexis has been removed and the new fair values of the assets are depreciated or amortized over their estimated useful lives.

•Interest Expense- Entry into the Second Amended Term Loan and repayment of the Perceptive Credit Agreement are assumed to have occurred on January 1, 2022. Historical interest expense has been removed and replaced with the applicable interest rate as of March 21, 2023 associated with the Second Amended Term Loan, which was 8.5%.

•Transaction costs- Both entities incurred transaction costs, which totaled $13.7 million. Of the $13.7 million, approximately $4.4 million was incurred in the first quarter of 2023 and has been eliminated as it is not recurring.

•Accounting policies adjustment- IsoPlexis historically classified certain operations, quality and facility related costs in selling, general and administrative expenses. To align with PhenomeX accounting policies, these costs were reclassified to costs of goods sold or research and development. However, since this is a reclassification between expense line items on the condensed statement of operations, the adjustment does not have an impact on revenue or net loss for purposes of the pro forma financial information disclosed above.

For the three and six months ended June 30, 2023, IsoPlexis contributed total revenues of $1.9 million and $2.9 million, respectively, and operating losses (excluding goodwill impairment charges) of $13.0 million and $14.1 million, respectively, that were included in the Company’s condensed consolidated statements of operations. In addition, the Company signed an agreement to license, on an exclusive and perpetual basis, certain intellectual property acquired in the IsoPlexis Merger for $7.3 million (see Note 6 for additional information).

16

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(6)Revenue From Contracts With Customers

The Company’s revenue consists of both product revenue and service and other revenue, which is primarily generated through the following revenue streams: (i) platform, (ii) recurring and (iii) partnership, license and other.

In the first quarter of 2023, the Company entered into a license arrangement whereby certain patents were licensed to a third party and for which the customer agreed to pay a non-refundable fee. For licenses of intellectual property, the Company recognizes revenue from non-refundable fees when the license is transferred to the customer and the customer is able to use and benefit from the license.

The following tables provide an overview of the Company’s revenue streams and how the Company reports revenue in its consolidated statements of operations:

Income Statement Classification	Product or Service sold	Revenue Stream
Product revenue	Sale of advanced automation systems (Beacon and Lightning systems, Culture Station)	Platform
	Software and workflow licenses	Platform
	Fixed term sales-type lease arrangements with qualified customers	Platform
	Quarterly workflow subscriptions, annual or multi-year subscriptions arrangements (e.g., TechAccess)	Recurring
	Consumables and reagent kits (e.g., OptoSelect chips)	Recurring
Service and other revenue	Strategic partnerships, joint development and collaboration agreements where we provide services for development of new workflows, cells or organism types	Partnership, License and Other
	Application support, installation and training	Platform
	Fixed fee extended warranty and service programs	Recurring
	IP license revenue	Partnership, License and Other (1)

(1) License revenue relates to certain intellectual property acquired in the IsoPlexis Merger and subsequently licensed to a third party. License revenue related to the Company’s platforms (e.g., workflow licenses) is reported as Platform product revenue.

17

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following tables provide information by revenue stream for the periods presented:

	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
(in thousands)	Product		Service and other		Total		Product		Service and Other		Total
Platform	$	5,988	$	482	$	6,470	$	11,761	$	812	$	12,573
Recurring	4,316		2,952		7,268		6,921		5,510		12,431
Partnership, License and Other (1)	—		324		324		—		7,574		7,574
Total revenue	$	10,304	$	3,758	$	14,062	$	18,682	$	13,896	$	32,578

(1) During the six months ended June 30, 2023, the Company signed an agreement to license, on an exclusive and perpetual basis, certain intellectual property acquired in the IsoPlexis Merger for $7.3 million (“License Agreement”). As the $7.3 million represented a non-refundable fee and the license was transferred to the customer during the quarter, the $7.3 million was recognized as revenue during the first quarter of 2023.

	Three Months Ended June 30, 2022						Six Months Ended June 30, 2022
(in thousands)	Product		Service and other		Total		Product		Service and Other		Total
Platform	$	6,226	$	200	$	6,426	$	12,973	$	857	$	13,830
Recurring	3,242		2,687		5,929		6,269		5,103		11,372
Partnership, License and Other	—		6,795		6,795		—		14,154		14,154
Total revenue	$	9,468	$	9,682	$	19,150	$	19,242	$	20,114	$	39,356

Revenues by geographical markets are presented in Note 19.

Performance Obligations

A significant number of the Company’s product and service sales, as well as its feasibility study arrangements, are short-term in nature with a contract term of one year or less. For those contracts, the Company has utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

As of June 30, 2023, the aggregate amount of remaining performance obligations that are unsatisfied or partially unsatisfied related to customer contracts in excess of one year was $10.4 million, which, to the extent invoiced, is included in deferred revenue on the condensed consolidated balance sheets, of which approximately 50% is expected to be recognized as revenue in the next 12 months, with the remainder recognized afterwards.

Contract Balances

The following table provides information about receivables, contract assets and deferred revenue from contracts with customers (in thousands):

18

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	June 30, 2023		December 31, 2022
Trade accounts receivable, net	$	14,375	$	18,534
Contract assets, which are included in “Prepaid expenses and other current assets”	$	480	$	1,283
Contract assets, long-term, which are included in “Other assets”	$	442	$	549
Deferred revenue (current)	$	9,648	$	9,092
Deferred revenue (non-current)	$	876	$	963

The contract liabilities of $10.5 million and $10.1 million as of June 30, 2023 and December 31, 2022, respectively, consisted of deferred revenue related to extended warranty service agreements, strategic partnerships and services agreements and advanced automation systems arrangements. Revenue recorded during the three and six months ended June 30, 2023 included $2.1 million and $4.9 million, respectively, of previously deferred revenue that was included in contract liabilities as of December 31, 2022.

Sales-type Lease Arrangements

The Company also enters into sales-type lease arrangements with certain qualified customers. Revenue related to lease elements from sales-type leases is presented as product revenue and was none for the three and six months ended June 30, 2023 and 2022.

The following table presents the future maturity of the Company’s fixed-term customer leases and reconciles the undiscounted cash flows from the amounts due from customers under such arrangements as of June 30, 2023 (in thousands):

Year ending December 31,	Sales-Type Leases
Remainder of 2023 (1)	$	223
2024	445
2025	408
2026	—
Total undiscounted cash flows	1,076
Less: unearned income	(143)
Total amounts due from customers (2)	$	933

(1) During the six months ended June 30, 2023, the Company impaired the net investment of a sales-type lease with a customer. The write down of the respective contract asset of $0.8 million, net of the return of the underlying asset, was recorded as an impairment charge of $0.6 million within selling, general and administrative expense in the Company’s condensed consolidated statement of operations and the resulting return of the underlying asset was recorded as an addition to fixed assets in the Company’s condensed consolidated balance sheet.

(2) Of the $0.9 million, $0.1 million is recorded in trade accounts receivable, with the remaining balance recorded in contract assets.

19

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(7)Balance Sheet Accounts

Trade accounts receivable, net consists of the following (in thousands):

	June 30, 2023		December 31, 2022
Trade accounts receivable	$	14,583	$	18,534
Allowance for doubtful accounts	(208)		—
Total	$	14,375	$	18,534

Changes in the allowance for doubtful accounts were as follows (in thousands):

	Six months ended June 30, 2023
Allowance for doubtful accounts, beginning of year	$	—
Write-offs of uncollectible accounts	58
Provision for doubtful accounts	(266)
Allowance for doubtful accounts, end of period	$	(208)

Inventory

The following table shows the components of inventory (in thousands):

	June 30, 2023		December 31, 2022
Raw materials	$	30,143	$	11,946
Work in progress	425		—
Finished goods	10,887		6,915
Total	$	41,455	$	18,861

Prepaid expenses and other current assets

The following table shows the components of prepaid expenses and other current assets (in thousands):

	June 30, 2023		December 31, 2022
Contract asset	$	480	$	1,283
Vendor deposits	728		126
Deferred costs	365		472
Prepaid insurance	2,583		2,025
Other (1)	3,836		2,877
Total	$	7,992	$	6,783

(1) Other includes primarily prepaid rent expenses, software licenses and prepaid VAT.

20

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Accrued expenses and other current liabilities

The following table shows the components of accrued expenses and other current liabilities (in thousands):

	June 30, 2023		December 31, 2022
Accrued payroll and employee related expenses	$	6,116	$	7,410
Lease liability – short-term	5,018		3,291
Accrued product warranty	654		749
Accrued legal expenses	518		8,271
Other (1)	1,640		1,619
Total	$	13,946	$	21,340

(1) Other includes accrued income taxes, sales taxes, accrued royalties and other miscellaneous accruals.

(8)Goodwill and Other Intangible Assets

Goodwill

On March 21, 2023, the Company completed the IsoPlexis Merger. Under the purchase method of accounting, the Company preliminarily recorded as goodwill, the $16.6 million excess of the Acquisition Date fair value of the consideration transferred over the estimated fair value of net tangible and identifiable intangible assets that it acquired.

The Company tests goodwill for impairment at the reporting unit level annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists. During the three and six months ended June 30, 2023, the Company experienced a decline in its market capitalization as a result of a sustained decrease in the Company’s stock price. The Company considered such sustained decrease to represent a triggering event requiring management to perform a quantitative goodwill impairment test as of June 30, 2023.

The Company utilized a combination of an income and market approach to assess the fair value of the reporting unit as of June 30, 2023. The income approach considers the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate and projected future economic and market conditions while the guideline public company market approach considers marketplace earnings multiples from within a peer public company group.

Based on the results of the quantitative goodwill impairment test, it was concluded that the estimated fair value of the Company’s single reporting unit was lower than its carrying value, as such, the Company recorded a goodwill impairment charge of $16.6 million during the three months ended June 30, 2023, which is included in the condensed consolidated statement of operations under the caption “Loss on impairment of goodwill”. As of June 30, 2023, cumulative goodwill impairment charges of $16.6 million were incurred.

The following table presents changes in the Company’s goodwill (in thousands):

Beginning balance, January 1, 2023	$	—
Preliminary goodwill recognized in connection with the IsoPlexis Merger	12,246
Ending balance, March 31, 2023	12,246
Measurement period adjustments (1)	4,311
Impairment charge	(16,557)
Ending balance, June 30, 2023	$	—

(1) Includes a $2.2 million correction of the opening balance sheet to reduce the fair value of acquired inventory.

21

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Acquired Intangible Assets

In connection with the IsoPlexis Merger, the Company identified certain intangible assets summarized in the table below (see Note 5 for further information). In addition, on February 15, 2023, the Company acquired certain tangible and intangible assets from Evorion Biotechnologies for a total purchase price of $0.3 million, of which $0.2 million related to intangible assets attributable to patents and technology. These intangible assets are also included in the table below.

	June 30, 2023
(in thousands):	Remaining Useful Life (Years)	Gross		Accumulated Amortization		Net
Customer relationships	8	$	7,700	$	(280)	$	7,420
Trade names	10	3,500		(97)		3,403
Patented technology	14	11,915		(239)		11,676
Total intangible assets		$	23,115	$	(616)	$	22,499

Amortization expense was $577,000 and $616,000 for the three and six months ended June 30, 2023.

As discussed above, during the six months ended June 30, 2023, the Company experienced a decline in market capitalization resulting from a sustained decrease in stock price and recorded a $16.6 million loss on impairment of goodwill. Management considered these events to be triggering events and reviewed its single long-lived asset group (including its intangible assets) for impairment. Because the sum of future undiscounted cash flows for the asset group exceeded the carrying value of the asset group, management concluded the assets were recoverable and no impairment charge was recorded.

The estimated aggregate future amortization expense for intangible assets subject to amortization expense are summarized below (in thousands). Actual amortization expense to be reported in future periods could differ from these estimates as a result of the finalization of the preliminary purchase price allocation of the IsoPlexis Merger, divestitures and other factors.

	Estimated Future Amortization
Year Ending December 31:
Remainder of 2023	$	1,091
2024	$	2,164
2025	$	2,164
2026	$	2,164
2027	$	2,164

(9)Fair Value of Financial Instruments

The following is a description of the valuation techniques the Company uses to measure the fair value of assets and reports fair value on a recurring basis:

•Cash equivalents: As of June 30, 2023, the Company’s cash equivalents consisted of money market funds. Money market funds are highly liquid investments and are actively traded and pricing information is readily available. Accordingly, the Company classifies these securities as Level 1 of the fair value hierarchy.

•Short Term Marketable Securities: As of June 30, 2023, the Company did not hold any short-term marketable securities. Generally, the Company values short-term marketable securities using quoted

22

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

prices in active markets for similar instruments. Accordingly, the Company classifies marketable securities as Level 2 of the fair value hierarchy.

The carrying amounts of the Company’s cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses and other current liabilities as of June 30, 2023 and December 31, 2022 approximate fair value due to their relatively short maturities.

As of June 30, 2023 and December 31, 2022, the fair value measurements of the Company’s assets measured on a recurring basis were as follows (in thousands):

	June 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	2,904	$	2,904	$	—	$	—
Total assets measured at fair value	$	2,904	$	2,904	$	—	$	—

	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	2,354	$	2,354	$	—	$	—
Commercial paper	16,602		—		16,602		—
U.S. agency securities	3,970		—		3,970		—
Total cash equivalents	22,926		2,354		20,572		—
Debt securities, available for sale:
Commercial paper	22,148		—		22,148		—
U.S. agency securities	4,942		—		4,942		—
U.S. government securities	19,162		—		19,162		—
Total debt securities, available for sale	46,252		—		46,252		—
Total assets measured at fair value	$	69,178	$	2,354	$	66,824	$	—

As of June 30, 2023 and December 31, 2022, the carrying values and fair values of the Company’s financial instruments not measured at fair value were as follows (in thousands):

	June 30, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt, including current maturities (1)	$	—	$	—	$	19,826	$	17,443

(1) The Company repaid in full all outstanding indebtedness on June 30,2023.

23

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The Company estimated the fair value of its long-term debt using a market-based approach that considers an average cost of debt. The Company has incorporated its own credit risk for all liability fair value measurements. Such fair value measurements are considered Level 2 under the fair value hierarchy.

The Company did not have any transfers of financial assets measured at fair value on a recurring basis between the levels of the fair value measurement hierarchy during the periods presented.

(10)Property and Equipment, net

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

	June 30, 2023		December 31, 2022
Equipment, tooling and molds	$	44,814	$	36,152
Computer software and equipment	4,427		2,667
Furniture, fixtures and other	2,401		2,007
Leasehold improvements	11,978		10,836
Construction in process	1,304		1,409
Total property and equipment	64,924		53,071
Less: Accumulated depreciation	(32,214)		(29,224)
Property and equipment, net (1)	$	32,710	$	23,847

(1) As of December 31, 2022, Property and equipment, net included $0.1 million of assets held for sale.

Depreciation expense for the three and six months ended June 30, 2023 was $2.5 million and $4.6 million, respectively. Depreciation expense for the three and six months ended June 30, 2022 was $2.5 million and $4.4 million, respectively.

During the three and six months ended June 30, 2023 and 2022, losses on the impairment and disposal of property and equipment were not material.

(11)Leases

The Company leases office, manufacturing, distribution and laboratory facilities in various locations in the United States, primarily in Emeryville, California and Branford, Connecticut. The Company also leases facilities in Shanghai, China for office and laboratory facilities. On December 28, 2022, the Company entered into a sub-lease arrangement for its facility in Lexington, Massachusetts. Sub-lease income for the three and six months ended June 30, 2023 was $0.2 million and $0.3 million, respectively and was recorded as an offset to rent expense. There was no sub-lease income during the three and six months ended June 30, 2022.

Future payments associated with the Company’s operating lease liabilities as of June 30, 2023 are as follows (in thousands):

24

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	Operating leases
Undiscounted lease payments for the year ending December 31,
Remainder of 2023	$	3,121
2024	6,297
2025	5,952
2026	5,398
2027	4,759
Thereafter	7,464
Total undiscounted lease payments	32,991
Less: implied interest	(3,958)
Less: tenant improvement allowances receivable	(65)
Present value of operating lease payments	28,968
Less: current portion (1)	(5,018)
Total long-term operating lease liabilities	$	23,950

(1) Included in the balance sheet caption “Accrued expenses and other current liabilities.”

Rent expense, net for the three and six months ended June 30, 2023 was $1.6 million and $2.5 million, respectively. Rent expense, net for the three and six months ended June 30, 2022 was $1.4 million and $2.5 million, respectively. Under the terms of the lease agreements, the Company is also responsible for certain variable lease payments that are not included in the measurement of the lease liability. Variable lease payments for operating leases were $0.8 million and $1.6 million for the three and six months ended June 30, 2023, respectively, including non-lease components such as common area maintenance fees. Variable lease payments for operating leases were $1.0 million and $1.8 million for the three and six months ended June 30, 2022, respectively, including non-lease components such as common area maintenance fees.

The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands):

	Six months ended June 30, 2023		Six months ended June 30, 2022
Right-of-use assets obtained for new operating lease liabilities	$	—	$	—
Right-of-use lease assets assumed in IsoPlexis Merger	$	4,975	$	—
Cash paid for amounts included in the measurement of lease liabilities	$	3,123	$	1,070

The following summarizes additional information related to operating leases:

	June 30, 2023		December 31, 2022
Weighted-average remaining lease term (years)	5.50		6.48
Weighted-average discount rate	4.72	%	4.66	%

The Company also enters into leasing transactions in which the Company is the lessor, which to date have been classified as sales-type leases. See Note 6 for the related sales-type lease disclosures.

25

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(12)Long-term Debt

On May 23, 2018, the Company entered into a Loan and Security Agreement (“Loan Agreement”) with EWB to provide a $20.0 million term loan facility (“Term Loan”). The loan facility was fully drawn as of May 23, 2018.

On June 30, 2021, the Company entered into an Amended and Restated Loan and Security Agreement (“Amended Loan Agreement”) with EWB. Pursuant to the Amended Loan Agreement, EWB provided a $20.0 million term loan (“Amended Term Loan”) which was used to refinance the Term Loan outstanding under the Loan Agreement dated May 23, 2018. The Amended Term Loan had a maturity of 48 months and a fixed interest rate of 4.17%. In addition, the Amended Term Loan had an initial interest-only period of 24 months, which could have been extended to up to 36 months based on the achievement of certain liquidity measures, and could have been pre-paid without penalty at any time.

On March 21, 2023, the Company entered into the Second Amended Loan Agreement with EWB. Pursuant to the Second Amended Loan Agreement, EWB increased the existing Amended Term Loan amount of $20.0 million by $50.0 million to an aggregate outstanding principal of $70.0 million (“Second Amended Term Loan”). The Second Amended Loan Agreement had a maturity of 60 months and a variable interest rate per annum equal to (i) the greater of 6.25% or the variable rate of interest, per annum most recently announced by EWB as its prime rate, plus (ii) one-half of one percent (0.5%). The Company used the proceeds from the Second Amended Term Loan to repay $52.5 million of indebtedness (including prepayment premium and interest) with Perceptive held by IsoPlexis (“Perceptive Credit Agreement”). Associated with these transactions, a $0.2 million loss on extinguishment of debt and a $0.7 million commitment fee associated with the Loan Agreement, was recorded in “Other expense, net” on the Company’s condensed consolidated statement of operations during the three months ended March 31, 2023.

On June 30, 2023, the Company repaid in full all outstanding indebtedness under the Second Amended Loan Agreement, and upon such repayment, the Second Amended Loan Agreement and all related guarantees and loan documents were terminated and have no further force and effect. The Second Amended Loan Agreement payoff of $71.2 million included the principal amount of $70.0 million, accrued interest of $0.5 million, an early termination fee of $0.7 million plus other related fees and expenses, which satisfied all of the Company’s indebtedness obligations thereunder. Associated with this repayment, a $1.8 million loss on extinguishment of debt (including the write off of deferred issuance costs amounting to $1.1 million at the payoff date), was recorded in “Other income (expense), net” on the Company’s condensed consolidated statement of operations during the three months ended June 30, 2023.

In connection with the repayment of such outstanding indebtedness obligations by the Company, all security interests, liens, pledges, financing statements, mortgages and other charges of whatever nature against the collateral and other encumbrances held by EWB securing the obligations of any loan party under the Second Amended Loan Agreement were automatically and irrevocably terminated and released.

Total interest cost incurred for the three and six months ended June 30, 2023 was $1.6 million and $2.0 million, respectively. Total interest cost incurred for the three and six months ended June 30, 2022 was $0.2 million and $0.5 million, respectively.

26

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(13)Equity and Stock Compensation Plans

IsoPlexis Merger

On March 21, 2023, in connection with the completion of the IsoPlexis Merger:

•All outstanding IsoPlexis RSAs were assumed by PhenomeX and converted into PhenomeX RSAs based on the 0.612 conversion ratio (see Note 5) and on the same terms and conditions (including with respect to vesting schedules and restrictions) as applied to IsoPlexis RSAs immediately prior to the closing of the IsoPlexis Merger.

•All outstanding IsoPlexis stock options (whether vested or unvested) that had a per share exercise price of less than $1.28 and were held by continuing employees were assumed by PhenomeX and converted into PhenomeX stock options based on the 0.612 conversion ratio (and rounded down) and on the same terms and conditions (including with respect to time-based vesting) as applied to IsoPlexis stock options immediately prior to the closing of the IsoPlexis Merger, with the exercise price per share of the assumed stock options determined by dividing the per share exercise price of the IsoPlexis options by the 0.612 conversion ratio (and rounded up to the nearest whole cent). The assumed stock options expire 10 years from their original date of grant. The assumed stock options and RSAs generally vest 25% upon the one-year anniversary of the service inception date and then ratably each month over the remaining 36 months.

On March 21, 2023, PhenomeX assumed 304,619 IsoPlexis RSAs and 378,767 IsoPlexis stock options after applying the 0.612 conversion ratio. The Company accounted for the assumed equity awards as a modification under ASC 718 and recorded stock compensation expense of $0.1 million during the six months ended June 30, 2023 associated with the modification.

Future grants of equity awards will be issued under the Company’s 2020 Plan.

Warrant Certificate

On March 21, 2023, and in connection with the closing of the IsoPlexis Merger, PhenomeX, IsoPlexis and Perceptive executed the Warrant Certificate. Under the Warrant Certificate, the outstanding warrant (“IsoPlexis Warrant”) to purchase shares of common stock, par value $0.001, of IsoPlexis (“IsoPlexis Common Stock”), issued by IsoPlexis to Perceptive was assumed by PhenomeX and converted into a warrant (“PhenomeX Warrant”) to purchase shares of common stock, par value $0.00005, of PhenomeX (“PhenomeX Common Stock”), on the same terms and subject to the same conditions as were applicable to the IsoPlexis Warrant as of immediately prior to the Acquisition Date; provided, that the PhenomeX Warrant is exercisable for 496,560 shares of PhenomeX Common Stock (i.e., a number of shares of PhenomeX Common Stock equal to the number of shares of IsoPlexis Common Stock that were subject to the IsoPlexis Warrant multiplied by the 0.612 exchange ratio) and has an exercise price of $9.80 per share of PhenomeX Common Stock (i.e., the exercise price per share of IsoPlexis Common Stock that was applicable to the IsoPlexis Warrant divided by 0.612).

Restricted stock awards

As a result of the IsoPlexis Merger and as discussed above, the Company now has RSAs outstanding. RSAs are rights to receive shares of the Company’s Common Stock upon meeting specified vesting requirements. The fair value of a RSA is the market value as determined by the closing price of the Company’s stock on the original grant date.

27

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Stock-based compensation

Stock-based compensation related to the Company’s stock-based awards was recorded as an expense and allocated as follows (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Cost of sales	$	46	$	68	$	62	$	119
Research and development	463		2,292		1,011		3,873
Selling, general and administrative	3,222		4,205		7,046		7,966
Total stock-based compensation	$	3,731	$	6,565	$	8,119	$	11,958

Stock-based compensation capitalized in inventory was not material as of June 30, 2023 and December 31, 2022.

(14)Restructuring

During 2022, the Company adopted a new strategic plan with the intention of reducing costs and better aligning the organization with the Company’s long-term goals. As a result, the Company approved a set of restructuring initiatives in 2022 and continued with similar initiatives in the first quarter and second quarter of 2023. During the three and six months ended June 30, 2023, the Company incurred restructuring charges of $1.1 million and $2.4 million, respectively, related to severance and other employee-related restructuring costs associated with the termination of approximately 15% of total full-time employees. As of June 30, 2023, the Company has substantially completed its restructuring efforts. It is unable to currently estimate future restructuring charges but will record any additional restructuring-related expenses as they are incurred.

Changes in the Company’s restructuring liability are set forth in the table below (in thousands):

	Employee severance and termination benefits		Non labor restructuring		Total
Accrual on January 1, 2023	$	130	$	107	$	237
Restructuring liability assumed in IsoPlexis Merger	834		—		834
Restructuring charges	2,383		—		2,383
Cash payments	(2,832)		(107)		(2,939)
Non-cash settlements	—		—		—
Accrual on June 30, 2023	$	515	$	—	$	515

Restructuring liabilities are included in accrued expenses and other current liabilities in the condensed consolidated balance sheet.

(15)Income Taxes

The Company’s provision for income taxes was $51,000 and $71,000, respectively, for the three and six months ended June 30, 2023, and $4,000 and $24,000, respectively, for the three and six months ended June 30, 2022. For the three and six months ended June 30, 2023 and 2022, loss from operations before taxes consisted of amounts related to U.S. operations and the Company’s foreign operations. The Company maintains a full valuation allowance on its deferred tax assets and intends to do so until there is sufficient evidence to support the reversal of all or some portion of this allowance.

28

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(16)Statements of Cash Flows

The supplemental cash flow information consists of the following (in thousands):

	Six months ended June 30,
	2023		2022
Cash paid for interest	$	1,954	$	278
Cash paid for income taxes	$	317	$	—
Non-cash investing and financing activities
Non-cash consideration for the acquisition of IsoPlexis	$	32,406	$	—
Property and equipment transferred to inventory	$	104	$	—
Inventory transferred to property and equipment (1)	$	1,912	$	—
Customer return of Beacon transferred to property and equipment (2)	$	201	$	—
Change in accounts payable and accrued liabilities related to purchases of property and equipment	$	(68)	$	(699)

(1) The non-cash transfer of inventory to property and equipment principally relates to Beacons that were transferred to the Company’s BioFoundry operations in the first half of 2023. Beacons that at inception are planned to be used in the Company’s BioFoundry operations will be categorized as “Purchase of property and equipment.”

(2) Refer to Note 6 under “Sales-type Lease Arrangements” for further information.

(17)Commitments and Contingencies

Legal Proceedings

From time to time, the Company may be involved in legal and administrative proceedings and claims of various types. The Company records a liability in its financial statements for these matters when a loss is known and considered probable and the amount can be reasonably estimated. The Company does not recognize gain contingencies until they are realized. Legal costs incurred relating to loss contingencies are expensed as incurred.

AbCellera Biologics Litigation

In July through September 2020, AbCellera Biologics Inc. (“AbCellera”) filed a series of complaints in the United States District Court for the District of Delaware, alleging that the Company infringed and continues to infringe, directly and indirectly, the following patents exclusively licensed by AbCellera by making, using, offering for sale, selling and/or importing the Company’s Beacon and Culture Station instruments and the OptoSelect chips, and sale of the Opto Plasma B Discovery Workflow: U.S. Patent Nos. 10,107,812, 10,274,494, 10,466,241, 10,578,618, 10,697,962, 10,087,408, 10,421,936, 10,704,018, 10,718,768, 10,738,270, 10,746,737, 10,753,933, 10,775,376, 10,775,377, and 10,775,378. The University of British Columbia (“UBC”), the owner of the patents, joined AbCellera as a named plaintiff in the lawsuits. AbCellera and UBC are seeking, among other things, judgment of infringement, a permanent injunction and damages (including lost profits, a reasonable royalty, reasonable costs and attorney’s fees, and treble damages for willful infringement). In addition to procedural motions, the Company has filed an answer and counterclaims in response to each of the lawsuits. The Company’s counterclaims in each lawsuit include counts for declaratory judgment of non-infringement of the asserted patents, for declaratory judgment of invalidity of the asserted patents, for declaratory judgment of unenforceability of the asserted patents due to inequitable conduct, and unfair competition under state and federal law.

The Company filed a motion to transfer the lawsuits to the United States District Court for the Northern District of California, which was granted and where the lawsuits have been consolidated and are now pending (“Consolidated Lawsuit”). On May 6, 2021, and pursuant to Court Order, AbCellera and UBC reduced, without prejudice, the asserted patents in the consolidated lawsuit to the following: US Patent Nos. 10,087,408, 10,421,936, 10,738,270, 10,697,962, 10,753,933, 10,775,376 and 10,775,378. On July 1, 2021, the court issued a

29

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Case Management Order that, among other things, requires AbCellera and UBC to further reduce the number of asserted patents to no more than two, and the total asserted patent claims to no more than four per patent prior to the trial.

In July 2021 and August 2021, the Company filed petitions for Inter Partes Review (“IPR”) with the Patent Trial and Appeal Board (“PTAB”) of the United States Patent & Trademark Office (“USPTO”), challenging the validity of various asserted claims of U.S. Patent No. 10,087,408 and all asserted claims of U.S. Patent Nos. 10,421,936 and 10,739,270. In August 2021, in response to a Motion to Stay filed by the Company, the court stayed the Consolidated Lawsuit pending the outcome of the IPR proceedings.

In January 2022, the PTAB of the USPTO issued a decision instituting IPR on U.S. Patent No. 10,087,408 (“408 Patent”) and a decision denying IPR on U.S. Patent No. 10,421,936. In February 2022, the PTAB issued a decision denying IPR on U.S. Patent No. 10,739,270. And in January 2023, the PTAB issued a final written decision declining to invalidate any challenged claim of the 408 Patent based on the grounds presented in the IPR. Subsequent to that decision, the Company filed a request for a rehearing of the 408 Patent IPR with the PTAB. In July 2023, following denial of the Company’s request for a rehearing, the Company appealed the PTAB’s final written decision on 408 Patent IPR to the U.S. Court of Appeals for the Federal Circuit. On August 4, 2023, the United States District Court for the Northern District of California issued an order lifting the stay in the litigation. The parties were directed to file a joint case management statement on August 22, 2023 and appear for a case management conference on August 29, 2023.

The Company believes that the patent assertions by AbCellera and UBC are without merit and it intends to defend itself vigorously. The Company also intends to proceed with its claims and counterclaims against AbCellera and UBC. Outcomes in litigation can be uncertain and it is possible a court may disagree with the Company’s position. An adverse determination in these lawsuits could subject the Company to significant liabilities, require it to seek licenses from or pay royalties to AbCellera and/or UBC, or prevent it from manufacturing, selling or using certain of the Company’s products, any of which could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

Securities Class Action

In December 2021, Victor J. Ng filed a securities class action complaint in the Northern District of California (“Securities Class Action”), which was amended on July 25, 2022. The Securities Class Action is on behalf of all persons who purchased or otherwise acquired: (a) Berkeley Lights common stock pursuant and/or traceable to certain July 2020 Initial Public Offering (“IPO”) offering documents and/or (b) securities of Berkeley Lights between July 17, 2020 and January 5, 2022, inclusive. The complaint alleges claims under §§10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and Rule 10b-5 promulgated thereunder as well as §§11, 12(a)(2) and 15 of the Securities Act of 1933. It names as defendants the Company, certain of the Company’s current and former senior executives and directors, the underwriter firms that sponsored the Company’s July 2020 IPO, and three firms that invested in the Company. The Company believes that the assertions in the Securities Class Action are without merit and intends to defend itself vigorously. The Company’s Motion to Dismiss is pending a decision from the court. Outcomes in litigation can be uncertain and it is possible a court may disagree with the Company’s positions. An adverse determination in the Securities Class Action could subject the Company to significant liabilities, which could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

30

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Derivative Action

In March 2022, Trung Nguyen filed a shareholder derivative complaint on behalf of nominal defendant Berkeley Lights, Inc., alleging that certain of the Company’s current and former directors and certain of the Company’s current and former senior executives breached their fiduciary duties to the Company. The complaint also alleged that certain of the Company’s current and former directors and former senior executives used material, non-public information to improperly profit from the sale of Company stock, and that certain of the Company’s current and former senior executives owe the Company contribution for violations of Sections 10(b) and 21D of the Exchange Act.

Trademark Infringement

The Company entered into a non-financial settlement agreement which resolves a previously disclosed dispute filed by Phenomenex alleging trademark infringement.

The Company is not currently involved in any other claims or legal actions, nor is management aware of any potential claims or legal actions, for which the ultimate disposition could have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

No provision has been made for litigation because the Company believes that it is not probable that a liability has been incurred as of June 30, 2023.

Purchase commitments

The Company has entered into various purchase agreements, including inventory-related agreements with its contract manufacturers. Once these orders are placed, they are generally cancelable by providing notice prior to the expected ship date, however such cancellations could result in the Company incurring certain charges depending on the timing. The Company had non-cancellable purchase obligations to contract manufacturers and other suppliers of $21.2 million on June 30, 2023.

Product Warranty

The Company generally provides a one year assurance-type warranty on its platforms and chip consumables. The table below represents the activity in the product warranty accrual included in “Accrued expenses and other current liabilities” on the condensed consolidated balance sheets (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Balance, beginning of period	$	788	$	914	$	749	$	1,085
Warranty accrual assumed in IsoPlexis Merger	—		—		128		—
Adjustments to existing warranties	(236)		(185)		(349)		(430)
Provision for new warranties	161		179		294		342
Settlement of pre-existing warranties	(59)		(156)		(168)		(245)
Balance, end of period	$	654	$	752	$	654	$	752

(18)Net Loss Attributable to Common Stockholders Per Share

Potentially issuable shares of common stock include shares issuable upon the exercise of outstanding employee stock option awards and unvested RSUs.

31

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except share and per share data):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Numerator
Net loss attributable to common stockholders, basic and diluted	$	(50,245)	$	(25,747)	$	(73,664)	$	(47,173)
Denominator
Weighted-average shares used to compute net income per share, basic and diluted	98,900,780		67,985,664		87,394,201		67,842,372
Net loss per share
Net loss per share attributable to common stockholders, basic and diluted	$	(0.51)	$	(0.38)	$	(0.84)	$	(0.70)

Since the Company was in a loss position for all periods presented, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. The following shares of common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods presented as they had an anti-dilutive effect:

	June 30,
	2023	2022
Warrants to purchase common stock	496,560	—
Options to purchase common stock	6,606,909	7,750,612
Restricted stock awards	290,774	—
Restricted stock units	8,636,618	4,241,025
Total	16,030,861	11,991,637

(19)Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company has one business activity and there are no segment managers who are held accountable for operations. Accordingly, the Company has one operating segment. The IsoPlexis Merger on March 21, 2023 did not change the Company’s assessment about operating segments. The Company’s principal operations and decision-making functions are located in the United States.

The following table provides the Company’s revenues by geographical market based on the location where the services were provided or to which product was shipped (in thousands):

32

PhenomeX Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
North America	$	7,568	$	9,891	$	21,623	$	23,585
Asia Pacific (1)	1,584		7,201		4,731		12,236
Europe	4,910		2,058		6,224		3,535
	$	14,062	$	19,150	$	32,578	$	39,356

(1) Asia Pacific includes Australia.

As of June 30, 2023 and December 31, 2022, substantially all of the Company’s long-lived assets were located in the United States.

33

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

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business, operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “seek,” “should,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Examples of forward-looking statements include, among others: our ability to continue as a going concern; maintaining the listing of our common stock on Nasdaq; the exploration, review and evaluation of a range of potential strategic alternatives focused on addressing capital requirements and maximizing stockholder value; our intention to improve operating cash flow by increasing our revenue and lowering our operational costs; our expectations regarding the drivers of expected revenue growth, including new commercial leadership, geographic expansion, and a refined product roadmap; our expectations regarding the timing to achieve our goal of generating positive operating cash flow in the fourth quarter of 2024; our expectations regarding anticipated returns on investment through increased focus and rigor on development initiatives; our strategy, plans and timing for acquisitions, growth, product development and expansion, the expected benefits of the IsoPlexis Merger, including the estimated cost synergies of the combined company in order to pursue profitability, lower operating expenses and advance the path to cash flow breakeven; our expectations regarding the drivers of our expected cost synergies, including eliminating duplicative costs associated with maintaining the infrastructure needed by public companies, complementary R&D capabilities, marketing resources and sales operations, and manufacturing, supply chain, logistics and operations synergies; and other expectations, outlooks and forecasts on our future business, operational and financial performance.

Forward-looking statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management’s beliefs and assumptions are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be inaccurate. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended December 31, 2022 included in the Annual Report on Form 10-K and filed with the Securities

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and Exchange Commission (“SEC”) on February 23, 2023 (“Annual Report”). Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in Item 1A. “Risk Factors” of our Annual Report, Part II, Item 1A and elsewhere in this Quarterly Report on Form 10-Q, and our other reports filed with the SEC.

Overview

PhenomeX is the combination of two companies, Berkeley Lights and IsoPlexis. Berkeley Lights acquired IsoPlexis on March 21, 2023 (“IsoPlexis Merger”) and the newly combined company was rebranded as PhenomeX.

PhenomeX is a life sciences tools company with a focus on functional cell biology. Our products and services provide customers with, among other offerings, Optofluidic platforms such as the Beacon, Beacon Select and Beacon Quest (developed by Berkeley Lights) as well as Proteomic Barcoding platforms, such as the IsoLight System and the IsoSpark System (developed by IsoPlexis). These platforms provide scientists with opportunities to perform cell biology research through experiments using our proprietary consumables.

The mission of PhenomeX is to empower scientists to leverage the full potential of each cell and drive the next era of functional cell biology that will advance human health.

PhenomeX’s strategy is organized around the following five key pillars:

1.    Generate positive operating cash flow in the fourth quarter of 2024.

2.    Prioritize research and development’s return on investment through increased focus and rigor on development initiatives.

3.    Deliver consistent commercial execution through a new sales structure and enhanced product portfolio and pricing strategy.

4.    Build a world-class life sciences leadership team with a proven track record in profitably scaling life sciences tools companies.

5.    Evaluate merger and acquisition opportunities that will help us accelerate profitable growth and leverage our current cost structure.

Recent Developments

On July 7, 2023, we announced that we have launched a process to explore, review and evaluate a range of potential strategic alternatives focused on addressing capital requirements and maximizing stockholder value. There can be no assurance that any offers will be made or accepted, that any agreement will be executed, or that any transaction will be consummated, in connection with the strategic alternatives or capital raising processes.

On June 21, 2023, we received a notice (“Notice”) from The Nasdaq Stock Market (“Nasdaq”) that we are not in compliance with Nasdaq’s Listing Rule 5450(a)(1) (the “Minimum Bid Price Rule”), because the minimum bid price of our common stock had been below $1.00 per share for 30 consecutive business days. We have 180 calendar days following receipt of the Notice, or until December 12, 2023, to regain compliance with the Minimum Bid Price Rule. To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days during this 180 calendar day grace period. The Notice

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has no immediate effect on the listing or trading of our common stock on The Nasdaq Global Select Market, subject to our compliance with other Nasdaq continued listing standards. We intend to monitor the closing bid price of our common stock and may, if appropriate, consider available options, including a reverse stock split, to regain compliance with the Minimum Bid Price Rule. For additional information, see “Risk Factors – An active, liquid trading market for our securities may not be sustained.”

Recent Trends

There are multiple broad based factors impacting our business:

1.Macroeconomic factors have resulted in unfavorable global economic conditions, including increased inflation and interest rates, and may lead to a recession.

2.Global and domestic supply chains and the timely availability of raw materials and product as a result of the COVID-19 pandemic factory slowdowns or shutdowns, border closing and other measures have previously impacted our operational and financial performance and its impact in future periods remains uncertain.

3.Adverse developments affecting financial institutions and the financial services industry, including the government closure of Silicon Valley Bank, have affected certain of our vendors, suppliers, investors and customers and may lead to market-wide liquidity problems.

Our business has been impacted and will continue to be impacted by the above factors. To date, our production, shipping and customer service functions have remained operational to maintain a continuous supply of products both to our customers and for our internal research and development activities. Any manufacturing supply interruption of materials could adversely affect our ability to conduct ongoing and future activities. We continue to closely monitor global supply issues around materials, parts and components, including plastics and integrated circuit chips, and we have not experienced any material supply issue to date.

The ultimate impact of the foregoing factors on our operations and financial performance in future periods remains uncertain and will depend on many factors outside of our control, including the timing, extent, trajectory, and duration of the pandemic as well as the magnitude of any potential recession and related government actions to prevent and manage these issues, all of which are uncertain and cannot be predicted. While the overall impact of these matters is impossible to measure, they have resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and, ultimately our business and operations. Refer to Part I, Item 1A of our Annual Report on Form 10-K and Part II, Item 1A in this Quarterly Report on Form 10-Q under the heading “Risk Factors” for more information.

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Results of operations

Comparison of the three and six months ended June 30, 2023 and 2022

Revenue

	Three months ended June 30,				Three month change				Six months ended June 30,				Six month change
(in thousands, except percentages)	2023		2022		Amount		%		2023		2022		Amount		%
Platform	$	6,470	$	6,426	$	44	1	%	$	12,573	$	13,830	$	(1,257)	(9)	%
Recurring	7,268		5,929		1,339		23	%	12,431		11,372		1,059		9	%
Partnership, License and Other	324		6,795		(6,471)		(95)	%	7,574		14,154		(6,580)		(46)	%
Total revenue	$	14,062	$	19,150	$	(5,088)	(27)	%	$	32,578	$	39,356	$	(6,778)	(17)	%

See Note 6 to our condensed consolidated financial statements for additional information regarding how our product and service revenue is generated through our Platform, Recurring and Partnership, License and Other revenue streams.

Platform revenue was flat during the three months ended June 30, 2023, compared to the three months ended June 30, 2022 and included $6.0 million of Optofluidic sales and $0.5 million of Proteomic sales.

Recurring revenue increased by $1.3 million, or 23%, for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. The increase was primarily driven by $1.3 million of Proteomic consumable revenue during the three months ended June 30, 2023.

Partnership, License and Other revenue decreased by $6.5 million or 95% for the three months ended June 30, 2023 compared to the three months ended June 30, 2022 as a result of the completion and termination of the majority of our partnership and service engagements in the second half of 2022.

Platform revenue decreased by $1.3 million or 9% during the six months ended June 30, 2023, compared to the six months ended June 30, 2022, primarily due to a decrease in Optofluidic platform sales of $2.2 million, partially offset by $0.9 million of Proteomic platform sales, which we acquired through the IsoPlexis Merger in March 2023.

Recurring revenue increased by $1.1 million or 9% during the six months ended June 30, 2023, compared to the six months ended June 30, 2022 which was primarily driven by Proteomic recurring revenue of $1.8 million, \ partially offset by a decrease of $0.7 million of Optofluidic recurring revenue.

Partnership, License and Other revenue decreased by $6.6 million or 46% for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 as a result of the completion and termination of the majority of our partnership and service engagements in the second half of 2022, partially offset by $7.3 million of license revenue related to intellectual property acquired in the IsoPlexis Merger and licensed to a third party.

See below for details of our installed base. Note that the significant majority of our installed base relates to platform sales, with a much smaller percentage being provided under leasing programs.

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	Optofluidic Platforms	Proteomic Platforms	Total
Installed base on January 1, 2023	135	—	135
Acquired in IsoPlexis Merger	—	287	287
Q1 2023 Placements	4	4	8
Installed base on March 31, 2023	139	291	430
Q2 2023 Placements	2	3	5
Installed base on June 30, 2023	141	294	435

Cost of sales, gross profit and gross margin

	Three months ended June 30,				Three month change				Six months ended June 30,				Six month change
(in thousands, except percentages)	2023		2022		Amount		%		2023		2022		Amount		%
Cost of sales	$	8,019	$	6,224	$	1,795	29	%	$	13,107	$	12,603	$	504	4	%
Gross profit	$	6,043	$	12,926	$	(6,883)	(53	%)	$	19,471	$	26,753	$	(7,282)	(27	%)
Gross margin	43 %		67 %						60 %		68 %

Cost of sales for the three and six months ended June 30, 2023 increased by $1.8 million and $0.5 million, respectively, compared to the three and six months ended June 30, 2022 primarily as a result of increased inventory reserves, idle manufacturing costs and amortization expense related to the inventory purchase price adjustment and the intangible assets acquired in the IsoPlexis Merger.

Gross margin for the three and six months ended June 30, 2023 decreased from 67% to 43% and 68% to 60%, respectively, compared to the three and six months ended June 30, 2022. The decrease was primarily a result of increased inventory reserves, idle manufacturing costs and amortization expense related to the inventory purchase price adjustment and the intangible assets acquired in the IsoPlexis Merger. Gross margin for the six months ended June 30, 2023 was positively impacted by the revenue recognized from a License Agreement of $7.3 million, which did not have associated cost of sales.

Operating Expenses

Organizational and presentational changes

Starting in the third quarter of 2022, we made certain changes to our operating structure to align with our new business strategy. These changes included reorganizing our go-to-market efforts, employee terminations and additional organizational changes (see also Note 14 to our condensed consolidated financial statements for further information).

As part of these changes, our “service center,” a team of scientists and engineers who perform services for both our internal and external projects, is now part of our platform sales and support organization. The service center historically reported to our former Chief Product Officer.

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As a result of these changes, we now classify expenses associated with our service center as “Selling, general and administrative” instead of “Research and development” expenses on our condensed consolidated statements of operations starting in the third quarter of 2022. Service center expenses recorded in “Research and development” during the three and six months ended June 30, 2022 were $5.1 million and $9.7 million, respectively. Service center expenses recorded in “Selling, general and administrative” during the three and six months ended June 30, 2023 were $4.8 million and $9.4 million, respectively.

	Three months ended June 30,				Three month change				Six months ended June 30,				Six month change
(in thousands, except percentages)	2023		2022		Amount		%		2023		2022		Amount		%
Research and development	$	9,342	$	18,178	$	(8,836)	(49	%)	$	17,763	$	35,751	$	(17,988)	(50 %)
Selling, general and administrative	26,258		20,295		5,963		29	%	52,805		37,822		14,983		40 %
Restructuring	1,093		—		1,093		100	%	2,383		—		2,383		100 %
Loss on impairment of Goodwill	16,557		—		16,557		NM		16,557		$	—	16,557		NM
Total operating expenses	$	53,250	$	38,473	$	14,777	38	%	$	89,508	$	73,573	$	15,935	22 %

Operating expenses for the three and six months ended June 30, 2023 increased by $14.8 million, or 38% and $15.9 million or 22 %, respectively, compared to the three and six months ended June 30, 2022. The increase was

primarily related to the increased size of the organization as a result of the IsoPlexis Merger, the goodwill impairment charge recorded during the second quarter of 2023, and restructuring charges, partially offset by a decrease in research and development expenses.

Research and development expense for the three and six months ended June 30, 2023 decreased by $8.8 million, or 49%, and $18.0 million, or 50%, respectively, compared to the three and six months ended June 30, 2022. This decrease reflects the impact of the reclassification of the service center expenses discussed above. In addition, research and development expense decreased during both periods as a result of our strategy to prioritize the return on investment of development initiatives which resulted in workforce reductions and overall lowered spend.

Selling, general and administrative expense for the three and six months ended June 30, 2023 increased by $6.0 million, or 29%, and $15.0 million, or 40%, respectively, compared to the three and six months ended June 30, 2022. This increase reflects the impact of the reclassification of the service center expenses discussed above and costs associated with the operations of IsoPlexis. In addition, selling, general and administrative costs for the six months ended June 30, 2023 increased due to transaction costs associated with the IsoPlexis Merger of $3.5 million.

Restructuring expense for the three and six months ended June 30, 2023 primarily relate to employee termination benefits.

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Interest expense

	Three months ended June 30,				Three month change				Six months ended June 30,				Six month change
(in thousands, except percentages)	2023		2022		Amount		%		2023		2022		Amount		%
Interest expense	$	1,632	$	227	$	1,405	619	%	$	2,016	$	451	$	1,565	347	%

Interest expense increased by $1.4 million and $1.6 million, respectively, for the three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022. The increase was primarily due to higher interest expense as a result of the refinancing of our Term Loan with EWB on March 21, 2023, which increased the loan amount from $20.0 million to $70.0 million and also increased the interest rate from 4.17% to the Prime Rate plus one-half of one percent (0.5%). On June 30, 2023, we repaid the outstanding loan amount of $70.0 million in full.

Interest income

	Three months ended June 30,				Three month change				Six months ended June 30,				Six month change
(in thousands, except percentages)	2023		2022		Amount		%		2023		2022		Amount		%
Interest income	$	694	$	53	$	641	1209	%	$	1,521	$	87	$	1,434	1648	%

Interest income increased by $0.6 million and $1.4 million during the three and six months ended June 30, 2023 as compared to the corresponding periods in 2022. These increases are primarily the result of higher yields received on our cash management program.

Other income (expense), net

	Three months ended June 30,				Three month change				Six months ended June 30,				Six month change
(in thousands, except percentages)	2023		2022		Amount		%		2023		2022		Amount		%
Other income (expense), net	$	(2,049)	$	(22)	$	(2,027)	9214	%	$	(3,061)	$	35	$	(3,096)	8846	%

Other income (expense), net for the three and six months ended June 30, 2023 included $1.8 million and $2.7 million, respectively, of debt extinguishment costs. On June 30, 2023 we fully repaid our debt with EWB, and on March 21, 2023 we refinanced our term loan with EWB. See Note 12 for further information.

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Components of results of operations

Revenue

Our revenue consists of (i) platform, (ii) recurring and (iii) partnership, license and other revenue. Platform revenue consists of the sale of Optofluidic and Proteomic platforms (including the Beacon, Beacon Quest, IsoSpark and IsoLight), associated software, fixed-term sales-type lease arrangements with qualified customers, as well as application support, installation and training. Recurring revenue includes consumables and reagent kits, quarterly workflow subscriptions, annual or multi-year subscriptions arrangements (e.g., Reagent Rental), and fixed fee extended warranty and service programs. Partnership, license and other revenue consists of strategic partnerships, as well as joint development and collaboration agreements where we provide services for the development of new workflows, cells or organism types, revenue from licenses of intellectual property, and other revenue. See Note 6 to our condensed consolidated financial statements for additional information regarding how our product and service revenue is generated through our platform, recurring and partnerships, license and other revenue streams.

Cost of sales, gross profit and gross margin

Cost of sales. Cost of sales includes manufacturing related costs incurred in the production process, including personnel and related costs, costs of component materials, labor and overhead, packaging and delivery costs and allocated costs, including facilities and information technology and amortization expense associated with intangible assets with finite useful lives and the step up in fair value of acquired inventory. Also included in cost of sales are the personnel and related costs associated with our services, expenses related to the development of customized platforms and workflows, feasibility studies on our platforms and service and warranty costs to support our customers. We also include the costs associated with the standard assurance-type product warranty provided on our platforms, which are recorded at the time of sale.

Gross profit and gross margin. Gross profit is calculated as revenue less cost of sales. Gross margin is gross profit expressed as a percentage of revenue. Our gross profit in future periods will depend on a variety of factors, including: market conditions that may impact our pricing; sales mix among platform access options, including the regional mix of sales; sales mix changes among consumables, platforms and services; product mix changes between established products and new products; excess and obsolete inventories; our cost structure for manufacturing operations relative to volume; and product warranty obligations.

Operating expenses

Research and development. Research and development costs primarily consist of salaries, benefits, incentive compensation, stock-based compensation, laboratory supplies, materials expenses and allocated facilities and IT costs for employees and contractors engaged in research and product development. We expense all research and development costs in the period in which they are incurred.

Selling, general and administrative. Our selling, general and administrative expenses primarily consist of costs related to the selling and marketing of our products and services and costs associated with our executive, finance, accounting, legal, human resources and administrative functions. These costs include salaries, benefits, sales commissions and stock-based compensation for our employees, as well as advertising and marketing costs and professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses. We expect these expenses to vary from period to period as a percentage of revenue.

Restructuring. Our restructuring expense primarily consists of one-time cash severance benefits associated with the termination of certain employees. Restructuring expense can also include infrastructure charges to vacate facilities and contract cancellation costs. See Note 14 to our condensed consolidated financial statements for additional information.

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Other income (expense)

Interest expense. Interest expense consists primarily of interest related to borrowings under our debt obligations.

Interest income. Interest income primarily consists of interest earned on our cash, cash equivalents and short-term available-for-sale debt securities. We sold our short-term available-for-sale debt securities during March 2023.

Other income (expense), net. Other income (expense), net consists primarily of foreign currency exchange gains and losses. Foreign currency exchange gains and losses relate to transactions and asset and liability balances denominated in currencies other than the U.S. dollar, primarily related to our operations in the United Kingdom and China. We expect our foreign currency gains and losses to continue to fluctuate in the future due to changes in foreign currency exchange rates. During the three and six months ended June 30, 2023, other income (expense) also included debt refinancing and extinguishment costs.

Provision for income taxes

Our provision for income taxes consists primarily of foreign taxes and state taxes in the United States. The Company maintains a full valuation allowance on its deferred tax assets and intends to do so until there is sufficient evidence to support the reversal of all or some portion of these allowances. As we expand the scale and scope of our international business activities, any changes in taxation of such activities may increase our overall provision for income taxes in the future.

Liquidity and capital resources

As of June 30, 2023, we had approximately $31.0 million in cash, cash equivalents (including marketable securities classified as cash equivalents), which were primarily held in U.S. short-term bank deposit accounts and money market funds. Restricted cash of $0.1 million on June 30, 2023 relates to a letter of credit with an international customer. We have generated negative cash flows from operations since inception through June 30, 2023.

We expect to incur additional operating losses in the foreseeable future as we continue to invest in the research and development of our product offerings, commercialize and launch platforms, and expand into new markets. Our future capital requirements will depend on many factors including our revenue, research and development efforts, the timing and extent of additional capital expenditures to invest in existing and new facilities as well as our manufacturing operations, the expansion of sales and marketing and the introduction of new products. Our future capital needs may also depend upon factors affecting the macroeconomic environment. We have implemented measures to reduce our costs to extend our cash runway, including conducting reductions in force.

As discussed in Note 1 to our condensed consolidated financial statements, certain factors raise substantial doubt about our ability to continue as a going concern within one year from the issuance of such financial statements. Management’s intent is to implement plans that will allow us to continue as a going concern. We intend to improve operating cash flow by increasing our revenue and lowering our operational costs. New commercial leadership, geographic expansion, and a refined product roadmap are expected to drive revenue growth, and significant cost synergies as a result of the IsoPlexis Merger and are expected to lower operating expenses. Cost synergies are expected to be accomplished by eliminating duplicative costs associated with maintaining the infrastructure needed by public companies, complementary R&D capabilities, marketing resources and sales operations, and manufacturing, supply chain, logistics and operations synergies. In addition, we have launched a process to explore, review and evaluate a range of potential strategic alternatives focused on addressing capital requirements and maximizing stockholder value. While management is focused on these efforts, there can be no assurance that we will be successful in doing so.

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Sources of liquidity

Since our inception, we have financed our operations primarily from the issuance and sale of our equity securities, borrowings under long-term debt agreements, and to a lesser extent, cash generated by product and service sales. In July 2020, we completed our IPO, resulting in the receipt of aggregate proceeds of $187.9 million, net of offering costs, underwriter discounts and commissions of $17.0 million.

East West Bank Loan and Security Agreement

On May 23, 2018, we entered into a Loan and Security Agreement (“Loan Agreement”) with East West Bank (“EWB”) to provide a $20.0 million term loan facility (“Term Loan”). The loan facility was fully drawn as of May 23, 2018.

On June 30, 2021, we entered into an Amended and Restated Loan and Security Agreement (“Amended Loan Agreement”) with EWB. Pursuant to the Amended Loan Agreement, EWB provided a $20.0 million term loan (“Amended Term Loan”) which was used to refinance the Term Loan outstanding under the Loan Agreement dated May 23, 2018. The Amended Term Loan had a maturity of 48 months and a fixed interest rate of 4.17%. In addition, the Amended Term Loan had an initial interest-only period of 24 months, which could have been extended up to two times, each by an additional six months, if certain EBITDA tests as set forth in the Amended Loan Agreement are satisfied.

On March 21, 2023, we entered into a Second Amended and Restated Loan and Security Agreement (“Second Amended Loan Agreement”) with EWB. Pursuant to the Second Amended Loan Agreement, EWB increased the existing Amended Term Loan amount of $20.0 million by $50.0 million to an aggregate outstanding principal of $70.0 million (“Second Amended Term Loan”). The Second Amended Loan Agreement had a maturity of 60 months and a variable interest rate per annum equal to (i) the greater of 6.25% or the variable rate of interest, per annum most recently announced by EWB as its prime rate, plus (ii) one-half of one percent (0.5%). We used the proceeds from the Second Amended Term Loan to repay $52.5 million of indebtedness (including prepayment premium and interest) with Perceptive held by IsoPlexis (“Perceptive Credit Agreement”). Associated with these transactions, a $0.2 million loss on extinguishment of debt and $0.7 million commitment fee associated with the Loan Agreement was recorded in Other expense, net on our condensed consolidated statement of operations during the three months ended March 31, 2023.

On June 30, 2023, we repaid in full all outstanding indebtedness under the Second Amended Loan Agreement, and upon such repayment, the Second Amended Loan Agreement and all related guarantees and loan documents were terminated and have no further force and effect. The Second Amended Loan Agreement payoff of $71.2 million included the principal amount of $70.0 million, accrued interest of $0.5 million, an early termination fee of $0.7 million plus other related fees and expenses, which satisfied all of the Company’s indebtedness obligations thereunder. Associated with this repayment, a $1.8 million loss on extinguishment of debt (including the write off of deferred issuance costs amounting to $1.1 million at the payoff date), was recorded in “Other expense, net” on the Company’s condensed consolidated statement of operations during the three months ended June 30, 2023.

In connection with the repayment of such outstanding indebtedness obligations by the Company, all security interests, liens, pledges, financing statements, mortgages and other charges of whatever nature against the collateral and other encumbrances held by East West Bank securing the obligations of any loan party under the Second Amended Loan Agreement were automatically and irrevocably terminated and released.

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Cash flows

The following table summarizes our cash flows for the periods presented:

	Six months ended June 30,
(in thousands)	2023		2022
Net cash (used in) provided by:
Operating activities	$	(39,417)	$	(20,588)
Investing activities	5,692		(16,130)
Financing activities	(21,740)		1,376
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(55,465)	$	(35,342)

Operating activities

Net cash used in operating activities of $39.4 million for the six months ended June 30, 2023 was attributable to a net loss of $73.7 million and a net cash outflow of $3.6 million from changes in our operating assets and liabilities, partially offset by non-cash adjustments of $37.8 million, mainly consisting of goodwill impairment charges, stock-based compensation, equity awards issued for bonuses and depreciation and amortization expense.

Net cash used in operating activities of $20.6 million for the six months ended June 30, 2022 was attributable to a net loss of $47.2 million, partially offset by non-cash adjustments of $18.7 million, mainly consisting of stock-based compensation and depreciation expense, and a net cash inflow from changes in our operating assets and liabilities of $7.8 million, primarily due to a decrease in our accounts receivable.

Investing activities

Net cash used in investing activities of $5.7 million during the six months ended June 30, 2023 was primarily attributable to the net sale of $46.7 million of available-for-sale marketable securities during the first quarter of 2023, partially offset by $40.3 million in cash paid for the IsoPlexis Merger (net of cash acquired in the acquisition).

Net cash used in investing activities was $16.1 million during the six months ended June 30, 2022. Net cash used was primarily driven by the purchase of $9.4 million of available-for-sale marketable securities during the second quarter of 2022 and $6.8 million of purchases of property, plant and equipment. Capital expenditures for the first six months of 2022 include the expansion of our BioFoundry laboratory operations to support current and planned programs as well as leasehold improvements related to our new offices in Boston, Massachusetts.

Financing activities

Net cash used in financing activities was $21.7 million during the six months ended June 30, 2023 and was primarily related to the net repayment of $22.0 million of our long-term debt with EWB (including debt issuance costs and prepayment penalties).

Net cash provided by financing activities was $1.4 million during the six months ended June 30, 2022 and primarily related to proceeds received from the issuance of common stock upon exercise of stock options as well as proceeds received related to the issuance of common stock under our employee stock purchase plan.

Concentration of credit risk

Most of our customers are located in the United States and Asia Pacific. For the three months ended June 30, 2023, three customers accounted for 12%, 11% and 10% of revenue. For the six months ended June 30, 2023, one customer accounted for 22% of revenue. For the three months ended June 30, 2022, three customers accounted for

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20%, 11%, and 10% of revenue. For the six months ended June 30, 2022, three customers accounted for 16%, 11% and 10% of revenue.

As of June 30, 2023, two customers comprised 16% and 10% of accounts receivable. As of December 31, 2022, two customers accounted for 24% and 11% of accounts receivable.

Contractual obligations and commitments

The following table summarizes our commitments to settle contractual obligations as of June 30, 2023:

	Payments due by period
(in thousands)	Total		Less than 1 year		1 - 3 years		3 -5 years		More than 5 years
Debt obligations, including interest (1)	$	—	$	—	$	—	$	—	$	—
Lease commitments (2)	32,991		3,121		12,249		10,157		7,464
Purchase Obligations (3)	21,191		13,805		7,386		—		—
Total	$	54,182	$	16,926	$	19,635	$	10,157	$	7,464

(1)The Company repaid the loan with EWB in full on June 30, 2023. See also Note 12 for further information.

(2)Represents commitments under our non-cancelable office and facility leases.

(3)Purchase obligations relate primarily to our contract manufacturer which manufactures our Optofluidic instruments and makes advance purchases of components based on our sales forecasts and the placement of property by us, as well as the commitments made to certain providers of components of our consumable manufacturing. To the extent components are purchased by the contract manufacturer on our behalf and cannot be used by the contract manufacturer’s other customers, we are obligated to purchase such components.

Off-balance sheet arrangements

We do not have, and did not have during the periods presented, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical accounting policies and estimates

We have prepared our condensed consolidated financial statements in accordance with United States generally accepted accounting principles. Our preparation of these condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ materially from these estimates under different assumptions or conditions.

There have been no significant changes in our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in the section titled “Management’s Discussion and Analysis of Financial Condition and Operations” included in our Annual Report on Form 10-K, with the exception of the following critical accounting policies and estimates related to the IsoPlexis Merger.

45

Valuation of Goodwill

Goodwill represents the excess of the consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination. The allocation of purchase consideration in a business combination requires us to make significant estimates and assumptions. Our estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. We do not amortize goodwill rather, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, including declines in historical or projected revenue, operating income or cash flows, sustained decreases in our stock price or market capitalization, competition, or sale or disposition of a significant asset.

To determine whether goodwill is impaired, we perform a quantitative impairment test whereby we estimate the fair values of our single reporting unit using a combination of an income and market approach. To determine the fair value, we are required to make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include the valuation methodology itself, as well as inputs to the valuation model. We utilized a combination of an income and market approach to assess the fair value of the reporting unit as of June 30, 2023. The income approach considers the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate and projected future economic and market conditions while the guideline public company market approach considers marketplace earnings multiples from within a peer public company group.

To the extent the carrying amount of goodwill exceeds the implied goodwill, the difference is the amount of the goodwill impairment. We also complete a reconciliation between the implied equity valuation prepared and our market capitalization. The majority of the inputs used in the discounted cash flow model are unobservable and thus are considered to be Level 3 inputs. The inputs for the market capitalization calculation are considered Level 1 inputs.

During the six months ended June 30, 2023, we experienced a decline in our market capitalization as a result of a sustained decrease in our stock price. This sustained decrease was considered to represent a triggering event requiring management to perform a quantitative goodwill impairment test as of June 30, 2023. As a result of the impairment test, we fully impaired our goodwill and recorded a loss on impairment of $16.6 million.

Long-Lived Assets

Long-lived assets, including property, plant and equipment and finite-lived intangible assets, are reviewed for impairment whenever facts or circumstances indicate that the carrying value of an asset may not be recoverable. Events or circumstances that could trigger an impairment review of a long-lived asset or asset group include, but are not limited to: (i) a significant decrease in the market price of the asset, (ii) a significant adverse change in the extent or manner that the asset is used or in its physical condition, (iii) a significant adverse change in legal factors or in the business climate that could affect the value of the asset, (iv) an accumulation of costs significantly in excess of original expectation for the acquisition or construction of the asset, (v) a current period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast of continuing losses associated with the use of the asset and (vi) a more-likely-than-not expectation that the asset will be sold or disposed of significantly before the end of its previously estimated useful life. Should there be an indication of impairment, we first test for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset group to the carrying amount of that asset group. If the carrying amount of the asset group is not recoverable on an undiscounted cash flow basis, we are then required to estimate the fair value of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.

46

During the six months ended June 30, 2023, we experienced a decline in market capitalization resulting from a sustained decline in our stock price and also recorded a $16.6 million loss on impairment of goodwill. Management considered these events to be triggering events and reviewed its single asset group for realizability. When performing recoverability testing, we are required to identify the asset group’s primary asset and make judgements and estimates about the primary asset’s remaining useful life. The sum of undiscounted cash flows generated over the primary asset’s remaining useful life form the basis for recoverability testing and requires us to make judgments and assumptions regarding the future cash flows that are expected to arise as a direct result of the use and eventual disposition of the asset group. Because the sum of future undiscounted cash flows for our single asset group exceeded the carrying value, management concluded the asset group was recoverable and no impairment charge was recorded. If the asset group or its assets were for sale, our estimates of their values could be significantly different because of market conditions, specific transaction terms and a buyer’s perspective on future cash flows.

47

Item 3.    Quantitative and Qualitative Disclosures about Market Risk.

Not applicable to a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

Item 4.    Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our principal executive officer and principal financial officer concluded that as of June 30, 2023 our disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

On March 21, 2023, we completed the IsoPlexis Merger. This resulted in us implementing new processes and internal controls to assist us in the preparation and disclosure of financial information associated with the transaction. Given the magnitude of the IsoPlexis Merger and the complexity of the applicable systems and business processes, we have excluded IsoPlexis from our assessment and report on internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act), during the most recently completed fiscal quarter.

Limitations on the Effectiveness of Controls

Control systems, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control systems’ objectives are being met. Further, the design of any system of controls must reflect the fact that there are resource constraints, and the benefits of all controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of error or mistake. Control systems can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

48

Part II. OTHER INFORMATION.

Item 1.    Legal Proceedings.

See Note 17 to our condensed consolidated financial statements for legal proceedings and related matters.

Item 1A. Risk Factors.

Factors that could cause or contribute to differences in our future financial and operating results include those discussed in the risk factors set forth in our Annual Report on Form 10-K filed with the SEC on February 23, 2023. The risks described in our Form 10-K and this Report are not the only risks that we face. Additional risks not presently known to us or that we do not currently consider significant may also have an adverse effect on the Company. If any of the risks actually occur, our business, results of operations, cash flows or financial condition could suffer.

An active, liquid trading market for our securities may not be sustained.

There can be no assurance that we will be able to maintain an active trading market for our common stock and warrants on Nasdaq or any other exchange. On June 21, 2023, we received a notice (“Notice”) from The Nasdaq Stock Market (“Nasdaq”) that we are not in compliance with Nasdaq’s Listing Rule 5450(a)(1) (the “Minimum Bid Price Rule”), because the minimum bid price of our common stock had been below $1.00 per share for 30 consecutive business days. We have 180 calendar days following receipt of the Notice, or until December 12, 2023, to regain compliance with the Minimum Bid Price Rule. To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days during this 180 calendar day grace period. The Notice has no immediate effect on the listing or trading of our common stock on The Nasdaq Global Select Market, subject to our compliance with other Nasdaq continued listing standards. We intend to monitor the closing bid price of our common stock and may, if appropriate, consider available options, including a reverse stock split, to regain compliance with the Minimum Bid Price Rule. If we are unable to regain compliance with Nasdaq’s listing standards, Nasdaq may delist our common stock. At that point, it is possible that our common stock could be quoted on the over-the-counter bulletin board or the pink sheets. This could have negative consequences, including negative publicity, a negative effect on the price of our common stock, reduced liquidity for stockholders, reduced trading levels for our common stock, limited availability of market quotations or analyst coverage of our securities, stricter trading rules for brokers trading our securities, diminished investor, supplier and employee confidence, and reduced access to financing alternatives for us. We also would be subject to greater state securities regulation if our common stock was no longer listed on a national securities exchange. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, or prevent future non-compliance with Nasdaq’s listing requirements.

There are uncertainties introduced by our announcement of our exploration, review and evaluation of strategic alternatives focused on addressing capital requirements and maximizing stockholder value.

On July 7, 2023, we announced that we have launched a process to explore, review and evaluate a range of potential strategic alternatives focused on addressing capital requirements and maximizing stockholder value. We do not intend to make further announcements about the strategic alternatives or capital raising processes unless and until our Board of Directors has approved a specific transaction or otherwise determines that further disclosure is appropriate or necessary.

There can be no assurance that any offers will be made or accepted, that any agreement will be executed, or that any transaction will be consummated, in connection with the strategic alternatives or capital raising processes. We may not be able to consummate such a transaction in a timely manner or at all or in a manner that would not adversely impact our business. Strategic transactions are complex and time-consuming to identify, evaluate,

49

negotiate and consummate in compliance with applicable laws and Nasdaq requirements. We may also incur substantial costs in connection with the pursuit of strategic alternatives which are not ultimately consummated. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. Additionally, such strategic transactions may not be favorable to investors nor deliver any anticipated benefits, and unexpected liabilities may result from such transaction and that the process of consummating or the effects of consummating such a transaction may cause interruption or slow down the operations of our existing or continuing businesses.

We need to obtain substantial funding in the near term in order to continue operations and our exploration of strategic alternatives.

We require significant capital resources in order to continue to operate our business and conduct our exploration of strategic alternatives, and our limited liquidity could materially and adversely affect our business operations. Cash and cash equivalents (including marketable securities classified as cash equivalents) were $31.0 million as of June 30, 2023, and are not anticipated to be sufficient to support our operations for at least 12 months from the date of the filing of this Quarterly Report on Form 10-Q unless we reduce our burn rate or increase our capital. Because we have no current source of committed financing, our current available cash and cash equivalents provide us with limited liquidity. Any required additional capital may not be available on reasonable terms, if at all, due to a variety of factors, including uncertainty about the future direction of the Company, as well as broader conditions in the economy and capital markets. The Company has already engaged in significant cost reductions, including our prior reductions in force, so our ability to further cut costs and extend our operating runway is limited. Without sufficient additional capital funding in the near term, we may be required, among other things, to seek bankruptcy protection.

Our negative cash flows and current lack of financial resources raise substantial doubt as to our ability to continue as a going concern. If we are unable to raise additional funding to meet our operational needs, we may be forced to limit or cease our operations and/or liquidate our assets.

Although our unaudited consolidated interim financial statements have been prepared assuming our company will continue as a going concern, our negative cash flows and current lack of financial resources raise substantial doubt as to our ability to satisfy our obligations as they become due within one year from the date of filing of this Quarterly Report on Form 10-Q. For the three months ended June 30, 2023, we had a consolidated net loss of $50.2 million and had an accumulated deficit of $435.3 million as of June 30, 2023. Cash and cash equivalents (including marketable securities classified as cash equivalents) were $31.0 million as of June 30, 2023. We expect to incur additional operating losses in the foreseeable future as we continue to invest in the research and development of our product offerings, commercialize and launch platforms, and expand into new markets. Although we intend to improve operating cash flow by increasing our revenue and lowering our operational costs, we may not succeed in driving revenue growth, including through new commercial leadership, geographic expansion or a refined product roadmap, or in lowering operating expenses, including through the cost synergies expected as a result of the IsoPlexis Merger by eliminating duplicative costs associated with maintaining the infrastructure needed by public companies, complementary R&D capabilities, marketing resources and sales operations, and manufacturing, supply chain, logistics and operations synergies. There can be no assurance that any offers will be made or accepted, that any agreement will be executed, or that any transaction will be consummated, in connection with the strategic alternatives or capital raising processes. If at any time in the future we are unable to continue as a going concern, we may be forced to seek protection from our creditors through bankruptcy proceedings, discontinue operations, and liquidate our assets, and we may receive less than the value at which those assets are carried on our unaudited interim financial statements. Any of these outcomes could cause our stockholders to lose some or all of their investment.

50

Even if we are able to raise significant additional capital necessary to continue our operations over the next year, if we are unable to obtain additional adequate financing on terms satisfactory to us, or at all, when we require it, our ability to continue to pursue our business objectives, develop our technology and products, and respond to business opportunities, challenges, unforeseen circumstances or developments could be significantly limited, and our business, financial condition, results of operations and prospects could be materially and adversely affected.

If we fail to innovate in response to rapidly evolving technological and market developments, including artificial intelligence, our competitive position and business prospects may be harmed.

Our future success depends, in part, on our ability to anticipate and respond effectively to the threat and opportunity presented by new technology disruption and developments. These may include new software applications or related services based on artificial intelligence, machine learning or robotics. We may be exposed to competitive risks related to the adoption and application of new technologies by established market participants or new entrants, start-up companies and others.

We cannot predict the effect of technological changes on our business. Failure to keep pace with these technological developments or otherwise bring to market products that reflect these technologies could have a material adverse impact on our overall business and results of operations. We may not be successful in anticipating or responding to these developments on a timely and cost-effective basis. Additionally, the effort to gain technological expertise and develop new technologies in our business requires us to incur significant expenses. If we cannot offer new technologies as quickly as our competitors, or if our competitors develop more cost-effective technologies or product offerings, we could experience a material adverse effect on our operating results, growth and financial condition.

51

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

Sale of Unregistered Securities

There were no unregistered sales of the Company’s equity securities during the three months ended June 30, 2023.

Item 3.    Defaults Upon Senior Securities.

Not applicable.

Item 4.    Mine Safety Disclosures.

Not applicable.

Item 5.    Other Information.

None.

52

Item 6. Exhibits.

The following exhibits are filed with this Quarterly Report on Form 10-Q:

		Incorporated by Reference
Exhibit Number	Exhibit Title	Form	File No.	Exhibit	Filing Date	Filed Herewith
3.1	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Berkeley Lights, Inc.	8-K	001-39388	3.1	3/21/2023
3.2	Amended and Restated Bylaws of PhenomeX Inc.	8-K	001-39388	3.2	3/21/2023
31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
32.1*	Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
32.2*	Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
101.INS	XBRL Instance Document.					X
101.SCH	XBRL Taxonomy Extension Schema Document.					X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document					X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.					X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.					X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.					X
104	Cover Page Interactive Data File - formatted in Inline XBRL and included as Exhibit 101					X

*This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in such filings

53

Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of the undersigned thereunto duly authorized.

PhenomeX Inc.

Date: August 14, 2023	By:	/s/ Mehul Joshi
		Mehul Joshi Chief Financial Officer (Principal Financial Officer)

54

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Siddhartha Kadia, certify that:

(1)I have reviewed this Quarterly Report on Form 10-Q of PhenomeX Inc.,

(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5)The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 14, 2023	By:	/s/ SIDDHARTHA KADIA
	Name:	Siddhartha Kadia, Ph.D.
	Title:	Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mehul Joshi, certify that:

(1)I have reviewed this Quarterly Report on Form 10-Q of PhenomeX Inc.,

(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5)The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 14, 2023	By:	/s/ MEHUL JOSHI
	Name:	Mehul Joshi
	Title:	Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PhenomeX Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 14, 2023	By:	/s/ SIDDHARTHA KADIA
	Name:	Siddhartha Kadia, Ph.D.
	Title:	Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PhenomeX Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 14, 2023	By:	/s/ MEHUL JOSHI
	Name:	Mehul Joshi
	Title:	Chief Financial Officer
		(Principal Financial Officer)

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Cover - shares	6 Months Ended
	Jun. 30, 2023	Jul. 31, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-39388
Entity Registrant Name	PhenomeX Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	35-2415390
Entity Address, Address Line One	5858 Horton Street, Suite 320
Entity Address, City or Town	Emeryville
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94608
City Area Code	510
Local Phone Number	858-2855
Title of 12(b) Security	Common stock, $0.00005 par value
Trading Symbol	CELL
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		99,296,604
Entity Central Index Key	0001689657
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 30,964	$ 86,522
Short-term marketable securities	0	46,252
Trade accounts receivable, net	14,375	18,534
Inventory	41,455	18,861
Prepaid expenses and other current assets	7,992	6,783
Total current assets	94,786	176,952
Restricted cash	93	0
Property and equipment, net	32,710	23,847
Operating lease right-of-use assets	26,224	23,326
Intangible assets, net	22,499	0
Other assets	2,020	1,969
Total assets	178,332	226,094
Current liabilities:
Trade accounts payable	18,631	10,092
Accrued expenses and other current liabilities	13,946	21,340
Current portion of long-term debt	0	4,966
Deferred revenue	9,648	9,092
Total current liabilities	42,225	45,490
Long-term debt	0	14,860
Deferred revenue, net of current portion	876	963
Lease liability, long-term	23,950	22,726
Total liabilities	67,051	84,039
Commitments and contingencies (Note 17)
Stockholders’ equity:
Common stock, $0.00005 par value. Authorized 300,000,000 shares on June 30, 2023 and December 31, 2022; issued and outstanding 99,113,089 and 72,169,052 shares on June 30, 2023 and December 31, 2022, respectively	5	4
Additional paid-in capital	546,538	503,708
Accumulated deficit	(435,312)	(361,648)
Accumulated other comprehensive income (loss)	50	(9)
Total stockholders’ equity	111,281	142,055
Total liabilities and stockholders’ equity	$ 178,332	$ 226,094

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.00005	$ 0.00005
Common stock authorized (in shares)	300,000,000	300,000,000
Common stock issued (in shares)	99,113,089	72,169,052
Common stock outstanding (in shares)	99,113,089	72,169,052

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenue:
Total revenue	$ 14,062	$ 19,150	$ 32,578	$ 39,356
Cost of sales:
Total cost of sales	8,019	6,224	13,107	12,603
Gross profit	6,043	12,926	19,471	26,753
Operating expenses:
Research and development	9,342	18,178	17,763	35,751
Selling, general and administrative	26,258	20,295	52,805	37,822
Restructuring	1,093	0	2,383	0
Loss on impairment of goodwill	16,557	0	16,557	0
Total operating expenses	53,250	38,473	89,508	73,573
Loss from operations	(47,207)	(25,547)	(70,037)	(46,820)
Other income (expense):
Interest expense	(1,632)	(227)	(2,016)	(451)
Interest income	694	53	1,521	87
Other income (expense), net	(2,049)	(22)	(3,061)	35
Loss before income taxes	(50,194)	(25,743)	(73,593)	(47,149)
Provision for income taxes	51	4	71	24
Net loss	$ (50,245)	$ (25,747)	$ (73,664)	$ (47,173)
Net loss attributable to common stockholders per share, basic (in dollars per share)	$ (0.51)	$ (0.38)	$ (0.84)	$ (0.70)
Net loss attributable to common stockholders per share, diluted (in dollars per share)	$ (0.51)	$ (0.38)	$ (0.84)	$ (0.70)
Weighted-average shares used in calculating net loss per share, basic (in shares)	98,900,780	67,985,664	87,394,201	67,842,372
Weighted-average shares used in calculating net loss per share, diluted (in shares)	98,900,780	67,985,664	87,394,201	67,842,372
Product
Revenue:
Total revenue	$ 10,304	$ 9,468	$ 18,682	$ 19,242
Cost of sales:
Total cost of sales	7,089	2,614	11,001	5,309
Service and other revenue
Revenue:
Total revenue	3,758	9,682	13,896	20,114
Cost of sales:
Total cost of sales	$ 930	$ 3,610	$ 2,106	$ 7,294

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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net loss	$ (50,245)	$ (25,747)	$ (73,664)	$ (47,173)
Other comprehensive income (loss):
Foreign currency translation adjustments	53	0	50	0
Unrealized gain on marketable securities, net of tax	0	(19)	9	(19)
Other comprehensive income (loss):	53	(19)	59	(19)
Comprehensive loss	$ (50,192)	$ (25,766)	$ (73,605)	$ (47,192)

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands		Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Dec. 31, 2021			67,595,535
Beginning balance at Dec. 31, 2021		$ 208,216	$ 4	$ 471,820	$ (263,608)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)			262,667
Exercise of stock options		766		766
Vesting of restricted stock units (in shares)			300,384
Employee stock purchase plan (in shares)			115,346
Employee stock purchase plan		610		610
Restricted Stock Units issued for 2022 Bonuses		0
Stock-based compensation		12,016		12,016
Unrealized gain (loss) on marketable securities, net of tax		(19)				(19)
Foreign currency translation adjustments		0
Net loss		(47,173)			(47,173)
Ending balance (in shares) at Jun. 30, 2022			68,273,932
Ending balance at Jun. 30, 2022		174,416	$ 4	485,212	(310,781)	(19)
Beginning balance (in shares) at Mar. 31, 2022			67,820,115
Beginning balance at Mar. 31, 2022		193,201	$ 4	478,231	(285,034)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)			181,013
Exercise of stock options		354		354
Vesting of restricted stock units (in shares)			272,804
Stock-based compensation		6,627		6,627
Unrealized gain (loss) on marketable securities, net of tax		(19)				(19)
Foreign currency translation adjustments		0
Net loss		(25,747)			(25,747)
Ending balance (in shares) at Jun. 30, 2022			68,273,932
Ending balance at Jun. 30, 2022		174,416	$ 4	485,212	(310,781)	(19)
Beginning balance (in shares) at Dec. 31, 2022			72,169,052
Beginning balance at Dec. 31, 2022		142,055	$ 4	503,708	(361,648)	(9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued for IsoPlexis Merger (in shares)			24,945,611
Common stock issued for IsoPlexis Merger		31,930	$ 1	31,929
Fair value of vested IsoPlexis options attributable to pre-merger service		306		306
Fair value of IsoPlexis warrant at Acquisition Date		170		170
Exercise of stock options (in shares)			134,234
Exercise of stock options		64		64
Vesting of restricted stock units (in shares)			597,428
Employee stock purchase plan (in shares)			121,863
Employee stock purchase plan		166		166
Restricted Stock Units issued for 2022 Bonuses (in shares)	[1]		1,144,901
Restricted Stock Units issued for 2022 Bonuses	[1]	2,107		2,107
Stock-based compensation		8,088		8,088
Unrealized gain (loss) on marketable securities, net of tax		9				9
Foreign currency translation adjustments		50				50
Net loss		(73,664)			(73,664)
Ending balance (in shares) at Jun. 30, 2023			99,113,089
Ending balance at Jun. 30, 2023		111,281	$ 5	546,538	(435,312)	50
Beginning balance (in shares) at Mar. 31, 2023			98,744,915
Beginning balance at Mar. 31, 2023		157,740	$ 5	542,805	(385,067)	(3)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)			55,875
Exercise of stock options		35		35
Vesting of restricted stock units (in shares)			312,299
Stock-based compensation		3,698		3,698
Foreign currency translation adjustments		53				53
Net loss		(50,245)			(50,245)
Ending balance (in shares) at Jun. 30, 2023			99,113,089
Ending balance at Jun. 30, 2023		$ 111,281	$ 5	$ 546,538	$ (435,312)	$ 50

[1] Annual bonuses for certain employees related to fiscal year 2022 were not paid in cash and instead the Company issued fully vested restricted stock units on March 3, 2023 with a grant date fair value of $1.84 per share. The associated expense was recorded in 2022, the period in which the bonus was earned.

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical)	Mar. 03, 2023 $ / shares
Statement of Stockholders' Equity [Abstract]
Issuance of vested restricted stock units with grant date fair value (in dollars per share)	$ 1.84

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023		Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (73,664)		$ (47,173)
Adjustments to reconcile net loss to cash used in operating activities:
Loss on impairment of goodwill	16,557		0
Depreciation and amortization	6,202		4,431
Stock-based compensation	8,119		11,958
Restricted stock units issued for 2022 Bonuses	2,107	[1]	0
Amortization of operating lease right-of-use assets	2,076		1,538
Non-cash interest and other expense related to debt and note receivable agreements	63		32
Provision for excess and obsolete inventory	1,899		479
Provision for doubtful accounts	208		0
Loss on debt extinguishment	1,230		0
Loss on disposal and impairment of property and equipment	306		27
Realized loss on marketable securities	6		0
Other non-cash	(927)		271
Changes in operating assets and liabilities:
Trade accounts receivable	7,025		12,128
Inventory	(4,120)		(1,539)
Prepaid expenses, other current assets and other assets	3,449		1,340
Trade accounts payable	7,724		1,000
Deferred revenue	(929)		(4,400)
Accrued expenses and other current liabilities	(14,664)		(585)
Operating lease liabilities	(2,084)		(95)
Net cash used in operating activities	(39,417)		(20,588)
Cash flows from investing activities:
Purchase of property and equipment	(457)		(6,758)
Purchase of marketable securities	(2,451)		(9,372)
Proceeds from sales of marketable securities	36,749		0
Proceeds from maturities of marketable securities	12,400		0
Asset acquisition	(264)		0
Acquisitions, net of cash acquired	(40,285)		0
Net cash provided by (used in) investing activities	5,692		(16,130)
Cash flows from financing activities:
Repayment of term loan	(90,000)		0
Payment of term loan prepayment fees	(770)
Proceeds from issuance of term loan	70,000		0
Payment of debt issuance costs	(1,200)		0
Proceeds from issuance of common stock upon exercise of stock options	64		766
Proceeds from issuance of common stock under employee stock purchase plan	166		610
Net cash (used in) provided by financing activities	(21,740)		1,376
Net increase (decrease) in cash and cash equivalents and restricted cash	(55,465)		(35,342)
Cash, cash equivalents and restricted cash at beginning of period	86,522		178,366
Cash, cash equivalents and restricted cash at end of period	$ 31,057		$ 143,024

[1] Annual bonuses for certain employees related to fiscal year 2022 were not paid in cash and instead the Company issued fully vested restricted stock units on March 3, 2023 with a grant date fair value of $1.84 per share. The associated expense was recorded in 2022, the period in which the bonus was earned.

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The Company and Basis of Presentation

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company and Basis of Presentation

The Company and Basis of Presentation

Description of Business

PhenomeX Inc. (the “Company” or “PhenomeX”) is a functional cell biology company that provides live cell biology research tools which deliver deep insights into cellular function and new perspectives on phenomes.

PhenomeX and its consolidated subsidiaries are hereinafter referred to as the “Company.” The Company’s headquarters are in Emeryville, California.

Basis of Presentation

On December 21, 2022, Berkeley Lights, Inc. (“Berkeley Lights”) entered into an Agreement and Plan of Merger (“Merger Agreement”) with Iceland Merger Sub Inc., a wholly owned subsidiary of Berkeley Lights (“Merger Sub”) and IsoPlexis Corporation (“IsoPlexis”). Pursuant to the Merger Agreement on March 21, 2023 (“Acquisition Date”), Merger Sub was merged with IsoPlexis, with IsoPlexis surviving the merger as a wholly owned subsidiary of Berkeley Lights (“IsoPlexis Merger”). The newly combined company has been renamed PhenomeX. The historical financial statements of PhenomeX for periods prior to the IsoPlexis Merger are the historical financial statements of Berkeley Lights.

The accompanying unaudited condensed consolidated financial statements (“condensed consolidated financial statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates.

Liquidity

The Company has experienced losses from its operations since its inception and has relied primarily on equity and debt financing to fund its operations to date. For the three and six months ended June 30, 2023, the Company had a consolidated net loss of $50.2 million and $73.7 million, respectively, and as of June 30, 2023 had an accumulated deficit of $435.3 million. Cash and cash equivalents (including marketable securities classified as cash equivalents) were $31.0 million as of June 30, 2023.

On June 30, 2023, the Company repaid in full all outstanding indebtedness under the Second Amended and Restated Loan and Security Agreement (“Second Amended Loan Agreement”) dated as of March 21, 2023, among, inter alios, the Company, IsoPlexis Corporation, a Delaware corporation and East West Bank, a California banking corporation (“EWB”), and upon such repayment, the Second Amended Loan Agreement and all related guarantees and loan documents were terminated and have no further force and effect. The Company entered into the Second Amended Loan Agreement with EWB on March 21, 2023 to increase the Company’s and EWB’s term loan amount of $20.0 million by $50.0 million to an aggregate outstanding principal of $70.0 million. The proceeds were used to repay $52.5 million of indebtedness (including prepayment premium and interest) held by IsoPlexis on the acquisition date. Under the terms of the Second Amended Loan Agreement, the Company was required to maintain cash and cash equivalents of no less than $70.0 million in the aggregate at all times in a deposit account with EWB that is assigned to EWB. Because such cash was restricted and unavailable for use in financing operations, management elected to prepay the outstanding balance. As of June 30, 2023, the

Company has not entered into any further financing arrangements. See Note 12 for additional information on our Second Amended Loan Agreement with EWB.

These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after these financial statements are issued. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustment that might result if the Company is unable to continue as a going concern.

Management’s intent is to implement plans that will allow the Company to continue as a going concern. The Company intends to improve operating cash flow by increasing its revenue and lowering its operational costs. New commercial leadership, geographic expansion, and a refined product roadmap are expected to drive revenue growth, and significant cost synergies as a result of the IsoPlexis Merger and are expected to lower operating expenses. Cost synergies are expected to be accomplished by eliminating duplicative costs associated with maintaining the infrastructure needed by public companies, complementary research and development (“R&D”) capabilities, marketing resources and sales operations, and manufacturing, supply chain, logistics and operations synergies. In addition, the Company has launched a process to explore, review and evaluate a range of potential strategic alternatives focused on addressing capital requirements and maximizing stockholder value. While management is focused on these efforts, there can be no assurance that the Company will be successful in doing so.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission.

Updates to those policies are below, including updates related to the IsoPlexis Merger.

Cash, cash equivalents and restricted cash

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

The Company records cash and cash equivalents as restricted when it is unable to freely use such cash and cash equivalents for general operating purposes. As of June 30, 2023, restricted cash consisted of $0.1 million related to a letter of credit with an international customer.

The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the Company’s condensed consolidated balance sheets to the totals presented on the condensed consolidated statements of cash flows (in thousands):

	June 30, 2023		December 31, 2022
Cash	$	28,060	$	63,596
Cash equivalents	2,904		22,926
Restricted cash	93		—
Total cash, cash equivalents and restricted cash as presented on the condensed consolidated statements of cash flows	$	31,057	$	86,522

Accounts Receivables and Allowance for Credit Losses

Trade accounts receivable are recorded at the invoiced amount as a result of the transaction with customers. The Company maintains allowances for credit losses for uncollectible accounts receivable. The Company estimates anticipated losses from doubtful accounts based on days past due, historical collection history, and other factors. Write-offs are recorded at the time all collection efforts have been exhausted. The Company reviews its allowance for doubtful accounts on a quarterly basis.

Inventory

Inventories are recorded at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Inventory that is obsolete or in excess of forecasted usage is written down to its estimated net realizable value based on assumptions about future demand and market conditions. Inventory write-downs are charged to cost of goods sold and establish a new cost basis for the inventory. Costs included in inventories are raw materials, labor, supplies, allocable depreciation of manufacturing facilities, equipment and overhead.

Stock-based compensation

The Company maintains the 2020 Incentive Award Plan (“2020 Plan”), an incentive compensation plan under which stock options, restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) are granted to employees, non-employee consultants and directors.

Stock-based compensation expense is calculated based on the grant date fair value of the award. The Company determines the fair value of RSUs and RSAs based on the closing price of the Company’s common stock as reported by Nasdaq on the date of the grant.

The Company estimates the fair value of the majority of stock option awards on the grant date using the Black-Scholes option-pricing model. For option awards that include a goal tied to the Company share price (i.e., a market condition), the Company uses a Monte Carlo simulation to estimate the fair value.

The fair value of stock options, RSUs and RSAs with only a service condition is recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are recognized as they occur.

Stock options and RSUs that include a service condition and a performance condition are considered expected to vest when the performance condition is probable of being met. Compensation expense associated with performance awards that are determined to be probable of achievement is recognized over the requisite service period on a tranche-by-tranche basis.

For performance stock options and RSUs not initially assessed as probable of achievement, the Company records a cumulative adjustment to compensation expense in the period the Company changes its determination that a performance condition becomes probable of being achieved. The Company ceases recognition of compensation expense in any periods where the Company determines the attainment of a performance condition is no longer probable. If the performance goals are determined to be improbable, any previously recognized compensation expense is reversed.

The fair value of stock options with a market condition is recognized over the requisite service period for each tranche of the award and is recognized regardless of whether (or to what extent) the market condition is ultimately achieved.

Business Combinations

The Company records tangible and intangible assets acquired and liabilities assumed in a business combination using the purchase method of accounting. The excess of the purchase consideration over the fair value of net assets acquired is recorded as goodwill. The allocation of purchase consideration in a business combination requires the Company to make significant estimates and assumptions. Such estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the Acquisition Date, the Company may record adjustments to the fair value of the tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or the final determination of the fair value, whichever comes first, any subsequent adjustments are recorded to the consolidated statement of operations. Transaction costs associated with business combinations are expensed as they are incurred.

Goodwill and Intangible Assets

Goodwill represents the excess of the consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination. Intangible assets are measured at their respective fair values as of the Acquisition Date and may be subject to adjustment within the measurement period, which may be up to one year from the Acquisition Date. The Company does not amortize goodwill rather; goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Such triggering events potentially warranting an annual or interim goodwill impairment assessment include, among other factors, declines in historical or projected revenue, operating income or cash flows, and sustained decreases in the Company’s stock price or market capitalization.

To determine whether goodwill is impaired, the Company performs a quantitative impairment test whereby the Company estimates the fair values of its single reporting unit using a combination of an income and market approach. To determine the fair value, the Company is required to make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include the valuation methodology itself, as well as inputs to the valuation model. The Company utilizes a combination of an income and market approach to assess the fair value of the reporting unit. The income approach considers the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate and projected future economic and market conditions while the guideline public company market approach considers marketplace earnings multiples from within a peer public company group. These assumptions require significant judgement.

To the extent the carrying amount of goodwill exceeds the implied goodwill, the difference is the amount of the goodwill impairment. The Company also completes a reconciliation between the implied equity valuation prepared and the Company’s market capitalization. The majority of the inputs used in the discounted cash flow model are unobservable and thus are considered to be Level 3 inputs. The inputs for the market capitalization calculation are considered Level 1 inputs.

During the six months ended June 30, 2023, the Company experienced a decline in its market capitalization as a result of a sustained decrease in the Company’s stock price. This sustained decrease was considered to represent a triggering event requiring management to perform a quantitative goodwill impairment test as of June 30, 2023. As a result of the impairment test, the Company fully impaired its goodwill and recorded a loss on impairment of goodwill of $16.6 million. Refer to Note 8 for further information regarding Goodwill and Intangible Assets.

Intangible assets with finite useful lives are amortized over their estimated useful lives, generally on a straight-line basis, and are reviewed for impairment when facts or circumstances indicate that the carrying value of these assets may not be recoverable. As discussed above, during the six months ended June 30, 2023, the Company experienced a decline in market capitalization resulting from a sustained decrease in stock price and also recorded a $16.6 million loss on impairment of goodwill. Management considered these events to be triggering events and

reviewed its single long-lived asset group (including its intangible assets) for impairment. Because the sum of future undiscounted cash flows for the asset group exceeded the carrying value of the asset group, management concluded the assets were recoverable and no impairment charge was recorded.

The Company does not have any indefinite-lived intangible assets as of June 30, 2023.

Long-Lived Assets

Long-lived assets, including property, plant and equipment and finite-lived intangible assets, are amortized over their estimated useful lives, generally on a straight line basis, and are reviewed for impairment whenever facts or circumstances indicate that the carrying value of an asset may not be recoverable. Should there be an indication of impairment, the Company first tests for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset group to the carrying amount of that asset group. If the carrying amount of the asset group is not recoverable on an undiscounted cash flow basis, the Company is then required to estimate the fair value of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.

During the six months ended June 30, 2023, the Company experienced a decline in its market capitalization as a result of a sustained decrease in the Company’s stock price. This sustained decrease was considered to represent a triggering event requiring management to perform a quantitative impairment test of its long-lived assets as of June 30, 2023. Because the sum of future estimated undiscounted cash flows for the Company’s single asset group exceeded its carrying value, the Company concluded there was no impairment as of June 30, 2023. Refer to Note 8, Goodwill and Other Intangible Assets, and Note 10, Property and Equipment, Net, for further information.

Foreign currency translation and transactions

The Company assesses the functional currency of each of its international subsidiaries. For subsidiaries where the functional currency is the U.S. dollar, gains or losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the U.S. dollar are included in “Other income (expense), net” in the condensed consolidated statement of operations.

For subsidiaries where the functional currency is the local currency, the translation of foreign currencies into U.S. dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet dates and revenue and expense accounts using the average exchange rate during each period. The gains and losses resulting from the translation are included in accumulated other comprehensive loss in stockholders’ equity and are excluded from net loss. The portions of intercompany accounts receivable and accounts payable that are intended for settlement are translated at exchange rates in effect at the balance sheet date.

Research and development state tax credits

R&D tax credits exchanged for cash pursuant to the Connecticut R&D Tax Credit Exchange Program, which permits a qualified small business engaged in R&D activities within Connecticut to exchange its unused R&D tax credits for a cash amount equal to 65% of the value of exchanged credits, are recorded as a receivable and other income in the year the R&D tax credits relate to, as it is reasonably assured that the R&D tax credits will be received, based upon the Company’s history of filing for and receiving the tax credits. R&D tax credits receivable where cash is expected to be received by the Company more than one year after the balance sheet date are classified as noncurrent in the consolidated balance sheets. The Company has recorded $0.2 million of R&D tax credits receivable as of June 30, 2023.

Warrants

On March 21, 2023, and in connection with the closing of the IsoPlexis Merger, PhenomeX, IsoPlexis and Perceptive Credit Holdings III, LP (“Perceptive”) executed a warrant certificate to purchase shares of PhenomeX stock (“Warrant Certificate”). The Company accounts for these common stock warrants as equity classified instruments in accordance with ASC 480, Distinguishing Liabilities from Equity.

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Marketable Securities

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

Marketable Securities

The Company may invest in available-for-sale marketable debt securities generally consisting of commercial paper and U.S. government securities with contractual maturities due within one year. Marketable securities with a maturity of three months or less when purchased are considered to be cash equivalents.

The following tables summarize the amortized costs and carrying value of the Company’s available-for-sale securities, by balance sheet classification and major security type, as of June 30, 2023 and December 31, 2022 (in thousands):

Marketable Securities reported as Cash Equivalents

	June 30, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Money market funds	$	2,904	$	—	$	—	$	2,904
Total	$	2,904	$	—	$	—	$	2,904

	December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Money market funds	$	2,354	$	—	$	—	$	2,354
Commercial paper	16,606		—		(4)		16,602
U.S. agency securities	3,969		1		—		3,970
U.S. government securities	—		—		—		—
Total	$	22,929	$	1	$	(4)	$	22,926

Marketable Securities reported as Short-term Marketable Securities

As of June 30, 2023, the Company did not hold any short-term marketable securities. Realized gains/losses from the sale of short-term marketable securities during the three and six months ended June 30, 2023 were immaterial.

Short-term marketable securities on December 31, 2022 were as follows (in thousands):

	December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Commercial paper	$	22,158	$	1	$	(11)	$	22,148
U.S. agency securities	4,941		1		—		4,942
U.S. government securities	19,159		5		(2)		19,162
Total	$	46,258	$	7	$	(13)	$	46,252

At each reporting date, the Company performs an evaluation of impairment to determine if any unrealized losses are the result of credit losses. Impairment is assessed at the individual security level. Unrealized losses on available-for-sale debt securities as of December 31, 2022 were not significant and were primarily market driven due to changes in interest rates, and not due to increased credit risk associated with specific securities. Accordingly, the Company did not record an allowance for credit losses on these short-term investments as of December 31, 2022.

See Note 9 for information about the fair value of the Company’s short-term marketable securities.

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Significant Risks and Uncertainties Including Business and Credit Concentrations

6 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

Significant Risks and Uncertainties Including Business and Credit Concentrations

Significant Risks and Uncertainties Including Business and Credit Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, short-term available-for-sale debt securities and trade receivables. The Company invests its excess cash in money market funds and short-term available-for-sale debt securities with the primary objective of facilitating liquidity and capital preservation. The Company has established guidelines relative to credit ratings, diversification and maturities that seek to maintain safety and liquidity. Deposits in financial institutions may exceed the amounts of insurance provided on such deposits. To date, the Company has not experienced any material realized losses on its deposits of cash, cash equivalents and marketable securities.

The Company controls credit risk through credit approvals and monitoring procedures. The Company performs periodic credit evaluations of its customers and generally does not require collateral. Accounts receivable are recorded net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of specific customer accounts and the aging of the related invoices and represents the Company’s best estimate of expected credit losses in its existing trade accounts receivable. As of June 30, 2023, the Company recorded an allowance for doubtful accounts of $0.2 million. As of December 31, 2022, the Company had not recorded any material allowance for doubtful accounts.

For the three months ended June 30, 2023, three customers accounted for 12%, 11% and 10% of revenue. For the six months ended June 30, 2023, one customer accounted for 22% of revenue. For the three months ended June 30, 2022, three customers accounted for 20%, 11% and 10% of revenue. For the six months ended June 30, 2022, three customers accounted for 16%, 11% and 10% of revenue.

As of June 30, 2023, two customers comprised 16% and 10% of accounts receivable. As of December 31, 2022, two customers accounted for 24% and 11% of accounts receivable.

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Business Combinations

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Business Combinations

Business Combinations

IsoPlexis Merger

On March 21, 2023, the Company completed the IsoPlexis Merger. Under the terms of the Merger Agreement, IsoPlexis shareholders received, for each share of IsoPlexis stock, 0.612 shares of Berkeley Lights common stock (which was automatically converted into shares of PhenomeX common stock).

Consideration Transferred

The Acquisition Date fair value of consideration transferred in the IsoPlexis Merger totaled $84.9 million, summarized as follows (in thousands):

Fair value of PhenomeX common stock issued to IsoPlexis stockholders (1)	$	31,930
Repayment of IsoPlexis debt (2)	52,482
Fair value of vested IsoPlexis options attributable to pre-merger service (3)	306
Fair value of IsoPlexis Warrant at Acquisition Date (4)	170
Total purchase consideration	$	84,888

(1) Represents the fair value of PhenomeX common stock issued to IsoPlexis stockholders pursuant to the Merger Agreement. The fair value is based on 24,945,611 shares of PhenomeX common stock at $1.28 per share on March 21, 2023 issued to IsoPlexis stockholders. IsoPlexis stockholders received 0.612 shares of PhenomeX stock for each IsoPlexis share they held.

(2) Includes $50 million in principal repayment to retire debt of IsoPlexis, as required by change in control provisions of the debt, as well as prepayment penalties and accrued interest.

(3) Represents the fair value on March 21, 2023 of IsoPlexis options assumed by PhenomeX attributable to pre-combination service (see Note 13 for additional information).

(4) Represents the fair value of the IsoPlexis warrant assumed by PhenomeX at March 21, 2023 (see Note 13 for additional information).

Fair Value of Assets Acquired and Liabilities Assumed

The Company accounted for the IsoPlexis Merger as a business combination. The identifiable assets acquired and liabilities assumed are recorded at their fair values as of the Acquisition Date and are consolidated into the Company’s financial statements. The assignment of fair market value requires significant judgments regarding the estimates and assumptions used to value the acquired assets and liabilities assumed. In determining the fair values of the assets acquired and liabilities assumed, the Company utilized the cost, income and market approaches from the perspective of a market participant.

The following table summarizes the fair values for each major class of assets acquired and liabilities assumed at the Acquisition Date (in thousands). The Company used third party valuation professionals to aid in the determination of the estimated fair value of certain assets acquired and liabilities assumed. As of the date of this Quarterly Report, the allocation of the acquisition purchase price to the intangible assets acquired and the resulting goodwill has not been finalized. Management’s analysis of these items has not yet been completed because of the inherent complexities of estimating fair values of acquired patented technologies, customer relationships and trade names and trademarks. The fair value of the remaining assets acquired and liabilities assumed were determined by management based on its consideration of all currently available information and the allocation of consideration to these items can be considered final. Notwithstanding the above, as described in Note 8, Goodwill and Intangible Assets, management determined that there were indicators of asset impairment during the quarterly period ended June 30, 2023, and assessed the carrying values of the Company’s long-lived assets and goodwill.

During the three months ended June 30, 2023, the Company recorded a $4.3 million increase to goodwill related to changes in estimates pertaining to the fair value of inventory and property and equipment. Of the $4.3 million increase to goodwill, approximately $2.2 million represents a correction of the opening balance sheet to reduce the fair value of acquired inventory.

Cash and cash equivalents	$	12,197
Accounts receivable	3,075
Inventories	22,612
Prepaid expenses and other current assets	4,190
Property and equipment, net	11,562
Intangible assets	22,900
Goodwill	16,557
Operating lease right-of-use assets	4,975
Other assets	526
Total assets acquired	98,594
Accounts payable	2,359
Accrued expenses and other current liabilities	4,912
Deferred revenue	1,399
Operating lease obligations	5,036
Total liabilities assumed	13,706
Total consideration transferred	$	84,888

Acquired Receivables

The fair value of accounts receivable acquired was $3.1 million.

Inventory

The fair value of inventory acquired was initially estimated to be $27.3 million. During the three months ended June 30, 2022, the initial estimate of fair value of inventory acquired in the opening balance sheet was decreased to $22.6 million (which included a step up from the acquired cost basis of $4.1 million) as a result of a correction of $2.2 million and a measurement period adjustment of $2.5 million.

Intangible Assets and Goodwill

Intangible assets include $11.7 million of patented technology, $7.7 million of customer relationships and $3.5 million of IsoPlexis trade names and trademarks. The intangible assets will be amortized over their respective useful lives which range from eight to fourteen years. Goodwill with a provisional assigned value of $16.6 million represents the excess of the consideration transferred over the estimated fair values of assets and liabilities assumed. None of the goodwill resulting from the IsoPlexis Merger is deductible for tax purposes. Refer to Note 8, Goodwill and Intangible Assets, for further information.

Transaction Costs

The Company recognized transaction costs associated with the IsoPlexis Merger of $3.5 million for the six months ended June 30, 2023, plus $2.8 million which was recognized in the fourth quarter of 2022. These costs are primarily related to professional services and are recorded in selling, general, and administrative expenses in the Company’s condensed consolidated statement of operations.

Supplemental Pro Forma Information

The following unaudited pro forma financial information gives effect to the IsoPlexis Merger as if it had been completed on January 1, 2022. The unaudited pro forma information was prepared in accordance with the requirements of ASC 805, which is a different basis than pro forma information prepared under Article 11 of Regulation S-X (“Article 11”). As such, they are not directly comparable with historical results for stand-alone Berkeley Lights prior to March 21, 2023 or our previously provided pro forma financials prepared in accordance with Article 11. The pro forma adjustments are based on historical reported transactions by the respective companies and do not include any anticipated synergies or other expected benefits of the acquisition.

(in thousands)	Three months ended June 30, 2023		Three months ended June 30, 2022		Six months ended June 30, 2023		Six months ended June 30, 2022
Total revenue	$	14,062	$	23,155	$	34,232	$	48,272
Net loss	$	(50,245)	$	(51,404)	$	(116,708)	$	(101,822)

Pro forma adjustments consisted of:

•Amortization/Depreciation- Tangible and intangible assets are assumed to be recorded at their assigned fair values as of January 1, 2022. Historical depreciation and amortization for IsoPlexis has been removed and the new fair values of the assets are depreciated or amortized over their estimated useful lives.

•Interest Expense- Entry into the Second Amended Term Loan and repayment of the Perceptive Credit Agreement are assumed to have occurred on January 1, 2022. Historical interest expense has been removed and replaced with the applicable interest rate as of March 21, 2023 associated with the Second Amended Term Loan, which was 8.5%.

•Transaction costs- Both entities incurred transaction costs, which totaled $13.7 million. Of the $13.7 million, approximately $4.4 million was incurred in the first quarter of 2023 and has been eliminated as it is not recurring.

•Accounting policies adjustment- IsoPlexis historically classified certain operations, quality and facility related costs in selling, general and administrative expenses. To align with PhenomeX accounting policies, these costs were reclassified to costs of goods sold or research and development. However, since this is a reclassification between expense line items on the condensed statement of operations, the adjustment does not have an impact on revenue or net loss for purposes of the pro forma financial information disclosed above.

For the three and six months ended June 30, 2023, IsoPlexis contributed total revenues of $1.9 million and $2.9 million, respectively, and operating losses (excluding goodwill impairment charges) of $13.0 million and $14.1 million, respectively, that were included in the Company’s condensed consolidated statements of operations. In addition, the Company signed an agreement to license, on an exclusive and perpetual basis, certain intellectual property acquired in the IsoPlexis Merger for $7.3 million (see Note 6 for additional information).

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Revenue From Contracts With Customers

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue From Contracts With Customers

Revenue From Contracts With Customers

The Company’s revenue consists of both product revenue and service and other revenue, which is primarily generated through the following revenue streams: (i) platform, (ii) recurring and (iii) partnership, license and other.

In the first quarter of 2023, the Company entered into a license arrangement whereby certain patents were licensed to a third party and for which the customer agreed to pay a non-refundable fee. For licenses of intellectual property, the Company recognizes revenue from non-refundable fees when the license is transferred to the customer and the customer is able to use and benefit from the license.

The following tables provide an overview of the Company’s revenue streams and how the Company reports revenue in its consolidated statements of operations:

Income Statement Classification	Product or Service sold	Revenue Stream
Product revenue	Sale of advanced automation systems (Beacon and Lightning systems, Culture Station)	Platform
	Software and workflow licenses	Platform
	Fixed term sales-type lease arrangements with qualified customers	Platform
	Quarterly workflow subscriptions, annual or multi-year subscriptions arrangements (e.g., TechAccess)	Recurring
	Consumables and reagent kits (e.g., OptoSelect chips)	Recurring
Service and other revenue	Strategic partnerships, joint development and collaboration agreements where we provide services for development of new workflows, cells or organism types	Partnership, License and Other
	Application support, installation and training	Platform
	Fixed fee extended warranty and service programs	Recurring
	IP license revenue	Partnership, License and Other (1)

(1) License revenue relates to certain intellectual property acquired in the IsoPlexis Merger and subsequently licensed to a third party. License revenue related to the Company’s platforms (e.g., workflow licenses) is reported as Platform product revenue.

The following tables provide information by revenue stream for the periods presented:

	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
(in thousands)	Product		Service and other		Total		Product		Service and Other		Total
Platform	$	5,988	$	482	$	6,470	$	11,761	$	812	$	12,573
Recurring	4,316		2,952		7,268		6,921		5,510		12,431
Partnership, License and Other (1)	—		324		324		—		7,574		7,574
Total revenue	$	10,304	$	3,758	$	14,062	$	18,682	$	13,896	$	32,578

(1) During the six months ended June 30, 2023, the Company signed an agreement to license, on an exclusive and perpetual basis, certain intellectual property acquired in the IsoPlexis Merger for $7.3 million (“License Agreement”). As the $7.3 million represented a non-refundable fee and the license was transferred to the customer during the quarter, the $7.3 million was recognized as revenue during the first quarter of 2023.

	Three Months Ended June 30, 2022						Six Months Ended June 30, 2022
(in thousands)	Product		Service and other		Total		Product		Service and Other		Total
Platform	$	6,226	$	200	$	6,426	$	12,973	$	857	$	13,830
Recurring	3,242		2,687		5,929		6,269		5,103		11,372
Partnership, License and Other	—		6,795		6,795		—		14,154		14,154
Total revenue	$	9,468	$	9,682	$	19,150	$	19,242	$	20,114	$	39,356

Revenues by geographical markets are presented in Note 19.

Performance Obligations

A significant number of the Company’s product and service sales, as well as its feasibility study arrangements, are short-term in nature with a contract term of one year or less. For those contracts, the Company has utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

As of June 30, 2023, the aggregate amount of remaining performance obligations that are unsatisfied or partially unsatisfied related to customer contracts in excess of one year was $10.4 million, which, to the extent invoiced, is included in deferred revenue on the condensed consolidated balance sheets, of which approximately 50% is expected to be recognized as revenue in the next 12 months, with the remainder recognized afterwards.

Contract Balances

The following table provides information about receivables, contract assets and deferred revenue from contracts with customers (in thousands):

	June 30, 2023		December 31, 2022
Trade accounts receivable, net	$	14,375	$	18,534
Contract assets, which are included in “Prepaid expenses and other current assets”	$	480	$	1,283
Contract assets, long-term, which are included in “Other assets”	$	442	$	549
Deferred revenue (current)	$	9,648	$	9,092
Deferred revenue (non-current)	$	876	$	963

The contract liabilities of $10.5 million and $10.1 million as of June 30, 2023 and December 31, 2022, respectively, consisted of deferred revenue related to extended warranty service agreements, strategic partnerships and services agreements and advanced automation systems arrangements. Revenue recorded during the three and six months ended June 30, 2023 included $2.1 million and $4.9 million, respectively, of previously deferred revenue that was included in contract liabilities as of December 31, 2022.

Sales-type Lease Arrangements

The Company also enters into sales-type lease arrangements with certain qualified customers. Revenue related to lease elements from sales-type leases is presented as product revenue and was none for the three and six months ended June 30, 2023 and 2022.

The following table presents the future maturity of the Company’s fixed-term customer leases and reconciles the undiscounted cash flows from the amounts due from customers under such arrangements as of June 30, 2023 (in thousands):

Year ending December 31,	Sales-Type Leases
Remainder of 2023 (1)	$	223
2024	445
2025	408
2026	—
Total undiscounted cash flows	1,076
Less: unearned income	(143)
Total amounts due from customers (2)	$	933

(1) During the six months ended June 30, 2023, the Company impaired the net investment of a sales-type lease with a customer. The write down of the respective contract asset of $0.8 million, net of the return of the underlying asset, was recorded as an impairment charge of $0.6 million within selling, general and administrative expense in the Company’s condensed consolidated statement of operations and the resulting return of the underlying asset was recorded as an addition to fixed assets in the Company’s condensed consolidated balance sheet.

(2) Of the $0.9 million, $0.1 million is recorded in trade accounts receivable, with the remaining balance recorded in contract assets.

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Balance Sheet Accounts

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Accounts

Balance Sheet Accounts

Trade accounts receivable, net consists of the following (in thousands):

	June 30, 2023		December 31, 2022
Trade accounts receivable	$	14,583	$	18,534
Allowance for doubtful accounts	(208)		—
Total	$	14,375	$	18,534

Changes in the allowance for doubtful accounts were as follows (in thousands):

	Six months ended June 30, 2023
Allowance for doubtful accounts, beginning of year	$	—
Write-offs of uncollectible accounts	58
Provision for doubtful accounts	(266)
Allowance for doubtful accounts, end of period	$	(208)

Inventory

The following table shows the components of inventory (in thousands):

	June 30, 2023		December 31, 2022
Raw materials	$	30,143	$	11,946
Work in progress	425		—
Finished goods	10,887		6,915
Total	$	41,455	$	18,861

Prepaid expenses and other current assets

The following table shows the components of prepaid expenses and other current assets (in thousands):

	June 30, 2023		December 31, 2022
Contract asset	$	480	$	1,283
Vendor deposits	728		126
Deferred costs	365		472
Prepaid insurance	2,583		2,025
Other (1)	3,836		2,877
Total	$	7,992	$	6,783

(1) Other includes primarily prepaid rent expenses, software licenses and prepaid VAT.

Accrued expenses and other current liabilities

The following table shows the components of accrued expenses and other current liabilities (in thousands):

	June 30, 2023		December 31, 2022
Accrued payroll and employee related expenses	$	6,116	$	7,410
Lease liability – short-term	5,018		3,291
Accrued product warranty	654		749
Accrued legal expenses	518		8,271
Other (1)	1,640		1,619
Total	$	13,946	$	21,340

(1) Other includes accrued income taxes, sales taxes, accrued royalties and other miscellaneous accruals.

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill

On March 21, 2023, the Company completed the IsoPlexis Merger. Under the purchase method of accounting, the Company preliminarily recorded as goodwill, the $16.6 million excess of the Acquisition Date fair value of the consideration transferred over the estimated fair value of net tangible and identifiable intangible assets that it acquired.

The Company tests goodwill for impairment at the reporting unit level annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists. During the three and six months ended June 30, 2023, the Company experienced a decline in its market capitalization as a result of a sustained decrease in the Company’s stock price. The Company considered such sustained decrease to represent a triggering event requiring management to perform a quantitative goodwill impairment test as of June 30, 2023.

The Company utilized a combination of an income and market approach to assess the fair value of the reporting unit as of June 30, 2023. The income approach considers the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate and projected future economic and market conditions while the guideline public company market approach considers marketplace earnings multiples from within a peer public company group.

Based on the results of the quantitative goodwill impairment test, it was concluded that the estimated fair value of the Company’s single reporting unit was lower than its carrying value, as such, the Company recorded a goodwill impairment charge of $16.6 million during the three months ended June 30, 2023, which is included in the condensed consolidated statement of operations under the caption “Loss on impairment of goodwill”. As of June 30, 2023, cumulative goodwill impairment charges of $16.6 million were incurred.

The following table presents changes in the Company’s goodwill (in thousands):

Beginning balance, January 1, 2023	$	—
Preliminary goodwill recognized in connection with the IsoPlexis Merger	12,246
Ending balance, March 31, 2023	12,246
Measurement period adjustments (1)	4,311
Impairment charge	(16,557)
Ending balance, June 30, 2023	$	—

(1) Includes a $2.2 million correction of the opening balance sheet to reduce the fair value of acquired inventory.

Acquired Intangible Assets

In connection with the IsoPlexis Merger, the Company identified certain intangible assets summarized in the table below (see Note 5 for further information). In addition, on February 15, 2023, the Company acquired certain tangible and intangible assets from Evorion Biotechnologies for a total purchase price of $0.3 million, of which $0.2 million related to intangible assets attributable to patents and technology. These intangible assets are also included in the table below.

	June 30, 2023
(in thousands):	Remaining Useful Life (Years)	Gross		Accumulated Amortization		Net
Customer relationships	8	$	7,700	$	(280)	$	7,420
Trade names	10	3,500		(97)		3,403
Patented technology	14	11,915		(239)		11,676
Total intangible assets		$	23,115	$	(616)	$	22,499

Amortization expense was $577,000 and $616,000 for the three and six months ended June 30, 2023.

As discussed above, during the six months ended June 30, 2023, the Company experienced a decline in market capitalization resulting from a sustained decrease in stock price and recorded a $16.6 million loss on impairment of goodwill. Management considered these events to be triggering events and reviewed its single long-lived asset group (including its intangible assets) for impairment. Because the sum of future undiscounted cash flows for the asset group exceeded the carrying value of the asset group, management concluded the assets were recoverable and no impairment charge was recorded.

The estimated aggregate future amortization expense for intangible assets subject to amortization expense are summarized below (in thousands). Actual amortization expense to be reported in future periods could differ from these estimates as a result of the finalization of the preliminary purchase price allocation of the IsoPlexis Merger, divestitures and other factors.

	Estimated Future Amortization
Year Ending December 31:
Remainder of 2023	$	1,091
2024	$	2,164
2025	$	2,164
2026	$	2,164
2027	$	2,164

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The following is a description of the valuation techniques the Company uses to measure the fair value of assets and reports fair value on a recurring basis:

•Cash equivalents: As of June 30, 2023, the Company’s cash equivalents consisted of money market funds. Money market funds are highly liquid investments and are actively traded and pricing information is readily available. Accordingly, the Company classifies these securities as Level 1 of the fair value hierarchy.

•Short Term Marketable Securities: As of June 30, 2023, the Company did not hold any short-term marketable securities. Generally, the Company values short-term marketable securities using quoted

prices in active markets for similar instruments. Accordingly, the Company classifies marketable securities as Level 2 of the fair value hierarchy.

The carrying amounts of the Company’s cash, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses and other current liabilities as of June 30, 2023 and December 31, 2022 approximate fair value due to their relatively short maturities.

As of June 30, 2023 and December 31, 2022, the fair value measurements of the Company’s assets measured on a recurring basis were as follows (in thousands):

	June 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	2,904	$	2,904	$	—	$	—
Total assets measured at fair value	$	2,904	$	2,904	$	—	$	—

	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	2,354	$	2,354	$	—	$	—
Commercial paper	16,602		—		16,602		—
U.S. agency securities	3,970		—		3,970		—
Total cash equivalents	22,926		2,354		20,572		—
Debt securities, available for sale:
Commercial paper	22,148		—		22,148		—
U.S. agency securities	4,942		—		4,942		—
U.S. government securities	19,162		—		19,162		—
Total debt securities, available for sale	46,252		—		46,252		—
Total assets measured at fair value	$	69,178	$	2,354	$	66,824	$	—

As of June 30, 2023 and December 31, 2022, the carrying values and fair values of the Company’s financial instruments not measured at fair value were as follows (in thousands):

	June 30, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt, including current maturities (1)	$	—	$	—	$	19,826	$	17,443

(1) The Company repaid in full all outstanding indebtedness on June 30,2023.

The Company estimated the fair value of its long-term debt using a market-based approach that considers an average cost of debt. The Company has incorporated its own credit risk for all liability fair value measurements. Such fair value measurements are considered Level 2 under the fair value hierarchy.

The Company did not have any transfers of financial assets measured at fair value on a recurring basis between the levels of the fair value measurement hierarchy during the periods presented.

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Property and Equipment, net

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

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

	June 30, 2023		December 31, 2022
Equipment, tooling and molds	$	44,814	$	36,152
Computer software and equipment	4,427		2,667
Furniture, fixtures and other	2,401		2,007
Leasehold improvements	11,978		10,836
Construction in process	1,304		1,409
Total property and equipment	64,924		53,071
Less: Accumulated depreciation	(32,214)		(29,224)
Property and equipment, net (1)	$	32,710	$	23,847

(1) As of December 31, 2022, Property and equipment, net included $0.1 million of assets held for sale.

Depreciation expense for the three and six months ended June 30, 2023 was $2.5 million and $4.6 million, respectively. Depreciation expense for the three and six months ended June 30, 2022 was $2.5 million and $4.4 million, respectively.

During the three and six months ended June 30, 2023 and 2022, losses on the impairment and disposal of property and equipment were not material.

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Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

Leases

The Company leases office, manufacturing, distribution and laboratory facilities in various locations in the United States, primarily in Emeryville, California and Branford, Connecticut. The Company also leases facilities in Shanghai, China for office and laboratory facilities. On December 28, 2022, the Company entered into a sub-lease arrangement for its facility in Lexington, Massachusetts. Sub-lease income for the three and six months ended June 30, 2023 was $0.2 million and $0.3 million, respectively and was recorded as an offset to rent expense. There was no sub-lease income during the three and six months ended June 30, 2022.

Future payments associated with the Company’s operating lease liabilities as of June 30, 2023 are as follows (in thousands):

	Operating leases
Undiscounted lease payments for the year ending December 31,
Remainder of 2023	$	3,121
2024	6,297
2025	5,952
2026	5,398
2027	4,759
Thereafter	7,464
Total undiscounted lease payments	32,991
Less: implied interest	(3,958)
Less: tenant improvement allowances receivable	(65)
Present value of operating lease payments	28,968
Less: current portion (1)	(5,018)
Total long-term operating lease liabilities	$	23,950

(1) Included in the balance sheet caption “Accrued expenses and other current liabilities.”

Rent expense, net for the three and six months ended June 30, 2023 was $1.6 million and $2.5 million, respectively. Rent expense, net for the three and six months ended June 30, 2022 was $1.4 million and $2.5 million, respectively. Under the terms of the lease agreements, the Company is also responsible for certain variable lease payments that are not included in the measurement of the lease liability. Variable lease payments for operating leases were $0.8 million and $1.6 million for the three and six months ended June 30, 2023, respectively, including non-lease components such as common area maintenance fees. Variable lease payments for operating leases were $1.0 million and $1.8 million for the three and six months ended June 30, 2022, respectively, including non-lease components such as common area maintenance fees.

The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands):

	Six months ended June 30, 2023		Six months ended June 30, 2022
Right-of-use assets obtained for new operating lease liabilities	$	—	$	—
Right-of-use lease assets assumed in IsoPlexis Merger	$	4,975	$	—
Cash paid for amounts included in the measurement of lease liabilities	$	3,123	$	1,070

The following summarizes additional information related to operating leases:

	June 30, 2023		December 31, 2022
Weighted-average remaining lease term (years)	5.50		6.48
Weighted-average discount rate	4.72	%	4.66	%

The Company also enters into leasing transactions in which the Company is the lessor, which to date have been classified as sales-type leases. See Note 6 for the related sales-type lease disclosures.

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Long-Term Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Long-Term Debt

Long-term Debt

On May 23, 2018, the Company entered into a Loan and Security Agreement (“Loan Agreement”) with EWB to provide a $20.0 million term loan facility (“Term Loan”). The loan facility was fully drawn as of May 23, 2018.

On June 30, 2021, the Company entered into an Amended and Restated Loan and Security Agreement (“Amended Loan Agreement”) with EWB. Pursuant to the Amended Loan Agreement, EWB provided a $20.0 million term loan (“Amended Term Loan”) which was used to refinance the Term Loan outstanding under the Loan Agreement dated May 23, 2018. The Amended Term Loan had a maturity of 48 months and a fixed interest rate of 4.17%. In addition, the Amended Term Loan had an initial interest-only period of 24 months, which could have been extended to up to 36 months based on the achievement of certain liquidity measures, and could have been pre-paid without penalty at any time.

On March 21, 2023, the Company entered into the Second Amended Loan Agreement with EWB. Pursuant to the Second Amended Loan Agreement, EWB increased the existing Amended Term Loan amount of $20.0 million by $50.0 million to an aggregate outstanding principal of $70.0 million (“Second Amended Term Loan”). The Second Amended Loan Agreement had a maturity of 60 months and a variable interest rate per annum equal to (i) the greater of 6.25% or the variable rate of interest, per annum most recently announced by EWB as its prime rate, plus (ii) one-half of one percent (0.5%). The Company used the proceeds from the Second Amended Term Loan to repay $52.5 million of indebtedness (including prepayment premium and interest) with Perceptive held by IsoPlexis (“Perceptive Credit Agreement”). Associated with these transactions, a $0.2 million loss on extinguishment of debt and a $0.7 million commitment fee associated with the Loan Agreement, was recorded in “Other expense, net” on the Company’s condensed consolidated statement of operations during the three months ended March 31, 2023.

On June 30, 2023, the Company repaid in full all outstanding indebtedness under the Second Amended Loan Agreement, and upon such repayment, the Second Amended Loan Agreement and all related guarantees and loan documents were terminated and have no further force and effect. The Second Amended Loan Agreement payoff of $71.2 million included the principal amount of $70.0 million, accrued interest of $0.5 million, an early termination fee of $0.7 million plus other related fees and expenses, which satisfied all of the Company’s indebtedness obligations thereunder. Associated with this repayment, a $1.8 million loss on extinguishment of debt (including the write off of deferred issuance costs amounting to $1.1 million at the payoff date), was recorded in “Other income (expense), net” on the Company’s condensed consolidated statement of operations during the three months ended June 30, 2023.

In connection with the repayment of such outstanding indebtedness obligations by the Company, all security interests, liens, pledges, financing statements, mortgages and other charges of whatever nature against the collateral and other encumbrances held by EWB securing the obligations of any loan party under the Second Amended Loan Agreement were automatically and irrevocably terminated and released.

Total interest cost incurred for the three and six months ended June 30, 2023 was $1.6 million and $2.0 million, respectively. Total interest cost incurred for the three and six months ended June 30, 2022 was $0.2 million and $0.5 million, respectively.

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Equity and Stock Compensation Plans

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Equity and Stock Compensation Plans

Equity and Stock Compensation Plans

IsoPlexis Merger

On March 21, 2023, in connection with the completion of the IsoPlexis Merger:

•All outstanding IsoPlexis RSAs were assumed by PhenomeX and converted into PhenomeX RSAs based on the 0.612 conversion ratio (see Note 5) and on the same terms and conditions (including with respect to vesting schedules and restrictions) as applied to IsoPlexis RSAs immediately prior to the closing of the IsoPlexis Merger.

•All outstanding IsoPlexis stock options (whether vested or unvested) that had a per share exercise price of less than $1.28 and were held by continuing employees were assumed by PhenomeX and converted into PhenomeX stock options based on the 0.612 conversion ratio (and rounded down) and on the same terms and conditions (including with respect to time-based vesting) as applied to IsoPlexis stock options immediately prior to the closing of the IsoPlexis Merger, with the exercise price per share of the assumed stock options determined by dividing the per share exercise price of the IsoPlexis options by the 0.612 conversion ratio (and rounded up to the nearest whole cent). The assumed stock options expire 10 years from their original date of grant. The assumed stock options and RSAs generally vest 25% upon the one-year anniversary of the service inception date and then ratably each month over the remaining 36 months.

On March 21, 2023, PhenomeX assumed 304,619 IsoPlexis RSAs and 378,767 IsoPlexis stock options after applying the 0.612 conversion ratio. The Company accounted for the assumed equity awards as a modification under ASC 718 and recorded stock compensation expense of $0.1 million during the six months ended June 30, 2023 associated with the modification.

Future grants of equity awards will be issued under the Company’s 2020 Plan.

Warrant Certificate

On March 21, 2023, and in connection with the closing of the IsoPlexis Merger, PhenomeX, IsoPlexis and Perceptive executed the Warrant Certificate. Under the Warrant Certificate, the outstanding warrant (“IsoPlexis Warrant”) to purchase shares of common stock, par value $0.001, of IsoPlexis (“IsoPlexis Common Stock”), issued by IsoPlexis to Perceptive was assumed by PhenomeX and converted into a warrant (“PhenomeX Warrant”) to purchase shares of common stock, par value $0.00005, of PhenomeX (“PhenomeX Common Stock”), on the same terms and subject to the same conditions as were applicable to the IsoPlexis Warrant as of immediately prior to the Acquisition Date; provided, that the PhenomeX Warrant is exercisable for 496,560 shares of PhenomeX Common Stock (i.e., a number of shares of PhenomeX Common Stock equal to the number of shares of IsoPlexis Common Stock that were subject to the IsoPlexis Warrant multiplied by the 0.612 exchange ratio) and has an exercise price of $9.80 per share of PhenomeX Common Stock (i.e., the exercise price per share of IsoPlexis Common Stock that was applicable to the IsoPlexis Warrant divided by 0.612).

Restricted stock awards

As a result of the IsoPlexis Merger and as discussed above, the Company now has RSAs outstanding. RSAs are rights to receive shares of the Company’s Common Stock upon meeting specified vesting requirements. The fair value of a RSA is the market value as determined by the closing price of the Company’s stock on the original grant date.

Stock-based compensation

Stock-based compensation related to the Company’s stock-based awards was recorded as an expense and allocated as follows (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Cost of sales	$	46	$	68	$	62	$	119
Research and development	463		2,292		1,011		3,873
Selling, general and administrative	3,222		4,205		7,046		7,966
Total stock-based compensation	$	3,731	$	6,565	$	8,119	$	11,958

Stock-based compensation capitalized in inventory was not material as of June 30, 2023 and December 31, 2022.

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Restructuring

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

During 2022, the Company adopted a new strategic plan with the intention of reducing costs and better aligning the organization with the Company’s long-term goals. As a result, the Company approved a set of restructuring initiatives in 2022 and continued with similar initiatives in the first quarter and second quarter of 2023. During the three and six months ended June 30, 2023, the Company incurred restructuring charges of $1.1 million and $2.4 million, respectively, related to severance and other employee-related restructuring costs associated with the termination of approximately 15% of total full-time employees. As of June 30, 2023, the Company has substantially completed its restructuring efforts. It is unable to currently estimate future restructuring charges but will record any additional restructuring-related expenses as they are incurred.

Changes in the Company’s restructuring liability are set forth in the table below (in thousands):

	Employee severance and termination benefits		Non labor restructuring		Total
Accrual on January 1, 2023	$	130	$	107	$	237
Restructuring liability assumed in IsoPlexis Merger	834		—		834
Restructuring charges	2,383		—		2,383
Cash payments	(2,832)		(107)		(2,939)
Non-cash settlements	—		—		—
Accrual on June 30, 2023	$	515	$	—	$	515

Restructuring liabilities are included in accrued expenses and other current liabilities in the condensed consolidated balance sheet.

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Income Taxes	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesThe Company’s provision for income taxes was $51,000 and $71,000, respectively, for the three and six months ended June 30, 2023, and $4,000 and $24,000, respectively, for the three and six months ended June 30, 2022. For the three and six months ended June 30, 2023 and 2022, loss from operations before taxes consisted of amounts related to U.S. operations and the Company’s foreign operations. The Company maintains a full valuation allowance on its deferred tax assets and intends to do so until there is sufficient evidence to support the reversal of all or some portion of this allowance.

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Statements of Cash Flows

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Statements of Cash Flows

Statements of Cash Flows

The supplemental cash flow information consists of the following (in thousands):

	Six months ended June 30,
	2023		2022
Cash paid for interest	$	1,954	$	278
Cash paid for income taxes	$	317	$	—
Non-cash investing and financing activities
Non-cash consideration for the acquisition of IsoPlexis	$	32,406	$	—
Property and equipment transferred to inventory	$	104	$	—
Inventory transferred to property and equipment (1)	$	1,912	$	—
Customer return of Beacon transferred to property and equipment (2)	$	201	$	—
Change in accounts payable and accrued liabilities related to purchases of property and equipment	$	(68)	$	(699)

(1) The non-cash transfer of inventory to property and equipment principally relates to Beacons that were transferred to the Company’s BioFoundry operations in the first half of 2023. Beacons that at inception are planned to be used in the Company’s BioFoundry operations will be categorized as “Purchase of property and equipment.”

(2) Refer to Note 6 under “Sales-type Lease Arrangements” for further information.

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Commitment and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

From time to time, the Company may be involved in legal and administrative proceedings and claims of various types. The Company records a liability in its financial statements for these matters when a loss is known and considered probable and the amount can be reasonably estimated. The Company does not recognize gain contingencies until they are realized. Legal costs incurred relating to loss contingencies are expensed as incurred.

AbCellera Biologics Litigation

In July through September 2020, AbCellera Biologics Inc. (“AbCellera”) filed a series of complaints in the United States District Court for the District of Delaware, alleging that the Company infringed and continues to infringe, directly and indirectly, the following patents exclusively licensed by AbCellera by making, using, offering for sale, selling and/or importing the Company’s Beacon and Culture Station instruments and the OptoSelect chips, and sale of the Opto Plasma B Discovery Workflow: U.S. Patent Nos. 10,107,812, 10,274,494, 10,466,241, 10,578,618, 10,697,962, 10,087,408, 10,421,936, 10,704,018, 10,718,768, 10,738,270, 10,746,737, 10,753,933, 10,775,376, 10,775,377, and 10,775,378. The University of British Columbia (“UBC”), the owner of the patents, joined AbCellera as a named plaintiff in the lawsuits. AbCellera and UBC are seeking, among other things, judgment of infringement, a permanent injunction and damages (including lost profits, a reasonable royalty, reasonable costs and attorney’s fees, and treble damages for willful infringement). In addition to procedural motions, the Company has filed an answer and counterclaims in response to each of the lawsuits. The Company’s counterclaims in each lawsuit include counts for declaratory judgment of non-infringement of the asserted patents, for declaratory judgment of invalidity of the asserted patents, for declaratory judgment of unenforceability of the asserted patents due to inequitable conduct, and unfair competition under state and federal law.

The Company filed a motion to transfer the lawsuits to the United States District Court for the Northern District of California, which was granted and where the lawsuits have been consolidated and are now pending (“Consolidated Lawsuit”). On May 6, 2021, and pursuant to Court Order, AbCellera and UBC reduced, without prejudice, the asserted patents in the consolidated lawsuit to the following: US Patent Nos. 10,087,408, 10,421,936, 10,738,270, 10,697,962, 10,753,933, 10,775,376 and 10,775,378. On July 1, 2021, the court issued a

Case Management Order that, among other things, requires AbCellera and UBC to further reduce the number of asserted patents to no more than two, and the total asserted patent claims to no more than four per patent prior to the trial.

In July 2021 and August 2021, the Company filed petitions for Inter Partes Review (“IPR”) with the Patent Trial and Appeal Board (“PTAB”) of the United States Patent & Trademark Office (“USPTO”), challenging the validity of various asserted claims of U.S. Patent No. 10,087,408 and all asserted claims of U.S. Patent Nos. 10,421,936 and 10,739,270. In August 2021, in response to a Motion to Stay filed by the Company, the court stayed the Consolidated Lawsuit pending the outcome of the IPR proceedings.

In January 2022, the PTAB of the USPTO issued a decision instituting IPR on U.S. Patent No. 10,087,408 (“408 Patent”) and a decision denying IPR on U.S. Patent No. 10,421,936. In February 2022, the PTAB issued a decision denying IPR on U.S. Patent No. 10,739,270. And in January 2023, the PTAB issued a final written decision declining to invalidate any challenged claim of the 408 Patent based on the grounds presented in the IPR. Subsequent to that decision, the Company filed a request for a rehearing of the 408 Patent IPR with the PTAB. In July 2023, following denial of the Company’s request for a rehearing, the Company appealed the PTAB’s final written decision on 408 Patent IPR to the U.S. Court of Appeals for the Federal Circuit. On August 4, 2023, the United States District Court for the Northern District of California issued an order lifting the stay in the litigation. The parties were directed to file a joint case management statement on August 22, 2023 and appear for a case management conference on August 29, 2023.

The Company believes that the patent assertions by AbCellera and UBC are without merit and it intends to defend itself vigorously. The Company also intends to proceed with its claims and counterclaims against AbCellera and UBC. Outcomes in litigation can be uncertain and it is possible a court may disagree with the Company’s position. An adverse determination in these lawsuits could subject the Company to significant liabilities, require it to seek licenses from or pay royalties to AbCellera and/or UBC, or prevent it from manufacturing, selling or using certain of the Company’s products, any of which could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

Securities Class Action

In December 2021, Victor J. Ng filed a securities class action complaint in the Northern District of California (“Securities Class Action”), which was amended on July 25, 2022. The Securities Class Action is on behalf of all persons who purchased or otherwise acquired: (a) Berkeley Lights common stock pursuant and/or traceable to certain July 2020 Initial Public Offering (“IPO”) offering documents and/or (b) securities of Berkeley Lights between July 17, 2020 and January 5, 2022, inclusive. The complaint alleges claims under §§10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and Rule 10b-5 promulgated thereunder as well as §§11, 12(a)(2) and 15 of the Securities Act of 1933. It names as defendants the Company, certain of the Company’s current and former senior executives and directors, the underwriter firms that sponsored the Company’s July 2020 IPO, and three firms that invested in the Company. The Company believes that the assertions in the Securities Class Action are without merit and intends to defend itself vigorously. The Company’s Motion to Dismiss is pending a decision from the court. Outcomes in litigation can be uncertain and it is possible a court may disagree with the Company’s positions. An adverse determination in the Securities Class Action could subject the Company to significant liabilities, which could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

Derivative Action

In March 2022, Trung Nguyen filed a shareholder derivative complaint on behalf of nominal defendant Berkeley Lights, Inc., alleging that certain of the Company’s current and former directors and certain of the Company’s current and former senior executives breached their fiduciary duties to the Company. The complaint also alleged that certain of the Company’s current and former directors and former senior executives used material, non-public information to improperly profit from the sale of Company stock, and that certain of the Company’s current and former senior executives owe the Company contribution for violations of Sections 10(b) and 21D of the Exchange Act.

Trademark Infringement

The Company entered into a non-financial settlement agreement which resolves a previously disclosed dispute filed by Phenomenex alleging trademark infringement.

The Company is not currently involved in any other claims or legal actions, nor is management aware of any potential claims or legal actions, for which the ultimate disposition could have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

No provision has been made for litigation because the Company believes that it is not probable that a liability has been incurred as of June 30, 2023.

Purchase commitments

The Company has entered into various purchase agreements, including inventory-related agreements with its contract manufacturers. Once these orders are placed, they are generally cancelable by providing notice prior to the expected ship date, however such cancellations could result in the Company incurring certain charges depending on the timing. The Company had non-cancellable purchase obligations to contract manufacturers and other suppliers of $21.2 million on June 30, 2023.

Product Warranty

The Company generally provides a one year assurance-type warranty on its platforms and chip consumables. The table below represents the activity in the product warranty accrual included in “Accrued expenses and other current liabilities” on the condensed consolidated balance sheets (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Balance, beginning of period	$	788	$	914	$	749	$	1,085
Warranty accrual assumed in IsoPlexis Merger	—		—		128		—
Adjustments to existing warranties	(236)		(185)		(349)		(430)
Provision for new warranties	161		179		294		342
Settlement of pre-existing warranties	(59)		(156)		(168)		(245)
Balance, end of period	$	654	$	752	$	654	$	752

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Net Loss Attributable to Common Stockholders Per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Net Loss Attributable to Common Stockholders Per Share

Net Loss Attributable to Common Stockholders Per SharePotentially issuable shares of common stock include shares issuable upon the exercise of outstanding employee stock option awards and unvested RSUs.

The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except share and per share data):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Numerator
Net loss attributable to common stockholders, basic and diluted	$	(50,245)	$	(25,747)	$	(73,664)	$	(47,173)
Denominator
Weighted-average shares used to compute net income per share, basic and diluted	98,900,780		67,985,664		87,394,201		67,842,372
Net loss per share
Net loss per share attributable to common stockholders, basic and diluted	$	(0.51)	$	(0.38)	$	(0.84)	$	(0.70)

Since the Company was in a loss position for all periods presented, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. The following shares of common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods presented as they had an anti-dilutive effect:

	June 30,
	2023	2022
Warrants to purchase common stock	496,560	—
Options to purchase common stock	6,606,909	7,750,612
Restricted stock awards	290,774	—
Restricted stock units	8,636,618	4,241,025
Total	16,030,861	11,991,637

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Segments

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segments

Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company has one business activity and there are no segment managers who are held accountable for operations. Accordingly, the Company has one operating segment. The IsoPlexis Merger on March 21, 2023 did not change the Company’s assessment about operating segments. The Company’s principal operations and decision-making functions are located in the United States.

The following table provides the Company’s revenues by geographical market based on the location where the services were provided or to which product was shipped (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
North America	$	7,568	$	9,891	$	21,623	$	23,585
Asia Pacific (1)	1,584		7,201		4,731		12,236
Europe	4,910		2,058		6,224		3,535
	$	14,062	$	19,150	$	32,578	$	39,356

(1) Asia Pacific includes Australia.

As of June 30, 2023 and December 31, 2022, substantially all of the Company’s long-lived assets were located in the United States.

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The Company and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

On December 21, 2022, Berkeley Lights, Inc. (“Berkeley Lights”) entered into an Agreement and Plan of Merger (“Merger Agreement”) with Iceland Merger Sub Inc., a wholly owned subsidiary of Berkeley Lights (“Merger Sub”) and IsoPlexis Corporation (“IsoPlexis”). Pursuant to the Merger Agreement on March 21, 2023 (“Acquisition Date”), Merger Sub was merged with IsoPlexis, with IsoPlexis surviving the merger as a wholly owned subsidiary of Berkeley Lights (“IsoPlexis Merger”). The newly combined company has been renamed PhenomeX. The historical financial statements of PhenomeX for periods prior to the IsoPlexis Merger are the historical financial statements of Berkeley Lights.

The accompanying unaudited condensed consolidated financial statements (“condensed consolidated financial statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates.

Cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

The Company records cash and cash equivalents as restricted when it is unable to freely use such cash and cash equivalents for general operating purposes. As of June 30, 2023, restricted cash consisted of $0.1 million related to a letter of credit with an international customer.

Accounts Receivables and Allowance for Credit Losses

Accounts Receivables and Allowance for Credit Losses

Trade accounts receivable are recorded at the invoiced amount as a result of the transaction with customers. The Company maintains allowances for credit losses for uncollectible accounts receivable. The Company estimates anticipated losses from doubtful accounts based on days past due, historical collection history, and other factors. Write-offs are recorded at the time all collection efforts have been exhausted. The Company reviews its allowance for doubtful accounts on a quarterly basis.

Inventory

Inventory

Inventories are recorded at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Inventory that is obsolete or in excess of forecasted usage is written down to its estimated net realizable value based on assumptions about future demand and market conditions. Inventory write-downs are charged to cost of goods sold and establish a new cost basis for the inventory. Costs included in inventories are raw materials, labor, supplies, allocable depreciation of manufacturing facilities, equipment and overhead.

Stock-based compensation

Stock-based compensation

The Company maintains the 2020 Incentive Award Plan (“2020 Plan”), an incentive compensation plan under which stock options, restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) are granted to employees, non-employee consultants and directors.

Stock-based compensation expense is calculated based on the grant date fair value of the award. The Company determines the fair value of RSUs and RSAs based on the closing price of the Company’s common stock as reported by Nasdaq on the date of the grant.

The Company estimates the fair value of the majority of stock option awards on the grant date using the Black-Scholes option-pricing model. For option awards that include a goal tied to the Company share price (i.e., a market condition), the Company uses a Monte Carlo simulation to estimate the fair value.

The fair value of stock options, RSUs and RSAs with only a service condition is recognized as compensation expense on a straight-line basis over the requisite service period in which the awards are expected to vest and forfeitures are recognized as they occur.

Stock options and RSUs that include a service condition and a performance condition are considered expected to vest when the performance condition is probable of being met. Compensation expense associated with performance awards that are determined to be probable of achievement is recognized over the requisite service period on a tranche-by-tranche basis.

For performance stock options and RSUs not initially assessed as probable of achievement, the Company records a cumulative adjustment to compensation expense in the period the Company changes its determination that a performance condition becomes probable of being achieved. The Company ceases recognition of compensation expense in any periods where the Company determines the attainment of a performance condition is no longer probable. If the performance goals are determined to be improbable, any previously recognized compensation expense is reversed.

The fair value of stock options with a market condition is recognized over the requisite service period for each tranche of the award and is recognized regardless of whether (or to what extent) the market condition is ultimately achieved.

Business Combinations

Business Combinations

The Company records tangible and intangible assets acquired and liabilities assumed in a business combination using the purchase method of accounting. The excess of the purchase consideration over the fair value of net assets acquired is recorded as goodwill. The allocation of purchase consideration in a business combination requires the Company to make significant estimates and assumptions. Such estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the Acquisition Date, the Company may record adjustments to the fair value of the tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or the final determination of the fair value, whichever comes first, any subsequent adjustments are recorded to the consolidated statement of operations. Transaction costs associated with business combinations are expensed as they are incurred.

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill represents the excess of the consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination. Intangible assets are measured at their respective fair values as of the Acquisition Date and may be subject to adjustment within the measurement period, which may be up to one year from the Acquisition Date. The Company does not amortize goodwill rather; goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Such triggering events potentially warranting an annual or interim goodwill impairment assessment include, among other factors, declines in historical or projected revenue, operating income or cash flows, and sustained decreases in the Company’s stock price or market capitalization.

To determine whether goodwill is impaired, the Company performs a quantitative impairment test whereby the Company estimates the fair values of its single reporting unit using a combination of an income and market approach. To determine the fair value, the Company is required to make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include the valuation methodology itself, as well as inputs to the valuation model. The Company utilizes a combination of an income and market approach to assess the fair value of the reporting unit. The income approach considers the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate and projected future economic and market conditions while the guideline public company market approach considers marketplace earnings multiples from within a peer public company group. These assumptions require significant judgement.

To the extent the carrying amount of goodwill exceeds the implied goodwill, the difference is the amount of the goodwill impairment. The Company also completes a reconciliation between the implied equity valuation prepared and the Company’s market capitalization. The majority of the inputs used in the discounted cash flow model are unobservable and thus are considered to be Level 3 inputs. The inputs for the market capitalization calculation are considered Level 1 inputs.

Long-Lived Assets

Long-Lived Assets

Long-lived assets, including property, plant and equipment and finite-lived intangible assets, are amortized over their estimated useful lives, generally on a straight line basis, and are reviewed for impairment whenever facts or circumstances indicate that the carrying value of an asset may not be recoverable. Should there be an indication of impairment, the Company first tests for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset group to the carrying amount of that asset group. If the carrying amount of the asset group is not recoverable on an undiscounted cash flow basis, the Company is then required to estimate the fair value of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.

During the six months ended June 30, 2023, the Company experienced a decline in its market capitalization as a result of a sustained decrease in the Company’s stock price. This sustained decrease was considered to represent a triggering event requiring management to perform a quantitative impairment test of its long-lived assets as of June 30, 2023. Because the sum of future estimated undiscounted cash flows for the Company’s single asset group exceeded its carrying value, the Company concluded there was no impairment as of June 30, 2023. Refer to Note 8, Goodwill and Other Intangible Assets, and Note 10, Property and Equipment, Net, for further information.

Foreign currency translation and transactions

Foreign currency translation and transactions

The Company assesses the functional currency of each of its international subsidiaries. For subsidiaries where the functional currency is the U.S. dollar, gains or losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the U.S. dollar are included in “Other income (expense), net” in the condensed consolidated statement of operations.

For subsidiaries where the functional currency is the local currency, the translation of foreign currencies into U.S. dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet dates and revenue and expense accounts using the average exchange rate during each period. The gains and losses resulting from the translation are included in accumulated other comprehensive loss in stockholders’ equity and are excluded from net loss. The portions of intercompany accounts receivable and accounts payable that are intended for settlement are translated at exchange rates in effect at the balance sheet date.

Research and development state tax credits

Research and development state tax creditsR&D tax credits exchanged for cash pursuant to the Connecticut R&D Tax Credit Exchange Program, which permits a qualified small business engaged in R&D activities within Connecticut to exchange its unused R&D tax credits for a cash amount equal to 65% of the value of exchanged credits, are recorded as a receivable and other income in the year the R&D tax credits relate to, as it is reasonably assured that the R&D tax credits will be received, based upon the Company’s history of filing for and receiving the tax credits. R&D tax credits receivable where cash is expected to be received by the Company more than one year after the balance sheet date are classified as noncurrent in the consolidated balance sheets.

Warrants

Warrants

On March 21, 2023, and in connection with the closing of the IsoPlexis Merger, PhenomeX, IsoPlexis and Perceptive Credit Holdings III, LP (“Perceptive”) executed a warrant certificate to purchase shares of PhenomeX stock (“Warrant Certificate”). The Company accounts for these common stock warrants as equity classified instruments in accordance with ASC 480, Distinguishing Liabilities from Equity.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Schedule of cash and cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the Company’s condensed consolidated balance sheets to the totals presented on the condensed consolidated statements of cash flows (in thousands):

	June 30, 2023		December 31, 2022
Cash	$	28,060	$	63,596
Cash equivalents	2,904		22,926
Restricted cash	93		—
Total cash, cash equivalents and restricted cash as presented on the condensed consolidated statements of cash flows	$	31,057	$	86,522

Schedule of cash and cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the Company’s condensed consolidated balance sheets to the totals presented on the condensed consolidated statements of cash flows (in thousands):

	June 30, 2023		December 31, 2022
Cash	$	28,060	$	63,596
Cash equivalents	2,904		22,926
Restricted cash	93		—
Total cash, cash equivalents and restricted cash as presented on the condensed consolidated statements of cash flows	$	31,057	$	86,522

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Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of unrealized gains and losses related to our available-for-sale marketable securities

The following tables summarize the amortized costs and carrying value of the Company’s available-for-sale securities, by balance sheet classification and major security type, as of June 30, 2023 and December 31, 2022 (in thousands):

Marketable Securities reported as Cash Equivalents

	June 30, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Money market funds	$	2,904	$	—	$	—	$	2,904
Total	$	2,904	$	—	$	—	$	2,904

	December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Money market funds	$	2,354	$	—	$	—	$	2,354
Commercial paper	16,606		—		(4)		16,602
U.S. agency securities	3,969		1		—		3,970
U.S. government securities	—		—		—		—
Total	$	22,929	$	1	$	(4)	$	22,926

Marketable Securities reported as Short-term Marketable Securities

As of June 30, 2023, the Company did not hold any short-term marketable securities. Realized gains/losses from the sale of short-term marketable securities during the three and six months ended June 30, 2023 were immaterial.

Short-term marketable securities on December 31, 2022 were as follows (in thousands):

	December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Commercial paper	$	22,158	$	1	$	(11)	$	22,148
U.S. agency securities	4,941		1		—		4,942
U.S. government securities	19,159		5		(2)		19,162
Total	$	46,258	$	7	$	(13)	$	46,252

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of fair value of consideration transferred

The Acquisition Date fair value of consideration transferred in the IsoPlexis Merger totaled $84.9 million, summarized as follows (in thousands):

Fair value of PhenomeX common stock issued to IsoPlexis stockholders (1)	$	31,930
Repayment of IsoPlexis debt (2)	52,482
Fair value of vested IsoPlexis options attributable to pre-merger service (3)	306
Fair value of IsoPlexis Warrant at Acquisition Date (4)	170
Total purchase consideration	$	84,888

(1) Represents the fair value of PhenomeX common stock issued to IsoPlexis stockholders pursuant to the Merger Agreement. The fair value is based on 24,945,611 shares of PhenomeX common stock at $1.28 per share on March 21, 2023 issued to IsoPlexis stockholders. IsoPlexis stockholders received 0.612 shares of PhenomeX stock for each IsoPlexis share they held.

(2) Includes $50 million in principal repayment to retire debt of IsoPlexis, as required by change in control provisions of the debt, as well as prepayment penalties and accrued interest.

(3) Represents the fair value on March 21, 2023 of IsoPlexis options assumed by PhenomeX attributable to pre-combination service (see Note 13 for additional information).

(4) Represents the fair value of the IsoPlexis warrant assumed by PhenomeX at March 21, 2023 (see Note 13 for additional information).

Schedule of fair value of assets acquired and liabilities assumed

The following table summarizes the fair values for each major class of assets acquired and liabilities assumed at the Acquisition Date (in thousands). The Company used third party valuation professionals to aid in the determination of the estimated fair value of certain assets acquired and liabilities assumed. As of the date of this Quarterly Report, the allocation of the acquisition purchase price to the intangible assets acquired and the resulting goodwill has not been finalized. Management’s analysis of these items has not yet been completed because of the inherent complexities of estimating fair values of acquired patented technologies, customer relationships and trade names and trademarks. The fair value of the remaining assets acquired and liabilities assumed were determined by management based on its consideration of all currently available information and the allocation of consideration to these items can be considered final. Notwithstanding the above, as described in Note 8, Goodwill and Intangible Assets, management determined that there were indicators of asset impairment during the quarterly period ended June 30, 2023, and assessed the carrying values of the Company’s long-lived assets and goodwill.

During the three months ended June 30, 2023, the Company recorded a $4.3 million increase to goodwill related to changes in estimates pertaining to the fair value of inventory and property and equipment. Of the $4.3 million increase to goodwill, approximately $2.2 million represents a correction of the opening balance sheet to reduce the fair value of acquired inventory.

Cash and cash equivalents	$	12,197
Accounts receivable	3,075
Inventories	22,612
Prepaid expenses and other current assets	4,190
Property and equipment, net	11,562
Intangible assets	22,900
Goodwill	16,557
Operating lease right-of-use assets	4,975
Other assets	526
Total assets acquired	98,594
Accounts payable	2,359
Accrued expenses and other current liabilities	4,912
Deferred revenue	1,399
Operating lease obligations	5,036
Total liabilities assumed	13,706
Total consideration transferred	$	84,888

Schedule of pro forma information

The following unaudited pro forma financial information gives effect to the IsoPlexis Merger as if it had been completed on January 1, 2022. The unaudited pro forma information was prepared in accordance with the requirements of ASC 805, which is a different basis than pro forma information prepared under Article 11 of Regulation S-X (“Article 11”). As such, they are not directly comparable with historical results for stand-alone Berkeley Lights prior to March 21, 2023 or our previously provided pro forma financials prepared in accordance with Article 11. The pro forma adjustments are based on historical reported transactions by the respective companies and do not include any anticipated synergies or other expected benefits of the acquisition.

(in thousands)	Three months ended June 30, 2023		Three months ended June 30, 2022		Six months ended June 30, 2023		Six months ended June 30, 2022
Total revenue	$	14,062	$	23,155	$	34,232	$	48,272
Net loss	$	(50,245)	$	(51,404)	$	(116,708)	$	(101,822)

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Revenue From Contracts With Customers (Tables)

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of disaggregation of revenue

The following tables provide an overview of the Company’s revenue streams and how the Company reports revenue in its consolidated statements of operations:

Income Statement Classification	Product or Service sold	Revenue Stream
Product revenue	Sale of advanced automation systems (Beacon and Lightning systems, Culture Station)	Platform
	Software and workflow licenses	Platform
	Fixed term sales-type lease arrangements with qualified customers	Platform
	Quarterly workflow subscriptions, annual or multi-year subscriptions arrangements (e.g., TechAccess)	Recurring
	Consumables and reagent kits (e.g., OptoSelect chips)	Recurring
Service and other revenue	Strategic partnerships, joint development and collaboration agreements where we provide services for development of new workflows, cells or organism types	Partnership, License and Other
	Application support, installation and training	Platform
	Fixed fee extended warranty and service programs	Recurring
	IP license revenue	Partnership, License and Other (1)

(1) License revenue relates to certain intellectual property acquired in the IsoPlexis Merger and subsequently licensed to a third party. License revenue related to the Company’s platforms (e.g., workflow licenses) is reported as Platform product revenue.

The following tables provide information by revenue stream for the periods presented:

	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
(in thousands)	Product		Service and other		Total		Product		Service and Other		Total
Platform	$	5,988	$	482	$	6,470	$	11,761	$	812	$	12,573
Recurring	4,316		2,952		7,268		6,921		5,510		12,431
Partnership, License and Other (1)	—		324		324		—		7,574		7,574
Total revenue	$	10,304	$	3,758	$	14,062	$	18,682	$	13,896	$	32,578

(1) During the six months ended June 30, 2023, the Company signed an agreement to license, on an exclusive and perpetual basis, certain intellectual property acquired in the IsoPlexis Merger for $7.3 million (“License Agreement”). As the $7.3 million represented a non-refundable fee and the license was transferred to the customer during the quarter, the $7.3 million was recognized as revenue during the first quarter of 2023.

	Three Months Ended June 30, 2022						Six Months Ended June 30, 2022
(in thousands)	Product		Service and other		Total		Product		Service and Other		Total
Platform	$	6,226	$	200	$	6,426	$	12,973	$	857	$	13,830
Recurring	3,242		2,687		5,929		6,269		5,103		11,372
Partnership, License and Other	—		6,795		6,795		—		14,154		14,154
Total revenue	$	9,468	$	9,682	$	19,150	$	19,242	$	20,114	$	39,356

Schedule of receivables, contract assets and deferred revenue from contracts with customers

The following table provides information about receivables, contract assets and deferred revenue from contracts with customers (in thousands):

	June 30, 2023		December 31, 2022
Trade accounts receivable, net	$	14,375	$	18,534
Contract assets, which are included in “Prepaid expenses and other current assets”	$	480	$	1,283
Contract assets, long-term, which are included in “Other assets”	$	442	$	549
Deferred revenue (current)	$	9,648	$	9,092
Deferred revenue (non-current)	$	876	$	963

Schedule of sales-type lease maturity

The following table presents the future maturity of the Company’s fixed-term customer leases and reconciles the undiscounted cash flows from the amounts due from customers under such arrangements as of June 30, 2023 (in thousands):

Year ending December 31,	Sales-Type Leases
Remainder of 2023 (1)	$	223
2024	445
2025	408
2026	—
Total undiscounted cash flows	1,076
Less: unearned income	(143)
Total amounts due from customers (2)	$	933

(1) During the six months ended June 30, 2023, the Company impaired the net investment of a sales-type lease with a customer. The write down of the respective contract asset of $0.8 million, net of the return of the underlying asset, was recorded as an impairment charge of $0.6 million within selling, general and administrative expense in the Company’s condensed consolidated statement of operations and the resulting return of the underlying asset was recorded as an addition to fixed assets in the Company’s condensed consolidated balance sheet.

(2) Of the $0.9 million, $0.1 million is recorded in trade accounts receivable, with the remaining balance recorded in contract assets.

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Balance Sheet Accounts (Tables)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of trade accounts receivable, net

Trade accounts receivable, net consists of the following (in thousands):

	June 30, 2023		December 31, 2022
Trade accounts receivable	$	14,583	$	18,534
Allowance for doubtful accounts	(208)		—
Total	$	14,375	$	18,534

Schedule of changes in the allowance for doubtful accounts

Changes in the allowance for doubtful accounts were as follows (in thousands):

	Six months ended June 30, 2023
Allowance for doubtful accounts, beginning of year	$	—
Write-offs of uncollectible accounts	58
Provision for doubtful accounts	(266)
Allowance for doubtful accounts, end of period	$	(208)

Schedule of inventory

The following table shows the components of inventory (in thousands):

	June 30, 2023		December 31, 2022
Raw materials	$	30,143	$	11,946
Work in progress	425		—
Finished goods	10,887		6,915
Total	$	41,455	$	18,861

Schedule of prepaid expenses and other current assets

The following table shows the components of prepaid expenses and other current assets (in thousands):

	June 30, 2023		December 31, 2022
Contract asset	$	480	$	1,283
Vendor deposits	728		126
Deferred costs	365		472
Prepaid insurance	2,583		2,025
Other (1)	3,836		2,877
Total	$	7,992	$	6,783

(1) Other includes primarily prepaid rent expenses, software licenses and prepaid VAT.

Schedule of accrued expenses and other current liabilities

The following table shows the components of accrued expenses and other current liabilities (in thousands):

	June 30, 2023		December 31, 2022
Accrued payroll and employee related expenses	$	6,116	$	7,410
Lease liability – short-term	5,018		3,291
Accrued product warranty	654		749
Accrued legal expenses	518		8,271
Other (1)	1,640		1,619
Total	$	13,946	$	21,340

(1) Other includes accrued income taxes, sales taxes, accrued royalties and other miscellaneous accruals.

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of changes in goodwill

The following table presents changes in the Company’s goodwill (in thousands):

Beginning balance, January 1, 2023	$	—
Preliminary goodwill recognized in connection with the IsoPlexis Merger	12,246
Ending balance, March 31, 2023	12,246
Measurement period adjustments (1)	4,311
Impairment charge	(16,557)
Ending balance, June 30, 2023	$	—

(1) Includes a $2.2 million correction of the opening balance sheet to reduce the fair value of acquired inventory.

Schedule of intangible assets

These intangible assets are also included in the table below.

	June 30, 2023
(in thousands):	Remaining Useful Life (Years)	Gross		Accumulated Amortization		Net
Customer relationships	8	$	7,700	$	(280)	$	7,420
Trade names	10	3,500		(97)		3,403
Patented technology	14	11,915		(239)		11,676
Total intangible assets		$	23,115	$	(616)	$	22,499

Schedule of estimated annual amortization of intangible assets

The estimated aggregate future amortization expense for intangible assets subject to amortization expense are summarized below (in thousands). Actual amortization expense to be reported in future periods could differ from these estimates as a result of the finalization of the preliminary purchase price allocation of the IsoPlexis Merger, divestitures and other factors.

	Estimated Future Amortization
Year Ending December 31:
Remainder of 2023	$	1,091
2024	$	2,164
2025	$	2,164
2026	$	2,164
2027	$	2,164

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of financial assets measured at fair value

As of June 30, 2023 and December 31, 2022, the fair value measurements of the Company’s assets measured on a recurring basis were as follows (in thousands):

	June 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	2,904	$	2,904	$	—	$	—
Total assets measured at fair value	$	2,904	$	2,904	$	—	$	—

	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	2,354	$	2,354	$	—	$	—
Commercial paper	16,602		—		16,602		—
U.S. agency securities	3,970		—		3,970		—
Total cash equivalents	22,926		2,354		20,572		—
Debt securities, available for sale:
Commercial paper	22,148		—		22,148		—
U.S. agency securities	4,942		—		4,942		—
U.S. government securities	19,162		—		19,162		—
Total debt securities, available for sale	46,252		—		46,252		—
Total assets measured at fair value	$	69,178	$	2,354	$	66,824	$	—

Schedule of financial instruments not measured at fair value

As of June 30, 2023 and December 31, 2022, the carrying values and fair values of the Company’s financial instruments not measured at fair value were as follows (in thousands):

	June 30, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt, including current maturities (1)	$	—	$	—	$	19,826	$	17,443

(1) The Company repaid in full all outstanding indebtedness on June 30,2023.

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Property and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

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

	June 30, 2023		December 31, 2022
Equipment, tooling and molds	$	44,814	$	36,152
Computer software and equipment	4,427		2,667
Furniture, fixtures and other	2,401		2,007
Leasehold improvements	11,978		10,836
Construction in process	1,304		1,409
Total property and equipment	64,924		53,071
Less: Accumulated depreciation	(32,214)		(29,224)
Property and equipment, net (1)	$	32,710	$	23,847

(1) As of December 31, 2022, Property and equipment, net included $0.1 million of assets held for sale.

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Leases (Table)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Schedule of operating lease liabilities maturity

Future payments associated with the Company’s operating lease liabilities as of June 30, 2023 are as follows (in thousands):

	Operating leases
Undiscounted lease payments for the year ending December 31,
Remainder of 2023	$	3,121
2024	6,297
2025	5,952
2026	5,398
2027	4,759
Thereafter	7,464
Total undiscounted lease payments	32,991
Less: implied interest	(3,958)
Less: tenant improvement allowances receivable	(65)
Present value of operating lease payments	28,968
Less: current portion (1)	(5,018)
Total long-term operating lease liabilities	$	23,950

(1) Included in the balance sheet caption “Accrued expenses and other current liabilities.”

Schedule of supplemental cash flow information related to operating leases

The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands):

	Six months ended June 30, 2023		Six months ended June 30, 2022
Right-of-use assets obtained for new operating lease liabilities	$	—	$	—
Right-of-use lease assets assumed in IsoPlexis Merger	$	4,975	$	—
Cash paid for amounts included in the measurement of lease liabilities	$	3,123	$	1,070

Schedule of additional information related to operating leases

The following summarizes additional information related to operating leases:

	June 30, 2023		December 31, 2022
Weighted-average remaining lease term (years)	5.50		6.48
Weighted-average discount rate	4.72	%	4.66	%

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Equity and Stock Compensation Plans (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of stock-based compensation

Stock-based compensation related to the Company’s stock-based awards was recorded as an expense and allocated as follows (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Cost of sales	$	46	$	68	$	62	$	119
Research and development	463		2,292		1,011		3,873
Selling, general and administrative	3,222		4,205		7,046		7,966
Total stock-based compensation	$	3,731	$	6,565	$	8,119	$	11,958

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Restructuring (Tables)

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

Schedule of Changes in Restructuring Liability

Changes in the Company’s restructuring liability are set forth in the table below (in thousands):

	Employee severance and termination benefits		Non labor restructuring		Total
Accrual on January 1, 2023	$	130	$	107	$	237
Restructuring liability assumed in IsoPlexis Merger	834		—		834
Restructuring charges	2,383		—		2,383
Cash payments	(2,832)		(107)		(2,939)
Non-cash settlements	—		—		—
Accrual on June 30, 2023	$	515	$	—	$	515

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Statements of Cash Flows (Tables)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of cash flow, supplemental disclosures

The supplemental cash flow information consists of the following (in thousands):

	Six months ended June 30,
	2023		2022
Cash paid for interest	$	1,954	$	278
Cash paid for income taxes	$	317	$	—
Non-cash investing and financing activities
Non-cash consideration for the acquisition of IsoPlexis	$	32,406	$	—
Property and equipment transferred to inventory	$	104	$	—
Inventory transferred to property and equipment (1)	$	1,912	$	—
Customer return of Beacon transferred to property and equipment (2)	$	201	$	—
Change in accounts payable and accrued liabilities related to purchases of property and equipment	$	(68)	$	(699)

(1) The non-cash transfer of inventory to property and equipment principally relates to Beacons that were transferred to the Company’s BioFoundry operations in the first half of 2023. Beacons that at inception are planned to be used in the Company’s BioFoundry operations will be categorized as “Purchase of property and equipment.”

(2) Refer to Note 6 under “Sales-type Lease Arrangements” for further information.

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Commitment and Contingencies (Tables)

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of product warranty liability

The table below represents the activity in the product warranty accrual included in “Accrued expenses and other current liabilities” on the condensed consolidated balance sheets (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Balance, beginning of period	$	788	$	914	$	749	$	1,085
Warranty accrual assumed in IsoPlexis Merger	—		—		128		—
Adjustments to existing warranties	(236)		(185)		(349)		(430)
Provision for new warranties	161		179		294		342
Settlement of pre-existing warranties	(59)		(156)		(168)		(245)
Balance, end of period	$	654	$	752	$	654	$	752

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Net Loss Attributable to Common Stockholders Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of basic and diluted net loss per common share

The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except share and per share data):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Numerator
Net loss attributable to common stockholders, basic and diluted	$	(50,245)	$	(25,747)	$	(73,664)	$	(47,173)
Denominator
Weighted-average shares used to compute net income per share, basic and diluted	98,900,780		67,985,664		87,394,201		67,842,372
Net loss per share
Net loss per share attributable to common stockholders, basic and diluted	$	(0.51)	$	(0.38)	$	(0.84)	$	(0.70)

Schedule of antidilutive securities excluded from computation of earnings per share

The following shares of common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods presented as they had an anti-dilutive effect:

	June 30,
	2023	2022
Warrants to purchase common stock	496,560	—
Options to purchase common stock	6,606,909	7,750,612
Restricted stock awards	290,774	—
Restricted stock units	8,636,618	4,241,025
Total	16,030,861	11,991,637

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Segments (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Summary of revenue by geographic areas

The following table provides the Company’s revenues by geographical market based on the location where the services were provided or to which product was shipped (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
North America	$	7,568	$	9,891	$	21,623	$	23,585
Asia Pacific (1)	1,584		7,201		4,731		12,236
Europe	4,910		2,058		6,224		3,535
	$	14,062	$	19,150	$	32,578	$	39,356

(1) Asia Pacific includes Australia.

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The Company and Basis of Presentation (Details) - USD ($)		3 Months Ended		6 Months Ended
	Mar. 21, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Mar. 20, 2023	Dec. 31, 2022	Jun. 30, 2021	May 23, 2018
Organization, Consolidation and Presentation of Financial Statement [Line Items]
Net loss		$ (50,245,000)	$ (25,747,000)	$ (73,664,000)	$ (47,173,000)
Accumulated deficit		(435,312,000)		(435,312,000)			$ (361,648,000)
Cash, cash equivalents, and marketable securities		31,000,000		31,000,000
IsoPlexis
Organization, Consolidation and Presentation of Financial Statement [Line Items]
Repayment of acquired debt	$ 52,482,000
EWB Term Loan | Notes Payable
Organization, Consolidation and Presentation of Financial Statement [Line Items]
Maximum borrowing capacity	70,000,000	$ 70,000,000		$ 70,000,000		$ 20,000,000		$ 20,000,000	$ 20,000,000
Increase in borrowing capacity	50,000,000
Debt instrument, covenant description, cash	70,000,000
Perceptive Credit Agreement | Line of Credit | IsoPlexis
Organization, Consolidation and Presentation of Financial Statement [Line Items]
Repayment of acquired debt	$ 52,500,000

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Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 93	$ 0
Letter of Credit
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 100

XML

Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash	$ 28,060	$ 63,596
Cash equivalents	2,904	22,926
Restricted cash	93	0
Total cash, cash equivalents and restricted cash as presented on the condensed consolidated statements of cash flows	$ 31,057	$ 86,522	$ 143,024	$ 178,366

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Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Accounting Policies [Abstract]
Loss on impairment of goodwill	$ 16,557	$ 0	$ 16,557	$ 0

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Summary of Significant Accounting Policies - Research and development state tax credits (Details) $ in Millions	Jun. 30, 2023 USD ($)
Research Tax Credit Carryforward
Tax Credit Carryforward [Line Items]
R&D tax credits receivable	$ 0.2

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Marketable Securities - Unrealized Gains and Losses Related to our Available-for-Sale Marketable Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Cash and Cash Equivalents [Abstract]
Amortized Cost	$ 2,904	$ 22,929
Unrealized Gains	0	1
Unrealized Losses	0	(4)
Fair Value	2,904	22,926
Debt Securities, Available-for-Sale [Abstract]
Amortized Cost		46,258
Unrealized Gains		7
Unrealized Losses		(13)
Fair Value		46,252
Commercial paper
Debt Securities, Available-for-Sale [Abstract]
Amortized Cost		22,158
Unrealized Gains		1
Unrealized Losses		(11)
Fair Value		22,148
U.S. agency securities
Debt Securities, Available-for-Sale [Abstract]
Amortized Cost		4,941
Unrealized Gains		1
Unrealized Losses		0
Fair Value		4,942
U.S. government securities
Debt Securities, Available-for-Sale [Abstract]
Amortized Cost		19,159
Unrealized Gains		5
Unrealized Losses		(2)
Fair Value		19,162
Money market funds
Cash and Cash Equivalents [Abstract]
Amortized Cost	2,904	2,354
Unrealized Gains	0	0
Unrealized Losses	0	0
Fair Value	$ 2,904	2,354
Commercial paper
Cash and Cash Equivalents [Abstract]
Amortized Cost		16,606
Unrealized Gains		0
Unrealized Losses		(4)
Fair Value		16,602
U.S. agency securities
Cash and Cash Equivalents [Abstract]
Amortized Cost		3,969
Unrealized Gains		1
Unrealized Losses		0
Fair Value		3,970
U.S. government securities
Cash and Cash Equivalents [Abstract]
Amortized Cost		0
Unrealized Gains		0
Unrealized Losses		0
Fair Value		$ 0

XML

Significant Risks and Uncertainties Including Business and Credit Concentrations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Concentration Risk [Line Items]
Allowance for doubtful accounts	$ 208		$ 208		$ 0
Revenue | Customer | Customer One
Concentration Risk [Line Items]
Concentration risk percentage	12.00%	20.00%	22.00%	16.00%
Revenue | Customer | Customer Two
Concentration Risk [Line Items]
Concentration risk percentage	11.00%	11.00%		11.00%
Revenue | Customer | Customer Three
Concentration Risk [Line Items]
Concentration risk percentage	10.00%	10.00%		10.00%
Accounts Receivable | Customer | Customer One
Concentration Risk [Line Items]
Concentration risk percentage			16.00%		24.00%
Accounts Receivable | Customer | Customer Two
Concentration Risk [Line Items]
Concentration risk percentage			10.00%		11.00%

XML

Business Combinations - Narrative (Details)		3 Months Ended				6 Months Ended
	Mar. 21, 2023 USD ($)	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)
Business Acquisition [Line Items]
Goodwill, purchase accounting adjustments		$ 4,311,000
Inventory adjustment					$ 2,500,000
Fair value of accounts receivable acquired	$ 3,100,000
Fair value of inventory acquired	$ 27,300,000
Step up form book value of inventory acquired					4,100,000		$ 4,100,000
Goodwill		0	$ 12,246,000	$ 0		$ 0
Incurred transaction costs			13,700,000
Total revenue		14,062,000			19,150,000	32,578,000	39,356,000
Service and other revenue
Business Acquisition [Line Items]
Total revenue		3,758,000			9,682,000	13,896,000	20,114,000
Partnership, License and Other
Business Acquisition [Line Items]
Total revenue		324,000			6,795,000	7,574,000	14,154,000
Partnership, License and Other | Service and other revenue
Business Acquisition [Line Items]
Total revenue		324,000			$ 6,795,000	7,574,000	$ 14,154,000
Acquisition-related Costs
Business Acquisition [Line Items]
Incurred transaction costs			4,400,000
Fair value adjustment to inventory
Business Acquisition [Line Items]
Inventory adjustment		2,200,000
IsoPlexis
Business Acquisition [Line Items]
Shares holding ratio	0.612
Inventories	$ 22,612,000
Goodwill	16,557,000
Goodwill, expected tax deductible amount	$ 0
Recognized transaction costs				$ 2,800,000		3,500,000
Revenues		1,900,000				2,900,000
Operating loss		$ 13,000,000				14,100,000
IsoPlexis | Partnership, License and Other | Service and other revenue
Business Acquisition [Line Items]
Total revenue			$ 7,300,000			$ 7,300,000
IsoPlexis | EWB Term Loan | Notes Payable
Business Acquisition [Line Items]
Interest rate	8.50%
IsoPlexis | Minimum
Business Acquisition [Line Items]
Weighted average useful life	8 years
IsoPlexis | Maximum
Business Acquisition [Line Items]
Weighted average useful life	14 years
IsoPlexis | Patented technology
Business Acquisition [Line Items]
Intangible assets	$ 11,700,000
IsoPlexis | Customer Relationships
Business Acquisition [Line Items]
Intangible assets	7,700,000
IsoPlexis | Trade Names and Trademarks
Business Acquisition [Line Items]
Intangible assets	$ 3,500,000

XML

Business Combinations - Schedule of Acquired Assets and Liabilities (Details) $ / shares in Units, $ in Thousands	Mar. 21, 2023 USD ($) $ / shares shares	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Fair value of assets acquired and liabilities assumed
Goodwill		$ 0	$ 12,246	$ 0
IsoPlexis
Consideration Transferred
Fair value of PhenomeX common stock issued to IsoPlexis stockholders	$ 31,930
Repayment of acquired debt	52,482
Fair value of vested IsoPlexis options attributable to pre-merger service	306
Fair value of IsoPlexis Warrant at merger date	170
Total purchase consideration	$ 84,888
Fair value of common stock issued (in shares) | shares	24,945,611
Price per share of the common stock acquired (in dollars per share) | $ / shares	$ 1.28
Shares holding ratio	0.612
Principal repayment to retire debt	$ 50,000
Fair value of assets acquired and liabilities assumed
Cash and cash equivalents	12,197
Accounts receivable	3,075
Inventories	22,612
Prepaid expenses and other current assets	4,190
Property and equipment, net	11,562
Intangible assets	22,900
Goodwill	16,557
Operating lease right-of-use assets	4,975
Other assets	526
Total assets acquired	98,594
Accounts payable	2,359
Accrued expenses and other current liabilities	4,912
Deferred revenue	1,399
Operating lease obligations	5,036
Total liabilities assumed	13,706
Total consideration transferred	$ 84,888

XML

Business Combinations - Schedule of Pro forma Information (Details) - IsoPlexis - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Business Acquisition [Line Items]
Total revenue	$ 14,062	$ 23,155	$ 34,232	$ 48,272
Net loss	$ (50,245)	$ (51,404)	$ (116,708)	$ (101,822)

XML

Revenue from Contracts with Customer (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Remaining performance obligation	$ 10,400,000		$ 10,400,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities	10,500,000		10,500,000		$ 10,100,000
Contract liability , revenue recognized	2,100,000		4,900,000
Lease income	$ 0	$ 0	$ 0	$ 0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, percentage	50.00%		50.00%
Remaining performance obligation, period	12 months		12 months

XML

Revenue From Contracts With Customers (Schedule of Disaggregation of Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Total revenue	$ 14,062		$ 19,150	$ 32,578	$ 39,356
Platform
Disaggregation of Revenue [Line Items]
Total revenue	6,470		6,426	12,573	13,830
Recurring
Disaggregation of Revenue [Line Items]
Total revenue	7,268		5,929	12,431	11,372
Partnership, License and Other
Disaggregation of Revenue [Line Items]
Total revenue	324		6,795	7,574	14,154
Product
Disaggregation of Revenue [Line Items]
Total revenue	10,304		9,468	18,682	19,242
Product | Platform
Disaggregation of Revenue [Line Items]
Total revenue	5,988		6,226	11,761	12,973
Product | Recurring
Disaggregation of Revenue [Line Items]
Total revenue	4,316		3,242	6,921	6,269
Product | Partnership, License and Other
Disaggregation of Revenue [Line Items]
Total revenue	0		0	0	0
Service and other
Disaggregation of Revenue [Line Items]
Total revenue	3,758		9,682	13,896	20,114
Service and other | Platform
Disaggregation of Revenue [Line Items]
Total revenue	482		200	812	857
Service and other | Recurring
Disaggregation of Revenue [Line Items]
Total revenue	2,952		2,687	5,510	5,103
Service and other | Partnership, License and Other
Disaggregation of Revenue [Line Items]
Total revenue	$ 324		$ 6,795	7,574	$ 14,154
Service and other | Partnership, License and Other | IsoPlexis
Disaggregation of Revenue [Line Items]
Total revenue		$ 7,300		$ 7,300

XML

Revenue From Contracts With Customers (Schedule of Receivables, Contract Assets and Deferred Revenue) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Trade accounts receivable, net	$ 14,375	$ 18,534
Contract assets, which are included in “Prepaid expenses and other current assets”	480	1,283
Contract assets, long-term, which are included in “Other assets”	442	549
Deferred revenue (current)	9,648	9,092
Deferred revenue (non-current)	$ 876	$ 963

XML

Revenue From Contracts With Customers (Sale-type Lease Arrangement) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Lessor, Lease, Description [Line Items]
Remainder of 2023	$ 223
2024	445
2025	408
2026	0
Total undiscounted cash flows	1,076
Less: unearned income	(143)
Total amounts due from customers	933
Contract asset	800
Impairment charge	600
Accounts Receivable, after Allowance for Credit Loss, Current
Lessor, Lease, Description [Line Items]
Total amounts due from customers	$ 100

XML

Balance Sheet Accounts - Trade Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Trade accounts receivable	$ 14,583	$ 18,534
Allowance for doubtful accounts	(208)	0
Trade accounts receivable, net	$ 14,375	$ 18,534

XML

Balance Sheet Accounts - Changes in Allowance for Doubtful Accounts (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Allowance for doubtful accounts, beginning of year	$ 0
Write-offs of uncollectible accounts	58
Provision for doubtful accounts	(266)
Allowance for doubtful accounts, end of period	$ (208)

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Balance Sheet Accounts - Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Raw materials	$ 30,143	$ 11,946
Work in progress	425	0
Finished goods	10,887	6,915
Total	$ 41,455	$ 18,861

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Balance Sheet Accounts - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Contract asset	$ 480	$ 1,283
Vendor deposits	728	126
Deferred costs	365	472
Prepaid insurance	2,583	2,025
Other	3,836	2,877
Total	$ 7,992	$ 6,783

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Balance Sheet Accounts - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued payroll and employee related expenses	$ 6,116	$ 7,410
Lease liability - short-term [Extensible Enumeration]	Total	Total
Lease liability – short-term	$ 5,018	$ 3,291
Accrued product warranty	654	749
Accrued legal expenses	518	8,271
Other	1,640	1,619
Total	$ 13,946	$ 21,340

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Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Feb. 15, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023	Mar. 21, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Goodwill		$ 0		$ 0		$ 12,246		$ 0
Loss on impairment of goodwill		16,557	$ 0	16,557	$ 0
Amortization expense		$ 577		$ 616
Evorion Biotechnologies
Finite-Lived Intangible Assets [Line Items]
Total purchase price	$ 300
Evorion Biotechnologies | Patents and Technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 200
IsoPlexis
Finite-Lived Intangible Assets [Line Items]
Goodwill							$ 16,557

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Goodwill and Other Intangible Assets - Schedule of Changes in Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Goodwill [Roll Forward]
Goodwill, Beginning Balance	$ 12,246	$ 0		$ 0
Preliminary goodwill recognized in connection with the IsoPlexis Merger		12,246
Measurement period adjustments	4,311
Impairment charge	(16,557)		$ 0	(16,557)	$ 0
Goodwill, Ending Balance	0	$ 12,246		$ 0
Goodwill [Line Items]
Inventory adjustment			$ 2,500
Fair value adjustment to inventory
Goodwill [Line Items]
Inventory adjustment	$ 2,200

XML

Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 23,115
Accumulated Amortization	(616)
Intangible assets, net	$ 22,499
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Remaining Useful Life (Years)	8 years
Intangible assets, gross	$ 7,700
Accumulated Amortization	(280)
Intangible assets, net	$ 7,420
Trade names
Finite-Lived Intangible Assets [Line Items]
Remaining Useful Life (Years)	10 years
Intangible assets, gross	$ 3,500
Accumulated Amortization	(97)
Intangible assets, net	$ 3,403
Patented technology
Finite-Lived Intangible Assets [Line Items]
Remaining Useful Life (Years)	14 years
Intangible assets, gross	$ 11,915
Accumulated Amortization	(239)
Intangible assets, net	$ 11,676

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Goodwill and Other Intangible Assets - Schedule of Estimated Annual Amortization of Intangible Assets (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Year Ending December 31:
Remainder of 2023	$ 1,091
2024	2,164
2025	2,164
2026	2,164
2027	$ 2,164

XML

Fair Value of Financial Instruments - Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale	$ 0	$ 46,252
Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		22,926
Total debt securities, available for sale		46,252
Total assets measured at fair value	2,904	69,178
Commercial paper | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		22,148
U.S. agency securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		4,942
U.S. government securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		19,162
Money market funds | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents	2,904	2,354
Commercial paper | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		16,602
U.S. agency securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		3,970
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		2,354
Total debt securities, available for sale		0
Total assets measured at fair value	2,904	2,354
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial paper | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. agency securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents	2,904	2,354
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial paper | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. agency securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		0
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		20,572
Total debt securities, available for sale		46,252
Total assets measured at fair value	0	66,824
Significant Other Observable Inputs (Level 2) | Commercial paper | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		22,148
Significant Other Observable Inputs (Level 2) | U.S. agency securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		4,942
Significant Other Observable Inputs (Level 2) | U.S. government securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		19,162
Significant Other Observable Inputs (Level 2) | Money market funds | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents	0	0
Significant Other Observable Inputs (Level 2) | Commercial paper | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		16,602
Significant Other Observable Inputs (Level 2) | U.S. agency securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		3,970
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		0
Total debt securities, available for sale		0
Total assets measured at fair value	0	0
Significant Unobservable Inputs (Level 3) | Commercial paper | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		0
Significant Unobservable Inputs (Level 3) | U.S. agency securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		0
Significant Unobservable Inputs (Level 3) | U.S. government securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt securities, available for sale		0
Significant Unobservable Inputs (Level 3) | Money market funds | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents	$ 0	0
Significant Unobservable Inputs (Level 3) | Commercial paper | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		0
Significant Unobservable Inputs (Level 3) | U.S. agency securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash equivalents		$ 0

XML

Fair Value of Financial Instruments - Schedule of Financial Instruments Not Measured at Fair Value (Details) - Significant Other Observable Inputs (Level 2) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, including current maturities (1)	$ 0	$ 19,826
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, including current maturities (1)	$ 0	$ 17,443

XML

Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 64,924	$ 53,071
Less: Accumulated depreciation	(32,214)	(29,224)
Property and equipment, net	32,710	23,847
Assets held for sale		100
Equipment, tooling and molds
Property, Plant and Equipment [Line Items]
Total property and equipment	44,814	36,152
Computer software and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	4,427	2,667
Furniture, fixtures and other
Property, Plant and Equipment [Line Items]
Total property and equipment	2,401	2,007
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	11,978	10,836
Construction in process
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 1,304	$ 1,409

XML

Property and Equipment, net - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation and amortization	$ 2.5	$ 2.5	$ 4.6	$ 4.4

XML

Leases - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Sub-lease income	$ 200,000	$ 0	$ 300,000	$ 0
Rent expense	1,600,000	1,400,000	2,500,000	2,500,000
Variable lease payments	$ 800,000	$ 1,000,000	$ 1,600,000	$ 1,800,000

XML

Leases - Maturity Schedule of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Remainder of 2023	$ 3,121
2024	6,297
2025	5,952
2026	5,398
2027	4,759
Thereafter	7,464
Total undiscounted lease payments	32,991
Less: implied interest	(3,958)
Less: tenant improvement allowances receivable	(65)
Present value of operating lease payments	28,968
Less: current portion	(5,018)	$ (3,291)
Total long-term operating lease liabilities	$ 23,950	$ 22,726

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Leases - Schedule of Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Right-of-use assets obtained for new operating lease liabilities	$ 0	$ 0
Right-of-use lease assets assumed in IsoPlexis Merger	4,975	0
Cash paid for amounts included in the measurement of lease liabilities	$ 3,123	$ 1,070

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Leases - Schedule of Additional Information Related to Operating Leases (Details)	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Weighted-average remaining lease term (in years)	5 years 6 months	6 years 5 months 23 days
Weighted-average discount rate	4.72%	4.66%

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Long-Term Debt - Narrative (Details) - USD ($)				3 Months Ended			6 Months Ended
	Jun. 30, 2023	Mar. 21, 2023	Jun. 30, 2021	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Mar. 20, 2023	May 23, 2018
Debt Instrument [Line Items]
Loss on debt extinguishment							$ 1,230,000	$ 0
Interest cost				$ 1,600,000		$ 200,000	2,000,000	$ 500,000
Notes Payable
Debt Instrument [Line Items]
Loss on debt extinguishment					$ 200,000
Commitment fee					$ 700,000
Notes Payable | EWB Term Loan
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 70,000,000	$ 70,000,000	$ 20,000,000	70,000,000			70,000,000		$ 20,000,000	$ 20,000,000
Note payable, term (in years)		60 months	48 months
Interest rate			4.17%
Interest-only period			24 months
Interest-only period with extension			36 months
Increase in borrowing capacity		$ 50,000,000
Loss on debt extinguishment				1,800,000
Repayments of indebtedness	71,200,000
Accrued interest	500,000
Early termination fee	$ 700,000			700,000			$ 700,000
Write off of deferred issuance costs				$ 1,100,000
Notes Payable | EWB Term Loan | Prime Rate
Debt Instrument [Line Items]
Interest rate		6.25%
Basis spread on variable rate		0.50%

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Equity and Stock Compensation Plans (Narrative) (Details) $ / shares in Units, $ in Millions		6 Months Ended
	Mar. 21, 2023 $ / shares shares	Jun. 30, 2023 USD ($) $ / shares	Dec. 31, 2022 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase shares of common stock, par value (in dollars per share)		$ 0.00005	$ 0.00005
IsoPlexis Warrant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase shares of common stock, par value (in dollars per share)	$ 0.001
PhenomeX Warrant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion ratio	0.612
Purchase shares of common stock, par value (in dollars per share)	$ 0.00005
PhenomeX Warrant | Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrant exercisable shares (in shares) | shares	496,560
Warrant exercise price per share (in dollars per share)	$ 9.80
IsoPlexis
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion ratio	0.612
Exercise price per share (in dollars per share)	$ 1.28
Stock-based compensation | $		$ 0.1
IsoPlexis | Share-Based Payment Arrangement, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage	25.00%
Vesting period	1 year
IsoPlexis | Share-Based Payment Arrangement, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	36 months
IsoPlexis | RSAs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion ratio	0.612
Business acquisition, equity instruments other than options, number of shares acquired (in shares) | shares	304,619
IsoPlexis | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion ratio	0.612
Expiration period	10 years
Business acquisition, options, number of shares acquired (in shares) | shares	378,767

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Equity and Stock Compensation Plans - Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 3,731	$ 6,565	$ 8,119	$ 11,958
Cost of sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	46	68	62	119
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	463	2,292	1,011	3,873
Selling, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 3,222	$ 4,205	$ 7,046	$ 7,966

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Restructuring - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Restructuring and Related Activities [Abstract]
Restructuring charges	$ 1,093	$ 0	$ 2,383	$ 0
Total full-time employees (in percent)			15.00%

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Restructuring - Changes in Restructuring Liability (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Restructuring Reserve [Roll Forward]
Restructuring liability, beginning balance			$ 237
Restructuring liability assumed in IsoPlexis Merger			834
Restructuring charges	$ 1,093	$ 0	2,383	$ 0
Cash payments			(2,939)
Non-cash settlements			0
Restructuring liability, ending balance	515		515
Employee severance and termination benefits
Restructuring Reserve [Roll Forward]
Restructuring liability, beginning balance			130
Restructuring liability assumed in IsoPlexis Merger			834
Restructuring charges			2,383
Cash payments			(2,832)
Non-cash settlements			0
Restructuring liability, ending balance	515		515
Non labor restructuring
Restructuring Reserve [Roll Forward]
Restructuring liability, beginning balance			107
Restructuring liability assumed in IsoPlexis Merger			0
Restructuring charges			0
Cash payments			(107)
Non-cash settlements			0
Restructuring liability, ending balance	$ 0		$ 0

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 51	$ 4	$ 71	$ 24

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Statements of Cash Flows (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash paid for interest	$ 1,954	$ 278
Cash paid for income taxes	317	0
Non-cash investing and financing activities
Non-cash consideration for the acquisition of IsoPlexis	32,406	0
Property and equipment transferred to inventory	104	0
Inventory transferred to property and equipment	1,912	0
Customer return of Beacon transferred to property and equipment	201	0
Change in accounts payable and accrued liabilities related to purchases of property and equipment	$ (68)	$ (699)

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Commitment and Contingencies - Narrative (Details)		1 Months Ended	6 Months Ended
	Jul. 01, 2021 claim patent	Dec. 31, 2021 investedCompany	Jun. 30, 2023 USD ($)
Loss Contingencies [Line Items]
Number of company invested | investedCompany		3
Loss contingency accrual			$ 0
Purchase obligations			$ 21,200,000
Product warranty, term			1 year
AbCellera and UBC
Loss Contingencies [Line Items]
Case management order, maximum number of patents allegedly infringed | patent	2
Case management order, maximum asserted patent claims per patent | claim	4

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Commitment and Contingencies - Product Warranty (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance, beginning of period	$ 788	$ 914	$ 749	$ 1,085
Warranty accrual assumed in IsoPlexis Merger	0	0	128	0
Adjustments to existing warranties	(236)	(185)	(349)	(430)
Provision for new warranties	161	179	294	342
Settlement of pre-existing warranties	(59)	(156)	(168)	(245)
Balance, end of period	$ 654	$ 752	$ 654	$ 752

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Net Loss Attributable to Common Stockholders Per Share - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Numerator
Net loss attributable to common stockholders, basic	$ (50,245)	$ (25,747)	$ (73,664)	$ (47,173)
Net loss attributable to common stockholders, diluted	$ (50,245)	$ (25,747)	$ (73,664)	$ (47,173)
Denominator
Weighted-average shares used to compute net income per share, basic (in shares)	98,900,780	67,985,664	87,394,201	67,842,372
Weighted-average shares used to compute net income per share, diluted (in shares)	98,900,780	67,985,664	87,394,201	67,842,372
Net loss per share
Net loss per share attributable to common stockholders, basic (in dollars per share)	$ (0.51)	$ (0.38)	$ (0.84)	$ (0.70)
Net loss per share attributable to common stockholders, diluted (in dollars per share)	$ (0.51)	$ (0.38)	$ (0.84)	$ (0.70)

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Net Loss Attributable to Common Stockholders Per Share - Schedule of Antidilutive Securities (Details) - shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the calculation of net loss per share (in shares)	16,030,861	11,991,637
Warrants to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the calculation of net loss per share (in shares)	496,560	0
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the calculation of net loss per share (in shares)	6,606,909	7,750,612
Restricted stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the calculation of net loss per share (in shares)	290,774	0
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the calculation of net loss per share (in shares)	8,636,618	4,241,025

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Segments (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) segment	Jun. 30, 2022 USD ($)
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of operating segments | segment			1
Total revenue	$ 14,062	$ 19,150	$ 32,578	$ 39,356
North America
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	7,568	9,891	21,623	23,585
Asia Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	1,584	7,201	4,731	12,236
Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 4,910	$ 2,058	$ 6,224	$ 3,535