10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A
(Amendment No. 1)

(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, 2022

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: 001-31822

ACCELERATE DIAGNOSTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware			84-1072256
(State or other jurisdiction			(I.R.S. Employer Identification No.)
of incorporation or organization)
3950 South Country Club Road,		Suite 470
Tucson,	Arizona		85714
(Address of principal executive offices)			(Zip Code)

(520) 365-3100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par	AXDX	The Nasdaq Stock Market LLC
value per share		(The Nasdaq Capital Market)

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

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

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

Large accelerated filer	☐
Accelerated filer	☐
Non-accelerated filer	☑
Smaller reporting company	☑
Emerging growth company	☐

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

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

As of August 11, 2022, there were 81,559,928 shares of the registrant’s common stock outstanding.

EXPLANATORY NOTE

In this Amendment No. 1 to the Quarterly Report on Form 10-Q (this “Form 10-Q/A”), all references to “we” or “us” or “our” or “Accelerate” or the “Company” refer to Accelerate Diagnostics, Inc. and its consolidated subsidiaries.    

Restatement Overview

On February 6, 2023, the Audit Committee of the Company’s Board of Directors (the “Board”), in consultation with members of the Company’s management, determined that the Company’s previously issued interim unaudited financial statements as of and for the three months ended March 31, 2022, three and six months ended June 30, 2022 and three and nine months ended September 30, 2022 (collectively, the “2022 Interim Financial Statements”), should no longer be relied upon due to the error in the balance sheet classification of the Company’s 2.50% Senior Convertible Notes due 2023 (the “Notes”) described below. For additional information, please refer to our Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 9, 2023.

This Form 10-Q/A amends and restates certain items noted below in the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2022, as originally filed with the SEC on August 15, 2022 (the “Original Filing”). Except as described below, no other material changes have been made to the Original Filing. Unless otherwise noted, this Form 10-Q/A speaks as of the date of the Original Filing and does not reflect other events that may have occurred after the date of the Original Filing or modify or update any disclosures that may have been affected by subsequent events. Accordingly, this Form 10-Q/A should be read in conjunction with the Company’s filings made with the SEC subsequent to the filing of the Original Filing, including any amendment to those filings.

Background of Restatement

In March and April 2018, the Company issued $171.5 million aggregate principal amount of Notes, which have a maturity date of March 15, 2023, unless earlier converted or repurchased. Between September 2021 and August 2022, the Company entered into certain exchange transactions pursuant to which the Company exchanged $114.9 million aggregate principal amount of Notes for one or a combination of shares of the Company’s common stock, a secured promissory note and/or warrants to purchase the Company’s common stock. As of the date of the filing of this Form 10-Q/A, $56.6 million aggregate principal amount of Notes remain outstanding.

The balance sheets contained in each of the 2022 Interim Financial Statements classified the Notes as a non-current liability with a net carrying amount of $115.8 million, $105.8 million and $56.3 million as of March 31, 2022, June 30, 2022 and September 30, 2022, respectively. Pursuant to Accounting Standards Codification (“ASC”) 210-10-45, current classification is required for convertible debt if the settlement in cash is expected to occur within 12 months, subject to the issuer’s intent and ability to refinance the debt on a long-term basis pursuant to ASC 470-10-45. The identification of the error arose in connection with the Company’s year-end close for the year ended December 31, 2022, whereby the Company determined that, as of the respective balance sheet dates for each of the 2022 Interim Financial Statements, its intent to refinance the Notes on a long-term basis was not supported by an ability to consummate the refinancing of all or a portion of the Notes in accordance with ASC 470-10-45. Accordingly, the Notes (or a portion thereof, as applicable in the specific period) should have been classified as a current liability in the balance sheets contained in each of the 2022 Interim Financial Statements.

The “as restated” classification of the Notes is further described and the impact of the restatement is included in Note 1 and Note 10 of the “Notes to the Condensed Consolidated Financial Statements” included in Part I, Item 1. “Financial Statements” of this Form 10-Q/A.

Control Considerations

In connection with the restatement, management concluded that there was a deficiency in our internal control over financial reporting that constituted a material weakness as of June 30, 2022. For a discussion of management's consideration of our disclosure controls and procedures and the material weakness identified, see Part I, Item 4, Controls and Procedures of this Form 10-Q/A.

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Items Amended in this Filing

For the convenience of the reader, this Form 10-Q/A sets forth the Original Filing, as amended, in its entirety; however, this Form 10-Q/A amends and restates only the following Items of the Original Filing to the extent necessary to reflect the adjustments discussed above and to make corresponding adjustments to the Company’s financial data and disclosures cited elsewhere in this Form 10-Q/A:

-Part I, Item 1 - Financial Statements

-Part I, Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

-Part I, Item 4 - Controls and Procedures

-Part II, Item 6 - Exhibits

In addition, in connection with the preparation of this Form 10-Q/A, the Company has evaluated its financial condition as of the date of filing this Form 10-Q/A. Based on this evaluation, the Company has determined that there is substantial doubt about its ability to continue as a going concern as of the date of the filing of this Form 10-Q/A, as the Company does not currently have adequate financial resources to pay its outstanding debt obligation under the Notes and to fund its forecasted operating costs for at least twelve months from the filing of this Form 10-Q/A. The assessment of going concern is further discussed in Note 1 of the “Notes to the Condensed Consolidated Financial Statements” included in Part I, Item 1. “Financial Statements” of this Form 10-Q/A.

Further, the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this filing (Exhibits 31.1, 31.2 and 32), and the Company has provided its restated condensed consolidated financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibit 101.

Restatement of Other Financial Statements

In addition to the restated financial information for the quarter ended June 30, 2022 included in this Form 10-Q/A, we are also restating our interim condensed consolidated financial statements and related disclosures for the quarters ended March 31, 2022 and September 30, 2022. Concurrently with the filing of this Form 10-Q/A, we are filing amended Quarterly Reports on Form 10-Q with the SEC with respect to these periods to address the error in the balance sheet classification of the Notes described above.

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TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3. Quantitative and Qualitative Disclosures About Market Risk	51
Item 4. Controls and Procedures	52
Part II - OTHER INFORMATION
Item 1. Legal Proceedings	53
Item 1A. Risk Factors	53
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3. Defaults Upon Senior Securities	53
Item 4. Mine Safety Disclosures	53
Item 5.  Other Information	53
Item 6. Exhibits	54

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEETS

(in thousands, except share data)

	June 30,		December 31,
	2022		2021
	(As Restated)
	Unaudited
ASSETS
Current assets:
Cash and cash equivalents	$	4,581	$	39,898
Investments	32,191		23,720
Trade accounts receivable, net	2,935		2,320
Inventory	5,304		5,067
Prepaid expenses	1,429		768
Other current assets	1,619		1,558
Total current assets	48,059		73,331
Property and equipment, net	4,097		5,389
Finance lease assets, net	2,538		—
Operating lease right of use assets, net	2,181		2,510
Other non-current assets	1,851		1,817
Total assets	$	58,726	$	83,047
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	2,221	$	1,983
Accrued liabilities	5,654		2,853
Accrued interest	746		909
Deferred revenue	335		451
Current portion of convertible notes	56,204		—
Current portion of long-term debt	84		80
Finance lease, current	953		—
Operating lease, current	732		669
Total current liabilities	66,929		6,945
Finance lease, non-current	1,383		—
Operating lease, non-current	1,997		2,381
Other non-current liabilities	757		808
Convertible notes	49,624		107,984
Total liabilities	$	120,690	$	118,118
Commitments and contingencies

See accompanying notes to condensed consolidated financial statements.

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEETS (CONTINUED)

(in thousands, except share data)

	June 30,		December 31,
	2022		2021
	(As Restated)
	Unaudited
Stockholders’ deficit:
Preferred shares, $0.001 par value;
5,000,000 preferred shares authorized and 3,954,546 outstanding as of June 30, 2022 and December 31, 2021	4		4
Common stock, $0.001 par value;
200,000,000 common shares authorized with 79,701,428 shares issued and outstanding on June 30, 2022 and 100,000,000 common shares authorized with 67,649,018 shares issued and outstanding on December 31, 2021	80		68
Contributed capital	560,185		580,652
Treasury stock	(45,067)		(45,067)
Accumulated deficit	(576,734)		(570,668)
Accumulated other comprehensive loss	(432)		(60)
Total stockholders’ deficit	(61,964)		(35,071)
Total liabilities and stockholders’ deficit	$	58,726	$	83,047

See accompanying notes to condensed consolidated financial statements.

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Unaudited

(in thousands, except per share data)

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2022		2021		2022		2021
	(As Restated)
Net sales	$	3,861	$	2,798	$	6,820	$	5,316
Cost of sales	2,781		1,745		4,937		3,365
Gross profit	1,080		1,053		1,883		1,951
Costs and expenses:
Research and development	7,576		5,733		13,600		12,629
Sales, general and administrative	11,493		12,910		22,167		26,938
Total costs and expenses	19,069		18,643		35,767		39,567
Loss from operations	(17,989)		(17,590)		(33,884)		(37,616)
Other income (expense):
Interest expense	(713)		(4,177)		(1,630)		(8,267)
Gain on extinguishment of debt	199		—		3,565		—
Foreign currency exchange gain (loss)	31		—		40		(159)
Interest income	56		12		78		55
Other (expense) income, net	(107)		81		(157)		74
Total other income (expense), net	(534)		(4,084)		1,896		(8,297)
Net loss before income taxes	(18,523)		(21,674)		(31,988)		(45,913)
Provision for income taxes	—		—		—		—
Net loss	$	(18,523)	$	(21,674)	$	(31,988)	$	(45,913)
Basic and diluted net loss per share	$	(0.24)	$	(0.36)	$	(0.44)	$	(0.77)
Weighted average shares outstanding	76,231		61,049		71,998		59,790
Other comprehensive loss:
Net loss	$	(18,523)	$	(21,674)	$	(31,988)	$	(45,913)
Net unrealized (loss) gain on debt securities available-for-sale	(39)		1		(132)		(18)
Foreign currency translation adjustment	(161)		21		(240)		(60)
Comprehensive loss	$	(18,723)	$	(21,652)	$	(32,360)	$	(45,991)

See accompanying notes to condensed consolidated financial statements.

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Unaudited

(in thousands)

	Six Months Ended
	June 30,		June 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(31,988)	$	(45,913)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,435		1,248
Amortization of investment discount	79		97
Equity-based compensation	6,950		15,429
Amortization of debt discount and issuance costs	284		6,079
Loss (gain) on disposal of property and equipment	283		(100)
Unrealized loss on equity investments	157		—
Gain on extinguishment of debt	(3,565)		—
(Increase) decrease in assets:
Contributions to deferred compensation plan	(110)		(236)
Accounts receivable	(615)		(564)
Inventory	(416)		(524)
Prepaid expense and other	(719)		60
Increase (decrease) in liabilities:
Accounts payable	658		564
Accrued liabilities	2,288		736
Accrued interest	(159)		45
Deferred revenue and income	(116)		(94)
Deferred compensation	(51)		245
Net cash used in operating activities	(25,605)		(22,928)
Cash flows from investing activities:
Purchases of equipment	(447)		(29)
Purchase of marketable securities	(27,504)		(15,699)
Maturities of marketable securities	18,738		23,993
Net cash (used in) provided by investing activities	(9,213)		8,265
Cash flows from financing activities:
Proceeds from issuance of common stock	—		22,122
Payments on finance leases	(424)		—
Proceeds from exercise of options	7		1,222
Proceeds from issuance of common stocks under employee purchase plan	137		161
Net cash (used in) provided by financing activities	(280)		23,505
Effect of exchange rate on cash	(219)		(43)
(Decrease) increase in cash and cash equivalents	(35,317)		8,799
Cash and cash equivalents, beginning of period	39,898		35,781
Cash and cash equivalents, end of period	$	4,581	$	44,580

See accompanying notes to condensed consolidated financial statements.

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS (CONTINUED)

Unaudited

(in thousands)

	Six Months Ended
	June 30,		June 30,
	2022		2021
Non-cash investing activities:
Net transfer of instruments from inventory to property and equipment	$	202	$	500
Supplemental cash flow information:
Interest paid	$	1,506	$	2,144
Extinguishment of Convertible Senior Notes through issuance of common stock	$	10,180	$	—

See accompanying notes to condensed consolidated financial statements.

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF STOCKHOLDERS' DEFICIT

Unaudited

(in thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(As Restated)
Preferred stock shares outstanding
Beginning	3,955		—		3,955		—
Ending	3,955		—		3,955		—
Preferred stock
Beginning	$	4	$	—	$	4	$	—
Ending	$	4	$	—	$	4	$	—
Common stock shares outstanding
Beginning	68,712		59,561		67,649		57,608
Issuance of common stock	—		1,481		—		2,870
Exercise of options and restricted stock awards issued	974		436		1,128		990
Issuance of common stock under employee purchase plan	66		11		125		21
Issuance of shares to retire Convertible Notes	9,949		—		10,799		—
Ending	79,701		61,489		79,701		61,489
Common stock
Beginning	$	69	$	60	$	68	$	58
Proceeds from issuance of common stock	—		1		—		2
Exercise of Options	1		—		1		1
Issuance of shares to retire Convertible Notes	10		—		11		—
Ending	$	80	$	61	$	80	$	61
Contributed capital
Beginning	$	547,381	$	495,857	$	580,652	$	475,072
Cumulative effect of accounting changes	—		—		(37,438)		—
Proceeds from issuance of common stock			11,455		—		22,120
Exercise of options	6		113		6		1,221
Issuance of common stock under employee purchase plan	60		81		137		161
Issuance of shares to retire Convertible Notes	8,912		—		10,169		—
Equity-based compensation	3,826		6,616		6,659		15,548
Ending	$	560,185	$	514,122	$	560,185	$	514,122

See accompanying notes to condensed consolidated financial statements.

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ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF STOCKHOLDERS' DEFICIT (CONTINUED)

Unaudited

(in thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(As Restated)
Accumulated deficit
Beginning	$	(558,211)	$	(517,205)	$	(570,668)	$	(492,966)
Cumulative effect of accounting changes	—		—		25,922		—
Net loss	(18,523)		(21,674)		(31,988)		(45,913)
Ending	$	(576,734)	$	(538,879)	$	(576,734)	$	(538,879)
Treasury stock
Beginning	$	(45,067)	$	(45,067)	$	(45,067)	$	(45,067)
Ending	$	(45,067)	$	(45,067)	$	(45,067)	$	(45,067)
Accumulated other comprehensive (loss) income
Beginning	$	(232)	$	(9)	$	(60)	$	91
Net unrealized loss on debt securities available-for-sale	(39)		1		(132)		(18)
Foreign currency translation adjustment	(161)		21		(240)		(60)
Ending	$	(432)	$	13	$	(432)	$	13
Total stockholders' deficit	$	(61,964)	$	(69,750)	$	(61,964)	$	(69,750)

See accompanying notes to condensed consolidated financial statements.

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ACCELERATE DIAGNOSTICS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

NOTE 1. ORGANIZATION AND NATURE OF BUSINESS; BASIS OF PRESENTATION; PRINCIPLES OF CONSOLIDATION; SIGNIFICANT ACCOUNTING POLICIES

Accelerate Diagnostics, Inc. (“we” or “us” or “our” or “Accelerate” or the “Company”) is an in vitro diagnostics company dedicated to providing solutions that improve patient outcomes and lower healthcare costs through the rapid diagnosis of serious infections.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on March 14, 2022.

The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date but does not include all disclosures such as notes required by U.S. GAAP.

The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods presented, but are not necessarily indicative of the results of operations to be anticipated for the entire year ending December 31, 2022, or any future period.

All amounts are rounded to the nearest thousand dollars unless otherwise indicated.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after elimination of intercompany transactions and balances.

Restatement of Previously Issued Financial Statements

Background on the restatement

The Company’s previously issued interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2022 classified its 2.50% Senior Convertible Notes due 2023 (the “Notes”) as a non-current liability with a net carrying amount of $105.8 million as of June 30, 2022. Pursuant to Accounting Standards Codification (“ASC”) 210-10-45, Balance Sheet, a portion of the Notes should have been classified as a current liability in the balance sheet as of June 30, 2022. In addition, the Company recorded an adjustment to correct a previously identified immaterial error related to the gain on extinguishment of debt for the three months ended June 30, 2022.

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Effect of the restatement

The effects of the correction of the prior-period misstatements on our Condensed Consolidated Balance Sheet relating to the Notes are reflected in the table below (in thousands). The Condensed Consolidated Statements of Operations and Comprehensive Loss, and the Condensed Consolidated Statements of Stockholders’ Equity were also corrected for the other previously identified immaterial error as reflected in the table below (in thousands, except per share data).

	June 30,
	2022
	As Previously Reported	Adjustments	As Restated
Current portion of convertible notes	—	56,204	56,204
Total current liabilities	10,725	56,204	66,929
Convertible notes	105,828	(56,204)	49,624

	Three Months Ended
	June 30,
	2022
	As Previously Reported	Adjustments	As Restated
Accumulated deficit beginning balance	(558,931)	720	(558,211)
Gain on extinguishment of debt	919	(720)	199
Total other income (expense), net	186	(720)	(534)
Net loss before income taxes	(17,803)	(720)	(18,523)
Net loss	(17,803)	(720)	(18,523)
Basic and diluted net loss per share	(0.23)	(0.01)	(0.24)
Comprehensive loss	(18,003)	(720)	(18,723)

In addition to correcting the consolidated financial statements, related revisions and updates have been made to “Liquidity & Going Concern (As Restated)” below and Note 10, Convertible Notes (As Restated).

Liquidity & Going Concern (As Restated)

Since inception, the Company has not achieved profitable operations or positive cash flows from operations. The Company’s accumulated deficit totaled $576.7 million as of June 30, 2022. For the three and six months ended June 30, 2022, the Company had net losses of approximately $18.5 million and $32.0 million, respectively, and had negative cash flows from operations of approximately $25.6 million for the six months ended June 30, 2022. The future success of the Company is dependent on its ability to successfully commercialize its products, obtain regulatory clearance for and successfully launch its future product candidates, obtain additional capital and ultimately attain profitable operations. Historically, the Company has funded its operations primarily through multiple equity raises and the issuance of debt (see Note 9, Long-Term Debt, Note 10, Convertible Notes and Note 17, Stockholders' Equity for additional details).

At June 30, 2022, the Company held cash, cash equivalents, and marketable securities of $36.8 million and current liabilities of $66.9 million, including $56.2 million of Notes due March 15, 2023. Based on its evaluation pursuant to ASC 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company has determined that, as of the date of this Form 10-Q/A filing, there is substantial doubt about its ability to continue as a going concern, as the Company does not currently have adequate financial resources to pay its outstanding debt obligation under the Notes and to fund its forecasted operating costs for at least twelve months from the filing of this Form 10-Q/A.

While the Company continues to explore additional funding in the form of potential equity and/or debt financing arrangements or similar transactions, as well as non-cash means to settle or refinance the Notes, there can be no assurance the necessary financing will be available on terms acceptable to the Company, or at all. If the

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Company raises funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of common stock. If the Company raises funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of preferred and common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations. Similarly, there can be no assurance that market conditions and refinancing alternatives will be sufficient to settle or refinance the Notes on or prior to their maturity on March 15, 2023. The capital markets have in the past, and may in the future, experience periods of upheaval that could impact the availability and cost of equity and debt financing. In addition, recent and anticipated future increases in federal fund rates set by the Federal Reserve, which serve as benchmark rates on borrowing, and other general economic conditions may impact the cost of debt financing or refinancing existing debt.

Although we are actively considering all available strategic alternatives to maximize value, if we are unable to obtain adequate capital resources to fund operations and address the upcoming maturity of the Notes, we would not be able to continue to operate our business pursuant to our current plans. This may require us to, among other things, materially modify our operations to reduce spending; sell assets or operations; delay the implementation of, or revising certain aspects of, our business strategy; file a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in order to implement a restructuring; or discontinue our operations entirely.

The accompanying condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to accounts receivable, inventory, property and equipment, accrued liabilities, warranty liabilities, convertible notes, tax valuation accounts, equity–based compensation, revenue and leases. Actual results could differ materially from those estimates.

Estimated Fair Value of Financial Instruments

The Company follows ASC 820, Fair Value Measurement, which has defined fair value and requires the Company to establish a framework for measuring and disclosing fair value. The framework requires the valuation of assets and liabilities subject to fair value measurements using a three-tiered approach and fair value measurement be classified and disclosed in one of the following three categories:

•Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

•Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).

The carrying amounts of financial instruments such as cash and cash equivalents, trade accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, and other current liabilities approximate the related fair values due to the short-term maturities of these instruments.

See Note 4, Fair Value of Financial Instruments, for further information and related disclosures regarding the Company’s fair value measurements.

The estimated fair value of the Notes represents a Level 2 measurement. See Note 10, Convertible Notes for further detail on the Company’s Notes.

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Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or less at time of purchase are considered to be cash equivalents. Cash and cash equivalents include overnight repurchase agreement accounts and other investments. As part of our cash management process, excess operating cash is invested in overnight repurchase agreements with our bank. Repurchase agreements and other investments classified as cash and cash equivalents are not deposits and are not insured by the U.S. Government, the FDIC or any other government agency and involve investment risk including possible loss of principal. We believe however, that the market risk arising from holding these financial instruments is minimal.

Investments

The Company invests in various debt and equity securities which are primarily held in the custody of major financial institutions. Debt securities consist of certificates of deposit, U.S. government and agency securities, commercial paper, and corporate notes and bonds. Equity securities consist of mutual funds. The Company records these investments in the condensed consolidated balance sheet at fair value. Unrealized gains or losses for debt securities available-for-sale are included in accumulated other comprehensive income (loss), a component of stockholders’ deficit. Unrealized gains or losses for equity securities are included in other income (expense), net, a component of condensed consolidated statements of operations and comprehensive loss. The Company considers all debt securities available-for-sale, including those with maturity dates beyond 12 months, as available to support current operational liquidity needs. The Company classifies its investments as current based on the nature of the investments and their availability for use in current operations.

We perform an assessment to determine whether there have been any events or economic circumstances to indicate that a debt security available-for-sale in an unrealized loss position has suffered impairment as a result of credit loss or other factors. A debt security is considered impaired if its fair value is less than its amortized cost basis at the reporting date. If we intend to sell the debt security or if it is more-likely-than-not that we will be required to sell the debt security before the recovery of its amortized cost basis, the impairment is recognized and the unrealized loss is recorded as a direct write-down of the security's amortized cost basis with an offsetting entry to earnings. If we do not intend to sell the debt security or believe we will not be required to sell the debt security before the recovery of its amortized cost basis, the impairment is assessed to determine if a credit loss component exists. We use a discounted cash flow method to determine the credit loss component. In the event a credit loss exists, an allowance for credit losses is recorded in earnings for the credit loss component of the impairment while the remaining portion of the impairment attributable to factors other than credit loss is recognized, net of tax, in accumulated other comprehensive income (loss). The amount of impairment recognized due to credit factors is limited to the excess of the amortized cost basis over the fair value of the security.

Inventory

Inventory is stated at the lower of cost or net realizable value. The Company determines the cost of inventory using the first-in, first out method. The Company estimates the recoverability of inventory by reference to internal estimates of future demands and product life cycles, including expiration. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value and records a charge to expense for such inventory as appropriate.

We charge cost of sales for inventory provisions to write-down our inventory to the lower of cost or net realizable value or for obsolete or excess inventory. Most of our inventory provisions relate to excess quantities of products, based on our inventory levels and future product purchase commitments compared to assumptions about future demand and market conditions. Once inventory has been written-off or written-down, it creates a new cost basis for the inventory that is not subsequently written-up.

See Note 6, Inventory, for further information and related disclosures.

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Accounts Receivable

Accounts receivable consist of amounts due to the Company for sales to customers and are based on what we expect to collect in exchange for goods and services. Receivables are considered past due based on the contractual payment terms and are written off if reasonable collection efforts prove unsuccessful.

We maintain an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense in the consolidated statements of operations. We assess collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectibility issues. In determining the amount of the allowance for credit losses, we consider historical collectibility and make judgments about the creditworthiness of customers based on credit evaluations. Our customers typically have good credit quality. We also consider customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data.

The allowance for credit losses for the three and six months ended June 30, 2022 and 2021 is comprised of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Beginning balance	$	159	$	209	140		445
Provisions	7		7		30		38
Write-offs	(16)		(3)		(20)		(270)
	$	150	$	213	$	150	$	213

The write-offs recorded during the six months ended June 30, 2021 were in connection with a one-time restructuring activity of the Company's Europe, Middle East and Africa (“EMEA”) business. These credit losses were incurred as part of the Company terminating agreements with select distributors in geographies it exited and did not pursue collection of these accounts receivables.

Property and Equipment

Property and equipment are recorded at cost. Maintenance and repairs are charged to expense as incurred and expenditures for major improvements are capitalized. Gains and losses from retirement or replacement are included in costs and expenses. Depreciation of property and equipment is computed using the straight-line method over the estimated useful life of the assets, ranging from one to seven years. Leasehold improvements are depreciated over the remaining life of the lease or the life of the asset, whichever is less.

Instruments Classified as Property and Equipment

Property and equipment includes Accelerate Pheno systems (also referred to as instruments) used for sales demonstrations, instruments under rental agreements and instruments used for research and development. Depreciation expense for instruments used for sales demonstrations is recorded as a component of sales, general and administrative expense. Depreciation expense for instruments placed at customer sites pursuant to reagent rental agreements is recorded as a component of cost of sales. Depreciation expense for instruments used in our laboratory and research is recorded as a component of research and development expense. The Company retains title to these instruments and depreciates them over five years. Losses from the retirement of returned instruments are included in costs and expenses.

The Company evaluates the recoverability of the carrying amount of its instruments whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable, and at least annually. This evaluation is based on our estimate of future cash flows and the estimated fair value of such long-lived assets, and provides for impairment if such undiscounted cash flows or the estimated fair value are insufficient to recover the carrying amount of instruments. No impairment charges have been recorded as of June 30, 2022 and December 31, 2021.

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See Note 7, Property and Equipment, for further information and related disclosures.

Long-lived Assets

Long-lived assets and certain identifiable intangibles to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company continuously evaluates the recoverability of its long-lived assets based on estimated future cash flows from and the estimated fair value of such long-lived assets, and provides for impairment if such undiscounted cash flows or the estimated fair value are insufficient to recover the carrying amount of the long-lived asset.

Warranty Reserve

Instruments are typically sold with a one year limited warranty, while kits and accessories are typically sold with a sixty days limited warranty. Accordingly, a provision for the estimated cost of the limited warranty repair is recorded at the time revenue is recognized. Our estimated warranty provision is based on our estimate of future repair events and the related estimated cost of repairs. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. The cost incurred for these provisions is included in cost of sales on the condensed consolidated statements of operations and comprehensive loss.

Warranty reserve activity for the three and six months ended June 30, 2022 and 2021 is as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Beginning balance	$	176	$	184	$	139	$	232
Provisions	93		12		139		(10)
Warranty cost incurred	(14)		(27)		(23)		(53)
Ending balance	$	255	$	169	$	255	$	169

Convertible Notes

On January 1, 2022 the Company adopted Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). As a result, the Notes are now accounted for as a single liability measured at their amortized cost. The Notes are no longer bifurcated between debt and equity and are instead accounted for entirely as debt at face value net of any discount or premium and issuance costs. Interest expense is comprised of (1) cash interest payments, (2) amortization of any debt discounts or premiums based on the original offering, and (3) amortization of any debt issuance costs. Gain or loss on extinguishment of Notes is calculated as the difference between the (i) fair value of the consideration transferred and (ii) the sum of the carrying value of the debt at the time of repurchase.

See Note 2, Recently Issued Accounting Pronouncements and Note 10, Convertible Notes, for further information and related disclosures.

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Revenue Recognition

The Company recognizes revenue when control of the promised good or service is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales taxes are excluded from revenues.

The Company determines revenue recognition through the following steps:

•Identification of the contract with a customer

•Identification of the performance obligations in the contract

•Determination of the transaction price

•Allocation of the transaction price to the performance obligations

•Recognition of revenue as we satisfy a performance obligation

Product revenue is derived from the sale or rental of instruments and sales of related consumable products. When an instrument is sold, revenue is generally recognized upon installation of the unit consistent with contract terms, which do not include a right of return. When a consumable product is sold, revenue is generally recognized upon shipment. Invoices are generally issued when revenue is recognized. Payment terms vary by the type and location of the customer and the products or services offered. The term between invoicing and when payment is due is not significant.

Service revenue is derived from the sale of extended service agreements which are generally non-cancellable. This revenue is recognized on a straight-line basis over the contract term beginning on the effective date of the contract because the Company is standing ready to provide services. Invoices are generally issued annually and coincide with the beginning of individual service terms.

The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines relative standalone selling prices based on the price charged to customers for each individual performance obligation.

Sales commissions earned by the Company’s sales force are considered incremental and recoverable costs of obtaining a contract with a customer. The Company has determined these costs would have an amortization period of less than one year and has elected to recognize them as an expense when incurred. Contract asset opening and closing balances were immaterial for the three and six months ended June 30, 2022.

Gross Profit and Gross Margin

Gross profit consists of total revenue, net of allowances, less cost of sales. Cost of sales includes cost of materials, direct labor, equity-based compensation, facility and other manufacturing overhead costs for consumable tests and instruments sold to customers. Cost of sales for instruments also includes depreciation on revenue generating instruments that have been placed with our customers under a reagent rental agreement. Cost of sales includes repair and maintenance cost for instruments covered by a service agreement or instruments covered by a reagent rental agreement. Cost of sales also includes warranty related costs.

The Company’s overall gross margin was 28% and 38% for the three months ended June 30, 2022 and 2021, respectively, and 28% and 37% for the six months ended June 30, 2022 and 2021, respectively. The decreases were primarily due to increases in the costs to manufacture consumables due to supply chain inflationary factors and a decrease in our average unit sales price period over period.

Shipping and Handling

Shipping and handling costs billed to customers are included as a component of revenue. The corresponding expense incurred with third party carriers is included as a component of sales, general and administrative costs on the consolidated statements of operations and comprehensive loss.

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Leases

The Company accounts for leases in accordance with ASC 842, Leases. The Company determines if an arrangement is or contains a lease and the type of lease at inception. The Company classifies leases as finance leases (lessee) or sales-type leases (lessor) when there is either a transfer of ownership of the underlying asset by the end of the lease term, the lease contains an option to purchase the asset that we are reasonably certain will be exercised, the lease term is for the major part of the remaining economic life of the asset, the present value of the lease payments and any residual value guarantee equals or substantially exceeds all the fair value of the asset, or the asset is of such a specialized nature that it will have no alternative use to the lessor at the end of the lease term. Payments contingent on future events (i.e. based on usage) are considered variable and excluded from lease payments for the purposes of classification and initial measurement. Several of our leases include options to renew or extend the term upon mutual agreement of the parties and others include one-year extensions exercisable by the lessee. None of our leases contain residual value guarantees, restrictions, or covenants.

To determine whether a contract contains a lease, the Company uses its judgment in assessing whether the lessor retains a material amount of economic benefit from an underlying asset, whether explicitly or implicitly identified, which party holds control over the direction and use of the asset, and whether any substantive substitution rights over the asset exist.

Leases as Lessee

Operating leases are included in right-of-use (“ROU”) assets and corresponding lease liabilities, and finance leases are included in ROU assets and corresponding lease liabilities within our condensed consolidated balance sheets. These assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and their related liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Typically, we use our incremental borrowing rate based on the information available at commencement in determining the present value of lease payments. We use the implicit rate when readily determinable. ROU assets are net of lease payments made and exclude lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term, which may include options to extend or terminate the lease when it is reasonably certain that we will exercise the option.

Our operating leases consist primarily of leased office, factory, and laboratory space in the U.S. and office space in Europe, have between two and six-year terms, and typically contain penalizing, early-termination provisions. Our finance leases consist of leased equipment and have three-year terms.

Leases as Lessor

The Company leases instruments to customers under “reagent rental” agreements, whereby the customer agrees to purchase consumable products over a stated term, typically five years or less, for a volume-based price that includes an embedded rental for the instruments. When collectibility is probable, that amount is recognized as income at lease commencement for sales-type leases and as product is shipped, typically in a straight–line pattern, over the term for operating leases, which typically include a termination without cause or penalty provision given a short notice period.

Consideration is allocated between lease and non-lease components based on stand-alone selling price in accordance with ASC 606, Revenue from Contracts with Customers.

Net investment in sales-type leases are included within our condensed consolidated balance sheets as a component of other current assets and other non-current assets, which include the present value of lease payments not yet received and the present value of the residual asset, which are determined using the information available at commencement, including the lease term, estimated useful life, rate implicit in the lease, and expected fair value of the instrument.

Nonqualified Cash Deferral Plan

The Company's Cash Deferral Plan (the “Deferral Plan”) provides certain key employees with an opportunity to defer the receipt of such participant's base salary. The Deferral Plan is intended to be a nonqualified deferred compensation plan that complies with the provisions of Section 409A of the Internal Revenue Code. All of

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the investments held in the Deferral Plan are equity securities consisting of mutual funds and recorded at fair value with changes in the investments' fair value recognized as earnings in the period they occur. The corresponding liability for the Deferral Plan is included in other non-current liabilities in the condensed consolidated balance sheet.

Equity-Based Compensation

The Company may award stock options, restricted stock units (“RSUs”), performance-based awards and other equity-based instruments to its employees, directors and consultants. Compensation cost related to equity-based instruments is based on the fair value of the instrument on the grant date, and is recognized over the requisite service period on a straight-line basis over the vesting period for each tranche (an accelerated attribution method) except for performance-based awards. Performance-based awards vest based on the achievement of performance targets. Compensation costs associated with performance-based awards are recognized over the requisite service period based on probability of achievement. Performance-based awards require management to make assumptions regarding the likelihood of achieving performance targets.

The Company estimates the fair value of service based and performance based stock option awards, including modifications of stock option awards, using the Black-Scholes option pricing model. This model derives the fair value of stock options based on certain assumptions related to expected stock price volatility, expected option life, risk-free interest rate and dividend yield.

•Volatility: The expected volatility is based on the historical volatility of the Company's stock price over the most recent period commensurate with the expected term of the stock option award.

•Expected term: The estimated expected term for employee awards is based on a simplified method that considers an insufficient history of employee exercises. For consultant awards, the estimated expected term is the same as the life of the award.

•Risk-free interest rate: The risk-free interest rate is based on published U.S. Treasury rates for a term commensurate with the expected term.

•Dividend yield: The dividend yield is estimated as zero as the Company has not paid dividends in the past and does not have any plans to pay any dividends in the foreseeable future.

The Company records the fair value of RSUs or stock grants based on the published closing market price on the day before the grant date.

The Company accounts for forfeitures as they occur rather than on an estimated basis.

The Company also has an employee stock purchase program whereby eligible employees can elect payroll deductions that are subsequently used to purchase common stock at a discounted price. There is no compensation recorded for this program as (i) the purchase discount does not exceed the issuance costs that would have been incurred to raise a significant amount of capital by a public offering, (ii) substantially all employees that meet limited employment qualifications may participate on an equitable basis, and (iii) the plan doesn't incorporate option features that would require compensation to be recorded.

See Note 12, Employee Equity-Based Compensation for further information.

Deferred Tax

Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying condensed consolidated balance sheet. The change in deferred tax assets and liabilities for the period represents the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws in deferred tax assets and liabilities are reflected as an adjustment to the tax provision or benefit in the period of enactment.

The Company follows the provisions of ASC 740, Income Taxes, to account for any uncertainty in income taxes with respect to the accounting for all tax positions taken (or expected to be taken) on any income tax return. This guidance applies to all open tax periods in all tax jurisdictions in which the Company is required to file an income tax return. Under U.S. GAAP, in order to recognize an uncertain tax benefit the taxpayer must be more

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likely than not certain of sustaining the position, and the measurement of the benefit is calculated as the largest amount that is more likely than not to be realized upon resolution of the position. Interest and penalties, if any, would be recorded within tax expense.

Foreign Currency Translation and Foreign Currency Transactions

Adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive loss in the condensed consolidated statements of stockholders’ deficit.

The Company has assets and liabilities, including receivables and payables, which are denominated in currencies other than their functional currency. These balance sheet items are subject to re-measurement, the impact of which is recorded in foreign currency exchange gain and loss, within the condensed consolidated statement of operations and comprehensive loss.

Loss Per Share

Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Potentially dilutive common shares consist of shares issuable from stock options and unvested RSUs. Potentially dilutive common shares would also include common shares that would be outstanding if the Notes and the Series A Preferred Stock outstanding at the balance sheet date were converted and shares issuable in connection with the Securities Purchase Agreement (as defined in Note 17). Diluted earnings are not presented when the effect of adding such additional common shares is antidilutive.

See Note 11, Loss Per Share, for further information.

Comprehensive Loss

In addition to net loss, comprehensive loss includes all changes in equity during a period, except those resulting from investments by and distributions to owners. The Company holds debt securities as available-for-sale and records the change in fair market value as a component of comprehensive loss. The Company also has adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars which is included as a component of comprehensive loss.

NOTE 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Standards that were recently adopted

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). This update simplifies the accounting for convertible debt instruments by removing the beneficial conversion and cash conversion separation models for convertible instruments. Under the update, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives or that do not result in substantial premiums accounted for as paid-in capital. The update also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will no longer be available. The Company adopted the standard on January 1, 2022 through application of the modified retrospective method of transition. The Company applied the standard to the Notes outstanding as of January 1, 2022, as discussed in Note 10, Convertible Notes. As a result, the Notes are now accounted for as a single liability measured at their amortized cost. The Notes are no longer bifurcated between debt and equity and are instead accounted for entirely as debt at face value net of any discount or premium and issuance costs. Interest expense is comprised of (1) cash interest payments, (2) amortization of any debt discounts or premiums based on the original offering, and (3) amortization of any debt issuance costs. On January 1, 2022, the cumulative effect of adoption resulted in an increase in the net carrying amount of the Notes, of $11.5 million, a decrease in additional-paid-in-capital of $37.4 million, and a decrease in accumulated deficit of $25.9 million. ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share. This change has no impact on the Company given the Company was already using the if-converted method to calculate diluted earnings per share.

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In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Topic 815 - 40). ASU 2021-04 codifies the final consensus reached by the Emerging Issues Task Force (EITF) on how an issuer should account for modifications made to equity-classified written call options (hereafter referred to as a warrant to purchase the issuer’s common stock). The guidance in the ASU requires the issuer to treat a modification of an equity-classified warrant that does not cause the warrant to become liability-classified as an exchange of the original warrant for a new warrant. This guidance applies whether the modification is structured as an amendment to the terms and conditions of the warrant or as termination of the original warrant and issuance of a new warrant. This ASU was adopted January 1, 2022, and did not impact the Company's consolidated financial statements at January 1, 2022.

Standards not yet adopted

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method. ASU 2022-01 is related to the portfolio layer method of hedge accounting. The amendments in this update clarify the accounting and promote consistency in reporting for hedges where the portfolio layer method is applied. This update is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. We do not expect the update to have a material effect on our condensed consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 relates to troubled debt restructurings (“TDRs”) and vintage disclosures for financing receivables. The amendments in this update eliminate the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We do not expect the update to have a material effect on our condensed consolidated financial statements.

NOTE 3. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, short-term investments and accounts receivable.

The Company has financial institutions for banking operations that hold 10% or more of the Company’s cash and cash equivalents. As of June 30, 2022, four of the Company's financial institutions held 33%, 19%, 17% and 16% of the Company’s cash and cash equivalents. As of December 31, 2021, two of the Company's financial institutions held 72% and 13% of the Company’s cash and cash equivalents.

The Company grants credit to domestic and international customers. Exposure to losses on accounts receivable is principally dependent on each client's financial position. The Company had one customer that accounted for 11% and 13% of the Company’s net accounts receivable balance as of June 30, 2022 and December 31, 2021, respectively.

The Company did not have any customers that represented 10% or more of the Company’s total revenue for the three and six months ended June 30, 2022 and 2021.

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NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following tables represent the financial instruments measured at fair value on a recurring basis in the financial statements of the Company and the valuation approach applied to each class of financial instruments at June 30, 2022 and December 31, 2021 (in thousands):

	June 30, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash and cash equivalents:
Money market funds	$	118	$	—	$	—	$	118
Total cash and cash equivalents	118		—		—		118
Equity investments:
Mutual funds	793		—		—		793
Total equity investments	793		—		—		793
Debt securities available-for-sale:
Certificates of deposit	—		5,242		—		5,242
U.S. Treasury securities	13,218		—		—		13,218
Commercial paper	—		5,044		—		5,044
Corporate notes and bonds	—		7,894		—		7,894
Debt securities available-for-sale	13,218		18,180		—		31,398
Total assets measured at fair value	$	14,129	$	18,180	$	—	$	32,309

	December 31, 2021
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash and cash equivalents:
Money market funds	$	5,563	$	—	$	—	$	5,563
Commercial paper	—		200		—		200
Total cash and cash equivalents	5,563		200		—		5,763
Equity investments:
Mutual funds	841		—		—		841
Total equity investments	841		—		—		841
Debt securities available-for-sale:
Certificates of deposit	—		1,351		—		1,351
U.S. Treasury securities	250		—		—		250
Commercial paper	—		8,046		—		8,046
Corporate notes and bonds	—		13,232		—		13,232
Debt securities available-for-sale	250		22,629		—		22,879
Total assets measured at fair value	$	6,654	$	22,829	$	—	$	29,483

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Highly liquid investments with an original maturity of three months or less at time of purchase are included in cash and cash equivalents on the condensed consolidated balance sheet.

Level 1 assets are priced using quoted prices in active markets for identical assets which include money market funds, U.S. Treasury securities and mutual funds as these specific assets are liquid.

Level 2 available-for-sale securities are priced using quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market data. The Company uses inputs such as actual trade data, benchmark yields, broker/dealer quotes, and other similar data, which are obtained from quoted market prices, independent pricing vendors, or other sources, to determine the ultimate fair value of these assets and liabilities. The Company uses such pricing data as the primary input to make its assessments and determinations as to the ultimate valuation of its investment portfolio and has not made, during the periods presented, any material adjustments to such inputs.

At June 30, 2022, the Notes had an outstanding principal amount of $106.5 million with a fair value of $70.7 million. At December 31, 2021, the Notes had an outstanding principal amount of $120.5 million with a fair value of $89.4 million. The fair value of the Notes represents a Level 2 measurement.

The fair value of the Notes is typically correlated to the Company’s stock price and as a result, significant changes to the Company’s stock price will have a significant impact on the calculated fair value.

See Note 10, Convertible Notes for further detail on the Notes.

NOTE 5. INVESTMENTS

The following tables summarize the Company’s debt securities available-for-sale investments at June 30, 2022 and December 31, 2021 (in thousands):

	June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	5,268	$	—	$	(26)	$	5,242
U.S. Treasury securities	13,272		—		(54)		13,218
Commercial paper	5,067		—		(23)		5,044
Corporate notes and bonds	7,938		—		(44)		7,894
Total	$	31,545	$	—	$	(147)	$	31,398

	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	1,351	$	—	$	—	$	1,351
U.S. Treasury securities	250		—		—		250
Commercial paper	8,048		—		(2)		8,046
Corporate notes and bonds	13,245		—		(13)		13,232
Total	$	22,894	$	—	$	(15)	$	22,879

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The following table summarizes the maturities of the Company’s debt securities available-for-sale investments at June 30, 2022 and December 31, 2021 (in thousands):

	June 30, 2022				December 31, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in less than 1 year	$	31,140	$	30,995	$	22,663	$	22,649
Due in 1-3 years	405		403		231		230
Total	$	31,545	$	31,398	$	22,894	$	22,879

There were no proceeds from sales of debt securities available-for-sale (including principal paydowns) for the three and six months ended June 30, 2022 and 2021. The Company determines gains and losses of marketable securities based on specific identification of the securities sold. There were no material realized gains or losses from debt securities available-for-sale for the three and six months ended June 30, 2022 and 2021. No material balances were reclassified out of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021. No unrealized losses on debt securities available-for-sale have been recognized in income for the three and six months ended June 30, 2022 and 2021, as the issuers of such securities held by us were of high credit quality.

As of June 30, 2022, there were no holdings of debt securities available-for-sale of any one issuer, other than the U.S. government, in an amount greater than 10%.

As of June 30, 2022 the Company did not carry any debt securities available-for-sale that were below the Company's minimum credit rating. All debt securities available-for-sale had a credit rating of A- or better as of June 30, 2022.

Equity securities are comprised of investments in mutual funds. The fair value of equity securities for each of the periods ended June 30, 2022 and December 31, 2021 was $0.8 million.

Unrealized gains or losses on equity securities recorded in income during the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Unrealized loss on equity investments	$	107	$	0	$	157	$	—

These unrealized gains or losses are recorded as a component of other income (expense), net. There were no realized gains or losses from equity securities for each of the three and six months ended June 30, 2022 and 2021.

NOTE 6. INVENTORY

Inventories consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

	June 30,		December 31,
	2022		2021
Raw materials	$	2,078	$	1,343
Work in process	1,690		1,625
Finished goods	1,536		2,099
	$	5,304	$	5,067

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NOTE 7. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

	June 30,		December 31,
	2022		2021
Computer equipment	$	3,872	$	3,181
Technical equipment	3,285		3,285
Facilities	3,674		3,675
Instruments	4,253		5,364
Capital projects in progress	13		683
Total property and equipment	$	15,097	$	16,188
Accumulated depreciation	(11,000)		(10,799)
Property and equipment, net	$	4,097	$	5,389

Depreciation expense for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Depreciation expense	$	443	$	493	$	903	$	1,053

Instruments at cost and accumulated depreciation where the Company is the lessor under operating leases consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

	June 30,		December 31,
	2022		2021
Instruments at cost under operating leases	$	2,547	$	3,110
Accumulated depreciation under operating leases	(1,014)		(1,165)
Net property and equipment under operating leases	$	1,533	$	1,945

NOTE 8. DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS

Deferred revenue consists of amounts received for products or services not yet delivered or earned. If we anticipate revenue will not be earned within the following twelve months, the amount is reported as other non-current liabilities. A summary of the balances as of June 30, 2022 and December 31, 2021 follows (in thousands):

	June 30,		December 31,
	2022		2021
Products and services not yet delivered	$	335	$	451

We recognized $0.2 million and $0.3 million of revenues that were included in the beginning contract liabilities balances during the three and six months ended June 30, 2022, respectively, and $0.2 million and $0.3 million of revenues that were included in the beginning contract liabilities balances during the three and six months ended June 30, 2021, respectively. No material amount of revenue recognized during the period was from performance obligations satisfied in prior periods.

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Transaction Price Allocated to Remaining Performance Obligations

As of June 30, 2022, $10.1 million of revenue is expected to be recognized from remaining performance obligations. This balance primarily relates to product shipments for reagents sold to customers under sales-type lease agreements. These agreements have between two and four year terms and revenue is recognized as product is shipped, typically on a straight-line basis. The remaining balance relates to executed service contracts that begin as warranty periods expire. These service contracts typically provide for four-year terms and revenue is recognized on a straight-line basis.

The Company elects not to disclose the value of unsatisfied performance obligations for (i) contracts with an expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

NOTE 9. LONG-TERM DEBT

The Company entered into two loan agreements with one financing company in 2020. Loan proceeds were $0.2 million, with interest rates ranging from 9.8% to 12.4% and maturities becoming due through 2022.

As of June 30, 2022 and December 31, 2021, long-term debt consisted of the following (in thousands):

	June 30,		December 31,
	2022		2021
Loans - various interest	$	84	$	80
Current portion of long-term debt	84		80
Long-term debt	$	—	$	—

The following presents maturities of future principal obligations of long-term debt as of June 30, 2022 (in thousands):

Remainder of 2022	$	84
2023	—
2024	—
2025	—
2026	—
Thereafter	—
Total	$	84

NOTE 10. CONVERTIBLE NOTES (As Restated)

The Notes are the Company's senior unsecured obligations and mature on March 15, 2023 (the “Maturity Date”), unless earlier repurchased or converted into shares of common stock under certain circumstances described below. Upon conversion of the Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of common stock, pursuant to the terms and conditions of the Notes. The initial conversion rate of the Notes is 32.3428 shares of common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $30.92 per share of common stock, subject to adjustment. The Company pays interest on the Notes semi-annually in arrears on March 15 and September 15 of each year. The Company’s Notes have a fixed coupon rate of 2.5% per annum on the principal amount.

The Company incurred issuance costs related to the issuance of the Notes which is amortized over the five-year contractual term of the Notes using the effective interest method. The effective interest rate on the Notes, including accretion of the Notes to par was 3.2%.

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The Notes include customary terms and covenants, including certain events of default upon which the Notes may be due and payable immediately. Holders have the option to convert the Notes in multiples of $1,000 principal amount at any time prior to December 15, 2022, but only in the following circumstances:

•if the Company’s stock price exceeds 130% of the conversion price for 20 of the last 30 trading days of any calendar quarter after June 30, 2018;

•during the 5 business day period after any 5 consecutive trading day period in which the Notes’ trading price is less than 98% of the product of the common stock price times the conversion rate; or

•the occurrence of certain corporate events, such as a change of control, merger or liquidation.

At any time on or after December 15, 2022, a holder may convert its Notes in multiples of $1,000 principal amount. Holders of the Notes who convert their Notes in connection with a make-whole fundamental change (as defined in the Indenture pursuant to which the Notes were issued) are, under certain circumstances, entitled to an increase in the conversion rate. In addition, in the event of a fundamental change or event of default prior to the Maturity Date, holders will, subject to certain conditions, have the right, at their option, to require the Company to repurchase for cash all or part of the Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the repurchase date.

Interest expense during the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Contractual coupon interest	$	666	$	1,072	$	1,449	$	2,144
Amortization of debt issuance costs	154		180		265		354
Amortization of the debt discount	—		$	2,903	$	—	$	5,724
Total interest expense on convertible notes	$	820	$	4,155	$	1,714	$	8,222

As of June 30, 2022 and December 31, 2021, no Notes were convertible pursuant to their original terms.

On March 21, 2022, the Company entered into a privately negotiated exchange agreement (the “Exchange Agreement”) with a holder of the Notes. Under the terms of the Exchange Agreement, the note holder agreed to exchange with the Company $14.0 million in aggregate principal amount of Notes held by it in eight equal tranches as follows for each tranche: (a) 22.64 shares per $1,000 principal amount of Notes exchanged, plus (b) an additional number of shares of the Company’s common stock per $1,000 principal amount of Notes exchanged equal to the sum, for each of the trading days during a separate agreed upon reference period for each tranche commencing on March 21, 2022 for the first tranche, of the quotient of (i) $155.67 divided by (ii) the daily volume-weighted average price for such trading day (collectively, the “Exchange Transaction”). The closing of the Exchange Transaction occurred in eight tranches (“Obligation to Exchange”), with the first closing occurring on March 29, 2022 and the last closing on May 18, 2022.

On March 21, 2022 the Obligation to Exchange the $14.0 million of Notes was accounted for as an extinguishment and was replaced by new notes with an embedded feature (the “New Notes”). The New Notes were elected to be carried using the fair value option. The New Notes were recorded at fair value on initial measurement and remeasured at fair value (“mark to market”) at each reporting period with changes in fair value reported in other income and expense, net. This fair value election was exclusive to the New Notes and did not extend to other Notes. At June 30, 2022 the embedded feature was no longer outstanding as the New Notes were exchanged and the Obligation to Exchange was retired. At June 30, 2022 no Notes were carried using the fair value option.

During the six months ended June 30, 2022 the holder of the Notes exchanged approximately $14.0 million in aggregate principal amount of Notes held by the holder for 10,798,482 shares of the Company's common stock pursuant to the Exchange Agreement. The legal exchange of the Notes resulted in a gain of $3.6 million. The Company's common stock was determined to have a value of $10.2 million, which was recorded to contributed capital during the six months ended June 30, 2022.

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Gain on extinguishment of exchanged Notes during the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	As Restated
Gain on extinguishment	$	199	$	0	$	3,565	$	0

The carrying value of the Notes at June 30, 2022 consisted of the following (in thousands):

	June 30,
	2022
Outstanding principal at par	$	106,500
Unamortized debt issuance	(672)
Net carrying amount of the liability component	$	105,828

As of June 30, 2022, the Notes and New Notes consisted of the following (in thousands):

	June 30,
	2022
	As Restated
Current portion of convertible notes	$	56,204
Non-current portion of convertible notes	49,624
Total convertible notes	$	105,828

Effective August 15, 2022, the Company entered into an exchange agreement (the “Exchange Agreement”) with the Jack W. Schuler Living Trust (the “Schuler Trust”), a holder of the Notes. Jack Schuler, who serves as a member of the Company’s board of directors, is the sole trustee of the Schuler Trust. Under the terms of the Exchange Agreement, the Schuler Trust agreed to exchange with the Company (the “Exchange”) $49.9 million in aggregate principal amount of Notes held by it for (a) a secured promissory note in an aggregate principal amount of $34.9 million (the “Secured Note”) and (b) a warrant (the “Warrant”) to acquire the Company’s common stock at an exercise price of $2.12 per share (the “Exercise Price”). See Note 19, Subsequent Events for additional information.

In connection with the Notes issuance, the Company entered into a prepaid forward stock repurchase transaction (“Prepaid Forward”) with a financial institution (“Forward Counterparty”). Pursuant to the Prepaid Forward, the Company used approximately $45.1 million of the net proceeds from its issuance of the Notes to fund the Prepaid Forward. The aggregate number of shares of the Company’s common stock underlying the Prepaid Forward was approximately 1,858,500. The expiration date for the Prepaid Forward is March 15, 2023, although it may be settled earlier in whole or in part. Upon settlement of the Prepaid Forward, at expiration or upon any early settlement, the Forward Counterparty will deliver to the Company the number of shares of common stock underlying the Prepaid Forward or the portion thereof being settled early. The shares purchased under the Prepaid Forward are treated as treasury stock and not outstanding for purposes of the calculation of basic and diluted earnings per share, but will remain outstanding for corporate law purposes, including for purposes of any future stockholders’ votes, until the Forward Counterparty delivers the shares underlying the Prepaid Forward to the Company. The Company’s Prepaid Forward hedge transaction exposes the Company to credit risk to the extent that its counterparty may be unable to meet the terms of the transaction. The Company mitigates this risk by limiting its counterparty to a major financial institution.

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NOTE 11. LOSS PER SHARE

Basic net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. Basic and diluted net loss per share are the same because all outstanding common stock equivalents have been excluded, as they are anti-dilutive due to the Company’s losses.

The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect for each of the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Shares issuable upon the release of restricted stock units	4,909	2,444	4,909	2,444
Shares issuable upon exercise of stock options	6,039	7,941	6,039	7,941
	10,948	10,385	10,948	10,385

Potentially dilutive common shares would include common shares that would be outstanding if Notes convertible at the balance sheet date were converted. As discussed in Note 10, Convertible Notes, upon conversion of the Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of common stock, at the Company’s election. The initial conversion rate of the Notes is 32.3428 shares of common stock per $1,000 principal amount of the Notes. As of June 30, 2022, no Notes were convertible pursuant to the original terms. The number of shares of common stock issuable upon conversion of the outstanding Notes based on the initial conversion rate was approximately 3.4 million shares as of June 30, 2022.

In connection with the Notes, the Company entered into a prepaid forward stock repurchase transaction. The aggregate number of shares of the Company’s common stock underlying the Prepaid Forward was approximately 1,858,500. The shares purchased under the Prepaid Forward are treated as treasury stock and not outstanding for purposes of the calculation of basic and diluted earnings per share, but will remain outstanding for corporate law purposes, including for purposes of any future stockholders’ votes, until the Forward Counterparty delivers the shares underlying the Prepaid Forward to the Company.

Potentially dilutive common shares would also include common shares that would be outstanding if Series A Preferred Stock were converted into common stock. Each share of Series A Preferred Stock is convertible, at the option of the holder, at any time into one share of the Company’s common stock. Additionally, each share of Series A Preferred Stock will automatically be converted into one share of the Company’s common stock immediately upon a sale of all outstanding stock of the Company or a merger of the Company into another corporation where the pre-merger Company’s stockholders cease to be the controlling stockholders of the post-merger corporation. The number of shares of common stock issuable upon conversion of the Series A Preferred Stock is 3,954,546 as of June 30, 2022.

As discussed in Note 17, Stockholders' Equity, the Company entered into a securities purchase agreement with the Jack W. Schuler Living Trust for the issuance and sale by the Company of an aggregate of 2,439,024 shares of the Company’s common stock The closing of the transaction is expected to occur on September 26, 2022, subject to the satisfaction of customary closing conditions and is considered an equity forward agreement. The shares to be issued from this agreement were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect due to net losses.

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NOTE 12. EMPLOYEE EQUITY-BASED COMPENSATION

The following table summarizes option activity under the Company's equity-based compensation plans for the six months ended June 30, 2022:

	Number of Shares	Weighted Average Exercise Price per Share
Options outstanding January 1, 2022	7,192,540	$	13.89
Granted	140,000	3.05
Forfeited	(128,670)	13.02
Exercised	(6,105)	1.04
Expired	(1,158,808)	10.05
Options outstanding June 30, 2022	6,038,957	$	14.41

The table below summarizes the resulting weighted average inputs used to calculate the estimated fair value of options awarded for the three months ended June 30, 2022 and 2021:

	Three Months Ended June 30,
	2022			2021
Expected term (in years)	0.0			5.79
Volatility	—		%	65		%
Expected dividends	—			—
Risk free interest rates	—		%	1.10		%
Weighted average fair value	$	—		$	4.09

No stock options were granted during the three months ended June 30, 2022, resulting in no summarized data for the period.

The following table shows summary information for outstanding options and options that are exercisable (vested) as of June 30, 2022:

	Options Outstanding		Options Exercisable
Number of options	6,038,957		4,644,828
Weighted average remaining contractual term (in years)	5.71		5.18
Weighted average exercise price	$	14.41	$	15.04
Weighted average fair value	$	9.00	$	9.31
Aggregate intrinsic value (in thousands)	$	—	$	—

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The following table summarizes RSU and restricted stock award activity for the six months ended June 30, 2022:

	Number of Shares	Weighted Average Grant Date Fair Value per Share
Outstanding January 1, 2022	2,090,182	$	10.77
Granted	4,107,083	1.55
Forfeited	(167,129)	9.94
Vested/released	(1,121,468)	3.39
Outstanding June 30, 2022	4,908,668	$	4.77

The table below summarizes equity-based compensation expense for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost of sales	$	228	$	74	$	403	$	175
Research and development	539		1,328		901		4,074
Sales, general and administrative	3,204		5,188		5,646		11,180
	$	3,971	$	6,590	$	6,950	$	15,429

The table below summarizes share-based compensation cost capitalized to inventory or inventory transferred to property and equipment (also referred to as instruments) for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost capitalized to inventory	$	74	$	87	$	117	$	242

As of June 30, 2022, unrecognized equity-based compensation expense related to unvested stock options and unvested RSUs was $3.1 million and $11.0 million, respectively. This is expected to be recognized over the years 2022 through 2027.

Included in the above-noted stock options outstanding and stock compensation expense are performance-based stock options which vest only upon the achievement of certain targets. Performance-based stock options are generally granted at-the-money, contingently vest over a period of 1 to 2 years, depending on the nature of the performance goal, and have contractual lives of 10 years. These options were valued in the same manner as the time-based options, with the assumption that performance goals will be achieved. The inputs for expected volatility, expected dividends, and risk-free rate used in estimating those options’ fair value are the same as the time-based options issued under the Company's equity incentive plans. The expected term for performance-based stock options is 5 to 7 years. However, the Company only recognizes stock compensation expense to the extent that the targets are determined to be probable of being achieved, which triggers the vesting of the performance options.

During 2020, the Company granted 105,000 performance-based stock options. Of these performance-based stock options, performance obligations had been met for 90,000 options which became exercisable in a prior period. Of these performance-based stock options, 90,000 options expired during the three and six months ended June 30, 2022. No performance-based stock options were outstanding as of June 30, 2022.

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The table below summarizes share-based compensation cost in connection with performance-based stock options for the six months ended June 30, 2022 and 2021 (in thousands):

	Six Months Ended June 30,
	2022		2021
Performance-based stock option expense	$	—	$	230

Included in the above-noted RSU and restricted stock award outstanding amounts are performance-based RSUs which vest only upon the achievement of certain targets. Performance-based RSUs contingently vest over a period of 1 to 3 years, depending on the nature of the performance goal, and have contractual lives of 10 years. These units were valued in the same manner as other RSUs, based on the published closing market price on the day before the grant date. However, the Company only recognizes stock compensation expense to the extent that the targets are determined to be probable of being achieved, which triggers the vesting of the performance options.

During 2020, the Company granted performance-based RSUs of which 165,974 were outstanding as of June 30, 2022. No changes occurred during the six months ended June 30, 2022.

During 2021, the Company granted performance-based RSUs of which 111,806 were outstanding as of June 30, 2022. No changes occurred during the six months ended June 30, 2022.

The table below summarizes share-based compensation cost in connection with performance-based RSUs for the six months ended June 30, 2022 and 2021 (in thousands):

	Six Months Ended June 30,
	2022		2021
Performance-based RSU expense	$	—	$	818

NOTE 13. INCOME TAXES

For the six months ended June 30, 2022, the Company did not carry an income tax provision amount as the Company does not recognize tax benefits from current year tax losses in the U.S. and other foreign jurisdictions. The Company’s tax expense for the six months ended June 30, 2022 differs from the tax expense computed by applying the U.S. statutory tax rate to its year-to-date pre-tax loss of $32.0 million, as no tax benefits were recorded for tax losses generated in the U.S. and other foreign jurisdictions due to the valuation allowance. At June 30, 2022, the Company had deferred tax assets primarily related to U.S. federal and state tax loss carryforwards and a deferred tax liability related to amortization of the Notes. The Company provided a valuation allowance against its net deferred tax assets as future realization of such assets is not more likely than not to occur.

The Company accounts for uncertain tax positions pursuant to the recognition and measurement criteria under ASC 740, Income Taxes. For the three and six months ended June 30, 2022, we did not note any significant changes to our uncertain tax positions. We do not anticipate significant changes to uncertain tax positions within the next 12 months.

NOTE 14. COMMITMENTS

During April 2022, the Company entered into a non-cancellable purchase obligation with a supplier to acquire raw materials for a total commitment of $11.9 million. Under the terms of this agreement the Company has until March 15, 2027 to take delivery of purchased items. This commitment was entered into to ensure proper material quantities to develop and commercialize our next generation AST platform.

As of June 30, 2022 the commitment remains $11.9 million as the Company has not taken delivery of any inventory.

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NOTE 15. LEASES

The following presents supplemental information related to our leases in which we are the lessee for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cash paid for amounts included in lease liabilities
Operating cash flows from operating leases	$	203	$	154	$	266	$	308
Operating cash flows from finance leases	$	424	$	—	$	424	$	—
ROU assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	—	$	—
Finance leases	$	2,760	$	—	$	2,760	$	—
Lease Cost
Operating leases	$	259	$	261	$	564	$	559
Finance leases	$	97	$	—	$	97	$	—
Short-term leases	$	21	$	59	$	41	$	59

The weighted average remaining lease term on our operating leases is 3.1 years. The weighted average discount rate on those leases is 7.1%. The weighted average remaining lease term on our finance leases is 2.7 years. The weighted average discount rate on those leases is 4.6%.

The following presents maturities of lease liabilities in which we are the lessee as of June 30, 2022 (in thousands):

	Operating		Finance
Remainder of 2022	$	446	$	491
2023	968		983
2024	1,055		983
2025	585		239
2026	—		—
Thereafter	—		—
Total lease payments	3,054		2,696
Less imputed interest	(325)		(158)
	$	2,729	$	2,538

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The net investment in sales-type leases, where we are the lessor, is a component of other current assets and other non-current assets in our condensed consolidated balance sheet. As of June 30, 2022, the total net investment in these leases was $3.3 million. The following presents maturities of lease receivables under sales-type leases as of June 30, 2022 (in thousands):

Remainder of 2022	$	727
2023	1,140
2024	646
2025	192
2026	606
Thereafter	—
Total undiscounted cash flows	3,311
Less imputed interest	—
Present value of lease payments	$	3,311

NOTE 16. GEOGRAPHIC AND REVENUE DISAGGREGATION

The Company operates as one operating segment. Sales to customers outside the U.S. represented 14% for each of the three and six months ended June 30, 2022, and 15% for each of the three and six months ended June 30, 2021.

As of June 30, 2022 and December 31, 2021, balances due from foreign customers, in U.S. dollars, were $0.8 million and $0.7 million, respectively.

The following presents total net sales by geographic territory for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Domestic	$	3,321	$	2,386	$	5,839	$	4,532
Foreign	540		412		981		784
	$	3,861	$	2,798	$	6,820	$	5,316

The following presents total net sales by line of business for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Accelerate Pheno revenue	$	3,818	$	2,767	$	6,736	$	5,240
Other revenue	43		31		84		76
	$	3,861	$	2,798	$	6,820	$	5,316

The following presents total net sales by products and services for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2020		2019
Products	$	3,476	$	2,483	$	6,023	$	4,700
Services	385		315		797		616
	$	3,861	$	2,798	$	6,820	$	5,316

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Lease revenue included in net sales was $0.6 million and $0.4 million for the three months ended June 30, 2022 and 2021, respectively, and $1.1 million and $0.8 million for the six months ended June 30, 2022 and 2021, respectively, which does not represent revenues recognized from contracts with customers.

The following presents property and equipment, net by geographic territory (in thousands):

	June 30,		December 31,
	2022		2021
Domestic	$	3,866	$	5,014
Foreign	231		375
	$	4,097	$	5,389

NOTE 17. STOCKHOLDERS' EQUITY

Convertible Notes Exchange Agreement

During the six months ended June 30, 2022, a holder of the Notes exchanged approximately $14.0 million in aggregate principal amount of Notes held by the holder for 10,798,482 shares of the Company's common stock pursuant to the Exchange Agreement. The Company's common stock was determined to have a value of $10.2 million, which was recorded to contributed capital during the six months ended June 30, 2022. See Note 10, Convertible Notes for additional information.

Securities Purchase Agreement

On March 24, 2022, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the Jack W. Schuler Living Trust (the “Schuler Trust”) for the issuance and sale by the Company of an aggregate of 2,439,024 shares of the Company’s common stock (the “Shares”) to the Schuler Trust in an offering (the “Private Placement”) exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder. Jack Schuler, serves as a member of the Company’s board of directors and is the sole trustee of the Schuler Trust.

Pursuant to the Securities Purchase Agreement, the Schuler Trust has agreed to purchase the Shares at a purchase price (determined in accordance with Nasdaq rules relating to the “market value” of the Company’s common stock) of $1.64 per share, which is equal to the consolidated closing bid price reported by Nasdaq immediately preceding the time the Company entered into the Securities Purchase Agreement, for an aggregate purchase price of $4.0 million.

On June 29, 2022, the Company and the Schuler Trust agreed to extend the closing date of the Private Placement from June 30, 2022 to September 26, 2022. The Securities Purchase Agreement is considered an equity forward agreement and meets the definition of a freestanding financial instrument which is classified in stockholders’ deficit. The value of this equity forward agreement as June 30, 2022 is immaterial.

NOTE 18. RELATED PARTY TRANSACTIONS

Securities Purchase Agreement

On March 24, 2022, the Company entered into the Securities Purchase Agreement with the Schuler Trust for the issuance and sale by the Company of the Shares to the Schuler Trust. Jack Schuler, serves as a member of the Company’s board of directors and is the sole trustee of the Schuler Trust.

See Note 17, Stockholders' Equity, for further information.

Convertible Notes

As of June 30, 2022 the Schuler Trust held $1.8 million aggregate principal amount of the Notes. See Note 10, Convertible Notes, for further information regarding the Notes.

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NOTE 19. SUBSEQUENT EVENTS

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued.

Debt Exchange

Effective August 15, 2022, the Company entered into (the Exchange Agreement with the Schuler Trust, a holder of the Notes. Jack Schuler, who serves as a member of the Company’s board of directors, is the sole trustee of the Schuler Trust. Under the terms of the Exchange Agreement, the Schuler Trust has agreed to exchange with the Company $49,905,000 in aggregate principal amount of Notes held by it for (a) the Secured Note in an aggregate principal amount of $34,933,500 and (b) the Warrant to acquire the Company’s common stock at an exercise price of $2.12 per share, which represents the closing price of the Company’s common stock as of August 12, 2022.

The Secured Note has a scheduled maturity date of August 15, 2027 and will be repayable upon written demand at any time on or after such date. The Company may, at its option, repay the note in (i) United States dollars or (ii) in the form of common stock of the Company, in a number of shares that is obtained by dividing the total amount of such payment by $2.12, subject to certain adjustments as more fully described in the Secured Note. The Secured Note bears interest at a rate of 5.0% per annum, payable at the option of the Company in the same form, at the earlier of (i) any prepayment of principal and (ii) maturity. The Company may prepay the Secured Note at any time without premium or penalty. The Secured Note contains customary representations and warranties and events of default, including certain “change of control” events involving the Company. The Secured Note is secured by substantially all of the assets of the Company. The Secured Note does not restrict the incurrence of future indebtedness by the Company but shall become subordinated in right of payment and lien priority upon the request of any future senior lender.

The Warrant may be exercised from February 15, 2023 through the earlier of (i) August 15, 2029 and (ii) the consummation of certain acquisition transactions involving the Company, as set forth in the Warrant. The Warrant is exercisable for up to 2,471,710 shares, or 15% of the principal amount of the Secured Note, divided by the Exercise Price. Such number of shares and the Exercise Price are subject to certain customary proportional adjustments for fundamental events, including stock splits and recapitalizations, as set forth in the Warrant.

Sales and Marketing Agreement

On August 15, 2022 (the “Effective Date”), the Company entered into a Sales and Marketing Agreement (the “Sales Agreement”) with Becton, Dickinson and Company (“BD”) appointing BD as the Company’s worldwide exclusive sales agent to commercialize the Company’s Pheno 1.0 and Arc instruments and kits (“Products”) in the field of microbiology and in territories in which the necessary regulatory approvals are achieved and granting to BD certain other rights to future Company products. The term of the agreement is five (5) years (the “Initial Term”) and is subject to automatic one year renewals unless prior notice is provided to a party.

Pursuant to the Sales Agreement, the Company engages BD to be generally responsible for sales-related support activities for the Products in exchange for commissions on Product sales by Company. BD will provide such sales activities pursuant to a mutually acceptable commercialization plan and strategy. These services will be agreed to by the parties and set forth in a commercialization plan, the first one to be negotiated by the parties shortly after the Effective Date, and are expected to include sales, marketing, technical and order support. The Company and BD shall agree on rolling 12-month sales forecasts on a quarterly basis for the Products. BD must use reasonable efforts to meet or exceed each Product forecast and the Company must use reasonable efforts to produce sufficient quantities of Products to meet each Product forecast. The Company retains the responsibility for all other commercialization necessary to market the Products, including negotiating and booking sales for customer orders, manufacture and provision of inventory of Products, and marketing materials and collateral support.

The Company is responsible for all regulatory approvals in the United States and other countries where Products are marketed as of the Effective Date. Company is also responsible for obtaining and maintaining regulatory approvals in additional countries until December 31, 2023 (“Additional Countries”). The Additional Countries are to be agreed upon by the parties and the Company must deliver existing and new registrations for the Arc instruments and kits in such Additional Countries. The Company will hold the regulatory approvals for the existing countries and the Additional Countries. Beginning on January 1, 2024, BD will lead the registration process

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for regulatory approvals in any other countries (“BD Countries”) other than the existing countries as of the Effective Date and any Additional Countries. BD will hold the regulatory approvals for the BD Countries. Expenses associated with BD obtaining regulatory approvals will be agreed upon by the parties’ steering committee and set forth in a commercialization plan. For the Additional Countries and BD Countries, the steering committee will assess and approve specific regulatory approval requirements at the appropriate time in relation to the commercialization plan. Once regulatory approvals are obtained in an Additional Country or by BD in a BD Country, BD shall be responsible, at its expense, for the commercial launch of Products in those countries, except that costs associated with strategic marketing for such commercial launch of Products in any Additional Country will be paid for by the Company. In the event the steering committee does not approve specific regulatory approval requirements within a specific region or area, BD will lose the exclusivity granted to it in such region or area and BD will not be prohibited from selling, promoting, distributing or otherwise commercializing any third party products that directly compete with the Products.

The Parties each have made certain exclusivity commitments with respect to the Products and the promotion of directly competitive products. Subject to certain limitations Company has granted exclusive global commercial rights to BD and is required to wind down any existing agreements with third party sales agents or distributors within one year of the Effective Date. In addition, BD has agreed not enter into any new agreements with a third party for BD to sell, promote, distribute or otherwise commercialize any directly competing products. However, BD may continue to perform its obligations under any existing agreement. BD is not precluded from (i) making an expenditure to acquire or invest in third property or assets of directly competing products, or (ii) developing, improving, and/or commercializing its BD PhoenixTM automated identification and susceptibility testing system. Either party has the right to terminate the Sales Agreement upon 90 days’ notice to the other party following the first public announcement of BD’s acquisition of any directly competing product. The Company’s sole and exclusive remedy in the event of such termination is to receive any remaining balance of the Commercial Fee (as defined below).

Sales Agreement also grants BD certain rights with respect to the Company’s next generation antibiotic susceptibility test system of microbiology (“Pheno 2.0”). BD has an exclusive right of first negotiation to be the exclusive sales agent to commercialize Pheno 2.0, which will be triggered if the Company proposes to license Pheno 2.0, or if the Company and BD mutually agree that Pheno 2.0 clinical data is ready to be submitted to the U.S. Food and Drug Administration for 510(k) clearance. The terms of such subsequent agreement would have to be negotiated by the parties.

BD also has certain rights regarding a potential acquisition or financing of the Company. BD has the right to receive notice of an acquisition proposal or the initiation of a sale process. BD also has a right to receive information and a non-exclusive negotiation right regarding such potential change of control transaction. In the event of an acquisition of Company by a third party, other than BD, either party will have the right to terminate the Sales Agreement on three (3) months prior notice. Upon such termination, the Company or the acquiring party must pay BD 20% of revenue recognized for the shorter of one year or the remainder of the Initial Term, and any remaining unpaid Commercial Fee will be forgiven. Further, BD has the right to provide up to 20% of all future financings of the Company, the terms of which would be subject to negotiation by the parties.

In consideration of the rights granted, BD will pay the Company an exclusive commercial arrangement fee of $15.0 million (the “Commercial Fee”). The Commercial Fee is payable in equal $3.0 million installments commencing on the date the parties agree BD will start providing services and for the next four subsequent calendar years. The Commercial Fee is payable in the event of a termination of the Sales Agreement, except in the event of a termination (i) for convenience by the Company, (ii) by BD within one year of the Effective Date as a result of the Company’s insolvency, (iii) by BD for the Company’s material breach of the Sales Agreement, or (iv) by either party following a change of control to a third party. Additionally, the Commercial Fee or any unpaid balance will be forgiven in the event that a Product infringes a third party’s intellectual property rights. The Company also is obligated to pay BD sales commissions on the revenue recognized by the Company in accordance with U.S. generally accepted accounting principles on sales of Products (“Sales Commissions”). For existing business, the parties will define a base book listing of accounts in the commercialization plan and an annual base book fee for the Sales Commissions. For new business, the parties have established target revenue amounts and the Sales Commissions will be based on such revenue target amounts. New business is cumulative, including new accounts obtained in the previous year. Once the target level or the above target level is achieved, the Company will pay BD the target rate or the above target rate, as applicable, for all new business in that calendar year. In the event the Sales Agreement is terminated, the Company shall pay Sales Commissions for nine months past the effective date of such termination.

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The Sales Agreement contains rights for each of the Company and BD to terminate the Sales Agreement based on a material breach, insolvency and other circumstances. Company and BD each may terminate the Sales Agreement for material breach by, or insolvency of, the other party following notice, and if applicable, a cure period. After the second anniversary of the Effective Date, Company and BD each has the right to terminate the Sales Agreement and any commercialization plan with 12 months’ prior written notice to the other party. The Company may also terminate the Sales Agreement if BD fails to meet certain targets for Products in any 12 months period following a cure period.

The foregoing description of the Sales Agreement is not complete and is qualified in its entirety by reference to the full text of the Sales Agreement, which will be filed with the U.S. Securities and Exchange Commission as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ending September 30, 2022.

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

Introductory Note

Except as otherwise indicated by the context, references in this Form 10-Q/A to the “Company,” “Accelerate,” “we,” “us” or “our” are references to the combined business of Accelerate Diagnostics, Inc. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting our results of operations, liquidity, capital resources and contractual obligations. The following discussion and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and related notes included elsewhere herein.

All amounts in the MD&A have been rounded to the nearest thousand unless otherwise indicated.

Forward-Looking Statements

This Form 10-Q/A contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Company intends that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements, which can be identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” or “continue,” or variations thereon or comparable terminology, include but are not limited to, statements about our future development plans and growth strategy, including plans and objectives relating to our future operations, products and performance; projections as to when certain key business milestones may be achieved; expectations regarding the potential or benefits of our products and technologies; projections of future demand for our products; our continued investment in new product development to both our existing products and bring new ones to market; the anticipated impacts from the COVID-19 pandemic on the Company, including to our business, results of operations, cash flows and financial position, as well as our future responses to the COVID-19 pandemic; our expectations relating to current supply chain impacts; and our liquidity and capital requirements, including, without limitation, as to our ability to continue as a going concern and our belief that we do not currently have adequate financial resources to pay our outstanding debt obligation under the Notes and to fund our forecasted operating costs for at least twelve months from the filing of this Form 10-Q/A. In addition, all statements other than statements of historical facts that address activities, events, or developments the Company expects, believes, or anticipates will or may occur in the future, and other such matters, are forward-looking statements.

Future events and actual results could differ materially from those set forth in, contemplated or suggested by, or underlying the forward-looking statements. There can be no assurances that results described in forward-looking statements will be achieved, and actual results could differ materially from those suggested by the forward-looking statements. The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties, including the duration and severity of the ongoing COVID-19 pandemic, including any new variants that may become predominant; government and other third-party responses to it and the consequences for the global economy and the businesses of our suppliers and customers, such as the possibility of customer demand fluctuations, supply chain constraints and inflationary pressures; its ultimate effect on our business, results of operations, cash flows and financial position, as well as our ability (or inability) to execute on our plans to respond to the COVID-19 pandemic; and difficulties in resolving our continuing financial condition and ability to obtain additional capital to meet our financial obligations, including, without limitation, difficulties in obtaining adequate capital resources to fund our operations and address the upcoming maturity of the Notes. Other important factors that could cause our actual results to differ materially from those in our forward-looking statements include those discussed herein, and in other reports filed with the U.S. Securities and Exchange Commission (the “SEC”) including but not limited to the risks in the section entitled “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 10-K”) and in the Company's subsequent filings with the SEC. These forward-looking statements are also based on assumptions that the Company will retain key management personnel, the Company will be successful in the commercialization of the Accelerate Pheno® system and the Accelerate Arc™ system, the Company will obtain sufficient capital to commercialize the Accelerate Pheno system and the Accelerate Arc system and continue development of complementary products, the Company will be able to protect its intellectual property, the Company’s ability to respond to technological change, the Company will accurately anticipate market demand for the Company’s products and there will be no material adverse change in

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the Company’s operations or business and general market and industry conditions. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized. Any forward-looking statements made by us in this Form 10-Q speak only as of the date on which they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

Accelerate is an in vitro diagnostics company dedicated to providing solutions that improve patient outcomes and lower healthcare costs through the rapid diagnosis of serious infections. Microbiology laboratories need new tools to address what the U.S. Centers for Disease Control and Prevention (the “CDC”) calls one of the most serious healthcare threats of our time, antibiotic resistance. A significant contributing factor to the rise of resistance is the overuse and misuse of antibiotics, which is exacerbated by a lack of timely diagnostic results. The delay of identification and antibiotic susceptibility results is often due to the reliance by microbiology laboratories on traditional culture-based tests that often take two to three days to complete. Our technology platform is intended to address these challenges by delivering significantly faster testing of infectious pathogens in various patient sample types.

Our first system to address these challenges is the Accelerate Pheno® system. The Accelerate PhenoTest® BC Kit, which is the first test kit for the system, is indicated as an aid, in conjunction with other clinical and laboratory findings, in the diagnosis of bacteremia and fungemia, both life-threatening conditions with high morbidity and mortality risk. The device provides identification (“ID”) results followed by antibiotic susceptibility testing (“AST”) for certain pathogenic bacteria commonly associated with or causing bacteremia. This test kit utilizes genotypic technology to identify infectious pathogens and phenotypic technology to conduct AST, which determines whether live bacterial cells are resistant or susceptible to a particular antimicrobial. This information can be used by physicians to rapidly modify antibiotic therapy to lessen adverse events, improve clinical outcomes, and help preserve the useful life of antibiotics.

On June 30, 2015, we declared our conformity to the European In Vitro Diagnostic Directive 98/79/EC and applied a CE mark to the Accelerate Pheno system and the Accelerate PhenoTest BC Kit for in vitro diagnostic use. On February 23, 2017, the U.S. Food and Drug Administration (the “FDA”) granted our de novo classification request to market the first version of our Accelerate Pheno system and Accelerate PhenoTest BC Kit.

In 2017, we began selling the Accelerate Pheno system in hospitals in the United States, Europe, and the Middle East. Consistent with our “razor” / “razor-blade” business model, revenues to date have principally been generated from the sale or leasing of the instruments and the sale of single use consumable test kits.

In July 2021, we launched our second test for use on the Accelerate Pheno system, the Accelerate PhenoTest BC Kit, AST configuration. This test kit runs antibiotic susceptibility testing following the input of an ID result from another system or methodology. In August 2021, we announced that this new AST only configuration had been CE marked for use in Europe. We believe this new AST only configuration may be attractive to prospective customers who already have a rapid ID system but still need fast susceptibility results to support getting patients on an optimal antibiotic therapy as soon as possible.

In March any May 2022, we announced the launch and commercialization of the Accelerate ArcTM system and BC Kit. This instrument and associated one-time-use test kit automates the front end steps required to rapidly produce an ID result on an existing matrix-assisted laser desorption/ionization (“MALDI”) system. In May 2022, we announced IVD registration of the Accelerate Arc system and BC Kit with the FDA, and in June 2022 we received CE IVDR registration for use in Europe. We believe the Accelerate Arc system and BC Kit to be a complementary offering to our recently launched Accelerate PhenoTest BC Kit, AST configuration, by enabling a rapid ID result by leveraging an existing MALDI system and rapid AST through the Accelerate Pheno system, which we further believe provides an opportunity for a large new market for rapid MALDI.

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We continue to invest in new product development to both enhance our existing products and bring new ones to market. Current research and development areas of focus include the potential addition, if authorized by the FDA, of new AST content to our Accelerate Pheno system, additional applications for the Accelerate Arc system, and a next generation rapid susceptibility system, which is being developed with the goal to have lower costs, higher through-put, and capability to test a broader set of sample types.

COVID-19 and Supply Chain Impacts Update

In late 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in Wuhan, China, and spread globally. In March 2020, the World Health Organization declared COVID-19 a global pandemic. The COVID-19 outbreak resulted in government authorities around the world implementing numerous measures to try to reduce the spread of COVID-19, such as travel bans and restrictions, quarantines, shelter-in-place, stay-at-home or total lock-down (or similar) orders and business limitations and shutdowns. New cases and hospitalizations have risen and fallen throughout the course of this pandemic. More recently, the emergence and spread of new variants of COVID-19 that are significantly more contagious than previous strains initially led many government authorities and businesses to reimplement prior restrictions in an effort to lessen the spread of COVID-19 and its variants. While many of these restrictions have been lifted, uncertainty remains as to whether additional restrictions may be initiated or again reimplemented in response to surges in COVID-19 cases. The lingering impact of the COVID pandemic continues to create significant volatility throughout the global economy, including supply chain constraints, labor supply issues and higher inflation. Accordingly, it is unclear at this point the full impact COVID-19 and its variants will have on the global economy and on our Company.

The COVID-19 pandemic, containment measures, and downstream impacts to hospital staffing and financial stability have caused, and are continuing to cause, business slowdowns or shutdowns in affected areas, both regionally and worldwide, as well as disruptions to global supply chains and workforce participation. These effects have significantly impacted our business and results of operations, starting in the first quarter of 2020 and continuing through the current quarter, albeit to a lesser degree. For example, we have experienced diminished access to our customers, including hospitals, which has severely limited our ability to sell and, to a lesser degree, implement previously contracted Accelerate Pheno systems. Hospital turnover resulting from burnout and vaccine mandates have further diverted the attention of hospital decision makers. In addition, in certain months with high rates of COVID-19 hospitalization, our Accelerate PhenoTest BC Kit orders declined as many hospitals curtailed elective surgeries to respond to COVID-19.

The reduced new instrument sales and implementations caused by the COVID-19 pandemic lowered our realized and expected revenue growth for 2020 and 2021. In the first half of 2022, we began to see many of the detrimental effects of the pandemic on our business discussed above start to ease. However, with the emergence of COVID-19 variants, including the Omicron variant and its sub-variants, vaccine hesitancy and the prevalence of breakthrough cases of infection among fully vaccinated people, there remains uncertainty regarding our access to customers and prospects, demand for our products, and ability to implement our products.

As a medical device company, we have not experienced any disruptions to our ability to manufacture our products at our Tucson, Arizona headquarters under the various State of Arizona executive orders relating to the COVID-19 pandemic because we were classified as an essential service. We continue to expect that, should future orders be issued, we would be able to sustain our essential operations. Our third-party manufacturing supply chain for Accelerate Pheno systems and consumable test kits remains stable despite a high-degree of unpredictability in the broader supply chain environment. However, like many industries experiencing inflationary pressures in raw materials, the direct costs to manufacture our products are increasing and delivery schedules elongating.

For example, we are currently experiencing unprecedented cost increases from many of our suppliers primarily as a result of the ongoing COVID-19 pandemic, labor and supply disruptions and increased inflation. The areas of cost increases include raw materials, components, and value-add supplier labor. We believe that we currently have sufficient inventory of Accelerate Pheno system instruments to limit the impact of cost increases on such devices. However, we are being impacted by cost increases to components and raw materials necessary for the production of our Accelerate Pheno kits. Our ability to pass increased material costs to many of our customers is limited because of long-term sales agreements with limits on price increases. Accordingly, we are closely monitoring the ability of all our suppliers to provide us with necessary materials and services at reasonable costs. See “Risk Factors— Risks Related to Our Business and Strategy—Disruptions in the supply of raw materials, consumable goods or other key product components, or issues associated with their quality from our single source suppliers,

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could result in a significant disruption in sales and profitability” in Part I, Item 1A of 2021 10-K for additional information.

We continue to monitor the evolving impacts to our business caused by the COVID-19 pandemic. We may take further actions required by governmental authorities or that we determine are prudent to support the well-being of our employees, customers, suppliers, business partners and others. The degree to which the COVID-19 pandemic ultimately impacts our business, results of operations, cash flows and financial position will depend on future developments, which are highly uncertain, continuously evolving and cannot be predicted. This includes, but is not limited to, the duration and spread of the pandemic and its severity; the emergence and severity of its variants, including the Omicron variant and its subvariants; the actions to contain the virus or treat its impact, such as the availability and efficacy of vaccines (particularly with respect to emerging strains of the virus) and potential hesitancy to use them; the financial impact of COVID-19 on hospitals, including to their budget priorities; hospital staffing issues; general economic factors, such as increased inflation; global supply chain constraints and the related increase in costs; labor supply issues; and how quickly and to what extent normal economic and operating conditions can resume.

Accordingly, our current results and financial condition discussed herein may not be indicative of future operating results and trends. Refer to the section entitled “Risk Factors” in the 2021 10-K for additional risks we face due to the COVID-19 pandemic, including risks relating to our supply chain.

Changes in Results of Operations: Three and six months ended June 30, 2022 compared to three and six months ended June 30, 2021

The following analysis of our operating results contains corrections of errors identified in previously reported amounts. See Part I, Item 1., Note 1, Organization and Nature of Business; Basis of Presentation; Principles of Consolidation; Significant Accounting Policies, for a discussion of the impact of such corrections of errors on our consolidated financial statements.

The Company has provided enhanced information in a tabular format which presents some of the captions presented on the statement of operations less non-cash equity-based compensation expense. These figures are reconciled to the statement of operations and are intended to add additional clarity on the operating performance of the business. The Company believes providing such figures less non-cash equity-based compensation expense provides helpful information for investors in understanding and evaluating our operating results in the same manner as our management and our board of directors.

	Three Months Ended June 30,								Six Months Ended June 30,
	(in thousands)								(in thousands)
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Net sales	$	3,861	$	2,798	$	1,063	38	%	$	6,820	$	5,316	$	1,504	28	%

For the three and six months ended June 30, 2022, total revenues increased primarily as a result of higher sales of Accelerate PhenoTest instruments, Accelerate PhenoTest BC Kits and service contract revenue compared to the three and six months ended June 30, 2021. Accelerate PhenoTest BC Kit revenue increased as customers completed their instrument verifications and began purchasing kits. Service contract revenue increased as a higher number of customers entered into multi-year service agreements following the expiration of their warranty periods.

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	Three Months Ended June 30,								Six Months Ended June 30,
	(in thousands)								(in thousands)
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Cost of sales	$	2,781	$	1,745	$	1,036	59	%	$	4,937	$	3,365	$	1,572	47	%
Non-cash equity-based compensation as a component of cost of sales	228		74		154		208	%	403		175		228		130	%
Cost of sales less non-cash equity-based compensation	$	2,553	$	1,671	$	882	53	%	$	4,534	$	3,190	$	1,344	42	%

For the three and six months ended June 30, 2022, cost of sales increased as compared to the three and six months ended June 30, 2021, as a result of higher Accelerate Pheno sales, higher non-cash equity-based compensation, and increases to our cost of manufacturing consumables. Our cost of manufacturing has increased as we are experiencing cost increases from many of our suppliers primarily as a result of the ongoing COVID-19 pandemic, labor and supply disruptions and increased inflation. The areas of cost increases include raw materials, components, and value-add supplier labor.

Cost of sales includes non-cash equity-based compensation of $0.2 million and $0.1 million for the three months ended June 30, 2022 and 2021, respectively, and $0.4 million and $0.2 million for the six months ended June 30, 2022 and 2021, respectively. Non-cash equity-based compensation increased for the three and six months ended June 30, 2022 when compared to the three and six months ended June 30, 2021. Non-cash equity-based compensation cost is a component of manufacturing overhead and service cost of sales. Manufacturing overhead is capitalized as inventory and relieved to cost of sales when consumable tests are sold to a customer, instruments are sold to a customer, or when instruments under reagent rentals are amortized to cost of sales.

Cost of sales expenses excluding non-cash equity-based compensation expense for the three and six months ended June 30, 2022 increased compared to the three and six months ended June 30, 2021, as a result of higher Accelerate Pheno sales, and increases to our cost of manufacturing consumables, as described above.

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	Three Months Ended June 30,								Six Months Ended June 30,
	(in thousands)								(in thousands)
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Gross profit	$	1,080	$	1,053	$	27	3	%	$	1,883	$	1,951	$	(68)	(3)	%
Non-cash equity-based compensation as a component of gross profit	228		74		154		208	%	403		175		228		130	%
Gross profit less non-cash equity-based compensation	$	1,308	$	1,127	$	181	16	%	$	2,286	$	2,126	$	160	8	%

For the three months ended June 30, 2022, gross profit increased as compared to the three months ended June 30, 2021, as a result of higher Accelerate Pheno sales, partially offset by increases in costs of sales, and a decrease in our average unit sales price. The increase in cost of sales is due to increases to manufacture consumables, as described above. While our average unit sales price primarily decreased period over period due to securing long-term, committed contracts with existing customers.

For the six months ended June 30, 2022, gross profit decreased as compared to the six months ended June 30, 2021, as a result of increases in cost of sales and a decrease in our average unit sales price. The increase in cost of sales is due to increases to manufacture consumables, as described above. While our average unit sales price primarily decreased period over period due to securing long-term, committed contracts with existing customers.

The Company’s overall gross margin was 28% and 38% for the three months ended June 30, 2022 and 2021, respectively, and 28% and 37% for the six months ended June 30, 2022 and 2021, respectively. The decreases were primarily due to increases in the costs to manufacture consumables as described above, and a decrease in our average unit sales price period over period as discussed above.

	Three Months Ended June 30,								Six Months Ended June 30,
	(in thousands)								(in thousands)
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Research and development	$	7,576	$	5,733	$	1,843	32	%	$	13,600	$	12,629	$	971	8	%
Non-cash equity-based compensation as a component of research and development	539		1,328		(789)		(59)	%	901		4,074		(3,173)		(78)	%
Research and development less non-cash equity-based compensation	$	7,037	$	4,405	$	2,632	60	%	$	12,699	$	8,555	$	4,144	48	%

Research and development expenses for the three and six months ended June 30, 2022 increased as compared to the three and six months ended June 30, 2021 primarily due to increased expenses to develop our next generation AST platform, partially offset by a decrease in non-cash equity-based compensation expense.

Research and development expenses includes non-cash equity-based compensation of $0.5 million and $1.3 million for the three months ended June 30, 2022 and 2021, respectively, and $0.9 million and $4.1 million for the six months ended June 30, 2022 and 2021, respectively. Non-cash equity-based compensation decreased for the three and six months ended June 30, 2022 when compared to the three and six months ended June 30, 2021, due to a decrease in the fair value of awards being granted. The Company records the fair value of RSUs based on the published closing market price on the day before grant.

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Research and development expenses excluding non-cash equity-based compensation expense for the three and six months ended June 30, 2022 increased compared to the three and six months ended June 30, 2021, primarily due to increases in costs related to the completion of the Accelerate Arc system and related Accelerate Arc studies, as well as an increase in development and contracted services used to develop our next generation AST platform.

	Three Months Ended June 30,								Six Months Ended June 30,
	(in thousands)								(in thousands)
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Sales, general and administrative	$	11,493	$	12,910	$	(1,417)	(11)	%	$	22,167	$	26,938	$	(4,771)	(18)	%
Non-cash equity-based compensation as a component of sales, general and administrative	3,204		5,188		(1,984)		(38)	%	5,646		11,180		(5,534)		(49)	%
Sales, general and administrative less non-cash equity-based compensation	$	8,289	$	7,722	$	567	7	%	$	16,521	$	15,758	$	763	5	%

Sales, general and administrative expenses for the three and six months ended June 30, 2022 decreased as compared to the three and six months ended June 30, 2021 primarily due to a decrease in non-cash equity-based compensation expense.

Sales, general and administrative expenses includes non-cash equity-based compensation of $3.2 million and $5.2 million for the three months ended June 30, 2022 and 2021, respectively, and $5.6 million and $11.2 million for the six months ended June 30, 2022 and 2021, respectively. Non-cash equity-based compensation decreased for the three and six months ended June 30, 2022 when compared to the three and six months ended June 30, 2021, due to a decrease in the fair value of awards being granted. The Company records the fair value of RSUs based on the published closing market price on the day before grant.

Sales, general and administrative expenses excluding non-cash equity-based compensation expense for the three and six months ended June 30, 2022 increased compared to the three and six months ended June 30, 2021, primarily due to increases in costs related to marketing and promotional activities and professional services.

	Three Months Ended June 30,								Six Months Ended June 30,
	(in thousands)								(in thousands)
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Loss from operations	$	(17,989)	$	(17,590)	$	(399)	2	%	$	(33,884)	$	(37,616)	$	3,732	(10)	%
Non-cash equity-based compensation as a component of loss from operations	3,971		6,590		$	(2,619)	(40)	%	6,950		15,429		$	(8,479)	(55)	%
Loss from operations less non-cash equity-based compensation	$	(14,018)	$	(11,000)	$	(3,018)	27	%	$	(26,934)	$	(22,187)	$	(4,747)	21	%

For the three and six months ended June 30, 2022, our loss from operations decreased as compared to the three and six months ended June 30, 2021. The decrease was primarily the result of a decrease in non-cash equity-based compensation expense. As discussed above, the decrease in employee non-cash equity-based compensation expense was the result of a decrease in the fair value of equity awards granted.

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Loss from operations excluding non-cash equity-based compensation expense for the three and six months ended June 30, 2022 increased compared to the three and six months ended June 30, 2021, primarily due to increases in product development costs related to the Accelerate Arc and the next generation AST program, and increases to sales, general and administrative expenses related to marketing and promotional activities and professional services, as discussed above.

This loss and further losses are anticipated and was the result of our continued investments in sales and marketing, key research and development personnel, related costs associated with product development, and commercialization of the Company’s products.

	Three Months Ended June 30,								Six Months Ended June 30,
	(in thousands)								(in thousands)
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Total other income (expense), net	$	(534)	$	(4,084)	$	3,550	(87)	%	$	1,896	$	(8,297)	$	10,193	(123)	%

For the three months ended June 30, 2022 the Company’s other expense, net decreased compared to other expense, net for the three months ended June 30, 2021.

For the six months ended June 30, 2022 the Company incurred other income, net compared to other expense, net for the three and six months ended June 30, 2021.

In March 2022, the Company entered into a privately negotiated exchange agreement with a holder of the Notes pursuant to which such holder exchanged approximately $14.0 million in aggregate principal amount of Notes held by them for 10,798,482 shares of the Company's common stock. The closing of the exchange transaction occurred in eight tranches with the first closing occurring on March 29, 2022 and the last closing on May 18, 2022. The gain on extinguishment of exchanged Notes was $0.2 million for the three months ended June 30, 2022 and $3.6 million for the six months ended June 30, 2022. This reduction in principal also resulted in a decrease in interest expense for the three and six months ended June 30, 2022. See Part I, Item 1, Note 10, Convertible Notes for additional information.

The Company also adopted ASU 2020-06 on January 1, 2022. The Company’s 2.50% Senior Convertible Notes due 2023 (the “Notes”) Notes are no longer bifurcated between debt and equity and are instead accounted for entirely as debt at face value net of any discount or premium and issuance costs. Interest expense is comprised of cash interest incurred and amortization of any debt issuance costs. This change in accounting principle primarily resulted in a decrease in interest expense for the three and six months ended June 30, 2022 compared to the three and six months ended June 30, 2021.

Interest expense was $0.7 million and $4.2 million for the three months ended June 30, 2022 and 2021, respectively, and $1.6 million and $8.3 million for the six months ended June 30, 2022 and 2021, respectively.

	Three Months Ended June 30,							Six Months Ended June 30,
	(in thousands)							(in thousands)
	2022		2021		$ Change		% Change	2022		2021		$ Change		% Change
Provision for income taxes	$	—	$	—	$	—	NM	$	—	$	—	$	—	NM

NM indicates percentage is not meaningful

For the three and six months ended June 30, 2022 and 2021, the Company did not carry an income tax provision amount as the Company does not recognize tax benefits from current year tax losses in the U.S. and other foreign jurisdictions.

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Capital Resources and Liquidity

Since inception, the Company has not achieved profitable operations or positive cash flows from operations. The Company’s accumulated deficit totaled $576.7 million as of June 30, 2022. For the three and six months ended June 30, 2022, the Company had net losses of approximately $18.5 million and $32.0 million, respectively, and had negative cash flows from operations of approximately $25.6 million for the six months ended June 30, 2022. As of June 30, 2022, the Company had $36.8 million in cash and cash equivalents and investments, a decrease of $26.8 million from $63.6 million at December 31, 2021. The primary reason for the decrease was due to cash used in operations during the period. The future success of the Company is dependent on its ability to successfully commercialize its products, obtain regulatory clearance for and successfully launch its future product candidates, obtain additional capital and ultimately attain profitable operations. Historically, the Company has funded its operations primarily through multiple equity raises and the issuance of debt (see below and Note 9, Long-Term Debt, Note 10, Convertible Notes and Note 17, Stockholders' Equity in Part I, Item 1 of this Form 10-Q/A for additional details).

In connection with the preparation of this Form 10-Q/A, the Company is required to evaluate its financial condition as of the date of filing this Form 10-Q/A pursuant to the requirements of ASC 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are reissued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are reissued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are reissued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are reissued.

Based on its evaluation pursuant to ASC 205-40, the Company has determined that, as of the date of this Form 10-Q/A filing, there is substantial doubt about its ability to continue as a going concern, as the Company does not currently have adequate financial resources to pay its outstanding debt obligation under the Notes and to fund its forecasted operating costs for at least twelve months from the filing of this Form 10-Q/A.

Our primary use of capital has been for the development and commercialization of the Accelerate Pheno system and development of complementary products. While the Company continues to explore additional funding in the form of potential equity and/or debt financing arrangements or similar transactions, as well as non-cash means to settle or refinance the Notes, there can be no assurance the necessary financing will be available on terms acceptable to the Company, or at all. If the Company raises funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of common stock. If the Company raises funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of preferred and common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations. Similarly, there can be no assurance that market conditions and refinancing alternatives will be sufficient to settle or refinance the Notes on or prior to their maturity on March 15, 2023. The capital markets have in the past, and may in the future, experience periods of upheaval that could impact the availability and cost of equity and debt financing. In addition, recent and anticipated future increases in federal fund rates set by the Federal Reserve, which serve as benchmark rates on borrowing, and other general economic conditions may impact the cost of debt financing or refinancing existing debt.

Although we are actively considering all available strategic alternatives to maximize value, if we are unable to obtain adequate capital resources to fund operations and address the upcoming maturity of the Notes, we would not be able to continue to operate our business pursuant to our current plans. This may require us to, among other things, materially modify our operations to reduce spending; sell assets or operations; delay the implementation of, or revising certain aspects of, our business strategy; file a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in order to implement a restructuring; or discontinue our operations entirely.

The Company is also subject to lease agreements. The future minimum lease payments under these lease

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agreements are included in Part I, Item 1, Note 15, Leases.

For more information on the Company’s liquidity please see Part I, Item 1, Note 1, Organization and Nature of Business; Basis of Presentation; Principles of Consolidation; Significant Accounting Policies.

As of June 30, 2022, our material cash requirements were as follows:

Payments due by Period (in thousands)
Material Cash Requirements	Total		2022		2023		2024		2025		2026		Thereafter
Operating lease obligations	$	3,054	$	446	$	968	$	1,055	$	585	$	—	$	—
Purchase obligation	11,900		—		—		—		—		—		11,900
Finance lease obligations	2,696		491		983		983		239		—		—
Long term debt	84		84		—		—		—		—		—
Deferred compensation	806		—		—		—		406		400		—
Convertible notes1)	106,500		—		106,500		—		—		—		—
Convertible notes interest1)	2,662		1,331		1,331		—		—		—		—
Total	$	127,702	$	2,352	$	109,782	$	2,038	$	1,230	$	400	$	11,900

1) Effective August 15, 2022, the Company entered into an exchange agreement (the “Exchange Agreement”) with the Jack W. Schuler Living Trust (the “Schuler Trust”), a holder of the Notes. Under the terms of the Exchange Agreement, the Schuler Trust agreed to exchange with the Company (the “Exchange”) $49.9 million in aggregate principal amount of Notes held by it for a secured promissory note in an aggregate principal amount of $34.9 million (the “Secured Note”). The Secured Note has a scheduled maturity date of August 15, 2027 and will be repayable upon written demand at any time on or after such date. The Secured Note bears interest at a rate of 5.0% per annum, payable at the option of the Company in the same form, at the earlier of (i) any prepayment of principal and (ii) maturity. The reduction in convertible notes principal is not reflected in the convertible notes and interest balances provided above.

Until such time as we can generate substantial product revenue, we expect to finance our cash requirements, beyond what is currently available or on hand, through a combination of equity offerings and debt financings.

Summary of Cash Flows

The following summarizes selected items in the Company’s condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021:

Cash Flow Summary
	Six Months Ended June 30,
	(in thousands)
	2022		2021		$ Change
Net cash used in operating activities	$	(25,605)	$	(22,928)	$	(2,677)
Net cash (used in) provided by investing activities	(9,213)		8,265		(17,478)
Net cash (used in) provided by financing activities	(280)		23,505		(23,785)

Cash flows from operating activities

During the six months ended June 30, 2022, net cash used in operating activities was primarily the result of net losses and gain on extinguishment of debt, partially offset by equity-based compensation, and depreciation and amortization.

During the six months ended June 30, 2021, net cash used in operating activities was primarily the result of net losses offset by equity-based compensation, amortization of debt discount and issuance costs, and depreciation and amortization.

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The Company adopted ASU 2020-06 on January 1, 2022. The adoption of ASU 2020-06 resulted in the Notes now being accounted for as a single liability measured at their amortized cost. The Notes are no longer bifurcated between debt and equity and are instead accounted for entirely as debt at face value net of any discount or premium and issuance costs. This change in accounting principle resulted in a decrease in amortization of debt discount and issuance costs for the six months ended June 30, 2022.

Cash flows from investing activities

The net cash used in investing activities was $9.2 million for the six months ended June 30, 2022. The Company had purchases of marketable securities of $27.5 million which were offset in part by maturities of marketable securities of $18.7 million.

The net cash provided by investing activities was $8.3 million for the six months ended June 30, 2021. The Company had maturities of marketable securities of $24.0 million which were offset in part by purchases of marketable securities of $15.7 million.

Cash flows from financing activities

The net cash used in financing activities was $0.3 million for the six months ended June 30, 2022, which was from payments of finance leases, partially offset by proceeds from the issuance of common stock under the Company’s employee stock purchase plan.

The net cash provided by financing activities was $23.5 million for the six months ended June 30, 2021. During the six months ended June 30, 2021, the Company received $22.1 million in proceeds from the issuance of common stock in connection with a private placement offering and $1.2 million from the exercise of stock options.

Convertible Notes

On March 27, 2018, the Company issued $150.0 million aggregate principal amount of the Notes. In connection with the offering of the Notes, the Company granted the initial purchasers an option to purchase additional amounts. The option was partially exercised, which resulted in $21.5 million of additional proceeds, for total proceeds of $171.5 million. The Notes mature on March 15, 2023, unless earlier repurchased or converted into shares of common stock subject to certain conditions. Upon conversion of the Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of common stock, at the Company's election. The initial conversion rate of the Notes is 32.3428 shares of common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $30.92 per share of common stock, subject to adjustment. We pay interest on the Notes semi-annually in arrears on March 15 and September 15 of each year with interest payments beginning on September 15, 2018.

During the year ended December 31, 2021, the Company entered into separate exchange agreements with certain holders of the Notes. Under the terms of the exchange agreements, such holders agreed to exchange Notes held by them for shares of the Company’s common stock. During the year ended December 31, 2021, $51.0 million in aggregate principal amount of Notes were exchanged for 6,602,974 shares of the Company's common stock in these exchange transactions.

During the six months ended June 30, 2022, the Company entered into an exchange agreement with one holder of the Notes. Under the terms of the exchange agreement, the holder agreed to exchange Notes held by them for shares of the Company’s common stock. During the six months ended June 30, 2022, $14.0 million in aggregate principal amount of Notes were exchanged for 10,798,482 shares of the Company's common stock in this exchange transaction. After giving effect to the exchange transactions described above, the Notes had an outstanding principal amount of $106.5 million as of June 30, 2022.

In connection with the Notes offering, we entered into a prepaid forward stock repurchase transaction (the “Prepaid Forward”) with a financial institution. Pursuant to the Prepaid Forward, we used approximately $45.1 million of the proceeds from the offering of the Notes to pay the prepayment amount. The aggregate number of our common stock underlying the Prepaid Forward is approximately 1,858,500 shares (based on the sale price of $24.25). The expiration date for the Prepaid Forward is March 15, 2023, although it may be settled earlier in whole or in part. Upon settlement of the Prepaid Forward, at expiration or upon any early settlement, the Forward

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Counterparty will deliver to us the number of shares of common stock underlying the Prepaid Forward or the portion thereof being settled early. The shares purchased under the Prepaid Forward were treated as treasury stock on the condensed consolidated balance sheet (and not outstanding for purposes of the calculation of basic and diluted earnings per share), but remain outstanding for corporate law purposes, including for purposes of any future stockholders' votes, until the Forward Counterparty delivers the shares underlying the Prepaid Forward to us.

See Part I, Item 1, Note 10, Convertible Notes and Part I, Item 1., Note 19, Subsequent Events for additional information.

Sales of Equity Securities

On March 24, 2022, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the Jack W. Schuler Living Trust (the “Schuler Trust”) for the issuance and sale by the Company of an aggregate of 2,439,024 shares of the Company’s common stock (the “Shares”) to the Schuler Trust. Jack Schuler, serves as a member of the Company’s board of directors and is the sole trustee of the Schuler Trust.

Pursuant to the Securities Purchase Agreement, the Schuler Trust has agreed to purchase the Shares at a purchase price (determined in accordance with Nasdaq rules relating to the “market value” of the Company’s common stock) of $1.64 per share, which is equal to the consolidated closing bid price reported by Nasdaq immediately preceding the time the Company entered into the Securities Purchase Agreement, for an aggregate purchase price of $4.0 million. On June 29, 2022, the Company and the Schuler Trust agreed to extend the closing date of the Private Placement from June 30, 2022 to September 26, 2022.

For additional information regarding other sales of equity securities completed by the Company in 2020 and 2021, see “Capital Resources and Liquidity—Other sales of equity securities” in Part II, Item 7 of the 2021 10-K.

At-The-Market Equity Sales Agreement

On May 28, 2021, the Company entered into an Equity Sales Agreement (the “ATM Sales Agreement”) with William Blair pursuant to which it may sell shares of the Company’s common stock having an aggregate offering price of up to $50 million, from time to time, through an “at-the-market” equity offering program under which William Blair will act as sales agent. Subject to the terms and conditions of the ATM Sales Agreement, William Blair may sell shares by any method deemed to be an “at-the-market” offering as defined in Rule 415 under the Securities Act. The Company is not obligated to sell any shares under the ATM Sales Agreement. William Blair is entitled to a commission of 3% of the aggregate gross proceeds from each sale of shares occurring pursuant to the ATM Sales Agreement. During the six months ended June 30, 2022, the Company did not sell any shares of common stock under the ATM Sales Agreement. As of June 30, 2022, the Company had an aggregate of $39.1 million available for future sales under its at-the-market equity offering program.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of June 30, 2022.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We evaluate our estimates on an ongoing basis, including those related to accounts receivable, inventories, property and equipment, intangible assets, accruals, warranty liabilities, tax valuation accounts and stock-based compensation. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. Actual results may differ from these estimates. Our critical accounting policies and estimates are discussed in the 2021 10-K.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for a smaller reporting company.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed 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 the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Principal Executive Officer and the Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In connection with the preparation of this Form 10-Q/A, management, under the supervision and with the participation of the Principal Executive Officer and the Principal Financial Officer, conducted a re-evaluation of the effectiveness of the design and operations of our disclosure controls and procedures as of June 30, 2022. Based on that evaluation, due to a material weakness in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) described below, the Principal Executive Officer and the Principal Financial Officer have concluded that our disclosure controls and procedures, were not effective as of June 30, 2022.

Material Weakness in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management identified a material weakness in our internal control over financial reporting as of June 30, 2022 that prevented us from identifying the misclassification of the Notes on the Condensed Consolidated Balance Sheet and gave rise to the necessity to file this Form 10-Q/A. The Company’s internal control structure did not have a control to review the evaluation of the classification of its outstanding debt instruments in accordance with applicable accounting guidance at each reporting period.

Remediation Plan

With oversight from the Audit Committee and input from management, the Company has begun designing and implementing changes in processes and controls to remediate the material weakness described above and to enhance our internal control over financial reporting, including a control to review the accounting treatment of outstanding debt instruments on a quarterly basis in accordance with applicable accounting guidance.

Changes in Internal Control Over Financial Reporting

Other than as described above, there was no change in the Company’s internal control over financial reporting during the quarter ended June 30, 2022 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are from time to time subject to various claims and legal actions in the ordinary course of our business. We believe that there are currently no claims or legal actions that would reasonably be expected to have a material adverse effect on our results of operations or financial condition.

Item 1A. Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the risks discussed in the section entitled “Risk Factors” in the 2021 10-K. The risks described in our 2021 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, results of operations, cash flows and financial position.

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

There were no unregistered sales of equity securities during the quarter ended June 30, 2022 other than as reported in our Current Reports on Form 8-K filed with the SEC.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit No.	Description	Filing Information
3.1	Certificate of Incorporation of Registrant	Incorporated by reference to Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on November 13, 2012
3.1.1	Certificate of Amendment to Certificate of Incorporation of Registrant	Incorporated by reference to Exhibit A to the Registrant’s Definitive Information Statement on Schedule 14C filed on July 12, 2013
3.1.2	Certificate of Amendment to Certificate of Incorporation of Registrant	Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on March 15, 2016
3.1.3	Certificate of Amendment to the Certificate of Incorporation of Registrant	Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 15, 2019
3.1.4	Certificate of Amendment to the Certificate of Incorporation of Registrant	Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 13, 2021
3.1.5	Certificate of Designation of the Series A Preferred Stock of Registrant	Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on September 23, 2021
3.1.6	Certificate of Amendment to the Certificate of Incorporation of Registrant	Incorporate by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 17, 2022
3.2	Amended and Restated Bylaws of Registrant	Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on August 8, 2019
3.2.1	Amendment No. 1 to the Amended and Restated Bylaws of Registrant	Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 3, 2022
10.1	Accelerate Diagnostics, Inc. 2022 Omnibus Equity Incentive Plan	Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 17, 2022
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished herewith
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	Filed herewith
101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith
104	Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)	Filed herewith

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SIGNATURES

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

ACCELERATE DIAGNOSTICS, INC.

March 3, 2023	/s/ Jack Phillips
	Jack Phillips President and Chief Executive Officer
	(Principal Executive Officer)
March 3, 2023	/s/ Steve Reichling
	Steve Reichling Chief Financial Officer
	(Principal Financial and Accounting Officer)

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EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jack Phillips, certify that:

1.I have reviewed this quarterly report on Amendment No. 1 to the Quarterly Report on Form 10-Q of Accelerate Diagnostics, 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(s) 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(s) 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.

March 3, 2023	/s/ Jack Phillips
	Jack Phillips President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steve Reichling, certify that:

1.I have reviewed this quarterly report on Amendment No. 1 to the Quarterly Report on Form 10-Q of Accelerate Diagnostics, 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(s) 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(s) 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.

March 3, 2023	/s/ Steve Reichling
	Steve Reichling Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned officers of Accelerate Diagnostics, Inc. (the “Company”) hereby certifies that, to his knowledge, the Company’s Quarterly Report on Amendment No. 1 to the Quarterly Report on Form 10-Q for the period ended June 30, 2022 to which this certification is attached (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

March 3, 2023	/s/ Jack Phillips
	Jack Phillips President and Chief Executive Officer
	(Principal Executive Officer)
March 3, 2023	/s/ Steve Reichling
	Steve Reichling Chief Financial Officer
	(Principal Financial and Accounting Officer)

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2022	Aug. 11, 2022
Cover [Abstract]
Document Type	10-Q/A
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-31822
Entity Registrant Name	ACCELERATE DIAGNOSTICS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-1072256
Entity Address, Address Line One	3950 South Country Club Road,
Entity Address, Address Line Two	Suite 470
Entity Address, City or Town	Tucson,
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85714
City Area Code	520
Local Phone Number	365-3100
Title of 12(b) Security	Common Stock, $0.001 par
Trading Symbol	AXDX
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		81,559,928
Amendment Description	In this Amendment No. 1 to the Quarterly Report on Form 10-Q (this “Form 10-Q/A”), all references to “we” or “us” or “our” or “Accelerate” or the “Company” refer to Accelerate Diagnostics, Inc. and its consolidated subsidiaries.    Restatement OverviewOn February 6, 2023, the Audit Committee of the Company’s Board of Directors (the “Board”), in consultation with members of the Company’s management, determined that the Company’s previously issued interim unaudited financial statements as of and for the three months ended March 31, 2022, three and six months ended June 30, 2022 and three and nine months ended September 30, 2022 (collectively, the “2022 Interim Financial Statements”), should no longer be relied upon due to the error in the balance sheet classification of the Company’s 2.50% Senior Convertible Notes due 2023 (the “Notes”) described below. For additional information, please refer to our Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 9, 2023.This Form 10-Q/A amends and restates certain items noted below in the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2022, as originally filed with the SEC on August 15, 2022 (the “Original Filing”). Except as described below, no other material changes have been made to the Original Filing. Unless otherwise noted, this Form 10-Q/A speaks as of the date of the Original Filing and does not reflect other events that may have occurred after the date of the Original Filing or modify or update any disclosures that may have been affected by subsequent events. Accordingly, this Form 10-Q/A should be read in conjunction with the Company’s filings made with the SEC subsequent to the filing of the Original Filing, including any amendment to those filings.Background of RestatementIn March and April 2018, the Company issued $171.5 million aggregate principal amount of Notes, which have a maturity date of March 15, 2023, unless earlier converted or repurchased. Between September 2021 and August 2022, the Company entered into certain exchange transactions pursuant to which the Company exchanged $114.9 million aggregate principal amount of Notes for one or a combination of shares of the Company’s common stock, a secured promissory note and/or warrants to purchase the Company’s common stock. As of the date of the filing of this Form 10-Q/A, $56.6 million aggregate principal amount of Notes remain outstanding.The balance sheets contained in each of the 2022 Interim Financial Statements classified the Notes as a non-current liability with a net carrying amount of $115.8 million, $105.8 million and $56.3 million as of March 31, 2022, June 30, 2022 and September 30, 2022, respectively. Pursuant to Accounting Standards Codification (“ASC”) 210-10-45, current classification is required for convertible debt if the settlement in cash is expected to occur within 12 months, subject to the issuer’s intent and ability to refinance the debt on a long-term basis pursuant to ASC 470-10-45. The identification of the error arose in connection with the Company’s year-end close for the year ended December 31, 2022, whereby the Company determined that, as of the respective balance sheet dates for each of the 2022 Interim Financial Statements, its intent to refinance the Notes on a long-term basis was not supported by an ability to consummate the refinancing of all or a portion of the Notes in accordance with ASC 470-10-45. Accordingly, the Notes (or a portion thereof, as applicable in the specific period) should have been classified as a current liability in the balance sheets contained in each of the 2022 Interim Financial Statements.The “as restated” classification of the Notes is further described and the impact of the restatement is included in Note 1 and Note 10 of the “Notes to the Condensed Consolidated Financial Statements” included in Part I, Item 1. “Financial Statements” of this Form 10-Q/A.Control ConsiderationsIn connection with the restatement, management concluded that there was a deficiency in our internal control over financial reporting that constituted a material weakness as of June 30, 2022. For a discussion of management's consideration of our disclosure controls and procedures and the material weakness identified, see Part I, Item 4, Controls and Procedures of this Form 10-Q/A.Items Amended in this FilingFor the convenience of the reader, this Form 10-Q/A sets forth the Original Filing, as amended, in its entirety; however, this Form 10-Q/A amends and restates only the following Items of the Original Filing to the extent necessary to reflect the adjustments discussed above and to make corresponding adjustments to the Company’s financial data and disclosures cited elsewhere in this Form 10-Q/A:-Part I, Item 1 - Financial Statements-Part I, Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations-Part I, Item 4 - Controls and Procedures-Part II, Item 6 - ExhibitsIn addition, in connection with the preparation of this Form 10-Q/A, the Company has evaluated its financial condition as of the date of filing this Form 10-Q/A. Based on this evaluation, the Company has determined that there is substantial doubt about its ability to continue as a going concern as of the date of the filing of this Form 10-Q/A, as the Company does not currently have adequate financial resources to pay its outstanding debt obligation under the Notes and to fund its forecasted operating costs for at least twelve months from the filing of this Form 10-Q/A. The assessment of going concern is further discussed in Note 1 of the “Notes to the Condensed Consolidated Financial Statements” included in Part I, Item 1. “Financial Statements” of this Form 10-Q/A.Further, the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this filing (Exhibits 31.1, 31.2 and 32), and the Company has provided its restated condensed consolidated financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibit 101.Restatement of Other Financial StatementsIn addition to the restated financial information for the quarter ended June 30, 2022 included in this Form 10-Q/A, we are also restating our interim condensed consolidated financial statements and related disclosures for the quarters ended March 31, 2022 and September 30, 2022. Concurrently with the filing of this Form 10-Q/A, we are filing amended Quarterly Reports on Form 10-Q with the SEC with respect to these periods to address the error in the balance sheet classification of the Notes described above.
Entity Central Index Key	0000727207
Amendment Flag	true
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 4,581	$ 39,898
Investments	32,191	23,720
Trade accounts receivable, net	2,935	2,320
Inventory	5,304	5,067
Prepaid expenses	1,429	768
Other current assets	1,619	1,558
Total current assets	48,059	73,331
Property and equipment, net	4,097	5,389
Finance lease assets, net	2,538	0
Operating lease right of use assets, net	2,181	2,510
Other non-current assets	1,851	1,817
Total assets	58,726	83,047
Current liabilities:
Accounts payable	2,221	1,983
Accrued liabilities	5,654	2,853
Accrued interest	746	909
Deferred revenue	335	451
Current portion of convertible notes	56,204	0
Current portion of long-term debt	84	80
Finance lease, current	953	0
Operating lease, current	732	669
Total current liabilities	66,929	6,945
Finance lease, non-current	1,383	0
Operating lease, non-current	1,997	2,381
Other non-current liabilities	757	808
Convertible notes	49,624	107,984
Total liabilities	120,690	118,118
Commitments and contingencies
Stockholders’ deficit:
Preferred shares, $0.001 par value	4	4
Common stock, $0.001 par value	80	68
Contributed capital	560,185	580,652
Treasury stock	(45,067)	(45,067)
Accumulated deficit	(576,734)	(570,668)
Accumulated other comprehensive loss	(432)	(60)
Total stockholders’ deficit	(61,964)	(35,071)
Total liabilities and stockholders’ deficit	$ 58,726	$ 83,047

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred Stock, par value (in usd per share)	$ 0.001	$ 0.001
Preferred Stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred Stock, shares outstanding (in shares)	3,954,546	3,954,546
Common Stock, par value (in usd per share)	$ 0.001	$ 0.001
Common Stock, shares authorized (in shares)	200,000,000	100,000,000
Common Stock, shares issued (in shares)	79,701,428	67,649,018
Common Stock, shares outstanding (in shares)	79,701,428	67,649,018

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Unaudited - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Net sales	$ 3,861,000	$ 2,798,000	$ 6,820,000	$ 5,316,000
Cost of sales	2,781,000	1,745,000	4,937,000	3,365,000
Gross profit	1,080,000	1,053,000	1,883,000	1,951,000
Costs and expenses:
Research and development	7,576,000	5,733,000	13,600,000	12,629,000
Sales, general and administrative	11,493,000	12,910,000	22,167,000	26,938,000
Total costs and expenses	19,069,000	18,643,000	35,767,000	39,567,000
Loss from operations	(17,989,000)	(17,590,000)	(33,884,000)	(37,616,000)
Other income (expense):
Interest expense	(713,000)	(4,177,000)	(1,630,000)	(8,267,000)
Gain on extinguishment of debt	199,000	0	3,565,000	0
Foreign currency exchange gain (loss)	31,000	0	40,000	(159,000)
Interest income	56,000	12,000	78,000	55,000
Other (expense) income, net	(107,000)	81,000	(157,000)	74,000
Total other income (expense), net	(534,000)	(4,084,000)	1,896,000	(8,297,000)
Net loss before income taxes	(18,523,000)	(21,674,000)	(31,988,000)	(45,913,000)
Provision for income taxes	0	0	0	0
Net loss	$ (18,523,000)	$ (21,674,000)	$ (31,988,000)	$ (45,913,000)
Basic net loss per share (in usd per share)	$ (0.24)	$ (0.36)	$ (0.44)	$ (0.77)
Diluted net loss per share (in usd per share)	$ (0.24)	$ (0.36)	$ (0.44)	$ (0.77)
Weighted average shares outstanding, basic (in shares)	76,231	61,049	71,998	59,790
Weighted average shares outstanding, diluted (in shares)	76,231	61,049	71,998	59,790
Other comprehensive loss:
Net loss	$ (18,523,000)	$ (21,674,000)	$ (31,988,000)	$ (45,913,000)
Net unrealized (loss) gain on debt securities available-for-sale	(39,000)	1,000	(132,000)	(18,000)
Foreign currency translation adjustment	(161,000)	21,000	(240,000)	(60,000)
Comprehensive loss	$ (18,723,000)	$ (21,652,000)	$ (32,360,000)	$ (45,991,000)

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities:
Net loss	$ (31,988)	$ (45,913)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,435	1,248
Amortization of investment discount	79	97
Equity-based compensation	6,950	15,429
Amortization of debt discount and issuance costs	284	6,079
Loss (gain) on disposal of property and equipment	283	(100)
Unrealized loss on equity investments	157	0
Gain on extinguishment of debt	(3,565)	0
(Increase) decrease in assets:
Contributions to deferred compensation plan	(110)	(236)
Accounts receivable	(615)	(564)
Inventory	(416)	(524)
Prepaid expense and other	(719)	60
Increase (decrease) in liabilities:
Accounts payable	658	564
Accrued liabilities	2,288	736
Accrued interest	(159)	45
Deferred revenue and income	(116)	(94)
Deferred compensation	(51)	245
Net cash used in operating activities	(25,605)	(22,928)
Cash flows from investing activities:
Purchases of equipment	(447)	(29)
Purchase of marketable securities	(27,504)	(15,699)
Maturities of marketable securities	18,738	23,993
Net cash (used in) provided by investing activities	(9,213)	8,265
Cash flows from financing activities:
Proceeds from issuance of common stock	0	22,122
Payments on finance leases	(424)	0
Proceeds from exercise of options	7	1,222
Proceeds from issuance of common stocks under employee purchase plan	137	161
Net cash (used in) provided by financing activities	(280)	23,505
Effect of exchange rate on cash	(219)	(43)
(Decrease) increase in cash and cash equivalents	(35,317)	8,799
Cash and cash equivalents, beginning of period	39,898	35,781
Cash and cash equivalents, end of period	4,581	44,580
Non-cash investing activities:
Net transfer of instruments from inventory to property and equipment	202	500
Supplemental cash flow information:
Interest paid	1,506	2,144
Extinguishment of Convertible Senior Notes through issuance of common stock	$ 10,180	$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT Unaudited - USD ($) shares in Thousands, $ in Thousands	Total	Preferred stock shares outstanding	Common stock	Contributed capital	Contributed capital Cumulative effect of accounting changes	Accumulated deficit	Accumulated deficit Cumulative effect of accounting changes	Treasury stock	Accumulated other comprehensive (loss) income
Beginning Balance (in shares) at Dec. 31, 2020		0	57,608
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)			2,870
Exercise of options and restricted stock awards issued (in shares)			990
Issuance of common stock under employee purchase plan (in shares)			21
Ending Balance (in shares) at Jun. 30, 2021		0	61,489
Beginning Balance, amount at Dec. 31, 2020		$ 0	$ 58	$ 475,072		$ (492,966)		$ (45,067)	$ 91
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Proceeds from issuance of common stock			2	22,120
Exercise of options			1	1,221
Issuance of common stock under employee purchase plan				161
Equity-based compensation				15,548
Net loss	$ (45,913)					(45,913)
Net unrealized loss on debt securities available-for-sale	(18)								(18)
Foreign currency translation adjustment	(60)								(60)
Ending Balance, amount at Jun. 30, 2021	(69,750)	$ 0	$ 61	514,122		(538,879)		(45,067)	13
Beginning Balance (in shares) at Mar. 31, 2021		0	59,561
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)			1,481
Exercise of options and restricted stock awards issued (in shares)			436
Issuance of common stock under employee purchase plan (in shares)			11
Ending Balance (in shares) at Jun. 30, 2021		0	61,489
Beginning Balance, amount at Mar. 31, 2021		$ 0	$ 60	495,857		(517,205)		(45,067)	(9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Proceeds from issuance of common stock			1	11,455
Exercise of options				113
Issuance of common stock under employee purchase plan				81
Equity-based compensation				6,616
Net loss	(21,674)					(21,674)
Net unrealized loss on debt securities available-for-sale	1								1
Foreign currency translation adjustment	21								21
Ending Balance, amount at Jun. 30, 2021	(69,750)	$ 0	$ 61	514,122		(538,879)		(45,067)	13
Beginning Balance (in shares) at Dec. 31, 2021		3,955	67,649
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of options and restricted stock awards issued (in shares)			1,128
Issuance of common stock under employee purchase plan (in shares)			125
Issuance of shares to retire Convertible Senior Notes (in shares)			10,799
Ending Balance (in shares) at Jun. 30, 2022		3,955	79,701
Beginning Balance, amount at Dec. 31, 2021	(35,071)	$ 4	$ 68	580,652	$ (37,438)	(570,668)	$ 25,922	(45,067)	(60)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of options			1	6
Issuance of shares to retire Convertible Notes			11	10,169
Issuance of common stock under employee purchase plan				137
Equity-based compensation				6,659
Net loss	(31,988)					(31,988)
Net unrealized loss on debt securities available-for-sale	(132)								(132)
Foreign currency translation adjustment	(240)								(240)
Ending Balance, amount at Jun. 30, 2022	(61,964)	$ 4	$ 80	560,185		(576,734)		(45,067)	(432)
Beginning Balance (in shares) at Mar. 31, 2022		3,955	68,712
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of options and restricted stock awards issued (in shares)			974
Issuance of common stock under employee purchase plan (in shares)			66
Issuance of shares to retire Convertible Senior Notes (in shares)			9,949
Ending Balance (in shares) at Jun. 30, 2022		3,955	79,701
Beginning Balance, amount at Mar. 31, 2022		$ 4	$ 69	547,381		(558,211)		(45,067)	(232)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of options			1	6
Issuance of shares to retire Convertible Notes			10	8,912
Issuance of common stock under employee purchase plan				60
Equity-based compensation				3,826
Net loss	(18,523)					(18,523)
Net unrealized loss on debt securities available-for-sale	(39)								(39)
Foreign currency translation adjustment	(161)								(161)
Ending Balance, amount at Jun. 30, 2022	$ (61,964)	$ 4	$ 80	$ 560,185		$ (576,734)		$ (45,067)	$ (432)

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Organization and Nature of Business; Basis of Presentation; Principles of Consolidation; Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Organization and Nature of Business; Basis of Presentation; Principles of Consolidation; Significant Accounting Policies

NOTE 1. ORGANIZATION AND NATURE OF BUSINESS; BASIS OF PRESENTATION; PRINCIPLES OF CONSOLIDATION; SIGNIFICANT ACCOUNTING POLICIES

Accelerate Diagnostics, Inc. (“we” or “us” or “our” or “Accelerate” or the “Company”) is an in vitro diagnostics company dedicated to providing solutions that improve patient outcomes and lower healthcare costs through the rapid diagnosis of serious infections.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on March 14, 2022.

The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date but does not include all disclosures such as notes required by U.S. GAAP.

The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods presented, but are not necessarily indicative of the results of operations to be anticipated for the entire year ending December 31, 2022, or any future period.

All amounts are rounded to the nearest thousand dollars unless otherwise indicated.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after elimination of intercompany transactions and balances.

Restatement of Previously Issued Financial Statements

Background on the restatement

The Company’s previously issued interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2022 classified its 2.50% Senior Convertible Notes due 2023 (the “Notes”) as a non-current liability with a net carrying amount of $105.8 million as of June 30, 2022. Pursuant to Accounting Standards Codification (“ASC”) 210-10-45, Balance Sheet, a portion of the Notes should have been classified as a current liability in the balance sheet as of June 30, 2022. In addition, the Company recorded an adjustment to correct a previously identified immaterial error related to the gain on extinguishment of debt for the three months ended June 30, 2022.

Effect of the restatement

The effects of the correction of the prior-period misstatements on our Condensed Consolidated Balance Sheet relating to the Notes are reflected in the table below (in thousands). The Condensed Consolidated Statements of Operations and Comprehensive Loss, and the Condensed Consolidated Statements of Stockholders’ Equity were also corrected for the other previously identified immaterial error as reflected in the table below (in thousands, except per share data).

	June 30,
	2022
	As Previously Reported	Adjustments	As Restated
Current portion of convertible notes	—	56,204	56,204
Total current liabilities	10,725	56,204	66,929
Convertible notes	105,828	(56,204)	49,624

	Three Months Ended
	June 30,
	2022
	As Previously Reported	Adjustments	As Restated
Accumulated deficit beginning balance	(558,931)	720	(558,211)
Gain on extinguishment of debt	919	(720)	199
Total other income (expense), net	186	(720)	(534)
Net loss before income taxes	(17,803)	(720)	(18,523)
Net loss	(17,803)	(720)	(18,523)
Basic and diluted net loss per share	(0.23)	(0.01)	(0.24)
Comprehensive loss	(18,003)	(720)	(18,723)

In addition to correcting the consolidated financial statements, related revisions and updates have been made to “Liquidity & Going Concern (As Restated)” below and Note 10, Convertible Notes (As Restated).

Liquidity & Going Concern (As Restated)

Since inception, the Company has not achieved profitable operations or positive cash flows from operations. The Company’s accumulated deficit totaled $576.7 million as of June 30, 2022. For the three and six months ended June 30, 2022, the Company had net losses of approximately $18.5 million and $32.0 million, respectively, and had negative cash flows from operations of approximately $25.6 million for the six months ended June 30, 2022. The future success of the Company is dependent on its ability to successfully commercialize its products, obtain regulatory clearance for and successfully launch its future product candidates, obtain additional capital and ultimately attain profitable operations. Historically, the Company has funded its operations primarily through multiple equity raises and the issuance of debt (see Note 9, Long-Term Debt, Note 10, Convertible Notes and Note 17, Stockholders' Equity for additional details).

At June 30, 2022, the Company held cash, cash equivalents, and marketable securities of $36.8 million and current liabilities of $66.9 million, including $56.2 million of Notes due March 15, 2023. Based on its evaluation pursuant to ASC 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company has determined that, as of the date of this Form 10-Q/A filing, there is substantial doubt about its ability to continue as a going concern, as the Company does not currently have adequate financial resources to pay its outstanding debt obligation under the Notes and to fund its forecasted operating costs for at least twelve months from the filing of this Form 10-Q/A.

While the Company continues to explore additional funding in the form of potential equity and/or debt financing arrangements or similar transactions, as well as non-cash means to settle or refinance the Notes, there can be no assurance the necessary financing will be available on terms acceptable to the Company, or at all. If the

Company raises funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of common stock. If the Company raises funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of preferred and common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations. Similarly, there can be no assurance that market conditions and refinancing alternatives will be sufficient to settle or refinance the Notes on or prior to their maturity on March 15, 2023. The capital markets have in the past, and may in the future, experience periods of upheaval that could impact the availability and cost of equity and debt financing. In addition, recent and anticipated future increases in federal fund rates set by the Federal Reserve, which serve as benchmark rates on borrowing, and other general economic conditions may impact the cost of debt financing or refinancing existing debt.

Although we are actively considering all available strategic alternatives to maximize value, if we are unable to obtain adequate capital resources to fund operations and address the upcoming maturity of the Notes, we would not be able to continue to operate our business pursuant to our current plans. This may require us to, among other things, materially modify our operations to reduce spending; sell assets or operations; delay the implementation of, or revising certain aspects of, our business strategy; file a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in order to implement a restructuring; or discontinue our operations entirely.

The accompanying condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to accounts receivable, inventory, property and equipment, accrued liabilities, warranty liabilities, convertible notes, tax valuation accounts, equity–based compensation, revenue and leases. Actual results could differ materially from those estimates.

Estimated Fair Value of Financial Instruments

The Company follows ASC 820, Fair Value Measurement, which has defined fair value and requires the Company to establish a framework for measuring and disclosing fair value. The framework requires the valuation of assets and liabilities subject to fair value measurements using a three-tiered approach and fair value measurement be classified and disclosed in one of the following three categories:

•Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

•Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).

The carrying amounts of financial instruments such as cash and cash equivalents, trade accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, and other current liabilities approximate the related fair values due to the short-term maturities of these instruments.

See Note 4, Fair Value of Financial Instruments, for further information and related disclosures regarding the Company’s fair value measurements.

The estimated fair value of the Notes represents a Level 2 measurement. See Note 10, Convertible Notes for further detail on the Company’s Notes.

Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or less at time of purchase are considered to be cash equivalents. Cash and cash equivalents include overnight repurchase agreement accounts and other investments. As part of our cash management process, excess operating cash is invested in overnight repurchase agreements with our bank. Repurchase agreements and other investments classified as cash and cash equivalents are not deposits and are not insured by the U.S. Government, the FDIC or any other government agency and involve investment risk including possible loss of principal. We believe however, that the market risk arising from holding these financial instruments is minimal.

Investments

The Company invests in various debt and equity securities which are primarily held in the custody of major financial institutions. Debt securities consist of certificates of deposit, U.S. government and agency securities, commercial paper, and corporate notes and bonds. Equity securities consist of mutual funds. The Company records these investments in the condensed consolidated balance sheet at fair value. Unrealized gains or losses for debt securities available-for-sale are included in accumulated other comprehensive income (loss), a component of stockholders’ deficit. Unrealized gains or losses for equity securities are included in other income (expense), net, a component of condensed consolidated statements of operations and comprehensive loss. The Company considers all debt securities available-for-sale, including those with maturity dates beyond 12 months, as available to support current operational liquidity needs. The Company classifies its investments as current based on the nature of the investments and their availability for use in current operations.

We perform an assessment to determine whether there have been any events or economic circumstances to indicate that a debt security available-for-sale in an unrealized loss position has suffered impairment as a result of credit loss or other factors. A debt security is considered impaired if its fair value is less than its amortized cost basis at the reporting date. If we intend to sell the debt security or if it is more-likely-than-not that we will be required to sell the debt security before the recovery of its amortized cost basis, the impairment is recognized and the unrealized loss is recorded as a direct write-down of the security's amortized cost basis with an offsetting entry to earnings. If we do not intend to sell the debt security or believe we will not be required to sell the debt security before the recovery of its amortized cost basis, the impairment is assessed to determine if a credit loss component exists. We use a discounted cash flow method to determine the credit loss component. In the event a credit loss exists, an allowance for credit losses is recorded in earnings for the credit loss component of the impairment while the remaining portion of the impairment attributable to factors other than credit loss is recognized, net of tax, in accumulated other comprehensive income (loss). The amount of impairment recognized due to credit factors is limited to the excess of the amortized cost basis over the fair value of the security.

Inventory

Inventory is stated at the lower of cost or net realizable value. The Company determines the cost of inventory using the first-in, first out method. The Company estimates the recoverability of inventory by reference to internal estimates of future demands and product life cycles, including expiration. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value and records a charge to expense for such inventory as appropriate.

We charge cost of sales for inventory provisions to write-down our inventory to the lower of cost or net realizable value or for obsolete or excess inventory. Most of our inventory provisions relate to excess quantities of products, based on our inventory levels and future product purchase commitments compared to assumptions about future demand and market conditions. Once inventory has been written-off or written-down, it creates a new cost basis for the inventory that is not subsequently written-up.

See Note 6, Inventory, for further information and related disclosures.

Accounts Receivable

Accounts receivable consist of amounts due to the Company for sales to customers and are based on what we expect to collect in exchange for goods and services. Receivables are considered past due based on the contractual payment terms and are written off if reasonable collection efforts prove unsuccessful.

We maintain an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense in the consolidated statements of operations. We assess collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectibility issues. In determining the amount of the allowance for credit losses, we consider historical collectibility and make judgments about the creditworthiness of customers based on credit evaluations. Our customers typically have good credit quality. We also consider customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data.

The allowance for credit losses for the three and six months ended June 30, 2022 and 2021 is comprised of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Beginning balance	$	159	$	209	140		445
Provisions	7		7		30		38
Write-offs	(16)		(3)		(20)		(270)
	$	150	$	213	$	150	$	213

The write-offs recorded during the six months ended June 30, 2021 were in connection with a one-time restructuring activity of the Company's Europe, Middle East and Africa (“EMEA”) business. These credit losses were incurred as part of the Company terminating agreements with select distributors in geographies it exited and did not pursue collection of these accounts receivables.

Property and Equipment

Property and equipment are recorded at cost. Maintenance and repairs are charged to expense as incurred and expenditures for major improvements are capitalized. Gains and losses from retirement or replacement are included in costs and expenses. Depreciation of property and equipment is computed using the straight-line method over the estimated useful life of the assets, ranging from one to seven years. Leasehold improvements are depreciated over the remaining life of the lease or the life of the asset, whichever is less.

Instruments Classified as Property and Equipment

Property and equipment includes Accelerate Pheno systems (also referred to as instruments) used for sales demonstrations, instruments under rental agreements and instruments used for research and development. Depreciation expense for instruments used for sales demonstrations is recorded as a component of sales, general and administrative expense. Depreciation expense for instruments placed at customer sites pursuant to reagent rental agreements is recorded as a component of cost of sales. Depreciation expense for instruments used in our laboratory and research is recorded as a component of research and development expense. The Company retains title to these instruments and depreciates them over five years. Losses from the retirement of returned instruments are included in costs and expenses.

The Company evaluates the recoverability of the carrying amount of its instruments whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable, and at least annually. This evaluation is based on our estimate of future cash flows and the estimated fair value of such long-lived assets, and provides for impairment if such undiscounted cash flows or the estimated fair value are insufficient to recover the carrying amount of instruments. No impairment charges have been recorded as of June 30, 2022 and December 31, 2021.

See Note 7, Property and Equipment, for further information and related disclosures.

Long-lived Assets

Long-lived assets and certain identifiable intangibles to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company continuously evaluates the recoverability of its long-lived assets based on estimated future cash flows from and the estimated fair value of such long-lived assets, and provides for impairment if such undiscounted cash flows or the estimated fair value are insufficient to recover the carrying amount of the long-lived asset.

Warranty Reserve

Instruments are typically sold with a one year limited warranty, while kits and accessories are typically sold with a sixty days limited warranty. Accordingly, a provision for the estimated cost of the limited warranty repair is recorded at the time revenue is recognized. Our estimated warranty provision is based on our estimate of future repair events and the related estimated cost of repairs. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. The cost incurred for these provisions is included in cost of sales on the condensed consolidated statements of operations and comprehensive loss.

Warranty reserve activity for the three and six months ended June 30, 2022 and 2021 is as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Beginning balance	$	176	$	184	$	139	$	232
Provisions	93		12		139		(10)
Warranty cost incurred	(14)		(27)		(23)		(53)
Ending balance	$	255	$	169	$	255	$	169

Convertible Notes

On January 1, 2022 the Company adopted Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). As a result, the Notes are now accounted for as a single liability measured at their amortized cost. The Notes are no longer bifurcated between debt and equity and are instead accounted for entirely as debt at face value net of any discount or premium and issuance costs. Interest expense is comprised of (1) cash interest payments, (2) amortization of any debt discounts or premiums based on the original offering, and (3) amortization of any debt issuance costs. Gain or loss on extinguishment of Notes is calculated as the difference between the (i) fair value of the consideration transferred and (ii) the sum of the carrying value of the debt at the time of repurchase.

See Note 2, Recently Issued Accounting Pronouncements and Note 10, Convertible Notes, for further information and related disclosures.

Revenue Recognition

The Company recognizes revenue when control of the promised good or service is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales taxes are excluded from revenues.

The Company determines revenue recognition through the following steps:

•Identification of the contract with a customer

•Identification of the performance obligations in the contract

•Determination of the transaction price

•Allocation of the transaction price to the performance obligations

•Recognition of revenue as we satisfy a performance obligation

Product revenue is derived from the sale or rental of instruments and sales of related consumable products. When an instrument is sold, revenue is generally recognized upon installation of the unit consistent with contract terms, which do not include a right of return. When a consumable product is sold, revenue is generally recognized upon shipment. Invoices are generally issued when revenue is recognized. Payment terms vary by the type and location of the customer and the products or services offered. The term between invoicing and when payment is due is not significant.

Service revenue is derived from the sale of extended service agreements which are generally non-cancellable. This revenue is recognized on a straight-line basis over the contract term beginning on the effective date of the contract because the Company is standing ready to provide services. Invoices are generally issued annually and coincide with the beginning of individual service terms.

The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines relative standalone selling prices based on the price charged to customers for each individual performance obligation.

Sales commissions earned by the Company’s sales force are considered incremental and recoverable costs of obtaining a contract with a customer. The Company has determined these costs would have an amortization period of less than one year and has elected to recognize them as an expense when incurred. Contract asset opening and closing balances were immaterial for the three and six months ended June 30, 2022.

Gross Profit and Gross Margin

Gross profit consists of total revenue, net of allowances, less cost of sales. Cost of sales includes cost of materials, direct labor, equity-based compensation, facility and other manufacturing overhead costs for consumable tests and instruments sold to customers. Cost of sales for instruments also includes depreciation on revenue generating instruments that have been placed with our customers under a reagent rental agreement. Cost of sales includes repair and maintenance cost for instruments covered by a service agreement or instruments covered by a reagent rental agreement. Cost of sales also includes warranty related costs.

The Company’s overall gross margin was 28% and 38% for the three months ended June 30, 2022 and 2021, respectively, and 28% and 37% for the six months ended June 30, 2022 and 2021, respectively. The decreases were primarily due to increases in the costs to manufacture consumables due to supply chain inflationary factors and a decrease in our average unit sales price period over period.

Shipping and Handling

Shipping and handling costs billed to customers are included as a component of revenue. The corresponding expense incurred with third party carriers is included as a component of sales, general and administrative costs on the consolidated statements of operations and comprehensive loss.

Leases

The Company accounts for leases in accordance with ASC 842, Leases. The Company determines if an arrangement is or contains a lease and the type of lease at inception. The Company classifies leases as finance leases (lessee) or sales-type leases (lessor) when there is either a transfer of ownership of the underlying asset by the end of the lease term, the lease contains an option to purchase the asset that we are reasonably certain will be exercised, the lease term is for the major part of the remaining economic life of the asset, the present value of the lease payments and any residual value guarantee equals or substantially exceeds all the fair value of the asset, or the asset is of such a specialized nature that it will have no alternative use to the lessor at the end of the lease term. Payments contingent on future events (i.e. based on usage) are considered variable and excluded from lease payments for the purposes of classification and initial measurement. Several of our leases include options to renew or extend the term upon mutual agreement of the parties and others include one-year extensions exercisable by the lessee. None of our leases contain residual value guarantees, restrictions, or covenants.

To determine whether a contract contains a lease, the Company uses its judgment in assessing whether the lessor retains a material amount of economic benefit from an underlying asset, whether explicitly or implicitly identified, which party holds control over the direction and use of the asset, and whether any substantive substitution rights over the asset exist.

Leases as Lessee

Operating leases are included in right-of-use (“ROU”) assets and corresponding lease liabilities, and finance leases are included in ROU assets and corresponding lease liabilities within our condensed consolidated balance sheets. These assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and their related liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Typically, we use our incremental borrowing rate based on the information available at commencement in determining the present value of lease payments. We use the implicit rate when readily determinable. ROU assets are net of lease payments made and exclude lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term, which may include options to extend or terminate the lease when it is reasonably certain that we will exercise the option.

Our operating leases consist primarily of leased office, factory, and laboratory space in the U.S. and office space in Europe, have between two and six-year terms, and typically contain penalizing, early-termination provisions. Our finance leases consist of leased equipment and have three-year terms.

Leases as Lessor

The Company leases instruments to customers under “reagent rental” agreements, whereby the customer agrees to purchase consumable products over a stated term, typically five years or less, for a volume-based price that includes an embedded rental for the instruments. When collectibility is probable, that amount is recognized as income at lease commencement for sales-type leases and as product is shipped, typically in a straight–line pattern, over the term for operating leases, which typically include a termination without cause or penalty provision given a short notice period.

Consideration is allocated between lease and non-lease components based on stand-alone selling price in accordance with ASC 606, Revenue from Contracts with Customers.

Net investment in sales-type leases are included within our condensed consolidated balance sheets as a component of other current assets and other non-current assets, which include the present value of lease payments not yet received and the present value of the residual asset, which are determined using the information available at commencement, including the lease term, estimated useful life, rate implicit in the lease, and expected fair value of the instrument.

Nonqualified Cash Deferral Plan

The Company's Cash Deferral Plan (the “Deferral Plan”) provides certain key employees with an opportunity to defer the receipt of such participant's base salary. The Deferral Plan is intended to be a nonqualified deferred compensation plan that complies with the provisions of Section 409A of the Internal Revenue Code. All of

the investments held in the Deferral Plan are equity securities consisting of mutual funds and recorded at fair value with changes in the investments' fair value recognized as earnings in the period they occur. The corresponding liability for the Deferral Plan is included in other non-current liabilities in the condensed consolidated balance sheet.

Equity-Based Compensation

The Company may award stock options, restricted stock units (“RSUs”), performance-based awards and other equity-based instruments to its employees, directors and consultants. Compensation cost related to equity-based instruments is based on the fair value of the instrument on the grant date, and is recognized over the requisite service period on a straight-line basis over the vesting period for each tranche (an accelerated attribution method) except for performance-based awards. Performance-based awards vest based on the achievement of performance targets. Compensation costs associated with performance-based awards are recognized over the requisite service period based on probability of achievement. Performance-based awards require management to make assumptions regarding the likelihood of achieving performance targets.

The Company estimates the fair value of service based and performance based stock option awards, including modifications of stock option awards, using the Black-Scholes option pricing model. This model derives the fair value of stock options based on certain assumptions related to expected stock price volatility, expected option life, risk-free interest rate and dividend yield.

•Volatility: The expected volatility is based on the historical volatility of the Company's stock price over the most recent period commensurate with the expected term of the stock option award.

•Expected term: The estimated expected term for employee awards is based on a simplified method that considers an insufficient history of employee exercises. For consultant awards, the estimated expected term is the same as the life of the award.

•Risk-free interest rate: The risk-free interest rate is based on published U.S. Treasury rates for a term commensurate with the expected term.

•Dividend yield: The dividend yield is estimated as zero as the Company has not paid dividends in the past and does not have any plans to pay any dividends in the foreseeable future.

The Company records the fair value of RSUs or stock grants based on the published closing market price on the day before the grant date.

The Company accounts for forfeitures as they occur rather than on an estimated basis.

The Company also has an employee stock purchase program whereby eligible employees can elect payroll deductions that are subsequently used to purchase common stock at a discounted price. There is no compensation recorded for this program as (i) the purchase discount does not exceed the issuance costs that would have been incurred to raise a significant amount of capital by a public offering, (ii) substantially all employees that meet limited employment qualifications may participate on an equitable basis, and (iii) the plan doesn't incorporate option features that would require compensation to be recorded.

See Note 12, Employee Equity-Based Compensation for further information.

Deferred Tax

Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying condensed consolidated balance sheet. The change in deferred tax assets and liabilities for the period represents the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws in deferred tax assets and liabilities are reflected as an adjustment to the tax provision or benefit in the period of enactment.

The Company follows the provisions of ASC 740, Income Taxes, to account for any uncertainty in income taxes with respect to the accounting for all tax positions taken (or expected to be taken) on any income tax return. This guidance applies to all open tax periods in all tax jurisdictions in which the Company is required to file an income tax return. Under U.S. GAAP, in order to recognize an uncertain tax benefit the taxpayer must be more

likely than not certain of sustaining the position, and the measurement of the benefit is calculated as the largest amount that is more likely than not to be realized upon resolution of the position. Interest and penalties, if any, would be recorded within tax expense.

Foreign Currency Translation and Foreign Currency Transactions

Adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive loss in the condensed consolidated statements of stockholders’ deficit.

The Company has assets and liabilities, including receivables and payables, which are denominated in currencies other than their functional currency. These balance sheet items are subject to re-measurement, the impact of which is recorded in foreign currency exchange gain and loss, within the condensed consolidated statement of operations and comprehensive loss.

Loss Per Share

Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Potentially dilutive common shares consist of shares issuable from stock options and unvested RSUs. Potentially dilutive common shares would also include common shares that would be outstanding if the Notes and the Series A Preferred Stock outstanding at the balance sheet date were converted and shares issuable in connection with the Securities Purchase Agreement (as defined in Note 17). Diluted earnings are not presented when the effect of adding such additional common shares is antidilutive.

See Note 11, Loss Per Share, for further information.

Comprehensive Loss

In addition to net loss, comprehensive loss includes all changes in equity during a period, except those resulting from investments by and distributions to owners. The Company holds debt securities as available-for-sale and records the change in fair market value as a component of comprehensive loss. The Company also has adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars which is included as a component of comprehensive loss.

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Recently Issued Accounting Pronouncements

6 Months Ended

Jun. 30, 2022

Accounting Changes and Error Corrections [Abstract]

Recently Issued Accounting Pronouncements

NOTE 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Standards that were recently adopted

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). This update simplifies the accounting for convertible debt instruments by removing the beneficial conversion and cash conversion separation models for convertible instruments. Under the update, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives or that do not result in substantial premiums accounted for as paid-in capital. The update also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will no longer be available. The Company adopted the standard on January 1, 2022 through application of the modified retrospective method of transition. The Company applied the standard to the Notes outstanding as of January 1, 2022, as discussed in Note 10, Convertible Notes. As a result, the Notes are now accounted for as a single liability measured at their amortized cost. The Notes are no longer bifurcated between debt and equity and are instead accounted for entirely as debt at face value net of any discount or premium and issuance costs. Interest expense is comprised of (1) cash interest payments, (2) amortization of any debt discounts or premiums based on the original offering, and (3) amortization of any debt issuance costs. On January 1, 2022, the cumulative effect of adoption resulted in an increase in the net carrying amount of the Notes, of $11.5 million, a decrease in additional-paid-in-capital of $37.4 million, and a decrease in accumulated deficit of $25.9 million. ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share. This change has no impact on the Company given the Company was already using the if-converted method to calculate diluted earnings per share.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Topic 815 - 40). ASU 2021-04 codifies the final consensus reached by the Emerging Issues Task Force (EITF) on how an issuer should account for modifications made to equity-classified written call options (hereafter referred to as a warrant to purchase the issuer’s common stock). The guidance in the ASU requires the issuer to treat a modification of an equity-classified warrant that does not cause the warrant to become liability-classified as an exchange of the original warrant for a new warrant. This guidance applies whether the modification is structured as an amendment to the terms and conditions of the warrant or as termination of the original warrant and issuance of a new warrant. This ASU was adopted January 1, 2022, and did not impact the Company's consolidated financial statements at January 1, 2022.

Standards not yet adopted

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method. ASU 2022-01 is related to the portfolio layer method of hedge accounting. The amendments in this update clarify the accounting and promote consistency in reporting for hedges where the portfolio layer method is applied. This update is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. We do not expect the update to have a material effect on our condensed consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 relates to troubled debt restructurings (“TDRs”) and vintage disclosures for financing receivables. The amendments in this update eliminate the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We do not expect the update to have a material effect on our condensed consolidated financial statements.

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Concentration of Credit Risk

6 Months Ended

Jun. 30, 2022

Risks and Uncertainties [Abstract]

Concentration of Credit Risk

NOTE 3. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, short-term investments and accounts receivable.

The Company has financial institutions for banking operations that hold 10% or more of the Company’s cash and cash equivalents. As of June 30, 2022, four of the Company's financial institutions held 33%, 19%, 17% and 16% of the Company’s cash and cash equivalents. As of December 31, 2021, two of the Company's financial institutions held 72% and 13% of the Company’s cash and cash equivalents.

The Company grants credit to domestic and international customers. Exposure to losses on accounts receivable is principally dependent on each client's financial position. The Company had one customer that accounted for 11% and 13% of the Company’s net accounts receivable balance as of June 30, 2022 and December 31, 2021, respectively.

The Company did not have any customers that represented 10% or more of the Company’s total revenue for the three and six months ended June 30, 2022 and 2021.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following tables represent the financial instruments measured at fair value on a recurring basis in the financial statements of the Company and the valuation approach applied to each class of financial instruments at June 30, 2022 and December 31, 2021 (in thousands):

	June 30, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash and cash equivalents:
Money market funds	$	118	$	—	$	—	$	118
Total cash and cash equivalents	118		—		—		118
Equity investments:
Mutual funds	793		—		—		793
Total equity investments	793		—		—		793
Debt securities available-for-sale:
Certificates of deposit	—		5,242		—		5,242
U.S. Treasury securities	13,218		—		—		13,218
Commercial paper	—		5,044		—		5,044
Corporate notes and bonds	—		7,894		—		7,894
Debt securities available-for-sale	13,218		18,180		—		31,398
Total assets measured at fair value	$	14,129	$	18,180	$	—	$	32,309

	December 31, 2021
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash and cash equivalents:
Money market funds	$	5,563	$	—	$	—	$	5,563
Commercial paper	—		200		—		200
Total cash and cash equivalents	5,563		200		—		5,763
Equity investments:
Mutual funds	841		—		—		841
Total equity investments	841		—		—		841
Debt securities available-for-sale:
Certificates of deposit	—		1,351		—		1,351
U.S. Treasury securities	250		—		—		250
Commercial paper	—		8,046		—		8,046
Corporate notes and bonds	—		13,232		—		13,232
Debt securities available-for-sale	250		22,629		—		22,879
Total assets measured at fair value	$	6,654	$	22,829	$	—	$	29,483

Highly liquid investments with an original maturity of three months or less at time of purchase are included in cash and cash equivalents on the condensed consolidated balance sheet.

Level 1 assets are priced using quoted prices in active markets for identical assets which include money market funds, U.S. Treasury securities and mutual funds as these specific assets are liquid.

Level 2 available-for-sale securities are priced using quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market data. The Company uses inputs such as actual trade data, benchmark yields, broker/dealer quotes, and other similar data, which are obtained from quoted market prices, independent pricing vendors, or other sources, to determine the ultimate fair value of these assets and liabilities. The Company uses such pricing data as the primary input to make its assessments and determinations as to the ultimate valuation of its investment portfolio and has not made, during the periods presented, any material adjustments to such inputs.

At June 30, 2022, the Notes had an outstanding principal amount of $106.5 million with a fair value of $70.7 million. At December 31, 2021, the Notes had an outstanding principal amount of $120.5 million with a fair value of $89.4 million. The fair value of the Notes represents a Level 2 measurement.

The fair value of the Notes is typically correlated to the Company’s stock price and as a result, significant changes to the Company’s stock price will have a significant impact on the calculated fair value.

See Note 10, Convertible Notes for further detail on the Notes.

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Investments

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Investments

NOTE 5. INVESTMENTS

The following tables summarize the Company’s debt securities available-for-sale investments at June 30, 2022 and December 31, 2021 (in thousands):

	June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	5,268	$	—	$	(26)	$	5,242
U.S. Treasury securities	13,272		—		(54)		13,218
Commercial paper	5,067		—		(23)		5,044
Corporate notes and bonds	7,938		—		(44)		7,894
Total	$	31,545	$	—	$	(147)	$	31,398

	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	1,351	$	—	$	—	$	1,351
U.S. Treasury securities	250		—		—		250
Commercial paper	8,048		—		(2)		8,046
Corporate notes and bonds	13,245		—		(13)		13,232
Total	$	22,894	$	—	$	(15)	$	22,879

The following table summarizes the maturities of the Company’s debt securities available-for-sale investments at June 30, 2022 and December 31, 2021 (in thousands):

	June 30, 2022				December 31, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in less than 1 year	$	31,140	$	30,995	$	22,663	$	22,649
Due in 1-3 years	405		403		231		230
Total	$	31,545	$	31,398	$	22,894	$	22,879

There were no proceeds from sales of debt securities available-for-sale (including principal paydowns) for the three and six months ended June 30, 2022 and 2021. The Company determines gains and losses of marketable securities based on specific identification of the securities sold. There were no material realized gains or losses from debt securities available-for-sale for the three and six months ended June 30, 2022 and 2021. No material balances were reclassified out of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021. No unrealized losses on debt securities available-for-sale have been recognized in income for the three and six months ended June 30, 2022 and 2021, as the issuers of such securities held by us were of high credit quality.

As of June 30, 2022, there were no holdings of debt securities available-for-sale of any one issuer, other than the U.S. government, in an amount greater than 10%.

As of June 30, 2022 the Company did not carry any debt securities available-for-sale that were below the Company's minimum credit rating. All debt securities available-for-sale had a credit rating of A- or better as of June 30, 2022.

Equity securities are comprised of investments in mutual funds. The fair value of equity securities for each of the periods ended June 30, 2022 and December 31, 2021 was $0.8 million.

Unrealized gains or losses on equity securities recorded in income during the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Unrealized loss on equity investments	$	107	$	0	$	157	$	—

These unrealized gains or losses are recorded as a component of other income (expense), net. There were no realized gains or losses from equity securities for each of the three and six months ended June 30, 2022 and 2021.

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Inventory

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Inventory

NOTE 6. INVENTORY

Inventories consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

	June 30,		December 31,
	2022		2021
Raw materials	$	2,078	$	1,343
Work in process	1,690		1,625
Finished goods	1,536		2,099
	$	5,304	$	5,067

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Property and Equipment

6 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment

NOTE 7. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

	June 30,		December 31,
	2022		2021
Computer equipment	$	3,872	$	3,181
Technical equipment	3,285		3,285
Facilities	3,674		3,675
Instruments	4,253		5,364
Capital projects in progress	13		683
Total property and equipment	$	15,097	$	16,188
Accumulated depreciation	(11,000)		(10,799)
Property and equipment, net	$	4,097	$	5,389

Depreciation expense for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Depreciation expense	$	443	$	493	$	903	$	1,053

Instruments at cost and accumulated depreciation where the Company is the lessor under operating leases consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

	June 30,		December 31,
	2022		2021
Instruments at cost under operating leases	$	2,547	$	3,110
Accumulated depreciation under operating leases	(1,014)		(1,165)
Net property and equipment under operating leases	$	1,533	$	1,945

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Deferred Revenue and Remaining Performance Obligations

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Deferred Revenue and Remaining Performance Obligations

NOTE 8. DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS

Deferred revenue consists of amounts received for products or services not yet delivered or earned. If we anticipate revenue will not be earned within the following twelve months, the amount is reported as other non-current liabilities. A summary of the balances as of June 30, 2022 and December 31, 2021 follows (in thousands):

	June 30,		December 31,
	2022		2021
Products and services not yet delivered	$	335	$	451

We recognized $0.2 million and $0.3 million of revenues that were included in the beginning contract liabilities balances during the three and six months ended June 30, 2022, respectively, and $0.2 million and $0.3 million of revenues that were included in the beginning contract liabilities balances during the three and six months ended June 30, 2021, respectively. No material amount of revenue recognized during the period was from performance obligations satisfied in prior periods.

Transaction Price Allocated to Remaining Performance Obligations

As of June 30, 2022, $10.1 million of revenue is expected to be recognized from remaining performance obligations. This balance primarily relates to product shipments for reagents sold to customers under sales-type lease agreements. These agreements have between two and four year terms and revenue is recognized as product is shipped, typically on a straight-line basis. The remaining balance relates to executed service contracts that begin as warranty periods expire. These service contracts typically provide for four-year terms and revenue is recognized on a straight-line basis.

The Company elects not to disclose the value of unsatisfied performance obligations for (i) contracts with an expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

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Long-Term Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Long-Term Debt

NOTE 9. LONG-TERM DEBT

The Company entered into two loan agreements with one financing company in 2020. Loan proceeds were $0.2 million, with interest rates ranging from 9.8% to 12.4% and maturities becoming due through 2022.

As of June 30, 2022 and December 31, 2021, long-term debt consisted of the following (in thousands):

	June 30,		December 31,
	2022		2021
Loans - various interest	$	84	$	80
Current portion of long-term debt	84		80
Long-term debt	$	—	$	—

The following presents maturities of future principal obligations of long-term debt as of June 30, 2022 (in thousands):

Remainder of 2022	$	84
2023	—
2024	—
2025	—
2026	—
Thereafter	—
Total	$	84

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Convertible Notes

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Convertible Notes

NOTE 10. CONVERTIBLE NOTES (As Restated)

The Notes are the Company's senior unsecured obligations and mature on March 15, 2023 (the “Maturity Date”), unless earlier repurchased or converted into shares of common stock under certain circumstances described below. Upon conversion of the Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of common stock, pursuant to the terms and conditions of the Notes. The initial conversion rate of the Notes is 32.3428 shares of common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $30.92 per share of common stock, subject to adjustment. The Company pays interest on the Notes semi-annually in arrears on March 15 and September 15 of each year. The Company’s Notes have a fixed coupon rate of 2.5% per annum on the principal amount.

The Company incurred issuance costs related to the issuance of the Notes which is amortized over the five-year contractual term of the Notes using the effective interest method. The effective interest rate on the Notes, including accretion of the Notes to par was 3.2%.

The Notes include customary terms and covenants, including certain events of default upon which the Notes may be due and payable immediately. Holders have the option to convert the Notes in multiples of $1,000 principal amount at any time prior to December 15, 2022, but only in the following circumstances:

•if the Company’s stock price exceeds 130% of the conversion price for 20 of the last 30 trading days of any calendar quarter after June 30, 2018;

•during the 5 business day period after any 5 consecutive trading day period in which the Notes’ trading price is less than 98% of the product of the common stock price times the conversion rate; or

•the occurrence of certain corporate events, such as a change of control, merger or liquidation.

At any time on or after December 15, 2022, a holder may convert its Notes in multiples of $1,000 principal amount. Holders of the Notes who convert their Notes in connection with a make-whole fundamental change (as defined in the Indenture pursuant to which the Notes were issued) are, under certain circumstances, entitled to an increase in the conversion rate. In addition, in the event of a fundamental change or event of default prior to the Maturity Date, holders will, subject to certain conditions, have the right, at their option, to require the Company to repurchase for cash all or part of the Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the repurchase date.

Interest expense during the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Contractual coupon interest	$	666	$	1,072	$	1,449	$	2,144
Amortization of debt issuance costs	154		180		265		354
Amortization of the debt discount	—		$	2,903	$	—	$	5,724
Total interest expense on convertible notes	$	820	$	4,155	$	1,714	$	8,222

As of June 30, 2022 and December 31, 2021, no Notes were convertible pursuant to their original terms.

On March 21, 2022, the Company entered into a privately negotiated exchange agreement (the “Exchange Agreement”) with a holder of the Notes. Under the terms of the Exchange Agreement, the note holder agreed to exchange with the Company $14.0 million in aggregate principal amount of Notes held by it in eight equal tranches as follows for each tranche: (a) 22.64 shares per $1,000 principal amount of Notes exchanged, plus (b) an additional number of shares of the Company’s common stock per $1,000 principal amount of Notes exchanged equal to the sum, for each of the trading days during a separate agreed upon reference period for each tranche commencing on March 21, 2022 for the first tranche, of the quotient of (i) $155.67 divided by (ii) the daily volume-weighted average price for such trading day (collectively, the “Exchange Transaction”). The closing of the Exchange Transaction occurred in eight tranches (“Obligation to Exchange”), with the first closing occurring on March 29, 2022 and the last closing on May 18, 2022.

On March 21, 2022 the Obligation to Exchange the $14.0 million of Notes was accounted for as an extinguishment and was replaced by new notes with an embedded feature (the “New Notes”). The New Notes were elected to be carried using the fair value option. The New Notes were recorded at fair value on initial measurement and remeasured at fair value (“mark to market”) at each reporting period with changes in fair value reported in other income and expense, net. This fair value election was exclusive to the New Notes and did not extend to other Notes. At June 30, 2022 the embedded feature was no longer outstanding as the New Notes were exchanged and the Obligation to Exchange was retired. At June 30, 2022 no Notes were carried using the fair value option.

During the six months ended June 30, 2022 the holder of the Notes exchanged approximately $14.0 million in aggregate principal amount of Notes held by the holder for 10,798,482 shares of the Company's common stock pursuant to the Exchange Agreement. The legal exchange of the Notes resulted in a gain of $3.6 million. The Company's common stock was determined to have a value of $10.2 million, which was recorded to contributed capital during the six months ended June 30, 2022.

Gain on extinguishment of exchanged Notes during the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	As Restated
Gain on extinguishment	$	199	$	0	$	3,565	$	0

The carrying value of the Notes at June 30, 2022 consisted of the following (in thousands):

	June 30,
	2022
Outstanding principal at par	$	106,500
Unamortized debt issuance	(672)
Net carrying amount of the liability component	$	105,828

As of June 30, 2022, the Notes and New Notes consisted of the following (in thousands):

	June 30,
	2022
	As Restated
Current portion of convertible notes	$	56,204
Non-current portion of convertible notes	49,624
Total convertible notes	$	105,828

Effective August 15, 2022, the Company entered into an exchange agreement (the “Exchange Agreement”) with the Jack W. Schuler Living Trust (the “Schuler Trust”), a holder of the Notes. Jack Schuler, who serves as a member of the Company’s board of directors, is the sole trustee of the Schuler Trust. Under the terms of the Exchange Agreement, the Schuler Trust agreed to exchange with the Company (the “Exchange”) $49.9 million in aggregate principal amount of Notes held by it for (a) a secured promissory note in an aggregate principal amount of $34.9 million (the “Secured Note”) and (b) a warrant (the “Warrant”) to acquire the Company’s common stock at an exercise price of $2.12 per share (the “Exercise Price”). See Note 19, Subsequent Events for additional information.

In connection with the Notes issuance, the Company entered into a prepaid forward stock repurchase transaction (“Prepaid Forward”) with a financial institution (“Forward Counterparty”). Pursuant to the Prepaid Forward, the Company used approximately $45.1 million of the net proceeds from its issuance of the Notes to fund the Prepaid Forward. The aggregate number of shares of the Company’s common stock underlying the Prepaid Forward was approximately 1,858,500. The expiration date for the Prepaid Forward is March 15, 2023, although it may be settled earlier in whole or in part. Upon settlement of the Prepaid Forward, at expiration or upon any early settlement, the Forward Counterparty will deliver to the Company the number of shares of common stock underlying the Prepaid Forward or the portion thereof being settled early. The shares purchased under the Prepaid Forward are treated as treasury stock and not outstanding for purposes of the calculation of basic and diluted earnings per share, but will remain outstanding for corporate law purposes, including for purposes of any future stockholders’ votes, until the Forward Counterparty delivers the shares underlying the Prepaid Forward to the Company. The Company’s Prepaid Forward hedge transaction exposes the Company to credit risk to the extent that its counterparty may be unable to meet the terms of the transaction. The Company mitigates this risk by limiting its counterparty to a major financial institution.

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Loss Per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Loss Per Share

NOTE 11. LOSS PER SHARE

Basic net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average common shares outstanding during the period. Basic and diluted net loss per share are the same because all outstanding common stock equivalents have been excluded, as they are anti-dilutive due to the Company’s losses.

The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect for each of the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Shares issuable upon the release of restricted stock units	4,909	2,444	4,909	2,444
Shares issuable upon exercise of stock options	6,039	7,941	6,039	7,941
	10,948	10,385	10,948	10,385

Potentially dilutive common shares would include common shares that would be outstanding if Notes convertible at the balance sheet date were converted. As discussed in Note 10, Convertible Notes, upon conversion of the Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of common stock, at the Company’s election. The initial conversion rate of the Notes is 32.3428 shares of common stock per $1,000 principal amount of the Notes. As of June 30, 2022, no Notes were convertible pursuant to the original terms. The number of shares of common stock issuable upon conversion of the outstanding Notes based on the initial conversion rate was approximately 3.4 million shares as of June 30, 2022.

In connection with the Notes, the Company entered into a prepaid forward stock repurchase transaction. The aggregate number of shares of the Company’s common stock underlying the Prepaid Forward was approximately 1,858,500. The shares purchased under the Prepaid Forward are treated as treasury stock and not outstanding for purposes of the calculation of basic and diluted earnings per share, but will remain outstanding for corporate law purposes, including for purposes of any future stockholders’ votes, until the Forward Counterparty delivers the shares underlying the Prepaid Forward to the Company.

Potentially dilutive common shares would also include common shares that would be outstanding if Series A Preferred Stock were converted into common stock. Each share of Series A Preferred Stock is convertible, at the option of the holder, at any time into one share of the Company’s common stock. Additionally, each share of Series A Preferred Stock will automatically be converted into one share of the Company’s common stock immediately upon a sale of all outstanding stock of the Company or a merger of the Company into another corporation where the pre-merger Company’s stockholders cease to be the controlling stockholders of the post-merger corporation. The number of shares of common stock issuable upon conversion of the Series A Preferred Stock is 3,954,546 as of June 30, 2022.

As discussed in Note 17, Stockholders' Equity, the Company entered into a securities purchase agreement with the Jack W. Schuler Living Trust for the issuance and sale by the Company of an aggregate of 2,439,024 shares of the Company’s common stock The closing of the transaction is expected to occur on September 26, 2022, subject to the satisfaction of customary closing conditions and is considered an equity forward agreement. The shares to be issued from this agreement were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect due to net losses.

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Employee Equity-Based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Employee Equity-Based Compensation

NOTE 12. EMPLOYEE EQUITY-BASED COMPENSATION

The following table summarizes option activity under the Company's equity-based compensation plans for the six months ended June 30, 2022:

	Number of Shares	Weighted Average Exercise Price per Share
Options outstanding January 1, 2022	7,192,540	$	13.89
Granted	140,000	3.05
Forfeited	(128,670)	13.02
Exercised	(6,105)	1.04
Expired	(1,158,808)	10.05
Options outstanding June 30, 2022	6,038,957	$	14.41

The table below summarizes the resulting weighted average inputs used to calculate the estimated fair value of options awarded for the three months ended June 30, 2022 and 2021:

	Three Months Ended June 30,
	2022			2021
Expected term (in years)	0.0			5.79
Volatility	—		%	65		%
Expected dividends	—			—
Risk free interest rates	—		%	1.10		%
Weighted average fair value	$	—		$	4.09

No stock options were granted during the three months ended June 30, 2022, resulting in no summarized data for the period.

The following table shows summary information for outstanding options and options that are exercisable (vested) as of June 30, 2022:

	Options Outstanding		Options Exercisable
Number of options	6,038,957		4,644,828
Weighted average remaining contractual term (in years)	5.71		5.18
Weighted average exercise price	$	14.41	$	15.04
Weighted average fair value	$	9.00	$	9.31
Aggregate intrinsic value (in thousands)	$	—	$	—

The following table summarizes RSU and restricted stock award activity for the six months ended June 30, 2022:

	Number of Shares	Weighted Average Grant Date Fair Value per Share
Outstanding January 1, 2022	2,090,182	$	10.77
Granted	4,107,083	1.55
Forfeited	(167,129)	9.94
Vested/released	(1,121,468)	3.39
Outstanding June 30, 2022	4,908,668	$	4.77

The table below summarizes equity-based compensation expense for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost of sales	$	228	$	74	$	403	$	175
Research and development	539		1,328		901		4,074
Sales, general and administrative	3,204		5,188		5,646		11,180
	$	3,971	$	6,590	$	6,950	$	15,429

The table below summarizes share-based compensation cost capitalized to inventory or inventory transferred to property and equipment (also referred to as instruments) for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost capitalized to inventory	$	74	$	87	$	117	$	242

As of June 30, 2022, unrecognized equity-based compensation expense related to unvested stock options and unvested RSUs was $3.1 million and $11.0 million, respectively. This is expected to be recognized over the years 2022 through 2027.

Included in the above-noted stock options outstanding and stock compensation expense are performance-based stock options which vest only upon the achievement of certain targets. Performance-based stock options are generally granted at-the-money, contingently vest over a period of 1 to 2 years, depending on the nature of the performance goal, and have contractual lives of 10 years. These options were valued in the same manner as the time-based options, with the assumption that performance goals will be achieved. The inputs for expected volatility, expected dividends, and risk-free rate used in estimating those options’ fair value are the same as the time-based options issued under the Company's equity incentive plans. The expected term for performance-based stock options is 5 to 7 years. However, the Company only recognizes stock compensation expense to the extent that the targets are determined to be probable of being achieved, which triggers the vesting of the performance options.

During 2020, the Company granted 105,000 performance-based stock options. Of these performance-based stock options, performance obligations had been met for 90,000 options which became exercisable in a prior period. Of these performance-based stock options, 90,000 options expired during the three and six months ended June 30, 2022. No performance-based stock options were outstanding as of June 30, 2022.

The table below summarizes share-based compensation cost in connection with performance-based stock options for the six months ended June 30, 2022 and 2021 (in thousands):

	Six Months Ended June 30,
	2022		2021
Performance-based stock option expense	$	—	$	230

Included in the above-noted RSU and restricted stock award outstanding amounts are performance-based RSUs which vest only upon the achievement of certain targets. Performance-based RSUs contingently vest over a period of 1 to 3 years, depending on the nature of the performance goal, and have contractual lives of 10 years. These units were valued in the same manner as other RSUs, based on the published closing market price on the day before the grant date. However, the Company only recognizes stock compensation expense to the extent that the targets are determined to be probable of being achieved, which triggers the vesting of the performance options.

During 2020, the Company granted performance-based RSUs of which 165,974 were outstanding as of June 30, 2022. No changes occurred during the six months ended June 30, 2022.

During 2021, the Company granted performance-based RSUs of which 111,806 were outstanding as of June 30, 2022. No changes occurred during the six months ended June 30, 2022.

The table below summarizes share-based compensation cost in connection with performance-based RSUs for the six months ended June 30, 2022 and 2021 (in thousands):

	Six Months Ended June 30,
	2022		2021
Performance-based RSU expense	$	—	$	818

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Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 13. INCOME TAXES

For the six months ended June 30, 2022, the Company did not carry an income tax provision amount as the Company does not recognize tax benefits from current year tax losses in the U.S. and other foreign jurisdictions. The Company’s tax expense for the six months ended June 30, 2022 differs from the tax expense computed by applying the U.S. statutory tax rate to its year-to-date pre-tax loss of $32.0 million, as no tax benefits were recorded for tax losses generated in the U.S. and other foreign jurisdictions due to the valuation allowance. At June 30, 2022, the Company had deferred tax assets primarily related to U.S. federal and state tax loss carryforwards and a deferred tax liability related to amortization of the Notes. The Company provided a valuation allowance against its net deferred tax assets as future realization of such assets is not more likely than not to occur.

The Company accounts for uncertain tax positions pursuant to the recognition and measurement criteria under ASC 740, Income Taxes. For the three and six months ended June 30, 2022, we did not note any significant changes to our uncertain tax positions. We do not anticipate significant changes to uncertain tax positions within the next 12 months.

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Commitments

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments

NOTE 14. COMMITMENTS

During April 2022, the Company entered into a non-cancellable purchase obligation with a supplier to acquire raw materials for a total commitment of $11.9 million. Under the terms of this agreement the Company has until March 15, 2027 to take delivery of purchased items. This commitment was entered into to ensure proper material quantities to develop and commercialize our next generation AST platform.

As of June 30, 2022 the commitment remains $11.9 million as the Company has not taken delivery of any inventory.

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Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

NOTE 15. LEASES

The following presents supplemental information related to our leases in which we are the lessee for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cash paid for amounts included in lease liabilities
Operating cash flows from operating leases	$	203	$	154	$	266	$	308
Operating cash flows from finance leases	$	424	$	—	$	424	$	—
ROU assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	—	$	—
Finance leases	$	2,760	$	—	$	2,760	$	—
Lease Cost
Operating leases	$	259	$	261	$	564	$	559
Finance leases	$	97	$	—	$	97	$	—
Short-term leases	$	21	$	59	$	41	$	59

The weighted average remaining lease term on our operating leases is 3.1 years. The weighted average discount rate on those leases is 7.1%. The weighted average remaining lease term on our finance leases is 2.7 years. The weighted average discount rate on those leases is 4.6%.

The following presents maturities of lease liabilities in which we are the lessee as of June 30, 2022 (in thousands):

	Operating		Finance
Remainder of 2022	$	446	$	491
2023	968		983
2024	1,055		983
2025	585		239
2026	—		—
Thereafter	—		—
Total lease payments	3,054		2,696
Less imputed interest	(325)		(158)
	$	2,729	$	2,538

The net investment in sales-type leases, where we are the lessor, is a component of other current assets and other non-current assets in our condensed consolidated balance sheet. As of June 30, 2022, the total net investment in these leases was $3.3 million. The following presents maturities of lease receivables under sales-type leases as of June 30, 2022 (in thousands):

Remainder of 2022	$	727
2023	1,140
2024	646
2025	192
2026	606
Thereafter	—
Total undiscounted cash flows	3,311
Less imputed interest	—
Present value of lease payments	$	3,311

Leases

NOTE 15. LEASES

The following presents supplemental information related to our leases in which we are the lessee for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cash paid for amounts included in lease liabilities
Operating cash flows from operating leases	$	203	$	154	$	266	$	308
Operating cash flows from finance leases	$	424	$	—	$	424	$	—
ROU assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	—	$	—
Finance leases	$	2,760	$	—	$	2,760	$	—
Lease Cost
Operating leases	$	259	$	261	$	564	$	559
Finance leases	$	97	$	—	$	97	$	—
Short-term leases	$	21	$	59	$	41	$	59

The weighted average remaining lease term on our operating leases is 3.1 years. The weighted average discount rate on those leases is 7.1%. The weighted average remaining lease term on our finance leases is 2.7 years. The weighted average discount rate on those leases is 4.6%.

The following presents maturities of lease liabilities in which we are the lessee as of June 30, 2022 (in thousands):

	Operating		Finance
Remainder of 2022	$	446	$	491
2023	968		983
2024	1,055		983
2025	585		239
2026	—		—
Thereafter	—		—
Total lease payments	3,054		2,696
Less imputed interest	(325)		(158)
	$	2,729	$	2,538

The net investment in sales-type leases, where we are the lessor, is a component of other current assets and other non-current assets in our condensed consolidated balance sheet. As of June 30, 2022, the total net investment in these leases was $3.3 million. The following presents maturities of lease receivables under sales-type leases as of June 30, 2022 (in thousands):

Remainder of 2022	$	727
2023	1,140
2024	646
2025	192
2026	606
Thereafter	—
Total undiscounted cash flows	3,311
Less imputed interest	—
Present value of lease payments	$	3,311

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Geographic and Revenue Disaggregation

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Geographic and Revenue Disaggregation

NOTE 16. GEOGRAPHIC AND REVENUE DISAGGREGATION

The Company operates as one operating segment. Sales to customers outside the U.S. represented 14% for each of the three and six months ended June 30, 2022, and 15% for each of the three and six months ended June 30, 2021.

As of June 30, 2022 and December 31, 2021, balances due from foreign customers, in U.S. dollars, were $0.8 million and $0.7 million, respectively.

The following presents total net sales by geographic territory for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Domestic	$	3,321	$	2,386	$	5,839	$	4,532
Foreign	540		412		981		784
	$	3,861	$	2,798	$	6,820	$	5,316

The following presents total net sales by line of business for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Accelerate Pheno revenue	$	3,818	$	2,767	$	6,736	$	5,240
Other revenue	43		31		84		76
	$	3,861	$	2,798	$	6,820	$	5,316

The following presents total net sales by products and services for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2020		2019
Products	$	3,476	$	2,483	$	6,023	$	4,700
Services	385		315		797		616
	$	3,861	$	2,798	$	6,820	$	5,316

Lease revenue included in net sales was $0.6 million and $0.4 million for the three months ended June 30, 2022 and 2021, respectively, and $1.1 million and $0.8 million for the six months ended June 30, 2022 and 2021, respectively, which does not represent revenues recognized from contracts with customers.

The following presents property and equipment, net by geographic territory (in thousands):

	June 30,		December 31,
	2022		2021
Domestic	$	3,866	$	5,014
Foreign	231		375
	$	4,097	$	5,389

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Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Stockholders' Equity

NOTE 17. STOCKHOLDERS' EQUITY

Convertible Notes Exchange Agreement

During the six months ended June 30, 2022, a holder of the Notes exchanged approximately $14.0 million in aggregate principal amount of Notes held by the holder for 10,798,482 shares of the Company's common stock pursuant to the Exchange Agreement. The Company's common stock was determined to have a value of $10.2 million, which was recorded to contributed capital during the six months ended June 30, 2022. See Note 10, Convertible Notes for additional information.

Securities Purchase Agreement

On March 24, 2022, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the Jack W. Schuler Living Trust (the “Schuler Trust”) for the issuance and sale by the Company of an aggregate of 2,439,024 shares of the Company’s common stock (the “Shares”) to the Schuler Trust in an offering (the “Private Placement”) exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder. Jack Schuler, serves as a member of the Company’s board of directors and is the sole trustee of the Schuler Trust.

Pursuant to the Securities Purchase Agreement, the Schuler Trust has agreed to purchase the Shares at a purchase price (determined in accordance with Nasdaq rules relating to the “market value” of the Company’s common stock) of $1.64 per share, which is equal to the consolidated closing bid price reported by Nasdaq immediately preceding the time the Company entered into the Securities Purchase Agreement, for an aggregate purchase price of $4.0 million.

On June 29, 2022, the Company and the Schuler Trust agreed to extend the closing date of the Private Placement from June 30, 2022 to September 26, 2022. The Securities Purchase Agreement is considered an equity forward agreement and meets the definition of a freestanding financial instrument which is classified in stockholders’ deficit. The value of this equity forward agreement as June 30, 2022 is immaterial.

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Related Party Transactions

6 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 18. RELATED PARTY TRANSACTIONS

Securities Purchase Agreement

On March 24, 2022, the Company entered into the Securities Purchase Agreement with the Schuler Trust for the issuance and sale by the Company of the Shares to the Schuler Trust. Jack Schuler, serves as a member of the Company’s board of directors and is the sole trustee of the Schuler Trust.

See Note 17, Stockholders' Equity, for further information.

Convertible Notes

As of June 30, 2022 the Schuler Trust held $1.8 million aggregate principal amount of the Notes. See Note 10, Convertible Notes, for further information regarding the Notes.

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Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

NOTE 19. SUBSEQUENT EVENTS

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued.

Debt Exchange

Effective August 15, 2022, the Company entered into (the Exchange Agreement with the Schuler Trust, a holder of the Notes. Jack Schuler, who serves as a member of the Company’s board of directors, is the sole trustee of the Schuler Trust. Under the terms of the Exchange Agreement, the Schuler Trust has agreed to exchange with the Company $49,905,000 in aggregate principal amount of Notes held by it for (a) the Secured Note in an aggregate principal amount of $34,933,500 and (b) the Warrant to acquire the Company’s common stock at an exercise price of $2.12 per share, which represents the closing price of the Company’s common stock as of August 12, 2022.

The Secured Note has a scheduled maturity date of August 15, 2027 and will be repayable upon written demand at any time on or after such date. The Company may, at its option, repay the note in (i) United States dollars or (ii) in the form of common stock of the Company, in a number of shares that is obtained by dividing the total amount of such payment by $2.12, subject to certain adjustments as more fully described in the Secured Note. The Secured Note bears interest at a rate of 5.0% per annum, payable at the option of the Company in the same form, at the earlier of (i) any prepayment of principal and (ii) maturity. The Company may prepay the Secured Note at any time without premium or penalty. The Secured Note contains customary representations and warranties and events of default, including certain “change of control” events involving the Company. The Secured Note is secured by substantially all of the assets of the Company. The Secured Note does not restrict the incurrence of future indebtedness by the Company but shall become subordinated in right of payment and lien priority upon the request of any future senior lender.

The Warrant may be exercised from February 15, 2023 through the earlier of (i) August 15, 2029 and (ii) the consummation of certain acquisition transactions involving the Company, as set forth in the Warrant. The Warrant is exercisable for up to 2,471,710 shares, or 15% of the principal amount of the Secured Note, divided by the Exercise Price. Such number of shares and the Exercise Price are subject to certain customary proportional adjustments for fundamental events, including stock splits and recapitalizations, as set forth in the Warrant.

Sales and Marketing Agreement

On August 15, 2022 (the “Effective Date”), the Company entered into a Sales and Marketing Agreement (the “Sales Agreement”) with Becton, Dickinson and Company (“BD”) appointing BD as the Company’s worldwide exclusive sales agent to commercialize the Company’s Pheno 1.0 and Arc instruments and kits (“Products”) in the field of microbiology and in territories in which the necessary regulatory approvals are achieved and granting to BD certain other rights to future Company products. The term of the agreement is five (5) years (the “Initial Term”) and is subject to automatic one year renewals unless prior notice is provided to a party.

Pursuant to the Sales Agreement, the Company engages BD to be generally responsible for sales-related support activities for the Products in exchange for commissions on Product sales by Company. BD will provide such sales activities pursuant to a mutually acceptable commercialization plan and strategy. These services will be agreed to by the parties and set forth in a commercialization plan, the first one to be negotiated by the parties shortly after the Effective Date, and are expected to include sales, marketing, technical and order support. The Company and BD shall agree on rolling 12-month sales forecasts on a quarterly basis for the Products. BD must use reasonable efforts to meet or exceed each Product forecast and the Company must use reasonable efforts to produce sufficient quantities of Products to meet each Product forecast. The Company retains the responsibility for all other commercialization necessary to market the Products, including negotiating and booking sales for customer orders, manufacture and provision of inventory of Products, and marketing materials and collateral support.

The Company is responsible for all regulatory approvals in the United States and other countries where Products are marketed as of the Effective Date. Company is also responsible for obtaining and maintaining regulatory approvals in additional countries until December 31, 2023 (“Additional Countries”). The Additional Countries are to be agreed upon by the parties and the Company must deliver existing and new registrations for the Arc instruments and kits in such Additional Countries. The Company will hold the regulatory approvals for the existing countries and the Additional Countries. Beginning on January 1, 2024, BD will lead the registration process

for regulatory approvals in any other countries (“BD Countries”) other than the existing countries as of the Effective Date and any Additional Countries. BD will hold the regulatory approvals for the BD Countries. Expenses associated with BD obtaining regulatory approvals will be agreed upon by the parties’ steering committee and set forth in a commercialization plan. For the Additional Countries and BD Countries, the steering committee will assess and approve specific regulatory approval requirements at the appropriate time in relation to the commercialization plan. Once regulatory approvals are obtained in an Additional Country or by BD in a BD Country, BD shall be responsible, at its expense, for the commercial launch of Products in those countries, except that costs associated with strategic marketing for such commercial launch of Products in any Additional Country will be paid for by the Company. In the event the steering committee does not approve specific regulatory approval requirements within a specific region or area, BD will lose the exclusivity granted to it in such region or area and BD will not be prohibited from selling, promoting, distributing or otherwise commercializing any third party products that directly compete with the Products.

The Parties each have made certain exclusivity commitments with respect to the Products and the promotion of directly competitive products. Subject to certain limitations Company has granted exclusive global commercial rights to BD and is required to wind down any existing agreements with third party sales agents or distributors within one year of the Effective Date. In addition, BD has agreed not enter into any new agreements with a third party for BD to sell, promote, distribute or otherwise commercialize any directly competing products. However, BD may continue to perform its obligations under any existing agreement. BD is not precluded from (i) making an expenditure to acquire or invest in third property or assets of directly competing products, or (ii) developing, improving, and/or commercializing its BD PhoenixTM automated identification and susceptibility testing system. Either party has the right to terminate the Sales Agreement upon 90 days’ notice to the other party following the first public announcement of BD’s acquisition of any directly competing product. The Company’s sole and exclusive remedy in the event of such termination is to receive any remaining balance of the Commercial Fee (as defined below).

Sales Agreement also grants BD certain rights with respect to the Company’s next generation antibiotic susceptibility test system of microbiology (“Pheno 2.0”). BD has an exclusive right of first negotiation to be the exclusive sales agent to commercialize Pheno 2.0, which will be triggered if the Company proposes to license Pheno 2.0, or if the Company and BD mutually agree that Pheno 2.0 clinical data is ready to be submitted to the U.S. Food and Drug Administration for 510(k) clearance. The terms of such subsequent agreement would have to be negotiated by the parties.

BD also has certain rights regarding a potential acquisition or financing of the Company. BD has the right to receive notice of an acquisition proposal or the initiation of a sale process. BD also has a right to receive information and a non-exclusive negotiation right regarding such potential change of control transaction. In the event of an acquisition of Company by a third party, other than BD, either party will have the right to terminate the Sales Agreement on three (3) months prior notice. Upon such termination, the Company or the acquiring party must pay BD 20% of revenue recognized for the shorter of one year or the remainder of the Initial Term, and any remaining unpaid Commercial Fee will be forgiven. Further, BD has the right to provide up to 20% of all future financings of the Company, the terms of which would be subject to negotiation by the parties.

In consideration of the rights granted, BD will pay the Company an exclusive commercial arrangement fee of $15.0 million (the “Commercial Fee”). The Commercial Fee is payable in equal $3.0 million installments commencing on the date the parties agree BD will start providing services and for the next four subsequent calendar years. The Commercial Fee is payable in the event of a termination of the Sales Agreement, except in the event of a termination (i) for convenience by the Company, (ii) by BD within one year of the Effective Date as a result of the Company’s insolvency, (iii) by BD for the Company’s material breach of the Sales Agreement, or (iv) by either party following a change of control to a third party. Additionally, the Commercial Fee or any unpaid balance will be forgiven in the event that a Product infringes a third party’s intellectual property rights. The Company also is obligated to pay BD sales commissions on the revenue recognized by the Company in accordance with U.S. generally accepted accounting principles on sales of Products (“Sales Commissions”). For existing business, the parties will define a base book listing of accounts in the commercialization plan and an annual base book fee for the Sales Commissions. For new business, the parties have established target revenue amounts and the Sales Commissions will be based on such revenue target amounts. New business is cumulative, including new accounts obtained in the previous year. Once the target level or the above target level is achieved, the Company will pay BD the target rate or the above target rate, as applicable, for all new business in that calendar year. In the event the Sales Agreement is terminated, the Company shall pay Sales Commissions for nine months past the effective date of such termination.

The Sales Agreement contains rights for each of the Company and BD to terminate the Sales Agreement based on a material breach, insolvency and other circumstances. Company and BD each may terminate the Sales Agreement for material breach by, or insolvency of, the other party following notice, and if applicable, a cure period. After the second anniversary of the Effective Date, Company and BD each has the right to terminate the Sales Agreement and any commercialization plan with 12 months’ prior written notice to the other party. The Company may also terminate the Sales Agreement if BD fails to meet certain targets for Products in any 12 months period following a cure period.

The foregoing description of the Sales Agreement is not complete and is qualified in its entirety by reference to the full text of the Sales Agreement, which will be filed with the U.S. Securities and Exchange Commission as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ending September 30, 2022.

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Organization and Nature of Business; Basis of Presentation; Principles of Consolidation; Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on March 14, 2022.

The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date but does not include all disclosures such as notes required by U.S. GAAP.

The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods presented, but are not necessarily indicative of the results of operations to be anticipated for the entire year ending December 31, 2022, or any future period.

All amounts are rounded to the nearest thousand dollars unless otherwise indicated.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after elimination of intercompany transactions and balances.

Use of Estimates

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to accounts receivable, inventory, property and equipment, accrued liabilities, warranty liabilities, convertible notes, tax valuation accounts, equity–based compensation, revenue and leases. Actual results could differ materially from those estimates.

Estimated Fair Value of Financial Instruments

Estimated Fair Value of Financial Instruments

The Company follows ASC 820, Fair Value Measurement, which has defined fair value and requires the Company to establish a framework for measuring and disclosing fair value. The framework requires the valuation of assets and liabilities subject to fair value measurements using a three-tiered approach and fair value measurement be classified and disclosed in one of the following three categories:

•Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

•Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).

The carrying amounts of financial instruments such as cash and cash equivalents, trade accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, and other current liabilities approximate the related fair values due to the short-term maturities of these instruments.

See Note 4, Fair Value of Financial Instruments, for further information and related disclosures regarding the Company’s fair value measurements.

The estimated fair value of the Notes represents a Level 2 measurement.

Cash and Cash Equivalents

Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or less at time of purchase are considered to be cash equivalents. Cash and cash equivalents include overnight repurchase agreement accounts and other investments. As part of our cash management process, excess operating cash is invested in overnight repurchase agreements with our bank. Repurchase agreements and other investments classified as cash and cash equivalents are not deposits and are not insured by the U.S. Government, the FDIC or any other government agency and involve investment risk including possible loss of principal. We believe however, that the market risk arising from holding these financial instruments is minimal.

Investments

Investments

The Company invests in various debt and equity securities which are primarily held in the custody of major financial institutions. Debt securities consist of certificates of deposit, U.S. government and agency securities, commercial paper, and corporate notes and bonds. Equity securities consist of mutual funds. The Company records these investments in the condensed consolidated balance sheet at fair value. Unrealized gains or losses for debt securities available-for-sale are included in accumulated other comprehensive income (loss), a component of stockholders’ deficit. Unrealized gains or losses for equity securities are included in other income (expense), net, a component of condensed consolidated statements of operations and comprehensive loss. The Company considers all debt securities available-for-sale, including those with maturity dates beyond 12 months, as available to support current operational liquidity needs. The Company classifies its investments as current based on the nature of the investments and their availability for use in current operations.

We perform an assessment to determine whether there have been any events or economic circumstances to indicate that a debt security available-for-sale in an unrealized loss position has suffered impairment as a result of credit loss or other factors. A debt security is considered impaired if its fair value is less than its amortized cost basis at the reporting date. If we intend to sell the debt security or if it is more-likely-than-not that we will be required to sell the debt security before the recovery of its amortized cost basis, the impairment is recognized and the unrealized loss is recorded as a direct write-down of the security's amortized cost basis with an offsetting entry to earnings. If we do not intend to sell the debt security or believe we will not be required to sell the debt security before the recovery of its amortized cost basis, the impairment is assessed to determine if a credit loss component exists. We use a discounted cash flow method to determine the credit loss component. In the event a credit loss exists, an allowance for credit losses is recorded in earnings for the credit loss component of the impairment while the remaining portion of the impairment attributable to factors other than credit loss is recognized, net of tax, in accumulated other comprehensive income (loss). The amount of impairment recognized due to credit factors is limited to the excess of the amortized cost basis over the fair value of the security.

Inventory

Inventory

Inventory is stated at the lower of cost or net realizable value. The Company determines the cost of inventory using the first-in, first out method. The Company estimates the recoverability of inventory by reference to internal estimates of future demands and product life cycles, including expiration. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value and records a charge to expense for such inventory as appropriate.

We charge cost of sales for inventory provisions to write-down our inventory to the lower of cost or net realizable value or for obsolete or excess inventory. Most of our inventory provisions relate to excess quantities of products, based on our inventory levels and future product purchase commitments compared to assumptions about future demand and market conditions. Once inventory has been written-off or written-down, it creates a new cost basis for the inventory that is not subsequently written-up.

Accounts Receivable

Accounts Receivable

Accounts receivable consist of amounts due to the Company for sales to customers and are based on what we expect to collect in exchange for goods and services. Receivables are considered past due based on the contractual payment terms and are written off if reasonable collection efforts prove unsuccessful.

We maintain an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense in the consolidated statements of operations. We assess collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectibility issues. In determining the amount of the allowance for credit losses, we consider historical collectibility and make judgments about the creditworthiness of customers based on credit evaluations. Our customers typically have good credit quality. We also consider customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data.

Property and Equipment

Property and Equipment

Property and equipment are recorded at cost. Maintenance and repairs are charged to expense as incurred and expenditures for major improvements are capitalized. Gains and losses from retirement or replacement are included in costs and expenses. Depreciation of property and equipment is computed using the straight-line method over the estimated useful life of the assets, ranging from one to seven years. Leasehold improvements are depreciated over the remaining life of the lease or the life of the asset, whichever is less.

Instruments Classified as Property and Equipment

Property and equipment includes Accelerate Pheno systems (also referred to as instruments) used for sales demonstrations, instruments under rental agreements and instruments used for research and development. Depreciation expense for instruments used for sales demonstrations is recorded as a component of sales, general and administrative expense. Depreciation expense for instruments placed at customer sites pursuant to reagent rental agreements is recorded as a component of cost of sales. Depreciation expense for instruments used in our laboratory and research is recorded as a component of research and development expense. The Company retains title to these instruments and depreciates them over five years. Losses from the retirement of returned instruments are included in costs and expenses.

The Company evaluates the recoverability of the carrying amount of its instruments whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable, and at least annually. This evaluation is based on our estimate of future cash flows and the estimated fair value of such long-lived assets, and provides for impairment if such undiscounted cash flows or the estimated fair value are insufficient to recover the carrying amount of instruments. No impairment charges have been recorded as of June 30, 2022 and December 31, 2021.

Long-lived Assets

Long-lived Assets

Long-lived assets and certain identifiable intangibles to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company continuously evaluates the recoverability of its long-lived assets based on estimated future cash flows from and the estimated fair value of such long-lived assets, and provides for impairment if such undiscounted cash flows or the estimated fair value are insufficient to recover the carrying amount of the long-lived asset.

Warranty Reserve

Warranty Reserve

Instruments are typically sold with a one year limited warranty, while kits and accessories are typically sold with a sixty days limited warranty. Accordingly, a provision for the estimated cost of the limited warranty repair is recorded at the time revenue is recognized. Our estimated warranty provision is based on our estimate of future repair events and the related estimated cost of repairs. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. The cost incurred for these provisions is included in cost of sales on the condensed consolidated statements of operations and comprehensive loss.

Convertible Notes

Convertible Notes

On January 1, 2022 the Company adopted Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). As a result, the Notes are now accounted for as a single liability measured at their amortized cost. The Notes are no longer bifurcated between debt and equity and are instead accounted for entirely as debt at face value net of any discount or premium and issuance costs. Interest expense is comprised of (1) cash interest payments, (2) amortization of any debt discounts or premiums based on the original offering, and (3) amortization of any debt issuance costs. Gain or loss on extinguishment of Notes is calculated as the difference between the (i) fair value of the consideration transferred and (ii) the sum of the carrying value of the debt at the time of repurchase.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue when control of the promised good or service is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales taxes are excluded from revenues.

The Company determines revenue recognition through the following steps:

•Identification of the contract with a customer

•Identification of the performance obligations in the contract

•Determination of the transaction price

•Allocation of the transaction price to the performance obligations

•Recognition of revenue as we satisfy a performance obligation

Product revenue is derived from the sale or rental of instruments and sales of related consumable products. When an instrument is sold, revenue is generally recognized upon installation of the unit consistent with contract terms, which do not include a right of return. When a consumable product is sold, revenue is generally recognized upon shipment. Invoices are generally issued when revenue is recognized. Payment terms vary by the type and location of the customer and the products or services offered. The term between invoicing and when payment is due is not significant.

Service revenue is derived from the sale of extended service agreements which are generally non-cancellable. This revenue is recognized on a straight-line basis over the contract term beginning on the effective date of the contract because the Company is standing ready to provide services. Invoices are generally issued annually and coincide with the beginning of individual service terms.

The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines relative standalone selling prices based on the price charged to customers for each individual performance obligation.

Sales commissions earned by the Company’s sales force are considered incremental and recoverable costs of obtaining a contract with a customer. The Company has determined these costs would have an amortization period of less than one year and has elected to recognize them as an expense when incurred. Contract asset opening and closing balances were immaterial for the three and six months ended June 30, 2022.

Gross Profit and Gross Margin

Gross profit consists of total revenue, net of allowances, less cost of sales. Cost of sales includes cost of materials, direct labor, equity-based compensation, facility and other manufacturing overhead costs for consumable tests and instruments sold to customers. Cost of sales for instruments also includes depreciation on revenue generating instruments that have been placed with our customers under a reagent rental agreement. Cost of sales includes repair and maintenance cost for instruments covered by a service agreement or instruments covered by a reagent rental agreement. Cost of sales also includes warranty related costs.

The Company’s overall gross margin was 28% and 38% for the three months ended June 30, 2022 and 2021, respectively, and 28% and 37% for the six months ended June 30, 2022 and 2021, respectively. The decreases were primarily due to increases in the costs to manufacture consumables due to supply chain inflationary factors and a decrease in our average unit sales price period over period.

Shipping and Handling

Shipping and handling costs billed to customers are included as a component of revenue. The corresponding expense incurred with third party carriers is included as a component of sales, general and administrative costs on the consolidated statements of operations and comprehensive loss.

Leases as Lessee

Leases

The Company accounts for leases in accordance with ASC 842, Leases. The Company determines if an arrangement is or contains a lease and the type of lease at inception. The Company classifies leases as finance leases (lessee) or sales-type leases (lessor) when there is either a transfer of ownership of the underlying asset by the end of the lease term, the lease contains an option to purchase the asset that we are reasonably certain will be exercised, the lease term is for the major part of the remaining economic life of the asset, the present value of the lease payments and any residual value guarantee equals or substantially exceeds all the fair value of the asset, or the asset is of such a specialized nature that it will have no alternative use to the lessor at the end of the lease term. Payments contingent on future events (i.e. based on usage) are considered variable and excluded from lease payments for the purposes of classification and initial measurement. Several of our leases include options to renew or extend the term upon mutual agreement of the parties and others include one-year extensions exercisable by the lessee. None of our leases contain residual value guarantees, restrictions, or covenants.

To determine whether a contract contains a lease, the Company uses its judgment in assessing whether the lessor retains a material amount of economic benefit from an underlying asset, whether explicitly or implicitly identified, which party holds control over the direction and use of the asset, and whether any substantive substitution rights over the asset exist.

Leases as Lessee

Operating leases are included in right-of-use (“ROU”) assets and corresponding lease liabilities, and finance leases are included in ROU assets and corresponding lease liabilities within our condensed consolidated balance sheets. These assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and their related liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Typically, we use our incremental borrowing rate based on the information available at commencement in determining the present value of lease payments. We use the implicit rate when readily determinable. ROU assets are net of lease payments made and exclude lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term, which may include options to extend or terminate the lease when it is reasonably certain that we will exercise the option.

Our operating leases consist primarily of leased office, factory, and laboratory space in the U.S. and office space in Europe, have between two and six-year terms, and typically contain penalizing, early-termination provisions. Our finance leases consist of leased equipment and have three-year terms.

Leases as Lessor

Leases

The Company accounts for leases in accordance with ASC 842, Leases. The Company determines if an arrangement is or contains a lease and the type of lease at inception. The Company classifies leases as finance leases (lessee) or sales-type leases (lessor) when there is either a transfer of ownership of the underlying asset by the end of the lease term, the lease contains an option to purchase the asset that we are reasonably certain will be exercised, the lease term is for the major part of the remaining economic life of the asset, the present value of the lease payments and any residual value guarantee equals or substantially exceeds all the fair value of the asset, or the asset is of such a specialized nature that it will have no alternative use to the lessor at the end of the lease term. Payments contingent on future events (i.e. based on usage) are considered variable and excluded from lease payments for the purposes of classification and initial measurement. Several of our leases include options to renew or extend the term upon mutual agreement of the parties and others include one-year extensions exercisable by the lessee. None of our leases contain residual value guarantees, restrictions, or covenants.

To determine whether a contract contains a lease, the Company uses its judgment in assessing whether the lessor retains a material amount of economic benefit from an underlying asset, whether explicitly or implicitly identified, which party holds control over the direction and use of the asset, and whether any substantive substitution rights over the asset exist.

Leases as Lessor

The Company leases instruments to customers under “reagent rental” agreements, whereby the customer agrees to purchase consumable products over a stated term, typically five years or less, for a volume-based price that includes an embedded rental for the instruments. When collectibility is probable, that amount is recognized as income at lease commencement for sales-type leases and as product is shipped, typically in a straight–line pattern, over the term for operating leases, which typically include a termination without cause or penalty provision given a short notice period.

Consideration is allocated between lease and non-lease components based on stand-alone selling price in accordance with ASC 606, Revenue from Contracts with Customers.

Net investment in sales-type leases are included within our condensed consolidated balance sheets as a component of other current assets and other non-current assets, which include the present value of lease payments not yet received and the present value of the residual asset, which are determined using the information available at commencement, including the lease term, estimated useful life, rate implicit in the lease, and expected fair value of the instrument.

Nonqualified Cash Deferral Plan

Nonqualified Cash Deferral Plan

The Company's Cash Deferral Plan (the “Deferral Plan”) provides certain key employees with an opportunity to defer the receipt of such participant's base salary. The Deferral Plan is intended to be a nonqualified deferred compensation plan that complies with the provisions of Section 409A of the Internal Revenue Code. All of

the investments held in the Deferral Plan are equity securities consisting of mutual funds and recorded at fair value with changes in the investments' fair value recognized as earnings in the period they occur. The corresponding liability for the Deferral Plan is included in other non-current liabilities in the condensed consolidated balance sheet.

Equity-Based Compensation

Equity-Based Compensation

The Company may award stock options, restricted stock units (“RSUs”), performance-based awards and other equity-based instruments to its employees, directors and consultants. Compensation cost related to equity-based instruments is based on the fair value of the instrument on the grant date, and is recognized over the requisite service period on a straight-line basis over the vesting period for each tranche (an accelerated attribution method) except for performance-based awards. Performance-based awards vest based on the achievement of performance targets. Compensation costs associated with performance-based awards are recognized over the requisite service period based on probability of achievement. Performance-based awards require management to make assumptions regarding the likelihood of achieving performance targets.

The Company estimates the fair value of service based and performance based stock option awards, including modifications of stock option awards, using the Black-Scholes option pricing model. This model derives the fair value of stock options based on certain assumptions related to expected stock price volatility, expected option life, risk-free interest rate and dividend yield.

•Volatility: The expected volatility is based on the historical volatility of the Company's stock price over the most recent period commensurate with the expected term of the stock option award.

•Expected term: The estimated expected term for employee awards is based on a simplified method that considers an insufficient history of employee exercises. For consultant awards, the estimated expected term is the same as the life of the award.

•Risk-free interest rate: The risk-free interest rate is based on published U.S. Treasury rates for a term commensurate with the expected term.

•Dividend yield: The dividend yield is estimated as zero as the Company has not paid dividends in the past and does not have any plans to pay any dividends in the foreseeable future.

The Company records the fair value of RSUs or stock grants based on the published closing market price on the day before the grant date.

The Company accounts for forfeitures as they occur rather than on an estimated basis.

The Company also has an employee stock purchase program whereby eligible employees can elect payroll deductions that are subsequently used to purchase common stock at a discounted price. There is no compensation recorded for this program as (i) the purchase discount does not exceed the issuance costs that would have been incurred to raise a significant amount of capital by a public offering, (ii) substantially all employees that meet limited employment qualifications may participate on an equitable basis, and (iii) the plan doesn't incorporate option features that would require compensation to be recorded.

Deferred Tax

Deferred Tax

Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying condensed consolidated balance sheet. The change in deferred tax assets and liabilities for the period represents the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws in deferred tax assets and liabilities are reflected as an adjustment to the tax provision or benefit in the period of enactment.

The Company follows the provisions of ASC 740, Income Taxes, to account for any uncertainty in income taxes with respect to the accounting for all tax positions taken (or expected to be taken) on any income tax return. This guidance applies to all open tax periods in all tax jurisdictions in which the Company is required to file an income tax return. Under U.S. GAAP, in order to recognize an uncertain tax benefit the taxpayer must be more

likely than not certain of sustaining the position, and the measurement of the benefit is calculated as the largest amount that is more likely than not to be realized upon resolution of the position. Interest and penalties, if any, would be recorded within tax expense.

Foreign Currency Translation and Foreign Currency Transactions

Foreign Currency Translation and Foreign Currency Transactions

Adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive loss in the condensed consolidated statements of stockholders’ deficit.

The Company has assets and liabilities, including receivables and payables, which are denominated in currencies other than their functional currency. These balance sheet items are subject to re-measurement, the impact of which is recorded in foreign currency exchange gain and loss, within the condensed consolidated statement of operations and comprehensive loss.

Loss Per Share

Loss Per Share

Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Potentially dilutive common shares consist of shares issuable from stock options and unvested RSUs. Potentially dilutive common shares would also include common shares that would be outstanding if the Notes and the Series A Preferred Stock outstanding at the balance sheet date were converted and shares issuable in connection with the Securities Purchase Agreement (as defined in Note 17). Diluted earnings are not presented when the effect of adding such additional common shares is antidilutive.

Comprehensive Loss

Comprehensive Loss

In addition to net loss, comprehensive loss includes all changes in equity during a period, except those resulting from investments by and distributions to owners. The Company holds debt securities as available-for-sale and records the change in fair market value as a component of comprehensive loss. The Company also has adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars which is included as a component of comprehensive loss.

Standards that were recently adopted and standards not yet adopted

Standards that were recently adopted

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). This update simplifies the accounting for convertible debt instruments by removing the beneficial conversion and cash conversion separation models for convertible instruments. Under the update, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives or that do not result in substantial premiums accounted for as paid-in capital. The update also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will no longer be available. The Company adopted the standard on January 1, 2022 through application of the modified retrospective method of transition. The Company applied the standard to the Notes outstanding as of January 1, 2022, as discussed in Note 10, Convertible Notes. As a result, the Notes are now accounted for as a single liability measured at their amortized cost. The Notes are no longer bifurcated between debt and equity and are instead accounted for entirely as debt at face value net of any discount or premium and issuance costs. Interest expense is comprised of (1) cash interest payments, (2) amortization of any debt discounts or premiums based on the original offering, and (3) amortization of any debt issuance costs. On January 1, 2022, the cumulative effect of adoption resulted in an increase in the net carrying amount of the Notes, of $11.5 million, a decrease in additional-paid-in-capital of $37.4 million, and a decrease in accumulated deficit of $25.9 million. ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share. This change has no impact on the Company given the Company was already using the if-converted method to calculate diluted earnings per share.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity (Topic 815 - 40). ASU 2021-04 codifies the final consensus reached by the Emerging Issues Task Force (EITF) on how an issuer should account for modifications made to equity-classified written call options (hereafter referred to as a warrant to purchase the issuer’s common stock). The guidance in the ASU requires the issuer to treat a modification of an equity-classified warrant that does not cause the warrant to become liability-classified as an exchange of the original warrant for a new warrant. This guidance applies whether the modification is structured as an amendment to the terms and conditions of the warrant or as termination of the original warrant and issuance of a new warrant. This ASU was adopted January 1, 2022, and did not impact the Company's consolidated financial statements at January 1, 2022.

Standards not yet adopted

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method. ASU 2022-01 is related to the portfolio layer method of hedge accounting. The amendments in this update clarify the accounting and promote consistency in reporting for hedges where the portfolio layer method is applied. This update is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. We do not expect the update to have a material effect on our condensed consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 relates to troubled debt restructurings (“TDRs”) and vintage disclosures for financing receivables. The amendments in this update eliminate the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We do not expect the update to have a material effect on our condensed consolidated financial statements.

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Organization and Nature of Business; Basis of Presentation; Principles of Consolidation; Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Schedule of Effect of Restatement

The effects of the correction of the prior-period misstatements on our Condensed Consolidated Balance Sheet relating to the Notes are reflected in the table below (in thousands). The Condensed Consolidated Statements of Operations and Comprehensive Loss, and the Condensed Consolidated Statements of Stockholders’ Equity were also corrected for the other previously identified immaterial error as reflected in the table below (in thousands, except per share data).

	June 30,
	2022
	As Previously Reported	Adjustments	As Restated
Current portion of convertible notes	—	56,204	56,204
Total current liabilities	10,725	56,204	66,929
Convertible notes	105,828	(56,204)	49,624

	Three Months Ended
	June 30,
	2022
	As Previously Reported	Adjustments	As Restated
Accumulated deficit beginning balance	(558,931)	720	(558,211)
Gain on extinguishment of debt	919	(720)	199
Total other income (expense), net	186	(720)	(534)
Net loss before income taxes	(17,803)	(720)	(18,523)
Net loss	(17,803)	(720)	(18,523)
Basic and diluted net loss per share	(0.23)	(0.01)	(0.24)
Comprehensive loss	(18,003)	(720)	(18,723)

Schedule of Allowance For Credit Losses

The allowance for credit losses for the three and six months ended June 30, 2022 and 2021 is comprised of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Beginning balance	$	159	$	209	140		445
Provisions	7		7		30		38
Write-offs	(16)		(3)		(20)		(270)
	$	150	$	213	$	150	$	213

Schedule of Warranty Reserve

Warranty reserve activity for the three and six months ended June 30, 2022 and 2021 is as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Beginning balance	$	176	$	184	$	139	$	232
Provisions	93		12		139		(10)
Warranty cost incurred	(14)		(27)		(23)		(53)
Ending balance	$	255	$	169	$	255	$	169

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measurement

The following tables represent the financial instruments measured at fair value on a recurring basis in the financial statements of the Company and the valuation approach applied to each class of financial instruments at June 30, 2022 and December 31, 2021 (in thousands):

	June 30, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash and cash equivalents:
Money market funds	$	118	$	—	$	—	$	118
Total cash and cash equivalents	118		—		—		118
Equity investments:
Mutual funds	793		—		—		793
Total equity investments	793		—		—		793
Debt securities available-for-sale:
Certificates of deposit	—		5,242		—		5,242
U.S. Treasury securities	13,218		—		—		13,218
Commercial paper	—		5,044		—		5,044
Corporate notes and bonds	—		7,894		—		7,894
Debt securities available-for-sale	13,218		18,180		—		31,398
Total assets measured at fair value	$	14,129	$	18,180	$	—	$	32,309

	December 31, 2021
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash and cash equivalents:
Money market funds	$	5,563	$	—	$	—	$	5,563
Commercial paper	—		200		—		200
Total cash and cash equivalents	5,563		200		—		5,763
Equity investments:
Mutual funds	841		—		—		841
Total equity investments	841		—		—		841
Debt securities available-for-sale:
Certificates of deposit	—		1,351		—		1,351
U.S. Treasury securities	250		—		—		250
Commercial paper	—		8,046		—		8,046
Corporate notes and bonds	—		13,232		—		13,232
Debt securities available-for-sale	250		22,629		—		22,879
Total assets measured at fair value	$	6,654	$	22,829	$	—	$	29,483

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Investments (Tables)

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-Sale Investments

The following tables summarize the Company’s debt securities available-for-sale investments at June 30, 2022 and December 31, 2021 (in thousands):

	June 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	5,268	$	—	$	(26)	$	5,242
U.S. Treasury securities	13,272		—		(54)		13,218
Commercial paper	5,067		—		(23)		5,044
Corporate notes and bonds	7,938		—		(44)		7,894
Total	$	31,545	$	—	$	(147)	$	31,398

	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Certificates of deposit	$	1,351	$	—	$	—	$	1,351
U.S. Treasury securities	250		—		—		250
Commercial paper	8,048		—		(2)		8,046
Corporate notes and bonds	13,245		—		(13)		13,232
Total	$	22,894	$	—	$	(15)	$	22,879

Schedule of Maturities of Available-for-Sale Investments

The following table summarizes the maturities of the Company’s debt securities available-for-sale investments at June 30, 2022 and December 31, 2021 (in thousands):

	June 30, 2022				December 31, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in less than 1 year	$	31,140	$	30,995	$	22,663	$	22,649
Due in 1-3 years	405		403		231		230
Total	$	31,545	$	31,398	$	22,894	$	22,879

Schedule of Unrealized Gains or losses on Equity Securities

Unrealized gains or losses on equity securities recorded in income during the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Unrealized loss on equity investments	$	107	$	0	$	157	$	—

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Inventory (Tables)

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Components of Inventories

Inventories consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

	June 30,		December 31,
	2022		2021
Raw materials	$	2,078	$	1,343
Work in process	1,690		1,625
Finished goods	1,536		2,099
	$	5,304	$	5,067

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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

	June 30,		December 31,
	2022		2021
Computer equipment	$	3,872	$	3,181
Technical equipment	3,285		3,285
Facilities	3,674		3,675
Instruments	4,253		5,364
Capital projects in progress	13		683
Total property and equipment	$	15,097	$	16,188
Accumulated depreciation	(11,000)		(10,799)
Property and equipment, net	$	4,097	$	5,389

Depreciation expense for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Depreciation expense	$	443	$	493	$	903	$	1,053

Schedule of Instruments at Cost and Accumulated Depreciation, Lessor

Instruments at cost and accumulated depreciation where the Company is the lessor under operating leases consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

	June 30,		December 31,
	2022		2021
Instruments at cost under operating leases	$	2,547	$	3,110
Accumulated depreciation under operating leases	(1,014)		(1,165)
Net property and equipment under operating leases	$	1,533	$	1,945

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Deferred Revenue and Remaining Performance Obligations (Tables)

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Deferred Revenue and Income Summary

A summary of the balances as of June 30, 2022 and December 31, 2021 follows (in thousands):

	June 30,		December 31,
	2022		2021
Products and services not yet delivered	$	335	$	451

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Schedule of Long-term Debt

As of June 30, 2022 and December 31, 2021, long-term debt consisted of the following (in thousands):

	June 30,		December 31,
	2022		2021
Loans - various interest	$	84	$	80
Current portion of long-term debt	84		80
Long-term debt	$	—	$	—

Schedule of Maturities of Long-term Debt

The following presents maturities of future principal obligations of long-term debt as of June 30, 2022 (in thousands):

Remainder of 2022	$	84
2023	—
2024	—
2025	—
2026	—
Thereafter	—
Total	$	84

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Convertible Notes (Tables)

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Schedule of Interest Expense

Interest expense during the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Contractual coupon interest	$	666	$	1,072	$	1,449	$	2,144
Amortization of debt issuance costs	154		180		265		354
Amortization of the debt discount	—		$	2,903	$	—	$	5,724
Total interest expense on convertible notes	$	820	$	4,155	$	1,714	$	8,222

Schedule of Carrying Value of the Notes and New Notes

The carrying value of the Notes at June 30, 2022 consisted of the following (in thousands):

	June 30,
	2022
Outstanding principal at par	$	106,500
Unamortized debt issuance	(672)
Net carrying amount of the liability component	$	105,828

As of June 30, 2022, the Notes and New Notes consisted of the following (in thousands):

	June 30,
	2022
	As Restated
Current portion of convertible notes	$	56,204
Non-current portion of convertible notes	49,624
Total convertible notes	$	105,828

Schedule of Gain on Extinguishment

Gain on extinguishment of exchanged Notes during the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	As Restated
Gain on extinguishment	$	199	$	0	$	3,565	$	0

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Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Schedule of Potentially Issuable Common Shares not Included in Computation of Diluted Net Loss Per Share

The following potentially issuable common shares were not included in the computation of diluted net loss per share because they would have an anti-dilutive effect for each of the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Shares issuable upon the release of restricted stock units	4,909	2,444	4,909	2,444
Shares issuable upon exercise of stock options	6,039	7,941	6,039	7,941
	10,948	10,385	10,948	10,385

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Employee Equity-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Activity

The following table summarizes option activity under the Company's equity-based compensation plans for the six months ended June 30, 2022:

	Number of Shares	Weighted Average Exercise Price per Share
Options outstanding January 1, 2022	7,192,540	$	13.89
Granted	140,000	3.05
Forfeited	(128,670)	13.02
Exercised	(6,105)	1.04
Expired	(1,158,808)	10.05
Options outstanding June 30, 2022	6,038,957	$	14.41

Schedule of Black-Scholes Assumptions for Option Granted

The table below summarizes the resulting weighted average inputs used to calculate the estimated fair value of options awarded for the three months ended June 30, 2022 and 2021:

	Three Months Ended June 30,
	2022			2021
Expected term (in years)	0.0			5.79
Volatility	—		%	65		%
Expected dividends	—			—
Risk free interest rates	—		%	1.10		%
Weighted average fair value	$	—		$	4.09

Schedule of Stock Option Supplemental Information

The following table shows summary information for outstanding options and options that are exercisable (vested) as of June 30, 2022:

	Options Outstanding		Options Exercisable
Number of options	6,038,957		4,644,828
Weighted average remaining contractual term (in years)	5.71		5.18
Weighted average exercise price	$	14.41	$	15.04
Weighted average fair value	$	9.00	$	9.31
Aggregate intrinsic value (in thousands)	$	—	$	—

Schedule of Restricted Stock Activity

The following table summarizes RSU and restricted stock award activity for the six months ended June 30, 2022:

	Number of Shares	Weighted Average Grant Date Fair Value per Share
Outstanding January 1, 2022	2,090,182	$	10.77
Granted	4,107,083	1.55
Forfeited	(167,129)	9.94
Vested/released	(1,121,468)	3.39
Outstanding June 30, 2022	4,908,668	$	4.77

Schedule of Equity-Based Compensation Expense and Tax Benefit

The table below summarizes equity-based compensation expense for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost of sales	$	228	$	74	$	403	$	175
Research and development	539		1,328		901		4,074
Sales, general and administrative	3,204		5,188		5,646		11,180
	$	3,971	$	6,590	$	6,950	$	15,429

The table below summarizes share-based compensation cost capitalized to inventory or inventory transferred to property and equipment (also referred to as instruments) for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost capitalized to inventory	$	74	$	87	$	117	$	242

The table below summarizes share-based compensation cost in connection with performance-based stock options for the six months ended June 30, 2022 and 2021 (in thousands):

	Six Months Ended June 30,
	2022		2021
Performance-based stock option expense	$	—	$	230

The table below summarizes share-based compensation cost in connection with performance-based RSUs for the six months ended June 30, 2022 and 2021 (in thousands):

	Six Months Ended June 30,
	2022		2021
Performance-based RSU expense	$	—	$	818

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Leases (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Schedule of Supplemental Lease Information

The following presents supplemental information related to our leases in which we are the lessee for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cash paid for amounts included in lease liabilities
Operating cash flows from operating leases	$	203	$	154	$	266	$	308
Operating cash flows from finance leases	$	424	$	—	$	424	$	—
ROU assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	—	$	—
Finance leases	$	2,760	$	—	$	2,760	$	—
Lease Cost
Operating leases	$	259	$	261	$	564	$	559
Finance leases	$	97	$	—	$	97	$	—
Short-term leases	$	21	$	59	$	41	$	59

Schedule of Lease Costs

The following presents supplemental information related to our leases in which we are the lessee for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cash paid for amounts included in lease liabilities
Operating cash flows from operating leases	$	203	$	154	$	266	$	308
Operating cash flows from finance leases	$	424	$	—	$	424	$	—
ROU assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	—	$	—
Finance leases	$	2,760	$	—	$	2,760	$	—
Lease Cost
Operating leases	$	259	$	261	$	564	$	559
Finance leases	$	97	$	—	$	97	$	—
Short-term leases	$	21	$	59	$	41	$	59

Maturities of Operating Lease Liabilities

The following presents maturities of lease liabilities in which we are the lessee as of June 30, 2022 (in thousands):

	Operating		Finance
Remainder of 2022	$	446	$	491
2023	968		983
2024	1,055		983
2025	585		239
2026	—		—
Thereafter	—		—
Total lease payments	3,054		2,696
Less imputed interest	(325)		(158)
	$	2,729	$	2,538

Maturities of Sales-type Lease Receivables

The following presents maturities of lease receivables under sales-type leases as of June 30, 2022 (in thousands):

Remainder of 2022	$	727
2023	1,140
2024	646
2025	192
2026	606
Thereafter	—
Total undiscounted cash flows	3,311
Less imputed interest	—
Present value of lease payments	$	3,311

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Geographic and Revenue Disaggregation (Tables)

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Disaggregation of Revenue

The following presents total net sales by geographic territory for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Domestic	$	3,321	$	2,386	$	5,839	$	4,532
Foreign	540		412		981		784
	$	3,861	$	2,798	$	6,820	$	5,316

The following presents total net sales by line of business for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Accelerate Pheno revenue	$	3,818	$	2,767	$	6,736	$	5,240
Other revenue	43		31		84		76
	$	3,861	$	2,798	$	6,820	$	5,316

The following presents total net sales by products and services for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2020		2019
Products	$	3,476	$	2,483	$	6,023	$	4,700
Services	385		315		797		616
	$	3,861	$	2,798	$	6,820	$	5,316

Long-lived Assets by Geographic Territory

The following presents property and equipment, net by geographic territory (in thousands):

	June 30,		December 31,
	2022		2021
Domestic	$	3,866	$	5,014
Foreign	231		375
	$	4,097	$	5,389

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Organization and Nature of Business; Basis of Presentation; Principles of Consolidation; Significant Accounting Policies - Narrative (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)	Mar. 31, 2022 USD ($)
Property, Plant and Equipment [Line Items]
Convertible notes	$ 49,624,000		$ 49,624,000		$ 107,984,000
Accumulated deficit	(576,734,000)		(576,734,000)		(570,668,000)	$ (558,211,000)
Net loss	(18,523,000)	$ (21,674,000)	(31,988,000)	$ (45,913,000)
Net cash used in operating activities			(25,605,000)	$ (22,928,000)
Cash, cash equivalents, and marketable securities	36,800,000		36,800,000
Total current liabilities	66,929,000		66,929,000		6,945,000
Current portion of convertible notes	$ 56,204,000		56,204,000		0
Impairment charges			$ 0		$ 0
Instrument warranty term			1 year
Kits and accessories warranty term			60 days
Gross margin	0.28	0.38	0.28	0.37
Lease extension	1 year		1 year
Lessor lease term	5 years		5 years
As Previously Reported
Property, Plant and Equipment [Line Items]
Convertible notes	$ 105,828,000		$ 105,828,000
Net loss	(17,803,000)
Total current liabilities	10,725,000		10,725,000
Current portion of convertible notes	$ 0		$ 0
Instruments
Property, Plant and Equipment [Line Items]
Estimated useful life of assets			5 years
Equipment
Property, Plant and Equipment [Line Items]
Lease term	3 years		3 years
Minimum
Property, Plant and Equipment [Line Items]
Estimated useful life of assets			1 year
Lease term	2 years		2 years
Maximum
Property, Plant and Equipment [Line Items]
Estimated useful life of assets			7 years
Lease term	6 years		6 years
2.50% Convertible notes due 2023 | Convertible notes
Property, Plant and Equipment [Line Items]
Interest rate	2.50%		2.50%
2.50% Convertible notes due 2023 | Convertible notes | As Previously Reported
Property, Plant and Equipment [Line Items]
Convertible notes	$ 105,800,000		$ 105,800,000

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Organization and Nature of Business; Basis of Presentation; Principles of Consolidation; Significant Accounting Policies - Schedule of Effect of Restatement (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Mar. 31, 2022	Dec. 31, 2021
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Current portion of convertible notes	$ 56,204		$ 56,204			$ 0
Total current liabilities	66,929		66,929			6,945
Convertible notes	49,624		49,624			107,984
Accumulated deficit	(576,734)		(576,734)		$ (558,211)	$ (570,668)
Gain on extinguishment of debt	199	$ 0	3,565	$ 0
Total other income (expense), net	(534)	(4,084)	1,896	(8,297)
Net loss before income taxes	(18,523)	(21,674)	(31,988)	(45,913)
Net loss	$ 18,523	$ 21,674	$ 31,988	$ 45,913
Basic net loss per share (in usd per share)	$ (0.24)	$ (0.36)	$ (0.44)	$ (0.77)
Diluted net loss per share (in usd per share)	$ (0.24)	$ (0.36)	$ (0.44)	$ (0.77)
Comprehensive loss	$ (18,723)	$ (21,652)	$ (32,360)	$ (45,991)
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Current portion of convertible notes	0		0
Total current liabilities	10,725		10,725
Convertible notes	105,828		105,828
Gain on extinguishment of debt	919
Total other income (expense), net	186
Net loss before income taxes	(17,803)
Net loss	$ 17,803
Basic net loss per share (in usd per share)	$ (0.23)
Diluted net loss per share (in usd per share)	$ (0.23)
Comprehensive loss	$ (18,003)
Adjustment(s)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Current portion of convertible notes	56,204		56,204
Total current liabilities	56,204		56,204
Convertible notes	(56,204)		$ (56,204)
Gain on extinguishment of debt	(720)
Total other income (expense), net	(720)
Net loss before income taxes	(720)
Net loss	$ 720
Basic net loss per share (in usd per share)	$ (0.01)
Diluted net loss per share (in usd per share)	$ (0.01)
Comprehensive loss	$ (720)

XML

Organization and Nature of Business; Basis of Presentation; Principles of Consolidation; Significant Accounting Policies - Allowance For Doubtful Accounts (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 159	$ 209	$ 140	$ 445
Provisions	7	7	30	38
Write-offs	(16)	(3)	(20)	(270)
Ending balance	$ 150	$ 213	$ 150	$ 213

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Organization and Nature of Business; Basis of Presentation; Principles of Consolidation; Significant Accounting Policies - Schedule of Product Warranty Reserve Activity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 176	$ 184	$ 139	$ 232
Provisions	93	12	139	(10)
Warranty cost incurred	(14)	(27)	(23)	(53)
Ending balance	$ 255	$ 169	$ 255	$ 169

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Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Mar. 31, 2022	Jan. 01, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Carrying amount of convertible notes	$ 105,828
Accumulated deficit	$ (576,734)	$ (558,211)		$ (570,668)
Cumulative effect of accounting changes | Accounting Standards Update 2020-06
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Carrying amount of convertible notes			$ 11,500
Additional paid in capital			(37,400)
Accumulated deficit			$ 25,900

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Concentration of Credit Risk (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Cash and cash equivalents | Concentration of credit risk | Financial Institutions One
Concentration Risk [Line Items]
Risk concentration	33.00%	72.00%
Cash and cash equivalents | Concentration of credit risk | Financial Institutions Two
Concentration Risk [Line Items]
Risk concentration	19.00%	13.00%
Cash and cash equivalents | Concentration of credit risk | Financial Institutions Three
Concentration Risk [Line Items]
Risk concentration	17.00%
Cash and cash equivalents | Concentration of credit risk | Financial Institutions Four
Concentration Risk [Line Items]
Risk concentration	16.00%
Net accounts receivable | Customer concentration | One customer
Concentration Risk [Line Items]
Risk concentration	11.00%	13.00%

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Fair Value of Financial Instruments - Schedule of Fair Value Measurement (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity investments:	$ 800	$ 800
Debt securities available-for-sale:	31,398	22,879
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	5,242	1,351
U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	13,218	250
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	5,044	8,046
Corporate notes and bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	7,894	13,232
Fair Value on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	118	5,763
Equity investments:	793	841
Debt securities available-for-sale:	31,398	22,879
Total assets measured at fair value	32,309	29,483
Fair Value on a Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	118	5,563
Equity investments:	793	841
Debt securities available-for-sale:	13,218	250
Total assets measured at fair value	14,129	6,654
Fair Value on a Recurring Basis | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	0	200
Equity investments:	0	0
Debt securities available-for-sale:	18,180	22,629
Total assets measured at fair value	18,180	22,829
Fair Value on a Recurring Basis | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	0	0
Equity investments:	0	0
Debt securities available-for-sale:	0	0
Total assets measured at fair value	0	0
Fair Value on a Recurring Basis | Mutual funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity investments:	793	841
Fair Value on a Recurring Basis | Mutual funds | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity investments:	793	841
Fair Value on a Recurring Basis | Mutual funds | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity investments:	0	0
Fair Value on a Recurring Basis | Mutual funds | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity investments:	0	0
Fair Value on a Recurring Basis | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	5,242	1,351
Fair Value on a Recurring Basis | Certificates of deposit | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	0	0
Fair Value on a Recurring Basis | Certificates of deposit | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	5,242	1,351
Fair Value on a Recurring Basis | Certificates of deposit | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	0	0
Fair Value on a Recurring Basis | U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	13,218	250
Fair Value on a Recurring Basis | U.S. Treasury securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	13,218	250
Fair Value on a Recurring Basis | U.S. Treasury securities | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	0	0
Fair Value on a Recurring Basis | U.S. Treasury securities | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	0	0
Fair Value on a Recurring Basis | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	5,044	8,046
Fair Value on a Recurring Basis | Commercial paper | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	0	0
Fair Value on a Recurring Basis | Commercial paper | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	5,044	8,046
Fair Value on a Recurring Basis | Commercial paper | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	0	0
Fair Value on a Recurring Basis | Corporate notes and bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	7,894	13,232
Fair Value on a Recurring Basis | Corporate notes and bonds | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	0	0
Fair Value on a Recurring Basis | Corporate notes and bonds | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	7,894	13,232
Fair Value on a Recurring Basis | Corporate notes and bonds | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities available-for-sale:	0	0
Fair Value on a Recurring Basis | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	118	5,563
Fair Value on a Recurring Basis | Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	118	5,563
Fair Value on a Recurring Basis | Money market funds | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	0	0
Fair Value on a Recurring Basis | Money market funds | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	$ 0	0
Fair Value on a Recurring Basis | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:		200
Fair Value on a Recurring Basis | Commercial paper | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:		0
Fair Value on a Recurring Basis | Commercial paper | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:		200
Fair Value on a Recurring Basis | Commercial paper | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:		$ 0

XML

Fair Value of Financial Instruments - Narrative (Details) - Convertible notes - 2.50% Convertible notes due 2023 - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Outstanding principal	$ 106.5	$ 120.5
Significant Other Observable Inputs (Level 2)
Debt Instrument [Line Items]
Fair value	$ 70.7	$ 89.4

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Investments - Schedule of Available-for-sale Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Debt and Equity Securities, FV-NI [Line Items]
Amortized Cost	$ 31,545	$ 22,894
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(147)	(15)
Fair Value	31,398	22,879
Certificates of deposit
Debt and Equity Securities, FV-NI [Line Items]
Amortized Cost	5,268	1,351
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(26)	0
Fair Value	5,242	1,351
U.S. Treasury securities
Debt and Equity Securities, FV-NI [Line Items]
Amortized Cost	13,272	250
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(54)	0
Fair Value	13,218	250
Commercial paper
Debt and Equity Securities, FV-NI [Line Items]
Amortized Cost	5,067	8,048
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(23)	(2)
Fair Value	5,044	8,046
Corporate notes and bonds
Debt and Equity Securities, FV-NI [Line Items]
Amortized Cost	7,938	13,245
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(44)	(13)
Fair Value	$ 7,894	$ 13,232

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Investments - Schedule of Available-for-Sale Investment Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Amortized Cost
Due in less than 1 year	$ 31,140	$ 22,663
Due in 1-3 years	405	231
Amortized Cost	31,545	22,894
Fair Value
Due in less than 1 year	30,995	22,649
Due in 1-3 years	403	230
Fair Value	$ 31,398	$ 22,879

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Investments - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Debt Securities, Available-for-sale [Line Items]
Proceeds from sales of debt securities	$ 0	$ 0	$ 0	$ 0
Realized gain (loss) from debt securities	0	0	0	0
Unrealized loss position of debt securities	0	0	0	0
Fair value of equity securities	800,000		800,000		$ 800,000
Realized gains or losses from equity securities	0	0	0	0
Reclassified debt securities available-for-sale balances
Debt Securities, Available-for-sale [Line Items]
Reclassified from out of accumulated other comprehensive income (loss)	$ 0	$ 0	$ 0	$ 0

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Investments - Unrealized Gains or Losses on Equity Securities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Investments, Debt and Equity Securities [Abstract]
Unrealized loss on equity investments	$ 107	$ 0	$ 157	$ 0

XML

Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 2,078	$ 1,343
Work in process	1,690	1,625
Finished goods	1,536	2,099
Inventory	$ 5,304	$ 5,067

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Property and Equipment - Property and Equipment at Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 15,097		$ 15,097		$ 16,188
Accumulated depreciation	(11,000)		(11,000)		(10,799)
Property and equipment, net	4,097		4,097		5,389
Depreciation expense	443	$ 493	903	$ 1,053
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment	3,872		3,872		3,181
Technical equipment
Property, Plant and Equipment [Line Items]
Property and equipment	3,285		3,285		3,285
Facilities
Property, Plant and Equipment [Line Items]
Property and equipment	3,674		3,674		3,675
Instruments
Property, Plant and Equipment [Line Items]
Property and equipment	4,253		4,253		5,364
Capital projects in progress
Property, Plant and Equipment [Line Items]
Property and equipment	$ 13		$ 13		$ 683

XML

Property and Equipment - Instruments at Cost and Accumulated Depreciation, Lessor (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Abstract]
Instruments at cost under operating leases	$ 2,547	$ 3,110
Accumulated depreciation under operating leases	(1,014)	(1,165)
Net property and equipment under operating leases	$ 1,533	$ 1,945

XML

Deferred Revenue and Remaining Performance Obligations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Products and services not yet delivered	$ 335		$ 335		$ 451
Revenues recognized included in contract liabilities balances	200	$ 200	300	$ 300
Revenue expected to be recognized from remaining performance obligations	10,100		$ 10,100
Contact period			These agreements have between two and four year terms and revenue is recognized as product is shipped, typically on a straight-line basis. The remaining balance relates to executed service contracts that begin as warranty periods expire. These service contracts typically provide for four-year terms and revenue is recognized on a straight-line basis.
Products and services not yet delivered
Disaggregation of Revenue [Line Items]
Products and services not yet delivered	$ 335		$ 335		$ 451

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Long-Term Debt - Narrative (Details) - Other loans - Notes payable, other payables $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($) loan
Debt Instrument [Line Items]
Number of loan agreements	2
Number of capital asset financing companies	1
Proceeds from debt | $	$ 0.2
Minimum
Debt Instrument [Line Items]
Interest rate	9.80%
Maximum
Debt Instrument [Line Items]
Interest rate	12.40%

XML

Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Net carrying amount of the liability component	$ 84
Current portion of long-term debt	84	$ 80
Long-term debt	0	0
Loans - various interest | Loans - various interest
Debt Instrument [Line Items]
Net carrying amount of the liability component	$ 84	$ 80

XML

Long-Term Debt - Schedule of Maturities of Future Principal Obligations (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Debt Disclosure [Abstract]
Remainder of 2022	$ 84
2023	0
2024	0
2025	0
2026	0
Thereafter	0
Net carrying amount of the liability component	$ 84

XML

Convertible Notes - Narrative (Details)				3 Months Ended		6 Months Ended
	Aug. 15, 2022 USD ($) $ / shares	Mar. 29, 2022 tranche	Mar. 21, 2022 USD ($) tranche	Jun. 30, 2022 USD ($) $ / shares shares	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) day $ / shares shares	Jun. 30, 2021 USD ($)
Debt Instrument [Line Items]
Gain on extinguishment of debt				$ 199,000	$ 0	$ 3,565,000	$ 0
Exchange Agreement | Schuler Trust | Subsequent event | Warrant for Common Stock
Debt Instrument [Line Items]
Repurchase principal balance	15.00%
Warrants price (in usd per share) | $ / shares	$ 2.12
Prepaid Forward
Debt Instrument [Line Items]
Funded prepaid forward						$ 45,100,000
Stock underlying the prepaid forward (in shares) | shares				1,858,500		1,858,500
2.50% Convertible notes due 2023 | Exchange Agreement | Schuler Trust | Subsequent event
Debt Instrument [Line Items]
Warrants price (in usd per share) | $ / shares	$ 2.12
Convertible notes | 2.50% Convertible notes due 2023
Debt Instrument [Line Items]
Conversion ratio						0.0323428
Initial conversion price (in usd per share) | $ / shares				$ 30.92		$ 30.92
Interest rate				2.50%		2.50%
Contractual term						5 years
Effective interest rate				3.20%		3.20%
Repurchase principal balance						100.00%
Convertible notes | 2.50% Convertible notes due 2023 | Exchange Agreement
Debt Instrument [Line Items]
Conversion ratio						0.02264
Notes exchanged			$ 14,000,000
Number of tranches | tranche		8	8
Conversion numerator (in usd per share)			$ 155.67
Convertible notes | 2.50% Convertible notes due 2023 | Exchange Agreement | Schuler Trust | Subsequent event
Debt Instrument [Line Items]
Common stock value	$ 49,905,000
Convertible notes | 2.50% Convertible notes due 2023 | Option one to convert
Debt Instrument [Line Items]
Stock price conversion threshold, percentage						130.00%
Consecutive trading days | day						20
Threshold trading days | day						30
Convertible notes | 2.50% Convertible notes due 2023 | Option two to convert
Debt Instrument [Line Items]
Consecutive trading days | day						5
Threshold trading days | day						5
Trading price threshold, percentage						98.00%
Convertible notes | New Notes | Exchange Agreement
Debt Instrument [Line Items]
Notes exchanged						$ 14,000,000
Shares issued (in shares) | shares						10,798,482
Gain on extinguishment of debt				$ 199,000	$ 0	$ 3,565,000	$ 0
Common stock value						10,200,000
Unsecured obligations | 2.50% Convertible notes due 2023
Debt Instrument [Line Items]
Gain on extinguishment of debt						$ (3,600,000)
Senior Notes | 5.0% Secured promissory note | Exchange Agreement | Schuler Trust | Subsequent event
Debt Instrument [Line Items]
Interest rate	5.00%
Common stock value	$ 34,933,500

XML

Convertible Notes - Schedule of Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Debt Disclosure [Abstract]
Contractual coupon interest	$ 666	$ 1,072	$ 1,449	$ 2,144
Amortization of debt issuance costs	154	180	265	354
Amortization of the debt discount	0	2,903	0	5,724
Total interest expense on convertible notes	$ 820	$ 4,155	$ 1,714	$ 8,222

XML

Convertible Notes - Gain on Extinguishment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Debt Instrument [Line Items]
Gain on extinguishment of debt	$ 199	$ 0	$ 3,565	$ 0
Exchange Agreement | New Notes | Convertible notes
Debt Instrument [Line Items]
Gain on extinguishment of debt	$ 199	$ 0	$ 3,565	$ 0

XML

Convertible Notes - Schedule of Notes and New Notes (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Net carrying amount of the liability component	$ 84
Convertible Debt [Abstract]
Current portion of convertible notes	56,204	$ 0
Non-current portion of convertible notes	49,624	$ 107,984
Total convertible notes	105,828
Convertible notes | New Notes
Debt Instrument [Line Items]
Outstanding principal at par	106,500
Unamortized debt issuance	(672)
Net carrying amount of the liability component	$ 105,828

XML

Loss Per Share - Schedule of Potentially Issuable Common Shares not Included in Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock instruments outstanding (in shares)	10,948	10,385	10,948	10,385
Shares issuable upon the release of restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock instruments outstanding (in shares)	4,909	2,444	4,909	2,444
Shares issuable upon exercise of stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock instruments outstanding (in shares)	6,039	7,941	6,039	7,941

XML

Loss Per Share - Narrative (Details)	6 Months Ended
	Jun. 30, 2022 shares	Mar. 24, 2022 shares
Debt Instrument [Line Items]
Common stock issuable upon conversion of the Series A Preferred Stock (in shares)	3,954,546
Securities Purchase Agreement | Affiliated Entity
Debt Instrument [Line Items]
Agreement to purchase shares (in shares)		2,439,024
Series A Preferred Stock
Debt Instrument [Line Items]
Conversion ratio (in shares)	0.01
Sale or merger trigger conversion ratio (in shares)	0.01
Prepaid Forward
Debt Instrument [Line Items]
Stock underlying the prepaid forward (in shares)	1,858,500
Convertible notes | 2.50% Convertible notes due 2023
Debt Instrument [Line Items]
Conversion ratio	0.0323428
Issuable upon conversion of the notes (in shares)	3,400,000

XML

Employee Equity-Based Compensation - Stock Option Activity (Details) - $ / shares	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Number of Shares
Outstanding, beginning balance (in shares)		7,192,540
Granted (in shares)	0	140,000
Forfeited (in shares)		(128,670)
Exercised (in shares)		(6,105)
Expired (in shares)		(1,158,808)
Outstanding, ending balance (in shares)	6,038,957	6,038,957
Weighted Average Exercise Price per Share
Outstanding, beginning balance (in usd per share)		$ 13.89
Granted (in usd per share)		3.05
Forfeited (in usd per share)		13.02
Exercised (in usd per share)		1.04
Expired (in usd per share)		10.05
Outstanding, ending balance (in usd per share)	$ 14.41	$ 14.41

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Employee Equity-Based Compensation - Inputs to Calculate Estimated Fair Value of Options Awarded (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]
Expected term (in years)	0 years	5 years 9 months 14 days
Volatility	0.00%	65.00%
Expected dividends	0.00%	0.00%
Risk free interest rates	0.00%	1.10%
Weighted average fair value (in usd per share)	$ 0	$ 4.09	$ 0
Granted (in shares)	0		140,000

XML

Employee Equity-Based Compensation - Stock Option Supplemental Information (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Options Outstanding
Number of options (in shares)	6,038,957	7,192,540
Weighted average remaining contractual term (in years)	5 years 8 months 15 days
Weighted average exercise price (in usd per share)	$ 14.41	$ 13.89
Weighted average fair value (in usd per shares)	$ 9.00
Aggregate intrinsic value (in thousands)	$ 0
Options Exercisable
Number of options (in shares)	4,644,828
Weighted average remaining contractual term (in years)	5 years 2 months 4 days
Weighted average exercise price (in usd per share)	$ 15.04
Weighted average fair value (in usd per share)	$ 9.31
Aggregate intrinsic value (in thousands)	$ 0

XML

Employee Equity-Based Compensation - Restricted Stock Activity (Details) - RSUs and RSAs	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Number of Shares
Beginning balance (in shares) | shares	2,090,182
Granted (in shares) | shares	4,107,083
Forfeited (in shares) | shares	(167,129)
Vested/Released (in shares) | shares	(1,121,468)
Ending balance (in shares) | shares	4,908,668
Weighted Average Grant Date Fair Value per Share
Beginning balance (in usd per share) | $ / shares	$ 10.77
Granted (in usd per share) | $ / shares	1.55
Forfeited (in usd per share) | $ / shares	9.94
Vested/Released (in usd per share) | $ / shares	3.39
Ending balance (in usd per share) | $ / shares	$ 4.77

XML

Employee Equity-Based Compensation - Equity-Based Compensation Expense and Tax Benefit (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Equity-based compensation expense	$ 3,971	$ 6,590	$ 6,950	$ 15,429
Cost capitalized to inventory	74	87	117	242
Performance-based stock option expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Equity-based compensation expense			0	230
Performance-based RSU expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Equity-based compensation expense			0	818
Cost of sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Equity-based compensation expense	228	74	403	175
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Equity-based compensation expense	539	1,328	901	4,074
Sales, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Equity-based compensation expense	$ 3,204	$ 5,188	$ 5,646	$ 11,180

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Employee Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2022	Dec. 31, 2020	Dec. 31, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Unrecognized equity-based compensation cost	$ 3.1	$ 3.1
Granted (in shares)	0	140,000
Expired (in shares)		1,158,808
Number of options (in shares)	6,038,957	6,038,957		7,192,540
RSUs
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Unrecognized equity-based compensation cost, restricted stock units	$ 11.0	$ 11.0
Performance-based stock options
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Contractual life		10 years
Granted (in shares)			105,000
Exercisable (in shares)			90,000
Expired (in shares)	90,000	90,000
Number of options (in shares)	0	0
Performance-based stock options | Minimum
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Vesting period		1 year
Expected term of award		5 years
Performance-based stock options | Maximum
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Vesting period		2 years
Expected term of award		7 years
Performance-based RSU expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Contractual life		10 years
Outstanding (in shares)			165,974	111,806
Performance-based RSU expense | Minimum
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Vesting period		1 year
Performance-based RSU expense | Maximum
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Vesting period		3 years

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Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 0	$ 0	$ 0	$ 0
Pre-tax loss	$ 18,523,000	$ 21,674,000	$ 31,988,000	$ 45,913,000

XML

Commitments (Details) - USD ($) $ in Millions	Jun. 30, 2022	Apr. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Total commitments	$ 11.9	$ 11.9

XML

Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Cash paid for amounts included in lease liabilities
Operating cash flows from operating leases	$ 203	$ 154	$ 266	$ 308
Operating cash flows from finance leases	424	0	424	0
ROU assets obtained in exchange for lease obligations
Operating leases	0	0	0	0
Finance leases	2,760	0	2,760	0
Lease Cost
Operating leases	259	261	564	559
Finance leases	97	0	97	0
Short-term leases	$ 21	$ 59	$ 41	$ 59
Weighted average remaining lease term (years)	3 years 1 month 6 days		3 years 1 month 6 days
Weighted average discount rate (%)	7.10%		7.10%
Weighted average remaining lease term finance leases (years)	2 years 8 months 12 days		2 years 8 months 12 days
Weighted average discount rate finance leases (%)	4.60%		4.60%

XML

Leases - Maturities of Lease Liabilities (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Operating
Remainder of 2022	$ 446
2023	968
2024	1,055
2025	585
2026	0
Thereafter	0
Total lease payments	3,054
Less imputed interest	(325)
Lessee lease liabilities	2,729
Finance
Remainder of 2022	491
2023	983
2024	983
2025	239
2026	0
Thereafter	0
Total lease payments	2,696
Total lease payments	(158)
Finance lease obligation	$ 2,538

XML

Leases - Sales-type Lease Receivable Maturity (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Leases [Abstract]
Net investment in leases	$ 3,300
Remainder of 2022	727
2023	1,140
2024	646
2025	192
2026	606
Thereafter	0
Total undiscounted cash flows	3,311
Less imputed interest	0
Present value of lease payments	$ 3,311

XML

Geographic and Revenue Disaggregation - Narrative (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) segment	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Segment Reporting [Abstract]
Number of operating segments | segment			1
Segment Reporting Information [Line Items]
Trade accounts receivable, net	$ 2,935		$ 2,935		$ 2,320
Lease income	$ 600	$ 400	$ 1,100	$ 800
Geographic concentration | Outside the U.S. | Total revenue
Segment Reporting Information [Line Items]
Risk concentration	14.00%	15.00%	14.00%	15.00%
Geographic concentration | Outside the U.S. | Net accounts receivable
Segment Reporting Information [Line Items]
Trade accounts receivable, net	$ 800		$ 800		$ 700

XML

Geographic and Revenue Disaggregation - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation of Revenue [Line Items]
Net sales	$ 3,861	$ 2,798	$ 6,820	$ 5,316
Accelerate Pheno revenue
Disaggregation of Revenue [Line Items]
Net sales	3,818	2,767	6,736	5,240
Other revenue
Disaggregation of Revenue [Line Items]
Net sales	43	31	84	76
Products
Disaggregation of Revenue [Line Items]
Net sales	3,476	2,483	6,023	4,700
Services
Disaggregation of Revenue [Line Items]
Net sales	385	315	797	616
Domestic
Disaggregation of Revenue [Line Items]
Net sales	3,321	2,386	5,839	4,532
Foreign
Disaggregation of Revenue [Line Items]
Net sales	$ 540	$ 412	$ 981	$ 784

XML

Geographic and Revenue Disaggregation - Long-lived Assets by Geographic Territory (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Long-lived assets (excluding intangible assets)	$ 4,097	$ 5,389
Property and equipment | Geographic concentration
Segment Reporting Information [Line Items]
Long-lived assets (excluding intangible assets)	4,097	5,389
Property and equipment | Geographic concentration | Domestic
Segment Reporting Information [Line Items]
Long-lived assets (excluding intangible assets)	3,866	5,014
Property and equipment | Geographic concentration | Foreign
Segment Reporting Information [Line Items]
Long-lived assets (excluding intangible assets)	$ 231	$ 375

XML

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2022	Mar. 24, 2022
New Notes | Convertible notes | Exchange Agreement
Class of Stock [Line Items]
Notes exchanged	$ 14.0
Shares issued (in shares)	10,798,482
Common stock value	$ 10.2
Securities Purchase Agreement | Affiliated Entity
Class of Stock [Line Items]
Agreement to purchase shares (in shares)		2,439,024
Share price (in usd per share)		$ 1.64
Purchase price		$ 4.0

XML

Related Party Transaction (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Related Party Transaction [Line Items]
Convertible Notes	$ 84
Convertible notes | New Notes
Related Party Transaction [Line Items]
Convertible Notes	105,828
Convertible notes | New Notes | Director
Related Party Transaction [Line Items]
Convertible Notes	$ 1,800

XML

Subsequent Events (Details) - USD ($)		6 Months Ended
	Aug. 15, 2022	Jun. 30, 2022
2.50% Convertible notes due 2023 | Convertible notes
Subsequent Event [Line Items]
Interest rate		2.50%
Repurchase principal balance		100.00%
Subsequent event | Becton, Dickinson and Company | Sales And Marketing Agreement
Subsequent Event [Line Items]
Agreement term	5 years
Automatic renewal period	1 year
Termination notice	90 days
Revenue percent to be paid	20.00%
Future financings percentage right	20.00%
Commercial fee	$ 15,000,000
Commercial fee installment	$ 3,000,000
Sales commission payment period	9 months
Written notice	12 months
Termination for product target not achieved	12 months
Commitment, Acquisition Termination Notice	3 months
Subsequent event | Exchange Agreement | Schuler Trust | Warrant for Common Stock
Subsequent Event [Line Items]
Warrants price (in usd per share)	$ 2.12
Warrants issued (in shares)	2,471,710
Repurchase principal balance	15.00%
Subsequent event | Exchange Agreement | Schuler Trust | 2.50% Convertible notes due 2023
Subsequent Event [Line Items]
Warrants price (in usd per share)	$ 2.12
Subsequent event | Exchange Agreement | Schuler Trust | 2.50% Convertible notes due 2023 | Convertible notes
Subsequent Event [Line Items]
Convertible notes value	$ 49,905,000
Subsequent event | Exchange Agreement | Schuler Trust | 5.0% Secured promissory note | Senior Notes
Subsequent Event [Line Items]
Interest rate	5.00%
Convertible notes value	$ 34,933,500