4219788764137135941754641371625613342197887641371000000000000000001380106--12-312022Q1false0036389073345640405553379690337914930000242990000.3537.890.240000036389073555337914930000242990000.3537.890.35http://www.rapidmicrobio.com/20220331#OperatingAndFinanceLeaseLiabilityCurrenthttp://www.rapidmicrobio.com/20220331#OperatingAndFinanceLeaseLiabilityCurrenthttp://www.rapidmicrobio.com/20220331#OperatingAndFinanceLeaseLiabilityNonCurrent36600000013801062021-07-190001380106rmb:SeriesD1AndD2RedeemableConvertiblePreferredStockMember2021-03-310001380106us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-01-012021-03-310001380106us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-01-012022-03-310001380106us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-01-012022-03-3100013801062021-07-092021-07-090001380106us-gaap:RetainedEarningsMember2022-03-310001380106us-gaap:AdditionalPaidInCapitalMember2022-03-310001380106us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001380106us-gaap:RetainedEarningsMember2021-12-310001380106us-gaap:AdditionalPaidInCapitalMember2021-12-310001380106us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001380106us-gaap:RetainedEarningsMember2021-03-310001380106us-gaap:AdditionalPaidInCapitalMember2021-03-310001380106us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001380106us-gaap:RetainedEarningsMember2020-12-310001380106us-gaap:AdditionalPaidInCapitalMember2020-12-310001380106us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001380106us-gaap:CommonClassBMemberus-gaap:CommonStockMember2022-03-310001380106us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-03-310001380106us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-12-310001380106us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-12-310001380106us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-03-310001380106us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-12-310001380106us-gaap:OverAllotmentOptionMember2021-08-040001380106us-gaap:IPOMember2021-07-190001380106rmb:StockOptionAndGrantPlan2010Member2022-01-012022-03-310001380106us-gaap:EmployeeStockMemberrmb:EmployeeStockPurchasePlan2021Member2022-03-310001380106rmb:IncentiveAwardPlan2021Member2022-03-310001380106rmb:StockOptionAndGrantPlan2010Member2021-03-012021-03-310001380106us-gaap:EmployeeStockOptionMemberrmb:IncentiveAwardPlan2021Member2022-01-012022-03-310001380106us-gaap:EmployeeStockMemberrmb:EmployeeStockPurchasePlan2021Member2022-01-012022-03-310001380106us-gaap:EmployeeStockOptionMemberrmb:IncentiveAwardPlan2021Member2021-01-012021-03-310001380106us-gaap:RestrictedStockMember2022-01-012022-03-310001380106us-gaap:RestrictedStockMember2022-03-310001380106us-gaap:RestrictedStockMember2021-12-310001380106us-gaap:EmployeeStockMemberrmb:EmployeeStockPurchasePlan2021Memberus-gaap:CommonClassAMember2022-01-012022-03-310001380106us-gaap:EmployeeStockMemberrmb:EmployeeStockPurchasePlan2021Memberus-gaap:CommonClassAMember2021-01-012021-03-310001380106us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001380106rmb:CommonStockAndCommonStockWarrantMember2022-01-012022-03-310001380106us-gaap:OverAllotmentOptionMember2021-08-042021-08-040001380106rmb:CommercialRecurringRevenueMember2022-01-012022-03-310001380106rmb:CommercialNonRecurringRevenueMember2022-01-012022-03-310001380106rmb:AllOtherCountriesOtherThenUsGermanyAndSwitzerlandMember2022-01-012022-03-310001380106country:US2022-01-012022-03-310001380106country:DE2022-01-012022-03-310001380106country:CH2022-01-012022-03-310001380106rmb:NonCommercialNonRecurringRevenueMember2021-01-012021-03-310001380106rmb:CommercialRecurringRevenueMember2021-01-012021-03-310001380106rmb:CommercialNonRecurringRevenueMember2021-01-012021-03-310001380106rmb:AllOtherCountriesOtherThenUsGermanyAndSwitzerlandMember2021-01-012021-03-310001380106country:US2021-01-012021-03-310001380106country:DE2021-01-012021-03-310001380106country:CH2021-01-012021-03-310001380106us-gaap:LeaseholdImprovementsMember2022-03-310001380106us-gaap:ConstructionInProgressMember2022-03-310001380106rmb:ManufacturingAndLaboratoryEquipmentMember2022-03-310001380106rmb:ComputerHardwareAndSoftwareMember2022-03-310001380106us-gaap:LeaseholdImprovementsMember2021-12-310001380106us-gaap:FurnitureAndFixturesMember2021-12-310001380106us-gaap:ConstructionInProgressMember2021-12-310001380106rmb:ManufacturingAndLaboratoryEquipmentMember2021-12-310001380106rmb:ComputerHardwareAndSoftwareMember2021-12-310001380106us-gaap:RestrictedStockMember2021-02-012021-02-280001380106us-gaap:IPOMember2021-07-192021-07-190001380106rmb:SeriesD1AndD2RedeemableConvertiblePreferredStockMember2021-03-012021-03-310001380106us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001380106us-gaap:RetainedEarningsMember2022-01-012022-03-310001380106us-gaap:RetainedEarningsMember2021-01-012021-03-310001380106srt:MinimumMember2022-03-3100013801062021-03-012021-03-310001380106srt:MaximumMember2022-03-310001380106us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2022-03-310001380106us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberrmb:LongTermInvestmentsMember2022-03-310001380106us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2022-03-310001380106us-gaap:FairValueMeasurementsRecurringMemberrmb:LongTermInvestmentsMember2022-03-310001380106us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2021-12-310001380106us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberrmb:LongTermInvestmentsMember2021-12-310001380106us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2021-12-310001380106us-gaap:FairValueMeasurementsRecurringMemberrmb:LongTermInvestmentsMember2021-12-310001380106us-gaap:FurnitureAndFixturesMember2022-03-310001380106us-gaap:AccountingStandardsUpdate201602Member2022-01-010001380106rmb:PreferredStockWarrantLiabilityMember2021-03-310001380106rmb:PreferredStockWarrantLiabilityMember2020-12-310001380106rmb:PreferredStockWarrantLiabilityMember2021-01-012021-03-310001380106us-gaap:EmployeeStockOptionMember2022-03-310001380106us-gaap:RestrictedStockUnitsRSUMember2022-03-310001380106us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001380106us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001380106us-gaap:CommonClassBMember2022-01-012022-03-310001380106us-gaap:CommonClassAMember2022-01-012022-03-310001380106us-gaap:CommonClassAMember2021-01-012021-03-3100013801062021-01-012021-12-310001380106us-gaap:RestrictedStockUnitsRSUMemberus-gaap:OtherNoncurrentLiabilitiesMember2022-03-310001380106us-gaap:RestrictedStockMemberus-gaap:OtherNoncurrentLiabilitiesMember2022-03-310001380106us-gaap:RestrictedStockUnitsRSUMemberus-gaap:OtherNoncurrentLiabilitiesMember2021-12-310001380106us-gaap:RestrictedStockMemberus-gaap:OtherNoncurrentLiabilitiesMember2021-12-310001380106rmb:TermLoanTwoThousandTwentyThirdTrancheMember2020-05-310001380106rmb:TermLoanTwoThousandTwentySecondTrancheMember2020-05-310001380106rmb:TermLoanTwoThousandTwentySecondAndThirdTrancheMember2020-05-310001380106rmb:TermLoanTwoThousandTwentyFirstTrancheMember2020-05-310001380106us-gaap:ServiceMember2022-01-012022-03-310001380106us-gaap:ProductMember2022-01-012022-03-310001380106us-gaap:ServiceMember2021-01-012021-03-310001380106us-gaap:ProductMember2021-01-012021-03-310001380106rmb:NonCommercialRevenueMember2021-01-012021-03-310001380106us-gaap:CommonClassBMember2021-07-142021-07-140001380106us-gaap:CommonClassAMember2021-07-142021-07-140001380106rmb:SignificantOrMajorCustomersMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001380106rmb:SignificantOrMajorCustomersMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001380106rmb:CustomerMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001380106rmb:CustomerMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001380106rmb:CustomerCMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001380106rmb:CustomerCMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001380106rmb:CustomerBMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001380106rmb:CustomerBMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001380106rmb:SignificantOrMajorCustomersMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-12-310001380106rmb:CustomerMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-12-310001380106rmb:CustomerIMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-12-310001380106rmb:CustomerHMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-12-310001380106rmb:CustomerGMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-12-310001380106rmb:SignificantOrMajorCustomersMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-03-310001380106rmb:CustomerFMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-03-310001380106rmb:CustomerEMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-03-310001380106rmb:CustomerDMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-03-310001380106us-gaap:CommonClassBMember2021-07-190001380106us-gaap:CommonClassAMember2021-07-190001380106us-gaap:CommonClassBMember2022-03-310001380106us-gaap:CommonClassBMember2021-12-310001380106us-gaap:CommonClassAMember2021-12-310001380106rmb:PreferredStockWarrantMember2022-03-310001380106rmb:PreferredStockWarrantMember2021-12-310001380106rmb:TermLoanTwoThousandTwentyMemberrmb:SeriesC1RedeemableConvertiblePreferredStockMember2020-05-310001380106rmb:PreferredStockWarrantMemberrmb:SeriesC1RedeemableConvertiblePreferredStockMember2020-05-3100013801062021-03-3100013801062020-12-310001380106rmb:LongTermInvestmentsMemberus-gaap:USTreasuryNotesSecuritiesMember2021-12-310001380106rmb:LongTermInvestmentsMember2021-12-310001380106us-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryNotesSecuritiesMember2022-03-310001380106us-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryBillSecuritiesMember2022-03-310001380106rmb:LongTermInvestmentsMemberus-gaap:USTreasuryNotesSecuritiesMember2022-03-310001380106us-gaap:ShortTermInvestmentsMember2022-03-310001380106rmb:LongTermInvestmentsMember2022-03-310001380106us-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryNotesSecuritiesMember2021-12-310001380106us-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryBillSecuritiesMember2021-12-310001380106us-gaap:ShortTermInvestmentsMember2021-12-310001380106us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-03-310001380106us-gaap:FairValueMeasurementsRecurringMember2022-03-310001380106us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001380106us-gaap:FairValueMeasurementsRecurringMember2021-12-310001380106us-gaap:WarrantMember2022-01-012022-03-310001380106us-gaap:RestrictedStockMember2022-01-012022-03-310001380106us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001380106us-gaap:EmployeeStockMember2022-01-012022-03-310001380106us-gaap:WarrantMember2021-01-012021-03-310001380106us-gaap:RestrictedStockMember2021-01-012021-03-310001380106us-gaap:RedeemableConvertiblePreferredStockMember2021-01-012021-03-310001380106us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001380106rmb:WarrantsToPurchasePreferredStockMember2021-01-012021-03-310001380106rmb:TermLoanTwoThousandTwentyMember2021-01-012021-03-310001380106srt:MaximumMemberus-gaap:EmployeeStockMember2022-01-012022-03-310001380106us-gaap:SellingAndMarketingExpenseMember2022-01-012022-03-310001380106us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-03-310001380106us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-03-310001380106us-gaap:CostOfSalesMember2022-01-012022-03-310001380106us-gaap:EmployeeStockMemberrmb:EmployeeStockPurchasePlan2021Member2021-01-012021-03-310001380106us-gaap:SellingAndMarketingExpenseMember2021-01-012021-03-310001380106us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001380106us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-03-310001380106us-gaap:CostOfSalesMember2021-01-012021-03-310001380106srt:MaximumMember2021-01-012021-03-310001380106us-gaap:PurchaseCommitmentMember2022-03-310001380106rmb:SoftwareSubscriptionAgreementMember2022-03-310001380106us-gaap:PurchaseCommitmentMember2021-12-310001380106rmb:SoftwareSubscriptionAgreementMember2021-12-310001380106rmb:TermLoanTwoThousandTwentyMember2020-05-012020-05-310001380106rmb:SeriesD2RedeemableConvertiblePreferredStockMember2021-03-012021-03-310001380106rmb:SeriesD1RedeemableConvertiblePreferredStockMember2021-03-012021-03-310001380106rmb:SeriesD2RedeemableConvertiblePreferredStockMember2021-01-012021-03-310001380106rmb:SeriesD1RedeemableConvertiblePreferredStockMember2021-01-012021-03-310001380106rmb:IncentiveAwardPlan2021Member2021-07-012021-07-310001380106rmb:EmployeeStockPurchasePlan2021Member2021-07-012021-07-310001380106us-gaap:EmployeeStockMemberrmb:EmployeeStockPurchasePlan2021Member2021-07-012021-07-310001380106us-gaap:EmployeeStockMemberrmb:EmployeeStockPurchasePlan2021Member2021-07-310001380106rmb:IncentiveAwardPlan2021Member2021-07-310001380106srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:AccountingStandardsUpdate201602Member2022-01-010001380106us-gaap:MeasurementInputRiskFreeInterestRateMember2021-01-012021-03-310001380106us-gaap:MeasurementInputPriceVolatilityMember2021-01-012021-03-310001380106us-gaap:MeasurementInputExpectedTermMember2021-01-012021-03-310001380106rmb:SeriesC1RedeemableConvertiblePreferredStockMember2021-01-012021-03-310001380106rmb:SeriesB1RedeemableConvertiblePreferredStockMember2021-01-012021-03-310001380106rmb:SeriesA1RedeemableConvertiblePreferredStockMember2021-01-012021-03-3100013801062022-03-012022-03-310001380106us-gaap:CommonClassAMember2022-03-310001380106rmb:SeriesD2RedeemableConvertiblePreferredStockMember2021-06-252021-06-250001380106rmb:SeriesC2RedeemableConvertiblePreferredStockMember2021-06-252021-06-250001380106rmb:TermLoanTwoThousandTwentyMember2020-05-3100013801062022-03-310001380106srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate201602Member2022-01-010001380106us-gaap:AccountingStandardsUpdate201602Member2021-12-3100013801062021-12-310001380106rmb:TermLoanTwoThousandTwentyMember2022-01-012022-03-310001380106rmb:July242017Memberus-gaap:EquityMemberrmb:CommonStockAndCommonStockWarrantMember2022-03-310001380106rmb:FourteenJuly2021Memberus-gaap:EquityMemberrmb:CommonStockAndCommonStockWarrantMember2022-03-310001380106rmb:April122018Memberus-gaap:EquityMemberrmb:CommonStockAndCommonStockWarrantMember2022-03-310001380106rmb:CommonStockAndCommonStockWarrantMember2022-03-310001380106rmb:July242017Memberus-gaap:EquityMemberrmb:CommonStockAndCommonStockWarrantMember2021-12-310001380106rmb:FourteenJuly2021Memberus-gaap:EquityMemberrmb:CommonStockAndCommonStockWarrantMember2021-12-310001380106rmb:April122018Memberus-gaap:EquityMemberrmb:CommonStockAndCommonStockWarrantMember2021-12-310001380106rmb:CommonStockAndCommonStockWarrantMember2021-12-310001380106srt:MaximumMember2022-01-012022-03-310001380106us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001380106us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-3100013801062021-01-012021-03-310001380106us-gaap:CommonClassBMember2022-04-300001380106us-gaap:CommonClassAMember2022-04-3000013801062022-01-012022-03-31xbrli:sharesiso4217:USDrmb:itemrmb:Voteiso4217:USDxbrli:sharesrmb:Yxbrli:purermb:segment

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 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: 001-40592

Rapid Micro Biosystems, Inc.

(Exact name of registrant as specified in its charter)

Graphic

Delaware

    

20-8121647

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

1001 Pawtucket Boulevard West, Suite 280

Lowell, MA 01854

(Address of Principal Executive Offices)

(978) 349-3200

(Registrant’s telephone number)

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

Title of Each Class

    

Trading symbol

    

Name of Exchange on which registered

Class A common stock, $0.01 par value per share

RPID

The Nasdaq Global Select Market

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

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

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

Large accelerated filer

    

Accelerated filer

    

Non-accelerated filer

  

Smaller reporting company

Emerging growth company

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

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

As of April 30, 2022, there were 36,389,073 of the registrant’s Class A common stock, par value $0.01, outstanding.

As of April 30, 2022, there were 5,553,379 of the registrant’s Class B common stock, par value $0.01, outstanding.

Table of Contents

TABLE OF CONTENTS

    

    

Page

Part I

Financial Information

Item 1.

Financial Statements

5

Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 (Unaudited)

5

Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 (Unaudited)

6

Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2022 and 2021 (Unaudited)

7

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three months ended March 31, 2022 and 2021 (Unaudited)

8

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (Unaudited)

10

Notes to Condensed Consolidated Financial Statements (Unaudited)

12

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

36

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

50

Item 4.

Controls and Procedures

50

Part II

Other Information

Item 1.

Legal Proceedings

51

Item 1A.

Risk Factors

51

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

51

Item 3.

Defaults Upon Senior Securities

51

Item 4.

Mine Safety Disclosures

51

Item 5.

Other Information

51

Item 6.

Exhibits

51

Exhibit Index

Signatures

2

Table of Contents

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in 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”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. These forward-looking statements are often, but not always, made through the use of words or phrases such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:

our business strategy for our Growth Direct platform and systems;
our future results of operations and financial position, including our expectations regarding revenue, operating expenses and ability to generate cash flow;
our expectations and assumptions related to our future funding requirements and available capital resources, which may be impacted by market uptake of our Growth Direct system, our research and development activities and the expansion of our sales, marketing, manufacturing and distribution capabilities;
our ability to maintain and expand our customer base for our Growth Direct platform and systems;
anticipated trends and growth rates in our business and in the markets in which we operate;
our research and development activities and prospective new features, products and product approvals;
our ability to anticipate market needs and successfully develop new and enhanced solutions to meet those needs, including prospective products;
our ability to hire and retain necessary qualified employees to grow our business and expand our operations;
our expectations regarding the potential impact of the ongoing COVID-19 pandemic on our business, operations and the markets in which we and our customers operate; 
our expectations regarding the potential impact of inflation and deflation and corresponding fluctuations in interest rates on our business and operating costs;
our ability to adequately protect our intellectual property; and
our ability to hire and retain necessary qualified employees to grow our business and expand our operations.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 under the heading “Risk Factors.” The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

3

Table of Contents

TRADEMARKS

Solely for convenience, our trademarks and trade names in this report are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that we will not assert, to the fullest extent under applicable law, our rights thereto.

4

Table of Contents

PART I —FINANCIAL INFORMATION

Item 1. Financial Statements

RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated balance sheets

(Unaudited)

(In thousands, except share and per share amounts)

March 31, 

December 31,

    

2022

    

2021

Assets

 

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

62,501

$

178,387

Short-term investments

 

99,732

 

15,110

Accounts receivable

 

3,835

 

5,005

Inventory

 

17,711

 

15,671

Prepaid expenses and other current assets

 

3,118

 

3,951

Total current assets

 

186,897

 

218,124

Property and equipment, net

 

12,388

 

11,304

Right-of-use assets, net

7,081

Long-term investments

21,944

9,966

Other long-term assets

 

1,458

 

1,491

Restricted cash

 

284

 

284

Total assets

$

230,052

$

241,169

Liabilities and Stockholders’ Equity

 

  

 

  

Current liabilities:

Accounts payable

$

3,550

$

3,944

Accrued expenses and other current liabilities

 

6,735

 

10,917

Deferred revenue

 

3,952

 

3,305

Lease liabilities, short-term

 

635

 

Total current liabilities

 

14,872

 

18,166

Deferred rent, long term

 

 

813

Lease liabilities, long-term

 

7,375

 

Other long-term liabilities

735

1,210

Total liabilities

 

22,982

 

20,189

Commitments and contingencies (Note 17)

 

  

 

  

Stockholders’ equity:

 

  

 

  

Class A common stock, $0.01 par value; 210,000,000 shares authorized at March 31, 2022 and December 31, 2021; 36,389,073 shares and 34,564,040 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

 

365

 

346

Class B common stock, $0.01 par value; 10,000,000 shares authorized at March 31, 2022 and December 31, 2021; 5,553,379 shares and 6,903,379 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

55

69

Preferred stock, $0.01 par value: 10,000,000 shares authorized at March 31, 2022 and December 31, 2021; zero shares issued and outstanding at March 31, 2022 and December 31, 2021

Additional paid-in capital

 

537,296

 

535,693

Accumulated deficit

 

(330,042)

 

(315,112)

Accumulated other comprehensive income (loss)

 

(604)

 

(16)

Total stockholders’ equity

 

207,070

 

220,980

Total liabilities and stockholders’ equity

$

230,052

$

241,169

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Table of Contents

RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of operations

(Unaudited)

(In thousands, except share and per share amounts)

Three Months Ended March 31, 

    

2022

    

2021

Revenue:

 

  

 

  

Product revenue

$

2,563

$

3,718

Service revenue

 

1,597

 

1,067

Non-commercial revenue

 

 

210

Total revenue

 

4,160

 

4,995

Costs and operating expenses:

 

  

 

  

Cost of product revenue

 

4,358

 

5,510

Cost of service revenue

 

1,726

 

1,137

Cost of non-commercial revenue

 

 

414

Research and development

 

3,525

 

2,147

Sales and marketing

 

3,456

 

2,275

General and administrative

 

6,094

 

3,203

Total costs and operating expenses

 

19,159

 

14,686

Loss from operations

 

(14,999)

 

(9,691)

Other income (expense):

 

  

 

  

Interest expense

 

(11)

 

(932)

Change in fair value of preferred stock warrant liability

 

 

(11,448)

Other income (expense), net

 

103

 

(11)

Total other income (expense), net

 

92

 

(12,391)

Loss before income taxes

 

(14,907)

 

(22,082)

Income tax expense

 

23

 

19

Net loss

 

(14,930)

 

(22,101)

Accretion of redeemable convertible preferred stock to redemption value

 

 

(787)

Cumulative redeemable convertible preferred stock dividends

 

 

(1,411)

Net loss attributable to common stockholders — basic and diluted

$

(14,930)

$

(24,299)

Net loss per share attributable to Class A and Class B common stockholders — basic and diluted

$

(0.35)

$

(37.89)

Weighted average common shares outstanding — basic and diluted

 

42,197,887

 

641,371

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Table of Contents

RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of comprehensive loss

(Unaudited)

(In thousands)

Three Months Ended March 31, 

    

2022

    

2021

Net loss

$

(14,930)

$

(22,101)

Other comprehensive income:

 

  

 

  

Unrealized loss on short-term investments, net of tax

 

(588)

 

Comprehensive loss

$

(15,518)

$

(22,101)

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

Table of Contents

RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of stockholders’ equity

(Unaudited)

(In thousands, except share amounts)

Accumulated

Redeemable convertible

Class A

Class B

Additional

other

preferred stock

Common stock

Common stock

paid-in

Accumulated

comprehensive

    

Shares

    

Amount

   

  

Shares

    

Amount

    

Shares

    

Amount

    

capital

    

deficit

    

income

    

Total

Balances at December 31, 2021

$

34,564,040

$

346

6,903,379

$

69

  

$

535,693

$

(315,112)

$

(16)

$

220,980

Conversion of Class B common stock to Class A common stock

 

1,350,000

14

(1,350,000)

(14)

Restricted stock award liability accretion

 

 

 

 

154

154

Issuance of Class A common stock upon exercise of common stock options

 

 

 

475,033

5

466

471

Stock-based compensation expense

 

 

 

 

983

 

 

983

Net loss

(14,930)

(14,930)

Other comprehensive income

(588)

(588)

Balances at March 31, 2022

 

 

$

 

36,389,073

 

$

365

5,553,379

 

$

55

 

$

537,296

 

$

(330,042)

 

$

(604)

 

$

207,070

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

Table of Contents

RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of stockholders’ deficit

(Unaudited), continued

(In thousands, except share amounts)

    

    

    

    

  

  

    

    

    

    

    

    

    

    

    

    

    

    

    

    

Accumulated

    

    

    

Redeemable convertible

Class A

Class B

Additional

other

preferred stock

Common stock

Common stock

paid-in

Accumulated

comprehensive

    

Shares

    

Amount

  

  

Shares

    

Amount

    

Shares

    

Amount

    

capital

    

deficit

    

income

    

Total

Balances at December 31, 2020

 

133,021,640

$

151,826

612,850

$

6

$

114,575

$

(241,588)

 

$

1

 

$

(127,006)

Issuance of Series D1 redeemable convertible preferred stock, net of issuance costs of $1,174

 

22,086,725

78,338

 

 

Issuance of Series D2 redeemable convertible preferred stock, net of issuance costs of $18

 

413,268

1,470

 

 

Accretion of redeemable convertible preferred stock to redemption value

 

787

(787)

 

 

(787)

Cumulative redeemable convertible preferred stock dividends

 

1,411

(1,411)

 

 

(1,411)

Issuance of Class A common stock upon exercise of common stock options

 

67,418

1

66

 

 

67

Issuance of restricted Class A common stock awards

 

248,903

2

(2)

 

 

Stock-based compensation expense

 

191

 

 

191

Net loss

 

(22,101)

 

 

(22,101)

Other comprehensive income

Balances at March 31, 2021

 

155,521,633

 

$

233,832

 

929,171

$

9

$

 

$

112,632

 

$

(263,689)

 

$

1

 

$

(151,047)

The accompanying notes are an integral part of these condensed consolidated financial statements.

9

Table of Contents

RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of cash flows

(Unaudited)

(In thousands)

    

Three Months Ended March 31, 

2022

2021

Cash flows from operating activities:

 

  

 

  

Net loss

$

(14,930)

$

(22,101)

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

 

  

 

  

Depreciation and amortization expense

 

560

 

344

Stock-based compensation expense

 

983

 

191

Change in fair value of preferred stock warrant liability

 

 

11,448

Noncash lease expense

 

261

 

Noncash interest expense

 

 

139

Accretion on investments

 

6

 

Other, net

8

(3)

Changes in operating assets and liabilities

 

 

Accounts receivable

 

1,169

 

1,264

Inventory

 

(2,041)

 

(812)

Prepaid expenses and other current assets

 

839

 

324

Other long-term assets

 

(51)

 

13

Accounts payable

 

(372)

 

(1,974)

Accrued expenses and other current liabilities

 

(3,880)

 

(781)

Deferred revenue

 

647

 

717

Deferred rent, long term

 

 

(31)

Net cash used in operating activities

 

(16,801)

 

(11,262)

Cash flows from investing activities:

 

  

 

  

Purchases of property and equipment

 

(2,353)

 

(251)

Purchases of investments

(97,195)

Maturity of investments

 

 

10,000

Net cash (used) provided by investing activities

 

(99,548)

 

9,749

Cash flows from financing activities:

 

  

 

  

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs

 

 

79,808

Proceeds from issuance of Class A common stock upon stock option exercise

 

471

 

67

Proceeds from issuance of restricted Class A stock award

 

 

523

Payments on finance lease obligations

(8)

Payments of deferred offering costs

 

 

(329)

Net cash provided by financing activities

 

463

 

80,069

Net (decrease) increase in cash, cash equivalents and restricted cash

 

(115,886)

 

78,556

Cash, cash equivalents and restricted cash at beginning of period

 

178,671

 

30,179

Cash, cash equivalents and restricted cash at end of period

$

62,785

$

108,735

The accompanying notes are an integral part of these condensed consolidated financial statements.

10

Table of Contents

RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of cash flows, continued

(Unaudited)

(In thousands)

    

Three Months Ended March 31, 

2022

2021

Supplemental disclosure of cash flow information

 

  

 

  

Cash paid for interest

$

11

$

339

Supplemental disclosure of non-cash investing activities

 

 

  

Establishment of right of use operating assets

$

6,932

$

Purchases of property and equipment in accounts payable

$

1,503

$

Supplemental disclosure of non-cash financing activities

 

 

Establishment of right of use finance assets

$

366

$

Deferred offering costs included in accounts payable and accrued expenses

$

$

978

Accretion of redeemable convertible preferred stock to redemption value

$

$

787

Cumulative redeemable convertible preferred stock dividends

$

$

1,411

The accompanying notes are an integral part of these condensed consolidated financial statements.

11

Table of Contents

RAPID MICRO BIOSYSTEMS, INC.

Notes to condensed consolidated financial statements

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

(Unaudited)

1. Nature of the business and basis of presentation

Rapid Micro Biosystems, Inc. (the “Company”) was incorporated under the laws of the State of Delaware on December 29, 2006. The Company develops, manufactures, markets and sells Growth Direct systems (“Systems”) proprietary consumables, laboratory information management system (“LIMS”) connection software, and services to address rapid microbial analysis used for quality control in the manufacture of pharmaceuticals, medical devices and personal care products. The Company’s technology uses a highly sensitive camera and the natural auto fluorescence of living cells to identify and quantify microbial growth faster and more accurately than the traditional method, which relies on the human eye. The Company currently sells to customers in North America, Europe and Asia. The Company is headquartered in Lowell, Massachusetts.

In March 2020, the World Health Organization declared the global novel coronavirus disease 2019 (“COVID-19”) outbreak a pandemic. The impact of this pandemic has been and may continue to be extensive in many aspects of society, which has resulted in and may continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world. The Company cannot at this time predict the ultimate extent, duration, or full impact that the COVID-19 pandemic will have on its future financial condition and operations. The impact of the ongoing COVID-19 pandemic on the Company’s financial performance will depend on future developments, including the duration and spread of the pandemic and related governmental advisories and restrictions. These developments and the impact of COVID-19, and its variants, on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results may be materially adversely affected.

Future impacts to the Company’s business as a result of COVID-19, and its variants, could include disruptions to the Company’s manufacturing operations and supply chain caused by facility closures, reductions in operating hours, staggered shifts and other social distancing efforts; labor shortages; decreased productivity and unavailability of materials or components; limitations on its employees’ and customers’ ability to travel, and delays in shipments to and from affected countries and within the United States. While the Company maintains an inventory of finished products and raw materials used in its products, the effects of the ongoing COVID-19 pandemic could still lead to shortages in the raw materials necessary to manufacture its products.

Basis of presentation

These condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries in Germany and Switzerland. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s audited consolidated financial statements for the year ended December 31, 2021. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2022 and the results of its operations and its cash flows for the three months ended March 31, 2022 and 2021. The financial data and other information disclosed in these notes related to the three months ended March 31, 2022 and

12

Table of Contents

2021 are also unaudited. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period.

Reverse split

On July 9, 2021, the Company effected a one-for-five reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s Preferred Stock (see Note 10). Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the Preferred Stock conversion ratios.

Initial public offering

On July 19, 2021, the Company closed an initial public offering (“IPO”) of its Class A common stock, which resulted in the sale of 7,920,000 shares of its Class A common stock at the initial public offering price of $20.00 per share, before underwriting discounts. The offering resulted in gross proceeds of $158.4 million and net proceeds to the Company of $143.8 million from the IPO after deducting underwriting discounts, commissions and offering expenses payable by the Company.

On August 4, 2021, the underwriters exercised their overallotment option in part and purchased 1,086,604 shares of Class A common stock at the initial public offering price of $20.00 per share less underwriting discounts and commissions. The overallotment option exercise resulted in net proceeds of $20.2 million.

Liquidity

The Company has incurred recurring losses and net cash outflows from operations since its inception. The Company expects to continue to generate significant operating losses for the foreseeable future. The Company expects that its existing cash and cash equivalents and investments will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months following the date these unaudited interim condensed consolidated financial statements were issued.

2. Summary of significant accounting policies

Use of estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, calculating the standalone selling price for revenue recognition, the valuation of inventory, the valuation of common stock and stock-based awards, and the valuation of the preferred stock warrant liability. The Company bases its estimates on historical experience, known trends and other market-specific and relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained.

13

Table of Contents

Other than policies noted below, there have been no significant changes to the significant accounting policies during the three months ended March 31, 2022, as compared to the significant accounting policies disclosed in Note 2 of the audited consolidated financial statements as of December 31, 2021 filed with the 2021 Form 10-K.

Risk of concentrations of credit, significant customers and significant suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term and long-term investments and accounts receivable. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company maintains its cash and cash equivalents and investments with financial institutions that management believes to be of high credit quality. The Company has not experienced any other-than-temporary losses with respect to its cash equivalents and investments and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Significant customers are those which represent more than 10% of the Company’s total revenue or accounts receivable balance at each respective balance sheet date. The following table presents customers that represent 10% or more of the Company’s total revenue:

Three Months Ended March 31, 

 

    

2022

    

2021

 

Customer A

 

15.6

%  

*

Customer B

12.9

%  

*

Customer C

10.1

%  

*

Customer D

*

18.7

%

Customer E

 

*

17.5

%

Customer F

 

*

16.1

%

 

38.6

%  

52.3

%

*

– less than 10%

The following table presents customers that represent 10% or more of the Company’s accounts receivable:

    

March 31,

December 31,

    

2022

    

2021

 

Customer A

13.3

%  

19.5

%

Customer B

13.5

%  

*

Customer C

 

14.4

%  

*

Customer G

*

12.6

%

Customer H

*

10.6

%

Customer I

 

*

10.0

%

 

41.2

%  

52.7

%

*

– less than 10%

The Company relies on third parties for the supply and manufacture of certain components of its products as well as third-party logistics providers. There are no significant concentrations around a single third-party supplier or manufacturer for the three months ended March 31, 2022 or 2021.

Debt issuance costs

The Company capitalizes certain legal and other third-party fees that are directly associated with the issuance of debt as debt issuance costs. Debt issuance costs are recorded as a direct reduction of the carrying amount of the associated debt on the condensed consolidated balance sheets and amortized as interest expense on the condensed consolidated statements of operations using the effective interest method, which approximates the straight-line method.

14

Table of Contents

As of March 31, 2022 and December 31, 2021, the Company had no debt issuance costs on its condensed consolidated balance sheets. During the three months ended March 31, 2022 and 2021, the Company recorded zero and $0.1 million, respectively, of interest expense related to amortization of debt issuance costs in the condensed consolidated statements of operations.

Cash equivalents

The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents that are readily convertible to cash are stated at cost, which approximates fair value. At March 31, 2022 and December 31, 2021, the Company held cash of $0.2 million and $0.3 million, respectively, in banks located outside of the United States.

Restricted cash

As of March 31, 2022 and December 31, 2021, the Company was required to maintain guaranteed investment certificates of $0.3 million with maturities of three months to one year that are subject to an insignificant risk of changes in value. The guaranteed investment certificates are held for the benefit of the landlord in connection with an operating lease which has a remaining term of greater than one year and are classified as restricted cash (non-current) on the Company’s consolidated balance sheets.

Software Development Costs

The Company accounts for software development costs for internal-use software under the provisions of ASC 350-40, “Internal-Use Software” (“ASC 350”). Accordingly, certain costs to develop internal-use computer software are capitalized, provided these costs are expected to be recoverable. There was $1.3 million of software development costs, net of amortization, capitalized in other long-term assets at March 31, 2022. The capitalized costs are being amortized on a straight-line basis over the initial subscription term of five years. There was $0.1 million and zero of amortization expense recorded in the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021, respectively.

Fair value measurements

Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The Company’s cash equivalents, short-term and long-term investments are carried at fair value, determined according to the fair value hierarchy described above (see Note 3). The carrying values of the Company’s accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities.

15

Table of Contents

Product warranties

The Company offers a one-year limited assurance warranty on System sales, which is included in the selling price. The warranty accrual is included in accrued expenses and other current liabilities in the condensed consolidated balance sheets. The following table presents a summary of changes in the amount reserved for warranty cost (in thousands):

    

March 31,

December 31,

    

2022

    

2021

Balance, beginning of period

$

598

$

637

Warranty provisions

10

Warranty repairs

 

(13)

 

(39)

Balance, end of period

$

595

$

598

Segment information

The Company determined its operating segment after considering the Company’s organizational structure and the information regularly reviewed and evaluated by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company has determined that its CODM is its Chief Executive Officer. The CODM reviews the financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources. On the basis of these factors, the Company determined that it operates and manages its business as one operating segment, that develops, manufactures, markets and sells Systems and related LIMS connection software, consumables and services; and accordingly has one reportable segment for financial reporting purposes. Substantially all of the Company’s long-lived assets are held in the United States.

Revenue recognition

Remaining performance obligations

The Company does not disclose the value of remaining performance obligations for (i) contracts with an original contract term of one year or less, (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice when that amount corresponds directly with the value of services performed, and (iii) variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied distinct service that forms part of a single performance obligation. The Company does not have material remaining performance obligations associated with contracts with terms greater than one year.

Contract balances from contracts with customers

Contract assets arise from unbilled amounts in customer arrangements when revenue recognized exceeds the amount billed to the customer and the Company’s right to payment is conditional and not only subject to the passage of time. The Company had $0.1 million and $0.3 million in contract assets as of March 31, 2022 and December 31, 2021, respectively, included in prepaid expenses and other current assets. These balances relate to the BARDA (as defined below) agreements, as well as unbilled amounts with commercial customers.

Contract liabilities represent the Company’s obligation to transfer goods or services to a customer for which it has received consideration (or the amount is due) from the customer. The Company has a contract liability related to service revenue, which consists of amounts that have been invoiced but that have not been recognized as revenue. Amounts expected to be recognized as revenue within 12 months of the balance sheet date are classified as current deferred revenue and amounts expected to be recognized as revenue beyond 12 months of the balance sheet date are classified as noncurrent deferred revenue. The Company did not record any non-current deferred revenue as of March 31, 2022 or December 31, 2021. Deferred revenue was $4.0 million and $3.3 million at March 31, 2022 and December 31, 2021, respectively. Revenue recognized during the three months ended March 31, 2022 and 2021 that was included in deferred revenue at the prior period-end was $1.1 million and $1.2 million, respectively.

16

Table of Contents

Non-commercial revenue

The Company has historically generated revenue from a long-term contract with the U.S. Department of Health and Human Services Biomedical Advanced Research and Development Authority (“BARDA”) a part of the U.S. government. The Company’s contracts with the U.S. government typically are subject to the Federal Acquisition Regulation (“FAR”) and are priced based on estimated or actual costs of producing goods or providing services. The FAR provides guidance on the types of costs that are allowable in establishing prices for goods or services provided under U.S. government contracts. In September 2017, the Company signed a contract with BARDA, which was subsequently modified on multiple occasions to increase the contract value and adjust the cost share reimbursement rate. Modifications were accounted for in accordance with the contract modification framework. The contract is a cost-reimbursable, cost- sharing arrangement, whereby BARDA reimburses the Company for a percentage of the total costs that have been incurred including indirect allowable costs. Revenue on the BARDA contract is recognized over time using an input method based on cost incurred to date in relation to total estimated cost. Due to the structure of the arrangement, the transaction price is variable in nature based on actual cost incurred. As such the amount included in the transaction price is constrained to the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. All funding under this contract was fully earned by the fourth quarter of 2021.

Disaggregated revenue

The Company disaggregates revenue based on the recurring and non-recurring, and commercial and non-commercial, nature of the underlying sale. Recurring revenue includes sales of consumables and service contracts. Non-recurring revenue includes sales of Systems, LIMS connection software, validation services, field service, and revenue under the Company’s contract with BARDA. The following table presents the Company’s revenue by the recurring or non-recurring and commercial or non-commercial nature of the revenue stream (in thousands):

    

Three Months Ended March 31, 

    

2022

    

2021

Product and service revenue — recurring

$

2,658

$

1,606

Product and service revenue — non-recurring

 

1,502

 

3,179

Non-commercial revenue — non-recurring

 

 

210

Total revenue

$

4,160

$

4,995

The following table presents the Company’s revenue by customer geography (in thousands):

    

Three Months Ended March 31, 

    

2022

    

2021

United States

$

2,042

$

2,329

Germany

 

424

 

325

Switzerland

 

879

 

1,041

All other countries

815

1,300

Total revenue

$

4,160

$

4,995

Advertising costs

Advertising costs are expensed as incurred and are included in sales and marketing expenses in the condensed consolidated statements of operations. Advertising costs were less than $0.1 million during the three months ended March 31, 2022 and 2021.

Stock-based compensation

The Company measures all stock-based awards granted to employees, officers and directors based on their fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. The Company issues stock-based awards with only

17

Table of Contents

service-based vesting conditions and records the expense for these awards using the straight-line method. Forfeitures are accounted for prospectively as they occur.

The Company measures all restricted common stock and restricted stock units granted to employees based on the common stock value on the date of grant. The purchase price of the restricted common stock is the common stock value on the date of grant. The restricted common stock includes a repurchase right, whereas upon the occurrence of a specific event, the Company shall have the right to repurchase unvested restricted common stock shares. At March 31, 2022 and December 31, 2021, the Company had $0.4 million and $0.5 million, respectively, in unvested restricted Class A common stock liability included in other long-term liabilities.

Comprehensive loss

Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. For the three months ended March 31, 2022 and 2021, there were $0.6 million and zero, respectively, of unrealized losses on short-term and long-term investments, net of tax.

Recently adopted accounting pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations related to their leasing arrangements. The update requires lessees to recognize most leases, with the exception of short-term leases if a policy election is made, on their balance sheets as a right-of-use (ROU) asset representing the right to use an underlying asset and a lease liability representing the obligation to make lease payments over the lease term, measured on a discounted basis, while recognizing lease expense on their income statements in a manner similar to current GAAP. The guidance also requires entities to disclose key quantitative and qualitative information about its leasing arrangements.

The Company leases office and manufacturing space under operating lease agreements. The Company leases furniture under a financing agreement. The Company adopted Topic 842 on January 1, 2022 using the optional transition method to the modified retrospective approach. Under this transition provision, results for reporting periods beginning on January 1, 2022 are presented under Topic 842 while prior period amounts continue to be reported and disclosed in accordance with the Company’s historical accounting treatment under ASC Topic 840, Leases (“ASC 840”).

The Company elected the “package of practical expedients” permitted under the transition guidance, which among other things, does not require reassessment of whether contracts entered into prior to adoption are or contain leases, and allows carryforward of the historical lease classification for existing leases. The Company did not elect the “hindsight” practical expedient, and therefore measured the ROU assets and lease liabilities using the remaining portion of the lease term at adoption on January 1, 2022.

The Company made an accounting policy election not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencement date of the lease (or January 1, 2022 for existing leases upon the adoption of ASC 842). Lease payments may include fixed rent escalation clauses or payments that depend on an index (such as the consumer price index). Subsequent changes to an index and any other periodic market-rate adjustments to base rent are recorded in variable lease expense in the period incurred. The ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are reduced by any lease incentives.

The Company has made an accounting policy election to account for lease and non-lease components in its contracts as single lease components for all asset classes. The non-lease components typically represent additional services transferred to the Company, such as common area maintenance for real estate, which are variable in nature and recorded in variable lease expense in the period incurred.

18

Table of Contents

The Company uses its incremental borrowing rate which is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount in a similar economic environment to determine the present value of lease payments as the Company’s leases do not have a readily determinable implicit discount rate. Judgment is applied in assessing factors such as Company specific credit risk, lease term, nature, and quality of the underlying collateral, currency, and economic environment in determining the incremental borrowing rate to apply to each lease.

Upon adoption, the Company recorded operating lease ROU assets and lease liabilities of $6.0 million and $7.0 million, respectively, the difference relating to deferred rent. The Company recorded financing lease ROU assets and lease liabilities of approximately $0.4 million. The adoption of the new lease standard did not materially impact our condensed consolidated statements of operations, comprehensive loss or cash flows for the quarter ended March 31, 2022.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various areas related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted this guidance effective January 1, 2022, and the adoption had no material impact on its condensed consolidated financial statements and related disclosures.

Recently issued accounting pronouncements

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company will adopt the newer revised standard at the time nonpublic companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for nonpublic companies.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016- 13”). The new standard adjusts the accounting for assets held at amortized costs basis, including marketable securities accounted for as available for sale, and trade receivables. The standard eliminates the probable initial recognition threshold and requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. The Company expects to adopt this guidance effective January 1, 2023, and it is currently evaluating the impact on its condensed consolidated financial statements and related disclosures.

3. Fair value of financial assets and liabilities

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values (in thousands):

    

Fair value measurements as of March 31, 2022

    

Level 1

    

Level 2

    

Level 3

    

Total

Assets

  

 

  

 

  

 

  

Cash equivalents

$

57,185

$

$

$

57,185

Short-term investments

 

99,732

 

 

 

99,732

Long-term investments

21,944

21,944

$

178,861

$

$

$

178,861

19

Table of Contents

    

Fair value measurements at December 31, 2021

    

Level 1

    

Level 2

    

Level 3

    

Total

Assets

  

 

  

 

  

 

  

Cash equivalents

$

173,755

$

$

$

173,755

Short-term investments

15,110

15,110

Long-term investments

 

9,966

 

 

 

9,966

$

198,831

$

$

$

198,831

During the three months ended March 31, 2022 and 2021, respectively, there were no transfers between Level 1, Level 2 and Level 3.

Valuation of short-term and long-term investments

Short-term and long-term investments, which consisted of U.S. Treasury bonds and notes were valued by the Company using quoted prices in active markets for similar securities, which represents a Level 1 measurement within the fair value hierarchy.

4. Investments

Short-term and long-term investments by investment type consisted of the following (in thousands):

    

March 31, 2022

Gross

Gross