You should read the following discussion and analysis of our financial condition
and results of operations together with our condensed consolidated financial
statements and the related notes included elsewhere in this Quarterly Report on
Form 10-Q and our audited financial statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations included in our Annual
Report on Form 10-K for the year ended December 31, 2021, filed with the
Securities and Exchange Commission (SEC). In addition to historical information,
the following discussion contains forward-looking statements that involve risks,
uncertainties and assumptions. Our actual results, performance or experience
could differ materially from what is indicated by any forward-looking statement
due to various important factors, risks and uncertainties, including, but not
limited to, those set forth under "Special Note Regarding Forward-Looking
Statements" included elsewhere in this quarterly report or under "Risk Factors"
in Item 1A of Part I of our Annual Report on Form 10-K for the year ended
December 31, 2021 as may be updated by "Part II, Item 1A, Risk Factors" of our
subsequently filed Quarterly Reports on Form 10-Q.

Overview



We are a life sciences company that has developed next generation,
ultra-sensitive digital immunoassay platforms that advance precision health for
life sciences research and diagnostics. Our platforms are based on our
proprietary digital "Simoa" detection technology. Our Simoa bead-based and
planar array platforms enable customers to reliably detect protein biomarkers in
extremely low concentrations in blood, serum and other fluids that, in many
cases, are undetectable using conventional, analog immunoassay technologies, and
also allow researchers to define and validate the function of novel protein
biomarkers that are only present in very low concentrations. These capabilities
provide our customers with insight into the role of protein biomarkers in human
health that has not been possible with other existing technologies and enable
researchers to unlock unique insights into the continuum between health and
disease. We believe this greater insight will enable the development of novel
therapies and diagnostics and facilitate a paradigm shift in healthcare from an
emphasis on treatment to a focus on earlier detection, monitoring, prognosis
and, ultimately, prevention.

Our instruments are designed to be used either with assays fully developed by
us, including all antibodies and supplies required to run the tests, or with
"homebrew" kits where we supply some of the components required for testing, and
the customer supplies the remaining required elements. Accordingly, our
installed instruments generate a recurring revenue stream. As the installed base
of the Simoa instruments increases, total consumables revenue overall is
expected to increase. We believe that consumables revenue should be subject to
less period-to-period fluctuation than our instrument sales revenue and will
become an increasingly important contributor to our overall revenue.

We commercially launched our first immunoassay platform, the Simoa HD-1, in
January 2014. The HD-1 is based on our bead-based technology, and assays run on
the HD-1 are fully automated. We initiated commercial launch of the SR-X
instrument in December 2017. The SR-X utilizes the same Simoa bead-based
technology and assay kits as the HD-1 in a compact benchtop form with a lower
price point, more flexible assay preparation, and a wider range of applications.
In July 2019, we launched the Simoa HD-X, an upgraded version of the Simoa HD-1,
which replaces the HD-1. The HD-X has been designed to deliver significant
productivity and operational efficiency improvements, as well as greater user
flexibility. We began shipping and installing HD-X instruments at customer
locations in 2019, and by the end of 2021, approximately 68% of the HD
instrument installed base was HD-X instruments.

We also provide contract research services for customers through our
CLIA-certified Accelerator Laboratory. The Accelerator Laboratory provides
customers with access to Simoa technology, and supports multiple projects and
services, including sample testing, homebrew assay development and custom assay
development. To date, we have completed over 1,700 projects for approximately
400 customers from all over the world using our Simoa platforms.

We sell our instruments, consumables and services to the life science,
pharmaceutical and diagnostics industries through a direct sales force and
support organizations in North America and Europe, and through distributors or
sales agents in other select markets, including Australia, Brazil, China, Czech
Republic, India, Hong Kong, Israel, Japan, New Zealand, Qatar, Saudi Arabia,
Singapore, South Africa, South Korea, Taiwan, and UAE. In addition, Uman sells
Nf-L

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antibodies and Nf-L ELISA kits directly, and in conjunction with us and another
distributor worldwide. We have an extensive base of customers in world class
academic and governmental research institutions, as well as pharmaceutical,
biotechnology and contract research companies.

During the three months ended March 31, 2022, we entered into a Master
Collaboration Agreement with Eli Lilly and Company (Lilly) establishing a
framework for future projects focused on the development of Simoa immunoassays
(the Lilly Collaboration Agreement). We also entered into a Statement of Work
under the Lilly Collaboration Agreement to perform assay research and
development services within the field of Alzheimer's disease. In connection with
the Lilly Collaboration Agreement, we received a non-refundable up-front payment
of $5.0 million during the three months ended March 31, 2022, and under the
Statement of Work receive $1.5 million per calendar quarter during 2022,
beginning with the three months ended March 31, 2022. The revenue will be
recognized over a one-year period.

Concurrent with the execution of the Lilly Collaboration Agreement, we entered
into a Technology License Agreement (the Lilly License) under which Lilly
granted to us a non-exclusive license to Lilly's proprietary P-tau217 antibody
technology for potential near-term use in research use only products and
services and future in vitro diagnostics applications within the field of
Alzheimer's disease. In consideration of the license, we paid an upfront fee,
are required to make milestone payments based on the achievement of
predetermined regulatory and commercial events, and will pay a royalty on net
sales of licensed products.

We concluded that the Lilly Collaboration Agreement and the Lilly License
represented a single contract with a customer and are accounting for the
agreements as service revenue recognized over time as the services are
delivered. The transaction price for the Lilly Collaboration Agreement is $10.9
million. Contingent amounts due to Lilly represent variable consideration
payable to a customer and will be recognized as reductions to service revenue up
to the amount of the transaction price recognized, when probable. We are
utilizing an input method to measure the delivery of services by calculating
costs incurred at each period end relative to total costs expected to be
incurred.

During the three months ended March 31, 2022, we recognized approximately $2.7 million of revenue from the Lilly Collaboration Agreement as service revenue.


On September 29, 2020, we entered the Abbott License Agreement with Abbott.
Pursuant to the terms of the Abbott License Agreement, we granted Abbott a
non-exclusive, worldwide, royalty-bearing license, without the right to
sublicense, under our bead-based single molecule detection patents in the field
of IVD. Abbott paid an initial license fee of $10.0 million in connection with
the execution of the Abbott License Agreement, which was recognized as license
revenue for the year ended December 31, 2020. Abbott has also agreed to pay us
milestone fees subject to the achievement by Abbott of certain development,
regulatory and commercialization milestones and low single digit royalties on
net sales of licensed products.

In view of the COVID-19 pandemic, in 2020 we began developing a SARS-CoV-2
antibody test (the "Antibody Test") and a SARS-CoV-2 antigen test (the "Antigen
Test") for our HD-X instrument. The FDA issued EUAs for the Antibody Test and
the Antigen Test in December 2020 and January 2021, respectively. In September
2021, the FDA expanded the EUA label for the Antigen Test to include testing
with nasal swabs and saliva and for asymptomatic serial testing with nasal swab
samples. In May 2022, we submitted a request to the FDA to voluntarily withdraw
the EUA for each of these tests as we no longer intend to market the EUA version
of the tests. This decision was made in recognition of the changing testing
dynamics of the COVID-19 pandemic. Our tests are optimized for use in central
laboratory testing environments that process samples in high volume. As the
health crisis transitions from the pandemic to endemic phase, public health
policy has shifted to prioritize more routine use of low-cost, rapid antigen
tests. Additionally, a substantial majority of revenue from our COVID-19 test
portfolio has been from the RUO-labeled versions of these tests, which continue
to be utilized in research and clinical settings. We intend to continue to
commercialize the RUO-labeled tests.

In September 2020, we entered into WP2 with the NIH under the RADx program. This
contract, which had a total award value of up to $18.2 million, was intended to
accelerate the continued development, scale-up and deployment of the Antigen
Test, in particular to expand assay kit manufacturing capacity and commercial
deployment readiness.

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Contract funding was subject to the achievement of pre-defined milestones and
the contract period ran through September 2021, with one milestone extended to
May 31, 2022. As of March 31, 2022, we had received $17.7 million out of the
full $18.2 million under WP2, and in May 2022 we received the final $0.5
million. Performance under the RADx WP2 contract is now complete.

We are subject to ongoing uncertainty concerning the COVID-19 pandemic,
including its length and severity and its effect on our business. In 2020, we
saw an impact on instrument revenue due to limitations on our ability to access
certain customer sites and complete instrument installations, as well as an
impact on consumables revenue from interruptions in certain customer
laboratories through the first quarter of 2021. As customers began returning to
normal operations in the second quarter of 2021, we have seen less of an impact
related to COVID-19 related shutdowns. However, we expect COVID-19 related
challenges to continue for the foreseeable future and potentially increase if
variants result in new shutdowns.

The COVID-19 situation remains dynamic, and there remains significant
uncertainty as to the length and severity of the pandemic, the actions that may
be taken by government authorities, the impact to the business of our customers
and suppliers, the long-term economic implications and other factors identified
in "Part I, Item 1A, Risk Factors" of this Annual Report on Form 10-K. We will
continue to evaluate the nature and extent of the impact to our business,
financial condition, and operating results.

As of March 31, 2022, we had cash and cash equivalents of $376.9 million. Since
inception, we have incurred annual net losses. Our net loss was $57.7 million,
$31.5 million, and $40.8 million for the years ended December 31, 2021, 2020,
and 2019, respectively, and $18.2 million and $10.1 million for the three months
ended March 31, 2022 and 2021, respectively. As of March 31, 2022, we had an
accumulated deficit of $323.6 million and stockholders' equity of $426.4
million. We expect to continue to incur significant expenses and operating
losses at least through the next 24 months. We expect our expenses will increase
substantially as we:

? expand our sales and marketing efforts to further commercialize our products;

? strategically acquire companies or technologies that may be complementary to

our business;

expand our research and development efforts to improve our existing products

? and develop and launch new products, particularly if any of our products are

deemed by the FDA to be medical devices or otherwise subject to additional

regulation by the FDA;

seek PMA or 510(k) clearance from the FDA for our existing products or new

? products if or when we decide to market products for use in the prevention,

diagnosis or treatment of a disease or other condition;

? hire additional personnel and continue to grow our employee headcount;




?
enter into additional collaboration arrangements or in-license other products
and technologies;
?
add operational, financial and management information systems; and
?
continue to incur increased costs as a result of operating as a public company.


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Results of Operations

Comparison of the Three Months Ended March 31, 2022 and March 31, 2021 (dollars in thousands):



                                       Three Months Ended March 31,         

Increase (Decrease)


                             2022      % of revenue       2021      % of revenue       Amount         %
Product revenue           $   20,656         70 %      $   18,248         67 %      $      2,408      13 %
Service and other revenue      8,810         30 %           6,409         24 %             2,401      37 %
Collaboration and license
revenue                           86          - %             261          1 %             (175)    (67) %
Grant revenue                      -          - %           2,291          8 %           (2,291)   (100) %
Total revenue                 29,552        100 %          27,209        100 %             2,343       9 %
Cost of goods sold:
Cost of product revenue       10,746         37 %           7,480         27 %             3,266      44 %
Cost of service revenue        4,247         14 %           3,380         12 %               867      26 %
Total costs of goods sold
and services                  14,993         51 %          10,860         40 %             4,133      38 %
Gross profit                  14,559         49 %          16,349         60 %           (1,790)    (11) %
Operating expenses:
Research and development       7,034         24 %           6,683         25 %               351       5 %
Selling, general, and
administrative                25,712         87 %          19,455         72 %             6,257      32 %

Total operating expenses 32,746 111 % 26,138 96 %

             6,608      25 %

Loss from operations (18,187) (62) % (9,789) (36) %

           (8,398)    (86) %
Interest income
(expense), net                    52          - %           (163)        (1) %    `          215     132 %
Other expense, net             (217)        (1) %           (194)        (1) %              (23)    (12) %

Loss before income taxes (18,352) (63) % (10,146) (37) %

           (8,206)    (81) %
Income tax benefit               199          2 %              42         

- %               157     374 %
Net loss                  $ (18,153)       (61) %      $ (10,104)       (37) %      $    (8,049)    (80) %


Revenue

Total revenue increased by $2.3 million, or 9%, to $29.6 million for the three
months ended March 31, 2022, as compared to $27.2 million for the three months
ended March 31, 2021. Product revenue consisted of sales of instruments totaling
$6.2 million and sales of consumables and other products of $14.2 million for
the three months ended March 31, 2022. Product revenue primarily consisted of
instrument sales totaling $7.0 million and sales of consumables and other
products of $11.3 million for the three months ended March 31, 2021. The
increase in product revenue of $2.4 million in the first quarter of 2022 was due
to the increase in consumable sales year over year, partially offset by a
decline in instrument sales. The increase in service and other revenue was due
to the $2.7 million of revenue recognized from the Lilly Collaboration Agreement
during the three months ended March 31, 2022. Our collaboration and license
revenue during both periods was mainly related to licensing technology and
intellectual property. Grant revenue of $2.3 million for the three months ended
March 31, 2021 consisted of revenue related to WP2. We did not have any grant
revenue during the three months ended March 31, 2022.

Cost of Goods Sold, Services, and Licenses


Cost of product revenue increased by $3.3 million, or 44%, to $10.7 million the
three months ended March 31, 2022, as compared to $7.5 million for the three
months ended March 31, 2021. The increase was primarily due to inefficiencies in
our manufacturing and inventory management processes resulting in higher excess
and obsolete product during the quarter. Accordingly, we changed our estimate
for excess and obsolete product during the three months ended March 31, 2022,
increasing our reserve. Cost of service revenue increased to $4.3 million the
three months ended March 31, 2022, as compared to $3.4 million for the three
months ended March 31, 2021, primarily due to our increased service revenue.
Overall, cost of goods sold as a percentage of revenue increased to 51% of total
revenue the three months ended March 31, 2022, as compared to 40% for the three
months ended March 31, 2021. This was a result of the inefficiencies in our
manufacturing and inventory management processes noted above.

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Research and Development Expense


Research and development expense increased by $0.4 million, or 5%, for the three
months ended March 31, 2022, as compared to the same period in 2021, primarily
due to additional headcount in research and development as we scale our
organization and invest in process improvements.

Selling, General, and Administrative Expense



Selling, general and administrative expense increased by $6.3 million, or 32%,
for the three months ended March 31, 2022, as compared to the same period in
2021, mainly due to additional headcount as we scale our organization and
discretionary spending increases.

Interest income (Expense), Net


Interest income (expense), net increased to income of $0.1 million for the three
months ended March 31, 2022, as compared to an expense of $0.2 million in the
same period in 2021, due to maturity of the Company's note payable in the fourth
quarter of 2021 and higher interest income on our cash equivalents during the
three months ended March 31, 2022.

Other Expense, Net

Other expense, net was consistent at $0.2 million in both periods presented and mainly consisted of the impact of foreign currency exchange rates.

Income Tax Benefit



Income tax benefit was $0.2 million for the three months ended March 31, 2022
and less than $0.1 million for the three months ended March 31, 2021 consisting
primarily of provisions recorded on the operating results of our foreign
subsidiaries.

Liquidity and Capital Resources

To date, we have financed our operations principally through equity offerings, borrowings from credit facilities and revenue from our commercial operations.

Cash Flows

The following table presents our cash flows (in thousands):



                                                          Three Months 

Ended March 31,


                                                            2022            

2021


Net cash used in operating activities                  $      (21,695)     $      (14,089)
Net cash (used in) provided by investing activities              (874)     

2,435


Net cash provided by financing activities                          979     

273,313


Net (decrease) increase in cash, cash equivalents and
restricted cash                                        $      (21,590)

$ 261,659

Net Cash Used in Operating Activities



We derive cash flows from operations primarily from the sale of our products and
services. Our cash flows from operating activities are also significantly
influenced by our use of cash for operating expenses to invest in process
improvements. We have historically experienced negative cash flows from
operating activities as we have developed our technology, expanded our business
and built our infrastructure and this may continue in the future.

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Net cash used in operating activities was $21.7 million during the three months
ended March 31, 2022. The net cash used in operating activities primarily
consisted of the net loss of $18.2 million offset by non-cash charges of $3.8
million of stock-based compensation expense and $1.4 million of depreciation and
amortization expense. Cash used as a result of changes in operating assets and
liabilities of $8.9 million was primarily due to a decrease in accounts payable
of $5.3 million and a decrease in accrued compensation and benefits, other
accrued expenses and other current liabilities of $4.9 million offset by an
increase in deferred revenue of $3.0 million.

Net cash used in operating activities was $14.1 million during the three months
ended March 31, 2021. The net cash used in operating activities primarily
consisted of the net loss of $10.1 million offset by non-cash charges of $3.4
million of stock-based compensation expense and $1.2 million of depreciation and
amortization expense. Cash used as a result of changes in operating assets and
liabilities of $8.9 million was primarily due to a decrease in accrued
compensation and benefits, other accrued expenses and other current liabilities
of $5.6 million, and an increase in inventory of $2.3 million.

Net Cash (Used in) Provided by Investing Activities

Historically, our primary investing activities have consisted of capital expenditures for the purchase of capital equipment to support our expanding infrastructure and work force. We expect to continue to incur additional costs for capital expenditures related to these efforts in future periods.

Investing activities used $0.9 million of cash during the three months ended March 31, 2022 primarily related to purchases of property and equipment.


Investing activities provided $2.4 million of cash during the three months ended
March 31, 2021 primarily related to $2.5 million in grant proceeds related to
WP2.

Net Cash Provided by Financing Activities

Historically, we have financed our operations principally through sales of our stock, borrowings from credit facilities, and revenues from our commercial operations.


Financing activities provided $1.0 million of cash during the three months ended
March 31, 2022, mainly from proceeds from employee stock purchases and stock
option exercises.

Financing activities provided $273.3 million of cash during the three months
ended March 31, 2021, primarily from $269.7 million in net proceeds from our
underwritten public offering during the first quarter of 2021, and $3.1 million
in proceeds from common stock option exercises.

Capital Resources


Other than the third quarter of 2020, since inception, we have incurred net
losses, and we also expect that our operating expenses will increase as we
continue to increase our marketing efforts to drive adoption of our commercial
products. Additionally, as a public company, we have incurred and will continue
to incur significant audit, legal and other expenses that we did not incur as a
private company. Our liquidity requirements have historically consisted, and we
expect that they will continue to consist, of sales and marketing expenses,
research and development expenses, working capital, debt service and general
corporate expenses.

We believe cash generated from commercial sales, our current cash and cash
equivalents, and interest income we earn on these balances will be sufficient to
meet our anticipated operating cash requirements for at least the next 12
months. In the future, we expect our operating and capital expenditures to
increase as we increase headcount, expand our sales and marketing activities and
grow our customer base. Our estimates of the period of time through which our
financial resources will be adequate to support our operations and the costs to
support research and development and our sales and marketing activities are
forward-looking statements and involve risks and uncertainties and actual
results could vary materially and negatively as a result of a number of factors,
including the factors discussed in Item 1A, "Risk

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Factors" of our Annual Report on Form 10-K for the year ended December 31, 2021
We have based our estimates on assumptions that may prove to be wrong and we
could utilize our available capital resources sooner than we currently expect.
Our future funding requirements will depend on many factors, including:

? market acceptance of our products;

? the cost and timing of establishing additional sales, marketing and

distribution capabilities;

? the cost of our research and development activities;

? our ability to enter into collaborations in the future, and the success of any

such collaborations;

? the cost and timing of potential regulatory clearances or approvals that may be

required in the future for our products;

? the effects of the COVID-19 pandemic; and

? the effect of competing technological and market developments.


If the conditions for raising capital are favorable, we may seek to finance
future cash needs through public or private equity or debt offerings or other
financings. On November 6, 2020, we filed an automatically effective shelf
registration statement with the SEC. Each issuance of securities under the shelf
registration statement will require the filing of a prospectus supplement
identifying the amount and terms of securities to be issued. The registration
statement does not limit the amount of securities that may be issued thereunder.
Our ability to issue securities is subject to market conditions and other
factors. This registration statement will expire on November 6, 2023, three
years after its date of effectiveness. However, we cannot assure you that we
will be able to obtain additional funds on acceptable terms, or at all. If we
raise additional funds by issuing equity or equity-linked securities, our
stockholders may experience dilution. Future debt financing, if available, may
involve covenants restricting our operations or our ability to incur additional
debt. Any debt or equity financing that we raise may contain terms that are not
favorable to us or our stockholders. If we raise additional funds through
collaboration and licensing arrangements with third parties, it may be necessary
to relinquish some rights to our technologies or our products, or grant licenses
on terms that are not favorable to us. If we do not have or are not able to
obtain sufficient funds, we may have to delay development or commercialization
of our products. We also may have to reduce marketing, customer support or other
resources devoted to our products or cease operations.

Contractual Obligations and Commitments


As of March 31, 2022, except for the Bedford, Massachusetts lease detailed in
Note 10, there have been no material changes to our contractual obligations and
commitments from those described under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in our Annual Report on
Form 10-K for the year ended December 31, 2021.

Off-Balance Sheet Arrangements

We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.

Critical Accounting Policies, Significant Judgments and Estimates



The preparation of financial statements in conformity with accounting principles
generally accepted in the United States, or U.S. GAAP, requires management to
make estimates and assumptions that impact the reported amounts of assets,
liabilities, revenues, and expenses and the disclosure of assets and liabilities
in our financial statements and accompanying notes. The most significant
assumptions used in the financial statements are the underlying assumptions used
in revenue recognition and valuation of inventory. We base estimates and
assumptions on historical experience when available and on various factors that
we determined to be reasonable under the circumstances. We evaluate our
estimates and assumptions on an ongoing basis. Our actual results may differ
from these estimates under different assumptions or conditions.

Our critical accounting policies and significant estimates that involve a higher
degree of judgment and complexity are described under "Management's Discussion
and Analysis of Financial Condition and Results of

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Operations-Critical Accounting Policies, Significant Judgments and Estimates" included in our Annual Report on Form 10-K for the year ended December 31, 2021.

There have been no material changes to our critical accounting policies and estimates as disclosed therein, with the exception of our adoption of recent accounting pronouncements, as discussed below.

Recent Accounting Pronouncements



Information concerning recently issued accounting pronouncements may be found in
Note 2 to our unaudited condensed consolidated financial statements included in
the quarterly report on Form 10-Q.

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