QUANTERIX CORPORATION 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 endedDecember 31, 2021 , filed with theSecurities and Exchange Commission (theSEC ) onMarch 1, 2022 . 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 Item 1A of Part II, "Risk Factors" and "Special Note Regarding Forward-Looking Statements" included elsewhere in this Quarterly Report on Form 10-Q or under "Risk Factors" in Item 1A of Part I of our Annual Report on Form 10-K for the year endedDecember 31, 2021 .
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, inJanuary 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 inDecember 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. InJuly 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 ourCLIA-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 1,900 projects for approximately 440 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 inNorth America andEurope , and through distributors or sales agents in other select markets, includingAustralia ,Brazil ,China ,Czech Republic ,India ,Hong Kong ,Israel ,Japan ,New Zealand ,Qatar ,Saudi Arabia ,Singapore ,South Africa ,South Korea ,Taiwan , andUAE . In addition, Uman sells Nf-L antibodies and Nf-L ELISA kits directly, and in conjunction with us and another distributor worldwide. We have an 23
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extensive base of customers in world class academic and governmental research institutions, as well as pharmaceutical, biotechnology and contract research companies. As ofSeptember 30, 2022 , we had cash and cash equivalents of$343.7 million . Since inception, we have incurred annual net losses. Our net losses were$57.7 million ,$31.5 million , and$40.8 million for the years endedDecember 31, 2021 , 2020, and 2019, respectively, and$78.1 million and$37.7 million for the nine months endedSeptember 30, 2022 and 2021, respectively. As ofSeptember 30, 2022 , we had an accumulated deficit of$383.6 million and stockholders' equity of$372.8 million .
Recent Business Developments
OnMarch 24, 2022 , we entered into a contract with the Alzheimer'sDrug Discovery Foundation (ADDF). ADDF is a charitable venture philanthropy entity that has granted us funding in support of certain activities for the development of an in vitro diagnostic (IVD) test for early detection of Alzheimer's disease (ADDF Grant). The ADDF Grant, which has a total funding value of$2.3 million , restricts our use of the granted funds to be used solely for activities related to the Alzheimer's diagnostic test development project. Contract funding is subject to achievement of pre-defined milestones and the contract period runs throughJune 2024 . As ofSeptember 30, 2022 , we had received$1.3 million out of the full$2.3 million funding value under the ADDF Grant. During the three months endedSeptember 30, 2022 , we recognized$0.3 million in grant revenue and incurred$0.3 million in research and development expense related to the ADDF Grant. During the nine months endedSeptember 30, 2022 , we recognized$0.4 million in grant revenue and incurred$0.4 million in research and development expense related to the ADDF Grant. During the first quarter of 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 (the 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 first quarter of 2022, and under the Statement of Work receive$1.5 million per calendar quarter during 2022, beginning with the three months endedMarch 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 Lilly 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 and nine months ended
Restructuring and Strategic Re-Alignment
Following a strategic review and assessment of our operations and cost structure, onAugust 8, 2022 , we announced a plan of restructuring and strategic re-alignment (the Restructuring Plan). As part of this plan, we began an assay redevelopment program with the ultimate objective of improving our ability to manufacture and deliver high-quality assays at scale. The plan aligns our investments to best serve the needs of customers, focuses innovation efforts on key platforms and provides the foundation for our entry into translational pharma and clinical markets, which we 24
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believe will be required to access new growth categories. The restructuring included the elimination of 119 positions across the Company and other cost-saving measures. The workforce reduction was substantially completed by the end of the third quarter of 2022. We recorded a$3.3 million charge in the third quarter of 2022 as a result of the workforce reduction, consisting of one-time termination benefits for employee severance, benefits and related costs. As part of the Restructuring Plan, we are also reviewing alternative uses of the additional facility space that we currently lease inBedford, Massachusetts . These alternatives may include terminating the lease or the sub-lease of all or a portion of the leased facility. During the three months endedSeptember 30, 2022 , we recorded an impairment expense of$7.7 million on our long-lived assets related to theBedford facilities, as well as a$1.0 million impairment expense related to software projects. Overall, as a result of the Restructuring Plan, we expect to realize estimated annualized operating expense savings of approximately$25 million .
Despite the Restructuring Plan, we expect to continue to incur significant expenses and operating losses at least through the next 24 months as we:
? execute the Restructuring Plan;
? expand our sales and marketing efforts to further commercialize our products;
? pursue strategic acquisitions of 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 FDA to be medical devices or otherwise subject to additional regulation by FDA;
seek PMA or 510(k) clearance from 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; and
? enter into additional collaboration arrangements or in-license other products
and technologies.
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Results of Operations
Comparison of the Three Months Ended
Three Months Ended September 30, Increase (Decrease)
2022 % of revenue 2021 % of revenue Amount %
Product revenue $ 17,693 66 % $ 20,662 75 % $ (2,969) (14) %
Service and other revenue 8,370 31 % 5,898 21 % 2,472 42 %
Collaboration and license
revenue 301 1 % 120 - % 181 151 %
Grant revenue 282 1 % 1,009 4 % (727) (72) %
Total revenue 26,646 99 % 27,689 100 % (1,043) (4) %
Cost of goods sold:
Cost of product revenue 10,511 39 % 8,639 31 % 1,872 22 %
Cost of service revenue 5,191 19 % 3,806 14 % 1,385 36 %
Total costs of goods sold
and services 15,702 58 % 12,445 45 % 3,257 26 %
Gross profit 10,944 41 % 15,244 55 % (4,300) (28) %
Operating expenses:Research and development 6,631 25 % 6,807 25 % (176) (3) % Selling, general, and administrative 19,966 75 % 23,670 85 % (3,704) (16) % Other lease costs 609 2 % - - % 609 - Restructuring 3,426 13 % - - % 3,426 - Goodwill impairment 8,220 31 % - - % 8,220 - Impairment expense 8,695 33 % - - % 8,695 - Total operating expenses 47,547 178 % 30,477 110 % 17,070 56 % Loss from operations (36,603) (137) % (15,233) (55) % (21,370) (140) % Interest income (expense), net 1,712 6 % (90) - % 1,802 2,002 % Other (expense) income, net (101) 1 % (305) (1) % 204 (67) % Loss before income taxes (34,992) (131) % (15,628) (56) % (19,364) (124) % Income tax provision 72 - % 33 - % 39 118 % Net loss$ (35,064) (131) %$ (15,661) (56) %$ (19,403) (124) % Revenue
Total revenue decreased$1.1 million , or 4%, to$26.6 million for the three months endedSeptember 30, 2022 , compared to$27.7 million for the three months endedSeptember 30, 2021 . Product revenue of$17.7 million for the three months endedSeptember 30, 2022 consisted of instrument sales of$7.8 million and sales of consumables and other products of$9.9 million . This represented a decrease of$3.0 million , or 14%, as compared to product revenue of$20.7 million for the three months endingSeptember 30, 2021 , which consisted of$6.5 million in instrument sales and$14.2 million in consumables and other. The decrease in product revenue was primarily due to our management of production levels as we address the quality challenges affecting our consumables. Service and other revenue was$8.4 million for the three months endedSeptember 30, 2022 , compared to$5.9 million for the three months endedSeptember 30, 2021 , an increase of$2.7 million , or 42%, primarily due to revenue recognized from the Lilly Collaboration Agreement which was new in 2022. Grant revenue decreased 72% period over period. Grant revenue of$0.3 million in the third quarter of 2022 was related to the ADDF Grant which was new in 2022 and grant revenue of$1.0 million in the third quarter of 2021, was related to the RADx Grant which ended in 2021.
Cost of Goods Sold and Services
Cost of goods sold and services increased$3.3 million , or 26%, to$15.7 million for the three months endedSeptember 30, 2022 compared to$12.4 million for the three months endedSeptember 30, 2021 , primarily due to increased cost of product revenue. Cost of product revenue increased 22% as a result of an increase our inventory 26 Table of Contents
reserve to address manufacturing and quality challenges and discontinued products. This increase was partially offset by the reduction in headcount due to the Restructuring Plan.
Research and Development Expense
Research and development expense decreased
Selling, General, and Administrative Expense
Selling, general and administrative expense decreased$3.7 million , or 16%, for the three months endedSeptember 30, 2022 , as compared to the same period in 2021, mainly due to the reduction in headcount in connection with the implementation of the Restructing Plan and a decrease in contracted services.
Other Lease Costs
As part of the Restructuring Plan, we are not utilizing the office and laboratory space leased inBedford, Massachusetts and are evaluating alternatives, including termination of the lease or sub-leasing the facilities. Other lease costs represent the depreciation expense of the right-of-use asset and the accretion of the lease facility for periods after the impairment and the determination that the facilities would not be utilized. There were no similar charges in the same period in 2021.
Restructuring, Goodwill Impairment, and Impairment Expense
During the three months endedSeptember 30, 2022 , we incurred restructuring expense of$3.4 million , and non-cash impairment expenses of$8.7 million and$8.2 million for long-lived assets, and goodwill, respectively. Included in restructuring expense were costs for severance and one-time termination benefits in connection with the elimination of 119 positions across the Company, associated legal fees and contract cancellation costs due to the implementation of the Restructuring Plan. Impairment expense of$8.7 million includes$7.7 million associated with theBedford, Massachusetts facilities and$1.0 million associated with the impairment of software costs for projects that have been rationalized as part of the Restructuring Plan. As part of the Restructuring Plan, we are not utilizing theBedford, Massachusetts facilities and are evaluating alternatives, including terminating the lease or sub-leasing the facilities. The entire goodwill balance was written off during the three months endedSeptember 30, 2022 , following the assessment of our interim goodwill impairment test. There were no similar charges in the same period in 2021.
Interest Income (Expense), Net
Interest income (expense), net was income of$1.7 million for the three months endedSeptember 30, 2022 , as compared to an expense of$0.1 million in the same period in 2021, due to the maturity of our note payable in the fourth quarter of 2021 and higher interest income on our cash equivalents during the three months endedSeptember 30, 2022 . Other (Expense) Income, Net
Other (expense) income, net was an expense of
Income Tax Provision
Income tax provision was$0.1 million for the three months endedSeptember 30, 2022 , and less than$0.1 million for the three months endedSeptember 30, 2021 , consisting primarily of provisions recorded on the operating results
of
our foreign subsidiaries.
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Comparison of the Nine Months Ended
Nine Months Ended September 30, Increase (Decrease)
2022 % of revenue 2021 % of revenue Amount %
Product revenue $ 53,134 67 % $ 57,586 72 %
7,773 43 %
Collaboration and license
revenue 479 1 % 486 1 % (7) (1) %
Grant revenue 357 - % 4,242 5 % (3,885) (92) %
Total revenue 79,698 100 % 80,269 100 % (571) (1) %
Cost of goods sold:
Cost of product revenue 31,178 39 % 24,233 30 % 6,945 29 %
Cost of service revenue 14,306 18 % 10,569 13 % 3,737 35 %
Total costs of goods sold
and services 45,484 57 % 34,802 43 % 10,682 31 %
Gross profit 34,214 43 % 45,467 57 % (11,253) (25) %
Operating expenses:Research and development 20,290 25 % 20,244
25 % 46 0 % Selling, general and administrative 72,723 91 % 63,913 80 % 8,810 14 % Other lease costs 609 1 % - - % 609 - Restructuring 3,426 4 % - - % 3,426 - Goodwill impairment 8,220 10 % - - % 8,220 - Impairment expense 8,695 11 % - - % 8,695 -
Total operating expenses 113,963 142 % 84,157 102 %
29,806 35 %
Loss from operations (79,749) (99) % (38,690) (48) % (41,059) (106) %
Interest income (expense),
net 2,316 3 % (418) (1) % 2,734 654 %
Other (expense) income,
net (676) (1) % 1,478 2 % (2,154) (146) %
Loss before income taxes (78,109) (97) % (37,630) (47) % (40,479) (108) % Income tax provision
10 - % 32 - % (22) (69) %
Net loss $ (78,119) (97) % $ (37,662) (47) % $ (40,457) (107) %
Revenue
Total revenue was $79.7 million for the nine months ended September 30, 2022
compared to $80.3 million for the nine months ended September 30, 2021 , a
decrease of $0.6 million , or 1%. Product revenue of $53.1 million for the nine
months ended September 30, 2022 , which consisted of instrument sales of $19.6
million and sales of consumables and other products of $33.5 million . This
represented a decrease of $4.5 million , or 8%, as compared to $57.6 million for
the nine months ended September 30, 2021 , which consisted instrument sales of
$19.3 million and sales of consumables and other products of $38.3 million . This
decrease in revenue was primarily due to quality issues with our consumables
product and, in the third quarter of 2022, the management of production levels
as we ensure we deliver quality products to our customers while we address the
quality challenges affecting our consumables.
Service and other revenue was $25.7 million for the nine months ended September
30, 2022 compared to $18.0 million for the nine months ended September 30, 2021 ,
an increase of $7.8 million , or 43% ,primarily due to revenue recognized from
the Lilly Collaboration Agreement which was new in 2022. Grant revenue decreased
92% period over period. Grant revenue of $0.4 million in the nine months ended
September 30, 2022 was related to the ADDF grant which was new in 2022 and grant
revenue of $4.2 million in the same period of 2021 was related to the RADx grant
which ended in 2021.
Cost of Goods Sold and Services
Cost of goods sold and service increased$10.7 million , or 31%, to$45.5 million for the nine months endedSeptember 30, 2022 compared to$34.8 million for the nine months endedSeptember 30, 2021 . Cost of product revenue increased 29% as a result of increasing our inventory reserve to reflect the ongoing efforts to address manufacturing and 28 Table of Contents quality challenges, and discontinued products. Cost of service revenue increased by 35% mainly due to a change in the way certain costs are allocated in the nine months endedSeptember 30, 2022 .
Research and Development Expense
Research and development expense was consistent at
Selling, General, and Administrative Expense
Selling, general and administrative expense increased$8.8 million , or 14%, for the nine months endedSeptember 30, 2022 , as compared to the same period in 2021, mainly due to additional headcount driving increased cash compensation expense, stock-based compensation expense, and other general and administrative expenses prior to the implementation of our Restructuring Plan. Rent expense increased for the nine months endedSeptember 30, 2022 due to the new leased facilities inBedford, Massachusetts that commenced onFebruary 1, 2022 when we gained access to the underlying facilities prior to the implementation of our Restructuring Plan. Other Lease Costs As part of the Restructuring Plan implemented during the third quarter of 2022, we are not utilizing the office and laboratory space leased inBedford, Massachusetts and are evaluating alternatives, including termination of the lease or sub-leasing the facilities. Other lease costs represent the depreciation expense of the right-of-use asset and the accretion of the lease facility for periods after the impairment and determination the facilities would not be utilized.
Restructuring, Goodwill Impairment, and Impairment Expense
During the nine months endedSeptember 30, 2022 , we incurred restructuring expense of$3.4 million , and non-cash impairment expenses of$8.7 million and$8.2 million for long-lived assets, and goodwill, respectively. Included in restructuring expense were costs for severance and one-time termination benefits in connection with the elimination of 119 positions across the Company, associated legal fees and contract cancellation costs due to the implementation of the Restructuring Plan. Impairment expense of$8.7 million includes$7.7 million associated with theBedford, Massachusetts facilities and$1.0 million associated with the impairment of software costs for projects that have been rationalized as part of the Restructuring Plan. As part of the Restructuring Plan, we are not utilizing these facilities and are evaluating alternatives, including termination of the lease or sub-leasing the facilities. The entire goodwill balance was written off during the nine months endedSeptember 30, 2022 , following the assessment of our interim goodwill impairment test. There were no similar charges in the same period in 2021.
Interest Income (Expense), Net
Interest income (expense), net was income of$2.3 million in the nine months endedSeptember 30, 2022 , as compared to an expense of$0.4 million in the same period in 2021, due to the maturity of our note payable in the fourth quarter of 2021 and higher interest income on our cash equivalents during the nine months endedSeptember 30, 2022 . Other (Expense) Income, Net Other (expense) income, net was an expense of$0.7 million in the nine months endedSeptember 30, 2022 , as compared to income of$1.5 million in the same period in 2021. Other expense, net for the nine months of 2022 was mainly due to the impact of foreign currency exchange rates. Other income, net for the nine months of 2021 was mainly due to a$2.1 million employee retention tax credit established under the Coronavirus Aid, Relief, and Economic Security Act. 29 Table of Contents Income Tax Provision Income tax provision was less than$0.1 million in both the nine months endedSeptember 30, 2022 and 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):
Nine Months Ended
2022 2021
Net cash used in operating activities $ (44,182) $ (37,615)
Net cash used in investing activities (9,611) (4,144)
Net cash provided by financing activities 1,597 271,646
Net (decrease) increase in cash, cash equivalents and restricted cash $
(52,196)
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. Net cash used in operating activities was$44.2 million during the nine months endedSeptember 30, 2022 . The net cash used in operating activities primarily consisted of the net loss of$78.1 million offset by non-cash charges of$11.8 million of stock-based compensation expense, impairment of long-lived assets of$8.7 million , impairment of goodwill of$8.2 million and$4.2 million of depreciation. Net cash used in operating activities was$37.6 million during the nine months endedSeptember 30, 2021 . The net cash used in operating activities primarily consisted of the net loss of$37.7 million offset by non-cash charges of$11.0 million of stock-based compensation expense and$3.6 million of depreciation and amortization expense. Cash used as a result of changes in operating assets and liabilities of$15.6 million was primarily due to an increase in inventory of$8.4 million , a decrease in accrued compensation and benefits, other accrued expenses and other current liabilities of$2.7 million , and an increase in accounts receivable of$1.6 million .
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.
We used
We used
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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$1.6 million of cash during the nine months endedSeptember 30, 2022 , from proceeds from employee stock purchases and stock option exercises. Financing activities provided$271.6 million of cash during the nine months endedSeptember 30, 2021 , primarily from$269.7 million in net proceeds from our underwritten public offering during the first quarter of 2021, and$6.6 million in proceeds from common stock option exercises, offset by$5.7 million in payments on notes payable.
Capital Resources
Since inception, we have incurred annual net losses. 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. 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 Part II, Item 1A. "Risk Factors", of this Quarterly Report on Form 10-Q, and Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the year endedDecember 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:
? our ability to successfully execute and realize the intended benefits of the
Restructuring Plan;
? market acceptance of our products and our ability to introduce new 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; 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. 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 ofSeptember 30, 2022 , except for theBedford, Massachusetts lease detailed in Note 12 to our unaudited condensed consolidated financial statements, there have been no material changes to our contractual obligations and 31
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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 endedDecember 31, 2021 .
Critical Accounting Policies, Significant Judgments and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted inthe United States , orU.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 Operations-Critical Accounting Policies, Significant Judgments and Estimates" included in our Annual Report on Form 10-K for the year endedDecember 31, 2021 .
There have been no material changes to our critical accounting policies and estimates as disclosed therein.
Recent Accounting Pronouncements
None.
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