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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-38720
https://cdn.kscope.io/52c4a920b82cf559c69b80a57e8639d7-twst-20210930x10k004.jpg
Twist Bioscience Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware46-2058888
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

681 Gateway Blvd, South San Francisco, CA 94080
(Address of principal executive offices and zip code)
(800) 719-0671
(Registrant’s telephone number, including area code)


Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class            Trading Symbol(s)            Name of each exchange on which registered
Common StockTWSTThe Nasdaq Global Select Market

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No
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. (Check one):
Large accelerated filerAccelerated filer
Non-accelerated filerSmall 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.


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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
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 March 31, 2022, the aggregate market value of shares of common stock held by non-affiliates of the registrant was approximately $2.39 billion based upon the closing sale price on the Nasdaq Global Select Market reported for such date. Shares of Common Stock held by each officer and director and by each person who owns 10% or more of the outstanding Common Stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
The number of shares of the Registrant’s common stock outstanding as of November 23, 2022, was 56,568,420.

DOCUMENTS INCORPORATED BY REFERENCE
None.



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EXPLANATORY NOTE

This amendment (this “Amendment No. 1) on Form 10-K/A amends the Annual Report on Form 10-K for the year ended September 30, 2022 (the “Original Form 10-K”) of Twist Bioscience Corporation (the “Company”) solely to correct typographical errors related to the date on the audit opinion of the Company’s previous independent registered public accounting firm, PricewaterhouseCoopers LLP, contained in Part II, Item 8 of the Original Form 10-K from November 28, 2022 to November 22, 2021, and the typeset signature of PricewaterhouseCoopers LLP on such opinion.

In accordance with Rule 12b-15 (“Rule 12b-15”) under the Securities Exchange Act of 1934, as amended, the Company has included the entire text of Part II, Item 8 “Financial Statements and Supplementary Data” in this Amendment No. 1. However, there have been no changes made to the text of such item other than the corrections stated in the immediately preceding paragraph. In addition, the Company is including in this Amendment No. 1 new certifications of its (i) Chief Executive Officer and (ii) Chief Financial Officer, as required by Rule 12b-15, as Exhibits 31.3, 31.4, 32.3 and 32.4, respectively, and currently dated consents from the independent registered public accounting firms as Exhibits 23.3 and 23.4.

Except as expressly set forth above, this Amendment No. 1 speaks as of the filing date of the Original Form 10-K, and does not reflect events that may have occurred subsequent to that date, nor does it modify or update in any way disclosure made in the Original Form 10-K.








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TWIST BIOSCIENCE CORPORATION
AMENDMENT NO. 1 TO ANNUAL REPORT ON FORM 10-K/A
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2022
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PART II

Item 8.Consolidated financial statements and supplementary data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



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Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors of Twist Bioscience Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Twist Bioscience Corporation (the Company) as of September 30, 2022, the related consolidated statements of operations and comprehensive loss, stockholders' equity and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated November 28, 2022 expressed an adverse opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.



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Valuation of intangible assets acquired in a business combination
Description of the MatterAs described in Note 14, on December 1, 2021, the Company acquired all of the outstanding stock of AbX Biologics, Inc. (“Abveris”), which was accounted for as a business combination using the acquisition method of accounting. The acquired intangible assets principally consisted of developed technology and customer relationships, which had estimated acquisition-date fair values of $30.9 million and $14.7 million, respectively.

Auditing the acquisition date fair values of the acquired developed technology and customer relationships was complex due to the significant judgment required in estimating their fair values. In particular, the fair value estimates required the use of valuation methodologies that were sensitive to significant assumptions (e.g., projected revenue growth rates, including forecasted selling prices and unit volumes, and discount rates applied to each intangible asset), which were affected by expected future market or economic conditions.
How We Addressed the Matter in Our AuditWe tested controls that address the risks of material misstatement relating to the valuation of the intangible assets which were primarily comprised of developed technology and customer relationships. For example, we tested controls over management’s review of the significant assumptions, such as the acquired business’s projected revenue growth rates, including forecasted selling prices and unit volumes, and the discount rate applied to each intangible asset.

To test the estimated fair value of the acquired developed technology and customer relationship intangible assets, our audit procedures included, among others, assessing the appropriateness of the valuation methodologies and testing the significant assumptions discussed above and the completeness and accuracy of the underlying data used by the Company. For example, we evaluated the reasonableness of assumptions used to determine the projected revenue growth rates by comparing the forecasted assumptions to historical performance, projected industry growth rates, and other factors considered by management in developing the model. We involved our valuation specialist to assist in evaluating the valuation methodologies and discount rates used to value the developed technology and customer relationships. We also performed sensitivity analyses to evaluate the changes in the fair value of the acquired developed technology and customer relationship intangible assets that would result from changes in the significant assumptions.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2022.
San Mateo, California
November 28, 2022




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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Twist Bioscience Corporation
Opinion on the Financial Statements
We have audited the consolidated balance sheet of Twist Bioscience Corporation and its subsidiaries (the “Company”) as of September 30, 2021, and the related consolidated statements of operations and comprehensive loss, of redeemable convertible preferred stock and stockholders’ equity and of cash flows for each of the two years in the period ended September 30, 2021, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2021, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2021 in conformity with accounting principles generally accepted in the United States of America.


Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.



/s/ PricewaterhouseCoopers LLP
San Jose, California
November 22, 2021
We served as the Company’s auditor from 2015 to 2021.


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Twist Bioscience Corporation
Consolidated Balance Sheets

(In thousands except per share data)September 30, 2022September 30, 2021
Assets  
Current assets:  
Cash and cash equivalents$378,687 $465,829 
Short-term investments126,281 12,034 
Accounts receivable, net40,294 28,549 
Inventories39,307 31,800 
Prepaid expenses and other current assets11,914 8,283 
Total current assets$596,483 $546,495 
Property and equipment, net139,441 44,122 
Operating lease right-of-use assets74,948 61,580 
Goodwill85,811 22,434 
Intangible assets, net59,738 18,262 
Restricted cash, non-current1,572 1,530 
Other non-current assets3,385 7,674 
Total assets$961,378 $702,097 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$20,092 $14,900 
Accrued expenses10,169 6,437 
Accrued compensation27,023 22,327 
Current portion of operating lease liability13,642 8,213 
Current portion of long-term debt 1,552 
Other current liabilities19,737 9,623 
Total current liabilities$90,663 $63,052 
Operating lease liability, net of current portion81,270 53,156 
Other non-current liabilities60 5,068 
Total liabilities$171,993 $121,276 
Commitments and contingencies (Note 7)
Stockholders’ equity
Common stock, $0.00001 par value — 100,000 and 100,000 shares authorized at September 30, 2022 and 2021, respectively; 56,523 and 49,499 shares issued and outstanding at September 30, 2022 and 2021, respectively
$ $ 
Additional paid-in capital1,619,644 1,190,828 
Accumulated other comprehensive (loss)/income(1,843)546 
Accumulated deficit(828,416)(610,553)
Total stockholders’ equity$789,385 $580,821 
Total liabilities and stockholders’ equity$961,378 $702,097 



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


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Twist Bioscience Corporation
Consolidated Statements of Operations and Comprehensive Loss

Year ended September 30,
(In thousands, except per share data)202220212020
Revenues$203,565 $132,333 $90,100 
Operating expenses:
Cost of revenues$119,330 $80,620 $61,406 
Research and development120,307 69,072 43,006 
Selling, general and administrative212,949 135,901 103,267 
Change in fair value of contingent considerations and holdbacks(14,245)(534) 
Litigation settlement  22,500 
Total operating expenses$438,341 $285,059 $230,179 
Loss from operations$(234,776)$(152,726)$(140,079)
Interest income3,062 435 1,499 
Interest expense(80)(367)(787)
Gain on deconsolidation of subsidiary4,607   
Other income (expense), net(1,087)(1,370)(182)
Loss before income taxes$(228,274)$(154,028)$(139,549)
Benefit from (provision for) income taxes10,411 1,930 (382)
Net loss attributable to common stockholders$(217,863)$(152,098)$(139,931)
Other comprehensive loss:
Change in unrealized gain (loss) on investments$(1,594)$(14)$(34)
Foreign currency translation adjustment(795)473 (60)
Comprehensive loss $(220,252)$(151,639)$(140,025)
Net loss per share attributable to common stockholders—basic and diluted$(4.04)$(3.15)$(3.57)
Weighted average shares used in computing net loss per share attributable to common stockholders—basic and diluted53,885 48,251 39,190 

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




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Twist Bioscience Corporation
Consolidated Statements of Stockholders’ Equity

Common stockAdditional paid-in capitalAccumulated other comprehensive incomeAccumulated deficitTotal stockholders' equity
(In thousands)SharesAmount
Balances as of September 30, 201932,873$ $470,425 $181 $(318,524)$152,082 
Issuance of common stock in public offerings, net of underwriting discounts, commissions and offering expenses of $18,916
11,064295,563295,563
Vesting of restricted stock units178
Issuance of shares under the employee stock purchase plan1263,4283,428
Exercise of stock options91510,53910,539
Repurchase of early exercised stock options(2)
Stock-based compensation17,09617,096
Other comprehensive loss(94)(94)
Repurchase of common stock for income tax withholdings(71)(2,421)(2,421)
Net loss(139,931)(139,931)
Balances as of September 30, 202045,083$ $794,630 $87 $(458,455)$336,262 
Issuance of common stock in public offerings, net of underwriting discounts, commissions and offering expenses of $21,139
3,136323,861323,861
Vesting of restricted stock units237
Issuance of shares under the employee stock purchase plan744,9444,944
Exercise of stock options80414,47114,471
Repurchase of early exercised stock options(2)
Business acquisition23726,77326,773
Stock-based compensation36,99836,998
Net exercise of stock warrants22
Other comprehensive income459459
Repurchase of common stock for income tax withholdings(92)(10,849)(10,849)
Net loss(152,098)(152,098)
Balances as of September 30, 202149,499$ $1,190,828 $546 $(610,553)$580,821 
Issuance of common stock in public offering, net of underwriting discounts and commissions and offering expenses of $17,678
5,227269,822269,822
Vesting of restricted stock units365
Issuance of shares under the employee stock purchase plan974,0104,010
Exercise of stock options4865,9525,952
Business acquisition98877,12277,122
Stock-based compensation79,66479,664
Other comprehensive loss(2,389)(2,389)
Repurchase of common stock for income tax withholdings(139)(7,754)(7,754)
Net loss(217,863)(217,863)
Balances as of September 30, 202256,523$ $1,619,644 $(1,843)$(828,416)$789,385 

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



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Twist Bioscience Corporation
Consolidated Statements of Cash Flows
Year ended September 30,
(in thousands)202220212020
Cash flows from operating activities   
Net loss$(217,863)$(152,098)$(139,931)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization16,514 9,750 6,677 
Non-cash lease expense, net of tenant improvement allowance
20,127 2,243 (1,043)
Gain on deconsolidation of Revelar (4,607)  
Loss on disposal of property and equipment 2  
Stock-based compensation79,664 36,998 17,096 
Discount (premium) accretion on investment securities1,315 593 (214)
Realized gain on investments (5) 
Allowance for doubtful accounts(11)40  
Change in fair value of contingent considerations and holdbacks(14,245)(534) 
Non-cash interest expense3 67 152 
Amortization of debt discount4 81 184 
Write off property and equipment 70   
Changes in assets and liabilities:
Accounts receivable, net(9,622)(2,202)(14,272)
Inventories(7,536)(19,489)(4,956)
Prepaid expenses and other current assets(2,551)(2,058)(3,683)
Other non-current assets7,273 (4,653)(554)
Accounts payable7,383 8,542 (5,506)
Accrued expenses2,269 3,115 (2,648)
Accrued compensation4,852 7,392 4,465 
Other liabilities(7,424)(28)1,978 
Net cash used in operating activities(124,385)(112,244)(142,255)
Cash flows from investing activities
Purchases of property and equipment(101,857)(27,061)(9,868)
Business acquisition, net of cash acquired(8,160)(483) 
Deconsolidation of cash and cash equivalent relating to Revelar(5,755)  
Purchases of investments(217,639)(58,795)(202,882)
Proceeds from maturity of investments100,481 242,494 98,100 
Net cash provided by (used in) investing activities(232,930)156,155 (114,650)
Cash flows from financing activities
Proceeds from exercise of stock options6,014 14,559 10,495 
Proceeds from public offerings, net of underwriting discounts, commissions and offering expenses269,822 323,861 295,563 
Proceeds from issuance under employee stock purchase plan4,010 4,944 3,428 
Repayments of long-term debt(1,558)(3,333)(3,333)
Repurchases of common stock for income tax withholding(7,754)(10,849)(2,421)
Net cash provided by financing activities270,534 329,182 303,732 
Effect of exchange rates on cash, cash equivalents and restricted cash(319)20 21 
Net increase (decrease) in cash, cash equivalents and restricted cash(87,100)373,113 46,848 
Cash, cash equivalents, and restricted cash at beginning of year467,359 94,246 47,398 
Cash, cash equivalents, and restricted cash at end of year$380,259 $467,359 $94,246 
Supplemental disclosure of cash flow information
Interest paid$9 $167 $438 
Income taxes paid, net of refunds246 101 172 
Non-cash investing and financing activities
Property and equipment additions included in accrued expenses and accounts payable$6,297 $2,011 $1,333 
Operating lease right-of-use assets obtained in exchange for operating lease liabilities21,367 33,617 3,718 
Issuance of common stock in connection with the business acquisition77,122 26,773  

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



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Twist Bioscience Corporation
Notes to Consolidated Financial Statements

1.The company
Twist Bioscience Corporation (the Company) was incorporated in the state of Delaware on February 4, 2013. The Company is a synthetic biology company that has developed a disruptive DNA synthesis platform. DNA is used in many applications across different industries: industrial chemicals/materials, academic, healthcare and food/agriculture.
The core of the Company’s platform is a proprietary technology that pioneers a new method of manufacturing synthetic DNA by “writing” DNA on a silicon chip. The Company has combined this technology with proprietary software, scalable commercial infrastructure and an e-commerce platform to create an integrated technology platform that enables the Company to achieve high levels of quality, precision, automation, and manufacturing throughput at a significantly lower cost than its competitors. The Company is leveraging its unique technology to manufacture a broad range of synthetic DNA-based products, including synthetic genes, tools for next generation sample preparation, and antibody libraries for drug discovery and development.
The Company has a limited operating history and its prospects are subject to risks, expenses and uncertainties frequently encountered by companies in this industry. These risks include, but are not limited to, the uncertainty of availability of additional financing, market acceptance of its products, the ability to retain and attract new customers, and the uncertainty of achieving future profitability.
The Company has generated net losses in all periods since inception. As of September 30, 2022, the Company had an accumulated deficit of $828.4 million and has not generated positive cash flows from operations since inception. Losses are expected to continue as the Company continues to invest in product development, manufacturing, and sales and marketing.
Since its inception, the Company has received an aggregate of $1,333.7 million in net proceeds from the issuance of equity securities and an aggregate of $13.8 million from debt. Management believes that these proceeds combined with existing cash balances on hand will be sufficient to fund operations for at least one year from the issuance of these consolidated financial statements. However, if the Company needs to obtain additional financing to fund operations beyond this period, there can be no assurance that it will be successful in raising additional financing on terms which are acceptable to the Company.

2.Summary of significant accounting policies
Basis of presentation and use of estimates
The presentation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include the valuation of deferred tax assets, stock-based compensation expense, transaction price and progress toward completion of performance obligation under the contracts with customers, determination of the net realizable value of inventory, valuation of developed technology, and customer relationships and the fair value of the Company’s common stock. Actual results could differ from those estimates. The Company’s consolidated financial statements include its wholly-owned subsidiaries. All intercompany balances and accounts are eliminated in consolidation.

Risks and uncertainties

The Company relies on third parties for the supply and manufacture of its products, including a single-source supplier for a critical component, as well as third-party logistics providers. In instances where these parties fail to perform their obligations, the Company may be unable to find alternative suppliers to satisfactorily deliver its products to its customers on time, if at all.

The Company operates in a dynamic and highly competitive industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows: ability to obtain future financing; advances and trends in new technologies and industry standards; market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company regarding intellectual property, patent, product, regulatory, or other factors; and the ability to attract and retain employees necessary to support its growth.


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The Company has expended and expects to continue to expend substantial funds to complete the research and development of its production process. The Company may require additional funds to commercialize its products and may be unable to entirely fund these efforts with its current financial resources. Additional funds may not be available on acceptable terms, if at all. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay the sale of the Company’s products and services which would materially and adversely affect its business, financial condition and operations.

During the year ended September 30, 2022, financial results of the Company were not significantly affected by the COVID 19 pandemic, which continues to have global impact. The Company has considered all information available as of the date of issuance of these financial statements and the Company is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information becomes available. The extent to which the COVID 19 outbreak affects the Company’s future financial results and operations will depend on future developments which continue to evolve and are difficult to predict, including new information concerning mutations in the SARS-CoV 2 virus, which may make it more contagious, and current or future domestic and international actions to contain it and treat it.
Concentration of credit risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, short-term investments and accounts receivable. Substantially all of the Company’s cash is held with two financial institutions that management believe are of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company’s investment policy addresses the level of credit exposure by establishing a minimum allowable credit rating and by limiting the concentration in any one investment.
The Company’s accounts receivable is derived from customers located principally in the United States and Europe. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses on customers’ accounts when deemed necessary. The Company does not typically require collateral from its customers. Credit losses historically have not been material. The Company continuously monitors customer payments and maintains an allowance for doubtful accounts based on its assessment of various factors including historical experience, age of the receivable balances, and other current economic conditions or other factors that may affect customers’ ability to pay.
Customer concentration
There are no major customers who accounted for 10% or more of the Company’s revenue for the fiscal year ended September 30, 2022 and September 30, 2021. There were two major customers who accounted for 12% and 10% of the Company’s revenue for the fiscal year ended September 30, 2020.
There are no major customers who accounted for 10% or more of the net accounts receivable as of September 30, 2022 and September 30, 2021.
Cash and cash equivalents
Cash equivalents that are readily convertible to cash are stated at cost, which approximates fair value. The Company considers all highly liquid investments with an original or remaining maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents consist of investments in money market funds as of September 30, 2022 and 2021.
Restricted cash represents cash held at financial institutions that are pledged as collateral for stand-by letters of credit for lease commitments. The lease related letters of credit will lapse at the end of the respective lease terms through 2044. At September 30, 2022 and 2021, the Company had restricted cash in the amount of $1.6 million and $1.5 million, respectively.
Short-term investments
The Company invests in various types of securities, including United States government, commercial paper, and corporate debt securities. It classifies its investments as available-for-sale and records them at fair value based upon market prices at period end. Unrealized gains and losses that are deemed temporary in nature are recorded in accumulated other comprehensive income as a separate component of stockholders’ equity. Dividend and interest income are recognized when earned. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of investments sold. The Company may sell these securities at any time for use in current operations.



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Accounts receivable
Trade receivables include amounts billed and currently due from customers, recorded at the net invoice value and are not interest bearing. The amounts due are stated at their net estimated realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated amounts of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable.
The Company re-evaluates such allowance on a regular basis and adjusts its allowance as needed. Once a receivable is deemed to be uncollectible, such balance is charged against the allowance.
The Company has a short order-to-invoice lifecycle, as most products can be manufactured within one month. Upon delivery of the products to the customer, the Company invoices the customer. The typical timing of payment is net 30 days.
Fair value of financial instruments
The carrying amounts of the Company’s financial instruments including cash equivalents, short term investments, and accounts receivable approximate fair value due to their relatively short maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, the carrying value of the Company’s long-term debt approximated its fair value (level 2 within the fair value hierarchy).
Inventories
Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Determining net realizable value of inventory involves judgments and assumptions, including projecting selling prices and costs to sell. Provisions are made to reduce excess and obsolete inventories to their estimated net realizable value based on forecasted demand, past experience, the age and nature of inventories.
Property and equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or the lesser of the useful life and the remaining lease term of the respective leasehold improvements assets, if any. Upon retirement or sale, the cost of assets
disposed of and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to operations in the period recognized. Repairs and maintenance costs are expensed as incurred.

The Company recorded depreciation and amortization expense of $16.5 million, $9.8 million, and $6.7 million for the years ended September 30, 2022, 2021 and 2020, respectively. Estimated lives of property and equipment are as follows:

Laboratory equipment5 Years
Furniture, fixtures and other equipment5 Years
Computer equipment3 Years
Computer software3 Years
Leasehold improvementsLesser of useful life or facilities’ lease term

Capitalized software development costs
Costs associated with internal-use software systems, including those to improve e-commerce capabilities, during the application development stage are capitalized. Capitalization of costs begins when the preliminary project stage is completed, management has committed to funding the project, and it is probable that the project will be completed and the software will be used to perform the function intended. Costs include external direct costs of services and applicable personnel costs of employees devoted to specific software application development. Personnel costs consist of salaries, employee benefit costs, bonuses and stock-based compensation expenses. The capitalized amounts are included in property and equipment, net on the consolidated balance sheets.
Capitalization ceases at the point when the project is substantially complete and is ready for its intended purpose. The capitalized amounts are included in property and equipment, net on the consolidated balance sheets.


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Capitalized software development costs were $5.3 million and $3.0 million as of September 30, 2022 and 2021, respectively. Capitalized costs are amortized from the project completion date, using the straight-line method over an estimated useful life of the assets.
Long-lived assets
The Company reviews property and equipment, right of use assets and intangibles subject to amortization for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future undiscounted cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. There have been no such impairments of long-lived assets during the years ended September 30, 2022, 2021 and 2020.
Intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method. The Company reviews intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. Impairment assessments inherently involve judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. No impairment charges were recorded during the years ended September 30, 2022, 2021 and 2020.
Leases
On October 1, 2019, the Company adopted Topic 842 using the modified retrospective approach. The adoption had a material effect on the consolidated balance sheets but did not have a material effect on the consolidated statements of operations and comprehensive loss. Prior period amounts were not adjusted and continue to be reported in accordance with the previous accounting under ASC 840, Leases. The Company elected the package of practical expedients permitted under the transition guidance which, among other things, allows carrying forward the historical classification of existing leases as of October 1, 2019.
The Company determines if an arrangement is a lease at inception primarily based on the determination of the party responsible for directing the use of an underlying asset within a contract. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease, net of any tenant improvement allowance. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of committed lease payments, the Company uses its incremental borrowing rate based on the information available at the lease commencement date which includes significant assumptions made including the Company’s estimated credit rating, annual percentage yields from corporate debt financings of companies of similar size and credit rating over a loan term approximating the remaining term of each lease, and government bond yields for terms approximating the remaining term of each lease in countries where the leased assets are located. Certain leases include payments of operating expenses that are dependent on the landlord’s estimate, and these variable payments are therefore excluded from the lease payments used to determine the operating lease right-of-use asset and lease liability. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise any such options. Lease expense is recognized on a straight-line basis over the expected lease term.
The Company elected to not apply the recognition requirements of Topic 842 to short-term leases with terms of 12 months or less which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. For short-term leases, lease payments are recognized as operating expenses on a straight-line basis over the lease term. The Company elected to account for lease and non-lease components as a single lease component.
Additional information and disclosures required by Topic 842 are contained in Note 7.
Goodwill and indefinite intangible assets
Goodwill is evaluated for impairment annually at the reporting unit level during the fourth quarter of the fiscal year or more frequently if events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. If, based on a qualitative assessment, the Company determines it is more likely than not that goodwill is impaired, a quantitative assessment is performed to determine if the fair value of the Company’s one reporting unit is less than its carrying value. During its goodwill impairment review, the Company assessed qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying value, including goodwill. The qualitative factors include, but are not limited to, industry and market considerations and the Company’s overall financial performance. The Company performed its annual assessment for goodwill impairment in the fourth quarter of the fiscal year noting no indication of impairment. There were no triggering events indicating potential for impairment through September 30, 2022.


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Segment information
The Company is a synthetic biology and genomics company that has developed a disruptive DNA synthesis platform to industrialize the engineering of biology and manufactures synthetic genes, tools for next-generation sequencing preparation, and antibody libraries for drug discovery and development and operates as one reportable and operating segment. The Company’s chief operating decision-maker, its Chief Executive Officer (CEO), reviews the Company’s operating results on an aggregate basis for purposes of allocating resources and evaluating financial performance.
Revenue recognition
The Company’s revenue is generated through the sale of synthetic biology tools, such as synthetic genes, oligo pools, next generation sequencing tools, and DNA and biopharma libraries. The Company recognizes revenue when control of the products is transferred to the customer and at a transaction price that is determined based on the agreed upon rates in the applicable order or master supply agreement applied to the quantity of synthetic DNA that was manufactured and shipped to the customer.
Contracts with customers are in the written form of a purchase order or a quotation, which outline the promised goods and the agreed upon price. Such orders are often accompanied by a Master Supply or Distribution Agreement that establishes the terms and conditions, rights of the parties, delivery terms, and pricing. The Company assesses collectability based on a number of factors, including past transaction history and creditworthiness of the customer.
For Company contracts to date other than antibody discovery services and DNA libraries ("Biopharma") contracts, the customer orders a specified quantity of synthetic DNA sequence; therefore, the delivery of the ordered quantity per the purchase order is accounted for as one performance obligation.

The transaction price is determined based on the agreed upon rates in the purchase order or master supply agreements applied to the quantity of synthetic DNA that was manufactured and shipped to the customer. The Company’s contracts include only one performance obligation – the shipment of the product to the customer. Accordingly, all of the transaction price, net of any discounts, is allocated to the one performance obligation. The Company’s sales are subject to Ex Works (as defined in Incoterms 2010) delivery terms and revenue is recorded at the point in time when products are picked up by the customer’s freight forwarder, as the Company has determined that this is the point in time that control transfers to the customer. Therefore, upon shipment of the product, there are no remaining performance obligations. The Company’s shipping and handling activities are performed before the customer obtains control of the goods and therefore are considered a fulfillment cost. Shipping and handling fees charged to our customers are recognized as product revenue in the period shipped and the related costs for providing these services are recorded as a cost of revenue. The Company has elected to exclude all sales and value added taxes from the measurement of the transaction price. The Company has not adjusted the transaction price for significant financing since the time period between the transfer of goods and payment is less than one year. The Company has elected the practical expedient to not disclose the consideration allocated to remaining performance obligations and an explanation of when those amounts are expected to be recognized as revenue since the duration of the contracts is less than one year.
The Company’s Biopharma revenue currently primarily consists of research and development agreements with third parties that provide for up-front and milestone-based payments. The Company also enters into research and development agreements that do not include up-front or milestone-based payments and recognizes revenue on these types of agreements based on the timing of development activities. The Company’s research and development agreements may include more than one performance obligation. At the inception of the agreement, the Company assesses whether each obligation represents a separate performance obligation or whether such obligations should be combined as a single performance obligation. The transaction price for each agreement is determined based on the amount of consideration the Company expects to be entitled to for satisfying all performance obligations within the agreement. The Company assesses the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. In agreements where the Company satisfies performance obligation(s) over time, the Company recognizes development revenue typically using an input method based on costs incurred relative to the total expected cost which determines the extent of progress toward completion. As part of the accounting for these arrangements, the Company must develop estimates and assumptions that require judgment to determine the transaction price and progress towards completion. The Company reviews its estimate of the transaction price and progress toward completion based on the best information available to recognize the cumulative progress toward completion as of the end of each reporting period and makes revisions to such estimates as necessary. Also, these research and development agreements may include license payments. The Company recognizes revenue from functional license agreements when the license is transferred to the customer and the customer is able to use and benefit from the license. Functional license has significant standalone functionality because it can be used as is for performing a specific task.



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The Company had contract assets of $3.4 million and contract liabilities of $3.5 million as of September 30, 2022. The Company had contract assets of $2.0 million and contract liabilities of $1.1 million as of September 30, 2021. For the year ended September 30, 2022, the Company recognized revenue of $1.1 million from the amount that was included in the contract liability balance at the beginning of the year. For September 30, 2021 and 2020, the Company did not recognize revenue from amounts that were included in the contract liability balance at the beginning of each period. In addition, for all periods presented, there was no revenue recognized in a reporting period from performance obligations satisfied in previous periods. The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied as of September 30, 2022 was $4.5 million.
Based on the nature of the Company’s contracts with customers which are recognized over a term of less than 12 months, the Company has elected to use the practical expedient whereby costs to obtain a contract are expensed as they are incurred.
The Company states its revenues net of any taxes collected from customers that are required to be remitted to various government agencies. The amount of taxes collected from customers and payable to governmental entities is included on the balance sheet as part of “Accrued expenses and other current liabilities.”

Refer to Note 13 for the disaggregation of revenues by geography, by product and by industry.
Research and development
Research and development expenses consist of compensation costs, employee benefits, subcontractors, research supplies, allocated facility related expenses and allocated depreciation and amortization. All research and development costs are expensed as incurred.
Advertising costs
Costs related to advertising and promotions are expensed to sales and marketing as incurred. Advertising and promotion expenses for the years ended September 30, 2022, 2021 and 2020, were $2.4 million, $2.5 million and $1.2 million, respectively.
Government contract payments
The Company has a subcontract with the Georgia Institute of Technology funded by the United States Director of Central Intelligence (IARPA). This subcontract is for the period from September 2019 to February 2023. The Company recognizes payments received from these arrangements when milestones are achieved and records them as a reduction of research and development expenses. The total expected cost for the IARPA development project is $7.2 million with IARPA funding $5.2 million and the Company is responsible for providing a minimum contribution of $2.0 million, which remains outstanding as of September 30, 2022. In fiscal year 2022, 2021, and 2020, the Company received IARPA payments of $0.9 million, $1.1 million, and $2.5 million, respectively.
Stock-based compensation
The Company maintains performance incentive plans under which incentive and nonqualified stock options and restricted stock units are granted primarily to employees and may be granted to members of the board of directors and certain non-employee consultants, and employees may participate in an employee stock purchase plan.
The Company recognizes stock compensation in accordance with ASC 718, Compensation—Stock Compensation. ASC 718 requires the recognition of compensation expense, using a fair value-based method, for costs related to all stock-based payments including stock options, restricted stock units and employee stock purchase plan.
The Company recognizes fair value of stock options granted to non-employees as a stock-based compensation expense over the period in which the related services are received. The Company recognizes forfeitures as they occur. The Company believes that the estimated fair value of stock options is more readily measurable than the fair value of the services rendered.
For performance-based stock options, expense is recognized over the period from the grant date to the estimated attainment date, which is the derived service period of the award.
Net loss per share attributable to common stockholders
The Company calculates its basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. In computing diluted net loss attributable to


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common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. For purposes of the calculation of diluted net loss per share attributable to common stockholders, unvested shares of common stock issued upon the early exercise of stock options, shares issuable for employee stock purchase plan contributions received, warrants to purchase common stock, unvested restricted common stock, unvested restricted stock units and stock options to purchase common stock are considered potentially dilutive securities but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive.
Basic and diluted net loss per share of common stock attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase, and excludes any dilutive effects of employee stock-based awards and warrants. Because the Company has reported a net loss for the years ended September 30, 2022, 2021 and 2020, diluted net loss per common share is the same as the basic net loss per share for those years.
Income taxes
The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability accounts are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are currently in effect. Valuation allowances are established where necessary to reduce deferred tax assets to the amounts expected to be realized.
In fiscal 2022, the Company began recognizing an additional component of total Federal tax expense, the tax on Global Intangible Low-Taxed Income (“GILTI”) provision of the Tax Act, which became applicable to the Company in fiscal 2022. The Company elected to account for GILTI as a period cost, and therefore included GILTI expense in the effective tax rate calculation. This provision did not have a material effect on the effective tax rate for the years ended September 30, 2022, 2021 and 2020.

Variable interest entities

The Company consolidates a VIE in which the Company is deemed to be the primary beneficiary. An entity is generally a VIE if it meets any of the following criteria: (i) the entity has insufficient equity to finance its activities without additional subordinated financial support from other parties, (ii) the equity investors cannot make significant decisions about the entity’s operations or (iii) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity or receive the expected returns of the entity and substantially all of the entity’s activities involve or are conducted on behalf of the investor with disproportionately few voting rights. The Company periodically makes judgments in determining whether its investees are VIEs and, for each reporting period, the Company assesses whether it is the primary beneficiary of its VIE. See Note 15 “Investment in variable interest entity.”

Business combinations

The Company accounts for business combinations using the acquisition method.
Under the acquisition method, the purchase price of the acquisition is allocated to the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the time of the acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in the Company’s financial statements. As a result, the Company may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date) with the corresponding offset to goodwill. The most subjective areas of the acquisition accounting method include determining the fair value of the following:
identifiable intangible assets, including the valuation methodology, estimates of projected revenues, technology obsolescence, and discount rates, as well as the estimated useful life of the intangible assets;
contingent consideration; and
goodwill, as measured as the excess of consideration transferred over the acquisition date fair value of the assets acquired, including the amount assigned to identifiable intangible assets, and the liabilities assumed.
The assumptions and estimates are based upon comparable market data and information obtained from the management of the acquired business.
Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date.
Identifiable intangible assets with finite lives are amortized over their estimated useful lives in a pattern in which the asset is consumed. Acquisition-related costs, including advisory, legal, accounting, valuation, and other similar costs, are


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expensed in the periods in which those costs are incurred. The results of operations of acquired businesses are included in the Company’s consolidated financial statements from the acquisition date.
Recent accounting pronouncements
New accounting guidance adopted
In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. The ASU simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740, Income Taxes, related to the approach for allocating income tax expense or benefit for the year to continuing operations, discontinued operations, other comprehensive income, and other charges or credits recorded directly to shareholders’ equity; the methodology for calculating income taxes in an interim period; and the recognition of deferred tax liabilities for outside basis differences. The Company adopted this standard effective October 1, 2021. The adoption of ASU-2019 12 did not have an impact on the Company’s consolidated financial statements as of and for the year ended September 30, 2022.
New accounting guidance issued but not yet effective
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires entities to use the new “expected credit loss” impairment model for most financial assets measured at amortized cost, including trade and other receivables and held-to-maturity debt securities, and modifies the impairment model for available-for-sale debt securities. The standard is effective for the Company for the fiscal year ending September 30, 2024, including interim periods within that fiscal year. Early application is permitted. Entity should apply the amendments in this update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, modified-retrospective approach). A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.
In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. The amendments in this update require the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model. The amendments in this update are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021. Early application is permitted. Entity should apply the amendments in this update either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

3.Fair value measurement
The Company assesses the fair value of financial instruments based on the provisions of ASC 820, Fair Value Measurements. ASC 820 defines fair value 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. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considering counterparty credit risk in its assessment of fair value.
The following table sets forth the cash and cash equivalents, and short-term investments as of September 30, 2022:


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(in thousands)Amortized costGross unrealized gainsGross unrealized lossesFair value
Cash and cash equivalents$378,687 $— $— $378,687 
Short-term investments:
Commercial paper 14,997   14,997 
U.S. government treasury bills112,878  (1,594)111,284 
Total$506,562 $ $(1,594)$504,968 

The following table sets forth the cash and cash equivalents, and short-term investments as of September 30, 2021:

(in thousands)Amortized costGross unrealized gainsGross unrealized lossesFair value
Cash and cash equivalents$465,829 $— $— $465,829 
Short-term investments:
U.S. government treasury bills12,033 1  12,034 
Total$477,862 $1 $ $477,863 

As of September 30, 2022, financial assets and liabilities measured and recognized at fair value are as follows:

(in thousands) Level 1 Level 2 Level 3 Fair value
Assets    
Money market funds$316,805$$$316,805
Commercial paper 14,99714,997
U.S. government treasury bills111,284111,284
Total financial assets$428,089$14,997$$443,086
Liabilities
Contingent consideration and indemnity holdback$$9,592$2,100$11,692
Total financial liabilities$$9,592$2,100$11,692

As of September 30, 2021, financial assets and liabilities measured and recognized at fair value are as follows:

(in thousands)Level 1Level 2Level 3Fair value
Assets    
Money market funds$430,438 $ $ $430,438 
U.S. government treasury bills12,034   12,034 
Total financial assets$442,472 $ $ $442,472 
Liabilities
Contingent consideration and indemnity holdback$$9,856$$9,856
Total financial liabilities$$9,856$$9,856

Contractual maturities of short-term investments, as of September 30, 2022, were less than 12 months. The Company does not intend to sell the money market funds and short term investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis. The unrealized loss on short-term investments have been in a continuous unrealized loss position for less than 12 months.
As of September 30, 2022, the Company’s contingent consideration related to its Abveris acquisition is categorized as Level 3 within the fair value hierarchy. Contingent consideration is classified as a liability and is remeasured to an estimated fair value at each reporting date until the contingency is resolved. Contingent consideration has been recorded at


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its fair values using unobservable inputs and have included using the Monte Carlo simulation option pricing framework, incorporating contractual terms and assumptions regarding financial forecasts, discount rates, and volatility of forecasted revenue. The key assumptions are forecasted calendar year 2022 revenue and the Company's share price. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management with the assistance of a third-party valuation specialist.
The key inputs into the Monte Carlo simulation as of December 1, 2021, the acquisition date and as of September 30, 2022 were as follows:
September 30,December 1,
Contingent consideration20222021
Stock price $35.24 $87.06 
Equity volatility93.7 %81.3 %
Risk-free interest rate 3.9 %0.4 %
Revenue volatility 30.2 %21.9 %
The following table provides a reconciliation of beginning and ending balances of the Level 3 financial liabilities during the year ended September 30, 2022:

(in thousands)Total
Balance as of September 30, 2021
$ 
Contingent consideration – additions8,500
Change in fair value (6,400)
Balance as of September 30, 2022
$2,100 
4.Balance sheet components
The Company’s accounts receivable, net balance consists of the following:

September 30,
(in thousands) 20222021
Trade Receivables$35,706 $26,549 
Other Receivables4,822 2,337 
Allowance for doubtful accounts(234)(337)
Accounts Receivable, net$40,294 $28,549 

Inventories consist of the following:

September 30,
(in thousands) 20222021
Raw Materials$28,787 $18,778 
Work-in-process2,866 4,837 
Finished Goods7,654 8,185 
$39,307 $31,800 

The work-in-process inventory included consigned inventory of $0.1 million and $1.9 million as of September 30, 2022 and 2021 respectively.



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Property and Equipment, net consists of the following:

September 30,
(in thousands) 20222021
Laboratory equipment$62,285 $48,439 
Furniture, fixtures and other equipment2,332 2,195 
Computer equipment2,815 2,977 
Computer software1,693 3,899 
Leasehold improvements14,371 5,066 
Construction in progress87,723 16,968 
171,218 79,544 
Less: Accumulated depreciation and amortization(31,777)(35,422)
$139,441 $44,122 

Construction in progress mainly represents equipment and leasehold improvements relating to the Wilsonville facility.

Other non-current assets
Other non-current assets consist of the following:

September 30,
(in thousands)20222021
Convertible note receivable$$3,021
Other non-current assets3,3854,653
$3,385$7,674

During 2021 and as amended in 2022, the Company entered into convertible promissory note agreements with a privately held company (“Borrower”) pursuant to which the Company agreed to loan to the Borrower $3.5 million in a series of loan installments, evidenced by a convertible promissory note having a maturity date of May 1, 2023 (“Convertible Note”). The Convertible Note accrues interest at a rate of 4% per annum. Outstanding principal and any unpaid accrued interest will be converted into preferred shares of the Borrower if before the repayment of the Note, the Borrower has an equity financing round. The convertible note receivable balance at September 30, 2022 is recognized in the prepaid expenses and other current assets on the balance sheet.

Other current liabilities
Other current liabilities consist of the following:

September 30,
(in thousands) 20222021
Contingent consideration$2,100$5,186
Indemnity holdbacks9,592
Income and sales taxes payable3,6612,440
Deferred revenue 3,4761,088
Other current liabilities908909
$19,737$9,623


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Other non-current liabilities

The other non-current liabilities consist of the following:

September 30,
(in thousands) 20222021
Holdback$$4,671
Other non current liabilities60397
$60$5,068

5.Goodwill and intangible assets
For the year ended September 30, 2022, goodwill and intangible assets increased from prior year by $63.4 million and $46.5 million, respectively, as a result of a business acquisition. For the year ended September 30, 2021, goodwill and intangible assets increased from the prior year by $21.3 million and $18.4 million, respectively, as a result of a business acquisition. See Note 14, “Business acquisition”. Total amortization expense related to intangible assets was $4.9 million, $0.5 million, and $0.2 million for the years ended September 30, 2022, 2021 and 2020, respectively.
The goodwill balance is presented below:

(in thousands)September 30,
20222021
Balance at beginning of year22,434 1,138 
Business acquisition – additions (see Note 14) 61,76821,538
Remeasurement adjustments to the deferred tax assets1,609(242)
Balance at end of year $85,811 $22,434 

The finite-lived intangible assets balances are presented below:

September 30, 2022
(in thousands, except for years)Weighted average
Amortization period
in years
Gross
carrying
amount
Accumulated
amortization
Net book
value
Developed Technology11$50,020 $(4,375)$45,645 
Customer Relationships1115,210(1,767)13,443
Tradenames & Trademarks3900(250)650
Total finite-lived intangible assets$66,130 $(6,392)$59,738 

September 30, 2021
(in thousands, except for years)Weighted average
Amortization period
in years
Gross
carrying
amount
Accumulated
amortization
Net book
value
Developed Technology16$19,120 $(1,361)$17,759 
Tradenames & Trademarks