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Balance Sheet Components | 12 Months Ended
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Dec. 31, 2022
Balance Sheet Components [Abstract] |
Balance Sheet Components | NOTE 6. BALANCE SHEET COMPONENTS Inventory, Net Inventory, net, consisted of the following components:
|  | December 31,
(in thousands) |  | 2022 |  | 2021
Purchased materials |  | $ | 24,139 |  | $ | 7,993
Work in process |  |  | 14,062 |  |  | 8,611
Finished goods |  |  | 12,180 |  |  | 7,995
Inventory, net |  | $ | 50,381 |  | $ | 24,599
Property and Equipment, Net Property and equipment, net, consisted of the following components:
|  | December 31,
(in thousands) |  | 2022 |  | 2021
Laboratory equipment and machinery |  | $ | 38,998 |  | $ | 31,534
Leasehold improvements |  |  | 34,129 |  |  | 31,114
Computer equipment |  |  | 18,438 |  |  | 15,059
Software |  |  | 6,879 |  |  | 5,578
Furniture and fixtures |  |  | 3,426 |  |  | 3,202
Construction in progress |  |  | 4,698 |  |  | 2,303
Total |  |  | 106,568 |  |  | 88,790
Less: Accumulated depreciation |  |  | (64,988) |  |  | (56,286)
Property and equipment, net |  | $ | 41,580 |  | $ | 32,504
Construction in progress consists of capitalizable costs that have been incurred for the construction of long-lived assets, and is primarily comprised of amounts that will be classified as lab equipment. Depreciation expense during the years ended December 31, 2022, 2021, and 2020 was $9.5 million, $7.2 million, and $6.4 million, respectively. Goodwill and intangible Assets Goodwill As of December 31, 2022 and 2021, the goodwill balance was $410.0 million. Goodwill is reviewed for impairment at least annually during the second quarter, or more frequently if an event occurs indicating the potential for impairment. We performed our annual assessment for goodwill impairment in the second quarter of 2022, noting no impairment. Acquired Intangible Assets Intangible assets include acquired IPR&D of $400 million as a result of the Omniome acquisition in September 2021. As of December 31, 2022, the research and development project had not been completed or abandoned and, therefore, the IPR&D intangible asset is not currently subject to amortization. IPR&D is reviewed for impairment at least annually, or more frequently if an event occurs indicating the potential for impairment. We performed our annual assessment for IPR&D impairment in the fourth quarter of 2022, noting no impairment. In addition to IPR&D, we had the following acquired definite-lived intangible assets as of December 31, 2022 (in thousands, except years):
|  | Estimated |  | Gross |  |  |  |  | Net
|  | Useful Life |  | Carrying |  | Accumulated |  | Carrying
|  | (in years) |  | Amount |  | Amortization |  | Amount
Developed technology |  | 15 |  | $ | 11,179 |  | $ | (1,039) |  | $ | 10,140
Customer relationships |  | 2 |  |  | 360 |  |  | (255) |  |  | 105
Total |  |  |  | $ | 11,539 |  | $ | (1,294) |  | $ | 10,245
Amortization expense of intangibles was $0.9 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively. We had no amortization expense of intangibles for the year ended December 31, 2020. The estimated future amortization expense of acquisition-related intangible assets with definite lives is estimated as follows (in thousands):
2023 |  | $ | 853
2024 |  |  | 745
2025 |  |  | 745
2026 |  |  | 745
2027 |  |  | 746
2028 and thereafter |  |  | 6,411
Total |  | $ | 10,245
Accrued Expenses Accrued expenses consisted of the following components:
|  | December 31,
(in thousands) |  | 2022 |  | 2021
Salaries and benefits |  | $ | 17,432 |  | $ | 25,282
Accrued interest payable |  |  | 5,100 |  |  | 5,100
Accrued purchase commitments |  |  | 3,705 |  |  | —
Accrued product development costs |  |  | 2,326 |  |  | 1,936
Accrued professional services and legal fees |  |  | 1,005 |  |  | 1,640
Inventory accrual |  |  | 332 |  |  | 108
Warranty accrual |  |  | 1,651 |  |  | 594
Other |  |  | 1,045 |  |  | 1,601
Accrued expenses |  | $ | 32,596 |  | $ | 36,261
Product Warranties We generally provide a one-year warranty on instruments. In addition, we provide a limited warranty on consumables. At the time revenue is recognized, an accrual is established for estimated warranty costs based on historical experience as well as anticipated product performance. We periodically review the warranty reserve for adequacy and adjust the warranty accrual, if necessary, based on actual experience and estimated costs to be incurred. Warranty expense is recorded as a component of cost of product revenue. There were no material changes in estimates for the periods presented below. Changes in the reserve for product warranties were as follows:
|  | Years Ended December 31,
(in thousands) |  | 2022 |  | 2021
Balance at beginning of period |  | $ | 594 |  | $ | 161
Additions charged to cost of product revenue |  |  | 3,199 |  |  | 2,120
Repairs and replacements |  |  | (2,142) |  |  | (1,687)
Balance at end of period |  | $ | 1,651 |  | $ | 594
Deferred Revenue As of December 31, 2022, we had a total of $32.3 million of deferred revenue, $30.5 million of which was recorded as deferred revenue, current and primarily relates to future performance obligations under the Amended and Restated Agreement with Invitae as described in Note 3. Invitae Collaboration. The deferred revenue, non-current balance of $1.8 million primarily relates to deferred service contract revenues and is scheduled to be recognized in the next 6 years. Revenue recorded in the year ended December 31, 2022 includes $13.0 million of previously deferred revenue that was included in deferred revenue, current as of December 31, 2021. Term Loans In connection with the acquisition of Omniome, we acquired $1.3 million in short-term debt and $3.0 million in long-term debt relating to a term loan facility that Omniome obtained in April 2020. Borrowings on the term loan facility were used to fund Omniome’s purchases of equipment, which serves as collateral. Each term loan has a term of 43 months and bears a fixed interest rate of approximately 17% annually. The fee for the elective option to prepay all, but not less than all, of the borrowed amounts at any time after the 24 th month and before the 43 rd month after the commencement date, is 4% of the outstanding loan balance. Payments are made in equal monthly installments including principal and interest. As of December 31, 2022, the carrying value of term loans outstanding was $2.3 million. The related long-term portion of $0.5 million was recorded as part of other liabilities, non-current and the short-term portion of $1.8 million was recorded as part of other liabilities, current on the Consolidated Balance Sheet. The interest expense was $0.6 million for the year ended December 31, 2022, which was included as part of interest expense in the Consolidated Statement of Operations and Comprehensive (Loss) Income. ‎ As of December 31, 2022, the future principal payments remaining on term loans was the following:
(in thousands) |  |  |
2023 |  | $ | 1,842
2024 |  |  | 490
Total |  | $ | 2,332
Other Liabilities, Current Other liabilities, current, consisted of the following components:
|  | December 31,
(in thousands) |  | 2022 |  | 2021
Accrued Employee Stock Purchase Plan |  | $ | 3,638 |  | $ | 3,598
Short-term loan |  |  | 1,842 |  |  | 1,608
Other |  |  | 1,753 |  |  | 553
Other liabilities, current |  | $ | 7,233 |  | $ | 5,759

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- Definition The entire disclosure for supplemental balance sheet disclosures, including descriptions and amounts for assets, liabilities, and equity. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -URI https://asc.fasb.org/topic&trid=2122208 + Details
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