0001501134false--12-312023Q30000P1Y0.03362930.0231589252.0800015011342023-01-012023-09-3000015011342023-11-06xbrli:shares00015011342023-09-30iso4217:USD00015011342022-12-310001501134nvta:DiagnosticTestsMember2023-07-012023-09-300001501134nvta:DiagnosticTestsMember2022-07-012022-09-300001501134nvta:DiagnosticTestsMember2023-01-012023-09-300001501134nvta:DiagnosticTestsMember2022-01-012022-09-300001501134nvta:CollaborationAndGenomeNetworkMember2023-07-012023-09-300001501134nvta:CollaborationAndGenomeNetworkMember2022-07-012022-09-300001501134nvta:CollaborationAndGenomeNetworkMember2023-01-012023-09-300001501134nvta:CollaborationAndGenomeNetworkMember2022-01-012022-09-3000015011342023-07-012023-09-3000015011342022-07-012022-09-3000015011342022-01-012022-09-30iso4217:USDxbrli:shares0001501134us-gaap:CommonStockMember2023-06-300001501134us-gaap:CommonStockMember2022-06-300001501134us-gaap:CommonStockMember2022-12-310001501134us-gaap:CommonStockMember2021-12-310001501134us-gaap:CommonStockMember2023-07-012023-09-300001501134us-gaap:CommonStockMember2022-07-012022-09-300001501134us-gaap:CommonStockMember2023-01-012023-09-300001501134us-gaap:CommonStockMember2022-01-012022-09-300001501134us-gaap:CommonStockMember2023-09-300001501134us-gaap:CommonStockMember2022-09-300001501134us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001501134us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001501134us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001501134us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001501134us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001501134us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001501134us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300001501134us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001501134us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001501134us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001501134us-gaap:AdditionalPaidInCapitalMember2023-06-300001501134us-gaap:AdditionalPaidInCapitalMember2022-06-300001501134us-gaap:AdditionalPaidInCapitalMember2022-12-310001501134us-gaap:AdditionalPaidInCapitalMember2021-12-310001501134us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001501134us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001501134us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300001501134us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001501134us-gaap:AdditionalPaidInCapitalMember2023-09-300001501134us-gaap:AdditionalPaidInCapitalMember2022-09-300001501134us-gaap:RetainedEarningsMember2023-06-300001501134us-gaap:RetainedEarningsMember2022-06-300001501134us-gaap:RetainedEarningsMember2022-12-310001501134us-gaap:RetainedEarningsMember2021-12-310001501134us-gaap:RetainedEarningsMember2023-07-012023-09-300001501134us-gaap:RetainedEarningsMember2022-07-012022-09-300001501134us-gaap:RetainedEarningsMember2023-01-012023-09-300001501134us-gaap:RetainedEarningsMember2022-01-012022-09-300001501134us-gaap:RetainedEarningsMember2023-09-300001501134us-gaap:RetainedEarningsMember2022-09-3000015011342022-09-3000015011342021-12-31nvta:Segment00015011342022-01-012022-12-3100015011342021-01-012021-12-3100015011342020-01-012020-12-3100015011342022-04-012022-06-300001501134us-gaap:ConvertibleDebtMembernvta:SeriesANotesMember2023-02-28xbrli:pure0001501134us-gaap:ConvertibleDebtMembernvta:SeriesBNotesMember2023-02-280001501134nvta:OncologyMembernvta:PatientInsuranceMember2023-07-012023-09-300001501134nvta:PatientDirectMembernvta:OncologyMember2023-07-012023-09-300001501134nvta:InstitutionMembernvta:OncologyMember2023-07-012023-09-300001501134nvta:OncologyMember2023-07-012023-09-300001501134nvta:WomensHealthMembernvta:PatientInsuranceMember2023-07-012023-09-300001501134nvta:PatientDirectMembernvta:WomensHealthMember2023-07-012023-09-300001501134nvta:WomensHealthMembernvta:InstitutionMember2023-07-012023-09-300001501134nvta:WomensHealthMember2023-07-012023-09-300001501134nvta:RareDiseasesMembernvta:PatientInsuranceMember2023-07-012023-09-300001501134nvta:PatientDirectMembernvta:RareDiseasesMember2023-07-012023-09-300001501134nvta:InstitutionMembernvta:RareDiseasesMember2023-07-012023-09-300001501134nvta:RareDiseasesMember2023-07-012023-09-300001501134nvta:DataAndServicesMembernvta:PatientInsuranceMember2023-07-012023-09-300001501134nvta:PatientDirectMembernvta:DataAndServicesMember2023-07-012023-09-300001501134nvta:InstitutionMembernvta:DataAndServicesMember2023-07-012023-09-300001501134nvta:DataAndServicesMember2023-07-012023-09-300001501134nvta:PatientInsuranceMember2023-07-012023-09-300001501134nvta:PatientDirectMember2023-07-012023-09-300001501134nvta:InstitutionMember2023-07-012023-09-300001501134nvta:OncologyMembernvta:PatientInsuranceMember2022-07-012022-09-300001501134nvta:PatientDirectMembernvta:OncologyMember2022-07-012022-09-300001501134nvta:InstitutionMembernvta:OncologyMember2022-07-012022-09-300001501134nvta:OncologyMember2022-07-012022-09-300001501134nvta:WomensHealthMembernvta:PatientInsuranceMember2022-07-012022-09-300001501134nvta:PatientDirectMembernvta:WomensHealthMember2022-07-012022-09-300001501134nvta:WomensHealthMembernvta:InstitutionMember2022-07-012022-09-300001501134nvta:WomensHealthMember2022-07-012022-09-300001501134nvta:RareDiseasesMembernvta:PatientInsuranceMember2022-07-012022-09-300001501134nvta:PatientDirectMembernvta:RareDiseasesMember2022-07-012022-09-300001501134nvta:InstitutionMembernvta:RareDiseasesMember2022-07-012022-09-300001501134nvta:RareDiseasesMember2022-07-012022-09-300001501134nvta:DataAndServicesMembernvta:PatientInsuranceMember2022-07-012022-09-300001501134nvta:PatientDirectMembernvta:DataAndServicesMember2022-07-012022-09-300001501134nvta:InstitutionMembernvta:DataAndServicesMember2022-07-012022-09-300001501134nvta:DataAndServicesMember2022-07-012022-09-300001501134nvta:PatientInsuranceMember2022-07-012022-09-300001501134nvta:PatientDirectMember2022-07-012022-09-300001501134nvta:InstitutionMember2022-07-012022-09-300001501134nvta:OncologyMembernvta:PatientInsuranceMember2023-01-012023-09-300001501134nvta:PatientDirectMembernvta:OncologyMember2023-01-012023-09-300001501134nvta:InstitutionMembernvta:OncologyMember2023-01-012023-09-300001501134nvta:OncologyMember2023-01-012023-09-300001501134nvta:WomensHealthMembernvta:PatientInsuranceMember2023-01-012023-09-300001501134nvta:PatientDirectMembernvta:WomensHealthMember2023-01-012023-09-300001501134nvta:WomensHealthMembernvta:InstitutionMember2023-01-012023-09-300001501134nvta:WomensHealthMember2023-01-012023-09-300001501134nvta:RareDiseasesMembernvta:PatientInsuranceMember2023-01-012023-09-300001501134nvta:PatientDirectMembernvta:RareDiseasesMember2023-01-012023-09-300001501134nvta:InstitutionMembernvta:RareDiseasesMember2023-01-012023-09-300001501134nvta:RareDiseasesMember2023-01-012023-09-300001501134nvta:DataAndServicesMembernvta:PatientInsuranceMember2023-01-012023-09-300001501134nvta:PatientDirectMembernvta:DataAndServicesMember2023-01-012023-09-300001501134nvta:InstitutionMembernvta:DataAndServicesMember2023-01-012023-09-300001501134nvta:DataAndServicesMember2023-01-012023-09-300001501134nvta:PatientInsuranceMember2023-01-012023-09-300001501134nvta:PatientDirectMember2023-01-012023-09-300001501134nvta:InstitutionMember2023-01-012023-09-300001501134nvta:OncologyMembernvta:PatientInsuranceMember2022-01-012022-09-300001501134nvta:PatientDirectMembernvta:OncologyMember2022-01-012022-09-300001501134nvta:InstitutionMembernvta:OncologyMember2022-01-012022-09-300001501134nvta:OncologyMember2022-01-012022-09-300001501134nvta:WomensHealthMembernvta:PatientInsuranceMember2022-01-012022-09-300001501134nvta:PatientDirectMembernvta:WomensHealthMember2022-01-012022-09-300001501134nvta:WomensHealthMembernvta:InstitutionMember2022-01-012022-09-300001501134nvta:WomensHealthMember2022-01-012022-09-300001501134nvta:RareDiseasesMembernvta:PatientInsuranceMember2022-01-012022-09-300001501134nvta:PatientDirectMembernvta:RareDiseasesMember2022-01-012022-09-300001501134nvta:InstitutionMembernvta:RareDiseasesMember2022-01-012022-09-300001501134nvta:RareDiseasesMember2022-01-012022-09-300001501134nvta:DataAndServicesMembernvta:PatientInsuranceMember2022-01-012022-09-300001501134nvta:PatientDirectMembernvta:DataAndServicesMember2022-01-012022-09-300001501134nvta:InstitutionMembernvta:DataAndServicesMember2022-01-012022-09-300001501134nvta:DataAndServicesMember2022-01-012022-09-300001501134nvta:PatientInsuranceMember2022-01-012022-09-300001501134nvta:PatientDirectMember2022-01-012022-09-300001501134nvta:InstitutionMember2022-01-012022-09-300001501134nvta:ChangeInEstimateOfRevenueRecognitionMember2023-07-012023-09-300001501134nvta:ChangeInEstimateOfRevenueRecognitionMember2022-07-012022-09-300001501134nvta:ChangeInEstimateOfRevenueRecognitionMember2023-01-012023-09-300001501134nvta:ChangeInEstimateOfRevenueRecognitionMember2022-01-012022-09-300001501134us-gaap:CustomerRelationshipsMember2023-09-300001501134us-gaap:TechnologyBasedIntangibleAssetsMember2023-09-300001501134us-gaap:TradeNamesMember2023-09-300001501134us-gaap:CustomerRelationshipsMember2022-12-310001501134us-gaap:TechnologyBasedIntangibleAssetsMember2022-12-310001501134us-gaap:NoncompeteAgreementsMember2022-12-310001501134us-gaap:TradeNamesMember2022-12-310001501134nvta:PatentLicensingAgreementMember2022-12-310001501134us-gaap:DevelopedTechnologyRightsMember2022-12-310001501134us-gaap:TechnologyBasedIntangibleAssetsMember2023-01-012023-03-310001501134us-gaap:ContractTerminationMember2023-01-012023-09-300001501134nvta:TechnologyBasedIntangibleAssetsPharmacogeneticTestingMember2023-04-012023-06-300001501134us-gaap:TechnologyBasedIntangibleAssetsMember2023-04-012023-06-300001501134nvta:TechnologyBasedIntangibleAssetsPharmacogeneticTestingMember2023-07-012023-09-300001501134us-gaap:TradeNamesMember2023-07-012023-09-3000015011342023-04-012023-06-300001501134us-gaap:LeaseholdImprovementsMember2023-09-300001501134us-gaap:LeaseholdImprovementsMember2022-12-310001501134us-gaap:EquipmentMember2023-09-300001501134us-gaap:EquipmentMember2022-12-310001501134us-gaap:ComputerEquipmentMember2023-09-300001501134us-gaap:ComputerEquipmentMember2022-12-310001501134us-gaap:FurnitureAndFixturesMember2023-09-300001501134us-gaap:FurnitureAndFixturesMember2022-12-310001501134us-gaap:ConstructionInProgressMember2023-09-300001501134us-gaap:ConstructionInProgressMember2022-12-310001501134srt:OtherPropertyMember2023-09-300001501134srt:OtherPropertyMember2022-12-3100015011342023-01-012023-03-310001501134us-gaap:MoneyMarketFundsMember2023-09-300001501134us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:USTreasurySecuritiesMember2023-09-300001501134us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300001501134us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueInputsLevel3Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134nvta:ContingentConsiderationMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueInputsLevel1Membernvta:ContingentConsiderationMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134nvta:ContingentConsiderationMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:FairValueInputsLevel3Membernvta:ContingentConsiderationMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001501134us-gaap:MoneyMarketFundsMember2022-12-310001501134us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:USTreasurySecuritiesMember2022-12-310001501134us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310001501134us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel3Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:AccruedLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel1Memberus-gaap:AccruedLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel2Memberus-gaap:AccruedLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel3Memberus-gaap:AccruedLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134nvta:ContingentConsiderationMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel1Membernvta:ContingentConsiderationMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134nvta:ContingentConsiderationMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134us-gaap:FairValueInputsLevel3Membernvta:ContingentConsiderationMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001501134srt:MinimumMember2023-01-012023-09-300001501134srt:MaximumMember2023-01-012023-09-300001501134nvta:StockPayableLiabilityMember2023-06-300001501134nvta:ContingentConsiderationMember2023-06-300001501134us-gaap:ConvertibleDebtMember2023-06-300001501134nvta:StockPayableLiabilityMember2023-07-012023-09-300001501134nvta:ContingentConsiderationMember2023-07-012023-09-300001501134us-gaap:ConvertibleDebtMember2023-07-012023-09-300001501134nvta:StockPayableLiabilityMember2023-09-300001501134nvta:ContingentConsiderationMember2023-09-300001501134us-gaap:ConvertibleDebtMember2023-09-300001501134nvta:StockPayableLiabilityMember2022-12-310001501134nvta:ContingentConsiderationMember2022-12-310001501134us-gaap:ConvertibleDebtMember2022-12-310001501134nvta:StockPayableLiabilityMember2023-01-012023-09-300001501134nvta:ContingentConsiderationMember2023-01-012023-09-300001501134us-gaap:ConvertibleDebtMember2023-01-012023-09-300001501134nvta:StockPayableLiabilityMember2022-06-300001501134nvta:ContingentConsiderationMember2022-06-300001501134nvta:StockPayableLiabilityMember2022-07-012022-09-300001501134nvta:ContingentConsiderationMember2022-07-012022-09-300001501134nvta:StockPayableLiabilityMember2022-09-300001501134nvta:ContingentConsiderationMember2022-09-300001501134nvta:StockPayableLiabilityMember2021-12-310001501134nvta:ContingentConsiderationMember2021-12-310001501134nvta:StockPayableLiabilityMember2022-01-012022-09-300001501134nvta:ContingentConsiderationMember2022-01-012022-09-300001501134nvta:GenelexMember2020-04-012020-04-300001501134nvta:GenelexMember2023-07-012023-09-300001501134nvta:GenelexMember2022-07-012022-09-300001501134nvta:GenelexMember2023-01-012023-09-300001501134nvta:GenelexMember2022-01-012022-09-300001501134us-gaap:ConvertibleDebtMembernvta:SeriesANotesMember2023-03-310001501134us-gaap:ConvertibleDebtMembernvta:SeriesBNotesMember2023-03-310001501134us-gaap:ConvertibleDebtMembernvta:SeriesANotesMember2023-08-310001501134nvta:ConvertibleSeniorSecuredNotesDueIn2028Member2023-03-070001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputSharePriceMember2023-09-300001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputSharePriceMember2023-03-070001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConversionPriceMember2023-09-300001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConversionPriceMember2023-03-070001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:MeasurementInputPriceVolatilityMemberus-gaap:FairValueInputsLevel3Member2023-09-300001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:MeasurementInputPriceVolatilityMemberus-gaap:FairValueInputsLevel3Member2023-03-070001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-09-300001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-03-070001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputCreditSpreadMember2023-09-300001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputCreditSpreadMember2023-03-070001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:FairValueInputsLevel3Membernvta:MeasurementInputCostOfDebtMember2023-09-300001501134nvta:ValuationTechniqueBionomialLatticeModelMemberus-gaap:FairValueInputsLevel3Membernvta:MeasurementInputCostOfDebtMember2023-03-0700015011342023-03-070001501134srt:MinimumMember2023-09-300001501134srt:MaximumMember2023-09-300001501134srt:MinimumMembernvta:MeasurementInputExpectedSubleaseIncomeMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:ExitedLeasedPremisesMember2023-03-310001501134nvta:MeasurementInputExpectedSubleaseIncomeMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:ExitedLeasedPremisesMembersrt:MaximumMember2023-03-310001501134srt:MinimumMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:ExitedLeasedPremisesMemberus-gaap:MeasurementInputDiscountRateMember2023-03-310001501134us-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:ExitedLeasedPremisesMembersrt:MaximumMemberus-gaap:MeasurementInputDiscountRateMember2023-03-310001501134nvta:ExitedLeasedPremisesMember2023-01-012023-03-310001501134srt:MinimumMembernvta:MeasurementInputExpectedSubleaseIncomeMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:LeasesPreviouslyImpairedMember2023-03-310001501134nvta:MeasurementInputExpectedSubleaseIncomeMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:MaximumMembernvta:LeasesPreviouslyImpairedMember2023-03-310001501134srt:MinimumMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:LeasesPreviouslyImpairedMemberus-gaap:MeasurementInputDiscountRateMember2023-03-310001501134us-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:MaximumMembernvta:LeasesPreviouslyImpairedMemberus-gaap:MeasurementInputDiscountRateMember2023-03-310001501134nvta:LeasesPreviouslyImpairedMember2023-01-012023-03-310001501134srt:MinimumMembernvta:MeasurementInputExpectedSubleaseIncomeMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:LeasesPreviouslyImpairedMember2023-06-300001501134nvta:MeasurementInputExpectedSubleaseIncomeMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembersrt:MaximumMembernvta:LeasesPreviouslyImpairedMember2023-06-300001501134us-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:LeasesPreviouslyImpairedMemberus-gaap:MeasurementInputDiscountRateMember2023-06-300001501134nvta:LeasesPreviouslyImpairedMember2023-04-012023-06-300001501134nvta:MeasurementInputExpectedSubleaseIncomeMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:LeasesPreviouslyImpairedMember2023-09-300001501134us-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:LeasesPreviouslyImpairedMemberus-gaap:MeasurementInputDiscountRateMember2023-09-300001501134nvta:LeasesPreviouslyImpairedMember2023-07-012023-09-300001501134srt:MinimumMembernvta:MeasurementInputExpectedSubleaseIncomeMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:ExitedLeasedPremisesMember2023-09-300001501134nvta:MeasurementInputExpectedSubleaseIncomeMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:ExitedLeasedPremisesMembersrt:MaximumMember2023-09-300001501134srt:MinimumMemberus-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:ExitedLeasedPremisesMemberus-gaap:MeasurementInputDiscountRateMember2023-09-300001501134us-gaap:ValuationTechniqueDiscountedCashFlowMembernvta:ExitedLeasedPremisesMembersrt:MaximumMemberus-gaap:MeasurementInputDiscountRateMember2023-09-300001501134nvta:ExitedLeasedPremisesMember2023-07-012023-09-300001501134us-gaap:SecuredDebtMembernvta:SeniorSecuredTermLoanFacilityMember2020-10-310001501134nvta:LondonInterbankOfferedRateLIBOR1Memberus-gaap:SecuredDebtMembernvta:SeniorSecuredTermLoanFacilityMember2020-10-012020-10-310001501134us-gaap:SecuredDebtMembersrt:MaximumMembernvta:SeniorSecuredTermLoanFacilityMember2020-10-012020-10-310001501134srt:MinimumMemberus-gaap:SecuredDebtMembernvta:SeniorSecuredTermLoanFacilityMember2020-10-012020-10-310001501134us-gaap:SecuredDebtMembernvta:SeniorSecuredTermLoanFacilityMember2023-07-012023-09-300001501134us-gaap:SecuredDebtMembernvta:SeniorSecuredTermLoanFacilityMember2022-07-012022-09-300001501134us-gaap:SecuredDebtMembernvta:SeniorSecuredTermLoanFacilityMember2023-01-012023-09-300001501134us-gaap:SecuredDebtMembernvta:SeniorSecuredTermLoanFacilityMember2022-01-012022-09-300001501134us-gaap:ConvertibleDebtMembernvta:SeniorSecuredTermLoanFacilityMember2023-02-012023-02-280001501134us-gaap:ConvertibleDebtMembernvta:SeniorSecuredTermLoanFacilityMember2023-01-012023-03-310001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorNotesDue2024Member2019-09-300001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorNotesDue2024Member2019-09-012019-09-30nvta:tradingDay0001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorNotesDue2024Member2023-09-300001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorNotesDue2028Member2021-04-012021-04-300001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorNotesDue2028Member2021-04-300001501134us-gaap:ConvertibleDebtMember2023-09-300001501134us-gaap:ConvertibleDebtMember2022-12-310001501134nvta:ConvertibleSeniorNotesDue2024Member2023-09-300001501134nvta:ConvertibleSeniorNotesDue2028Member2023-09-300001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorNotesDue2028Member2023-09-300001501134us-gaap:ConvertibleDebtMember2023-07-012023-09-300001501134us-gaap:ConvertibleDebtMember2022-07-012022-09-300001501134us-gaap:ConvertibleDebtMember2023-01-012023-09-300001501134us-gaap:ConvertibleDebtMember2022-01-012022-09-300001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorNotesDue2024Member2023-02-012023-02-280001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2023-02-2800015011342023-02-012023-02-280001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2023-02-012023-02-280001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorNotesDue2024Member2023-08-012023-08-310001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2023-08-3100015011342023-08-012023-08-310001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2023-07-012023-09-300001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2023-03-070001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2023-09-300001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorNotesDue2024Member2023-01-012023-03-310001501134us-gaap:ConvertibleDebtMembernvta:SeriesANotesMember2023-07-012023-09-300001501134nvta:ServiceAgreementsAndLaboratorySuppliesMember2023-09-300001501134nvta:NateraVsArcherDXMember2023-04-012023-06-300001501134nvta:NateraVsArcherDXMember2023-01-012023-09-300001501134us-gaap:PositiveOutcomeOfLitigationMember2021-08-272021-08-270001501134us-gaap:ConvertiblePreferredStockMember2017-08-310001501134us-gaap:ConvertiblePreferredStockMember2023-09-300001501134us-gaap:ConvertiblePreferredStockMember2022-12-310001501134nvta:CowenAndCompanyLimitedLiabilityCompanyMembersrt:MaximumMembernvta:CommonStockSalesAgreementMember2021-05-012021-05-300001501134nvta:CowenAndCompanyLimitedLiabilityCompanyMembernvta:CommonStockSalesAgreementMember2021-05-012021-05-300001501134nvta:CowenAndCompanyLimitedLiabilityCompanyMemberus-gaap:CommonStockMembernvta:CommonStockSalesAgreementMember2023-07-012023-09-300001501134nvta:CowenAndCompanyLimitedLiabilityCompanyMemberus-gaap:CommonStockMembernvta:CommonStockSalesAgreementMember2023-01-012023-09-300001501134nvta:CowenAndCompanyLimitedLiabilityCompanyMemberus-gaap:CommonStockMembernvta:CommonStockSalesAgreementMember2023-09-300001501134nvta:CowenAndCompanyLimitedLiabilityCompanyMemberus-gaap:CommonStockMembernvta:CommonStockSalesAgreementMember2022-01-012022-09-300001501134nvta:CowenAndCompanyLimitedLiabilityCompanyMemberus-gaap:CommonStockMembernvta:CommonStockSalesAgreementMember2022-07-012022-09-300001501134nvta:CowenAndCompanyLimitedLiabilityCompanyMemberus-gaap:CommonStockMembernvta:CommonStockSalesAgreementMember2022-09-300001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2023-03-170001501134us-gaap:ConvertibleDebtMembernvta:ConvertibleSeniorNotesDue2024Member2023-02-280001501134srt:MinimumMembernvta:StockIncentivePlan2010Member2023-01-012023-09-300001501134nvta:StockIncentivePlan2010Membersrt:MaximumMember2023-01-012023-09-300001501134nvta:StockIncentivePlanMember2023-01-012023-09-300001501134us-gaap:EmployeeStockOptionMembernvta:ArcherDXInc.Membernvta:StockIncentivePlanMember2020-10-012020-10-310001501134us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001501134us-gaap:RestrictedStockUnitsRSUMembersrt:ExecutiveOfficerMembernvta:StockIncentivePlanMember2023-01-012023-09-300001501134nvta:ManagementIncentivePlanMemberus-gaap:PerformanceSharesMember2023-01-012023-09-300001501134nvta:GenosityMemberus-gaap:RestrictedStockUnitsRSUMember2021-04-300001501134nvta:GenosityMember2022-07-012022-09-300001501134nvta:GenosityMember2023-07-012023-09-300001501134nvta:GenosityMember2023-01-012023-09-300001501134nvta:GenosityMember2022-01-012022-09-300001501134us-gaap:RestrictedStockUnitsRSUMembernvta:CiitizenCorporationMember2021-09-300001501134nvta:CiitizenCorporationMember2023-07-012023-09-300001501134nvta:CiitizenCorporationMember2022-07-012022-09-300001501134nvta:CiitizenCorporationMember2023-01-012023-09-300001501134nvta:CiitizenCorporationMember2022-01-012022-09-300001501134us-gaap:EmployeeStockOptionMembernvta:StockIncentivePlanMember2022-12-310001501134us-gaap:EmployeeStockOptionMembernvta:StockIncentivePlanMember2022-01-012022-12-310001501134us-gaap:EmployeeStockOptionMembernvta:StockIncentivePlanMember2023-01-012023-09-300001501134nvta:RSUsAndPRSUsMembernvta:StockIncentivePlanMember2023-01-012023-09-300001501134us-gaap:EmployeeStockOptionMembernvta:StockIncentivePlanMember2023-09-300001501134nvta:RSUsAndPRSUsMember2022-12-310001501134nvta:RSUsAndPRSUsMember2023-09-300001501134us-gaap:CostOfSalesMember2023-07-012023-09-300001501134us-gaap:CostOfSalesMember2022-07-012022-09-300001501134us-gaap:CostOfSalesMember2023-01-012023-09-300001501134us-gaap:CostOfSalesMember2022-01-012022-09-300001501134nvta:ResearchAndDevelopmentMember2023-07-012023-09-300001501134nvta:ResearchAndDevelopmentMember2022-07-012022-09-300001501134nvta:ResearchAndDevelopmentMember2023-01-012023-09-300001501134nvta:ResearchAndDevelopmentMember2022-01-012022-09-300001501134us-gaap:SellingAndMarketingExpenseMember2023-07-012023-09-300001501134us-gaap:SellingAndMarketingExpenseMember2022-07-012022-09-300001501134us-gaap:SellingAndMarketingExpenseMember2023-01-012023-09-300001501134us-gaap:SellingAndMarketingExpenseMember2022-01-012022-09-300001501134us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001501134us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001501134us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300001501134us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-300001501134us-gaap:RestructuringChargesMember2023-07-012023-09-300001501134us-gaap:RestructuringChargesMember2022-07-012022-09-300001501134us-gaap:RestructuringChargesMember2023-01-012023-09-300001501134us-gaap:RestructuringChargesMember2022-01-012022-09-30nvta:employeesnvta:employee0001501134us-gaap:EmployeeSeveranceMember2021-12-310001501134us-gaap:OtherRestructuringMember2021-12-310001501134us-gaap:EmployeeSeveranceMember2022-01-012022-12-310001501134us-gaap:OtherRestructuringMember2022-01-012022-12-310001501134us-gaap:EmployeeSeveranceMember2022-12-310001501134us-gaap:OtherRestructuringMember2022-12-310001501134us-gaap:EmployeeSeveranceMember2023-01-012023-09-300001501134us-gaap:OtherRestructuringMember2023-01-012023-09-300001501134us-gaap:EmployeeSeveranceMember2023-09-300001501134us-gaap:OtherRestructuringMember2023-09-300001501134us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001501134us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001501134us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001501134us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001501134nvta:RSUsAndPRSUsMember2023-07-012023-09-300001501134nvta:RSUsAndPRSUsMember2022-07-012022-09-300001501134nvta:RSUsAndPRSUsMember2023-01-012023-09-300001501134nvta:RSUsAndPRSUsMember2022-01-012022-09-300001501134nvta:EmployeeStockPurchasePlan2015Member2023-07-012023-09-300001501134nvta:EmployeeStockPurchasePlan2015Member2022-07-012022-09-300001501134nvta:EmployeeStockPurchasePlan2015Member2023-01-012023-09-300001501134nvta:EmployeeStockPurchasePlan2015Member2022-01-012022-09-300001501134us-gaap:ConvertibleDebtSecuritiesMembernvta:ConvertibleSeniorNotesDue2024Member2023-07-012023-09-300001501134us-gaap:ConvertibleDebtSecuritiesMembernvta:ConvertibleSeniorNotesDue2024Member2022-07-012022-09-300001501134us-gaap:ConvertibleDebtSecuritiesMembernvta:ConvertibleSeniorNotesDue2024Member2023-01-012023-09-300001501134us-gaap:ConvertibleDebtSecuritiesMembernvta:ConvertibleSeniorNotesDue2024Member2022-01-012022-09-300001501134us-gaap:ConvertibleDebtSecuritiesMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2023-07-012023-09-300001501134us-gaap:ConvertibleDebtSecuritiesMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2022-07-012022-09-300001501134us-gaap:ConvertibleDebtSecuritiesMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2023-01-012023-09-300001501134us-gaap:ConvertibleDebtSecuritiesMembernvta:ConvertibleSeniorSecuredNotesDueIn2028Member2022-01-012022-09-300001501134country:US2023-07-012023-09-300001501134country:US2022-07-012022-09-300001501134country:US2023-01-012023-09-300001501134country:US2022-01-012022-09-300001501134country:CA2023-07-012023-09-300001501134country:CA2022-07-012022-09-300001501134country:CA2023-01-012023-09-300001501134country:CA2022-01-012022-09-300001501134country:GB2023-07-012023-09-300001501134country:GB2022-07-012022-09-300001501134country:GB2023-01-012023-09-300001501134country:GB2022-01-012022-09-300001501134nvta:RestOfWorldMember2023-07-012023-09-300001501134nvta:RestOfWorldMember2022-07-012022-09-300001501134nvta:RestOfWorldMember2023-01-012023-09-300001501134nvta:RestOfWorldMember2022-01-012022-09-30


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2023
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                        to
 Commission File No. 001-36847
 
Invitaelogo1.jpg
Invitae Corporation
(Exact name of the registrant as specified in its charter)
 
Delaware27-1701898
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
 1400 16th Street, San Francisco, California 94103
(Address of principal executive offices, Zip Code)
 (415374-7782
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common Stock, $0.0001 par value per share
NVTA
New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b 2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
Non-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No  
The number of shares of the registrant’s common stock outstanding as of November 6, 2023 was 286,492,840.




TABLE OF CONTENTS
 





PART I — Financial Information
ITEM 1. Condensed Consolidated Financial Statements
INVITAE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
September 30,
2023
December 31,
2022
Assets  
Current assets:  
Cash and cash equivalents$158,007 $257,489 
Marketable securities96,566 289,611 
Accounts receivable82,507 96,148 
Inventory21,627 30,386 
Prepaid expenses and other current assets19,692 19,496 
Total current assets378,399 693,130 
Property and equipment, net65,446 108,723 
Operating lease assets61,639 106,563 
Restricted cash10,100 10,030 
Intangible assets, net 1,012,549 
Other assets19,531 23,121 
Total assets$535,115 $1,954,116 
Liabilities and stockholders’ (deficit) equity
Current liabilities:
Accounts payable$25,185 $13,984 
Accrued liabilities84,729 74,388 
Operating lease obligations17,650 14,600 
Finance lease obligations3,948 5,121 
Convertible senior notes, net current portion
26,907  
Total current liabilities158,419 108,093 
Operating lease obligations, net of current portion134,945 134,386 
Finance lease obligations, net of current portion855 3,780 
Debt 122,333 
Convertible senior notes, net1,127,830 1,470,783 
Convertible senior secured notes (at fair value)196,244  
Deferred tax liability 8,130 
Other long-term liabilities226 4,775 
Total liabilities1,618,519 1,852,280 
Commitments and contingencies (Note 7)
Stockholders’ (deficit) equity:
Common stock29 25 
Accumulated other comprehensive income (loss)25,378 (80)
Additional paid-in capital5,061,131 4,931,032 
Accumulated deficit(6,169,942)(4,829,141)
Total stockholders’ (deficit) equity(1,083,404)101,836 
Total liabilities and stockholders’ (deficit) equity$535,115 $1,954,116 
See accompanying notes to unaudited condensed consolidated financial statements.
1



INVITAE CORPORATION
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Revenue:    
Test revenue$117,561 $128,839 $346,127 $381,518 
Other revenue3,680 4,697 13,002 12,331 
Total revenue121,241 133,536 359,129 393,849 
Operating expenses:
Cost of revenue82,186 116,956 258,102 324,412 
Research and development58,336 87,177 184,138 330,559 
Selling and marketing37,999 49,193 127,241 172,086 
General and administrative45,619 44,939 160,826 147,221 
Goodwill and IPR&D impairment   2,313,047 
Restructuring, impairment and other costs
877,289 125,222 1,010,843 130,039 
Total operating expenses1,101,429 423,487 1,741,150 3,417,364 
Loss from operations(980,188)(289,951)(1,382,021)(3,023,515)
Other income (expense), net:
Gain (loss) on extinguishment of debt, net
229  (10,593) 
Debt issuance costs(845) (20,704) 
Change in fair value of convertible senior secured notes33,463  72,386  
Change in fair value of acquisition-related liabilities70 (527)337 15,666 
Other income, net4,843 2,399 15,105 3,971 
Total other income, net37,760 1,872 56,531 19,637 
Interest expense(5,850)(14,145)(23,366)(42,149)
Net loss before taxes(948,278)(302,224)(1,348,856)(3,046,027)
Income tax benefit6,171 1,068 8,055 39,551 
Net loss$(942,107)$(301,156)$(1,340,801)$(3,006,476)
Net loss per share, basic and diluted$(3.42)$(1.27)$(5.09)$(12.91)
Shares used in computing net loss per share, basic and diluted275,604 237,974 263,210 232,889 

See accompanying notes to unaudited condensed consolidated financial statements. 
2



INVITAE CORPORATION
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Net loss$(942,107)$(301,156)$(1,340,801)$(3,006,476)
Other comprehensive (loss) income:
Unrealized (loss) income on available-for-sale marketable securities, net of tax
(61)436 92 (891)
Changes in fair value attributable to instrument-specific credit risk of convertible senior secured notes measured at fair value, net of tax16,529  25,366  
Comprehensive loss$(925,639)$(300,720)$(1,315,343)$(3,007,367)
 
See accompanying notes to unaudited condensed consolidated financial statements.
 
3



INVITAE CORPORATION
Condensed Consolidated Statements of Stockholders' (Deficit) Equity
(in thousands)
(unaudited)

 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Common stock:
Balance, beginning of period
$27 $24 $25 $23 
Common stock issued
2  4 1 
Balance, end of period
29 24 29 24 
Accumulated other comprehensive income (loss):
Balance, beginning of period8,910 (1,334)(80)(7)
Unrealized (loss) income on available-for-sale marketable securities, net of tax(61)436 92 (891)
Changes in fair value attributable to instrument-specific credit risk of convertible senior secured notes measured at fair value, net of tax16,529  25,366  
Balance, end of period25,378 (898)25,378 (898)
Additional paid-in capital:
Balance, beginning of period
5,018,112 4,815,383 4,931,032 4,701,230 
Common stock issued in connection with the exchange of convertible senior notes due 202416,768  40,229  
Common stock issued in connection with public offering, net
(55)9,658 (55)9,658 
Common stock issued on exercise of stock options, net
 33 1 630 
Common stock issued pursuant to employee stock purchase plan
  2,168 5,637 
Common stock and equity awards issued pursuant to acquisitions309 3,984 2,202 9,253 
Stock-based compensation expense
25,997 60,006 85,554 162,656 
Balance, end of period
5,061,131 4,889,064 5,061,131 4,889,064 
Accumulated deficit:
Balance, beginning of period
(5,227,835)(4,428,168)(4,829,141)(1,722,848)
Net loss(942,107)(301,156)(1,340,801)(3,006,476)
Balance, end of period
(6,169,942)(4,729,324)(6,169,942)(4,729,324)
Total stockholders' (deficit) equity$(1,083,404)$158,866 $(1,083,404)$158,866 

See accompanying notes to unaudited condensed consolidated financial statements.
4



INVITAE CORPORATION
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 Nine Months Ended
September 30,
 20232022
Cash flows from operating activities:  
Net loss$(1,340,801)$(3,006,476)
Adjustments to reconcile net loss to net cash used in operating activities:
Goodwill and IPR&D impairment 2,313,047 
Impairments and losses on disposals of long-lived assets, net1,012,360 60,317 
Depreciation and amortization100,403 104,726 
Stock-based compensation85,554 164,314 
Amortization of debt discount and issuance costs5,483 11,676 
Loss on extinguishment of debt, net10,593  
Debt issuance costs20,704  
Change in fair value of convertible senior secured notes(72,386) 
Remeasurements of liabilities associated with business combinations(337)(15,666)
Benefit from income taxes(8,055)(39,551)
Post-combination expense for acceleration of unvested equity and deferred stock compensation1,789 4,980 
Amortization of premiums and discounts on investment securities(6,259)603 
Non-cash lease expense9,309 6,832 
Other2,211 (1,314)
Changes in operating assets and liabilities, net of businesses acquired:
Accounts receivable13,641 (22,903)
Inventory8,759 3,614 
Prepaid expenses and other current assets(196)9,012 
Other assets(139)2,740 
Accounts payable8,135 (6,345)
Accrued expenses and other long-term liabilities(6,966)(540)
Net cash used in operating activities(156,198)(410,934)
Cash flows from investing activities:
Purchases of marketable securities(231,044)(789,622)
Proceeds from maturities of marketable securities430,440 541,313 
Purchases of property and equipment(4,669)(48,385)
Proceeds from sale of property and equipment332  
Net cash provided by (used in) investing activities195,059 (296,694)
Cash flows from financing activities:
(Loss) proceeds from public offerings of common stock, net of issuance costs
(55)9,658 
Proceeds from issuance of common stock, net2,170 6,267 
Proceeds from issuance of Series B convertible senior secured notes due 202830,001  
Payments for debt issuance costs and prepayment fees(25,974) 
Repayment of debt(135,000) 
Finance lease principal payments(3,886)(4,184)
Settlement of acquisition obligations(5,529)(10,582)
Net cash (used in) provided by financing activities(138,273)1,159 
Net decrease in cash, cash equivalents and restricted cash(99,412)(706,469)
Cash, cash equivalents and restricted cash at beginning of period267,519 933,525 
Cash, cash equivalents and restricted cash at end of period$168,107 $227,056 
Supplemental cash flow information of non-cash investing and financing activities:
Equipment acquired through finance leases$ $4,472 
Purchases of property and equipment in accounts payable and accrued liabilities$764 $2,531 
Common stock issued for settlement of hold-back liabilities
$413 $4,274 
Exchange of convertible senior notes due 2024$(320,039)$ 
Exchange for convertible senior secured notes due 2028$301,171 $ 
Operating lease assets obtained in exchange for lease obligations, net$ $4,495 
See accompanying notes to unaudited condensed consolidated financial statements.
5



INVITAE CORPORATION
Notes to Condensed Consolidated Financial Statements

1. Organization and description of business
Invitae Corporation ("Invitae," “the Company," "we," "us," and "our") was incorporated in the State of Delaware on January 13, 2010, as Locus Development, Inc. and we changed our name to Invitae Corporation in 2012. We offer high-quality, comprehensive, affordable genetic testing across multiple clinical areas, including hereditary cancer, precision oncology, women's health, and rare diseases. Invitae operates in one segment.
Strategic realignment
On July 18, 2022, the Company initiated a strategic realignment of our operations and began implementing cost reduction programs, which was approved by the board of directors of the Company on July 16, 2022.
See Note 10, "Restructuring, impairment and other costs" for additional information regarding our strategic realignment.
Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) considered necessary for a fair presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results expected for the full fiscal year or any other periods.
Liquidity and Going Concern
The accompanying condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business and does not include any adjustments relating to the recoverability and classification of recorded asset and liability amounts that might result from the outcome of the uncertainties described below.
Pursuant to Accounting Standards Codification ("ASC") 205-40, Presentation of Financial Statements — Going Concern (“ASC 205-40”), management must evaluate whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these condensed consolidated financial statements are issued. In accordance with ASC 205-40, management’s analysis can only include the potential mitigating impact of management’s plans that have not been fully implemented as of the issuance date if (a) it is probable that management’s plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern.
The Company has generally incurred net losses since its inception and had an accumulated deficit of $6.2 billion and $4.8 billion as of September 30, 2023 and December 31, 2022, respectively. The Company had net losses of $3.1 billion, $379.0 million and $602.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. The Company used net cash in operating activities of $493.0 million, $559.8 million and $298.5 million during the years ended December 31, 2022, 2021 and 2020, respectively. The Company had net losses of $942.1 million and $301.2 million for the three months ended September 30, 2023 and 2022, respectively, and $1.3 billion and $3.0 billion for the nine months ended September 30, 2023 and 2022, respectively. Included in the Company's net loss for the three months ended September 30, 2023 are non-cash items such as $881.2 million for impairments and losses on disposals of long-lived assets, net. Included in the Company's net loss for the three months ended September 30, 2022 are non-cash items such as $55.5 million for impairments and losses on disposals of long-lived assets, net. Included in the Company’s net loss for the nine months ended September 30, 2023 are non-cash items such as $1.0 billion for impairments and losses on disposals of long-lived assets, net. Included in the Company’s net loss for the nine months ended September 30, 2022 are non-cash items such as a $2.3 billion loss on
6



impairment of goodwill and in-process research and development (“IPR&D”) intangible asset and $60.3 million related to impairments and losses on disposals of long-lived assets, net. See Note 4, “Intangible assets, net” for additional information. The Company used net cash in operating activities of $156.2 million and $410.9 million for the nine months ended September 30, 2023 and 2022, respectively.
At September 30, 2023 and December 31, 2022, the Company had $254.6 million and $547.1 million, respectively, of cash, cash equivalents, and marketable securities. The Company expects to incur additional operating losses and negative operating cash flows in the near term.
As a result of losses, projected cash needs, and current liquidity level, substantial doubt exists about the Company’s ability to continue as a going concern.
The Company’s ability to continue as a going concern is contingent upon successful execution of management’s intended plan over the next twelve months to reduce operating costs and improve the Company’s liquidity, which includes, without limitation:
Reducing operating costs by a reduction in lab and office space through consolidation, and focusing and eliminating certain business activities and services.
Seeking additional capital through the issuance of debt or equity securities, or the sale of assets.
While operational improvement efforts and expense control have resulted in margin expansion and stronger financial performance in the nine months ended September 30, 2023, the Company is engaging with stakeholders on a path forward and has formed a special committee of its board of directors focused on improving the Company’s capital position. The Company is exploring a number of options, including, but not limited to, raising capital, asset sales, business and research and development refocusing efforts, capital expenditure and operating expense reductions, and addressing its debt obligations.
The condensed consolidated financial statements do not include any adjustments that may result from the outcome of this going concern uncertainty.
Since inception, the Company’s operations have been financed primarily by fees collected from its customers, net proceeds from sales of its capital stock as well as borrowing from debt facilities and the issuance of convertible senior notes. The Company will need to raise additional funding to finance operations and service or repay debt obligations, however there is no assurance that it will be successful in obtaining such additional financing. If the Company raises additional capital through debt financing, the Company may be subject to covenants limiting or restricting the Company’s ability to take specific actions, such as incurring additional debt, capital expenditures or sale of assets. If the Company raises additional capital through public or private equity offerings, the ownership interest of our existing stockholders would be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the Company’s existing stockholders’ rights. There can be no assurance that additional capital will be available to the Company or, if available, would be available in sufficient amounts or on terms acceptable to us or on a timely basis. If sufficient funds on acceptable terms are not available when needed, the Company could be further required to curtail planned activities to reduce costs, which could include reductions in workforce, elimination of business operations and services, and significant reductions in operating expenses, liquidation of assets or pursuing bankruptcy proceedings. Doing so may potentially have an unfavorable effect on the Company’s ability to execute its business plan and have an adverse effect on the Company’s business, results of operations and future prospects.

2. Summary of significant accounting policies
Principles of consolidation
Our unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base these estimates on current facts, historical and anticipated results, trends and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to
7



future events. Actual results could differ materially from those judgments, estimates and assumptions. We evaluate our estimates on an ongoing basis.
Prior period reclassifications
Certain prior period amounts have been reclassified to conform with the current period presentation. Loss on disposal of property and equipment and impairment charges related to right-of-use assets and the related leasehold improvements are now included in restructuring, impairment and other costs in the condensed consolidated statements of operations. This reclassification had no effect on the previously reported results of operations.
Concentrations of credit risk and other risks and uncertainties
Financial instruments that potentially subject us to a concentration of credit risk consist of cash, cash equivalents, restricted cash, marketable securities and accounts receivable. Our cash and cash equivalents are primarily held by financial institutions in the United States. Such deposits often exceed federally insured limits.
Cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets are reconciled to the amounts reported in the condensed consolidated statements of cash flows as follows (in thousands):
September 30, 2023September 30, 2022
Cash and cash equivalents$158,007 $217,029 
Restricted cash10,100 10,027 
Total cash, cash equivalents and restricted cash$168,107 $227,056 
Fair value of financial instruments
Our financial instruments consist principally of cash and cash equivalents, marketable securities, accounts receivable, accounts payable, accrued liabilities, operating and finance leases obligations, liabilities associated with business combinations, and convertible senior notes. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued and other current liabilities approximate their current fair value due to the relatively short-term nature of these accounts. Based on borrowing rates available to us, the carrying value of our operating and finance leases approximates their fair values. Liabilities associated with business combinations and our 4.50% Series A convertible senior secured notes due 2028 (the “Series A Notes”) and 4.50% Series B convertible senior secured notes due 2028 (the “Series B Notes” and, together with the Series A Notes, the "Senior Secured 2028 Notes") are recorded at their estimated fair value.
Fair value option election
The fair value option provides an election that allows an entity to irrevocably elect to record certain financial assets and liabilities at fair value on an instrument-by-instrument basis at initial recognition. We have elected to apply the fair value option to the Senior Secured 2028 Notes and stock payable liabilities resulting from business combinations.
The Senior Secured 2028 Notes accounted for under the fair value option election pursuant to ASC 825, Financial Instruments, are each a debt host financial instrument containing embedded features that would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and recurring estimated fair value measurements under ASC 815, Derivatives and Hedging. Notwithstanding, ASC 825 provides for the fair value option election, to the extent not otherwise prohibited by ASC 825, to be afforded to financial instruments. When the fair value option election is applied to financial liabilities, bifurcation of an embedded derivative is not required, and the financial liability is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each reporting period date. The estimated fair value adjustment related to the portion of the change in fair value attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive loss, with the remaining amount of the fair value adjustment recognized in other income (expense), net in our condensed consolidated statements of operations. We have elected to present the component related to accrued interest in the change in fair value of the Senior Secured 2028 Notes.
8



In circumstances where an acquisition involves certain indemnification hold-backs that are settled in shares of our common stock, we recognize a stock payable liability based upon the number of shares that are issuable to the sellers and the quoted closing price of our common stock as of the reporting date. The number of shares that will ultimately be issued is subject to adjustment for indemnified claims that existed as of the closing date for each acquisition. We remeasure this liability each reporting period and record changes in the fair value related to stock payable liabilities in other income (expense), net in our condensed consolidated statements of operations.
Restructuring, impairment and other costs
Restructuring, impairment and other costs are comprised of employee severance and benefits, asset impairments and losses on asset disposals, and other costs. Employee severance and benefit costs are comprised of severance, other termination benefit costs, and stock-based compensation expense for the acceleration of stock awards related to workforce reductions. We recognize costs and liabilities associated with exit and disposal activities in accordance with ASC 420, Exit and Disposal Cost Obligations, and other costs and liabilities associated with nonretirement postemployment benefits in accordance with ASC 712, Nonretirement Postemployment Benefits. Liabilities are based on the estimate of fair value in the period the liabilities are incurred, with subsequent changes to the liability recognized as adjustments in the period of change. We recognize asset impairments and losses on disposals of long-lived assets in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets. Restructuring, impairment and other costs are recognized as an operating expense within the condensed consolidated statements of operations and related liabilities are recorded within accrued liabilities in the condensed consolidated balance sheets.
Recent accounting pronouncements
We evaluate all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (the "FASB") for consideration of their applicability. ASUs not included in the disclosures in this report were assessed and determined to be either not applicable or are not expected to have a material impact on our condensed consolidated financial statements.
Recently adopted accounting pronouncements
In October 2021, the FASB issued ASU 2021-08, Business Combinations ("Topic 805"): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments of this ASU require entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. The Company adopted the amendments in this update on January 1, 2023 with no impact to our condensed consolidated financial statements at the date of adoption. The amendments will be applied prospectively to any future business combinations.
3. Revenue, accounts receivable and deferred revenue
Test revenue is generated from sales of diagnostic tests and precision oncology products to two groups of customers: patients, consideration for which may be paid directly by the patients or the patients' insurance carriers, and institutions (e.g., hospitals, clinics, medical centers and biopharmaceutical partners). Amounts billed and collected, and the timing of collections, vary based on the type of customer and the corresponding payer, including the patients' insurance carriers that are paying on behalf of the customer. Data and service revenue consists principally of revenue recognized for the performance of activities outlined in biopharmaceutical development contracts and other collaboration and genome network agreements.
9



The following tables present disaggregated revenue by customer and product offering by category (in thousands):
 PatientInstitutionThree Months Ended September 30, 2023
 InsuranceDirect
Product:
Oncology$52,903 $1,680 $7,162 $61,745 
Women's health22,177 3,082 1,597 26,856 
Rare diseases15,534 2,386 5,381 23,301 
Data/services  9,339 9,339 
Total revenue$90,614 $7,148 $23,479 $121,241 
 PatientInstitutionThree Months Ended September 30, 2022
 InsuranceDirect
Product:
Oncology$53,104 $2,205 $23,862 $79,171 
Women's health18,887 3,977 1,775 24,639 
Rare diseases8,493 2,577 6,085 17,155 
Data/services  12,571 12,571 
Total revenue$80,484 $8,759 $44,293 $133,536 
 PatientInstitutionNine Months Ended September 30, 2023
 InsuranceDirect
Product:
Oncology$155,663 $5,233 $20,957 $181,853 
Women's health63,921 9,998 4,395 78,314 
Rare diseases40,880 7,337 17,173 65,390 
Data/services  33,572 33,572 
Total revenue$260,464 $22,568 $76,097 $359,129 
 PatientInstitutionNine Months Ended September 30, 2022
 InsuranceDirect
Product:
Oncology$155,298 $8,499 $68,753 $232,550 
Women's health54,963 15,031 6,061 76,055 
Rare diseases23,093 7,806 18,990 49,889 
Data/services  35,355 35,355 
Total revenue$233,354 $31,336 $129,159 $393,849 
10



We recognize revenue related to billings based on estimates of the amount that will ultimately be realized. Cash collections for certain tests delivered may differ from rates originally estimated. In subsequent periods, we update our estimate of the amounts recognized for previously delivered tests resulting in the following (decrease) increase to revenue and (decrease) increase to our net (loss) income from operations and basic and diluted net (loss) income per share (in millions, except per share data):
 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Revenue$(0.3)$1.1 $(4.5)$3.5 
(Loss) income from operations$(0.3)$1.1 $(4.5)$3.5 
Net (loss) income per share, basic and diluted$ $ $(0.02)$0.02 
Accounts receivable
The majority of our accounts receivable represents amounts billed to customers for test, data and service activities, and estimated amounts to be collected from patients' insurance carriers for test services.
We record a contract asset for services delivered under certain biopharmaceutical contracts, which are unbilled as of the end of the period. The contract receivable was $1.8 million and $1.3 million as of September 30, 2023 and December 31, 2022, respectively, and was included in prepaid expenses and other current assets in the condensed consolidated balance sheets.
Deferred revenue
We record a contract liability when cash payments are received or due in advance of our performance related to one or more performance obligations. The deferred revenue balance primarily consists of advanced billings for biopharmaceutical development services, including billings at the initiation of performance-based milestones, and recognized as revenue in the applicable future period when the revenue is earned. Also included are prepayments related to our consumer direct channel. We recognized revenue of $1.9 million and $2.3 million from deferred revenue during the three and nine months ended September 30, 2023, respectively. The current contract liability was $4.8 million as of each of September 30, 2023 and December 31, 2022, which was included in accrued liabilities in the condensed consolidated balance sheets. The long-term contract liability was zero and $0.1 million as of September 30, 2023 and December 31, 2022, respectively, which was included in other long-term liabilities in the condensed consolidated balance sheets.
Refund liability
As part of our strategic realignment, we terminated early or changed the scope of several companion diagnostic development contracts with milestones in progress. Upon termination, we recorded a refund liability related to the remaining outstanding performance-based milestones. During the three months ended March 31, 2023, we recorded settlement activity associated with the early termination of a companion diagnostic contract. The refund liability was $1.6 million and $4.7 million as of September 30, 2023 and December 31, 2022, respectively, which was included in accrued liabilities in the condensed consolidated balance sheets.
Performance obligations
Test and other revenue are generally recognized upon completion of our performance obligation when or as control of the promised good or service is transferred to the customer, which is typically a test report, or upon shipment of our precision oncology products or other contractually defined milestone(s). The Company has applied the practical expedient in relation to information about our remaining performance obligations, as we have a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date. Most remaining performance obligations are primarily related to personalized cancer monitoring ("PCM") services included in test revenue in our condensed consolidated statements of operations and are generally satisfied over one to six months.
11



4. Intangible assets, net
The following table presents details of our acquired intangible assets as of September 30, 2023 (in thousands):
September 30, 2023
 
Cost
Accumulated
Amortization
Asset Disposals/Impairments
Net
Weighted-Average
Useful Life
(In Years)
Customer relationships$40,928 $(20,838)$(20,090)$ 10.8
Developed technology1,138,702 (243,969)(894,733) 11.1
Trade name21,072 (5,268)(15,804) 
 $1,200,702 $(270,075)$(930,627)$ 11.1
The following table presents details of our acquired intangible assets as of December 31, 2022 (in thousands):
December 31, 2022
 
Cost
Accumulated
Amortization
Asset Disposals/Impairments
Net
Weighted-Average
Useful Life
(In Years)
Customer relationships$41,515 $(17,675)$(359)$23,481 10.8
Developed technology1,174,506 (183,133)(19,426)971,947 10.8
Non-compete agreement286 (286)  
Trade name21,085 (3,964) 17,121 12.0
Patent assets and licenses495 (156)(339) 
Right to develop new technology19,359 (2,474)(16,885) 
 $1,257,246 $(207,688)$(37,009)$1,012,549 10.8
Acquisition-related intangibles included in the above tables were generally definite-lived and were carried at cost less accumulated amortization. Customer relationships were being amortized on an accelerated basis in proportion to estimated cash flows. All other definite-lived acquisition-related intangibles were being amortized on a straight-line basis over their estimated lives, which approximated the pattern in which the economic benefits of the intangible assets were expected to be realized. Amortization expense was $25.6 million and $29.6 million for the three months ended September 30, 2023 and 2022, respectively, and $81.9 million and $79.8 million for the nine months ended September 30, 2023 and 2022, respectively. Amortization expense is recorded in cost of revenue, research and development, and selling and marketing expenses in our condensed consolidated statements of operations.
Impairment assessment
Goodwill and indefinite-lived intangible assets are assessed for impairment on an annual basis and whenever events or changes in circumstances indicate that these assets may be impaired. We evaluate the fair value of long-lived assets, which include property and equipment, right-of-use assets and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the asset may not be fully recoverable. In testing for goodwill impairment, we have the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the carrying value exceeds its fair value, we perform a quantitative goodwill impairment test to compare to the fair value of our reporting unit to its carrying value, including goodwill. If the carrying value, including goodwill, exceeds the reporting unit’s fair value, we will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value.
During the three months ended June 30, 2022, as a result of the significant, sustained decline in our stock price and related market capitalization and lower than expected financial performance, we performed an impairment assessment of goodwill, IPR&D intangible assets, and long-lived assets, including definite-lived intangibles. Based on this analysis, we recognized a non-cash, pre-tax goodwill impairment charge of $2.3 billion during the three months ended June 30, 2022, which was included in goodwill and IPR&D impairment expense in the condensed consolidated statements of operations. The goodwill was fully impaired as of June 30, 2022.
12



We also identified indicators of impairment related to the IPR&D intangible asset initially recognized as part of the acquisition of Singular Bio, Inc. ("Singular Bio") that it was more likely than not that the asset is impaired. We recognized a non-cash, pre-tax impairment charge of $30.0 million during the three months ended June 30, 2022 related to the IPR&D intangible asset. The impairment charges are recorded in goodwill and IPR&D impairment expense in the condensed consolidated statements of operations. The indefinite-lived intangible asset was fully impaired as of June 30, 2022. Additionally, we recognized a loss on disposal of property and equipment of $4.8 million during the three months ended June 30, 2022 related to specific equipment that is no longer being utilized on this project and has no alternative future use. The loss on disposal is recorded in restructuring, impairment and other costs in the condensed consolidated statements of operations for the nine months ended September 30, 2022.
In March 2023, we decided to cease the use of acquired technology focused on informing clinical decisions as management continued our portfolio optimization. During the three months ended March 31, 2023, we wrote-off the remaining carrying value of the related developed technology intangible asset of $2.1 million and recognized $1.0 million for related contractual obligations, which are included in restructuring, impairment and other costs in the condensed consolidated statements of operations for the nine months ended September 30, 2023. See Note 10, "Restructuring, impairment and other costs" for additional information.
In June 2023, we decided to cease the use of acquired technology focused on pharmacogenetic testing as management continued our portfolio optimization. During the three months ended June 30, 2023, we wrote-off the remaining carrying value of the related developed technology intangible asset of $5.5 million, which is included in restructuring, impairment and other costs in the condensed consolidated statements of operations for the nine months ended September 30, 2023. See Note 10, "Restructuring, impairment and other costs" for additional information.
During the three months ended June 30, 2023, while exploring strategic alternatives in relation to the use of our acquired technology for our patient data platform to help patients collect, organize, store and share their medical records digitally, the developed technology was tested for recoverability. Based on the results of our testing, we wrote-off the remaining carrying value of the related developed technology intangible asset of $74.8 million, which is included in restructuring, impairment and other costs in the condensed consolidated statements of operations for the nine months ended September 30, 2023.
In September 2023, we decided to cease the use of acquired technology focused on additional pharmacogenetic testing and cancer risk stratification, along with an acquired tradename. During the three months ended September 30, 2023, we wrote-off the remaining carrying value of the related developed technology and tradename intangible assets of $43.7 million and $15.8 million, respectively, which are included in restructuring, impairment and other costs in the condensed consolidated statements of operations. See Note 10, "Restructuring, impairment and other costs" for additional information.
The Company evaluates the carrying value of long-lived assets, which include definite-lived intangible assets, property and equipment, net and right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the asset or asset group may not be fully recoverable. If the sum of the expected future cash flows, on an undiscounted basis, is less than the carrying amount of the asset group, an impairment loss equal to the excess of the carrying amount over the fair value of the individual asset within the asset group is recognized.

13



During the three months ended September 30, 2023, as a result of difficult debt markets to obtain additional financing and the substantial doubt about the Company’s ability to continue as a going concern an impairment assessment of long-lived assets was performed. A recoverability test was performed for the long-lived assets, including definite-lived intangibles, using the undiscounted cash flows approach, which included unobservable inputs including management's forecasts of projected revenue associated with future cash flows, and residual value. The cash flow estimates reflected the Company’s assumptions about its use of the long-lived assets and eventual disposition of the asset group. The Company determined that our long-lived assets held and used, including intangible assets that are subject to amortization, did not have identifiable cash flows that are largely independent of the cash flows of other assets and liabilities and of other asset groups. Therefore, the Company evaluated its long-lived assets for impairment on an entity-wide level. The Company concluded that the carrying value of the entity-wide asset group was not recoverable as it exceeded the future net undiscounted cash flows that are expected to be generated from the use and/or eventual disposition of the asset group.
To measure, allocate and recognize the impairment loss, the Company, with the assistance of a third-party valuation specialist, determined the fair value of the asset group using the discounted cash flow method using the income approach. To determine the fair value of the individual assets within the asset group, the Company utilized the discounted cash flow method of the income approach for its intangible assets, the replacement cost less depreciation approach for property and equipment and the income approach for the right-of-use assets. Based on the analysis, the Company recognized non-cash impairment charges of $788.7 million on its definite-lived intangible assets during the three and nine months ended September 30, 2023, which is included in restructuring, impairment and other costs in the condensed consolidated statements of operations. See Note 10, "Restructuring, impairment and other costs" for additional information.
The fair value assessments represent Level 3 non-recurring fair value measurements. The fair value of the assets involves unobservable inputs including, but not limited to, management’s forecasts of projected revenue associated with future cash flows and risk-adjusted discount rates.

5. Balance sheet components
Inventory
Inventory consisted of the following (in thousands):
 September 30, 2023December 31, 2022
Raw materials$21,368 $29,992 
Work in progress259 382 
Finished goods 12 
Total inventory$21,627 $30,386 
During the second quarter of 2023, management decided to exit certain product offerings. During the three months ended June 30, 2023, we wrote-off the remaining inventory related to these product offerings of $0.7 million, which is included in cost of revenue in the condensed consolidated statements of operations for the nine months ended September 30, 2023.
Property and equipment, net
Property and equipment consisted of the following (in thousands):
September 30, 2023December 31, 2022
Leasehold improvements$56,392 $73,095 
Laboratory equipment50,465 67,261 
Computer equipment11,147 13,511 
Furniture and fixtures996 1,427 
Construction-in-progress7,621 21,006 
Other8,110 2,996 
Total property and equipment, gross134,731 179,296 
Accumulated depreciation(69,285)(70,573)
Total property and equipment, net$65,446 $108,723 
14



Depreciation expense was $5.2 million and $9.7 million for the three months ended September 30, 2023 and 2022, respectively, and $15.6 million and $21.1 million for the nine months ended September 30, 2023 and 2022, respectively.
During the first quarter of 2023, we decided to exit certain leased premises and we recognized a loss on disposal of property and equipment, net of $8.5 million during the three months ended March 31, 2023 for related lab equipment and leasehold improvements, which was included in restructuring, impairment and other costs in our condensed consolidated statements of operations. See Note 4, "Intangible assets, net" for additional information on impairment assessment.
During the third quarter of 2023, we decided to exit certain leased premises and we recognized a loss on disposal of property and equipment, net of $21.6 million for the related leasehold improvements, construction-in-process, and computer equipment, which was included in restructuring, impairment and other costs in our condensed consolidated statements of operations. See Note 4, "Intangible assets, net for additional information on impairment assessment.
See Note 7, "Commitments and contingencies" and Note 10, "Restructuring, impairment and other costs" for additional information including further discussion related to right-of-use asset impairments.
Accrued liabilities
Accrued liabilities consisted of the following (in thousands):
 September 30, 2023December 31, 2022
Accrued compensation and related expenses$39,345 $25,315 
Accrued litigation expense
20,761 905 
Accrued expenses14,349 23,628 
Deferred revenue4,788 4,814 
Other accrued liabilities3,265 4,568 
Accrued royalties2,176 3,177 
Accrued interest45 6,646 
Compensation and other liabilities associated with business combinations 5,335 
Total accrued liabilities$84,729 $74,388 
6. Fair value measurements
Financial assets and liabilities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The authoritative guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity.
The three-level hierarchy for the inputs to valuation techniques is summarized as follows:
Level 1—Observable inputs such as quoted prices (unadjusted) for identical instruments in active markets.
Level 2—Observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-derived valuations whose significant inputs are observable.
Level 3—Unobservable inputs that reflect the reporting entity’s own assumptions.
15



The following tables set forth the fair value of our financial instruments that were measured at fair value on a recurring basis (in thousands):
 September 30, 2023
 
Amortized
Cost
Gross Unrealized GainsGross Unrealized Losses
Estimated
Fair Value
   
 Level 1Level 2Level 3
Financial assets:       
Money market funds$163,424 $ $ $163,424 $163,424 $ $ 
U.S. Treasury notes18,848  (1)18,847 18,847   
U.S. government agency securities77,707 19 (7)77,719  77,719  
Total financial assets$259,979 $19 $(8)$259,990 $182,271 $77,719 $ 
Financial liabilities:
Convertible senior secured notes
$196,244 $ $ $196,244 
Contingent consideration
25   25 
Total financial liabilities$196,269 $ $ $196,269 
 September 30, 2023
Reported as: 
Cash equivalents$153,324 
Restricted cash10,100 
Marketable securities96,566 
Total cash equivalents, restricted cash, and marketable securities$259,990 
Convertible senior secured notes$196,244 
Other long-term liabilities25 
Total liabilities$196,269 
 December 31, 2022
 
Amortized
Cost
Gross Unrealized GainsGross Unrealized Losses
Estimated
Fair Value
   
 Level 1Level 2Level 3
Financial assets:       
Money market funds$158,931 $ $ $158,931 $158,931 $ $ 
U.S. Treasury notes193,685 1 (123)193,563 193,563   
U.S. government agency securities96,006 55 (13)96,048  96,048  
Total financial assets$448,622 $56 $(136)$448,542 $352,494 $96,048 $ 
Financial liabilities:
Stock payable liability$744 $ $ $744 
Contingent consideration25   25 
Total financial liabilities$769 $ $ $769 
 December 31, 2022
Reported as: 
Cash equivalents$148,901 
Restricted cash10,030 
Marketable securities289,611 
Total cash equivalents, restricted cash, and marketable securities$448,542 
Other long-term liabilities$769 
16



There were no transfers between Level 1, Level 2 and Level 3 during the periods presented. Our debt securities of U.S. government agencies are classified as Level 2 as they are valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third-party data providers, including but not limited to benchmark yields, interest rate curves, reported trades, broker/dealer quotes and reference data. At September 30, 2023, the remaining contractual maturities of available-for-sale securities ranged from one to five months. Interest income generated from our investments was $2.2 million and $2.0 million during the three months ended September 30, 2023 and 2022, respectively, and $6.5 million and $5.0 million for the nine months ended September 30, 2023 and 2022, respectively, which was included in other income (expense), net in the condensed consolidated statements of operations.
The total fair value of investments with unrealized losses at September 30, 2023 was $36.1 million. None of the available-for-sale securities held as of September 30, 2023 have been in an unrealized loss position for more than one year. The Company evaluates investments that are in an unrealized loss position for impairment as a result of credit loss. It was determined that no credit losses exist as of September 30, 2023, because the change in market value of those securities has resulted from fluctuations in market interest rates since the time of purchase, rather than a deterioration of the credit worthiness of the issuers. For marketable securities in an unrealized loss position, we assess our intent to sell, or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. We intend to hold our marketable securities to maturity and it is unlikely that they would be sold before their cost bases are recovered. The cost of securities sold is based on the specific identification method.
17



The following tables include a rollforward of the stock payable liability, contingent consideration, and Senior Secured 2028 Notes classified within Level 3 of the fair value hierarchy (in thousands):
Three Months Ended September 30, 2023
 Stock Payable LiabilityContingent ConsiderationConvertible Senior Secured Notes
Fair value at June 30, 2023$251 $25 $249,571 
Issuance of convertible senior secured notes at fair value  100 
Changes in fair value(70) (33,463)
Changes in fair value related to instrument-specific credit risk  (16,529)
Settlements(181)  
Cash payments for interest  (3,435)
Fair value at September 30, 2023
$ $25 $196,244 
    
Nine Months Ended September 30, 2023
 Stock Payable LiabilityContingent ConsiderationConvertible Senior Secured Notes
Fair value at December 31, 2022$744 $25 $ 
Issuance of convertible senior secured notes at fair value  301,171 
Changes in fair value(337) (72,386)
Changes in fair value related to instrument-specific credit risk  (25,366)
Settlements(407)  
Cash payments for interest  (7,175)
Fair value at September 30, 2023
$ $25 $196,244 
Three Months Ended
September 30, 2022
 Stock Payable LiabilityContingent Consideration
Fair value at June 30, 2022$2,782 $25 
Change in fair value527  
Settlements(2,324) 
Fair value at September 30, 2022
$985 $25 
Nine Months Ended
September 30, 2022
 Stock Payable LiabilityContingent Consideration
Fair value at December 31, 2021$20,925 $1,875 
Change in fair value(15,666)(1,850)
Settlements(4,274) 
Fair value at September 30, 2022
$985 $25 
Stock payable liabilities relate to certain indemnification hold-backs resulting from business combinations that are settled in shares of our common stock. We elected to account for these liabilities using the fair value option due to the inherent nature of the liabilities and the changes in value of the underlying shares that will ultimately be issued to settle the liabilities. The estimated fair value of these liabilities is classified as Level 3 and determined based upon the number of shares that are issuable to the sellers and the quoted closing price of our common stock as of the reporting date. The number of shares that will ultimately be issued is subject to adjustment for indemnified claims that existed as of the closing date for each acquisition. Changes in the number of shares issued and share price can significantly affect the estimated fair value of the liabilities. The change in fair value related to stock payable liabilities was income of $0.1 million and $0.5 million during the three months ended September 30, 2023 and 2022, respectively, and income of $0.4 million and $15.7 million for the nine months ended September 30, 2023 and 2022, respectively, which was recorded in change in fair value of acquisition-related liabilities in the condensed consolidated statements of operations.
18



Contingent consideration relates to the obligation we may be required to pay in the form of additional shares of our common stock resulting from the acquisition of Genelex in April 2020. The amount of the contingent obligation is dependent upon the achievement of a certain product milestone, at which time we would issue shares of our common stock with a value equal to a portion of the gross revenues actually received by us for a pharmacogenetic product reimbursed through certain payers during an earn-out period of up to four years. The estimated fair value of the contingent consideration is based upon significant inputs not observable in the market and, therefore, represents a Level 3 measurement. The material factors that may impact the fair value of the contingent consideration, and therefore, this liability, are the probabilities and timing of achieving the related milestone, the estimated revenues achieved for a pharmacogenetic product and the discount rate used to estimate the fair value. Significant changes in any of the probabilities of success would result in a significant change in the estimated fair value of the liability. The change in fair value related to contingent consideration recorded to general and administrative expense was zero during both the three months ended September 30, 2023 and 2022, respectively, and zero and a gain of $1.8 million during the nine months ended September 30, 2023 and 2022, respectively.
In March 2023, the Company issued Series A Notes in an aggregate principal amount of $275.3 million, and Series B Notes in an aggregate principal amount of $30.0 million. In August 2023, the Company issued additional Series A Notes in an aggregate principal amount of $0.1 million.
The Company elected the fair value option to account for the Senior Secured 2028 Notes. We utilize the binomial lattice model, specifically a lattice model to estimate the fair value of the Senior Secured 2028 Notes at issuance and subsequent reporting dates. The estimated fair value of the Senior Secured 2028 Notes is determined using Level 3 inputs and assumptions unobservable in the market. This model incorporates the terms and conditions of the Senior Secured 2028 Notes and assumptions related to stock price, expected stock price volatility, risk-free interest rate, market credit spread, and cost of debt. The stock price is based on the publicly traded price of our common stock as of the measurement date. We estimate the volatility of our stock price based on the historical and implied volatilities of our publicly traded common stock. The risk-free interest rate is based on interpolated U.S. Treasury rates, commensurate with a similar term to the Senior Secured 2028 Notes. The most significant assumptions in the binomial lattice model impacting the fair value of the Senior Secured 2028 Notes are (i) the estimated stock price, (ii) the estimated cost of debt, and (iii) the volatility of our common stock. Significant changes in any of these inputs may result in a significant change in the fair value of the Senior Secured 2028 Notes.
Under the fair value election as prescribed by ASC 825, we record changes in fair value, inclusive of related accrued interest, through the condensed consolidated statements of operations as a fair value adjustment of the convertible senior secured debt each reporting period, with the portion of the change that results from a change in the instrument-specific credit risk recorded separately in other comprehensive loss, if applicable. The portion of total changes in fair value of debt attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the risk-free interest rate, credit spread, and cost of debt assumptions. The initial carrying amount of the Senior Secured 2028 Notes, measured at the estimated fair value on the date of issuance, was $301.1 million. As of September 30, 2023, the estimated fair value was $196.2 million. During the three and nine months ended September 30, 2023, the corresponding change in fair value of the Senior Secured 2028 Notes was a gain of $33.5 million and $72.4 million, respectively, which is included in other income (expense), net in the condensed consolidated statements of operations. The change in fair value related to instrument-specific credit risk was $16.5 million and $25.4 million during the three and nine months ended September 30, 2023, respectively, which is included in the condensed consolidated statements of comprehensive loss. See Note 7, "Commitments and contingencies" under the heading "Convertible senior notes—Convertible senior secured notes due 2028" for a description of the Senior Secured 2028 Notes.
Significant inputs into the binomial lattice model as of September 30, 2023 and March 7, 2023 were as follows:
September 30, 2023March 7, 2023
Stock price$0.61$1.65
Conversion price$2.58$2.58
Volatility110.0 %107.5 %
Risk-free interest rate4.71 %4.35 %
Credit spread17.92 %13.76 %
Cost of debt22.6 %18.1 %
Term (years)4.465.02
19



7. Commitments and contingencies
Leases
The Company has entered into various non-cancellable operating lease agreements for office and laboratory space domestically and internationally. The Company's current leases have remaining terms ranging from approximately 1 to 12 years, some of which include options to extend the leases. The renewal options were not included in the calculation of the operating lease assets and the operating lease liabilities as they are not reasonably certain of being exercised. The security deposits for our operating leases are included in restricted cash in our condensed consolidated balance sheets.
In 2015, we entered into a non-cancelable operating lease agreement for our headquarters and main production facility in San Francisco, California, which commenced in 2016 with an initial lease term extending through 2026. In 2020, we entered into a non-cancelable operating lease agreement for additional office and laboratory space in San Francisco, California, which commenced in 2021 and has an initial lease term extending through 2031. In 2021, we entered into a non-cancelable operating lease agreement for a new laboratory and production facilities in Morrisville, North Carolina, which commenced in the same year with an initial lease term extending through 2035. See the discussion below regarding management's decision to exit the operating leases for additional office and laboratory space in San Francisco, California and the new laboratory and production facilities in Morrisville, North Carolina and the related impairments in 2023.
We have entered into various finance lease agreements to obtain laboratory equipment. The terms of our finance leases are generally three years and are typically secured by the underlying equipment. The portion of the future payments designated as principal repayment and related interest was classified as a finance lease obligation in our condensed consolidated balance sheets. Finance lease assets are recorded within other assets in our condensed consolidated balance sheets.
During the first quarter of 2023, we decided to exit certain leased premises and actively began looking to sublease certain facilities, including the related leasehold improvements. We determined that the changes in the intended use of these locations represented an indicator of impairment and performed a test of recoverability as of March 31, 2023. For operating leases where the carrying values of the asset group were higher than the undiscounted cash flows expected through sublease, we impaired the asset group to their fair value. The fair value was determined by utilizing the discounted cash flow method under the income approach. The key inputs to this valuation were expected sublease rental income ranging from $7.6 million to $35.7 million and a discount rate ranging from 7.0% to 8.0%. This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement. During the three months ended March 31, 2023, we recognized an impairment charge of $37.8 million related to the right-of-use assets and $2.0 million for the related leasehold improvements, which was included in restructuring, impairment and other costs in our condensed consolidated statements of operations.
During the first quarter of 2023, we reassessed certain leases previously impaired as part of the strategic realignment for additional impairment due to the continued decline in market conditions and changes in the ability to sublease the properties. We determined that the changes in market conditions represented an indicator of impairment and performed a test of recoverability as of March 31, 2023. For operating leases where the carrying values of the asset group were higher than the undiscounted cash flows expected through sublease, we further impaired the asset group to their fair value. The fair value was determined by utilizing the discounted cash flow method under the income approach. The key inputs to this valuation were expected sublease rental income ranging from $0.3 million to $1.9 million and discount rates ranging from 7.50% to 7.75%. This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement. During the three months ended March 31, 2023, we recognized an impairment charge of $2.3 million related to the right-of-use assets, which was included in restructuring, impairment and other costs in our consolidated statements of operations.
During the second quarter of 2023, we reassessed certain leases previously impaired as part of the strategic realignment for additional impairment due to the continued decline in market conditions and changes in the ability to sublease the properties. We determined that the changes in market conditions represented an indicator of impairment and performed a test of recoverability as of June 30, 2023. For operating leases where the carrying values of the asset group were higher than the undiscounted cash flows expected through sublease, we further impaired the asset group to their fair value. The fair value was determined by utilizing the discounted cash flow method under the income approach. The key inputs to this valuation were expected sublease rental income ranging from $0.1 million to $0.4 million and a discount rate of 7.75%. This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement. During the three months
20



ended June 30, 2023, we recognized an impairment charge of $0.6 million related to the right-of-use assets, which was included in restructuring, impairment and other costs in our consolidated statements of operations.
During the third quarter of 2023, we decided to exit certain leased premises and actively began looking to sublease certain facilities, including the related leasehold improvements. We determined that the changes in the intended use of these locations represented an indicator of impairment and performed a test of recoverability as of September 30, 2023. For operating leases where the carrying values of the asset group were higher than the undiscounted cash flows expected through sublease, we impaired the asset group to their fair value. The fair value was determined by utilizing the discounted cash flow method under the income approach. The key inputs to this valuation were expected sublease rental income of $50.9 million and a discount rate of 7.5%. This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement. During the three months ended September 30, 2023, we recognized an impairment charge of $9.9 million related to the right-of-use assets and $17.1 million for the related leasehold improvements, which was included in restructuring, impairment and other costs in our condensed consolidated statements of operations.
During the third quarter of 2023, we reassessed certain leases previously impaired as part of the strategic realignment for additional impairment due to the continued decline in market conditions and changes in the ability to sublease the properties. We determined that the changes in market conditions represented an indicator of impairment and performed a test of recoverability as of September 30, 2023. For operating leases where the carrying values of the asset group were higher than the undiscounted cash flows expected through sublease, we impaired the asset group to their fair value. The fair value was determined by utilizing the discounted cash flow method under the income approach. The key inputs to this valuation were expected sublease rental income ranging from less than $