MAXCYTE, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

You should read the following discussion and analysis of our financial condition
and results of operations in conjunction with our unaudited condensed
consolidated financial statements and related notes thereto included in Part I,
Item 1 of this Quarterly Report on Form 10-Q, our audited consolidated financial
statements and related notes for the year ended December 31, 2021, included in
our Annual Report on Form 10-K filed with the Securities and Exchange Commission
(the "SEC") on March 22, 2022, as well as the information contained under
Management's Discussion and Analysis of Financial Condition and Results of
Operations and "Risk Factors" contained in the Annual Report on Form 10-K, and
"Risk Factors Summary" and Part II, Item 1A "Risk Factors" of this Quarterly
Report on Form 10-Q, and other information provided from time to time in our
other filings with the SEC.

Special note regarding forward-looking statements

This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements about us and our industry involve substantial risks, uncertainties,
and assumptions, including those described in "Risk Factors Summary" and
elsewhere in this report. All statements other than statements of historical
facts contained in this report, including statements regarding our future
results of operations or financial condition, business strategy and plans and
objectives of management for future operations, are forward-looking statements.
In some cases, you can identify forward-looking statements because they contain
words such as "anticipate," "believe," "contemplate," "continue," "could,"
"estimate," "expect," "intend," "may," "plan," "potential," "predict,"
"project," "should," "target," "will" or "would" or the negative of these words
or other similar terms or expressions. These forward-looking statements include,
but are not limited to, statements concerning the following:

? our expected future growth and the success of our business model;

? potential payments we may receive under our strategic platform

Licenses (“SPL”);

the size and growth potential of markets for our products, and our ability

? to serve these markets, increase our market share, and achieve and maintain

industry leadership;

? the rate and degree of acceptance of our products by the market within the cell

engineering market;

? the expected future growth of our manufacturing capabilities and sales, the support

and marketing capabilities;

? our ability to expand our customer base and enter into additional SPLs;

? our ability to accurately forecast and manufacture the appropriate quantities of

our products to meet commercial demand;

our expectations regarding the development of the cell therapy market, in particular

? predicted growth in adoption of non-viral delivery approaches and gene editing

handling technologies;

? our ability to maintain our FDA Master file and Technical Files;

our research and development for any future product, including our intention

? to introduce new instruments and treatment sets and upgrade to new

apps;

the development, regulatory approval and commercialization of competing products

? products and our ability to compete with companies that develop and sell

these products ;

? our ability to retain and hire senior executives and key personnel;

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? regulatory developments in United States and foreign countries;

? our expectations regarding the period during which we qualify as an emerging company

growth company under the JOBS law;

? our ability to develop and maintain our business infrastructure, including our

internal controls;

? our financial performance and capital requirements;

our expectations regarding our ability to obtain and maintain

? protection of ownership of our products, as well as our ability to operate our

business without infringing the intellectual property rights of others; and

? our use of available capital resources.

You should not rely on forward-looking statements as predictions of future
events. We have based the forward-looking statements contained in this Quarterly
Report primarily on our current expectations and projections about future events
and trends that we believe may affect our business, financial condition and
operating results. The outcome of the events described in these forward-looking
statements is subject to risks, uncertainties and other factors described in the
section titled "Risk Factors Summary" in this report and under the caption "Risk
Factors" and elsewhere in the Final Prospectus. Moreover, we operate in a very
competitive and rapidly changing environment. New risks and uncertainties emerge
from time to time, and it is not possible for us to predict all risks and
uncertainties that could have an impact on the forward-looking statements
contained in this report. The results, events and circumstances reflected in the
forward-looking statements may not be achieved or occur, and actual results,
events or circumstances could differ materially from those described in the
forward-looking statements.

In addition, statements that "we believe" and similar statements reflect our
beliefs and opinions on the relevant subject. These statements are based on
information available to us as of the date of this Quarterly Report on
Form 10-Q. And while we believe that information provides a reasonable basis for
these statements, that information may be limited or incomplete. Our statements
should not be read to indicate that we have conducted an exhaustive inquiry
into, or review of, all relevant information. These statements are inherently
uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate
only to events as of the date on which the statements are made. We undertake no
obligation to update any forward-looking statements made in this Quarterly
Report to reflect events or circumstances after the date of this Quarterly
Report or to reflect new information or the occurrence of unanticipated events,
except as required by law. We may not actually achieve the plans, intentions or
expectations disclosed in our forward-looking statements, and you should not
place undue reliance on our forward-looking statements. Our forward-looking
statements do not reflect the potential impact of any future acquisitions,
mergers, dispositions, joint ventures or investments.

You should read this Quarterly Report and the documents that we file with the
SEC with the understanding that our actual future results, levels of activity,
performance and events and circumstances may be materially different from what
we expect.

In this Quarterly Report on Form 10-Q, unless the context otherwise requires, all references to “we”, “us”, “we”, “MaxCyte” and the “Company” are to
MaxCyte, Inc.

Insight

We are a leading commercial cell engineering company focused on providing
enabling platform technologies to advance innovative cell-based research as well
as next-generation cell therapeutic discovery, development and
commercialization. Over the past twenty years, we have developed and
commercialized our proprietary Flow Electroporation platform, which facilitates
complex engineering through the delivery of molecules into a wide variety of
cells. Electroporation is a method

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transfection, or the process of deliberately introducing molecules into cells, which involves applying an electric field to temporarily increase the permeability of the cell membrane. This precisely controlled increase in permeability allows for the intracellular delivery of molecules, such as genetic material and proteins, that would normally not be able to cross the cell membrane as easily.

Our ExPERT platform, which is based on our Flow Electroporation technology, has
been designed to address this rapidly expanding cell therapy market and can be
utilized across the continuum of the high-growth cell therapy sector, from
discovery and development through commercialization of next-generation,
cell-based medicines. The ExPERT family of products includes three instruments,
which we call the ATx, STx and GTx, respectively, as well as a portfolio of
proprietary related disposables and consumables (as well as the VLx instrument
for very large-scale cell engineering made available for sale in December 2021).
These include processing assemblies, or PAs, designed for use with our
instruments, as well as accessories supporting PAs such as electroporation
buffer solution and software protocols. We have garnered meaningful expertise in
cell engineering via our internal research and development efforts as well as
our customer-focused commercial approach, which includes a growing application
scientist team. The platform is also supported by a robust intellectual property
portfolio with more than 130 granted U.S. and foreign patents and more than 60
pending patent applications worldwide.

From leading commercial cell therapy drug developers and top biopharmaceutical
companies to top academic and government research institutions, including the
U.S. National Institutes of Health, or NIH, our customers have extensively
validated our technology. We believe the features and performance of our
platform have led to sustained customer engagement. Our existing customer base
ranges from large biopharmaceutical companies, including all of the top 10, and
20 of the top 25, pharmaceutical companies based on 2021 global revenue, to
hundreds of biotechnology companies and academic centers focused on
translational research.

Since our inception, we have incurred significant operating losses. Our ability
to generate revenue sufficient to achieve profitability will depend on the
successful further development and commercialization of our products. We
generated revenue of $11.6 million and incurred a net loss of $4.1 million for
the three months ended March 31, 2022. As of March 31, 2022, we had an
accumulated deficit of $118.4 million. We expect to continue to incur net losses
as we focus on growing commercial sales of our products in both the United
States and international markets, including growing our sales and field
application scientist teams, scaling our manufacturing operations, and research
and development efforts to develop new products and further enhance our existing
products. Further, we expect to incur additional costs associated with operating
as a public company in the United States.

Impact of COVID-19 on our business

We continue to closely monitor the impact of the novel coronavirus ("COVID-19")
pandemic on our business and the geographic regions where we operate. The impact
of this pandemic has been and will likely continue to be extensive in many
aspects of society, which has resulted in and will likely continue to result in
significant disruptions to the global economy, as well as businesses and capital
markets around the world.

Impacts to our business as a result of COVID-19 have included disruptions to our
manufacturing operations and supply chain caused by facility closures,
reductions in operating hours, staggered shifts and other social distancing
efforts, decreased productivity and unavailability of materials or components,
limitations on our employees' and customers' ability to travel, and delays in
product installations, demonstrations, trainings or shipments to and from
affected countries and within the United States. Disruptions in our customers'
operations have impacted and may continue to impact our business.  In light of
the uncertain and rapidly evolving situation relating to the spread of COVID-19,
we have taken precautionary measures intended to minimize the risk of the virus
to our employees, our customers and the communities in which we operate,
including temporarily closing our offices to visitors and limiting the number of
employees in our offices to those that are deemed essential for manufacturing
and research purposes, as well as virtualizing, postponing or canceling
customer, employee and industry events.

We do not yet know the net impact that the COVID-19 pandemic may have on our
business and cannot guarantee that it will not be materially negative. Although
we continue to monitor the situation and may adjust our current policies as more
information and public health guidance become available, the ongoing effects of
the COVID-19 pandemic and/or the

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The precautionary measures that we or our customers have implemented or may adopt may create operational and other challenges, any of which could adversely affect our business and results of operations.

RECENT DEVELOPMENTS

We have continued to enter into SPL agreements with our cell therapy customers.
These agreements are discussed in more detail in "Results of Operations" below
and provide us with revenue from instrument sales and leases and disposables
sales as well as downstream economics on our partners' programs (both pre- and
post-commercial). In the first three months of 2022, we have signed an SPL
agreement with Intima Bioscience. We continue to grow our SPL pipeline and,
while the specific timing of any agreement is uncertain, we expect to sign
additional SPL agreements in the future.

Operating results

Comparison of the three months ended March 31, 2022 and 2021

The following table sets forth our results of operations for the periods
presented:

                                  Three Months Ended
                                      March 31,
                                   2022        2021

                                    (in thousands)

Total revenue                 $    11,587   $   6,495
Cost of goods sold                  1,063         693
Gross profit                       10,525       5,802
Operating expense
Research and development            3,765       6,076
Sales and marketing                 3,839       2,789
General and administrative          6,633       2,998
Depreciation and amortization         447         312
Total operating expense            14,684      12,175
Operating loss                    (4,159)     (6,373)
Other income (expense)
Interest and other expense              -       (742)
Interest and other income              92          10
Total other income (expense)           92       (733)
Net loss                      $   (4,067)   $ (7,106)


Revenue

We generate revenue principally from the sale of instruments and single-use
processing assemblies ("PAs") and buffer, and from the lease of instruments to
our customers. In addition, our SPLs include clinical progress milestones and
sales-based payments to us which may also provide material revenues.

In order to evaluate how our sales are trending across key markets, as well as
the contribution of program economics from our SPLs, we separately analyze
revenue derived from our cell therapy customers and drug discovery customers, as
well as the performance-based milestone revenues we recognize under our SPLs.
Cell therapy revenues include primarily revenue from instruments sold, annual
license fees for instruments under lease, and sales of our proprietary
disposables. Drug discovery revenue includes primarily revenue from instruments
sold, sales of our proprietary disposables and, occasionally, instruments
leased.  Program-related revenues include clinical progress milestone and
sales-based revenues derived from SPL agreements. Milestone revenues are
recognized when a customer achieves the associated milestone event. To date, all
Program-related revenue has consisted entirely of pre-commercial milestone

revenue.

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The following table provides details regarding the sources of our revenue for
the periods presented:

                                        Three Months Ended
                                            March 31,               Change
                                         2022         2021       Amount      %
(in thousands, except percentages)
Cell therapy                          $     7,416    $ 4,729    $  2,687    57%
Drug discovery                              2,167      1,762         405    23%
Program-related                             2,004          4       2,000     NM
Total revenue                         $    11,587    $ 6,495    $  5,092    78%

Total revenue for the three months ended March 31, 2022 was $11.6 million, an
increase of $5.1 million, or 78%, compared to revenue of $6.5 million during the
three months ended March 31, 2021.

Our overall increase in revenue was primarily driven by growth in sales and
licenses of instruments to cell therapy customers, and sales of disposables to
cell therapy and drug discovery customers, as well as a significant increase in
program-related revenue. In the cell therapy market, instrument sales and
licenses of instruments increased by $1.7 million which was primarily due to
continued high levels of capital invested in companies operating in our target
markets and progress of existing SPL partners, while disposable sales increased
by $0.9 million, as a result of the continued progression of our cell therapy
partners' therapeutic development programs. In the drug discovery market, the
$0.4 million increase was primarily driven by increases in disposable sales. The
$2.0 million increase in program-related revenues resulted from clinical
progress of our SPL customers, consistent with the expected variability of
milestone revenues given the small number of individual triggering events which
currently generate this portion of revenue. We expect program-related revenue to
experience variability for some time, although we anticipate that it may
moderate as the volume of SPLs and associated milestones grows.

We expect total revenue to increase over time as our markets grow and we are
able to secure additional instrument sales and leases and disposable sales and
as the percentage of our installed base that are under cell therapy license
agreements increases. We expect revenue from instruments licensed to cell
therapy customers to continue to grow as those customers advance their
preclinical pipeline programs into clinical development and move their existing
drug development programs into later-stage clinical trials. In addition, we
expect new customers to emerge and contribute to these revenues, particularly
given the underlying growth in the cell therapy pipeline among companies in this
market, continued availability of capital to support such companies, and in
particular the switch by some of these cell therapy companies away from viral to
non-viral approaches. We expect, however, that our revenue will fluctuate from
period to period due to the timing of securing product sales and licenses, the
inherently uncertain nature of the timing of our partners' achievements of
clinical progress milestones and our dependence on the program decisions of our
partners.

Cost of goods sold and gross profit

Cost of goods sold primarily consists of costs for instrument and processing
assembly components, contract manufacturer costs, salaries, overhead and other
direct costs related to sales recognized as revenue in the period. Cost of goods
sold associated with instrument lease revenue consists of leased equipment
depreciation. Gross profit is calculated as revenue less cost of goods sold.
Gross profit margin is gross profit expressed as a percentage of revenue.

Our gross profit in future periods will depend on a variety of factors,
including sales mix among instruments, disposables and milestones, the specific
mix among types of instruments or disposables, the proportion of revenues
associated with instrument leases as opposed to sales, changes in the costs to
produce our various products, the launch of new products or changes in existing
products, our cost structure for manufacturing including changes in production
volumes, and the pricing of our products which may be impacted by market
conditions.

During the three months ended March 31, 2022, gross margin was 91%, compared to
89% in the same period of 2021. The increase in gross margin was principally due
to increased milestone revenues, which have no associated cost of goods sold.
Excluding program-related revenues, gross margin was materially unchanged. Our
margins depend on the revenue mix from instruments, PAs and milestones under
SPLs. We price our instruments at a premium given what we believe to be

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the broad advantages of our platform and the limited availability of alternative clinically validated non-viral delivery approaches. However, the non-viral delivery market is highly competitive, and the introduction of a GMP-grade platform by a competitor that provides similar performance on a similar diversity of cell types could negatively impact our activities and lead to increased pressure on prices which has a negative impact on our gross margins.

In addition, part of our growth strategy is to expand into new regional markets,
which could require the use of distributors and/or our participation in more
competitive environments, which could impact our ability to price our
instruments at a premium and could negatively impact our ability to enter into
SPLs on terms similar to those currently in effect.

                                              Three Months Ended March 31,  

Switch

                                                 2022                2021         Amount      %
(in thousands, except percentages)
Cost of goods sold                          $         1,063      $         693    $   370     53%
Gross profit                                $        10,525      $       5,802    $ 4,723     81%
Gross margin                                            91%                89%

Cost of goods sold increased by $0.4 million, or 53%, for the three months ended
March 31, 2022 compared to the three months ended March 31, 2021. The increase
was primarily driven by higher sales of instruments and disposables.

Gross profit increased by $4.7 million, or 81%, for the three months ended March
31, 2022 compared to the three months ended March 31, 2021. The increase was
primarily driven by increased revenue from instrument and disposable sales,

licensed instruments and the significant increase in program-related revenue.

We expect that our cost of goods sold will generally increase or decrease as our
instrument and disposables revenue increases or decreases. We expect our gross
margin to benefit from realization of the economics from our SPL agreements, to
the extent that such milestones grow to be a significant proportion of overall
revenues, as there is no cost of goods sold associated with such revenue.
However, realization and timing of these potential milestone revenues is
uncertain.

Operating Expenses

Research and Development

                                              Three Months Ended March 31,               Change
                                               2022                  2021            Amount        %
(in thousands, except percentages)
Research and development                  $         3,765       $         

6,076 ($2,311) (38%)

Research and development expenses consist primarily of costs incurred for our
research activities related to advancing our technology and development of
applications for our technology, including research into specific applications
and associated data development, process development, product development (e.g.,
development of instruments and disposables, including hardware and software
engineering) and design and other costs not directly charged to inventory or
cost of goods sold.

These expenses principally include employee-related costs, such as salaries,
benefits, incentive compensation, stock-based compensation, and travel, as well
as consultant services, facilities, and laboratory supplies and materials. These
expenses are exclusive of depreciation and amortization. We expense research and
development costs as incurred in the period in which the underlying activity is
undertaken.

For the three months ended March 31, 2021, our research and development expenses
included costs associated with developing the CARMA platform, principally for a
clinical trial that has concluded. There were no material CARMA-related expenses
after March 31, 2021 and none are expected in the future.

Research and development expenses decreased by $2.3 million, or 38%, for the
three months ended March 31, 2022 compared to the three months ended March 31,
2021. The decrease was primarily driven by a $3.6 million decrease in CARMA
expenses as a result of the wind-down of CARMA operations, partially offset

by a
$0.5 million increase in

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compensation costs due to the increase in the workforce and a $0.4 million
increase in stock-based compensation expense.

We believe that our continued investment in research and development is
essential to our long-term competitive position. We expect to continue to incur
substantial research and development expenses as we invest in research and
development to support our customers, develop new uses for our existing
technology and develop improved and/or new offerings for our customers and
partners. As a result, we expect that our research and development expenses,
excluding CARMA-related expenses, will continue to increase in absolute dollars
in future periods and vary from period to period as a percentage of revenue.

Sales and Marketing

                                                Three Months Ended March 31,             Change
                                                 2022                  2021          Amount      %
(in thousands, except percentages)
Sales and marketing                         $         3,839       $        

2,789 $1,050 38%

Our sales and marketing expenses consist primarily of salaries, commissions and
other variable compensation, benefits, stock-based compensation and travel costs
for employees within our commercial sales and marketing functions, as well as
third-party costs associated with our marketing activities. These expenses are
exclusive of depreciation and amortization.

Sales and marketing expenses increased by $1.1 million, or 38%, for the
three months ended March 31, 2022 compared to the three months ended March 31,
2021. The increase was primarily driven by a $0.6 million increase in
compensation expenses as a result of increases in headcount and a $0.2 million
increase in stock-based compensation.

We expect our sales and marketing expenses to increase in future periods as we
expand our commercial sales, marketing and business development teams, product
offerings, expand our collaboration efforts, increase our presence globally, and
increase marketing activities to drive awareness and adoption of our products.

General and Administrative

                                               Three Months Ended March 31,              Change
                                                2022                  2021          Amount       %
(in thousands, except percentages)
General and administrative                 $         6,633       $        

2,998 $3,635 121%

General and administrative expenses primarily consist of salaries, benefits,
stock-based compensation and travel costs for employees in our executive,
accounting and finance, legal, corporate development, human resources, and
office administration functions as well as professional services fees, such as
consulting, audit, tax and legal fees, general corporate costs, facilities and
allocated overhead expenses and costs associated with being a Nasdaq and AIM
listed public company such as director fees, U.K. NOMAD and broker fees,
investor relations consultants and insurance costs. These expenses are exclusive
of depreciation and amortization.

General and administrative expense increased by $3.6 million, or 121%, for the
three months ended March 31, 2022 compared to the three months ended March 31,
2021. The increase was primarily driven by a $1.3 million increase in expenses
associated with our common stock being listed on the Nasdaq stock exchange in
July 2021, as well as related legal and professional services, as well as a $1.0
million increase in compensation expense associated with headcount and salary
increases, a $0.6 million increase in stock-based compensation, and a $0.3
million increase in occupancy expense.

We expect that our general and administrative expenses will continue to increase
in absolute dollars in future periods, primarily due to increased headcount to
support anticipated growth in the business and due to incremental costs
associated with operating as a public company listed on a U.S. exchange,
including insurance (particularly directors and officers insurance), costs to
comply with the rules and regulations applicable to companies listed on a U.S.
securities exchange and costs related to compliance and reporting obligations
pursuant to the rules and regulations of the SEC and stock exchange

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listing standards, investor relations and professional services. We expect these charges to vary from period to period as a percentage of revenue.

Depreciation and amortization

Depreciation expense consists of the depreciation of property and equipment used
actively in the business, primarily by research and development activities.
Amortization expense includes the amortization of intangible assets over their
respective useful lives.

                                               Three Months Ended March 31,             Change
                                                 2022                 2021          Amount      %
(in thousands, except percentages)
Depreciation and amortization                $         447        $        

312 $136 44%

Depreciation and amortization expense increased by $0.1 million, or 44%, for the
three months ended March 31, 2022, compared to the three months ended March 31,
2021. The increase was primarily driven by a significant investment in capital
assets made in 2021 for laboratory equipment.

Interest and other income (expenses)

                                              Three Months Ended March 31,               Change
                                              2022                   2021           Amount       %
(in thousands, except percentages)
Interest and other expense                $           -         $           742      ($742)    (100%)
Interest and other income                            92                      10          82      837%

We did not incur interest or other expense for the three months ended March 31,
2022 as we currently have no indebtedness. Interest and other expense for the
three months ended March 31, 2021 comprise interest expense on our previously
outstanding bank loan and a fair value adjustment for a warrant that has
subsequently been exercised in full. Interest and other income represents
interest on our cash balances and was immaterial for each of the three months
ended March 31, 2022 and 2021.

Cash and capital resources

Since our inception, we have experienced losses and negative cash flows from
operations. For the three months ended March 31, 2022, we incurred net losses of
$4.1 million. As of March 31, 2022, we had an accumulated deficit of
$118.4 million. To date, we have funded our operations primarily with proceeds
from sales of common stock, including our IPO, as well as borrowings under loan
agreements and from revenues associated with sales and licenses of our products
to customers. As of March 31, 2022, we had cash and cash equivalents and
short-term investments of $246.3 million.

We expect to incur increased near-term operating losses as we continue to invest
in expanding our business through growing our sales and marketing efforts,
continued research and development, product development and expanding our
product offerings. Based on our current business plan, we believe our existing
cash and cash equivalents and short-term investments, will enable us to fund our
operating expenses and capital expenditure requirements for the foreseeable
future.

We have based this estimate on assumptions that may prove to be wrong, and we
could utilize our available capital resources sooner than we expect. Our future
funding requirements will depend on many factors, including:

? transaction and capital expenditure required for strategic activities;

? market acceptance of our products;

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

   distribution capabilities;


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the cost of our research and development activities and the success of our developments

? of data supporting the use of our products for new applications and rapid launch

new features and products;

? our ability to enter into additional SPLs and licenses for the clinical use of our

platform in the future;

? changes in the amount of capital available to existing and emerging customers

in our target markets;

? the effect of competing technological and business developments; and

? the level of our selling, general and administrative expenses.

If we are unable to execute on our business plan and adequately fund operations,
or if the business plan requires a level of spending in excess of cash
resources, we will have to seek additional equity or debt financing. If
additional financings are required from outside sources, we may not be able to
raise such capital on terms acceptable to us or at all. To the extent that we
raise additional capital through the sale of equity or debt securities, the
ownership interest of our stockholders will be diluted, and the terms of these
securities may include liquidation or other preferences that adversely affect
the rights of our common stockholders. Debt financing, if available, may involve
agreements that include covenants restricting our ability to take specific
actions, such as incurring additional debt, selling or licensing our assets,
making product acquisitions, making capital expenditures or declaring dividends.
If we raise additional funds through collaboration and licensing arrangements
with third parties, it may be necessary to relinquish some rights to our
technologies or our products, or grant licenses on terms that are not favorable
to us. If we are unable to raise additional capital when desired, we may have to
delay development or commercialization of future products. We also may have to
reduce marketing, customer support or other resources devoted to our existing
products.

Cash Flows

The following table summarizes our uses and sources of cash for the periods
presented:

                                               Three Months Ended
                                                   March 31,
(in thousands)                                 2022         2021
Net cash provided by (used in):
Operating activities                         $ (3,694)    $ (4,642)
Investing activities                           194,797       15,692
Financing activities                               893       48,899

Net increase in cash and cash equivalents $191,995 $59,949

Operational activities

Net cash used in operating activities for the three months ended March 31, 2022
was $3.7 million, and consisted primarily of our net loss of $4.1. million,
offset in part by net non-cash expenses of $3.0 million, including stock-based
compensation of $2.5 million and depreciation and amortization expenses of
$0.5 million. We also had net cash inflows of $2.7 million due to net changes in
our operating assets and liabilities. Net changes in our operating assets and
liabilities consisted primarily of an increase in the net effect of our
right-of-use assets and lease liabilities of $2.4 million and a $1.1 million
decrease in other current assets, partially offset by a $2.1 million increase in
TIA receivable, a $1.8 million increase in accounts receivable, a $1.4 million
increase in inventory, a $0.7 million increase in other non-current assets and a
$0.2 million increase in accounts payable and accrued expenses.

Net cash used in operating activities for the three months ended March 31, 2021
was $4.6 million, and consisted primarily of our net loss of $7.1 million,
offset in part by net non-cash expenses of $2.0 million, including stock-based
compensation of $1.3 million, warranty liability fair value adjustments of $0.3
million, and depreciation and amortization expenses of $0.3 million. We also had
net cash inflows of $0.5 million due to net changes in our operating assets and
liabilities. Net changes in our operating assets and liabilities consisted
primarily of an increase in deferred revenue of $1.2 million, a

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decrease in accounts receivable by $0.9 millionpartially offset by a $1.4 million decrease in accounts payable and accrued liabilities, and a $0.3 million
increase in inventory.

Investing Activities

Net cash provided by investing activities during the three months ended March
31, 2022 was $194.8 million, which was primarily attributable to maturities of
short-term marketable securities of $200.8 million, partially offset by
purchases of property and equipment of $0.6 million and capitalized
lease-related construction expenses of $5.5 million. Purchases and sales of
short-term marketable securities are made as part of ordinary course investing
activities in compliance with our investment policy which has as its primary
objective preservation of principal.

Net cash provided by investing activities during the three months ended March
31, 2021 was $15.7 million, which was primarily attributable to maturities of
marketable securities of $16.0 million, partially offset by purchases of
property and equipment of $0.3 million.

Fundraising activities

Net cash flows generated by financing activities during the three months ended March 31, 2022 been $0.9 millionattributable to the exercise of stock options.

Net cash provided by financing activities during the three months ended March
31, 2021 was $48.9 million, which was primarily attributable to net proceeds
from our issuance of common stock of $51.8 million and proceeds of $2.0 million
from the exercise of stock options, partially offset by the repayment of
indebtedness of $4.9 million.

Contractual obligations and commitments

Our contractual obligations and commitments as of March 31, 2022 consisted
exclusively of operating lease obligations. In May, 2021, we entered into an
operating lease for new office, lab and warehouse/manufacturing space. The lease
for the new facility consists of three phases, with Phase 1 having commenced in
December 2021 and Phase 2 having commenced in the first quarter of 2022, and the
lease of all phases is estimated to expire on August 31, 2035. We will design
and construct the leasehold improvements with the approval of the landlord. The
landlord will reimburse us for costs of property improvements up to amounts
specified in the lease. The total incremental non-cancellable lease payments
under the new lease agreements are approximately $29.6 million through the lease
term, which continues until 2035.

In June, 2021, we exercised our option to early terminate the terms of one of
our existing office space lease arrangements, which will terminate on June 7,
2022.

In August 2021we terminated a finance lease and effective from March 31, 2022we have no finance lease obligation.

From March 31, 2022operating lease obligations included $0.8 million in payments due under our office and laboratory leases under operating leases which expire in October 2023.

Purchase orders or contracts for the purchase of supplies and other goods and services are based on our current supply or development needs and are generally fulfilled by our suppliers on short notice.

Critical Accounting Policies and Significant Judgments and Estimates

We have prepared our condensed consolidated financial statements in accordance
with U.S. GAAP. Our preparation of these condensed consolidated financial
statements requires us to make estimates, assumptions and judgments that affect
the reported amounts of assets, liabilities, revenue, expenses and related
disclosures. We evaluate our estimates and judgments on an ongoing basis. We
base our estimates on historical experience and on various other factors that we
believe are reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources.

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Actual results could therefore differ materially from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies and
estimates from those disclosed in our consolidated financial statements and the
related notes and other financial information included in the Annual Report on
Form 10-K filed with SEC on March 22, 2022.

Accounting election of the JOBS law

We are an "emerging growth company," or EGC, under the Jumpstart Our Business
Startups Act of 2012, or the JOBS Act. Section 107 of the JOBS Act provides that
an EGC can take advantage of the extended transition period provided in
Section 7(a)(2)(B) of the Securities Act for complying with new or revised
accounting standards. Thus, an EGC can delay the adoption of certain accounting
standards until those standards would otherwise apply to private companies. We
have elected to avail ourselves of the delayed adoption of new and revised
accounting standards and, therefore, we will be subject to the same requirements
to adopt new or revised accounting standards as private entities. We also intend
to rely on other exemptions provided by the JOBS Act, including not being
required to comply with the auditor attestation requirements of
Section 404(b) of the Sarbanes-Oxley Act.

We will remain an EGC until the earliest of (i) December 31, 2026, (ii) the last
day of the fiscal year in which we have total annual gross revenues of $1.07
billion or more, (iii) the date on which we have issued more than $1 billion in
non-convertible debt during the previous rolling three-year period, or (iv) the
date on which we are deemed to be a "large accelerated filer" under SEC rules.

Recent accounting pronouncements

A description of recently issued accounting pronouncements that may potentially
impact our financial position, results of operations or cash flows is disclosed
in Note 2 to our condensed consolidated financial statements included in this
Quarterly Report on Form 10-Q.

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