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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For transition period from         to
Commission File Number 001-40354
Zymergen Inc.
(Exact name of registrant as specified in its charter)
Delaware46-2942439
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
5980 Horton Street, Suite 105
Emeryville, California 94608
(415) 801-8073
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, $0.001 par value per shareZYThe Nasdaq Global Select Market
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 filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No
As of May 14, 2021, there were approximately 100,324,768 shares of the registrant's common stock, par value $0.001 per share, outstanding.


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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risk and uncertainties. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “target,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.
These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
our ability to successfully commercialize our products, including Hyaline, which is the first product we launched in December 2020;
our ability to generate revenues from our products (including Hyaline) on the timelines we anticipate;
our plans for the development, launch and commercialization of the products in our current and future product pipeline;
our ability to successfully produce products (including Hyaline) through fermentation that we initially launch using non-fermentation monomers;
the implementation of our business model and our ability to transition from revenues that are substantially all derived from research and development ("R&D") service contracts and collaboration agreements to revenues primarily derived from the commercialization of our products;
our ability to create products in about half the time and 1/10th of the cost of what traditional chemicals and materials companies can deliver and to launch our products in roughly five years and $50 million;
our ability to find and qualify an alternate source of manufacturing after 2021;
our ability to successfully complete the expected 6-18 month product qualification process with customers;
the potential benefits of our existing and potential future R&D collaborations and other partner relationships;
our ability to address the market opportunity in the electronics, consumer care and agriculture sectors, as well as the total market opportunity across numerous sectors;
the size and growth potential of the markets for our products and our ability to serve those markets;
our capital requirements and our needs for additional financing;
our expectations regarding our ability to obtain and maintain intellectual property protection for our biofacturing platform, products and related technologies;
our ability to obtain and maintain regulatory approval for certain of our products;
regulatory developments in the United States and foreign countries;
the ability of incumbent chemical companies and synthetic biology companies to address the needs of our existing and potential customers;
developments relating to our competitors and our industry;
the success of competing products that are or may become available;
our goals for producing bio-based products that contribute to a more sustainable future;
our ability to successfully enter new markets and manage our international expansion;


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our financial performance;
our ability to generate revenue and obtain funding for our operations, including funding necessary to complete further development of our current and future products;
our estimates regarding margins, future revenue, expenses, capital requirements and needs for additional financing;
the success of our significant investments in our continued R&D of new products; and
the impact of COVID-19 on our business.
You should refer to the “Risk Factors” section of this Quarterly Report on Form 10-Q for a discussion of other important factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.


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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ZYMERGEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data)
 As of March 31, 2021
As of December 31, 2020 (1)
ASSETS
Current assets:  
Cash and cash equivalents$121,035 $210,205 
Accounts receivable2,422 2,516 
Accounts receivable, unbilled1,694 1,659 
Prepaid expenses5,987 7,024 
Inventories5,683 4,969 
Restricted cash, current20  
Other current assets2,889 2,201 
Total current assets139,730 228,574 
Restricted cash10,777 9,605 
Property and equipment, net55,462 48,718 
Goodwill11,604 11,604 
Intangible assets, net4,443 4,790 
Deferred offering cost4,098 509 
Deposits1,118 1,121 
Total assets$227,232 $304,921 
LIABILITIES AND CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable$16,578 $12,097 
Accrued and other liabilities20,942 26,888 
Short-term debt, net 79,331 
Short-term deferred rent688 494 
Deferred revenue2,102 2,648 
Total current liabilities40,310 121,458 
Long-term debt, net79,615  
Long-term deferred rent12,866 9,916 
Warrant liabilities11,952 14,231 
Other long-term liabilities2,624 2,254 
Total liabilities147,367 147,859 
Commitments and contingencies
Convertible preferred stock, $0.001 par value, 214,181,024 shares authorized as of March 31, 2021 and December 31, 2020, respectively; 68,093,280 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
900,798 900,798 
Stockholders' deficit
Common stock, $0.001 par value, 286,477,669 shares authorized as of March 31, 2021 and December 31, 2020, respectively; 13,473,832 and 12,812,109 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
13 13 
Additional paid-in capital37,379 29,991 
Accumulated deficit(858,325)(773,740)
Total stockholders' deficit(820,933)(743,736)
Total liabilities and convertible preferred stock and stockholders' deficit$227,232 $304,921 
(1) The balance sheet as of December 31, 2020 is derived from the audited financial statements as of that date.
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
1

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ZYMERGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(Unaudited)
(in thousands, except share and per share data)
 Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
Revenues from research and development service agreements$2,614 $1,904 
Collaboration revenue1,121 1,050 
Total revenues3,735 2,954 
Cost and operating expenses:
Cost of service revenue21,130 24,576 
Research and development39,811 21,802 
Sales and marketing6,872 5,541 
General and administrative19,331 13,693 
Total cost and operating expenses87,144 65,612 
Operating loss(83,409)(62,658)
Other income (expense):
Interest income43 377 
Interest expense(2,727)(2,684)
Gain (loss) on change in fair value of warrant liabilities 2,279 (450)
Other expense, net(763)(32)
Total other expense(1,168)(2,789)
Loss before income taxes(84,577)(65,447)
(Provision for) benefit from income taxes(8)107 
Net loss and comprehensive loss$(84,585)$(65,340)
Net loss per share attributable to common stockholders, basic$(6.51)$(5.77)
Net loss per share attributable to common stockholders, diluted$(6.51)$(5.77)
Weighted-average shares used in computing net loss per share to common stockholders, basic12,996,344 11,322,626 
Weighted-average shares used in computing net loss per share to common stockholders, diluted13,340,457 11,322,626 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
2

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ZYMERGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
(Unaudited)
(in thousands, except share data)
Convertible
Preferred Stock
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Total Stockholders’
Deficit
SharesAmountSharesAmount
Balance, December 31, 202068,093,280 $900,798 12,812,109 $13$29,991 $(773,740)$(743,736)
Vesting of restricted common stock— — 16,810 — — — 
Issuance of common stock upon exercise of options— — 711,963 3,189 — 3,189 
Stock-based compensation expense— — — 2,253 — 2,253 
Share settlement of non-recourse loan to employee— — (67,050)— — — 
Cash settlement of non-recourse loan to employee— — — 1,946 — 1,946 
Net loss— — — — (84,585)(84,585)
Balance, March 31, 202168,093,280 $900,798 13,473,832 $13$37,379 $(858,325)$(820,933)
Convertible
Preferred Stock
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Total Stockholders’
Deficit
SharesAmountSharesAmount
Balance, December 31, 201954,834,169 $607,763 11,030,816 $11$11,957 $(511,546)$(499,578)
Issuance of common stock in business acquisition— — 1,082,747 110,394 — 10,395 
Vesting of restricted common stock— — 16,810 — — — 
Issuance of common stock upon exercise of options— — 40,868 172 — 172 
Stock-based compensation expense— — — 1,042 — 1,042 
Net loss— — — — (65,340)(65,340)
Balance, March 31, 202054,834,169 $607,763 12,171,241 $12$23,565 $(576,886)$(553,309)
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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ZYMERGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
 Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
Operating activities
Net loss$(84,585)$(65,340)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense4,412 4,564 
Stock-based compensation expense2,253 1,042 
Non-cash interest expense283 213 
(Gain) loss on change in fair value of warrant liabilities(2,279)450 
Unrealized foreign exchange loss661  
Benefit from income tax (107)
Other(2)(52)
Changes in operating assets and liabilities:
Accounts receivable94 2,368 
Accounts receivable, unbilled(35)(1,313)
Prepaid expenses1,037 230 
Inventories(714)(451)
Other current assets(685)(253)
Deposits3  
Accounts payable1,223 (1,969)
Accrued and other liabilities(7,682)(2,849)
Deferred revenue(348)(65)
Deferred rent3,144 565 
Other long-term liabilities172 40 
Net cash used in operating activities(83,048)(62,927)
Investing activities
Purchases of property and equipment(8,639)(6,176)
Proceeds from sale of property and equipment 13 
Business acquisition, net of cash acquired 80 
Net cash used in investing activities(8,639)(6,083)
Financing activities
Proceeds from exercise of common stock options, net of repurchases3,189 172 
Proceeds from repayment of non-recourse loan to employee1,946  
Payment of deferred offering costs(806)(6)
Net cash provided by financing activities4,329 166 
Effect of exchange rate changes on cash(620) 
Change in cash and cash equivalents(87,978)(68,844)
Cash, cash equivalents, and restricted cash at beginning of the period219,810 163,042 
Cash, cash equivalents, and restricted cash at end of the period$131,832 $94,198 
Cash and cash equivalents$121,035 $78,899 
Restricted cash, current20 5,931 
Restricted cash, non-current10,777 9,368 
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows$131,832 $94,198 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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ZYMERGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
 Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
Supplemental disclosure of cash flow information:
Cash paid during the period for interest, net of interest capitalized$3,285 $1,982
Supplemental disclosure of non-cash investing and financing activities:
Acquisitions of property and equipment under accounts payable and accrued and other liabilities$6,095 $6,022
Issuance of common stock in business combination$ $10,395
Deferred offering cost under accounts payable and accrued and other liabilities$2,843 $
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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ZYMERGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.    Nature of Operations
Zymergen (the “Company”) integrates computational and manufacturing technologies to design, develop, and commercialize bio-based breakthrough products in a broad range of industries, including electronics, consumer care and agriculture. The Company has developed a platform that treats the genome as a search space, utilizing proprietary machine learning algorithms and advanced automation to identify genetic changes that improve the economics for its customers’ bio-based products. In addition, Zymergen's platform is used to discover novel molecules used to enable unique material properties. The Company was incorporated in Delaware on April 24, 2013.
Initial Public Offering
In April 2021, the Company completed the initial public offering ("IPO") of its common stock. The Company sold an aggregate of 18,549,500 shares of its common stock (inclusive of 2,419,500 shares pursuant to the underwriters’ option to purchase additional shares) at a price of $31.00 per share for aggregate cash proceeds of approximately $530.1 million, net of underwriting discounts, commissions, and estimated offering costs. The sale of 16,130,000 shares in the IPO and the sale of 2,419,500 shares pursuant to the underwriters’ option closed on April 26, 2021. On April 26, 2021, immediately prior to the closing of the IPO, all outstanding shares of convertible preferred stock converted into 68,115,459 shares of common stock. On April 26, 2021, immediately prior to the closing of the IPO, all warrants to purchase preferred stock were exercised and converted into 883,332 shares of common stock.
Need for Additional Capital
The Company has sustained operating losses and expects to continue to generate operating losses for the foreseeable future. The Company had unrestricted cash and cash equivalents of $121.0 million as of March 31, 2021 and the Company obtained net cash proceeds of approximately $530.1 million from the Company’s IPO, which closed on April 26, 2021. Since inception through March 31, 2021, the Company has incurred cumulative net losses of $858.3 million.
While the Company has signed a number of initial customer contracts, revenues have been insufficient to fund operations. Accordingly, the Company has funded the portion of operating costs exceeding revenues through a combination of proceeds raised from equity and debt issuances. The Company’s operating costs include the cost of developing and commercializing products as well as providing research and development services. As a consequence, the Company may need to raise additional equity and debt financing that may not be available, if at all, at terms acceptable to the Company to fund future operations. The Company expects that its cash and cash equivalents, including the funds obtained from the IPO in April 2021, will be sufficient to fund its operations for a period of at least one year from the date the accompanying unaudited Condensed Consolidated Financial Statements are filed with the Securities and Exchange Commission ("SEC").
The Company cannot at this time predict the specific extent, duration, or full impact that the ongoing COVID-19 pandemic will have on its financial condition and operations. The impact of the COVID-19 pandemic on the financial performance of the Company will depend on future developments, including the duration and spread of the pandemic and related governmental advisories and restrictions. These developments and the impact of the COVID-19 pandemic on the financial markets and the overall economy are highly uncertain. If business conditions, financial markets and/or the overall economy are impacted for an extended period, the Company’s results may be adversely affected.
Reverse Split
In April 2021, the Company's Board of Directors approved a 3-for-1 reverse split (“Reverse Split”) of its common stock and convertible preferred stock. This became effective on April 13, 2021 with the filing of the Company’s amended and restated certificate of incorporation. The par value of the common stock and convertible preferred stock was not adjusted as the result of the Reverse Split. All share and per share information has been retroactively adjusted to reflect the Reverse Split for all periods presented.
2.    Summary of Significant Accounting Policies
There were no significant changes to the accounting policies during the three months ended March 31, 2021, from the significant accounting policies described in Note 2 of the “Notes to Consolidated Financial Statements” in the Prospectus dated April 21, 2021, filed with the SEC on April 23, 2021 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the "Prospectus").
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ZYMERGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Basis of Preparation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2020 has been derived from audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. These unaudited interim Condensed Consolidated Financial Statements have been prepared on the same basis as our annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of our financial information. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other interim period or for any other future year.
The accompanying unaudited Condensed Consolidated Financial Statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2020 included in our Prospectus.
Principles of Consolidation
These Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.
Fiscal Year
The Company’s fiscal year ends on December 31. References to fiscal 2021, for example, refer to the fiscal year ended December 31, 2021. The period end for the Company covered by this report is March 31, 2021.
Use of Estimates
The presentation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates include, but are not limited to, standalone selling price ("SSP") of performance obligations for contracts with multiple performance obligations, estimate of variable consideration from revenue contracts, the average period of benefit associated with costs capitalized to obtain revenue contracts, useful life of property and equipment, allowance for doubtful accounts, net realizable value of inventories, the valuation of goodwill and intangible assets, the valuation of common and preferred stock used in the valuation of options to purchase common stock and warrants to purchase common stock or preferred stock and the settlement of certain vendor costs in preferred stock. Actual results could differ from those estimates.
Segment Information
Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in deciding resource allocation and assessing performance. The Company’s Chief Executive Officer is its CODM. The Company’s CODM reviews financial information presented on a consolidated basis for the purposes of making operating decisions, allocating resources and evaluating financial performance. Consequently, the Company has determined it operates and manages its business in one operating and one reportable segment.
Foreign Currency
For the Company and its subsidiaries, the functional currency has been determined to be the U.S. Dollar (USD). Assets and liabilities denominated in foreign currency are remeasured at period-end exchange rates for monetary assets. Non-monetary assets and liabilities denominated in foreign currencies are remeasured at historical rates. Foreign currency transaction gains and losses resulting from remeasurement are recognized in Other expense, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss.
CARES Act
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ZYMERGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security (CARES) Act which, among other things, permits the deferral of the employer’s portion of social security tax payments between March 27, 2020 and December 31, 2020. As of March 31, 2021 and December 31, 2020, respectively, approximately $3.7 million of employer payroll tax payments were deferred with 50% due by December 31, 2021 and the remaining 50% by December 31, 2022.
Accounting Pronouncements Adopted
In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, an amendment to the accounting guidance on cloud computing service arrangements that changes the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance also requires an entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. This guidance is effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within annual periods beginning after December 14, 2021. The Company adopted the new standard effective January 1, 2021 using a prospective transition method. The adoptions did not have a material impact on the Condensed Consolidated Financial Statements.
In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808), which discusses the interaction between Topic 808, Collaborative Arrangements and Topic 606, Revenue from Contracts with Customers, including clarification around certain transactions between collaborative arrangement participants, adding unit-of-account guidance to Topic 808 and require that transactions in a collaborative arrangement where the participant is not a customer not be presented together with revenue recognized under Topic 606. This standard is effective for the Company for annual periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted but an entity may not adopt the amendments earlier than its adoption date of Topic 606. The Company adopted the new standard effective January 1, 2021 using a retrospective transition method. The adoptions did not have a material impact on the Condensed Consolidated Financial Statements.
Recent Accounting Pronouncements Not Yet Adopted
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), (“ASU 2016-02”). Under ASU 2016-02, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. ASU 2016-02 will require both types of leases to be recognized on the balance sheet. The ASU also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The Company is required to adopt the new standard for 2022 and is currently evaluating the effect that Topic 842 will have on its financial statements and related disclosures.
In June 2016, the FASB issued ASU 2016-13, Credit losses (Topic 326), subsequently amended by ASU 2019- 10, which sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. The standard will become effective for the Company for fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. This pronouncement is effective for the Company for fiscal years beginning after December 15, 2021, and for interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on its financial statements and related disclosures.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S.
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ZYMERGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments of ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022 and do not apply to contract modifications made after December 31, 2022. The Company is evaluating the effect of this guidance and has not yet determined the impact to its financial statements and related disclosures
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This standard amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity and improves and amends the related earnings per share EPS guidance for both subtopics. This standard will be effective for annual reporting periods beginning after December 15, 2023 and interim periods within those annual periods, and early adoption is permitted in annual reporting periods ending after December 15, 2020. The Company is currently evaluating the impact of this standard on the Company’s financial statements and related disclosures, but does not expect the adoption of ASU 2020-06 to be material.
3.    Business Combination
On March 10, 2020, the Company completed an acquisition of 100% of the equity of enEvolv, Inc., which has developed an enzyme and strain development platform that is built on diverse strain libraries and ultra-high throughput screening that utilizes molecular sensor systems. The acquisition was accounted for as a business combination. The purchase price for the acquisition was $10.7 million, of which $10.6 million was non-cash consideration. The non-cash consideration primarily consisted of 1,082,747 shares of the Company’s common stock. The intangible assets acquired consisted primarily of $7.9 million of goodwill and enEvolv’s developed technology of $2.6 million. Goodwill recognized is primarily a measure of the expected synergies from combining the operations of enEvolv and the Company’s developed technologies.
The following table represents the allocation of the purchase consideration, including the non-cash consideration, based on fair value (in thousands):
Cash and cash equivalents$141 
Accounts receivable589 
Other current assets195 
Property, plant and equipment292 
Other non-current assets150 
Developed technology2,600 
Customer relationship intangible asset600 
Total identifiable assets acquired$4,567 
Accounts payable and accrued expenses$1,021 
Other current liabilities653 
Deferred tax liability107 
Total liabilities assumed$1,781 
Net identifiable assets acquired$2,786 
Goodwill7,871 
Net assets acquired$10,657 
As a result of the business combination the Company incurred $0.4 million of acquisition related costs for its benefit and were not accounted for as part of consideration transferred. Acquisition related costs related primarily to legal services, accounting, tax, valuation, due diligence, and escrow fees and are recognized in general and administrative expenses on the statements of operations. Prior to the close of the transaction, the Company and enEvolv were unrelated parties that entered into a Research Agreement, whereby enEvolv provided services to the Company. As of the transaction date, the Company had $0.2 million prepaid services which were effectively settled through the business combination. Pro forma results of operations have not been presented because the effects of this acquisition were not material to the Company's Condensed Consolidated Financial Statements under applicable SEC rules.
4.    Intangible Assets
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ZYMERGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table summarizes the net book value of the finite-lived intangible assets as of March 31, 2021 and December 31, 2020 (in thousands):
 CostAccumulated
Amortization
Intangible Assets, Net
 March 31,
2021
December 31,
2020
March 31,
2021
December 31,
2020
March 31,
2021
December 31,
2020
Developed technology$6,900 $6,900 $(2,732)$(2,460)$4,168 $4,440 
Customer relationships980 980 (705)(630)275 350 
Net carrying value$7,880 $7,880 $(3,437)$(3,090)$4,443 $4,790 

5.    Fair Value Measurements of Financial Instruments
GAAP defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements. GAAP permits an entity to choose to measure many financial instruments and certain other items at fair value and contains financial statement presentation and disclosure requirements for assets and liabilities for which the fair value option is elected.
The hierarchy of fair value valuation techniques under GAAP provides for three levels: Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing assets and liabilities under GAAP’s fair value measurement requirements are as follows:
Level 1 – Fair value of the asset or liability is determined using unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 – Fair value of the asset or liability is determined using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3 – Fair value of the asset or liability is determined using unobservable inputs that are significant to the fair value measurement and reflect management’s own assumptions regarding the applicable asset or liability.
There were no transfers between the levels during the periods presented. As of March 31, 2021 and December 31, 2020, the Company’s financial assets and financial liabilities measured at fair value on a recurring basis were classified within the fair value hierarchy as follows (in thousands):
Level 1Level 2Level 3Balance as of March 31, 2021
Financial Assets    
Cash equivalents$107,032 $ $ $107,032 
Total financial assets$107,032 $ $ $107,032 
Financial Liabilities
Warrant derivative liability$ $ $11,952 $11,952 
Total financial liabilities$ $ $11,952 $11,952 
Level 1Level 2Level 3Balance as of December 31, 2020
Financial Assets    
Cash equivalents$205,873 $ $ $205,873 
Total financial assets$205,873 $ $ $205,873 
Financial Liabilities
Warrant derivative liability$ $ $14,231 $14,231 
Total financial liabilities$ $ $14,231 $14,231 
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ZYMERGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Financial instruments consist principally of cash equivalents, trade receivables, accounts payable, accrued liabilities, debt, and warrant derivative liability. The estimated fair value of trade receivables, accounts payable, and accrued liabilities approximates their carrying value due to the short period of time to their maturities.
The following table provides a reconciliation of the beginning and ending balances for the warrant derivative liability measured at fair value using significant unobservable inputs (Level 3) (in thousands):
Balance at January 1, 2021$14,231 
Change in fair value(2,279)
Balance at March 31, 2021$11,952 
The warrant derivative liability represents the fair value of the warrants issued in conjunction with the term loan agreement entered into in 2019 (Note 7).
The following methods and assumptions were used by the Company in estimating the fair value of financial instruments:
Accounts receivable, accounts payable, and accrued expenses: The amounts reported in the accompanying balance sheets approximate fair value due to the short maturity of these instruments.
Debt: The gross amounts reported approximate fair value due to the debt being a variable interest rate debt and its relatively short-term maturity.
Warrant derivative liability: The Company estimated the fair value of outstanding warrants using a weighted average between the value derived from a Black-Scholes (BSM) option model with a term consistent with the time to the expected IPO date as of March 31, 2021 based on the expectation that the warrant would be exercised at the IPO and the value derived from the option pricing model with a term consistent with the remaining term until a future liquidity event, other than the IPO scenario discussed above. The weighted average BSM model's inputs reflect assumptions that a market participant would use in pricing the instrument in a current period transaction and included the following as of March 31, 2021 and December 31, 2020:
 March 31,
2021
December 31,
2020
Value per Series C Preferred share (fully-diluted)$31.29 $35.46 
Exercise price$16.98 $16.98 
Expected volatility82.0 %77.0 %
Risk-free rate0.01 %0.79 %
Time to liquidity (years)0.048.97
6.    Balance Sheet Components
Property and equipment consist of the following as of March 31, 2021 and December 31, 2020 (in thousands):
 March 31,
2021
December 31,
2020
Machinery and equipment$57,853 $54,999 
Leasehold improvements26,763 24,192 
Furniture and office equipment2,737 2,743 
Computers and software2,693 2,677 
90,046 84,611 
Less accumulated depreciation and amortization(52,000)(47,977)
38,046 36,634 
Construction in progress17,416 12,084 
Total property and equipment, net$55,462 $48,718 
Depreciation and amortization expense was $4.1 million and $4.3 million for the periods ended March 31, 2021 and 2020, respectively.
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ZYMERGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Accrued and other current liabilities consist of the following as of March 31, 2021 and December 31, 2020 (in thousands):
March 31,
2021
December 31,
2020
Accrued compensation cost$7,975 $15,211 
Other accrued operating expenses9,087 9,616 
Accrued offering costs2,790  
Accrued legal service fees1,009 1,105 
Accrued interest 842 
Accrued tax liabilities81 114 
Accrued and other current liabilities$20,942 $26,888 
7.    Term Loans
The debt consists of the following as of March 31, 2021 and December 31, 2020 (in thousands):
 March 31,
2021
December 31,
2020
Senior secured delayed draw term loan facility bearing interest equal to 11.5% as of March 31, 2021 and December 31, 2020; final maturity December 19, 2024
$85,000 $85,000 
Unamortized discount and offering cost(5,385)(5,669)
Senior secured delayed draw term loan facility, net79,615 79,331 
Less current portion 79,331 
Long-term debt, net$79,615 $ 
Except as described below, the Company’s debt is described in Note 9 of the “Notes to Consolidated Financial Statements” in the Prospectus.
As of the date of issuance of the Company's audited annual financial statements, due to the substantial doubt about the Company's ability to continue operating as a going concern and the material adverse change clause in the senior secured delayed draw term loan facility agreement with our lender, the amounts outstanding as of December 31, 2020 were classified as current. The lender did not invoke the material adverse change clause. The Company was in compliance with all covenants of the senior secured delayed draw term loan facility as of March 31, 2021.
Interest expense on the Company’s term loan consisted of the following (in thousands):
Three Months Ended March 31, 2021Three Months Ended March 31, 2020
Coupon interest$2,444 $2,471 
Amortization of debt discount and offering costs283 213 
Total interest expense on term loan$2,727 $2,684 
Warrants Related to Prior Loan Agreement
In November 2014, the Company entered into a loan and security agreement for a term note which was subsequently amended and extinguished. In connection with the loan and security agreement and its amendments, the Company issued warrants to purchase the Company's common stock. As of March 31, 2021, the following common stock warrants were outstanding:
Number of Warrants as of March 31, 2021Exercise
Price
Expiry DateWeighted Average Remaining
Contractual Life
25,000$0.35November 17, 20243.63
90,000$1.70August 5, 20254.35
90,146$4.47November 14, 20276.63
37,176$4.95April 30, 20287.09
242,3225.54
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ZYMERGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Warrants Related to Current Loan Facility
On December 2019, the Company entered into a credit agreement for a senior secured delayed draw term loan facility (the “2019 Loan Facility”). In connection with the 2019 Loan Facility, the Company issued a warrant to purchase the Company’s Series C Preferred Stock (the “2019 Warrants”). As of March 31, 2021, and after the partial transfer of the 2019 Warrants from the original holder, 883,332 of the 2019 Warrants were outstanding.
8.    Convertible Preferred Stock
Except as described below, the Company’s convertible preferred stock is described in Note 10 of the “Notes to Consolidated Financial Statements” in the Prospectus.
As of March 31, 2021 and December 31, 2020, the Company's convertible preferred stock consisted of the following:
Authorized and DesignatedOutstandingLiquidation Preference (per share)Liquidation Preference
(in thousands)
Series A redeemable convertible preferred stock21,998,2507,332,750$4.9893 $36,585 
Series A-1 redeemable convertible preferred stock26,158,8338,719,611$0.7599 6,626 
Series B redeemable convertible preferred stock42,244,58814,081,522$10.1091 142,352 
Series C redeemable convertible preferred stock76,750,88124,700,286$16.9836 419,500 
Series D redeemable convertible preferred stock47,028,47213,259,111$22.3269 296,035 
214,181,02468,093,280$901,098 

9.    Equity
Stock Option Plan
In July 2014, the Company adopted the 2014 Stock Plan (the “2014 Plan”) for employees and non-employees pursuant to which the Board of Directors granted share-based awards, including stock options, to officers, employees, and non-employees. As of March 31, 2021, there were 2,376,979 shares of common stock available for grant, under the 2014 Plan.
Virtually all stock options have ten-year terms and vest over four years, inclusive of a one-year cliff vesting period. Under the 2014 Stock Plan, as amended, employees, directors, and consultants of the Company are able to participate in the Company’s future performance through awards of nonqualified stock options, incentive stock options, and stock bonuses at the discretion of management and the Board of Directors. Incentive and non-statutory stock options may be granted with exercise prices not less than 100% of the estimated fair value of the common stock on the date of grant, as determined by the Board of Directors. Options granted to individuals owning over 10% of the total combined voting power of all classes of stock are exercisable up to five years from the date of grant. The exercise price of any option granted to a 10% stockholder may not be less than 110% of the estimated fair value of the common stock on the date of grant, as determined by the Board of Directors. Options granted under the 2014 Plan expire no later than ten years from the date of grant. Options granted under the 2014 Plan vest over periods determined by the Board of Directors, generally over periods of four years.
The following table summarizes option activity under the 2014 Plan as of March 31, 2021:
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Number of
Shares
Available
for Grant
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual Life
Aggregate
Intrinsic Value
    (in thousands)
Outstanding - December 31, 20205,498,490 $6.657.75$79,756
Options granted1,694,043 $27.02
Options exercised(711,963)$4.48
Options cancelled(50,960)$13.92
Outstanding - March 31, 20216,429,610 $12.208.24$110,640
Unvested - March 31, 20213,789,820 $17.109.34$46,652
Exercisable - March 31, 20212,639,790 $5.166.67$63,988
The weighted-average grant-date fair value of options granted during the three months ended March 31, 2021, and 2020, was $17.42 per share and $4.91 per share, respectively.
During the three months ended March 31, 2021, and 2020, the aggregate intrinsic value of stock option awards exercised was $17.8 million and $0.2 million, determined at the date of option exercise. The aggregate intrinsic value was calculated as the difference between the exercise prices of the underlying stock option awards and the estimated fair value of the Company’s common stock on the date of exercise.
Valuation of Stock Option Grants
Stock-based compensation expense for stock options is estimated at the grant date based on the fair-value using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on a straight- line basis over the requisite service period of the awards. The fair value of employee stock options was estimated using the following assumptions:
 Three Months Ended March 31, 2021Three Months Ended March 31, 2020
Expected dividend yield % %
Risk-free interest rate
0.77% - 1.04%
0.68% - 1.41%
Expected term (in years)6.086.08
Expected volatility
73.43% - 74.67%
50.43% - 50.85%
As of March 31, 2021, and 2020, the Company has employee stock-based compensation expense of $37.5 million and $8.6 million, respectively, related to unvested stock awards not yet recognized, which is expected to be recognized over an estimated weighted-average period of approximately 3.51 years and 2.70 years, respectively.
Non-vested Stock
As part of the acquisition of Radiant Genomics, Inc. ("Radiant") on December 29, 2017, the Company issued shares to the founders of Radiant. Half of the shares were subject to vesting based on the continued service of the founders with the Company post-acquisition over a four-year period. The shares are forfeited if the founders of Radiant do not complete the required service period and therefore represent compensation for post combination services.
The following table summarizes activity of the non-vested stock with service-based vesting granted as part of the Radiant acquisition (in thousands, except share and per share amounts and term):
 SharesWeighted Average
Grant Date Fair Value
Weighted Average
Remaining Years
Aggregate
Intrinsic Value
Non-vested stock as of December 31, 202067,240 $4.951.0$1,089
Granted 
Vested(16,810)$4.95
Forfeited 
Non-vested stock as of March 31, 202150,430 $4.950.75$1,233
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The total intrinsic value of non-vested stock that vested and were released in the periods ended March 31, 2021, and 2020 was $0.4 million and $0.1 million, respectively. The Company recorded $0.1 million of compensation costs related to non-vested stock units for the periods ended March 31, 2021, and 2020, respectively. As of March 31, 2021, and 2020, there was $0.2 million and $0.6 million, respectively, of total unrecognized compensation cost related to non-vested stock. These costs are expected to be recognized over a weighted average period of 0.75 years and 1.75 years for the periods ended March 31, 2021, and 2020, respectively.
Compensation Expense
Compensation expense related to stock-based awards was included in the following categories in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss in accordance with the accounting guidance for share-based payments for the periods ended March 31 (in thousands):
 20212020
Cost of revenue$424 $271 
Research and development753 318 
Sales and marketing195 156 
General and administrative881 297 
Total stock-based compensation$2,253 $1,042 
Non-recourse Loans to Employees
On October 5, 2017, the Company entered into promissory notes with two separate employees in the aggregate amount of $3.6 million. The notes bore interest at 3.0% per annum and were due on the earlier of October 18, 2027 or the date two weeks prior to the Company’s good faith estimate of the date of initial filing of a Form S-1 to sell shares of Company common stock in an initial public offering. Interest was payable annually in arrears and could be added to the principal amount at the borrower’s option. Both employees opted to add the interest in the aggregate amount of $0.1 million to be added to the principal for the interest payment due in October 2019 and October 2020, respectively. The outstanding principal and interest payment added to the principal were included in Additional Paid-In Capital on the Condensed Consolidated Balance Sheets.
On March 5, 2021, the principal and all unpaid interest in an amount of $4.0 million were settled by the receipt of a $2.0 million payment and the return of 67,050 shares of common stock to the Company. The 67,050 shares of common stock were immediately retired upon return to the Company.
Adoption of 2021 Incentive Award Plan
In April 2021, the 2021 Incentive Award Plan (the "2021 Plan") became effective. The 2021 Plan serves as a successor to the 2014 Plan. The 2021 Plan permits the award of stock options, restricted stock awards, stock appreciation rights, restricted stock units, performance awards, cash awards and stock bonuses. The Company reserved 10,770,034 shares of common stock for issuance under the 2021 Plan, which includes the remaining reserved and unissued shares under the 2014 plan on the effective date of the 2021 Plan. The number of shares reserved for issuance under the 2021 Plan will increase automatically on January 1 of each calendar year continuing through the tenth calendar year during the term of the 2021 Plan by the number of shares equal to 5.0% of the total outstanding shares of our common stock as of the immediately preceding December 31 or such lesser number as determined by our Board of Directors.
Adoption of 2021 Employee Stock Purchase Plan
In April 2021, the 2021 Employee Stock Purchase Plan (the "2021 ESPP") was adopted. The 2021 ESPP was adopted in order to enable eligible employees to purchase shares of the Company’s common stock at a discount. Purchases will be accomplished through participation in discrete offering periods. The Company initially reserved 2,154,006 shares of common stock for issuance under the 2021 ESPP. The number of shares reserved for issuance under the 2021 ESPP will increase automatically on January 1 of each calendar year beginning after the first offering date and continuing through the first ten calendar years by the number of shares equal to 1.0% of the total outstanding shares of our common stock as of the immediately preceding December 31 or such lesser number as determined by our Board of Directors.
10.    Net Loss Per Share
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Basic net loss per share is determined by dividing net loss by the weighted-average shares outstanding for the period. The Company analyzes the potential dilutive effect of stock options, non-vested stock and warrants under the treasury stock method (as applicable), during periods of income, or during periods in which income is recognized related to changes in fair value of its liability-classified securities.
The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share data) applicable to common stockholders for the periods ended March 31:
 20212020
Numerator:
Net loss, basic$(84,585)$(65,340)
Less: Gain on change in fair value of warrant liabilities 2,279  
Net loss, diluted $(86,864)$(65,340)
Denominator:
Weighted-average shares used in calculating net loss per share, basic12,996,344 11,322,626 
Effect of dilutive securities:
Warrants to purchase Series C convertible preferred stock344,113
Weighted-average shares used in calculating net loss per share, diluted13,340,45711,322,626
Net loss per share, basic$(6.51)$(5.77)
Net loss per share, diluted$(6.51)$(5.77)
The following potentially dilutive shares as of the periods ended March 31, 2021, and 2020, were excluded from the calculation of diluted net loss per share applicable to common stockholders because their effect would have been anti-dilutive for the periods presented:
 20212020
Shares issuable under convertible preferred stock68,115,459 54,856,348 
Warrants to purchase Series C convertible preferred stock 883,332 
Options to purchase common stock6,429,610 5,199,789 
Non-vested stock50,430 117,670 
Warrants to purchase common stock242,322 242,322 
Total74,837,821 61,299,461 
11.    Revenue, Credit Concentrations and Geographic Information
The Company has primarily earned revenue by engaging in R&D service contracts to help its customers improve the economics of their bio-based products. The Company also earns revenue through collaborative arrangements with partners to develop novel materials to be commercialized by the collaborative partner and the Company.
The Company’s R&D service contracts generally consist of fixed-fee multi-phase research terms with concurrent value-share and/or performance bonus payments based on developing an improved microbial strain. The research term of the contracts typically spans several quarters and the contract term for revenue recognition purposes is determined based on the customer’s rights to terminate the contract for convenience. Other payment types, typically consisting of performance bonuses or value share payments, are constrained until those payments become probable or are earned. For the period ended March 31, 2021, the Company recognized $0.3 million in performance bonuses. For the period ended March 31, 2020, performance bonuses the Company recognized were insignificant. For the periods ended March 31, 2021, and 2020, the Company has not recognized any royalty or value share payments.
When acceptance clauses are present in an agreement, the Company recognizes the R&D service revenue at a point in time when the R&D services provided have been accepted by the customer and the Company has a present right for payment and no refunds are permitted. The Company has recognized $0.8 million of revenue at a point in time due to customer acceptance clauses for the period ended March 31, 2021. For the period ended March 31, 2020, revenue recognized at a point in time due to customer acceptance clauses were insignificant.
The following table represents changes in the balances of our contract assets and liabilities during the periods ended March 31, 2021, and 2020 (in thousands):
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
December 31, 2020AdditionsDeletionsMarch 31, 2021
Contract liabilities:
Deferred revenue$3,014$1,256 $(1,604)$2,666
December 31, 2019AdditionsDeletionsMarch 31, 2020
Contract liabilities:
Deferred revenue$1,760$2,228 $(1,640)$2,348
Additions to contract liabilities during the period ended March 31, 2020 include $0.6 million of deferred revenue through the acquisition of enEvolv Inc. (Note 3). Long-term deferred revenue is included in Other long-term liabilities on the Condensed Consolidated Balance Sheets.
Transaction price allocated to the remaining performance obligation represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Remaining performance obligations consisted of the following (in thousands):
 CurrentNoncurrentTotal
As of March 31, 2021$4,311 $2,513$6,824 
The Company’s noncurrent remaining performance obligation is expected to be recognized in the next one to three years.
Customers representing 10% or greater of revenue were as follows for the periods ended March 31:
 20212020
Customer A30 %52 %
Customer B18 % %
Customer C16 %20 %
Customer D11 %14 %
Customers representing 10% or greater of billed accounts receivable were as follows as of March 31, 2021 and December 31, 2020:
 March 31, 2021December 31, 2020
Customer A37 %37 %
Customer D25 %23 %
Customer E24 %23 %
Customer F12 % %
Customer G %17 %
The Company's revenues by geographic region are presented in the table below for the periods ended March 31 (in thousands):
 20212020
United States of America$1,232 $1,111 
Asia1,421 1,338 
Europe1,082 505 
Total revenue$3,735 $