Natera Inc

Previous wording

The principal focus of our commercial operations is to offer our tests through both our direct sales force and laboratory distribution partners, and our Constellation licensees under our cloud-based distribution model. The number of tests that we accession is a key indicator that we use to assess our business. A test is accessioned when we receive the test at our laboratory, the relevant information about the test is entered into our computer system, and the test sample is routed into the appropriate workflow. This number is a subset of the number of tests that we process, which includes tests

Current wording

The principal focus of our commercial operations is to offer our tests through both our direct sales force and laboratory distribution partners, and our Constellation licensees under our cloud-based distribution model. The number of tests that we accession is a key indicator that we use to assess our business. A test is accessioned when we receive the test at our laboratory, the relevant information about the test is entered into our computer system, and the test sample is routed into the appropriate workflow. This number is a subset of the number of tests that we process, which includes tests distributed through our Constellation licensees. The number of tests that we process is a key metric as it tracks overall

Previous wording

distributed through our Constellation licensees. The number of tests that we process is a key metric as it tracks overall volume growth, particularly as our laboratory partners may transition from sending samples to our laboratory to our cloud-based distribution model, as a result of which our tests accessioned would decrease but our tests processed would remain unchanged.

Current wording

volume growth, particularly as our laboratory partners may transition from sending samples to our laboratory to our cloud-based distribution model, as a result of which our tests accessioned would decrease but our tests processed would remain unchanged.

Previous wording

During the three months ended March 31, 2024, we processed approximately 735,800 tests, comprised of approximately 718,700 tests accessioned in our laboratory, compared to approximately 626,200 tests processed, comprised of approximately 607,700 tests accessioned in our laboratory, during the three months ended March 31, 2023. This increase in volume primarily represents continued commercial growth of Signatera, Panorama and Horizon, both as tests performed in our laboratory as well as through our Constellation software platform.

Current wording

During the six months ended June 30, 2024, we processed approximately 1,496,000 tests, comprised of approximately 1,462,800 tests accessioned in our laboratory, compared to approximately 1,243,400 tests processed, comprised of approximately 1,206,700 tests accessioned in our laboratory, during the six months ended June 30, 2023. This increase in volume primarily represents continued commercial growth of Signatera, Panorama and Horizon, both as tests performed in our laboratory as well as through our Constellation software platform.

Previous wording

The percent of our revenues attributable to our U.S. direct sales force for the three months ended March 31, 2024 was 94%, an increase compared to 91% for the three months ended March 31, 2023. The percent of our revenues attributable to U.S. laboratory distribution partners for the three months ended March 31, 2024 was 4%, a decrease compared to 5% from the same period in the prior year. Our ability to increase our revenues and gross profit will depend on our ability to further penetrate the U.S. market with our direct sales force. The percent of our revenues attributable to international laboratory distribution partners and other international sales for the three months ended March 31, 2024 was 2%, a slight decrease from 4% in the three months ended March 31, 2023.

Current wording

The percent of our revenues attributable to our U.S. direct sales force for the six months ended June 30, 2024 was 95%, an increase compared to 90% for the six months ended June 30, 2023. The percent of our revenues attributable to U.S. laboratory distribution partners for the six months ended June 30, 2024 was 3%, a decrease compared to 7% from the same period in the prior year. Our ability to increase our revenues and gross profit will depend on our ability to further penetrate the U.S. market with our direct sales force. The percent of our revenues attributable to international laboratory distribution partners and other international sales for the six months ended June 30, 2024 was 2%, a decrease from 3% in the six months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, total revenues were $367.7 million compared to $241.8 million in the three months ended March 31, 2023. Product revenues accounted for $364.7 million, 99% of total revenues for the three months ended March 31, 2024 compared to $237.8 million representing 98% of total revenues for the three months ended March 31, 2023. For the three months ended March 31, 2024 and 2023, no customers exceeded 10% of the total revenues on an individual basis. Revenues from customers outside the United States were $8.3 million, representing approximately 2% of total revenues for the three months ended March 31, 2024. For the three months ended March 31, 2023, revenues from customers outside the United States were $8.5 million, representing approximately 4% total revenues. Most of our revenues have been denominated in U.S. dollars, though we generate some revenue in foreign currency, primarily denominated in Euros and Singapore Dollars.

Current wording

For the six months ended June 30, 2024, total revenues were $781.1 million compared to $503.2 million in the six months ended June 30, 2023. Product revenues accounted for $776.0 million, 99% of total revenues for the six months ended June 30, 2024 compared to $496.1 million representing 99% of total revenues for the six months ended June 30, 2023. For the six months ended June 30, 2024 and 2023, no customers exceeded 10% of the total revenues on an individual basis. Revenues from customers outside the United States were $16.8 million, representing approximately 2% of total revenues for the six months ended June 30, 2024. For the six months ended June 30, 2023, revenues from customers outside the United States were $16.6 million, representing approximately 3% total revenues. Most of our revenues have been denominated in U.S. dollars, though we generate some revenue in foreign currency, primarily denominated in Euros and Singapore Dollars.

Previous wording

Our net loss for the three months ended March 31, 2024 and 2023 was $67.6 million and $136.9 million, respectively. This included non-cash stock compensation expense of $64.4 million and $40.5 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, we had an accumulated deficit of $2.4 billion.

Current wording

Our net loss for the six months ended June 30, 2024 and 2023 was $105.1 million and $247.7 million, respectively. This included non-cash stock compensation expense of $131.9 million and $84.8 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $2.5 billion.

Previous wording

our financial performance depends on reimbursement for microdeletions testing. Many third-party payers do not currently reimburse for microdeletions screening in part because there has historically been limited published data on the performance of microdeletions screening tests, with oursingle nucleotide polymorphism-based Microdeletion and Aneuploidy RegisTry, or SMART study results only being published in early 2022.

Current wording

Our ability to increase our revenues will depend on our ability to further penetrate the domestic and international markets and, in particular, generate sales through our direct sales force, develop and commercialize additional tests, obtain reimbursement from additional third-party payers and increase our reimbursement rates for tests performed. For example, our financial performance depends on reimbursement for microdeletions testing. Many third-party payers do not currently reimburse for microdeletions screening in part because there has historically been limited published data on the performance of microdeletions screening tests, with our single nucleotide polymorphism-based Microdeletion and Aneuploidy RegisTry, or SMART study results only being published in early 2022.

Previous wording

The components of our cost of product revenues are material and service costs, impairment charges associated with testing equipment, personnel costs, including stock-based compensation expense, equipment and infrastructure expenses associated with testing samples, electronic medical records, order and delivery systems, shipping charges to transport samples, costs incurred from third party test processing fees, and allocated overhead such as rent, information technology costs, equipment depreciation and utilities. Costs associated with Whole Exome Sequencing, are also included, as well as labor costs, relating to our Signatera CLIAand Signatera research use only offerings. Costs associated with performing tests are recorded when the test is accessioned. We expect cost of product revenues in absolute dollars to increase as the number of tests we perform increases.

Current wording

The components of our cost of product revenues are material and service costs, impairment charges associated with testing equipment, personnel costs, including stock-based compensation expense, equipment and infrastructure expenses associated with testing samples, electronic medical records, order and delivery systems, shipping charges to transport samples, costs incurred from third party test processing fees, and allocated overhead such as rent, information technology costs, equipment depreciation and utilities. Costs associated with Whole Exome Sequencing, are also included, as well as labor costs, relating to our Signatera CLIA and Signatera research use only offerings. Costs associated with performing tests are recorded when the test is accessioned. We expect cost of product revenues in absolute dollars to increase as the number of tests we perform increases.

Previous wording

Total revenues are comprised of product revenues, which are primarily driven by sales of our Panorama and Horizon tests, oncology testing, and licensing and other revenues, which primarily includes development licensing revenue and licensing of our Constellation software. Total revenues increased by $126.0 million, or 52.1%, when compared to the three months ended March 31, 2023.

Current wording

Total revenues are comprised of product revenues, which are primarily driven by sales of our Panorama and Horizon tests, oncology testing, and licensing and other revenues, which primarily includes development licensing revenue and licensing of our Constellation software. Total revenues increased by $151.9 million, or 58.1%, when compared to the three months ended June 30, 2023.

Previous wording

We derive our revenues from tests based on units reported to customers—tests delivered with a result. All reported units are either accessioned in our laboratory or processed outside of our laboratory. As noted in the section titled “Overview” above, the number of tests that we process is a key metric as it tracks our overall volume growth. During the three months ended March 31, 2024, total reported units were approximately 679,400, comprised of approximately 663,500 tests reported in our laboratory. Comparatively, during the three months ended March 31, 2023, total reported units were approximately 583,400, comprising of approximately 566,000 tests reported in our laboratory. During the three months ended March 31, 2024 and 2023, total oncology units processed were approximately 114,800 and 71,000, respectively.

Current wording

We derive our revenues from tests based on units reported to customers—tests delivered with a result. All reported units are either accessioned in our laboratory or processed outside of our laboratory. As noted in the section titled “Overview” above, the number of tests that we process is a key metric as it tracks our overall volume growth. During the three months ended June 30, 2024, total reported units were approximately 725,200, comprised of approximately 709,800 tests reported in our laboratory. Comparatively, during the three months ended June 30, 2023, total reported units were approximately 594,900, comprising of approximately 578,200 tests reported in our laboratory. During the three months ended June 30, 2024 and 2023, total oncology units processed were approximately 125,400 and 83,500, respectively.

Previous wording

During the three months ended March 31, 2024, product revenues increased by $126.9 million, or 53.4% compared to the three months ended March 31, 2023, primarily as a result of the continued revenue growth from increased test volumes as well as average selling price improvements.

Current wording

During the three months ended June 30, 2024, product revenues increased by $153.1 million, or 59.3%, compared to the three months ended June 30, 2023, primarily as a result of the continued revenue growth from increased test volumes, average selling price improvements, as well as cash receipts during the quarter related to tests delivered in prior periods that were fully collected.

Previous wording

Licensing and other revenues decreased by $0.9 million, or 22.5%, during the three months ended March 31, 2024 when compared to the three months ended March 31, 2023. The decrease was primarily due to a decrease in revenue from our collaborative agreements.

Current wording

Licensing and other revenues decreased by $1.2 million, or 36.9%, during the three months ended June 30, 2024 when compared to the three months ended June 30, 2023. The decrease was primarily due to a decrease in revenue from our collaborative agreements.

Previous wording

During the three months ended March 31, 2024, cost of product revenues increased compared to the three months ended March 31, 2023 by approximately $11.1 million, or 7.5%, primarily due to higher costs related to inventory consumption of $3.8 million driven by an increase in accessioned cases, a $1.7 million increase in third-party fees, and a $5.6 million increase in labor, overhead, and other related costs driven by headcount growth and product support.

Current wording

During the three months ended June 30, 2024, cost of product revenues increased compared to the three months ended June 30, 2023 by approximately $27.0 million, or 18.9%, primarilydue to a $13.1 million increase in third-party fees, higher costs related to inventory consumption of $7.5 million driven by an increase in accessioned cases, and a $6.4 million increase in equipment and related depreciation expense, labor, overhead, shipping and other related costs driven by headcount growth and product support.

Previous wording

Research and development expenses during the three months ended March 31, 2024, increased by $6.3 million, or 7.7%, when compared to the three months ended March 31, 2023. The increase was attributable to a $8.0 million increase in salary and related compensation expenditures, which includes a $6.3 million increase in stock-based compensation expense, and a $1.6 million increase primarily due to consulting, travel, office, facilities, and other expenses. This was offset by a $3.3 million net decrease in lab and clinical trial related expenses primarily related to the decrease in identified in-process research and development asset expense compared to prior period.

Current wording

Research and development expenses during the three months ended June 30, 2024, increased by $10.9 million, or 14.0%, when compared to the three months ended June 30, 2023. The increase was attributable to a $11.5 million increase in salary and related compensation expenditures, which includes a $7.0 million increase in stock-based compensation expense. This was offset by a $0.6 million net decrease in lab and clinical trial related expenses, consulting, travel, office, facilities, and other expenses.

Previous wording

Selling, general and administrative expenses increased by $44.7 million, or 29.8%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily due to a $25.9 million increase in salary and related compensation expenditures, which includes a $16.7 million increase in stock-based compensation expense, and a $16.2 million increase in consulting and legal expenses, a $2.6 million in marketing, travel, facilities, office, other and other costs.

Current wording

Selling, general and administrative expenses increased by $45.5 million, or 29.8%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was attributable to a $26.6 million increase in salary and related compensation expenditures, which includes a $15.4 million increase in stock-based compensation expense, a $4.1 million increase in consulting and legal expenses, a $4.0 million increase in marketing expenses, a $5.0 million increase in vendor expenses, and a $5.8 million increase in travel, facilities, office and other costs.

Previous wording

Interest expense increased by $0.1 million in the three months ended March 31, 2024 compared to the same period in the prior year due to an increase in interest rate.

Current wording

Interest expense decreased by $0.1 million in the three months ended June 30, 2024 compared to the same period in the prior year. The interest expense decreased primarily as a result of the slight decrease in interest rate.

Previous wording

Interest and other income for the three months ended March 31, 2024 increased $5.7 million compared to the same period in the prior year, primarily due to greater cash and investment balances driving higher interest income.

Current wording

Interest and other income for the three months ended June 30, 2024 increased $5.9 million compared to the same period in the prior year, primarily due to greater cash and investment balances driving higher interest income.

Previous wording

Cost of licensing and other revenues for the three months ended March 31, 2024, when compared to the three months ended March 31, 2023, decreased by $0.1 million, or 17.0%, primarily due to a net decrease in costs to support our collaborative agreements.

Current wording

Cost of licensing and other revenues for the six months ended June 30, 2024, when compared to the six months ended June 30, 2023, decreased by $0.1 million, or 10.5%, primarily due to a net decrease in costs to support our collaborative agreements.

Previous wording

We have incurred net losses each year since our inception. For the three months ended March 31, 2024, we had a net loss of $67.6 million, and we expect to continue to incur losses in future periods as we continue to devote a substantial portion of our resources to our research and development and commercialization efforts for our existing and new products. As of March 31, 2024, we had an accumulated deficit of $2.4 billion. As of March 31, 2024, we had $813.8 million in cash and cash equivalents and restricted cash, $69.1 million in marketable securities, $80.4 million of outstanding balance under the Credit Line including accrued interest, and $287.5 million outstanding principal balance on the Convertible Notes. As of March 31, 2024, we had $20.0 million remaining and available on the Credit Line.

Current wording

We have incurred net losses each year since our inception. For the six months ended June 30, 2024, we had a net loss of $105.1 million, and we expect to continue to incur losses in future periods as we continue to devote a substantial portion of our resources to our research and development and commercialization efforts for our existing and new products. As of June 30, 2024, we had an accumulated deficit of $2.5 billion. As of June 30, 2024, we had $796.8 million in cash and cash equivalents and restricted cash, $90.3 million in marketable securities, $80.4 million of outstanding balance under the Credit Line including accrued interest, and $287.5 million outstanding principal balance on the Convertible Notes. As of June 30, 2024, we had $20.0 million remaining and available on the Credit Line.

Previous wording

While we have introduced multiple products that are generating revenues, these revenues have not been sufficient to fund all operations. Accordingly, we have funded the portion of operating costs that exceeds revenues through a

Current wording

While we have introduced multiple products that are generating revenues, these revenues have not been sufficient to fund all operations. Accordingly, we have funded the portion of operating costs that exceeds revenues through a combination of equity issuances and debt and other financings. We expect to develop and commercialize future products

Previous wording

combination of equity issuances and debt and other financings. We expect to develop and commercialize future products and continue to invest in the growth of our business and, consequently, we will need to generate additional revenues to achieve future profitability and may need to raise additional equity or incur additional debt. If we raise additional funds by issuing equity securities, our stockholders would experience dilution. Additional debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any additional debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders and requires significant debt service payments, which diverts resources from other activities. Additional financing may not be available at all, or in amounts or on terms acceptable to us. If we are unable to obtain additional financing, we may be required to delay the development and commercialization of our products and significantly scale back our business and operations.

Current wording

and continue to invest in the growth of our business and, consequently, we will need to generate additional revenues to achieve future profitability and may need to raise additional equity or incur additional debt. If we raise additional funds by issuing equity securities, our stockholders would experience dilution. Additional debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any additional debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders and requires significant debt service payments, which diverts resources from other activities. Additional financing may not be available at all, or in amounts or on terms acceptable to us. If we are unable to obtain additional financing, we may be required to delay the development and commercialization of our products and significantly scale back our business and operations.

Previous wording

In September 2015, we entered into a Credit Line with UBS, or the Credit Line, providing for a $50.0 million revolving line of credit which could be drawn in increments at any time. The Credit Line was amended in July 2017 and bears interest at 30-day LIBOR plus 1.10%, and it is secured by a first priority lien and security interest in our money market and marketable securities held in our managed investment account with UBS. UBS has the right to demand full or partial payment of the Credit Line obligations and terminate it, in its discretion and without cause, at any time. The interest rate was subsequently changed to the 30-day Secured Overnight Financing Rate, or SOFR, average, plus 1.21%. The SOFR rate is variable. The Credit Line was subsequently increased from $50.0 million to $150.0 million. In June 2023, the Credit Line decreased to $100.0 million. In October 2023, the interest rate for the Credit Line was subsequently changed to the 30-day SOFR average, plus 0.5%. As of March 31, 2024, the total principal amount outstanding with accrued interest was $80.4 million and $20.0 million is remaining as available under the Credit Line.

Current wording

In September 2015, we entered into a Credit Line with UBS, or the Credit Line, providing for a $50.0 million revolving line of credit which could be drawn in increments at any time. The Credit Line was amended in July 2017 and bears interest at 30-day LIBOR plus 1.10%, and it is secured by a first priority lien and security interest in our money market and marketable securities held in our managed investment account with UBS. UBS has the right to demand full or partial payment of the Credit Line obligations and terminate it, in its discretion and without cause, at any time. The interest rate was subsequently changed to the 30-day Secured Overnight Financing Rate (“SOFR”) average, plus 1.21%. The SOFR rate is variable. The Credit Line was subsequently increased from $50.0 million to $150.0 million. In June 2023, the Credit Line decreased to $100.0 million. In October 2023, the interest rate for the Credit Line was subsequently changed to the 30-day SOFR average, plus 0.5%. As of June 30, 2024, the total principal amount outstanding with accrued interest was $80.4 million and $20.0 million is remaining as available under the Credit Line.

Previous wording

Cash provided by operating activities during the three months ended March 31, 2024 was $27.0 million. The net loss of $67.6 million includes $75.3 million in non-cash charges resulting from $7.1 million of depreciation and amortization, $64.4 million of stock-based compensation expense, $3.6 million of non-cash lease expense, $0.3 million for amortization of debt discount and issuance cost, $0.4 million for foreign exchange adjustment, offset by $0.5 million premium amortization and discount accretion on investment securities. Operating assets had cash inflows of $1.7 million resulting from a $14.4 million decrease in prepaid expenses and other assets, offset by a $10.5 million increase in accounts receivable, a $2.2 million increase in inventory. Operating liabilities resulted in cash inflows of $17.6 million resulting from a $10.7 million increase in accounts payable, a $17.8 million increase in accrued compensation, and a $0.8 million increase in deferred revenue, offset by a $4.1 million decrease in lease liabilities and a $7.6 million decrease in other accrued liabilities.

Current wording

Cash provided by operating activities during the six months ended June 30, 2024 was $31.0 million. The net loss of $105.1 million includes $154.5 million in non-cash charges resulting from $15.0 million of depreciation and amortization, $131.9 million of stock-based compensation expense, $7.2 million of non-cash lease expense, $0.6 million for amortization of debt discount and issuance cost, and $0.4 million for foreign exchange adjustment, offset by a $0.6 million decrease in premium amortization and discount accretion on investment securities. Operating assets had cash outflows of $36.9 million resulting from a $57.6 million increase in accounts receivable, a $0.2 million increase in inventory, offset by a $20.9 million decrease in prepaid expenses and other assets. Operating liabilities resulted in cash inflows of $18.5 million resulting from a $16.7 million increase in accounts payable, $19.7 million increase in accrued compensation and a $1.0 million increase in deferred revenue, offset by, a $8.3 million decrease in lease liabilities and a $10.6 million decrease in other accrued liabilities.

Previous wording

Cash used in operating activities during the three months ended March 31, 2023 was $81.1 million. The net loss of $136.9 million includes $53.5 million in non-cash charges resulting from $5.1 million of depreciation and amortization, $2.7 million in-process research and development, $0.8 million premium amortization and discount accretion on investment securities, $40.5 million of stock-based compensation expense, $3.8 million of non-cash lease expense, $0.3 million for amortization of debt discount and issuance cost, and $0.3 million for foreign exchange adjustment. Operating assets had cash outflows of $5.4 million resulting from a $2.4 million increase in accounts receivable, a $5.3 million increase in inventory, offset by a $2.3 million decrease in prepaid expenses and other assets. Operating liabilities resulted in cash inflows of $7.7 million resulting from a $15.0 million increase in accrued compensation, a $7.3 million increase in deferred revenue and a $5.8 million increase in accounts payable offset by a $18.2 million decrease in other accrued liabilities and a $2.2 million decrease in lease liabilities.

Current wording

Cash used in operating activities during the six months ended June 30, 2023 was $159.7 million. The net loss of $247.7 million includes $107.5 million in non-cash charges resulting from $10.2 million of depreciation and amortization, $2.7 million in-process research and development, $1.5 million premium amortization and discount accretion on investment securities, $84.8 million of stock-based compensation expense, $7.4 million of non-cash lease expense, $0.6 million for amortization of debt discount and issuance cost, and $0.3 million for foreign exchange adjustment. Operating assets had cash outflows of $10.4 million resulting from a $15.7 million increase in accounts receivable, a $7.3 million increase in inventory, offset by a $12.6 million decrease in prepaid expenses and other assets. Operating liabilities resulted in cash outflows of $9.1 million resulting from a $9.0 million decrease in accounts payable, a $11.2 million decrease in other accrued liabilities and a $5.2 million decrease in lease liabilities, offset by a $9.9 million increase in accrued compensation and a $6.4 million increase in deferred revenue.

Previous wording

Cash provided by investing activities for the three months ended March 31, 2024 totaled $138.3 million, which was comprised of $169.1 million from proceeds of investments maturities, offset by $20.3 million in acquisitions of property and equipment and $10.5 million in asset acquisition.

Current wording

Cash provided by investing activities for the six months ended June 30, 2024 totaled $106.2 million, which was comprised of $221.5 million from proceeds of investments maturities, offset by $72.8 million in purchasing of new investments, $32.0 million in acquisitions of property and equipment and $10.5 million in asset acquisition.

Previous wording

Cash provided by investing activities for the three months ended March 31, 2023 totaled $15.9 million, which was comprised of $27.3 million from proceeds of investments maturities, offset by a $11.4 million in acquisitions of property and equipment.

Current wording

Cash provided by investing activities for the six months ended June 30, 2023 totaled $63.1 million, which was comprised of $83.2 million from proceeds of investments maturities, offset by $20.2 million in acquisitions of property and equipment.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2024, totaled $6.5 million which was comprised of $6.5 million from proceeds from the exercise of stock options.

Current wording

Cash provided by financing activities for the six months ended June 30, 2024, totaled $17.5 million which was comprised of $8.6 million from proceeds from the exercise of stock options and $8.9 million from the issuance of common stock under the employee stock purchase plan.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2023, totaled $2.3 million which was comprised of proceeds from the exercise of stock options.

Current wording

Cash provided by financing activities for the six months ended June 30, 2023, totaled $11.6 million which was comprised of $2.9 million from proceeds from the exercise of stock options and $8.7 million from the issuance of common stock under the employee stock purchase plan.

Previous wording

The long-term debt obligations consist of the $287.5 million principal amount from a private placement offering to qualified institutional buyers and applicable interest. The Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 2.25% per year, payable in cash semi-annually in arrears in May and November of each year, beginning in November 2020. The Convertible Notes mature in May 2027, unless earlier converted, repurchased or redeemed in accordance with their terms. Upon conversion, the Convertible Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. Please refer to Note 10,Debt, for further details.

Current wording

The long-term debt obligations consist of the $287.5 million principal amount from a private placement offering to qualified institutional buyers and applicable interest. The Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 2.25% per year, payable in cash semi-annually in arrears in May and November of each year, beginning in November 2020. The Convertible Notes mature in May 2027, unless earlier converted, repurchased

Previous wording

The Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 2.25% per year, payable in cash semi-annually in arrears in May and November of each year, beginning in November 2020. The Convertible Notes mature in May 2027, unless earlier converted, repurchased or redeemed in accordance with their terms. Upon conversion, the Convertible Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

Current wording

or redeemed in accordance with their terms. Upon conversion, the Convertible Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.