|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification No.)
|
|
||
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbols(s)
|
Name of each exchange on which registered
|
||
|
|
|
||
|
|
|
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
|
Emerging growth company
|
|
Page
|
||
3
|
||
Part I
|
4
|
|
Item 1.
|
4
|
|
4
|
||
5
|
||
6
|
||
8
|
||
9 | ||
Item 2.
|
21 | |
Item 3.
|
28 | |
Item 4.
|
28 | |
Part II
|
30 | |
Item 1.
|
30 | |
Item 1A.
|
30 | |
Item 2.
|
30 | |
Item 3.
|
30 | |
Item 4.
|
30 | |
Item 5.
|
30 | |
Item 6.
|
31 | |
32 |
● |
the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and our ability to
grow and manage growth profitably and retain our key employees;
|
● |
the ability to maintain the listing of our Class A common stock on The Nasdaq Stock Market LLC (“Nasdaq”);
|
● |
changes in applicable laws or regulations;
|
● |
our ability to raise financing in the future;
|
● |
the success, cost and timing of our product development activities;
|
● |
the commercialization and adoption of our existing products and the success of any product we may offer in the future;
|
● |
the potential attributes and benefits of our products once commercialized;
|
● |
our ability to obtain and maintain regulatory approval for our products, and any related restrictions and limitations of any approved product;
|
|
●
|
our ongoing leadership transition;
|
● |
our ability to identify, in-license or acquire additional technology;
|
● |
our ability to maintain our existing license agreements and manufacturing arrangements;
|
● |
our ability to compete with other companies currently marketing or engaged in the development of products and services that serve customers engaged in
proteomic analysis, many of which have greater financial and marketing resources than us;
|
● |
the size and growth potential of the markets for our products, and the ability of each product to serve those markets once commercialized, either alone or in
partnership with others;
|
● |
our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
|
● |
our financial performance; and
|
● |
the impact of the COVID-19 pandemic on our business.
|
March 31,
2022 |
December 31,
2021 |
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Marketable securities
|
||||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Goodwill |
||||||||
Other assets | ||||||||
Operating lease right-of-use assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses and other current liabilities
|
|
|
||||||
Short-term operating lease liabilities
|
||||||||
Total current liabilities
|
|
|
||||||
Long-term liabilities:
|
||||||||
Warrant liabilities
|
|
|
||||||
Other long-term liabilities
|
|
|
||||||
Operating lease liabilities
|
||||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Note 14)
|
||||||||
Stockholders’ equity
|
||||||||
Class A Common stock, $
|
|
|
||||||
Class B Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
Three months ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Operating expenses:
|
||||||||
Research and development
|
$
|
|
$
|
|
||||
Selling, general and administrative
|
|
|
||||||
Total operating expenses
|
|
|
||||||
Loss from operations
|
(
|
)
|
(
|
)
|
||||
Dividend income
|
||||||||
Change in fair value of warrant liabilities
|
|
|
||||||
Other expense, net
|
(
|
)
|
|
|||||
Loss before provision for income taxes
|
(
|
)
|
(
|
)
|
||||
Provision for income taxes
|
|
|
||||||
Net loss and comprehensive loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Net loss per common share attributable to common stockholders, basic and diluted
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted
|
|
|
Convertible preferred stock
|
Class A
common stock
|
Class B
common stock
|
Additional
paid-in
|
Accumulated | Total stockholders’
equity
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
deficit
|
(deficit)
|
||||||||||||||||||||||||||||
Balance - December 31, 2020
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||||||||||||
Net loss
|
-
|
-
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Issuance of Series E convertible preferred stock, net of issuance costs
|
|
(
|
)
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Common stock issued upon exercise of stock options and vesting of restricted stock units
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||
Balance - March 31, 2021
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
Class A
common stock
|
Class B
common stock
|
Additional
paid-in
|
Accumulated | Total stockholders’
equity
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
deficit
|
(deficit)
|
||||||||||||||||||||||
Balance - December 31, 2021
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||
Net loss
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Common stock issued upon exercise of stock options and vesting of restricted stock units
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Stock-based compensation
|
-
|
|
-
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Balance - March 31, 2022
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Three Months Ended
March 31,
|
||||||||
2022
|
2021
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation
|
|
|
||||||
Unrealized losses of marketable securities
|
||||||||
Change in fair value of warrant liabilities
|
(
|
)
|
|
|||||
Change in fair value of contingent consideration
|
||||||||
Stock-based compensation
|
(
|
)
|
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses and other current assets
|
|
(
|
)
|
|||||
Operating lease right-of-use assets | ( |
) | ||||||
Accounts payable
|
|
|
||||||
Accrued expenses and other current liabilities
|
|
|
||||||
Short-term operating lease liabilities
|
|
|
||||||
Operating lease liabilities | ||||||||
Net cash used in operating activities
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(
|
)
|
(
|
)
|
||||
Purchases of marketable securities | ( |
) | ||||||
Sales of marketable securities
|
||||||||
Net cash provided by (used in) investing activities
|
$
|
|
$
|
(
|
)
|
|||
Cash flows from financing activities:
|
||||||||
Proceeds from exercise of stock options
|
|
|
||||||
Stock issuance costs for Series E convertible preferred stock
|
|
( |
) | |||||
Principal payments under finance lease obligations
|
|
( |
) | |||||
Net cash provided by financing activities
|
$
|
|
$
|
|
||||
Net decrease in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash received from exchange of research and development tax credits
|
$
|
|
$
|
|
||||
Supplemental disclosure of noncash information:
|
||||||||
Noncash acquisition of property and equipment
|
$
|
|
$
|
|
||||
Forgiveness of related party promissory notes
|
$
|
|
$
|
|
● |
valuation allowances with respect to deferred tax assets;
|
● |
valuation for acquisitions;
|
● |
assumptions used for leases;
|
● |
valuation of warrant liabilities; and
|
● |
assumptions underlying the fair value used in the calculation of the stock-based compensation.
|
Purchase Price
Allocation
|
||||
Prepaid expenses and other current assets
|
$
|
|
||
Property and equipment, net
|
|
|||
Goodwill
|
|
|||
Total
|
$
|
|
● |
Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.
|
● |
Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not
active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
|
● |
Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or
liabilities.
|
Fair Value Measurement Level
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
March 31, 2022:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Fixed income mutual funds - Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Marketable securities
|
||||||||||||||||
Total assets at fair value on a recurring basis
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Public Warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Private Warrants
|
|
|
|
|
||||||||||||
Total liabilities at fair value on a recurring basis
|
$
|
|
$
|
|
$
|
|
$
|
|
Fair Value Measurement Level
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
December 31, 2021:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Fixed income mutual funds - Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Marketable securities
|
||||||||||||||||
Total assets at fair value on a recurring basis
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Public Warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Private Warrants
|
|
|
|
|
||||||||||||
Total liabilities at fair value on a recurring basis
|
$
|
|
$
|
|
$
|
|
$
|
|
March 31,
2022 |
December 31,
2021 |
|||||||
Laboratory and production equipment
|
$
|
|
$
|
|
||||
Computer equipment
|
|
|
||||||
Software
|
|
|
||||||
Furniture and fixtures
|
|
|
||||||
Leasehold improvements | ||||||||
Construction in process
|
|
|
||||||
Property and equipment, gross |
|
|
||||||
Less: Accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Property and equipment, net
|
$
|
|
$
|
|
March 31,
2022 |
December 31,
2021 |
|||||||
Employee compensation and benefits
|
$
|
|
$
|
|
||||
Contracted services
|
|
|
||||||
Business acquisition costs and contingencies | ||||||||
Legal fees
|
|
|
||||||
Other
|
|
|
||||||
Total accrued expenses and other current liabilities
|
$
|
|
$
|
|
Three months ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Operating lease cost
|
$
|
|
$
|
|
||||
Short-term lease cost
|
|
|
||||||
Variable lease cost
|
|
|
||||||
Total lease cost
|
$
|
|
$
|
|
March 31,
|
December 31,
|
|||||||
2022
|
2021
|
|||||||
Weighted-average remaining lease term (years)
|
|
|
||||||
Weighted-average discount rate
|
|
%
|
|
%
|
Three months ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Operating cash paid to settle operating lease liabilities
|
$
|
|
$
|
|
||||
Right-of-use assets obtained in exchange for lease liabilities
|
$
|
|
$
|
|
Operating Leases
|
||||
Remainder of 2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
Thereafter
|
|
|||
Total undiscounted lease payments
|
$
|
|
||
Less: Imputed interest
|
|
|||
Less: Lease incentives (1)
|
|
|||
Total lease liabilities
|
$
|
|
(1)
|
|
Number of
Options
|
Weighted Average
Exercise Price
|
Weighted Average
Remaining
Contractual Term
(Years)
|
Aggregate
Intrinsic Value
|
|||||||||||||
Outstanding at December 31, 2021
|
|
$
|
|
|
$
|
|
||||||||||
Granted
|
|
|
||||||||||||||
Exercised
|
(
|
)
|
|
|||||||||||||
Forfeited
|
(
|
)
|
|
|||||||||||||
Outstanding at March 31, 2022
|
|
$
|
|
|
$
|
|
||||||||||
Options exercisable at March 31, 2022
|
|
|
|
$
|
|
|||||||||||
Vested and expected to vest at March 31, 2022
|
|
$
|
|
|
$
|
|
Number of
Shares
Underlying
RSUs
|
Weighted
Average Grant-
Date Fair Value
|
|||||||
Outstanding non-vested RSUs at December 31, 2021
|
|
$ | ||||||
Granted
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Forfeited
|
(
|
)
|
|
|||||
Outstanding non-vested RSUs at March 31, 2022
|
|
$
|
|
Three months ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Research and development
|
$
|
|
$
|
|
||||
Selling, general and administrative
|
(
|
)
|
|
|||||
Total stock-based compensation
|
$
|
(
|
)
|
$
|
|
Three months ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Numerator
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Numerator for basic and diluted EPS - loss attributable to common stockholders
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Denominator
|
||||||||
Common stock
|
|
|
||||||
Denominator for basic and diluted EPS - weighted-average common stock
|
|
|
||||||
Basic and diluted net loss per share
|
$
|
(
|
)
|
$
|
(
|
)
|
Three months ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Outstanding options to purchase common stock
|
|
|
||||||
Outstanding restricted stock units
|
|
|
||||||
Outstanding warrants
|
|
|
||||||
Outstanding convertible preferred stock (Series A through E)
|
|
|
||||||
|
|
11.
|
WARRANT LIABILITIES
|
● |
in whole and not in part;
|
● |
at a price of $
|
● |
upon not less than
|
● |
if, and only if, the closing price of the Company’s common stock equals or exceeds $
|
15.
|
SUBSEQUENT EVENTS
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Three months ended March 31,
|
||||||||||||
(in thousands, except for % changes)
|
2022
|
2021
|
% Change
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$
|
18,771
|
$
|
7,972
|
135.5
|
%
|
||||||
Selling, general and administrative
|
8,369
|
3,807
|
119.8
|
%
|
||||||||
Total operating expenses
|
27,140
|
11,779
|
130.4
|
%
|
||||||||
Loss from operations
|
(27,140
|
)
|
(11,779
|
)
|
130.4
|
%
|
||||||
Dividend income
|
855
|
-
|
nm
|
|||||||||
Change in fair value of warrant liabilities
|
2,647
|
-
|
nm
|
|||||||||
Other expense, net
|
(11,537
|
)
|
-
|
nm
|
||||||||
Loss before provision for income taxes
|
(35,175
|
)
|
(11,779
|
)
|
198.6
|
%
|
||||||
Provision for income taxes
|
-
|
-
|
nm
|
|||||||||
Net loss and comprehensive loss
|
$
|
(35,175
|
)
|
$
|
(11,779
|
)
|
198.6
|
%
|
Three months ended
March 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2022
|
2021
|
Amount
|
%
|
||||||||||||
Research and development
|
$
|
18,771
|
$
|
7,972
|
$
|
10,799
|
135.5
|
%
|
Three months ended
March 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2022
|
2021
|
Amount
|
%
|
||||||||||||
Selling, general and administrative
|
$
|
8,369
|
$
|
3,807
|
$
|
4,562
|
119.8
|
%
|
Three months ended
March 31,
|
Change
|
|||||||||||||
(in thousands, except for % changes)
|
2022
|
2021
|
Amount
|
%
|
||||||||||
Dividend income
|
$
|
855
|
$
|
-
|
$
|
855
|
nm
|
Three months ended
March 31,
|
Change
|
|||||||||||||
(in thousands, except for % changes)
|
2022
|
2021
|
Amount
|
%
|
||||||||||
Change in fair value of warrant liabilities
|
$
|
2,647
|
$
|
-
|
$
|
2,647
|
nm
|
Three months ended
March 31,
|
Change
|
|||||||||||||
(in thousands, except for % changes)
|
2022
|
2021
|
Amount
|
%
|
||||||||||
Other expense, net
|
$
|
(11,537
|
)
|
$
|
-
|
$
|
(11,537
|
)
|
nm
|
Three months ended March 31,
|
||||||||
(in thousands)
|
2022
|
2021
|
||||||
Net loss
|
$
|
(35,175
|
)
|
$
|
(11,779
|
)
|
||
Dividend income
|
(855
|
)
|
-
|
|||||
Change in fair value of warrant liabilities
|
(2,647
|
)
|
-
|
|||||
Other expense, net
|
11,537
|
-
|
||||||
Stock-based compensation
|
(714
|
)
|
457
|
|||||
Depreciation
|
452
|
213
|
||||||
Adjusted EBITDA
|
$
|
(27,402
|
)
|
$
|
(11,109
|
)
|
Three months ended
March 31,
|
||||||||
(in thousands)
|
2022
|
2021
|
||||||
Net cash (used in) provided by:
|
||||||||
Net cash used in operating activities
|
$
|
(23,229
|
)
|
$
|
(10,736
|
)
|
||
Net cash provided by (used in) investing activities
|
21,698
|
(500
|
)
|
|||||
Net cash provided by financing activities
|
730
|
980
|
||||||
Net decrease in cash and cash equivalents
|
$
|
(801
|
)
|
$
|
(10,256
|
)
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
ITEM 1. |
LEGAL PROCEEDINGS.
|
ITEM 1A. |
RISK FACTORS.
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES.
|
ITEM 4. |
MINE SAFETY DISCLOSURES.
|
ITEM 5. |
OTHER INFORMATION.
|
ITEM 6. |
EXHIBITS
|
Exhibit
Number
|
|
Exhibit Description
|
|
Filed Herewith
|
|
Incorporated by
Reference Herein
from
Form or Schedule
|
|
Filing Date
|
|
SEC File/
Reg. Number
|
10.1+
|
Separation Agreement, dated as of February 11, 2022, by and between Quantum-Si Incorporated and John Stark
|
Form 8-K
(Exhibit 10.1)
|
2/14/2022
|
001-39486
|
||||||
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
X
|
|||||||||
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
X
|
|||||||||
|
Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
|
X
|
|
|
|
|||
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
X
|
|
|
|
|||
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
X
|
|
|
|
|||
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
X
|
||||||||
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
X
|
||||||||
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
X
|
||||||||
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
X
|
QUANTUM-SI INCORPORATED
|
|||
Date: May 9, 2022
|
By:
|
/s/ Jonathan M. Rothberg, Ph.D.
|
|
Jonathan M. Rothberg, Ph.D.
|
|||
Interim Chief Executive Officer
|
|||
Date: May 9, 2022
|
By:
|
/s/ Claudia Drayton
|
|
Claudia Drayton
|
|||
Chief Financial Officer
|
1. |
I have reviewed this quarterly report on Form 10-Q of Quantum-Si Incorporated;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Jonathan M. Rothberg, Ph.D.
|
|
Jonathan M. Rothberg, Ph.D.
|
|
Interim Chief Executive Officer
|
|
(Principal Executive Officer)
|
1. |
I have reviewed this quarterly report on Form 10-Q of Quantum-Si Incorporated;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Claudia Drayton
|
|
Claudia Drayton
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
Dated: May 9, 2022
|
/s/ Jonathan M. Rothberg, Ph.D.
|
|
Jonathan M. Rothberg, Ph.D.
|
||
Interim Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Dated: May 9, 2022
|
/s/ Claudia Drayton
|
|
Claudia Drayton
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Class A Common Stock [Member] | ||
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, shares issued (in shares) | 118,972,397 | 118,025,410 |
Common stock, shares outstanding (in shares) | 118,972,397 | 118,025,410 |
Class B Common Stock [Member] | ||
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 27,000,000 | 27,000,000 |
Common stock, shares issued (in shares) | 19,937,500 | 19,937,500 |
Common stock, shares outstanding (in shares) | 19,937,500 | 19,937,500 |
ORGANIZATION AND DESCRIPTION OF BUSINESS |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS |
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Quantum-Si Incorporated (including its subsidiaries, the “Company” or
“Quantum-Si”) was originally incorporated in Delaware on June 10, 2020 as a special purpose acquisition company under the name HighCape Capital Acquisition Corp. (“HighCape”) for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination involving HighCape and one or more businesses. On June 10, 2021 (the “Closing”), the Company consummated the transaction contemplated by the Business Combination Agreement,
dated February 18, 2021 (the “Business Combination Agreement”), by and among HighCape, Tenet Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and Quantum-Si Incorporated, a Delaware corporation (“Legacy Quantum-Si”).
Pursuant to the terms of the Business Combination Agreement, a business
combination between HighCape was effected through the merger of Merger Sub with and into Legacy Quantum-Si, with Legacy Quantum-Si surviving as the surviving company and a wholly owned subsidiary of HighCape (the “Merger” and collectively with the
other transaction described in the Business Combination Agreement, the “Business Combination”). Effective as of the Closing, HighCape changed its name to Quantum-Si Incorporated and Legacy Quantum-Si changed its name to Q-SI Operations Inc. The
prior period financial information represents the financial results and condition of Legacy Quantum-Si.
The Company is an innovative life sciences company with the mission of
transforming single molecule analysis and democratizing its use by providing researchers and clinicians access to the proteome, the set of proteins expressed within a cell. The Company has developed a proprietary universal single molecule detection
platform that the Company is first applying to proteomics to enable Next Generation Protein Sequencing (“NGPS”), the ability to sequence proteins in a massively parallel fashion (rather than sequentially, one at a time), and can be used for the
study of nucleic acids. The Company’s platform is comprised of the Carbon™ automated sample preparation instrument, the Platinum™ NGPS instrument, the Quantum-Si Cloud™ software service, and reagent kits and chips for use with its instruments.
Although the Company has incurred recurring losses each year since its inception,
the Company expects its cash and cash equivalents, and marketable securities will be able to fund its operations for at least the next twelve months.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and have been prepared in
accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial
reporting. All intercompany transactions are eliminated. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.
These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial
statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated
financial statements as of that date, but does not include all disclosures, including certain notes required by U.S. GAAP, on an annual reporting basis.
In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring
adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for
any subsequent quarter, the year ending December 31, 2022, or any other period.
There have been no material changes to the Company’s significant accounting policies as described in the Company’s audited
consolidated financial statements as of and for the years ended December 31, 2021 and 2020.
COVID-19 Outbreak
The outbreak of the novel coronavirus (“COVID-19”), which was declared a pandemic by the World Health Organization on March 11, 2020 and declared a National Emergency
by the President of the United States on March 13, 2020, has led to adverse impacts on the United States and global economies and created uncertainty regarding potential impacts on the Company’s operating results, financial condition and cash
flows. The COVID-19 pandemic had, and is expected to continue to have, an adverse impact on the Company’s operations, particularly as a result of preventive and precautionary measures that the Company, other businesses, and governments are taking.
Governmental mandates related to COVID-19 or other infectious diseases, or public health crises, have impacted, and the Company expects them to continue to impact, its personnel and personnel at third-party manufacturing facilities in the United
States and other countries, and the availability or cost of materials, which would disrupt or delay the Company’s receipt of instruments, components and supplies from the third parties the Company relies on to, among other things, produce its
products currently under development. The COVID-19 pandemic has also had an adverse effect on the Company’s ability to attract, recruit, interview and hire at the pace the Company would typically expect to support its rapidly expanding operations.
To the extent that any governmental authority imposes additional regulatory requirements or changes existing laws, regulations, and policies that apply to the Company’s business and operations, such as additional workplace safety measures, the
Company’s product development plans may be delayed, and the Company may incur further costs in bringing its business and operations into compliance with changing or new laws, regulations, and policies. The full extent to which the COVID-19 pandemic
will directly or indirectly impact the Company’s business, results of operations and financial condition, including expenses and research and development costs, will depend on future developments that are highly uncertain, including as a result of
new information that may emerge concerning COVID-19 and the actions taken to contain or treat COVID-19, as well as the economic impacts.
The estimates of the impact on the Company’s business may change based on new information that may emerge concerning COVID-19 and the actions to
contain it or address its impact and the economic impact on local, regional, national and international markets as well as other changes in macroeconomic factors. The COVID-19 pandemic and related economic disruptions have not had a material
adverse impact on the Company’s operations to date. While the Company is unable to predict the full impact that the COVID-19 pandemic will have on the Company’s future results of operations, liquidity and financial condition due to numerous
uncertainties, including the duration of the pandemic, the actions that may be taken by government authorities across the United States, adverse changes in macroeconomic conditions, if sustained or recurrent, could result in significant changes
in costs going forward with material adverse effect on the Company’s operating results, financial condition, and cash flows.
The Company has not incurred any significant impairment losses in the carrying values of the Company’s assets as a result of the COVID-19 pandemic and is not aware of
any specific related event or circumstance that would require the Company to revise its estimates reflected in its condensed consolidated financial statements.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents and marketable securities.
As of March 31, 2022 and December 31, 2021, substantially all of the Company’s cash and cash equivalents and marketable securities were invested in fixed income mutual funds at one financial institution. The Company also maintains balances in
various operating accounts above federally insured limits. The Company has not experienced any significant losses on such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents and marketable
securities.
Reclassifications
Certain prior year amounts have been reclassified for consistency with the current year’s presentation.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity
with U.S. GAAP requires the Company to make estimates and assumptions about future events that affect the amounts reported in its condensed consolidated financial statements and accompanying notes. Future events and their effects cannot be
determined with certainty. On an ongoing basis, management evaluates these estimates and assumptions. Significant estimates and assumptions included:
The Company bases these estimates on historical and anticipated results and trends
and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. Changes in estimates are recorded in the period in which they become known. Actual results could differ
from those estimates, and any such differences may be material to the Company’s condensed consolidated financial statements.
Investments in Marketable Securities
The Company’s investments in marketable securities consist of ownership
interests in fixed income mutual funds. The securities are stated at fair value, as determined by quoted market prices. As the securities have readily determinable fair value, unrealized gains and losses are reported as Other expense, net on
the condensed consolidated statements of operations and comprehensive loss. Subsequent gains or losses realized upon redemption or sale of these securities are also recorded as Other expense, net on the condensed consolidated statements of
operations and comprehensive loss. The Company considers all of its investments in marketable securities as available for use in current operations and therefore classifies these securities within current assets on the condensed consolidated
balance sheets. For the three months ended March 31, 2022, the Company recognized $11,511 of unrealized losses related to securities
still held as of March 31, 2022 and $50 of realized losses related to securities that matured or were sold during the three months
ended March 31, 2022.
Leases
Effective
December 31, 2021, the Company lost its emerging growth company status which accelerated the adoption of Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The Company’s adoption of ASU 2016-02 was effective retrospectively to January 1, 2021, the beginning of the year.
In accordance with ASU 2016-02, for arrangements in existence as of January 1, 2021 and any new arrangements entered into thereafter, the Company determines if an arrangement is a lease at inception and records right-of-use (“ROU”)
assets and lease liabilities on the condensed consolidated balance sheets at lease commencement.
The Company’s leases generally do not have a readily determinable implicit
discount rate. As such, the Company uses an incremental borrowing rate based on the information available at the lease commencement date to determine the present value of the lease payments. The Company’s incremental borrowing rate is the
estimated rate that would be required to pay for a collateralized borrowing equal to the total lease payment over the lease term. The Company measures ROU assets based on the corresponding lease liability adjusted for (i) payments made to the
lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it
will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term for operating leases. Finance leases will result in a front-loaded expense pattern. With respect to finance leases,
amortization of the ROU asset is presented separately from interest expense related to the finance lease liability. In addition, the Company does not have significant residual value guarantees or restrictive covenants in the lease portfolio.
The Company expenses monthly rental payments as incurred in Selling, general
and administrative and in Research and development in the condensed consolidated statements of operations and comprehensive loss. The Company’s lease agreements contain variable lease costs for common area maintenance, utilities, taxes and
insurance, which are expensed as incurred.
As a result of its adoption of the new lease standard effective January 1, 2021, the Company has implemented new accounting policies and processes which
changed the Company’s internal controls over financial reporting for lease accounting.
Goodwill
Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized;
rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Beginning in 2022, the Company will review goodwill for possible impairment annually during the fourth quarter as of October 1, or whenever
events or circumstances indicate that the carrying amount may not be recoverable.
In order to test goodwill for impairment, an entity is permitted to first assess qualitative factors to determine whether a quantitative assessment
of goodwill is necessary. The qualitative factors considered by the Company may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted
financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further
impairment testing is required. If a quantitative assessment is required, the Company determines the fair value of its reporting unit using a combination of the income and market approaches. If the net book value of the reporting unit exceeds
its fair value, the Company recognizes a goodwill impairment charge for the reporting unit equal to the lesser of (i) the total goodwill allocated to that reporting unit and (ii) the amount by which that reporting unit’s carrying amount
exceeds its fair value. Assumptions and estimates used in the evaluation of impairment may affect the carrying value of long-lived assets, which could result in impairment charges in future periods. Such assumptions include projections of
future cash flows and the current fair value of the asset. No impairments were recorded for the three months ended March 31, 2022.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment at least annually or
when the Company determines a triggering event has occurred. When a triggering event has occurred, each impairment test is based on a comparison of the future expected undiscounted cash flow to the recorded value of the asset. If the recorded
value of the asset is less than the undiscounted cash flow, the asset is written down to its estimated fair value. No
impairments were recorded for the three months ended March 31, 2022 or 2021.
Warrant Liabilities
The Company’s outstanding warrants include publicly-traded warrants (the “Public Warrants”) which were issued as Derivatives and Hedging-Contracts in
Entity’s Own Equity (“ASC 815-40”), and concluded that they do not meet the criteria to be classified in stockholders’ equity. Since the Public Warrants and Private Warrants meet the definition of a derivative under ASC 815-40, the Company
recorded these warrants as long-term liabilities on the condensed consolidated balance sheet at fair value upon the Closing of the Business Combination, with subsequent changes in their respective fair values recognized in the condensed
consolidated statements of operations and comprehensive loss at each reporting date.
of one redeemable warrant per unit issued during HighCape’s initial public offering on September 9, 2020, and warrants sold in a private placement (the “Private
Warrants”) to HighCape’s sponsor, HighCape Capital Acquisition LLC (the “Sponsor”). The Company evaluated its warrants under Accounting Standards Codification (“ASC”) 815-40, Recently Issued Accounting Pronouncements
Accounting
pronouncements issued but not yet adopted
No new accounting pronouncement issued or effective during the three months ended March 31, 2022 had, or is expected to have, a material impact
on the Company’s condensed consolidated financial statements.
|
BUSINESS COMBINATION |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
HighCape [Member] | |
BUSINESS COMBINATION [Abstract] | |
BUSINESS COMBINATION |
3. BUSINESS COMBINATION
As discussed in Note 1, “Organization and Description of Business,” on June 10, 2021, the Company consummated the Business
Combination, with Legacy Quantum-Si surviving the Merger as a wholly owned subsidiary of the Company.
Pursuant to the Business Combination Agreement, at the effective time of the Merger (the “Effective
Time”), each share of Legacy Quantum-Si capital stock (other than shares of Legacy Quantum-Si Series A preferred stock) that was issued and outstanding was automatically cancelled and extinguished and converted into the right to receive 0.7975 (the “Exchange Ratio”) shares of the Company’s Class A common stock, and each share of Legacy Quantum-Si Series A preferred stock that was issued
and outstanding was automatically cancelled and extinguished and converted into the right to receive the number of shares of the Company’s Class B common stock equal to the Exchange Ratio.
The total number of shares of the Company’s Class A common stock outstanding immediately following the
Closing was 116,463,160, and the total number of the Company’s Class B common stock outstanding immediately following the Closing was 19,937,500.
In connection with the Business Combination, certain institutional investors purchased from the Company
an aggregate of 42,500,000 shares of the Company’s Class A common stock for a purchase price of $10.00 per share and an aggregate purchase price of $425,001
pursuant to separate subscription agreements entered into effective as of February 18, 2021. In addition, pursuant to subscription agreements entered into effective as of February 18, 2021, certain affiliates of Foresite Capital Management, LLC
purchased an aggregate of 696,250 shares of the Company’s Class A common stock at a purchase price of $0.001 per share for aggregate purchase price of $1
after a corresponding number of shares of the Company’s Class B common stock was irrevocably forfeited by the Sponsor to HighCape for no consideration and automatically cancelled.
The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP
primarily due to the fact that Legacy Quantum-Si stockholders continued to control the Company following the Closing of the Business Combination. Under this method of accounting, HighCape is treated as the “acquired” company for accounting purposes
and the Business Combination is treated as the equivalent of Legacy Quantum-Si issuing stock for the net assets of HighCape, accompanied by a recapitalization. The net assets of HighCape are stated at historical cost, with no goodwill or other
intangible assets recorded. Reported shares and earnings per share available to holders of the Company’s capital stock and equity awards prior to the Business Combination have been retroactively restated reflecting the Exchange Ratio.
Upon the Closing, the Company’s certificate of incorporation was amended and restated to, among other
things, adopt a dual class structure, comprised of the Company’s Class A common stock, which is entitled to one vote per share, and the
Company’s Class B common stock, which is entitled to 20 votes per share. The Company’s Class B common stock has the same economic terms
as the Company’s Class A common stock, but is subject to a “sunset” provision if Jonathan M. Rothberg, Ph.D., the founder of Legacy Quantum-Si, Interim Chief Executive Officer and Executive Chairman of the Company (“Dr. Rothberg”), and other
permitted holders of the Company’s Class B common stock collectively cease to beneficially own at least twenty percent (20%) of the
number of shares of the Company’s Class B common stock (as such number of shares is equitably adjusted in respect of any reclassification, stock dividend, subdivision, combination or recapitalization of the Company’s Class B common stock)
collectively held by Dr. Rothberg and permitted transferees of the Company’s Class B common stock as of the Effective Time.
|
ACQUISITION |
3 Months Ended | |||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||
Majelac Technologies LLC [Member] | ||||||||||||||||||||||||||
ACQUISITION [Abstract] | ||||||||||||||||||||||||||
ACQUISITION |
4. ACQUISITION
Majelac Technologies LLC
Pursuant to the terms and conditions of an Asset Purchase Agreement by and among the Company, Majelac
Technologies LLC (“Majelac”), and certain other parties, on November 5, 2021 (the “Closing Date”), the Company acquired certain assets and assumed certain liabilities of Majelac, a privately-owned company providing semiconductor chip assembly and
packaging capabilities located in Pennsylvania, for $4,632 in cash including $132 in reimbursement for certain recently purchased equipment, and 535,715
shares of Class A common stock, valued at $4,232, issued to Majelac subject to certain restrictions. An additional 59,523 shares of Class A common stock valued at $471
will be issued to Majelac 12 months after the Closing Date less the number of shares of Class A common stock that may be required by the
buyer indemnitees to satisfy any unresolved claims for indemnification, if any. The Company also assumed the legal fees of Majelac of $50.
Additional purchase price consideration of $500 in cash will be paid six months after the Closing date less any amount that may be required by the buyer indemnitees to satisfy any unresolved claims for indemnification, if any. The Company may pay
up to an additional $800 valued at $531
subject to certain future milestones being met. The acquisition brings semiconductor chip assembly and packaging capabilities in-house to secure the Company’s supply chain and support scaling commercialization efforts. Prior to the acquisition,
Majelac was a vendor of the Company. On May 4, 2022, the Company paid Majelac $500 in cash for the additional purchase price consideration
and $400 in cash since the of two milestones was met.
The following table summarizes the preliminary purchase price allocation at the acquisition date as follows:
The above estimated fair values of consideration transferred, assets acquired and liabilities assumed are
provisional and are based on the information that was available as of the acquisition date. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. Thus, the
preliminary measurements of fair value set forth above may be subject to change. The Company expects to finalize the valuation as soon as practicable but no later than one year from the acquisition date.
Goodwill represents the excess of the consideration transferred over the aggregate fair values of assets
acquired and liabilities assumed. The goodwill recorded in connection with this acquisition was based on operating synergies and other benefits expected to result from the combined operations. The goodwill acquired is amortizable for tax purposes
over a period of 15 years.
Acquisition-related costs recognized for the three months ended March 31, 2022 including transaction
costs such as legal, accounting, valuation and other professional services, were $25 and are included in Selling, general and
administrative on the condensed consolidated statements of operations and comprehensive loss.
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FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS |
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial
instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value.
The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an
orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
The carrying value of cash and cash equivalents, accounts payable and accrued expenses and other current liabilities approximates their fair values due to the
short-term or on demand nature of these instruments. There were no transfers between fair value measurement levels during the three
months ended March 31, 2022. The Company accounted for the warrants as liabilities in accordance with ASC 815-40 and are presented as Warrant liabilities on the condensed consolidated balance sheets. The warrant liabilities are measured at fair
value at inception and on a recurring basis, with changes in fair value presented as Change in fair value of warrant liabilities in the condensed consolidated statements of operations and comprehensive loss.
The Public Warrants and Private Warrants were carried at fair value as of March 31, 2022. The Public Warrants were valued using Level 1 inputs as they are traded in an
active market. The Private Warrants were valued using a binomial lattice model, which results in a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Warrants was the expected
volatility of the Company’s Class A common stock. The expected volatility was based on consideration of the implied volatility from the Company’s own public warrant pricing and on the historical volatility observed at guideline public companies. As
of March 31, 2022, the significant assumptions used in preparing the binomial lattice model for valuing the Private Warrants liability include (i) volatility of 64.1%, (ii) risk-free interest rate of 2.42%, (iii) strike price of $11.50, (iv) fair value of common stock of $4.68,
and (v) expected life of 4.4 years.
Fixed income mutual funds were valued using quoted market prices and accordingly
were classified as Level 1.
The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy:
|
PROPERTY AND EQUIPMENT, NET |
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET |
6. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, are recorded at historical cost and consist of the following:
Depreciation expense amounted to $452 and $213 for the three months ended March 31, 2022 and 2021, respectively.
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
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LEASES |
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES |
8. LEASES
The Company has commitments under lease arrangements for office and manufacturing space and office equipment. The Company’s leases have initial lease terms ranging
from one year to 10
years. These leases include options to extend or renew the leases for an additional period of
to 10 years.Operating leases are accounted for on the condensed consolidated balance sheets with ROU assets being recognized in “Operating lease right-of-use assets” and lease
liabilities recognized in “Short-term operating lease liabilities” and “Operating lease liabilities”. Lease-related costs are included in Research and development and Selling, general and administrative in the condensed consolidated statements of
operations and comprehensive loss.
Lease-related costs for the three months ended March 31, 2022 and 2021 are as follows:
Other information related to operating leases as of March 31, 2022 and December 31, 2021 is as follows:
The following table provides certain cash flow and supplemental cash flow information related to the Company’s lease liabilities for the three months ended March 31,
2022 and 2021:
Future minimum lease payments under non-cancellable leases as of March 31, 2022 are as follows:
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EQUITY INCENTIVE PLAN |
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY INCENTIVE PLAN [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY INCENTIVE PLAN |
9. EQUITY INCENTIVE PLAN
The Company’s 2013 Employee, Director and Consultant Equity Incentive Plan, as amended on March 12, 2021 (the “2013 Plan”), was originally adopted by its Board of
Directors and stockholders in September 2013. In connection with the Closing of the Business Combination, the Company adjusted the equity awards as described in Note 3 “Business Combination”. The adjustments to the awards did not result in
incremental expense as the equitable adjustments were made pursuant to a preexisting nondiscretionary antidilution provision in the 2013 Plan, and the fair-value, vesting conditions, and classification are the same immediately before and after
the modification. In connection with the Business Combination, HighCape’s stockholders approved and adopted the Quantum-Si Incorporated 2021 Equity Incentive Plan (the “2021 Plan”) and the Company no longer makes issuances under the 2013 Plan.
The 2021 Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock or cash-based awards. Directors, officers and other employees of the Company and its subsidiaries, as well as
others performing consulting or advisory services for the Company, are eligible for grants under the 2021 Plan.
Stock option activity
During the three months ended March 31, 2022, the Company granted 4,371,150 option awards subject to service conditions. The service condition requires the participant’s continued employment with the Company through the applicable vesting
date. Stock-based compensation for stock options for the three months ended March 31, 2022 and 2021 was $1,494 and $457, respectively.
A summary of the stock option activity under the 2013 Plan and the 2021 Plan is presented in the table below:
Restricted stock unit activity
During the three months ended March 31, 2022, the Company did not grant any
restricted stock unit (“RSU”) awards. On February 8, 2022, John Stark, the Company’s then-Chief Executive Officer and member of its board of directors, stepped down from all of his positions with the Company. As a result of Mr. Stark
not meeting the service conditions of certain awards previously granted to him, 1,731,371 RSU awards were forfeited resulting in a reversal of stock-based compensation for the three months ended March 31, 2022 of $4,742. Stock-based compensation for RSU awards for the three months ended March 31, 2022 and 2021 was $(2,208) and $0, respectively.
A summary of the RSU activity under the 2013 Plan and the 2021 Plan is presented in the table below:
The Company’s stock-based compensation is allocated to the following operating expense categories as follows:
|
NET LOSS PER SHARE |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE |
10. NET LOSS PER SHARE
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock of the Company outstanding during the period.
Diluted net loss per share is computed by giving effect to all common share equivalents of the Company, including those presented in the table below, to the extent dilutive. Basic and diluted net loss per share was the same for each period
presented as the inclusion of all common share equivalents would have been anti-dilutive.
The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock:
Since the Company was in a net loss position for all periods presented, the basic net loss per shares calculation excludes preferred stock as it does not participate
in net losses of the Company. Additionally, net loss per share attributable to Class A and Class B common stockholders was the same on a basic and diluted basis, as the inclusion of all potential common equivalent shares outstanding would have
been anti-dilutive. Anti-dilutive
common equivalent shares were as follows:
|
WARRANT LIABILITIES |
3 Months Ended | ||||||||||||||
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Mar. 31, 2022 | |||||||||||||||
WARRANT LIABILITIES [Abstract] | |||||||||||||||
WARRANT LIABILITIES |
Public Warrants
As of March 31, 2022, there were an aggregate of 3,833,319
outstanding Public Warrants, which entitle the holder to acquire Class A common stock. Each whole warrant entitles the registered holder to purchase one
share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment as discussed below, beginning on September 9,
2021. The warrants will expire on June 10, 2026 or earlier upon redemption or liquidation.
Redemptions
At any time while the warrants are exercisable, the Company may redeem not less than all of the outstanding Public Warrants:
If the foregoing conditions are satisfied and the Company issues a notice of redemption of the Public Warrants at $0.01 per warrant, each holder of Public Warrants will be entitled to exercise his, her or its Public Warrants prior to the scheduled redemption date.
If the Company calls the Public Warrants for redemption for $0.01
as described above, the Company’s Board of Directors may elect to require any holder that wishes to exercise his, her or its Public Warrants to do so on a “cashless basis.” If the Company’s Board of Directors makes such election, all holders of
Public Warrants would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the
warrants, multiplied by the excess of the “fair market value” over the exercise price of the warrants by (y) the “fair market value”. For purposes of the redemption provisions of the warrants, the “fair market value” means the average last reported
sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of
redemption is sent to the holders of warrants.
The Company evaluated the Public Warrants under ASC 815-40, in conjunction with the SEC Division of Corporation Finance’s April 12, 2021 Public Statement, Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Statement”), and concluded that they do not meet the criteria to be
classified in stockholders’ equity. Specifically, the exercise of the warrants may be settled in cash upon the occurrence of a tender offer or exchange offer in which the maker of the tender offer or exchange offer, upon completion of the tender
offer or exchange offer, beneficially owns more than 50% of the outstanding shares of the Company’s Class A common stock, even if it would
not result in a change of control of the Company. This provision would preclude the warrants from being classified in equity and thus the warrants should be classified as a liability.
Private Warrants
As of March 31, 2022, there were 135,000 Private Warrants
outstanding. The Private Warrants are identical to the Public Warrants, except that so long as they are held by the Sponsor or any of its permitted transferees, (i) the Private Warrants and the shares of Class A common stock issuable upon the
exercise of the Private Warrants were not transferable, assignable or saleable until 30 days after the completion of the Business
Combination, (ii) the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and (iii) the Private Warrants are not subject to the Company’s redemption option at the price of $0.01 per warrant. The Private Warrants are subject to the Company’s redemption option at the price of $0.01 per warrant, provided that the other conditions of such redemption are met, as described above. If the Private Warrants are held by a holder other than the Sponsor or any of
its permitted transferees, the Private Warrants will be redeemable by the Company in all redemption scenarios applicable to the Public Warrants and exercisable by such holders on the same basis as the Public Warrants.
The Company evaluated the Private Warrants under ASC 815-40, in conjunction with the SEC Statement, and concluded that they do
not meet the criteria to be classified in stockholders’ equity. Specifically, the terms of the warrants provide for potential changes to the settlement amounts depending upon the characteristics of the warrant holder, and, because the holder of a
warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude the warrant from being classified in equity and thus the warrant has been classified as a liability.
The fair value of warrant liabilities was $4,592
as of March 31, 2022. The Company recognized a gain of $2,647 as a Change in fair value of warrant liabilities in the condensed
consolidated statement of operations and comprehensive loss for the three months ended March 31, 2022. There were no exercises or
redemptions of the Public Warrants or Private Warrants during the three months ended March 31, 2022.
|
INCOME TAXES |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
INCOME TAXES [Abstract] | |
INCOME TAXES |
12. INCOME TAXES
Income taxes for the three months ended March 31, 2022 and 2021 are recorded at the Company’s estimated annual effective income tax rate,
subject to adjustments for discrete events, if they occur. The Company’s estimated annual effective tax rate was 0.0% for the
three months ended March 31, 2022 and 2021. The primary reconciling items between the federal statutory rate of 21.0% for these
periods and the Company’s overall effective tax rate of 0.0% were related to the effects of deferred state income taxes,
nondeductible stock-based compensation, changes in the fair value of warrant liabilities, research and development credits, and the valuation allowance recorded against the full amount of its net deferred tax assets.
A valuation allowance is required when it is more likely than not that some portion or all of the Company’s deferred tax assets will not be realized. The realization
of deferred tax assets depends on the generation of sufficient future taxable income during the period in which the Company’s related temporary differences become deductible. The Company has recorded a full valuation allowance against its net
deferred tax assets as of March 31, 2022 and 2021 since management believes that based on the earnings history of the Company, it is more likely than not that the benefits of these assets will not be realized.
As a result of the Business Combination, as well as any other equity issuances during the year, the Company is currently evaluating whether an ownership change has
occurred under Section 382 of the Internal Revenue Code of 1986, as amended, and whether the Company’s ability to use its pre-change net operating loss and tax credit carryforwards will be limited in future periods. The Company expects to
complete its analysis during 2022.
|
RELATED PARTY TRANSACTIONS |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS |
13. RELATED PARTY TRANSACTIONS
The Company utilizes and subleases office and laboratory space in a building owned by a related party. The Company paid $80 under month-to-month lease arrangements for this space for the three months ended March 31, 2022 and 2021.
The Company was a party to an Amended and Restated Technology Services
Agreement (the “ARTSA”), most recently amended on November 11, 2020, by and among 4Catalyzer Corporation (“4C”), the Company and other participant companies controlled by the Rothberg family. The Company entered into a First Addendum to the
ARTSA on February 17, 2021 pursuant to which the Company agreed to terminate its participation under the ARTSA no later than immediately prior to the Effective Time of the Business Combination, resulting in the termination of the Company’s
participation under the ARTSA on June 10, 2021. In connection with the termination of the Company’s participation under the ARTSA, the Company terminated its lease agreement with 4C and negotiated an arm’s length lease agreement. Under the
ARTSA, the Company and the other participant companies had agreed to share certain non-core technologies, which means any technologies, information or equipment owned or otherwise controlled by the participant company that are not
specifically related to the core business area of the participant and subject to certain restrictions on use. The ARTSA also provided for 4C to perform certain services for the Company and each other participant company such as monthly
administrative, management and technical consulting services to the Company which were pre-funded approximately once per quarter. The Company incurred expenses of $210 and $535, which included $50
and $38 under month-to-month sublease arrangements for office and laboratory spaces from 4C, during the three months ended March
31, 2022 and 2021, respectively. The amounts advanced and due to 4C at March 31, 2022 and December 31, 2021, related to operating expenses was $140, of which $72 is included in Accrued expenses and other current
liabilities and $68 is included in Accounts payable, and $128, which is included in Accounts payable on the condensed consolidated balance sheets, respectively.
The ARTSA also provided for the participant companies to provide other services to each other. The Company also had transactions with other
entities under common ownership, which included payments made to third parties on behalf of the Company. The amounts remaining payable at March 31, 2022 and December 31, 2021 were $0 and $17, respectively, and are included in the Accounts payable on the
condensed consolidated balance sheets. In addition, the Company had transactions with these other entities under common ownership which included payments made by the Company to third parties on behalf of the other entities. The amounts
remaining payable at March 31, 2022 and December 31, 2021 are in the aggregate $16 and $15, respectively, and are reflected in the Prepaid expenses and other current assets on the condensed consolidated balance sheets.
On September 20, 2021, the Company entered into a Binders Collaboration (the “Collaboration”) with Protein Evolution, Inc. (“PEI”) to develop
technology and methods in the field of nanobodies and potentially other binders to produce novel biological reagents and related data. The Collaboration is made pursuant to and governed by the Technology and Services Exchange Agreement,
effective as of June 10, 2021, by and among the Company and the participants named therein, including PEI. Dr. Rothberg serves as Chairman of the Board of Directors of PEI and the Rothberg family are controlling stockholders of PEI. There was no
amount payable at December 31, 2021. The amount payable at March 31, 2022 was $1,135 and is reflected in Accrued expenses and other current liabilities on the condensed consolidated balance sheets. Effective March 31,
2022, the Collaboration with PEI was terminated. On May 5, 2022, the Company paid PEI $1,135 under the Collaboration.
Dr. Rothberg and the Company entered into an Executive Chairman Agreement as of June 10, 2021 (the “Executive Chairman Agreement”) in which
Dr. Rothberg provides consulting services to the Company for $400 annually. In addition to the Executive Chairman Agreement, Dr.
Rothberg also receives fees as the Company’s Chairman of the Board of Directors and a member of the Nominating and Corporate Governance Committee. Quantum-Si paid $114 to Dr. Rothberg for the three months ended March 31, 2022 for the services that were provided to the Company. Dr. Rothberg does not receive any additional compensation for serving
as the Company’s Interim Chief Executive Officer.
|
COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES |
14. COMMITMENTS AND CONTINGENCIES
Commitments
Licenses related to certain intellectual property:
The Company licenses certain intellectual property, some of which may be utilized in its future product offering. To preserve the right to use such intellectual
property, the Company is required to make annual minimum fixed payments totaling $220. Once the Company commercializes its product and
begins to generate revenues, there will be royalties payable by the Company based on the current anticipated utilization.
Other commitments:
The Company sponsors a 401(k) defined contribution plan covering all eligible U.S. employees. Contributions to the 401(k) plan are discretionary. The Company did not make any matching contributions to the 401(k) plan for the three months ended March 31, 2022 and 2021.
Contingencies
The Company is subject to claims in the ordinary course of business; however, the Company is not currently a party to any pending or threatened litigation, the outcome
of which would be expected to have a material adverse effect on its financial condition or the results of its operations. The Company accrues for contingent liabilities to the extent that the liability is probable and estimable.
The Company enters into agreements that contain indemnification provisions with other parties in the ordinary course of business, including business partners,
investors, contractors, and the Company’s officers, directors and certain employees. The Company has agreed to indemnify and defend the indemnified party claims and related losses suffered or incurred by the indemnified party from actual or
threatened third-party claims because of the Company’s activities or non-compliance with certain representations and warranties made by the Company. It is not possible to determine the maximum potential loss under these indemnification provisions
due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in any particular case. To date, losses recorded in the Company’s condensed consolidated statements of operations and comprehensive
loss in connection with the indemnification provisions have not been material.
|
SUBSEQUENT EVENTS |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 | |||
SUBSEQUENT EVENTS [Abstract] | |||
SUBSEQUENT EVENTS |
In April 2022, the Company entered into a lease for a facility in Branford, Connecticut for a term of approximately 7 years. Future minimum lease payments under this lease are $1,156.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||
Basis of Presentation and Principles of Consolidation |
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and have been prepared in
accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial
reporting. All intercompany transactions are eliminated. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.
These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial
statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated
financial statements as of that date, but does not include all disclosures, including certain notes required by U.S. GAAP, on an annual reporting basis.
In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring
adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for
any subsequent quarter, the year ending December 31, 2022, or any other period.
There have been no material changes to the Company’s significant accounting policies as described in the Company’s audited
consolidated financial statements as of and for the years ended December 31, 2021 and 2020.
|
|||||||||||||||
Concentration of Credit Risk |
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents and marketable securities.
As of March 31, 2022 and December 31, 2021, substantially all of the Company’s cash and cash equivalents and marketable securities were invested in fixed income mutual funds at one financial institution. The Company also maintains balances in
various operating accounts above federally insured limits. The Company has not experienced any significant losses on such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents and marketable
securities.
|
|||||||||||||||
Reclassifications |
Reclassifications
Certain prior year amounts have been reclassified for consistency with the current year’s presentation.
|
|||||||||||||||
Use of Estimates |
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity
with U.S. GAAP requires the Company to make estimates and assumptions about future events that affect the amounts reported in its condensed consolidated financial statements and accompanying notes. Future events and their effects cannot be
determined with certainty. On an ongoing basis, management evaluates these estimates and assumptions. Significant estimates and assumptions included:
The Company bases these estimates on historical and anticipated results and trends
and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. Changes in estimates are recorded in the period in which they become known. Actual results could differ
from those estimates, and any such differences may be material to the Company’s condensed consolidated financial statements.
|
|||||||||||||||
Investments in Marketable Securities |
Investments in Marketable Securities
The Company’s investments in marketable securities consist of ownership
interests in fixed income mutual funds. The securities are stated at fair value, as determined by quoted market prices. As the securities have readily determinable fair value, unrealized gains and losses are reported as Other expense, net on
the condensed consolidated statements of operations and comprehensive loss. Subsequent gains or losses realized upon redemption or sale of these securities are also recorded as Other expense, net on the condensed consolidated statements of
operations and comprehensive loss. The Company considers all of its investments in marketable securities as available for use in current operations and therefore classifies these securities within current assets on the condensed consolidated
balance sheets. For the three months ended March 31, 2022, the Company recognized $11,511 of unrealized losses related to securities
still held as of March 31, 2022 and $50 of realized losses related to securities that matured or were sold during the three months
ended March 31, 2022.
|
|||||||||||||||
Leases |
Leases
Effective
December 31, 2021, the Company lost its emerging growth company status which accelerated the adoption of Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The Company’s adoption of ASU 2016-02 was effective retrospectively to January 1, 2021, the beginning of the year.
In accordance with ASU 2016-02, for arrangements in existence as of January 1, 2021 and any new arrangements entered into thereafter, the Company determines if an arrangement is a lease at inception and records right-of-use (“ROU”)
assets and lease liabilities on the condensed consolidated balance sheets at lease commencement.
The Company’s leases generally do not have a readily determinable implicit
discount rate. As such, the Company uses an incremental borrowing rate based on the information available at the lease commencement date to determine the present value of the lease payments. The Company’s incremental borrowing rate is the
estimated rate that would be required to pay for a collateralized borrowing equal to the total lease payment over the lease term. The Company measures ROU assets based on the corresponding lease liability adjusted for (i) payments made to the
lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it
will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term for operating leases. Finance leases will result in a front-loaded expense pattern. With respect to finance leases,
amortization of the ROU asset is presented separately from interest expense related to the finance lease liability. In addition, the Company does not have significant residual value guarantees or restrictive covenants in the lease portfolio.
The Company expenses monthly rental payments as incurred in Selling, general
and administrative and in Research and development in the condensed consolidated statements of operations and comprehensive loss. The Company’s lease agreements contain variable lease costs for common area maintenance, utilities, taxes and
insurance, which are expensed as incurred.
As a result of its adoption of the new lease standard effective January 1, 2021, the Company has implemented new accounting policies and processes which
changed the Company’s internal controls over financial reporting for lease accounting.
|
|||||||||||||||
Goodwill |
Goodwill
Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized;
rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Beginning in 2022, the Company will review goodwill for possible impairment annually during the fourth quarter as of October 1, or whenever
events or circumstances indicate that the carrying amount may not be recoverable.
In order to test goodwill for impairment, an entity is permitted to first assess qualitative factors to determine whether a quantitative assessment
of goodwill is necessary. The qualitative factors considered by the Company may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted
financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further
impairment testing is required. If a quantitative assessment is required, the Company determines the fair value of its reporting unit using a combination of the income and market approaches. If the net book value of the reporting unit exceeds
its fair value, the Company recognizes a goodwill impairment charge for the reporting unit equal to the lesser of (i) the total goodwill allocated to that reporting unit and (ii) the amount by which that reporting unit’s carrying amount
exceeds its fair value. Assumptions and estimates used in the evaluation of impairment may affect the carrying value of long-lived assets, which could result in impairment charges in future periods. Such assumptions include projections of
future cash flows and the current fair value of the asset. No impairments were recorded for the three months ended March 31, 2022.
|
|||||||||||||||
Impairment of Long-Lived Assets |
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment at least annually or
when the Company determines a triggering event has occurred. When a triggering event has occurred, each impairment test is based on a comparison of the future expected undiscounted cash flow to the recorded value of the asset. If the recorded
value of the asset is less than the undiscounted cash flow, the asset is written down to its estimated fair value. No
impairments were recorded for the three months ended March 31, 2022 or 2021.
|
|||||||||||||||
Warrant Liabilities |
Warrant Liabilities
The Company’s outstanding warrants include publicly-traded warrants (the “Public Warrants”) which were issued as Derivatives and Hedging-Contracts in
Entity’s Own Equity (“ASC 815-40”), and concluded that they do not meet the criteria to be classified in stockholders’ equity. Since the Public Warrants and Private Warrants meet the definition of a derivative under ASC 815-40, the Company
recorded these warrants as long-term liabilities on the condensed consolidated balance sheet at fair value upon the Closing of the Business Combination, with subsequent changes in their respective fair values recognized in the condensed
consolidated statements of operations and comprehensive loss at each reporting date.
of one redeemable warrant per unit issued during HighCape’s initial public offering on September 9, 2020, and warrants sold in a private placement (the “Private
Warrants”) to HighCape’s sponsor, HighCape Capital Acquisition LLC (the “Sponsor”). The Company evaluated its warrants under Accounting Standards Codification (“ASC”) 815-40, |
|||||||||||||||
Recently Issued Accounting Pronouncements |
Recently Issued Accounting Pronouncements
Accounting
pronouncements issued but not yet adopted
No new accounting pronouncement issued or effective during the three months ended March 31, 2022 had, or is expected to have, a material impact
on the Company’s condensed consolidated financial statements.
|
ACQUISITION (Tables) |
3 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||||||||||||
BUSINESS COMBINATION/ACQUISITION [Abstract] | ||||||||||||||||||||||||||
Purchase Price Allocation for Majelac Technologies LLC |
The following table summarizes the preliminary purchase price allocation at the acquisition date as follows:
|
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis |
The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy:
|
PROPERTY AND EQUIPMENT, NET (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net |
Property and equipment, net, are recorded at historical cost and consist of the following:
|
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities |
Accrued expenses and other current liabilities consist of the following:
|
LEASES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease-Related Costs |
Lease-related costs for the three months ended March 31, 2022 and 2021 are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Information Related to Operating Leases |
Other information related to operating leases as of March 31, 2022 and December 31, 2021 is as follows:
The following table provides certain cash flow and supplemental cash flow information related to the Company’s lease liabilities for the three months ended March 31,
2022 and 2021:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease Payments Under Non-Cancellable Leases |
Future minimum lease payments under non-cancellable leases as of March 31, 2022 are as follows:
|
EQUITY INCENTIVE PLAN (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY INCENTIVE PLAN [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Activity |
A summary of the stock option activity under the 2013 Plan and the 2021 Plan is presented in the table below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Activity |
A summary of the RSU activity under the 2013 Plan and the 2021 Plan is presented in the table below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense |
The Company’s stock-based compensation is allocated to the following operating expense categories as follows:
|
NET LOSS PER SHARE (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Net Loss Per Share |
The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Anti-Dilutive Common Equivalent Shares | Anti-dilutive
common equivalent shares were as follows:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Sep. 09, 2020 |
|
Investments in Marketable Securities [Abstract] | |||
Unrealized losses on marketable securities | $ (11,511) | ||
Realized losses on marketable securities | (50) | ||
Goodwill [Abstract] | |||
Impairments | 0 | ||
Impairment of Long-Lived Assets [Abstract] | |||
Impairments | $ 0 | $ 0 | |
Warrant Liabilities [Abstract] | |||
Number of warrants issued per unit issued during IPO (in shares) | 0.33 |
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Property and Equipment, Net [Abstract] | |||
Property and equipment | $ 15,478 | $ 12,783 | |
Less: Accumulated depreciation | (4,327) | (3,875) | |
Property and equipment, net | 11,151 | 8,908 | |
Depreciation and amortization expense | 452 | $ 213 | |
Laboratory and Production Equipment [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment | 9,209 | 7,465 | |
Computer Equipment [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment | 907 | 637 | |
Software [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment | 179 | 156 | |
Furniture and Fixtures [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment | 172 | 125 | |
Leasehold Improvements [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment | 970 | 790 | |
Construction in Process [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment | $ 4,041 | $ 3,610 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accounts Expenses and Other Current Liabilities [Abstract] | ||
Employee compensation and benefits | $ 2,448 | $ 2,680 |
Contracted service | 4,395 | 2,606 |
Business acquisition costs and contingencies | 1,351 | 1,331 |
Legal fees | 568 | 636 |
Other | 17 | 23 |
Total accrued expenses and other current liabilities | $ 8,779 | $ 7,276 |
LEASES, Lease Terms (Details) |
Mar. 31, 2022 |
---|---|
Minimum [Member] | |
Operating Lease, Description [Abstract] | |
Lease term | 1 year |
Renewal term | 1 year |
Maximum [Member] | |
Operating Lease, Description [Abstract] | |
Lease term | 10 years |
Renewal term | 10 years |
LEASES, Lease-Related Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Lease-Related Costs [Abstract] | ||
Operating lease cost | $ 725 | $ 0 |
Short-term lease cost | 104 | 122 |
Variable lease cost | 286 | 0 |
Total lease cost | $ 1,115 | $ 122 |
LEASES, Other Information Related to Operating Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Weighted Average Remaining Term and Discount Rate [Abstract] | |||
Weighted-average remaining lease term | 8 years | 5 years 10 months 24 days | |
Weighted-average discount rate | 7.50% | 7.00% | |
Cash Flow and Supplemental Noncash Information [Abstract] | |||
Operating cash paid to settle operating lease liabilities | $ 310 | $ 0 | |
Right-of-use assets obtained in exchange for lease liabilities | $ 8,490 | $ 0 |
LEASES, Future Minimum Lease Payments Under Non-Cancellable Leases (Details) $ in Thousands |
Mar. 31, 2022
USD ($)
|
|||
---|---|---|---|---|
Future Minimum Lease Payments [Abstract] | ||||
Remainder of 2022 | $ 2,018 | |||
2023 | 3,972 | |||
2024 | 4,074 | |||
2025 | 4,178 | |||
2026 | 4,254 | |||
Thereafter | 16,547 | |||
Total undiscounted lease payments | 35,043 | |||
Less: Imputed interest | 9,580 | |||
Less: Lease incentives | 9,104 | [1] | ||
Total lease liabilities | $ 16,359 | |||
|
EQUITY INCENTIVE PLAN, Restricted Stock Unit Activity (Details) - RSU Awards [Member] - 2013 and 2021 Plans [Member] - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Restricted Stock Unit Activity [Abstract] | ||
Stock-based compensation expense | $ (2,208) | $ 0 |
Number of Shares Underlying RSUs [Roll Forward] | ||
Outstanding non-vested RSUs, beginning balance (in shares) | 4,586,972 | |
Granted (in shares) | 0 | |
Vested (in shares) | (543,967) | |
Forfeited (in shares) | (1,731,371) | |
Outstanding non-vested RSUs, ending balance (in shares) | 2,311,634 | |
Weighted Average Grant-Date Fair Value [Abstract] | ||
Outstanding non-vested RSUs, beginning balance (in dollars per share) | $ 8.00 | |
Granted (in dollars per share) | 0 | |
Vested (in dollars per share) | 7.91 | |
Forfeited (in dollars per share) | 7.15 | |
Outstanding non-vested RSUs, ending balance (in dollars per share) | $ 8.97 | |
Chief Executive Officer [Member] | ||
Restricted Stock Unit Activity [Abstract] | ||
Stock-based compensation expense | $ (4,742) |
EQUITY INCENTIVE PLAN, Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Stock-Based Compensation Expense [Abstract] | ||
Stock-based compensation expense | $ (714) | $ 457 |
Research and Development [Member] | ||
Stock-Based Compensation Expense [Abstract] | ||
Stock-based compensation expense | 1,192 | 340 |
Selling, General and Administrative [Member] | ||
Stock-Based Compensation Expense [Abstract] | ||
Stock-based compensation expense | $ (1,906) | $ 117 |
INCOME TAXES (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
INCOME TAXES [Abstract] | ||
Estimated annual effective tax rate | 0.00% | 0.00% |
Federal statutory rate | 21.00% | 21.00% |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Licenses Related to Certain Intellectual Property [Abstract] | ||
Annual minimum fixed payments | $ 220 | |
Other Commitments [Abstract] | ||
Employer matching contributions to 401(k) plan | $ 0 | $ 0 |
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands |
Apr. 30, 2022 |
Mar. 31, 2022 |
---|---|---|
Subsequent Events [Abstract] | ||
Future minimum lease payments | $ 35,043 | |
Subsequent Event [Member] | Facility in Branford, Connecticut [Member] | ||
Subsequent Events [Abstract] | ||
Lease term | 7 years | |
Future minimum lease payments | $ 1,156 |
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