☒ |
ANNUAL 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
|
Delaware
|
85-1388175
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
29 Business Park Drive
|
||
Branford, Connecticut
|
06405
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbols(s)
|
Name of each exchange on which registered
|
||
Class A common stock, $0.0001 per share
|
QSI
|
The Nasdaq Stock Market LLC
|
||
Redeemable warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share
|
QSIAW
|
The Nasdaq Stock Market LLC
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☒
|
Smaller reporting company
|
☒
|
Emerging growth company
|
☐
|
Page
|
|||
3 |
|||
6 |
|||
Item 1.
|
6 |
||
Item 1A.
|
28 |
||
Item 1B.
|
59 |
||
Item 1C.
|
59 |
||
Item 2.
|
60 |
||
Item 3.
|
60 |
||
Item 4.
|
60 |
||
|
|||
61 |
|||
Item 5.
|
61 |
||
Item 6.
|
61 |
||
Item 7.
|
62 |
||
Item 7A.
|
71 |
||
Item 8.
|
72 |
||
Item 9.
|
103 |
||
Item 9A.
|
103 |
||
Item 9B.
|
103 |
||
Item 9C.
|
104 |
||
|
|||
104 |
|||
Item 10.
|
104 |
||
Item 11.
|
104 |
||
Item 12.
|
104 |
||
Item 13.
|
104 |
||
Item 14.
|
104 |
||
|
|||
105 |
|||
Item 15.
|
105 | ||
Item 16.
|
108 |
||
109 |
|
• |
the impact of pandemics or epidemics on our business;
|
|
• |
the ability to recognize the benefits of the Business Combination (as defined below), which may be affected by, among other things, competition and our ability to grow and manage growth profitably and retain our
key employees;
|
|
• |
the inability to maintain the listing of our Class A common stock on The Nasdaq Stock Market LLC;
|
|
• |
changes in applicable laws or regulations;
|
|
• |
our ability to raise financing in the future;
|
|
• |
the success, cost and timing of our product development and commercialization activities;
|
|
• |
the commercialization and adoption of our existing products, including the Platinum® protein sequencing instrument, and the success of any product we may
offer in the future;
|
|
• |
our ability to obtain and maintain regulatory approval for its products, and any related restrictions and limitations of any approved product;
|
|
• |
our ability to identify, in-license or acquire additional technology;
|
|
• |
our ability to maintain its existing lease, license, manufacture and supply agreements;
|
|
• |
our ability to compete with other companies currently marketing or engaged in the development or commercialization 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 services, and its ability to serve those markets once commercialized, either alone or in partnership with others;
|
|
• |
our estimates regarding future expenses, future revenue, capital requirements and needs for additional financing; and
|
|
• |
our financial performance.
|
|
• |
We are an early-stage life sciences technology company with a history of net losses, which we expect to continue, and we may not be able to generate meaningful revenues or achieve and sustain profitability in
the future.
|
|
• |
We have a limited operating history, which may make it difficult to evaluate the prospects for our future viability and predict our future performance. As such, you cannot rely upon our historical operating
performance to make an investment or voting decision regarding us.
|
|
• |
We may need to raise additional capital to fund ongoing research and development, operating activities, and commercialization activities.
|
|
• |
We recently commercially launched our first product, but we may not be able to successfully commercially launch other future products.
|
|
• |
If we are unable to establish sales and marketing capabilities, we may not be successful in commercializing our products.
|
|
• |
The size of the markets for our products may be smaller than estimated, and new market opportunities may not develop as quickly as we expect, or at all, limiting our ability to successfully sell our products.
|
|
• |
Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.
|
|
• |
If we do not sustain or successfully manage our anticipated growth, our business and prospects will be harmed.
|
|
• |
Recently and in the past, we have undergone leadership transitions and an internal restructuring, and we depend on our key personnel and other highly qualified personnel, and if we are unable to recruit, train
and retain our personnel in the future, we may not achieve our goals.
|
|
• |
Our business will depend significantly on research and development spending by academic institutions and other research institutions, and any reduction in spending could limit demand for our products and
adversely affect our business, results of operations, financial condition and prospects.
|
|
• |
We rely on certain contract manufacturers to manufacture and supply our instruments, components of our instruments, and certain components of our consumable offerings. If these manufacturers should fail or not
perform satisfactorily, our ability to commercialize and supply our instruments and consumable offerings would be adversely affected.
|
|
• |
Our internal manufacturing equipment is specialized with limited vendor options and long lead times. If these pieces of equipment were to stop working and be unable to be repaired in a timely manner or at all,
our ability to manufacturer our semiconductor chips would be adversely affected.
|
|
• |
If we do not successfully develop and maintain our Platinum Analysis Software service, our commercialization efforts and therefore business and results of operations could suffer.
|
|
• |
Commercializing our products outside of the United States could expose us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United
States.
|
|
• |
We have limited experience producing and supplying our products, and we may be unable to consistently manufacture or source our instruments and consumables to the necessary specifications or in quantities
necessary to meet demand on a timely basis and at acceptable performance and cost levels.
|
|
• |
We rely on third-party foundries to produce wafers, which when packaged and tested internally, lead to our supply of semiconductor chips. If these third-party foundries should fail or not perform satisfactorily,
our ability to supply semiconductor chips would be negatively and adversely affected.
|
|
• |
The life sciences technology market is highly competitive. If we fail to compete effectively, our business and results of operations will suffer.
|
|
• |
We may acquire other companies or technologies which could divert our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and harm our operating
results.
|
|
• |
If our facilities or our third-party manufacturers’ facilities become unavailable or inoperable, our research and development program and commercialization launch plan could be adversely impacted and
manufacturing of our instruments and consumables could be interrupted.
|
|
• |
If we experience a significant disruption in our information technology systems, including our Platinum Analysis Software services, or cybersecurity incidents, our business could be adversely affected.
|
|
• |
Our research use only (“RUO”) products could become subject to government regulation as medical devices by the FDA and other regulatory agencies even if we do not elect to seek regulatory authorization to market
our products for diagnostic purposes, which would adversely impact our ability to market and sell our products and harm our business.
|
|
• |
Our reagents may be used by clinical laboratories to create LDTs, which could, in the future, become subject to some form of FDA regulatory requirements, which could materially and adversely affect our business
and results of operations.
|
|
• |
We may be subject to certain federal, state and foreign fraud and abuse laws, health information privacy and security laws and physician payment transparency laws, which, if violated, could subject us to
substantial penalties. Additionally, any challenge to or investigation into our practices under these laws could cause adverse publicity and be costly to respond to, and thus could harm our business.
|
|
• |
We are currently subject to, and may in the future become subject to, both U.S. federal and state laws and regulations as well as international laws imposing obligations on how we collect, store and process
personal information. Our actual or perceived failure to comply with such obligations could harm our business. Ensuring compliance with such laws could also impair our efforts to maintain and expand our business and future customer base,
and thereby decrease our revenue.
|
|
• |
If we are unable to obtain and maintain and enforce sufficient intellectual property protection for our products and technology, or if the scope of the intellectual property protection obtained is not
sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be impaired.
|
|
• |
If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected, and our business could be harmed.
|
|
• |
Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time.
|
|
• |
We may become involved in lawsuits to defend against third-party claims of infringement, misappropriation or other violations of intellectual property or to protect or enforce our intellectual property, any of
which could be expensive, time consuming and unsuccessful, and may prevent or delay our development and commercialization efforts.
|
|
• |
Our outstanding warrants became exercisable for our Class A common stock in September 2021, which increased the number of shares eligible for future resale in the public market and resulted in dilution to our
stockholders.
|
|
• |
We have in the past experienced material weaknesses in our internal control over financial reporting, and if we experience such material weaknesses in our internal control over financial reporting in the future
or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to report our financial condition, results of operations or cash flows accurately or in a timely manner, which may adversely affect
investor confidence in us and, as a result, materially and adversely affect our business and the value of our Class A common stock.
|
|
• |
Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
|
|
• |
Because we are a “controlled company” within the meaning of the Nasdaq rules, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not
controlled companies.
|
|
• |
The dual class structure of our common stock has the effect of concentrating voting power with our Chairman of the Board and Founder, which will limit an investor’s ability to influence the outcome of important
transactions, including a change in control.
|
ITEM 1. |
BUSINESS
|
|
• |
Personalized medicine: tailoring of disease treatment based real-time proteomic data;
|
|
• |
Biomarker discovery: identification of protein markers for disease identification;
|
|
• |
Drug discovery and development: identification of potential drug candidates and aid in the development of the drug;
|
|
• |
Systems biology: system-wide investigations of disease pathways to identify biomarkers, drug action, toxicity, efficacy and resistance;
|
|
• |
Industry / agriculture: bioproduction and study of plant-pathogen interaction (e.g. crop engineering for drought resistance); and
|
|
• |
Food science: identification of allergies, understanding an improvement of nutritional values and food quality and safety control.
|
|
• |
Lower-plex methods. Lower-plex proteomic analysis methods include immunoassay, gel, and chromatography-based methods. Immunoassay based methods rely on the availability of
antibodies targeting specific proteins or epitopes as a way to identify and quantify protein expression levels. Changes or modifications to the protein may prevent the antibody from binding, resulting in missed identification. Gel based
methods like western blots were the first proteomic technique developed. They utilize an electric current to separate proteins in a gel based on their size and charge, prior to further analysis by a MS instrument. Chromatography based
methods use ion-exchange chromatography to separate and purify proteins from complex biological mixtures. The purified proteins can then be analyzed using a MS.
|
|
• |
Higher-plex methods. Higher-plex proteomic analysis methods include protein microarrays and MS instruments. Existing high-plex proteomic technologies, however, often have
tradeoffs between sensitivity and dynamic range- current technologies that are able to analyze the proteome at higher plex, often do so with lower sensitivity and resolution. Specificity is also a key consideration when multiplexing
(analyzing multiple proteins in the same sample). Protein microarrays apply small amounts of sample to a glass semiconductor chip where specific antibodies are used to capture target proteins to measure the expression levels and binding
affinities of proteins. The most common way researchers currently analyze proteins is through the use of MS. MS is a method for the mass determination and characterization of proteins, and its direct applications include protein
identification and post translational modifications, elucidation of protein complexes, their subunits and functional interactions, as well as global measurement of proteins in proteomics. Some newer technologies have addressed certain
limitations of these methods, yet still require separate peptide drying or are reliant on existing MS instruments. With an estimated 16,000 MS instruments installed worldwide specifically for proteomics analysis, we believe the cost of
$250,000 to $1,000,000 or more per new instrument, according to research by DeciBio, LLC, limits access to proteomics research and we believe currently limits the size and growth of the overall proteomics industry.
|
|
• |
Limitations of biased approaches. Typical workflows rely on a specific reagent for protein detection. ASRs comprise a variety of molecules, such as antibodies or aptamers,
which bind to specific regions, rather than individual amino acids, and therefore may not detect the presence of a known protein variants. For instance, the average binding site of an ASR is an epitope with a length of five (5) to eight
(8) amino acids, whereas the average length of a human protein is approximately 470 amino acids. While ASRs are prevalent and readily available, inherent limitations in how these molecules interact with proteins for various detection
platforms limit their use for resolving protein sequences at single amino acid resolution.
|
|
• |
Mass spectrometry tools have a high cost of purchase and ownership. For more than a decade, MS has been the dominant tool for an unbiased approach to protein analysis.
Shotgun proteomics, the studying of pieces of proteins that have been broken apart, typically utilizes MS and MS workflows, allowing for the interrogation of individual peptides and protein sequences. However, these techniques are
generally complex, lengthy, expensive, laborious and require extensive data analysis. Taken together, these factors limit the scalability of this approach and broad adoption of the technology in the market. Comparatively, targeted or
biased methods like protein arrays are scalable but only enable interrogation of a fixed number of targeted proteins per sample. Biased approaches lack the capabilities necessary to catalog new protein variants. Users are therefore forced
to choose between breadth with MS or scalability with other biased technologies, or limited alternatives that can address both needs.
|
|
• |
Low levels of resolution and sensitivity. We believe successful technologies for use in broad proteomic and clinical testing generally require high levels of specificity
and sensitivity as well as the ability to scale to reliably meet volume demand. Current sensitivity and dynamic range restrictions make legacy technologies, such as MS, difficult to use with liquid samples and restrict the ability to
analyze at single molecule resolution or ability to deeply integrate a protein.
|
|
• |
Costly and complex data analysis. We believe the critical unmet needs remaining in proteomic analysis relate to cost, accessibility and simplicity. Given the complex and
dynamic aspects of proteins, proteomic analysis can generate vast amounts of data that can be difficult to analyze to arrive at a biologically relevant answer. Currently, the complexity of the analysis is also costly, due to the data
processing and analysis infrastructure that is often required.
|
|
• |
What protein is present? Amino acid resolution can provide insight into more than just whether a protein is present or absent. The sequence information could also
indicate what version of the protein is present and how it has been changed from the normal version.
|
|
• |
How much of the protein is present? A quantification provides precise protein abundance based on a colorimetric or mass abundance readout.
|
|
• |
How has the protein been modified? Single-molecule sensitivity could show how the protein has been post-translationally modified thus providing greater insights to its
role in the context of biological processes within the cell.
|
|
• |
User management for secured data access; and
|
|
• |
Light-weight library information management system for data management.
|
|
• |
Differentiated single molecule detection providing the ultimate level of protein sensitivity and specificity. Our platform is based on our proprietary semiconductor chip
designed to enable measurements at the ultimate level of sensitivity and specificity, single molecules. By enabling single molecule detection, we are not reliant on ensemble measurements, which can often vary from sample to sample and
even run to run.
|
|
• |
Amino acid resolution and Post-Translational Modification detection. Moving beyond simple confirmatory information provided by affinity-based platforms, our platform
delivers amino acid resolution shifting the output from analog to digital. The ability to also identify PTMs could provide novel insights into how pathways are turned on/off to improve our understanding of the estimated 1 million +
proteoforms.
|
|
• |
Real-time data processing and the Platinum Analysis Software platform provide fast, simple data analysis. We have developed our Platinum Analysis Software to provide key
tools needed to streamline use of the platform such as secure access and data management.
|
|
• |
Innovative proprietary proteomic platform offering differentiated full suite of protein sequencing solutions. We believe that our platform will enable an optimal workflow
solution, providing our customers with an opportunity to perform proteomic studies at scale. We also believe that we are the first company to successfully enable NGPS. We believe the digital nature of our readout provides an accurate and
repeatable quantification of proteins in the sample and could scale to enable millions of data points working at the ultimate level of sensitivity — single molecule resolution.
|
|
• |
Platform to enable democratized access to proteomics tools. Our platform is designed to provide an easy-to-use workflow with the potential to enable users the ability to
better characterize and understand the full complexity of the proteome in an unbiased fashion. Current workflows are typically disaggregated, expensive, require significant training to operate, and are often performed in a separate
specialty laboratory. We aim for our technology platform to be broadly available across pharmaceutical and academic research centers, basic research labs, and other healthcare centers and RUO clinical laboratories at a price point that is
a significant discount to most legacy technologies. The reduction in both cost and complexity could allow for rapid adoption, whether a user is replacing a legacy technology or buying a new instrument. In addition to appealing to users of
existing proteomics tools, we believe that our proteomics platform will appeal to users of DNA sequencing technologies who seek to augment their research and discovery of biomarkers and further deepen their understanding of biology.
|
|
• |
Business model that leverages growing installed base of instruments. In December 2022, we launched Platinum® for RUO. As part of our commercialization efforts, we aim to grow our installed base, optimize workflows, and expand our applications, which we expect will then generate substantial, recurring revenues from our
consumables.
|
|
• |
Robust patent protection. We have a strong intellectual property strategy in which we have 293 issued patents and 666 pending applications as of December 31, 2023. Many
members of our management team worked directly with our Founder, Dr. Jonathan Rothberg, as he revolutionized the creation of next generation DNA sequencing while founding Ion Torrent, which was acquired by Life Technologies in 2010. Our
team has similarly devoted its efforts to revolutionizing unbiased proteomic analysis using a similar scientific and technical validation approach since our founding in 2013.
|
|
• |
Experienced Life Science Management team with significant experience in healthcare. We have a world-class management team, including our executive officers and other
senior management, with decades of cumulative experience in the healthcare and life sciences end-markets. We believe this leadership team positions us as a potentially disruptive force in creating a new market of next generation protein
sequencing.
|
|
• |
Systematic and phased approach to broad commercialization and adoption. In December 2022, we began a controlled launch of Platinum® for RUO and subsequently began limited commercial shipments of Platinum® in January 2023. Members of our team
have previously utilized a systematic approach designed to drive early adoption to successfully launch other disruptive technologies. We believe this approach will allow us to introduce our platform in a structured manner to demonstrate
its use and practicality, while working directly with our key potential customers and industry thought leaders to help ensure a positive experience. Our core leadership team has decades of cumulative experience working directly in the
life sciences industry with many of the companies and research centers that have the potential to become key customers and that we will seek to build into our prospective customer pipeline.
|
|
• |
Build our commercial infrastructure to help ensure successful initial commercial launch in the U.S., Europe and limited areas in the rest of the world. We expect to build
out our commercial and operational infrastructure to sell and support our platform as we commercialize our technology and gain traction throughout the world. Our initial focus will be direct sales in the United States, with a combined
direct and distributor approach in Europe, and opportunistic sales in the rest of the world. We also have manufacturing capabilities and partnerships that we believe will allow us to scale our capacity.
|
|
• |
Invest in market development activities to increase awareness of the importance of the proteome and the strengths of our platform. We believe our platform has the
capability to enable users to generate significant amounts of proteomic information at speed, scale, and simplicity through a solution that until our launch, was not available. We believe the utility of our platform will span basic and
discovery applications and translational research in which there is a strong market need for proteomic analysis for novel discoveries and better insights into the complexity of disease. We plan to invest in market development activities
and partnerships to increase awareness of the importance and utility of proteomics to expand and accelerate demand for our products.
|
|
• |
Continued technical innovation to drive product enhancements, new products, and additional applications. Our leadership team has deep expertise in scientific and
technological development and commercialization. After we commercialize our initial products, we aim to continually innovate and develop new products, product enhancements, applications, workflows, and other tools to enable our customers
to generate unbiased proteomic information at scale.
|
|
• |
Accessibility and Enablement: Enable broad adoption of protein sequencing. Our mission is to democratize single molecule proteomic analysis by providing a full workflow
of solutions at an affordable cost. We believe that our platform will directly address many of the key bottlenecks that exist within legacy proteomic technologies, namely low sensitivity, lack of dynamic range, complex workflow, complex
analysis, and high cost. We believe our platform offers the potential for a more practical, affordable, and intuitive workflow solution relative to many legacy proteomic technologies. We have specifically developed our platform to be
adopted and integrated into any existing lab. We believe that our platform will have wide utility across the study of proteins, including basic and discovery research and, subject to regulatory authorization, clinical diagnostics, and
potentially industrial applications like bioproduction. Our ability to develop our platform such that it will be offered at a discount to many legacy instruments and other proteomic technologies, may allow proteomic analysis to reach new
markets and new users, potentially enabling and accelerating innovative discoveries.
|
|
• |
Continue to strengthen our intellectual property portfolio for existing and new technologies. We have a broad and deep patent protection strategy, which includes 293
issued patents and over 666 pending applications as of December 31, 2023. Protection of our intellectual property is a strategic priority for the business. We have taken, and will continue to take, steps to protect our current and future
intellectual property and proprietary technology. We believe our broad patent portfolio and continued rigorous patent protection strategy will help to allow us to focus on our key priorities of commercializing our platform, continuing to
innovate with new technologies, and preventing fast-followers.
|
|
1. |
Controlled Launch: In December 2022, we launched Platinum® for RUO. In our initial
launch, we are targeting established academic research centers and pharmaceutical companies in the United States and Europe. During our initial launch phase, we are focusing on driving our technology into research centers. Our platform is
currently intended for RUO applications, and it will continue to be marketed as RUO until regulatory authorizations allowing for clinical or diagnostic uses are obtained. We are targeting customers that will directly benefit from the
value of our platform across a number of applications, including basic research, biomarker discovery and translational research. We anticipate these customers may already have existing proteomic capabilities through legacy instruments
such as a MS, and so will understand the importance of single molecule, unbiased proteomic analysis. During this phase, we expect to continue to strengthen our commercial organization and broaden our commercial footprint to support an
increasing number of customers.
|
|
2. |
Product Updates: As we continue commercialization in 2024 and beyond, we expect to focus on building our installed base and expanding global access to our platform. We
expect to make product enhancements to our initial platform and to make them available to our new and then existing customers. Potential improvements could include chemistry enhancements to our instruments and deeper insights from our
analysis software, which may improve accuracy, coverage, speed and data output.
|
|
3. |
Portfolio Expansion: Ultimately, we plan to advance and develop new products and key applications designed to “scale up” our Platinum® instrument to provide higher throughput and enable greater levels of data output and broader coverage of the proteome, as well as deeper analysis capabilities, including onboard
analysis capabilities.
|
Name
|
Position
|
|
Executive Officers
|
||
Jeffrey Hawkins
|
President, Chief Executive Officer and Director
|
|
Jeffry Keyes
|
Chief Financial Officer and Treasurer
|
|
Grace Johnston, Ph.D.
|
Chief Commercial Officer
|
|
Christian LaPointe, Ph.D.
|
General Counsel and Corporate Secretary
|
|
Directors
|
||
Jonathan M. Rothberg, Ph.D.
|
Chairman of the Board of Directors
|
|
Ruth Fattori
|
Managing Partner, Pecksland Partners
Senior Advisor, Boston Consulting Group
|
|
Amir Jafri
|
Chief Executive Officer, Immunicom Inc.
|
|
John Patrick Kenny
|
Independent Director, Bioamerica, Inc.
|
|
Brigid A. Makes
|
Chief Financial Officer, Vivani Medical, Inc
Director, Elutia, Inc.
|
|
Scott Mendel
|
Director, Akoya Bioscience, Inc. and Visby Medical, Inc.
|
|
Kevin Rakin
|
Co-Founder and Partner, HighCape Capital
|
|
• |
resolution and sensitivity;
|
|
• |
cost of instruments and consumables;
|
|
• |
efficiency and speed of workflows;
|
|
• |
the scale required to address the complexity and dynamic range of the proteome;
|
|
• |
throughput to meet lab testing volume;
|
|
• |
reputation among customers and key thought leaders;
|
|
• |
innovation in product offerings;
|
|
• |
accuracy and reproducibility of results;
|
|
• |
strength of intellectual property portfolio;
|
|
• |
operational and manufacturing footprint;
|
|
• |
customer support infrastructure; and
|
|
• |
a leadership and commercial team with extensive execution and scientific background.
|
|
• |
Development of comprehensive product description and indications for use.
|
|
• |
Completion of extensive nonclinical tests and/or animal studies, performed in accordance with the FDA’s Good Laboratory Practice (“GLP”) regulations, as well as any performance standards or other testing
requirements established by the FDA through regulations or device-specific guidance.
|
|
• |
Comprehensive review of one or more predicate devices and development of data supporting the new product’s substantial equivalence to such predicate devices.
|
|
• |
the product may not be safe or effective for its intended use(s) to the FDA’s satisfaction;
|
|
• |
the data from the applicant’s nonclinical studies and clinical trials may be insufficient to support approval;
|
|
• |
the manufacturing process or facilities that the applicant uses may not meet applicable requirements; and
|
|
• |
changes in FDA approval policies or adoption of new regulations may require additional data to demonstrate the safety or effectiveness of the device.
|
|
• |
the FDA, the IRB(s), or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold;
|
|
• |
delays in reaching, or failure to reach, agreement with the FDA on a pivotal study’s mandatory diversity action plan;
|
|
• |
participants do not enroll in clinical trials at the expected rate;
|
|
• |
participants do not comply with trial protocols;
|
|
• |
participant follow-up is not at the expected rate;
|
|
• |
participants experience adverse side effects;
|
|
• |
participants die during a clinical trial, even though their death may not be related to the investigational products;
|
|
• |
third-party clinical investigators decline to participate in a trial or do not perform a trial on the sponsor’s anticipated schedule or consistent with the clinical trial protocol, GCPs or other FDA
requirements;
|
|
• |
the sponsor or third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the clinical trial protocol or investigational or statistical
plans;
|
|
• |
third-party clinical investigators have significant financial interests related to the sponsor or the study that the FDA deems to make the study results unreliable, or the sponsor or investigators fail to
disclose such interests;
|
|
• |
unfavorable regulatory inspections of the sponsor’s clinical trial sites or manufacturing facilities, which may, among other things, require the sponsor to undertake corrective action or suspend or terminate the
sponsor’s clinical trials;
|
|
• |
changes in governmental regulations or administrative actions applicable to the sponsor’s trial protocols;
|
|
• |
the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or effectiveness; and
|
|
• |
the FDA concludes that the results from the sponsor’s trial and/or trial design are inadequate to demonstrate safety and effectiveness of the product.
|
|
• |
establishment registration and device listing;
|
|
• |
the QSR, which requires manufacturers, including third-party manufacturers, to follow design, testing, control, storage, supplier/contractor selection, complaint handling, documentation and other quality
assurance procedures;
|
|
• |
labeling regulations, which govern the mandatory elements of the device labels and packaging (including Unique Device Identifier markings for certain categories of products);
|
|
• |
the FDA’s prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses and other requirements related to promotional activities;
|
|
• |
the MDR regulations, which require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to
a death or serious injury if it were to recur;
|
|
• |
voluntary and mandatory device recalls addressing problems when a device is defective and/or could be a risk to health;
|
|
• |
correction and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or
to remedy a violation of the FDCA that may present a risk to health; and
|
|
• |
post-market surveillance regulations, which apply to certain Class II or III devices when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
|
|
• |
Warning Letters or Untitled Letters that require corrective action;
|
|
• |
fines and civil penalties;
|
|
• |
unanticipated expenditures;
|
|
• |
delays in approving/clearing or refusal to approve/clear any of our future products;
|
|
• |
FDA refusal to issue certificates to foreign governments needed to export our products for sale in other countries;
|
|
• |
suspension or withdrawal of FDA approval or clearance (as may be applicable);
|
|
• |
product recall or seizure;
|
|
• |
partial suspension or total shutdown of production;
|
|
• |
operating restrictions;
|
|
• |
injunctions or consent decrees; and
|
|
• |
civil or criminal prosecution.
|
ITEM 1A. |
RISK FACTORS
|
|
• |
the timing and amount of expenditures that we may incur to develop, commercialize or acquire additional products and technologies or for other purposes, such as the expansion of our facilities;
|
|
• |
changes in governmental funding of life sciences research and development or changes that impact budgets or budget cycles;
|
|
• |
seasonal spending patterns of our customers;
|
|
• |
the timing of when we recognize any revenues;
|
|
• |
future accounting pronouncements or changes in our accounting policies;
|
|
• |
the outcome of any future litigation or governmental investigations involving us, our industry or both;
|
|
• |
higher than anticipated service, replacement and warranty costs;
|
|
• |
the impact of past or future epidemics or pandemics on the economy, investment in life sciences and research industries, our business operations, and resources and operations of our suppliers, distributors and
potential customers; and
|
|
• |
general industry, economic and market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.
|
|
• |
the inability to establish the capabilities and value proposition of our products with key opinion leaders in a timely fashion;
|
|
• |
the potential need or desire to modify aspects of our products throughout our commercial launch plan;
|
|
• |
changing industry or market conditions, customer requirements or competitor offerings over the span of our commercial launch plan;
|
|
• |
delays in building out our sales, customer support and marketing organization as needed for each of the phases of our commercial launch plan; and
|
|
• |
delays in ramping up manufacturing, either internally or through our suppliers to meet the expected demand in each of the phases of our commercial launch plan.
|
|
• |
our ability to market and increase awareness of the capabilities of our products;
|
|
• |
the ability of our products to demonstrate comparable performance in intended use applications broadly in the hands of customers consistent with the early access limited release phase of our commercialization
plan;
|
|
• |
our potential customers’ willingness to adopt new products and workflows;
|
|
• |
our product’s ease of use and whether it reliably provides advantages over other alternative technologies;
|
|
• |
the rate of adoption of our products by academic institutions, laboratories, biopharmaceutical companies and others;
|
|
• |
the prices we charge for our products;
|
|
• |
our ability to develop new products and workflows and solutions for customers;
|
|
• |
if competitors develop and commercialize products that perform similar functions as our products; and
|
|
• |
the impact of our investments in product innovation and commercial growth.
|
|
• |
our ability to attract, retain and manage the sales, marketing and customer service and support force necessary to commercialize and gain market acceptance of our products;
|
|
• |
the time and cost of establishing a specialized sales, marketing and customer service and support force; and
|
|
• |
our sales, marketing and customer service and support force may be unable to initiate and execute successful commercialization activities.
|
|
• |
decreases in government funding of research and development;
|
|
• |
changes to programs that provide funding to research laboratories and institutions, including changes in the amount of funds allocated to different areas of research or changes that have the effect of increasing
the length of the funding process;
|
|
• |
macroeconomic conditions and the political climate;
|
|
• |
potential changes in the regulatory environment;
|
|
• |
differences in budgetary cycles, especially government or grant-funded customers, whose cycles often coincide with government fiscal year ends;
|
|
• |
competitor product offerings or pricing;
|
|
• |
market-driven pressures to consolidate operations and reduce costs; and
|
|
• |
market acceptance of relatively new technologies.
|
|
• |
required compliance with existing and changing foreign regulatory requirements and laws that are or may be applicable to our business in the future, such as the GDPR and other data privacy requirements, labor
and employment regulations, anti-competition regulations, the U.K. Bribery Act of 2010 and other anti-corruption laws, regulations relating to the use of certain hazardous substances or chemicals in commercial products, and require the
collection, reuse, and recycling of waste from products we manufacture;
|
|
• |
required compliance with U.S. laws such as the Foreign Corrupt Practices Act, and other U.S. federal laws and regulations established by the Office of Foreign Assets Control of the U.S. Department of the
Treasury;
|
|
• |
export requirements and import or trade restrictions;
|
|
• |
laws and business practices favoring local companies;
|
|
• |
foreign currency exchange, longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;
|
|
• |
changes in social, economic, and political conditions or in laws, regulations and policies governing foreign trade, manufacturing, research and development, and investment both domestically as well as in the
other countries and jurisdictions in which we operate and into which it may sell our products including as a result of the separation of the United Kingdom from the European Union (“Brexit”);
|
|
• |
potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements, and other trade barriers;
|
|
• |
difficulties and costs of staffing and managing foreign operations; and
|
|
• |
difficulties protecting, maintaining, enforcing or procuring intellectual property rights.
|
|
• |
a failure to achieve market acceptance for our products or expansion of our product sales;
|
|
• |
loss of customer orders and delay in order fulfillment;
|
|
• |
damage to our brand reputation;
|
|
• |
loss of revenue;
|
|
• |
increased warranty and customer service and support costs due to product repair or replacement;
|
|
• |
product recalls or replacements;
|
|
• |
inability to attract new customers;
|
|
• |
diversion of resources from our manufacturing and research and development team into our service team; and
|
|
• |
legal claims against us, including product liability claims, which could be costly and time consuming to defend and result in substantial damages.
|
|
• |
greater name and brand recognition;
|
|
• |
greater financial and human resources;
|
|
• |
broader product lines;
|
|
• |
larger sales forces and more established distributor networks;
|
|
• |
substantial intellectual property portfolios;
|
|
• |
larger and more established customer bases and relationships; and
|
|
• |
better established, larger scale and lower cost manufacturing capabilities.
|
|
• |
the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in
cash or in kind, to induce either the referral of an individual or furnishing or arranging for a good or service, for which payment may be made, in whole or in part, under federal healthcare programs, such as Medicare and Medicaid. A
person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
|
|
• |
the federal civil and criminal false claims laws, including the federal civil False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented,
claims for payment from Medicare, Medicaid or other federal healthcare programs that are false or fraudulent. Private individuals can bring False Claims Act “qui tam” actions, on behalf of the government and such individuals, commonly
known as “whistleblowers,” may share in amounts paid by the entity to the government in fines or settlement.
|
|
• |
the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence
the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;
|
|
• |
HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare
matters;
|
|
• |
the federal Physician Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health
Insurance Program, to report annually to CMS, information related to payments and other transfers of value to physicians (defined broadly to include doctors, dentists, optometrists, podiatrists and chiropractors), teaching hospitals and
certain advanced non-physician healthcare practitioners, as well as ownership interests held by physicians and their immediate family members; and
|
|
• |
analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including
commercial insurers or patients.
|
|
• |
the scope of rights granted under the license agreement and other interpretation-related issues;
|
|
• |
our financial or other obligations under the license agreement;
|
|
• |
whether, and the extent to which, our products, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
|
|
• |
our diligence obligations under the license agreement and what activities satisfy those diligence obligations;
|
|
• |
the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensor(s); and
|
|
• |
the priority of invention of patented technology.
|
|
• |
others may be able to make products that are similar to products and technologies we may develop or utilize similar technology that are not covered by the claims of the patents that we own or license now or in
the future;
|
|
• |
we, or our licensor(s), might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future;
|
|
• |
we, or our licensor(s), might not have been the first to file patent applications covering certain of our or their inventions;
|
|
• |
others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating our owned or licensed intellectual property
rights;
|
|
• |
it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents;
|
|
• |
issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors;
|
|
• |
our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for
sale in our major commercial markets;
|
|
• |
we may not develop additional proprietary technologies that are patentable;
|
|
• |
the patents of others may harm our business; and
|
|
• |
we may choose not to file a patent for certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
|
|
• |
the ability of our Board to issue one or more series of preferred stock;
|
|
• |
stockholder action by written consent only until the first time when Dr. Rothberg ceases to beneficially own a majority of the voting power of our capital stock;
|
|
• |
certain limitations on convening special stockholder meetings;
|
|
• |
advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;
|
|
• |
amendment of certain provisions of the organizational documents only by the affirmative vote of (i) a majority of the voting power of our capital stock so long as Dr. Rothberg beneficially owns shares
representing a majority of the voting power of our capital stock and (ii) at least two-thirds of the voting power of the capital stock from and after the time that Dr. Rothberg ceases to beneficially own shares representing a majority of
our voting power; and
|
|
• |
a dual-class common stock structure with 20 votes per share of our Class B common stock, the result of which is that Dr. Rothberg has the ability to control the outcome of matters requiring stockholder approval,
even though Dr. Rothberg owns less than a majority of the outstanding shares of our capital stock.
|
ITEM 1B. |
UNRESOLVED STAFF COMMENTS
|
ITEM 1C. |
CYBERSECURITY
|
|
• |
monitor emerging data protection laws and implement changes to our processes that are designed to comply with such laws;
|
|
• |
through our policies, practices and contracts (as applicable), require employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care;
|
|
• |
employ technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are
evaluated and improved through vulnerability assessments and cybersecurity threat intelligence;
|
|
• |
provide regular, mandatory training for our employees and contractors regarding cybersecurity threats as a means to equip them with effective tools to address cybersecurity threats, and to communicate our evolving information security
policies, standards, processes and practices;
|
|
• |
conduct regular phishing email simulations for all employees and contractors with access to our email systems to enhance awareness and responsiveness to possible threats;
|
|
• |
leverage the NIST incident handling framework to help us identify, protect, detect, respond and recover when there is an actual or potential cybersecurity incident; and
|
|
• |
carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident.
|
ITEM 2. |
PROPERTIES
|
ITEM 3. |
LEGAL PROCEEDINGS
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
ITEM 6. |
[RESERVED]
|
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
• |
Expected Term: We calculate the expected term using the “simplified” method, which is the simple average of the vesting period and the contractual
term.
|
|
• |
Risk-free Interest Rate: The risk-free interest rate for periods within the expected term of the awards is based on the U.S. Treasury yield curve in
effect at the time of the grant.
|
|
• |
Expected Stock Price Volatility: We determined expected annual equity volatility based on the combination of the historical volatility of our common
stock and the historical volatility of the common stock comparable to our common stock.
|
|
• |
Dividend Yield: Because we have never paid a dividend and do not expect to begin doing so in the foreseeable future, we assume no dividend yield in valuing the
stock-based awards.
|
|
• |
Exercise Price: The exercise price is taken directly from the grant notice issued to employees and nonemployees.
|
2023
|
2022
|
% Change
|
||||||||||
Revenue
|
||||||||||||
Product
|
$
|
1,031
|
$
|
-
|
nm | |||||||
Service
|
51
|
-
|
nm | |||||||||
Total revenue
|
1,082
|
-
|
nm | |||||||||
Cost of revenue
|
594
|
-
|
nm | |||||||||
Gross profit
|
488
|
-
|
nm | |||||||||
Operating expenses:
|
||||||||||||
Research and development
|
67,025
|
72,062
|
(7.0
|
)%
|
||||||||
Selling, general and administrative
|
44,634
|
42,296
|
5.5
|
%
|
||||||||
Goodwill impairment
|
-
|
9,483
|
(100.0
|
)%
|
||||||||
Total operating expenses
|
111,659
|
123,841
|
(9.8
|
)%
|
||||||||
Loss from operations
|
(111,171
|
)
|
(123,841
|
)
|
(10.2
|
)%
|
||||||
Dividend income
|
9,536
|
5,301
|
79.9
|
%
|
||||||||
Gain (loss) on marketable securities, net
|
5,587
|
(20,603
|
)
|
(127.1
|
)%
|
|||||||
Change in fair value of warrant liabilities
|
(278
|
)
|
6,243
|
(104.5
|
)%
|
|||||||
Other income, net
|
366
|
458
|
(20.1
|
)%
|
||||||||
Loss before provision for income taxes
|
(95,960
|
)
|
(132,442
|
)
|
(27.5
|
)%
|
||||||
Provision for income taxes
|
-
|
-
|
nm
|
|||||||||
Net loss and comprehensive loss
|
$
|
(95,960
|
)
|
$
|
(132,442
|
)
|
(27.5
|
)%
|
2023
|
2022
|
$ Change
|
% Change
|
||||||||||
Total revenue
|
$
|
1,082
|
$
|
-
|
$
|
1,082
|
nm
|
||||||
Cost of revenue
|
594
|
-
|
594
|
nm
|
|||||||||
Gross profit
|
$
|
488
|
$
|
-
|
$
|
488
|
nm
|
||||||
Gross profit margin
|
45.1
|
%
|
-
|
2023
|
2022
|
$ Change
|
% Change
|
|||||||||||||
Research and development
|
$
|
67,025
|
$
|
72,062
|
$
|
(5,037
|
)
|
(7.0
|
)%
|
2023
|
2022
|
$ Change
|
% Change
|
|||||||||||||
Selling, general and administrative
|
$
|
44,634
|
$
|
42,296
|
$
|
2,338
|
5.5
|
%
|
2023
|
2022
|
$ Change
|
% Change
|
|||||||||||||
Goodwill impairment
|
$
|
-
|
$
|
9,483
|
$
|
(9,483
|
)
|
(100.0
|
)%
|
2023
|
2022
|
$ Change
|
% Change
|
|||||||||||||
Dividend income
|
$
|
9,536
|
$
|
5,301
|
$
|
4,235
|
79.9
|
%
|
2023
|
2022
|
$ Change
|
% Change
|
|||||||||||||
Gain (loss) on marketable securities, net
|
$
|
5,587
|
$
|
(20,603
|
)
|
$
|
26,190
|
(127.1
|
)%
|
2023
|
2022
|
$ Change
|
% Change
|
|||||||||||||
Change in fair value of warrant liabilities
|
$
|
(278
|
)
|
$
|
6,243
|
$
|
(6,521
|
)
|
(104.5
|
)%
|
2023
|
2022
|
$ Change
|
% Change
|
|||||||||||||
Other income, net
|
$
|
366
|
$
|
458
|
$
|
(92
|
)
|
(20.1
|
)%
|
2023
|
2022
|
|||||||
Net cash (used in) provided by:
|
||||||||
Net cash used in operating activities
|
$
|
(94,036
|
)
|
$
|
(90,560
|
)
|
||
Net cash provided by investing activities
|
143,428
|
137,185
|
||||||
Net cash provided by financing activities
|
149
|
1,909
|
||||||
Net increase in cash and cash equivalents
|
$
|
49,541
|
$
|
48,534
|
Item 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
73 |
|
75 |
|
76 |
|
77 |
|
78 |
|
79 |
•
|
We evaluated the Company’s significant accounting policies related to revenue recognition for reasonableness.
|
•
|
For a selection of revenue arrangements, we obtained and read the underlying agreements between the Company and its customers.
|
•
|
With the assistance of professionals in our firm having expertise in the accounting treatment for revenue arrangements, we evaluated the
Company’s assessment of the accounting treatment for such arrangements, including the identification of performance obligations and whether the identified
performance obligations were distinct.
|
December 31,
2023
|
December 31,
2022
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
133,860
|
$
|
84,319
|
||||
Marketable securities
|
123,876
|
266,990
|
||||||
Accounts receivable, net of allowance of $0 and $0, respectively
|
368 | - | ||||||
Inventory, net
|
3,945 | - | ||||||
Prepaid expenses and other current assets
|
4,261
|
6,873
|
||||||
Total current assets
|
266,310
|
358,182
|
||||||
Property and equipment, net
|
16,275
|
16,849
|
||||||
Internally developed software
|
532
|
-
|
||||||
Operating lease right-of-use assets
|
14,438
|
15,757
|
||||||
Other assets
|
695
|
697
|
||||||
Total assets
|
$
|
298,250
|
$
|
391,485
|
||||
Liabilities and stockholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
1,766
|
$
|
3,903
|
||||
Accrued payroll and payroll-related costs
|
4,943 | 5,548 | ||||||
Accrued contracted services
|
1,519 | 3,616 | ||||||
Accrued expenses and other current liabilities
|
1,815
|
1,270
|
||||||
Current portion of operating lease liabilities
|
1,566
|
1,369
|
||||||
Total current liabilities
|
11,609
|
15,706
|
||||||
Warrant liabilities
|
1,274
|
996
|
||||||
Operating lease liabilities
|
13,737
|
16,077
|
||||||
Other long-term liabilities
|
11
|
-
|
||||||
Total liabilities
|
26,631
|
32,779
|
||||||
Commitments and contingencies (Note 18)
|
|
|
||||||
Stockholders’ equity
|
||||||||
Class A Common stock, $0.0001 par value; 600,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 121,832,417 and 120,006,757 shares issued and outstanding as of December 31, 2023 and December 31, 2022,
respectively.
|
12
|
12
|
||||||
Class B Common stock, $0.0001 par value; 27,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 19,937,500 shares
issued and outstanding as of December 31, 2023 and December 31, 2022.
|
2
|
2
|
||||||
Additional paid-in capital
|
767,239
|
758,366
|
||||||
Accumulated deficit
|
(495,634
|
)
|
(399,674
|
)
|
||||
Total stockholders’ equity
|
271,619
|
358,706
|
||||||
Total liabilities and stockholders’ equity
|
$
|
298,250
|
$
|
391,485
|
Years Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Revenue |
||||||||||||
Product
|
$ | 1,031 | $ | - | $ | - | ||||||
Service
|
51 | - | - | |||||||||
Total revenue
|
1,082 | - | - | |||||||||
Cost of revenue |
594 | - | - | |||||||||
Gross profit |
488 | - | - | |||||||||
Operating expenses: |
||||||||||||
Research and development
|
|
67,025
|
|
72,062
|
|
46,575
|
||||||
Selling, general and administrative
|
44,634
|
42,296
|
50,333
|
|||||||||
Goodwill impairment
|
-
|
9,483
|
-
|
|||||||||
Total operating expenses
|
111,659
|
123,841
|
96,908
|
|||||||||
Loss from operations
|
(111,171
|
)
|
(123,841
|
)
|
(96,908
|
)
|
||||||
Interest expense, net
|
-
|
-
|
(5
|
)
|
||||||||
Dividend income
|
9,536
|
5,301
|
2,549
|
|||||||||
Gain (loss) on marketable securities, net |
5,587 | (20,603 | ) | (5,023 | ) | |||||||
Change in fair value of warrant liabilities
|
(278
|
)
|
6,243
|
4,379
|
||||||||
Other income, net
|
366
|
458
|
19
|
|||||||||
Loss before provision for income taxes
|
(95,960
|
)
|
(132,442
|
)
|
(94,989
|
)
|
||||||
Provision for income taxes
|
-
|
-
|
-
|
|||||||||
Net loss and comprehensive loss
|
$
|
(95,960
|
)
|
$
|
(132,442
|
)
|
$
|
(94,989
|
)
|
|||
Net loss per common share attributable to common stockholders, basic and diluted
|
$
|
(0.68
|
)
|
$
|
(0.95
|
)
|
$
|
(1.19
|
)
|
|||
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted
|
141,300
|
139,255
|
79,579
|
Convertible
preferred stock
|
Class A common stock
|
Class B common stock
|
Additional
|
Accumulated |
Total
stockholders’
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
paid-in capital
|
deficit
|
(deficit) equity
|
||||||||||||||||||||||||||||
Balance - January 1, 2021
|
90,789,268
|
$ |
195,814
|
5,378,287
|
$ |
1
|
-
|
$ |
-
|
$ |
12,517
|
$ |
(172,243
|
)
|
$ |
(159,725
|
)
|
|||||||||||||||||||
Issuance of Series E convertible preferred stock, net of issuance costs
|
-
|
(4
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||
Common stock issued upon exercise of stock options and vesting of restricted stock units
|
-
|
-
|
2,935,595
|
-
|
-
|
-
|
5,618
|
-
|
5,618
|
|||||||||||||||||||||||||||
Conversion of the convertible preferred stock into Class A and Class B common stock
|
(90,789,268 | ) | (195,810 | ) | 52,466,941 | 5 | 19,937,500 | 2 | 195,803 | - | 195,810 | |||||||||||||||||||||||||
Net equity infusion from the Business Combination
|
- | - | 56,708,872 | 6 | - | - | 501,164 | - | 501,170 | |||||||||||||||||||||||||||
Majelac Technologies LLC Acquisition
|
- | - | 535,715 | - | - | - | 4,232 | - | 4,232 | |||||||||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
24,918
|
-
|
24,918
|
|||||||||||||||||||||||||||
Net loss | - | - |
- | - | - | - | - | (94,989 | ) | (94,989 | ) | |||||||||||||||||||||||||
Balance - December 31, 2021
|
-
|
-
|
118,025,410
|
12
|
19,937,500
|
2
|
744,252
|
(267,232
|
)
|
477,034
|
||||||||||||||||||||||||||
Common stock issued upon exercise of stock options and vesting of restricted stock units
|
-
|
-
|
1,921,824
|
-
|
-
|
-
|
2,757
|
-
|
2,757
|
|||||||||||||||||||||||||||
Majelac Technologies LLC Acquisition
|
-
|
-
|
59,523
|
-
|
-
|
-
|
151
|
-
|
151
|
|||||||||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
11,206
|
-
|
11,206
|
|||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (132,442 | ) | (132,442 | ) | |||||||||||||||||||||||||
Balance - December 31, 2022
|
-
|
|
-
|
120,006,757
|
|
12
|
19,937,500
|
|
2
|
|
758,366
|
|
(399,674
|
)
|
|
358,706
|
||||||||||||||||||||
Common stock issued upon exercise of stock options and vesting of restricted stock units
|
- | - | 1,825,660 | - | - | - | 357 | - | 357 | |||||||||||||||||||||||||||
Stock-based compensation | - | - | - | - | - | - | 8,516 | - | 8,516 | |||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | (95,960 | ) | (95,960 | ) | |||||||||||||||||||||||||
Balance - December 31, 2023 | - | $ | - | 121,832,417 | $ | 12 | 19,937,500 | $ | 2 | $ | 767,239 | $ | (495,634 | ) | $ | 271,619 |
Years Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
$
|
(95,960
|
)
|
$
|
(132,442
|
)
|
$
|
(94,989
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation and amortization
|
4,156
|
2,584
|
1,041
|
|||||||||
Non-cash lease expense
|
1,402 | 1,249 | 415 | |||||||||
(Gain) loss on marketable securities, net
|
(5,587 | ) | 20,603 | 5,023 | ||||||||
Loss on disposal of fixed assets
|
136
|
91
|
70
|
|||||||||
Goodwill impairment
|
- | 9,483 | - | |||||||||
Change in fair value of warrant liabilities
|
278
|
(6,243
|
)
|
(4,379
|
)
|
|||||||
Change in fair value of contingent consideration
|
(400
|
)
|
176
|
36
|
||||||||
Change in fair value of stock consideration
|
- | (320 | ) | - | ||||||||
Stock-based compensation
|
8,516
|
11,206
|
24,918
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable, net
|
(368 | ) | - | - | ||||||||
Inventory, net
|
(3,096 | ) | - | - | ||||||||
Prepaid expenses and other current assets
|
2,159
|
(1,005
|
)
|
(4,893
|
)
|
|||||||
Operating lease right-of-use assets
|
(83 | ) | (10,033 | ) | (7,388 | ) | ||||||
Other assets
|
2
|
(7
|
)
|
(690
|
)
|
|||||||
Other assets - related party
|
-
|
-
|
738
|
|||||||||
Accounts payable
|
(1,220
|
)
|
721
|
709
|
||||||||
Accrued expenses and other current liabilities
|
(1,835
|
)
|
4,009
|
4,498
|
||||||||
Other long-term liabilities
|
7 | - | - | |||||||||
Operating lease liabilities
|
(2,143
|
)
|
9,368
|
8,078
|
||||||||
Net cash used in operating activities
|
(94,036
|
)
|
(90,560
|
)
|
(66,813
|
)
|
||||||
Cash flows from investing activities:
|
||||||||||||
Purchases of property and equipment
|
(4,510
|
)
|
(10,741
|
)
|
(5,763
|
)
|
||||||
Internally developed software - capitalized costs
|
(763 | ) | - | - | ||||||||
Purchases of marketable securities
|
(123,809
|
)
|
(834
|
)
|
(440,542
|
)
|
||||||
Sales of marketable securities
|
272,510 | 148,760 | - | |||||||||
Business acquisition
|
-
|
-
|
(4,632
|
)
|
||||||||
Net cash provided by (used in) investing activities
|
143,428
|
137,185
|
(450,937
|
)
|
||||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from exercise of stock options
|
357
|
2,757
|
5,618
|
|||||||||
Deferred offering costs
|
(208 | ) | - | - | ||||||||
Net proceeds from equity infusion from the Business Combination
|
-
|
-
|
512,788
|
|||||||||
Payment of notes payable
|
-
|
-
|
(1,749
|
)
|
||||||||
Stock issuance costs for Series E convertible preferred stock
|
-
|
-
|
(4
|
)
|
||||||||
Payment of contingent consideration - business acquisition
|
- | (348 | ) | - | ||||||||
Payment of deferred consideration - business acquisition
|
- | (500 | ) | - | ||||||||
Principal payments under finance lease obligations
|
-
|
-
|
(28
|
)
|
||||||||
Net cash provided by financing activities
|
149
|
1,909
|
516,625
|
|||||||||
Net increase (decrease) in cash and cash equivalents
|
49,541
|
48,534
|
(1,125
|
)
|
||||||||
Cash and cash equivalents at beginning of period
|
84,319
|
35,785
|
36,910
|
|||||||||
Cash and cash equivalents at end of period
|
$
|
133,860
|
$
|
84,319
|
$
|
35,785
|
||||||
Supplemental disclosure of cash flow information:
|
||||||||||||
Cash received from exchange of research and development tax credits
|
$
|
1,523
|
$
|
-
|
$
|
173
|
||||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||||||
Property and equipment purchased but not paid
|
$
|
302
|
$
|
1,260
|
$
|
1,385
|
||||||
Deferred offering costs payable
|
$ | 105 | $ | - | $ | - | ||||||
Forgiveness of related party promissory notes
|
$
|
-
|
$
|
-
|
$
|
150
|
||||||
Noncash equity issuance - business acquisition
|
$
|
-
|
$
|
151
|
$
|
4,232
|
||||||
Noncash equity related warrants from the Business Combination
|
$
|
-
|
$
|
-
|
$
|
11,618
|
||||||
Conversion of the convertible preferred stock into Class A and Class B common stock
|
$
|
-
|
$
|
-
|
$
|
195,810
|
||||||
Noncash contingent consideration and holdbacks - business acquisition
|
$ | - | $ | - | $ | 1,552 |
|
● |
valuation allowances with respect to deferred tax assets;
|
|
● |
inventory valuation;
|
|
● |
valuation of excess and obsolete inventory reserves;
|
|
● |
valuation for acquisitions;
|
|
● |
valuation of goodwill;
|
|
● |
assumptions used for leases;
|
|
● |
valuation of warrant liabilities;
|
|
● |
assumptions associated with revenue recognition; and
|
|
● |
assumptions underlying the fair value used in the calculation of the stock-based compensation.
|
Property and equipment, net
|
Estimated useful life
|
|
Laboratory and production equipment
|
3-5 years
|
|
Computer equipment
|
3-5 years
|
|
Software
|
3 years
|
|
Furniture and fixtures
|
7 years
|
|
● |
Expected Term: The expected term using the “simplified” method, which is the simple average of the vesting period and the contractual term.
|
|
● | Risk-free Interest Rate: The risk-free interest rate for periods within the expected term of the awards is based on the U.S. Treasury yield curve in effect at the time of the grant. |
|
● |
Expected Stock Price Volatility: The Company determined expected annual equity volatility based on the combination of the historical volatility of its common stock and the historical volatility of the common
stock comparable to the Company’s common stock.
|
|
● |
Dividend Yield: Because the Company has never paid a dividend and does not expect to begin doing so in the foreseeable future, we assume no dividend yield in valuing the stock-based awards.
|
|
● |
Exercise Price: The exercise price is taken directly from the grant notice issued to employees and nonemployees.
|
2023
|
2022
|
2021
|
||||||||||
Dividend income from marketable securities
|
$
|
9,536
|
$
|
5,301
|
$
|
2,549
|
||||||
Gain (loss) on marketable securities, net
|
$
|
5,587
|
$
|
(20,603
|
)
|
$
|
(5,023
|
)
|
December 31, 2023
|
||||||||||||||||
Amortized
Costs
|
Gross
Realized
Gains
|
Gross
Unrealized
Gains
|
Fair
Value
|
|||||||||||||
Short-term marketable securities:
|
||||||||||||||||
U.S. Treasury securities
|
$
|
82,625
|
$
|
-
|
$
|
15
|
$
|
82,640
|
||||||||
Commercial paper
|
41,229
|
-
|
7
|
41,236
|
||||||||||||
Total
|
$
|
123,854
|
$
|
-
|
$
|
22
|
$
|
123,876
|
December 31, 2023
|
||||||||||||||||
One Year
or Less
|
Over
One Year
Through
Five Years
|
Over
Five Years
|
Total
|
|||||||||||||
Short-term marketable securities:
|
||||||||||||||||
U.S. Treasury securities
|
$
|
82,640
|
$
|
-
|
$
|
-
|
$
|
82,640
|
||||||||
Commercial paper
|
41,236
|
-
|
-
|
41,236
|
||||||||||||
Total
|
$
|
123,876
|
$
|
-
|
$
|
-
|
$
|
123,876
|
|
● |
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.
|
December 31, 2023
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial Assets:
|
||||||||||||||||
Cash equivalents:
|
||||||||||||||||
Money market funds
|
$
|
50,226
|
$
|
-
|
$
|
-
|
$
|
50,226
|
||||||||
U.S. Treasury securities
|
59,654
|
-
|
-
|
59,654
|
||||||||||||
Commercial paper
|
-
|
19,436
|
-
|
19,436
|
||||||||||||
Marketable securities:
|
||||||||||||||||
U.S. Treasury securities
|
82,640
|
-
|
-
|
82,640
|
||||||||||||
Commercial paper
|
-
|
41,236
|
-
|
41,236
|
||||||||||||
Total assets at fair value on a recurring basis
|
$
|
192,520
|
$
|
60,672
|
$
|
-
|
$
|
253,192
|
||||||||
Liabilities:
|
||||||||||||||||
Public Warrants
|
$
|
1,227
|
$ |
-
|
$ |
-
|
$ |
1,227
|
||||||||
Private Warrants
|
-
|
-
|
47
|
47
|
||||||||||||
Total liabilities at fair value on a recurring basis
|
$
|
1,227
|
$
|
-
|
$
|
47
|
$
|
1,274
|
December 31, 2022
|
||||||||||||||||
Financial Assets:
|
||||||||||||||||
Cash equivalents:
|
||||||||||||||||
Money market funds
|
$
|
83,079
|
$
|
-
|
$
|
-
|
$
|
83,079
|
||||||||
Marketable securities
|
266,990
|
-
|
-
|
266,990
|
||||||||||||
Total assets at fair value on a recurring basis
|
$
|
350,069
|
$
|
-
|
$
|
-
|
$
|
350,069
|
||||||||
Liabilities:
|
||||||||||||||||
Public Warrants
|
$
|
958
|
$
|
-
|
$
|
-
|
$
|
958
|
||||||||
Private Warrants
|
-
|
-
|
38
|
38
|
||||||||||||
Total liabilities at fair value on a recurring basis
|
$
|
958
|
$
|
-
|
$
|
38
|
$
|
996
|
2023
|
2022
|
|||||||
Raw materials
|
$
|
1,608
|
$
|
-
|
||||
Work in progress
|
779
|
-
|
||||||
Finished goods
|
1,558
|
-
|
||||||
Total inventory, net
|
$
|
3,945
|
$
|
-
|
2023
|
2022
|
|||||||
Laboratory and production equipment
|
$
|
14,727
|
$
|
14,031
|
||||
Computer equipment
|
1,707
|
1,073
|
||||||
Software
|
188
|
188
|
||||||
Furniture and fixtures
|
310
|
218
|
||||||
Leasehold improvements
|
6,948
|
1,308
|
||||||
Construction in process
|
2,438
|
6,234
|
||||||
Subtotal
|
26,318
|
23,052
|
||||||
Less: Accumulated depreciation and amortization
|
(10,043
|
)
|
(6,203
|
)
|
||||
Property and equipment, net
|
$
|
16,275
|
$
|
16,849
|
2023 | 2022 |
|||||||
Operating lease cost
|
$
|
3,478
|
$ | 3,182 | ||||
Variable lease cost
|
1,678
|
1,370 | ||||||
Total lease cost
|
$
|
5,156
|
$ | 4,552 |
Remaining
Lease Payments
|
||||
2024
|
$
|
4,436
|
||
2025
|
4,527
|
|||
2026
|
4,585
|
|||
2027
|
4,549
|
|||
2028
|
2,975
|
|||
Thereafter
|
10,053
|
|||
Total remaining undiscounted lease payments
|
$
|
31,125
|
||
Less: Imputed interest
|
(6,718
|
)
|
||
Less: Lease
incentives (1) |
(9,104 | ) | ||
Total operating lease liabilities
|
15,303
|
|||
Less: current portion |
(1,566 | ) | ||
Long-term operating lease liabilities |
$ |
13,737 | ||
Weighted-average remaining lease term (in years) |
6.4 |
|||
Weighted-average discount rate |
7.9 | % |
(1)
|
Includes lease incentives that may be realized in 2024 for the costs of leasehold improvements.
|
2023 |
2022 |
||||||
Operating cash paid to settle operating lease liabilities
|
$
|
4,298
|
$ | 2,390 | |||
Right-of-use assets obtained in exchange for lease liabilities
|
$
|
83
|
$ |
10,033 |
2023
|
2022
|
|||||||
Restructuring costs |
$ | 519 | $ | - | ||||
Business acquisition costs and contingencies
|
-
|
343
|
||||||
Legal fees
|
979
|
839
|
||||||
Royalties |
123 | - | ||||||
Other
|
194
|
88
|
||||||
Total accrued expenses and other current liabilities
|
$
|
1,815
|
$
|
1,270
|
|
|
2023
|
|
2022
|
2021
|
|
Expected term (in years) |
5.0 – 6.2 | 5.5 – 6.4 | 5.5 – 6.3 | |||
Risk-free interest rate
|
|
3.4% – 4.4%
|
|
1.7% – 4.2%
|
0.9% – 1.4%
|
|
Expected volatility |
62% - 64% | 58% - 64% | 54% - 70% | |||
Expected dividend yield
|
|
-
|
|
-
|
-
|
|
Weighted average fair value/share at grant date
|
$ |
1.01
|
$
|
1.51
|
$ |
5.25
|
Number
of Options
|
Weighted Average
Exercise Price
(per share)
|
Weighted Average
Remaining
Contractual Life
(in years)
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||||||||||
Outstanding at December 31, 2020
|
7,369,541 | $ | 2.37 | 6.77 | $ |
4,094 | ||||||||||
Granted
|
3,514,510 |
|
8.89 | |||||||||||||
Exercised
|
(2,661,252 | ) |
|
2.11 | ||||||||||||
Forfeited
|
(495,827 | ) |
|
6.84 | ||||||||||||
Outstanding at December 31, 2021
|
7,726,972 | $ | 5.14 | 7.58 | $ |
24,511 | ||||||||||
Granted
|
14,271,330 |
|
3.04 | |||||||||||||
Exercised
|
(1,123,249 | ) |
|
2.45 | ||||||||||||
Forfeited
|
(1,447,298 | ) |
|
5.43 | ||||||||||||
Outstanding at December 31, 2022
|
19,427,755
|
$
|
3.69
|
8.68
|
$
|
378
|
||||||||||
Granted
|
10,138,730
|
|
1.79
|
|||||||||||||
Exercised
|
(140,559
|
)
|
|
2.55
|
||||||||||||
Forfeited
|
(6,914,026
|
)
|
|
3.86
|
||||||||||||
Outstanding at December 31, 2023
|
22,511,900
|
$
|
2.79
|
8.22
|
$
|
3,194
|
||||||||||
Exercisable at December 31, 2023
|
6,799,386
|
$
|
3.73
|
6.45
|
$
|
406
|
||||||||||
Vested and expected to vest at December 31, 2023
|
18,629,173
|
$
|
2.87
|
8.06
|
$
|
2,505
|
Number of Shares
Underlying RSUs
|
Weighted Average
Grant-Date Fair
Value (per share)
|
|||||||
Nonvested RSUs at December 31, 2020
|
- | $ | - | |||||
Granted
|
4,861,315 |
|
8.03 | |||||
Vested
|
(274,343 | ) |
|
8.53 | ||||
Forfeited
|
- |
|
- | |||||
Nonvested RSUs at December 31, 2021
|
4,586,972 | $ | 8.00 | |||||
Granted
|
66,666 |
|
3.00 | |||||
Vested
|
(798,575 | ) |
|
8.24 | ||||
Forfeited
|
(1,836,614 | ) |
|
7.26 | ||||
Nonvested RSUs at December 31, 2022
|
2,018,449
|
$
|
8.41
|
|||||
Granted
|
786,938
|
|
1.67
|
|||||
Vested
|
(1,685,101
|
)
|
|
8.55
|
||||
Forfeited
|
(273,117
|
)
|
|
5.89
|
||||
Nonvested RSUs at December 31, 2023
|
847,169
|
$
|
2.68
|
2023
|
2022
|
2021
|
||||||||||
Research and development
|
$
|
2,961
|
$
|
4,548
|
$
|
5,718
|
||||||
Selling, general and administrative
|
5,555
|
6,658
|
19,200
|
|||||||||
Total stock-based compensation
|
$
|
8,516
|
$
|
11,206
|
$
|
24,918
|
|
2023
|
2022
|
2021
|
|||||||||
Numerator
|
||||||||||||
Net loss
|
$
|
(95,960
|
)
|
$
|
(132,442
|
)
|
$
|
(94,989
|
)
|
|||
Numerator for basic and diluted EPS - loss attributable to common stockholders
|
$
|
(95,960
|
)
|
$
|
(132,442
|
)
|
$
|
(94,989
|
)
|
|||
Denominator
|
||||||||||||
Common stock
|
141,300
|
139,255
|
79,579
|
|||||||||
Denominator for basic and diluted EPS - weighted-average common stock
|
141,300
|
139,255
|
79,579
|
|||||||||
Basic and diluted net loss per share
|
$
|
(0.68
|
)
|
$
|
(0.95
|
)
|
$
|
(1.19
|
)
|
2023
|
2022
|
2021
|
||||||||||
Outstanding options to purchase common stock
|
22,511,900
|
19,427,755
|
7,726,972
|
|||||||||
Outstanding restricted stock units
|
847,169
|
2,018,449
|
4,586,972
|
|||||||||
Outstanding warrants
|
3,968,319
|
3,968,319
|
3,968,319
|
|||||||||
27,327,388
|
25,414,523
|
16,282,263
|
|
●
|
in whole and not in part;
|
|
●
|
at a price of $0.01 per warrant;
|
|
●
|
upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and
|
|
●
|
if, and only if, the closing price of the Company’s common stock equals or exceeds $18.00 per
share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20
trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders.
|
Research and
Development
|
Selling,
general and
administrative
|
Total
|
||||||||||
Balance as of December 31, 2022
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Restructuring charges incurred(1)
|
3,083
|
1,421
|
4,504
|
|||||||||
Cash payments and other adjustments(1)
|
(2,570
|
)
|
(1,415
|
)
|
(3,985
|
)
|
||||||
Balance as of December 31, 2023
|
$
|
513
|
$
|
6
|
$
|
519
|
||||||
Current liabilities
|
$
|
519
|
||||||||||
Long-term liabilities
|
-
|
|||||||||||
Total liabilities as of December 31, 2023 |
$
|
519
|
(1) |
Restructuring charges incurred and Cash payments and other adjustments include non-cash charges related to stock-based compensation expenses. |
|
2023
|
2022
|
2021 |
|||||||||
U.S. loss before
provision for income taxes
|
$
|
(95,977
|
)
|
$
|
(132,442
|
)
|
$ | (94,989 | ) | |||
Foreign income before
provision for income taxes
|
17
|
-
|
- | |||||||||
Loss before provision for
income taxes
|
$
|
(95,960
|
)
|
$ | (132,442 | ) | $ | (94,989 | ) |
2023
|
2022
|
2021 |
||||||||||
Federal income tax
at statutory rate
|
21.0
|
%
|
21.0
|
%
|
21.0 | % | ||||||
State income tax,
net of federal benefit
|
7.81
|
4.10
|
7.0 | |||||||||
Uncertain tax
positions
|
(1.45
|
)
|
-
|
- | ||||||||
Tax credits
generated in current year
|
0.68
|
1.90
|
2.8 | |||||||||
Return to provision
adjustments
|
(3.25
|
)
|
-
|
- | ||||||||
Stock-based
compensation
|
(3.17
|
)
|
(0.50
|
)
|
1.6 | |||||||
Other
|
(0.10
|
)
|
0.90
|
0.6 | ||||||||
Valuation allowance
change
|
(21.52
|
)
|
(27.40
|
)
|
(33.0 | ) | ||||||
Total
|
0.0
|
%
|
0.0
|
%
|
0.0 | % |
2023
|
2022
|
2021
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
State
|
-
|
-
|
-
|
|||||||||
Foreign
|
-
|
-
|
-
|
|||||||||
Total current
|
-
|
-
|
-
|
|||||||||
Deferred:
|
||||||||||||
Federal
|
-
|
-
|
-
|
|||||||||
State
|
-
|
-
|
-
|
|||||||||
Foreign
|
-
|
-
|
-
|
|||||||||
Total deferred
|
-
|
-
|
-
|
|||||||||
Income tax provision
|
$
|
-
|
$
|
-
|
$
|
- |
2023
|
2022
|
|||||||
Deferred income
tax assets:
|
||||||||
Net operating
loss carryforwards
|
$
|
89,525
|
$
|
77,008
|
||||
Tax credit
carryforwards
|
9,855
|
13,358
|
||||||
Stock-based
compensation
|
4,528
|
7,309
|
||||||
Operating lease
liabilities
|
3,385
|
4,344
|
||||||
Loss on
marketable securities
|
2,195
|
5,724
|
||||||
Capitalized
research and development
|
30,878
|
12,005
|
||||||
Other
|
2,938
|
3,925
|
||||||
Total deferred
income tax assets
|
$
|
143,304
|
$
|
123,673
|
||||
Deferred income
tax liabilities:
|
||||||||
Operating lease
right-of-use assets
|
$
|
(215
|
)
|
$
|
(4,258
|
)
|
||
Property and
equipment
|
(3,558
|
)
|
(381
|
)
|
||||
Total deferred
income tax liabilities
|
(3,773 | ) | (4,639 | ) | ||||
Valuation
allowance
|
(139,531 | ) | (119,034 | ) | ||||
Net deferred tax
assets (liabilities)
|
$ | - | $ | - |
2023
|
2022
|
2021 |
||||||||||
Beginning balance
|
$
|
-
|
$
|
-
|
$ |
- | ||||||
Increases related to prior year tax positions
|
1,310
|
-
|
- | |||||||||
Increases related to current year tax positions
|
69
|
-
|
- | |||||||||
Ending balance
|
$
|
1,379
|
$
|
- |
$ |
- |
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A. |
CONTROLS AND PROCEDURES
|
ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
|
ITEM 11. |
EXECUTIVE COMPENSATION
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Exhibit
Number
|
Exhibit Description
|
Filed
Herewith
|
Incorporated
by
Reference
Herein from
Form or
Schedule
|
Filing
Date
|
SEC File/
Reg. Number
|
|||||
Business Combination Agreement, dated as of February 18, 2021, by and among Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.), Clay Merger Sub, Inc., and Q-SI Operations Inc. (formerly
Quantum-Si Incorporated)
|
Form 8-K
(Exhibit 2.1)
|
2/18/2021
|
001-39486
|
|||||||
Second Amended and Restated Certificate of Incorporation of Quantum-Si Incorporated, as amended.
|
Form 10-Q
(Exhibit 3.1)
|
8/7/2023
|
001-39486
|
|||||||
Amended and Restated Bylaws of Quantum-Si Incorporated
|
Form 10-K
(Exhibit 3.2)
|
3/1/2021
|
001-39486
|
|||||||
Description of Securities
|
X
|
|||||||||
Specimen Class A Common Stock Certificate
|
Form S-4/A
(Exhibit 4.1)
|
5/11/2021
|
333-253691
|
|||||||
Warrant Agreement, dated as of September 3, 2020, by and between Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and Continental Stock Transfer & Trust Company
|
Form 8-K
(Exhibit 4.1)
|
9/9/2020
|
001-39486
|
Form of PIPE Investor Subscription Agreement for institutional investors, dated as of February 18, 2021, by and between Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and the subscriber
parties thereto
|
Form 8-K
(Exhibit 10.1)
|
2/18/2021
|
001-39486
|
|||||||
Form of PIPE Investor Subscription Agreement for accredited investors, dated as of February 18, 2021, by and between Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and the subscriber
parties thereto
|
Form 8-K/A
(Exhibit 10.2)
|
2/19/2021
|
001-39486
|
|||||||
Form of Subscription Agreement, dated as of February 18, 2021, by and between Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and the Foresite Funds
|
Form 8-K/A
(Exhibit 10.3)
|
2/19/2021
|
001-39486
|
|||||||
Transaction Support Agreement, dated as of February 19, 2021, by and among Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.), and certain supporting stockholders of Q-SI Operations Inc.
(formerly Quantum-Si Incorporated)
|
Form 8-K
(Exhibit 10.1)
|
2/22/2021
|
001-39486
|
|||||||
Sponsor Letter Agreement, dated as of February 18, 2021, by and among HighCape Capital Acquisition LLC, Deerfield Partners, L.P., Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and Q-SI
Operations Inc. (formerly Quantum-Si Incorporated)
|
Form 8-K
(Exhibit 10.4)
|
2/18/2021
|
001-39486
|
|||||||
Advisory Agreement, dated as of November 1, 2022, by and between Quantum-Si Incorporated and Jonathan M. Rothberg, Ph.D.
|
Form 10-K
(Exhibit 10.6)
|
3/17/2023
|
001-39486
|
|||||||
Offer Letter of Employment, dated as of October 2, 2022, by and between Quantum-Si Incorporated and Jeffrey Hawkins
|
Form 8-K
(Exhibit 10.1)
|
10/4/2022
|
001-39486
|
|||||||
Offer Letter of Employment, dated as of April 27, 2023, by and between Quantum-Si Incorporated and Jeffry Keyes
|
Form 8-K
(Exhibit 10.1)
|
5/2/2023
|
001-39486
|
|||||||
Offer Letter of Employment, dated as of December 8, 2022, by and between Quantum-Si Incorporated and Grace Johnston
|
Form 10-K
(Exhibit 10.9)
|
3/17/2023
|
001-39486
|
|||||||
Offer Letter of Employment, dated as of November 4, 2020, by and between Q-SI Operations Inc. (formerly Quantum-Si Incorporated) and Christian LaPointe, Ph.D., as supplemented by the Letter Agreement, dated as
of February 16, 2021, by and between Q-SI Operations Inc. and Christian LaPointe, Ph.D.
|
Form 10-K
(Exhibit 10.12)
|
3/1/2022
|
001-39486
|
Technology and Services Exchange Agreement, dated as of February 17, 2021, by and among Q-SI Operations Inc. (formerly Quantum-Si Incorporated) and the participants named therein
|
Form 10-Q
(Exhibit 10.1)
|
11/15/2021
|
001-39486
|
|||||||
Protein Engineering Collaboration Agreement, dated as of March 13, 2023, by and between Quantum-Si Incorporated and Protein Evolution, Inc.
|
Form 10-K
(Exhibit 10.14)
|
3/17/2023
|
001-39486
|
|||||||
Quantum-Si Incorporated 2021 Equity Incentive Plan
|
Form 8-K
(Exhibit 10.13.1)
|
6/15/2021
|
001-39486
|
|||||||
Form of Stock Option Agreement under 2021 Equity Incentive Plan
|
Form 8-K
(Exhibit 10.13.2)
|
6/15/2021
|
001-39486
|
|||||||
Form of Restricted Stock Unit Agreement under 2021 Equity Incentive Plan
|
X |
|
|
|
||||||
Q-SI Operations Inc. 2013 Employee, Director and Consultant Equity Incentive Plan, as amended
|
Form 8-K
(Exhibit 10.14.1)
|
6/15/2021
|
001-39486
|
|||||||
Form of Stock Option Agreement under 2013 Employee, Director and Consultant Equity Incentive Plan, as amended
|
Form 8-K
(Exhibit 10.14.2)
|
6/15/2021
|
001-39486
|
|||||||
Form of Restricted Stock Unit Agreement under 2013 Employee, Director and Consultant Equity Incentive Plan, as amended
|
Form 8-K
(Exhibit 10.14.3)
|
6/15/2021
|
001-39486
|
|||||||
Form of Performance-Based Non-Qualified Stock Option Agreement
|
Form S-8
(Exhibit 99.1)
|
11/10/2022
|
333-268301
|
|||||||
Nonemployee Director Compensation Policy
|
X |
|
|
|
|
|
||||
Form of Indemnification Agreement
|
Form 8-K
(Exhibit 10.16)
|
6/15/2021
|
001-39486
|
|||||||
Amended and Restated Registration Rights Agreement, dated as of June 10, 2021, by and among Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and certain of its securityholders
|
Form 8-K
(Exhibit 10.17)
|
6/15/2021
|
001-39486
|
|||||||
Lease Agreement between Quantum-Si Incorporated and BP3-SD5 5510 Morehouse Drive LLC, dated June 18, 2021
|
Form 8-K
(Exhibit 10.1)
|
6/24/2021
|
001-39486
|
|||||||
Lease Agreement between Quantum-Si Incorporated and Winchester Office LLC, dated December 28, 2021
|
Form 8-K
(Exhibit 10.1)
|
1/24/2022
|
001-39486
|
|||||||
Quantum-Si Incorporated Executive Severance Plan
|
Form 8-K
(Exhibit 10.1)
|
7/6/2021
|
001-39486
|
|||||||
2023 Inducement Equity Incentive Plan
|
Form S-8
(Exhibit 99.1)
|
7/20/2023
|
333-273350
|
Form of Stock Option Agreement under the 2023 Inducement Equity Incentive Plan
|
Form S-8
(Exhibit 99.2)
|
7/20/2023
|
333-273350
|
|||||||
Equity Distribution Agreement, dated as of August 11, 2023, by and between Quantum-Si Incorporated and Evercore Group L.L.C.
|
Form S-3
(Exhibit 1.2)
|
8/11/2023
|
333-272934
|
|||||||
List of Subsidiaries
|
Form 10-K
(Exhibit 21.1)
|
3/17/2023
|
001-39486
|
|||||||
Consent of Deloitte & Touche LLP
|
X
|
|||||||||
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
|
|||||||||
Clawback Policy, effective as of August 3, 2023
|
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
|
† |
Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the
SEC upon its request.
|
+ |
Management contract or compensatory plan or arrangement.
|
* |
The certifications attached as Exhibit 32 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any
filing of Quantum-Si Incorporated under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of such Form 10-K), irrespective of any general incorporation
language contained in such filing.
|
ITEM 16. |
FORM 10-K SUMMARY
|
QUANTUM-SI INCORPORATED
|
||
February 29, 2024
|
||
By:
|
/s/ Jeffrey Hawkins
|
|
Jeffrey Hawkins
|
||
President and Chief Executive Officer
|
Name
|
Title
|
Date
|
/s/ Jeffrey Hawkins
|
President, Chief Executive Officer and Director
|
February 29, 2024
|
Jeffrey Hawkins
|
(Principal Executive Officer)
|
|
/s/ Jeffry Keyes
|
Chief Financial Officer and Treasurer
|
February 29, 2024
|
Jeffry Keyes
|
(Principal Financial and Accounting Officer)
|
|
/s/ Jonathan M. Rothberg, Ph.D.
|
Chairman of the Board
|
February 29, 2024
|
Jonathan M. Rothberg, Ph.D.
|
||
/s/ Ruth Fattori
|
Director
|
February 29, 2024
|
Ruth Fattori
|
||
/s/ Amir Jafri
|
Director
|
February 29, 2024
|
Amir Jafri
|
||
/s/ John Patrick Kenny
|
Director
|
February 29, 2024
|
John Patrick Kenny
|
||
/s/ Brigid A. Makes
|
Director
|
February 29, 2024
|
Brigid A. Makes
|
||
/s/ Scott Mendel
|
Director
|
February 29, 2024
|
Scott Mendel
|
||
/s/ Kevin Rakin
|
Director
|
February 29, 2024
|
Kevin Rakin
|
|
(1) |
Any sale, assignment, transfer, conveyance, hypothecation, or other transfer or disposition, directly or indirectly, of any Class B common stock or any legal or beneficial interest in such share, whether or not
for value and whether voluntary or involuntary or by operation of law (including by merger, consolidation, or otherwise), including, without limitation the transfer of a share of Class B common stock to a broker or other nominee or the
transfer of, or entering into a binding agreement with respect to, voting control over such share by proxy or otherwise, other than a permitted transfer.
|
|
(2) |
Upon the first date on which Dr. Rothberg, together with all other qualified stockholders, collectively cease to beneficially own at least 20% of the number of 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 Class B common stock) collectively beneficially owned by Dr. Rothberg and permitted transferees of Class B common
stock as of the effective time of the Merger (defined below).
|
|
(3) |
Upon the date specified by the affirmative vote of the holders of at least two-thirds (2/3) of the outstanding shares of Class B common stock, voting as a separate class.
|
|
• |
in whole and not in part;
|
|
• |
at a price of $0.01 per Public Warrant;
|
|
• |
upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each Public Warrant holder; and
|
|
• |
if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20
trading days within a 30-trading day period ending three business days before Quantum-Si sends the notice of redemption to the Public Warrant holders.
|
|
• |
Registration rights. Quantum-Si was required to use its commercially reasonable efforts to file a registration statement under the Securities Act to permit the public resale of all registrable securities as permitted by Rule 415 of the
Securities Act. At any time at which Quantum-Si has an effective shelf registration statement with respect to a holder’s registrable securities, any such holder may request to sell all or a portion of their registrable securities pursuant
to an underwritten offering pursuant to such shelf registration statement, provided that such holder(s) reasonably expect any such sales to generate aggregate gross proceeds in excess of $25 million or reasonably expect to sell all of the
registrable securities held by such holder, but in no event for aggregate gross proceeds of less than $5 million in gross proceeds. Quantum-Si will enter into an underwriting agreement with a managing underwriter or underwriters selected
by the initiating holder(s), after consultation with Quantum-Si, and will take all such other reasonable actions as are requested by the managing underwriter to expedite or facilitate the disposition of such registrable securities.
|
|
• |
Demand registration rights. At any time after the closing of the Business Combination, if Quantum-Si does not have an effective registration statement outstanding, Quantum-Si will be required, upon the written request of the holders of
at least a majority-in-interest of the then-outstanding registrable securities held by the Sponsor Group Holders or the Quantum-Si Holders, as soon as practicable but not more than 45 days after receipt of such written request, to file a
registration statement and to effect the registration of all or part of their registrable securities. Quantum-Si is not obligated to effect more than an aggregate of three registrations pursuant to a demand registration request.
|
|
• |
Piggyback registration rights. At any time after the closing of the Business Combination, if Quantum-Si proposes to file a registration statement under the Securities Act to register any of its equity securities, or securities or other
obligations exchangeable or convertible into equity securities, or to conduct a public offering, either for its own account or for the account of any other person, subject to certain exceptions and reductions as described in the Amended and
Restated Registration Rights Agreement, then Quantum-Si will give written notice of such proposed filing to the holders of registrable securities as soon as practicable but not less than 10 days before the anticipated filing of such
registration statement. Upon the written request of any holder of registrable securities in response to such written notice, Quantum-Si will, in good faith, cause such registrable securities to be included in the registration statement and
use its commercially reasonable efforts to cause the underwriters of any proposed underwritten offering to include such holders’ registrable securities on the same terms and conditions as any similar securities of Quantum-Si included in
such registration.
|
|
(1) |
prior to such time the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
|
|
(2) |
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also
officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
|
|
(3) |
at or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of
at least 66 2∕3% of the outstanding voting stock which is not owned by the interested stockholder.
|
Name:
|
|
Grant Number:
|
|
Grant Date:
|
|
Grant Type:
|
|
Grant Shares:
|
|
Vesting of Award:
|
This Restricted Stock Unit Award shall vest as follows provided the Participant is an Employee, director or Consultant of the Company or of an Affiliate on the applicable vesting date:
|
[Vesting Schedule Description]
|
|
QUANTUM-SI INCORPORATED
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
Participant
|
A. |
Equity Grants
|
|
1. |
Annual Grants
|
|
2. |
Initial Grants for Newly Appointed or Elected Directors
|
|
3. |
Terms of Outside Director Grants
|
|
1. |
Annual Cash Fees
|
Board of Directors or Committee of Board of Directors
|
Annual
Retainer
Amount for
Chair
|
Annual
Retainer
Amount for
Other Members
|
||||||
Board of Directors (additional Chairman retainer)
|
$
|
50,000
|
$
|
-
|
||||
Audit Committee
|
$
|
20,000
|
$
|
10,000
|
||||
Compensation Committee
|
$
|
15,000
|
$
|
7,500
|
||||
Nominating and Governance Committee
|
$
|
10,000
|
$
|
5,000
|
|
2. |
Payment Terms for All Cash Fees
|
1. |
I have reviewed this annual report on Form 10-K 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)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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/ Jeffrey Hawkins
|
|
Jeffrey Hawkins
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
1. |
I have reviewed this annual report on Form 10-K 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)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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/ Jeffry Keyes
|
|
Jeffry Keyes
|
|
Chief Financial Officer and Treasurer
|
|
(Principal Financial and Accounting Officer)
|
Dated: February 29, 2024
|
/s/ Jeffrey Hawkins
|
Jeffrey Hawkins
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
Dated: February 29, 2024
|
/s/ Jeffry Keyes
|
Jeffry Keyes
|
|
Chief Financial Officer and Treasurer
|
|
(Principal Financial and Accounting Officer)
|
I.
|
Introduction
|
II.
|
Administration
|
III.
|
Covered Executives
|
IV.
|
Incentive-Based Compensation
|
|
• |
Annual bonuses and other short- and long-term cash incentives.
|
|
• |
Stock options.
|
|
• |
Stock appreciation rights.
|
|
• |
Restricted stock or restricted stock units.
|
|
• |
Performance shares or performance units.
|
|
• |
Company stock price.
|
|
• |
Total shareholder return.
|
|
• |
Revenues.
|
|
• |
Net income.
|
|
• |
Earnings before interest, taxes, depreciation, and amortization (EBITDA).
|
|
• |
Funds from operations.
|
|
• |
Liquidity measures such as working capital or operating cash flow.
|
|
• |
Return measures such as return on invested capital or return on assets.
|
|
• |
Earnings measures such as earnings per share.
|
V.
|
Recoupment; Accounting Restatement
|
VI.
|
Excess Incentive Compensation: Amount Subject to Recovery
|
VII.
|
Method of Recoupment
|
|
• |
requiring reimbursement of cash Incentive-Based Compensation previously paid;
|
|
• |
seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards;
|
|
• |
offsetting the recouped amount from any compensation otherwise owed by the Company to the Covered Executive;
|
|
• |
cancelling outstanding vested or unvested equity awards; and/or
|
|
• |
taking any other remedial and recovery action permitted by law, as determined by the Board.
|
VIII.
|
No Indemnification; Successors
|
IX.
|
Exception to Enforcement
|
X.
|
Interpretation
|
XI.
|
Effective Date
|
XII.
|
Amendment; Termination
|
XIII.
|
Other Recoupment Rights
|