SEC Filing - Telesis Bio

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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________

Commission file number 001-40497

CODEX DNA, INC.

(Exact name of registrant as specified in its charter)


Delaware	45-1216839
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
9535 Waples Street, Suite 100, San Diego, CA	92121-2993
(Address of Principal Executive Offices)	(Zip Code)

(858) 228-4115

Registrant's telephone number, including area code

9535 Waples Street, Suite 100

San Diego, CA 92121-2993

(858) 228-4115

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	DNAY	Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The registrant had outstanding 29,518,196 shares of common stock as of July 31, 2022.

Table of Contents


	Page
Part I - Financial Information
Item 1. Financial Statements (Unaudited)	5
Condensed Consolidated Balance Sheets	5
Condensed Consolidated Statements of Operations and Comprehensive Loss	6
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)	7
Condensed Consolidated Statements of Cash Flows	8
Notes to Condensed Consolidated Financial Statements	9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk	36
Item 4. Controls and Procedures	37
Part II - Other Information
Item 1. Legal Proceedings	38
Item 1A. Risk Factors	38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 3. Defaults Upon Senior Securities	78
Item 4. Mine Safety Disclosures	78
Item 5. Other Information	78
Item 6. Exhibits	79
Signatures	80

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (Quarterly Report) contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, research and development costs, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that are in some cases beyond our control and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal” “intend,” “may,” “objective” “plan,” “predict,” “potential,” “project,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

•

estimates of the synthetic biology market, market growth, and new market expansion;

•

our future revenue, expenses, capital requirements and our needs for additional financing;

•

our expectations regarding the rate and degree of market acceptance of our BioXp system, BioXp kits and benchtop reagents;

•

the ability of our products to facilitate the design-build-test paradigm of synthetic biology;

•

the size and growth of the synthetic biology market and competitive companies and technologies and our industry;

•

our ability to manage and grow our business;

•

our ability to develop and commercialize new products; our ability to establish and maintain intellectual property protection for our products or avoid or defend claims of infringement;

•

the performance of third-party manufacturers and suppliers and our ability to qualify second-source suppliers;

•

the potential effects of government regulation;

•

our ability to hire and retain key personnel and to manage our future growth effectively;

•

our ability to obtain additional financing in future offerings;

•

the volatility of the trading price of our common stock;

•

the impact of local, regional, and national and international economic conditions and events, including the war between Russia and Ukraine;

•

the impact of COVID-19 on our business;

•

our expectations about market trends;

•

our anticipated use of our existing resources; and

•

other risks and uncertainties, including those listed in the section titled “Risk Factors.”

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. Because forward-looking statements are

inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements contained herein to reflect events or circumstances after the date of this Quarterly Report, whether as a result of any new information, future events or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Codex DNA, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)


	June 30, 2022			December 31, 2021
Assets				(Note 2)
Current assets:
Cash and cash equivalents	$	22,282		$	82,806
Short-term investments		39,607			—
Accounts receivable, net of allowance for bad debts of $13 and $0 at June 30, 2022 and December 31, 2021, respectively		4,885			3,665
Inventory		1,776			2,368
Prepaid expenses and other current assets		3,477			4,345
Total current assets		72,027			93,184
Property and equipment, net		6,306			3,456
Right-of-use assets		1,747			2,281
Long-term deposits		734			609
Goodwill		14,330			14,330
Other intangible assets, net		2,140			2,397
Total Assets	$	97,284		$	116,257
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	3,870		$	2,499
Accrued employee expenses		3,999			3,849
Finance lease liability, current portion		39			81
Operating lease liability, current portion		596			1,156
Deferred revenue, current portion		4,086			205
Notes payable, current portion		4,204			603
Other accrued liabilities		981			1,005
Other current liabilities		469			335
Total current liabilities		18,244			9,733
Operating lease liability, net of current portion		1,249			1,394
Notes payable, net of discount and current portion		10,712			14,088
Derivative liabilities		112			108
Deferred revenue, net of current portion		2,247			150
Total liabilities	$	32,564		$	25,473
Commitments and contingencies (Note 11)
Stockholders' equity
Preferred stock, $.0001 par value; 5,000,000 shares authorized at June 30, 2022 and December 31, 2021. No shares issued and outstanding		—			—
Common stock, $.0001 par value; 100,000,000 shares authorized at June 30, 2022 and December 31, 2021; 29,514,071 and 29,318,578 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		5			5
Additional paid-in capital		158,044			156,049
Accumulated other comprehensive loss		(34	)		—
Accumulated deficit		(93,295	)		(65,270	)
Total stockholders' equity		64,720			90,784
Total liabilities and stockholders' equity	$	97,284		$	116,257

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Codex DNA, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Revenue:
Product sales	$	4,092		$	2,120		$	8,220		$	3,919
Royalties and other revenue		1,563			732			3,071			1,260
Total revenue		5,655			2,852			11,291			5,179
Cost of revenue		2,943			1,899			5,801			2,924
Gross profit		2,712			953			5,490			2,255
Operating expenses:
Research and development		7,124			2,746			13,505			5,624
Sales and marketing		4,514			2,630			7,975			4,905
General and administrative		5,561			3,149			11,360			5,562
Total operating expenses		17,199			8,525			32,840			16,091
Loss from operations		(14,487	)		(7,572	)		(27,350	)		(13,836	)
Other income (expense), net:
Interest expense, net		(299	)		(379	)		(635	)		(620	)
Change in fair value of derivative liabilities		(27	)		(1,251	)		(4	)		(1,547	)
Loss on extinguishment of debt		—			—			—			(618	)
Other income (expense), net		(12	)		3			(24	)		(16	)
Total other expense, net		(338	)		(1,627	)		(663	)		(2,801	)
Loss before provision for income taxes		(14,825	)		(9,199	)		(28,013	)		(16,637	)
Provision for income taxes		(6	)		(2	)		(12	)		(6	)
Net loss	$	(14,831	)	$	(9,201	)	$	(28,025	)	$	(16,643	)

Other comprehensive loss:
Unrealized loss on available-for-sale short-term investments		(18	)		—			(34	)		—
Total comprehensive loss	$	(14,849	)	$	(9,201	)	$	(28,059	)	$	(16,643	)
Net loss attributable to common stockholders	$	(14,831	)	$	(9,201	)	$	(28,025	)	$	(16,643	)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.50	)	$	(1.06	)	$	(0.95	)	$	(2.39	)
Weighted average common stock outstanding—basic and diluted		29,435,838			8,697,707			29,383,870			6,955,084

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Codex DNA, Inc.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)

(in thousands, except share data)

(Unaudited)


	Convertible Preferred Stock						Common Stock				Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Total Stockholders' Equity (Deficit)
	Shares			Amount			Shares		Amount
Balances at December 31, 2020		15,079,329		$	38,914			5,023,957	$	2	$	851	$	(26,312	)	$	—		$	(25,459	)
Issuance of Common Stock upon exercise of stock options		—			—			223,216		—		133		—			—			133
Stock-based compensation expense		—			—			—		—		67		—			—			67
Net loss		—			—			—		—		—		(7,442	)		—			(7,442	)
Balances at March 31, 2021		15,079,329		$	38,914			5,247,173	$	2	$	1,051	$	(33,754	)	$	—		$	(32,701	)
Issuance of common shares upon initial public offering, net of issuance costs of $8,587		—			—			7,666,664		1		112,483		—			—			112,484
Conversion of convertible preferred shares into an equivalent number of common shares		(15,079,329	)		(38,914	)		15,079,329		2		38,912		—			—			38,914
Issuance of warrant and conversion into common shares		—			—			1,252,468		—		2,770		—			—			2,770
Issuance of Common Stock upon exercise of stock options		—			—			45,929		—		25		—			—			25
Stock-based compensation expense		—			—			—		—		146		—			—			146
Net loss		—			—			—		—		—		(9,201	)		—			(9,201	)
Balances at June 30, 2021		—		$	—			29,291,563	$	5	$	155,387	$	(42,955	)	$	—		$	112,437
Balances at December 31, 2021		—		$	—			29,318,578	$	5	$	156,049	$	(65,270	)	$	—		$	90,784
Issuance of Common Stock upon exercise of stock options		—			—			70,534		—		78		—			—			78
Stock-based compensation expense		—			—			—		—		448		—			—			448
Unrealized loss on available- for-sale short-term investments		—			—			—		—		—		—			(16	)		(16	)
Net loss		—			—			—		—		—		(13,194	)		—			(13,194	)
Balances at March 31, 2022		—		$	—			29,389,112	$	5	$	156,575	$	(78,464	)	$	(16	)	$	78,100
Issuance of Common Stock upon exercise of stock options		—			—			11,752		—		12		—			—			12
Issuance of Common Stock related to ESPP		—			—			113,207		—		339		—			—			339
Stock-based compensation expense		—			—			—		—		1,118		—			—			1,118
Unrealized loss on available- for-sale short-term investments		—			—			—		—		—		—			(18	)		(18	)
Net loss		—			—			—		—		—		(14,831	)		—			(14,831	)
Balances at June 30, 2022		—		$	—			29,514,071	$	5	$	158,044	$	(93,295	)	$	(34	)	$	64,720

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Codex DNA, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Six Months Ended June 30,
	2022			2021
Cash Flows From Operating Activities:
Net loss	$	(28,025	)	$	(16,643	)
Adjustments to reconcile net loss to net cash used in operating activities: