10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2022

OR

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

Telesis Bio 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

Codex DNA, Inc.

(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 spuch 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 29,521,757 shares of common stock as of October 31, 2022.

 

 

 


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wTable 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

38

Item 4. Controls and Procedures

38

Part II - Other Information

 

Item 1. Legal Proceedings

40

Item 1A. Risk Factors

40

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

79

Item 3. Defaults Upon Senior Securities

79

Item 4. Mine Safety Disclosures

79

Item 5. Other Information

79

Item 6. Exhibits

80

Signatures

81

 

2


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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

3


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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.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Telesis Bio Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)

 

 

September 30,
2022

 

 

December 31,
2021

 

Assets

 

 

 

 

(Note 2)

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

24,741

 

 

$

82,806

 

Restricted cash

 

 

175

 

 

 

 

Short-term investments

 

 

25,014

 

 

 

 

Accounts receivable, net of allowance for bad debts of $13 and $0 at
   September 30, 2022 and December 31, 2021, respectively

 

 

5,661

 

 

 

3,665

 

Inventory

 

 

2,195

 

 

 

2,368

 

Prepaid expenses and other current assets

 

 

4,399

 

 

 

4,345

 

Total current assets

 

 

62,185

 

 

 

93,184

 

Property and equipment, net

 

 

6,291

 

 

 

3,456

 

Right-of-use assets

 

 

1,854

 

 

 

2,281

 

Long-term deposits

 

 

915

 

 

 

609

 

Goodwill

 

 

14,886

 

 

 

14,330

 

Other intangible assets, net

 

 

2,011

 

 

 

2,397

 

Total assets

 

$

88,142

 

 

$

116,257

 

Liabilities and stockholders' equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,617

 

 

$

2,499

 

Accrued employee expenses

 

 

4,529

 

 

 

3,849

 

Finance lease liability, current portion

 

 

17

 

 

 

81

 

Operating lease liability, current portion

 

 

716

 

 

 

1,156

 

Deferred revenue, current portion

 

 

4,191

 

 

 

205

 

Notes payable, current portion

 

 

 

 

 

603

 

Other accrued liabilities

 

 

1,258

 

 

 

1,005

 

Other current liabilities

 

 

480

 

 

 

335

 

Total current liabilities

 

 

12,808

 

 

 

9,733

 

Operating lease liability, net of current portion

 

 

1,174

 

 

 

1,394

 

Notes payable, net of discount and current portion

 

 

19,470

 

 

 

14,088

 

Derivative liabilities

 

 

396

 

 

 

108

 

Deferred revenue, net of current portion

 

 

986

 

 

 

150

 

Total liabilities

 

$

34,834

 

 

$

25,473

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Preferred stock, $.0001 par value; 5,000,000 shares authorized at September 30, 2022 and December 31, 2021. No shares issued and outstanding

 

 

 

 

 

 

Common stock, $.0001 par value; 100,000,000 shares authorized at
   September 30, 2022 and December 31, 2021;
29,521,757 and 29,318,578 shares
   issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

158,932

 

 

 

156,049

 

Accumulated other comprehensive loss

 

 

(20

)

 

 

 

Accumulated deficit

 

 

(105,609

)

 

 

(65,270

)

Total stockholders' equity

 

 

53,308

 

 

 

90,784

 

Total liabilities and stockholders' equity

 

$

88,142

 

 

$

116,257

 

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

 

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Table of Contents

 

Telesis Bio Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

4,723

 

 

$

2,180

 

 

$

12,943

 

 

$

6,099

 

Royalties and other revenue

 

 

1,952

 

 

 

606

 

 

 

5,023

 

 

 

1,866

 

Total revenue

 

 

6,675

 

 

 

2,786

 

 

 

17,966

 

 

 

7,965

 

Cost of revenue

 

 

3,016

 

 

 

1,624

 

 

 

8,817

 

 

 

4,548

 

Gross profit

 

 

3,659

 

 

 

1,162

 

 

 

9,149

 

 

 

3,417

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

5,816

 

 

 

3,593

 

 

 

19,321

 

 

 

9,217

 

Sales and marketing

 

 

3,833

 

 

 

2,955

 

 

 

11,808

 

 

 

7,881

 

General and administrative

 

 

5,261

 

 

 

4,055

 

 

 

16,621

 

 

 

9,596

 

Total operating expenses

 

 

14,910

 

 

 

10,603

 

 

 

47,750

 

 

 

26,694

 

Loss from operations

 

 

(11,251

)

 

 

(9,441

)

 

 

(38,601

)

 

 

(23,277

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(319

)

 

 

(381

)

 

 

(954

)

 

 

(1,001

)

Change in fair value of derivative liabilities

 

 

(17

)

 

 

15

 

 

 

(21

)

 

 

(1,532

)

Loss on extinguishment of debt

 

 

(727

)

 

 

 

 

 

(727

)

 

 

(618

)

Other income (expense), net

 

 

6

 

 

 

(13

)

 

 

(18

)

 

 

(29

)

Total other expense, net

 

 

(1,057

)

 

 

(379

)

 

 

(1,720

)

 

 

(3,180

)

Loss before provision for income taxes

 

 

(12,308

)

 

 

(9,820

)

 

 

(40,321

)

 

 

(26,457

)

Provision for income taxes

 

 

(6

)

 

 

(4

)

 

 

(18

)

 

 

(10

)

Net loss

 

$

(12,314

)

 

$

(9,824

)

 

$

(40,339

)

 

$

(26,467

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale short-term investments

 

 

14

 

 

 

 

 

 

(20

)

 

 

 

Total comprehensive loss

 

$

(12,300

)

 

$

(9,824

)

 

$

(40,359

)

 

$

(26,467

)

Net loss attributable to common stockholders

 

$

(12,314

)

 

$

(9,824

)

 

$

(40,339

)

 

$

(26,467

)

Net loss per share attributable to common stockholders—basic and diluted

 

$

(0.42

)

 

$

(0.34

)

 

$

(1.37

)

 

$

(1.83

)

Weighted average common stock outstanding—basic and diluted

 

 

29,518,955

 

 

 

29,299,769

 

 

 

29,429,393

 

 

 

14,485,161

 

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

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Telesis Bio 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

 

Issuance of Common Stock upon exercise of stock options

 

 

 

 

 

 

 

 

 

15,525

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

10

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

365

 

 

 

 

 

 

 

 

 

365

 

Payment of offering costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(226

)

 

 

 

 

 

 

 

 

(226

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,824

)

 

 

 

 

 

(9,824

)

Balances at September 30, 2021

 

 

 

 

$

 

 

 

 

29,307,088

 

 

$

5

 

 

$

155,536

 

 

$

(52,779

)

 

$

 

 

$

102,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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