0000950170-22-023380 | 10-Q | XBRL Viewer

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Goodwill and Other Intangible Assets - Other Intangible Assets, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 3,680	$ 3,680
Accumulated Amortization	(1,669)	(1,283)
Net Carrying Value	2,011	2,397
Intellectual Property
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	3,150	3,150
Accumulated Amortization	(1,613)	(1,275)
Net Carrying Value	1,537	1,875
Trade Name
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	80	80
Accumulated Amortization	(22)	(3)
Net Carrying Value	58	77
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	420	420
Accumulated Amortization	(25)	(4)
Net Carrying Value	395	416
Non-competition Agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	30	30
Accumulated Amortization	(9)	(1)
Net Carrying Value	$ 21	$ 29

Leases - Narrative (Details)	1 Months Ended
Leases - Narrative (Details)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) Lease
Lessee, Lease, Description [Line Items]
Number of outstanding leases \| Lease		6
Payments to be excluded		$ 45,100,000
Term of contract (in years)		10 years
10431 Wateridge Circle
Lessee, Lease, Description [Line Items]
Renovation price per unit (in USD per square foot)	$ 185.00
Renovation price	12,300,000
Additional allowance, up to (in USD per square foot)	10.00
Additional allowance, up to	700,000
Annual Lease Payments	$ 3,900,000
Annual rent increase (as a percent)	3.00%
Options to extend	one
Extension (in years)	5 years
Term of contract (in years)		10 years 3 months
Minimum
Lessee, Lease, Description [Line Items]
Term of leases (in months)		1 month
Maximum
Lessee, Lease, Description [Line Items]
Term of leases (in months)		62 months

Leases - Minimum Future Lease Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Operating
2022	$ 406
2023	514
2024	323
2025	333
2026	343
Thereafter	307
Total future minimum lease payments	2,226
Less: imputed interest	(336)
Present value of operating lease liability	1,890
Less: current portion of lease liability	(716)	$ (1,156)
Non-current portion of lease liability	1,174	1,394
Finance
2022	18
2023	0
2024	0
2025	0
2026	0
Thereafter	0
Total future minimum lease payments	18
Less: imputed interest	(1)
Present value of operating lease liability	17
Less: current portion of lease liability	$ (17)	$ (81)

Goodwill and Other Intangible Assets - Narrative (Details) - USD ($)		3 Months Ended		9 Months Ended
	Nov. 18, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Mar. 08, 2019
Finite-Lived Intangible Assets [Line Items]
Goodwill		$ 14,886,000		$ 14,886,000		$ 14,330,000	$ 3,500,000
Goodwill, impairment		0	$ 0	0	$ 0
Intangible assets		3,680,000		3,680,000		3,680,000
Amortization expense		100,000	$ 100,000	386,000	$ 337,000
Eton
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 11,400,000
Technology
Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life (in years)	7 years
Other intangible assets acquired	$ 3,200,000
Trade Name
Finite-Lived Intangible Assets [Line Items]
Intangible assets		80,000		80,000		80,000
Trade Name \| Eton
Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life (in years)	3 years
Other intangible assets acquired	$ 100,000
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets		420,000		420,000		420,000
Customer Relationships \| Eton
Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life (in years)	15 years
Other intangible assets acquired	$ 400,000
Noncompete Agreements
Finite-Lived Intangible Assets [Line Items]
Intangible assets		$ 30,000		$ 30,000		$ 30,000
Noncompete Agreements \| Eton
Finite-Lived Intangible Assets [Line Items]
Intangible asset useful life (in years)	3 years
Other intangible assets acquired	$ 30,000

Leases - Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Operating cash flows from operating leases	$ 1,198	$ 723
Operating cash flows from finance leases	3	8
Financing cash flows from finance leases	$ 61	$ 61

Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table summarizes the estimated future amortization expense of the intangible assets as of September 30, 2022 (in thousands):


Years ending December 31:	Amortization of Intangible Assets
2022	$	129
2023		515
2024		510
2025		478
2026		103
Thereafter		276
Total	$	2,011

Schedule of Other Intangible Assets, Net

Other intangible assets, net consists of the following (in thousands):


	September 30, 2022
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intellectual property	$	3,150		(1,613	)	$	1,537
Trade name		80		(22	)		58
Customer relationships		420		(25	)		395
Non-competition agreements		30		(9	)		21
Total	$	3,680		(1,669	)	$	2,011


	December 31, 2021
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intellectual property	$	3,150		(1,275	)	$	1,875
Trade name		80		(3	)		77
Customer relationships		420		(4	)		416
Non-competition agreements		30		(1	)		29
Total	$	3,680		(1,283	)	$	2,397

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Total	$ 7,847	$ 4,249
Less: Accumulated depreciation and amortization	(1,556)	(793)
Total property and equipment, net	6,291	3,456
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total	5,272	2,589
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total	64	0
Computer hardware and software
Property, Plant and Equipment [Line Items]
Total	1,531	29
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total	58	95
Construction in progress
Property, Plant and Equipment [Line Items]
Total	$ 922	$ 1,536

Condensed Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets
Allowance for bad debts	$ 13	$ 0
Stockholders' equity
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	29,521,757	29,318,578
Common stock, shares outstanding (in shares)	29,521,757	29,318,578

Collaboration

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaboration

14.

COLLABORATION

In December 2021, the Company entered into a Research Collaboration and License Agreement (Pfizer Agreement) with Pfizer Inc. (Pfizer), pursuant to which the Company agreed to collaborate with Pfizer to further develop the Company’s novel enzymatic DNA synthesis technology for Pfizer’s use in its research and development of mRNA-based vaccines and biotherapies. The financial terms of the deal include an upfront payment of $8.0 million from Pfizer to the Company, along with $10.0 million of success-based technical milestone payments that could be earned in the near term. The Company is also eligible to receive additional milestone payments based on the achievement of specified development, regulatory and commercialization goals associated with any products developed from the application of the Company’s technology developed and licensed under the agreement.

In addition to the upfront payment and technical milestone payments, Pfizer has agreed to make milestone payments to the Company upon the products meeting certain clinical milestones, with each product (other than exclusive products) being eligible for milestone payments up to $20.0 million if it were to meet the applicable clinical milestones and the first exclusive product in each exclusive field being eligible for milestone payments up to $55.0 million if it were to meet the applicable clinical milestones. Pfizer has also agreed to pay the Company up to $60.0 million in sales milestones for products (other than exclusive products) if aggregate net sales of such products meet certain thresholds and up to $180.0 million in sales milestones for exclusive products if aggregate net sales of the exclusive products meet certain thresholds. Provided the Pfizer Agreement remains in place, Pfizer will also pay escalating royalties from a low to mid-fraction of one percent of net sales of all products. Pfizer’s obligations to pay royalties with respect to a product within a country will expire after specific criteria including such product no longer being covered by patent rights licensed to Pfizer by the Company in such country. Royalty payments are subject to reduction after the introduction of a biosimilar product in such country by a third party.

The Company assessed the collaboration and license agreement in accordance with ASC 606, Revenue from Contracts with Customers, and concluded that Pfizer is a customer based on the agreement structure. The Company identified a single combined performance obligation under the arrangement which includes performance under the research plan, technology transfer between the parties, participation in the Joint Research Committee, research licenses exchanged by the parties and the non-exclusive commercial license. In addition, the Company identified a material right for the option granted to Pfizer to extend the research term by an additional year.

The Company determined that the $8.0 million upfront payment represents the entirety of the consideration to be included in the transaction price as of the outset of the arrangement. The potential milestone payments that the Company may have been eligible to receive were initially excluded from the transaction price at the outset of the arrangement because (i) all technical and development milestone payments did not meet the criteria for inclusion using the most-likely amount method and (ii) the Company recognizes as

revenue sales-based milestones and royalties when the related sales occur. As of September 30, 2022, no milestones or royalties have been deemed likely to be achieved or have been achieved.

In accordance with ASC 606, the Company allocated the transaction price, comprising the upfront payment of $8.0 million, based on the standalone selling price of the combined performance obligation and the material right. Based on management's analysis, the material right was allocated $0.3 million of the transaction price, while the combined performance obligation was allocated $7.7 million of the transaction price.

Because Pfizer did not exercise its right to extend the research period under our agreement, $0.3 million of revenue allocated to the material right is recognized in the quarter ended September 30, 2022. The remaining $7.7 million of revenue allocated to the combined performance obligation will be recognized using the input method based on time elapsed as compared to the research term of 24 months. During the three and nine months ended September 30, 2022, the Company recognized $1.3 million and $3.2 million of collaboration revenue, respectively. As of September 30, 2022, aggregate deferred revenue related to the Pfizer Agreement was $4.7 million, of which $3.8 million was classified as current.

Fair Value Measurement - Roll forward of Level 3 Financial Instruments (Details) - Contingent put option liability - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 112	$ 85	$ 108	$ 134	$ 303	$ 51
Extinguishment of liability	(112)					(51)
Issuance of liability	379					303
Change in fair value	17	27	(23)	(15)	(169)
Ending balance	$ 396	$ 112	$ 85	$ 119	$ 134	$ 303

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Numerator:
Net loss	$	(12,314	)	$	(9,824	)	$	(40,339	)	$	(26,467	)
Net loss attributable to common stockholders	$	(12,314	)	$	(9,824	)	$	(40,339	)	$	(26,467	)
Denominator:
Weighted average common stock outstanding - basic and diluted		29,518,955			29,299,769			29,429,393			14,485,161
Net loss per share attributable to common stockholders - basic and diluted	$	(0.42	)	$	(0.34	)	$	(1.37	)	$	(1.83	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The Company excluded the following

potential common shares from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:


	September 30,
	2022		2021
Stock options to purchase common stock		4,561,605		2,369,696
Restricted stock units that vest into common stock		272,601		—
Shares issuable under employee stock purchase plan		132,070		—
Total		4,966,276		2,369,696

Stock-Based Compensation - Fair Value Assumptions (Details)	9 Months Ended
	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk free interest rate	2.40%
Expected term	5 years 21 days
Expected volatility	54.50%
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	0.00%

Stockholders' Equity	9 Months Ended
Stockholders' Equity	Sep. 30, 2022
Equity [Abstract]
Stockholders' Equity	9. STOCKHOLDERS’ EQUITY On June 18, 2021, the Company completed its IPO of 7,666,664 shares of its common stock, including the exercise in full by the underwriters of their option to purchase up to 999,999 additional shares of common stock, for aggregate gross proceeds of $122.7 million. The Company’s common stock began trading on the Nasdaq Global Select Market under the ticker symbol “DNAY” on June 18, 2021. The Company received $112.5 million in net proceeds after deducting underwriting discounts and commissions and other offering expenses payable by the Company. Upon closing of the IPO, all outstanding convertible preferred stock converted into 15,079,329 shares of common stock and SGI’s outstanding warrants were automatically exercised into 1,201,059 shares of common stock. Subsequent to the closing of the IPO, all outstanding warrants issued pursuant to the 2021 Loan Agreement were exercised into 51,409 shares of common stock.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash Flows From Operating Activities:
Net loss	$ (40,339)	$ (26,467)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	773	283
Amortization of intangible assets	386	337
Amortization of debt discount	381	377
Loss on extinguishment of debt	727	618
Stock-based compensation	2,481	578
Amortization of operating lease right-of-use assets	840	479
Change in fair value of derivative liabilities	21	1,532
Non-cash interest on finance leases	(3)	(8)
Accretion of discount on short-term investments	(79)
Changes in operating assets and liabilities:
Accounts receivable	(1,996)	(672)
Inventories	173	(1,070)
Deposits, prepaid expenses and other current assets	(361)	(2,198)
Accounts payable, accrued payroll and accrued liabilities	171	2,717
Deferred revenue	4,821	(254)
Operating lease liabilities	(1,072)	(511)
Net cash used in operating activities	(33,076)	(24,259)
Cash Flows From Investing Activities:
Payment of acquisition related costs	(556)
Proceeds from maturities of short-term investments	46,545
Purchase of property and equipment	(3,705)	(498)
Purchases of short-term investments	(71,500)
Net cash used in investing activities	(29,216)	(498)
Cash Flows From Financing Activities:
Borrowings on term loan, net	19,761	14,872
Repayment of term loan	(15,000)	(5,000)
Debt extinguishment costs	(700)	(1,141)
Payments on finance leases	(61)	(61)
Payments of financing costs	(31)
Proceeds from the exercise of common stock options	94	168
Proceeds from the issuance of common stock related to ESPP	339
Net proceeds from issuance of shares of common stock in initial public offering		112,484
Payments of offering costs		(226)
Net cash provided by financing activities	4,402	121,096
Net (Decrease) Increase In Cash, Cash Equivalents, and Restricted Cash	(57,890)	96,339
Cash, cash equivalents, and restricted cash at beginning of period	82,806	13,463
Cash, cash equivalents, and restricted cash at end of period	24,916	109,802
Supplemental Disclosure Of Cash Flow Information:
Cash paid for interest	817	549
Purchases of property and equipment included in accounts payable and accrued expenses	43	28
Right-of-use-assets obtained in exchange for operating lease liabilities	413
Issuance of preferred stock warrant in connection with term loan		322
Extinguishment of put option derivative liability in connection with term loan	(112)	(51)
Issuance of put option derivative liability in connection with term loan	$ 379	303
Conversion of convertible preferred shares into common shares		38,914
Conversion of warrant into common shares		2,770
Right-of-use asset derecognized upon lease modification		$ 2,047

Notes Payable

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

NOTES PAYABLE

Loan and Security Agreement

As of September 30, 2022 and December 31, 2021, the loans payable on the condensed consolidated balance sheets pertains to the Credit, Security and Guaranty Agreement with MidCap Financial Trust and the Loan and Security Agreement with Silicon Valley Bank and consists of the following (in thousands):


	September 30, 2022			December 31, 2021
Principal amount of loans payable	$	20,000		$	15,000
Less: Current portion of loans payable		—			(603	)
Loans payable, net of current portion		20,000			14,397
Accrued interest		140			94
Final debt payment liability		900			400
Debt discount and financing costs, net of accretion		(1,570	)		(803	)
Loans payable, net of discount and current portion	$	19,470		$	14,088

2021 Loan Agreement

On March 4, 2021, the Company entered into a Loan and Security Agreement with Silicon Valley Bank (SVB) as the lender (the 2021 Loan Agreement). The 2021 Loan Agreement was terminated in August 2022, and was fully repaid. Under the 2021 Loan Agreement, the Company borrowed a $15.0 million senior secured term loan, the proceeds of which were used to repay all existing obligations under the Company's previously outstanding loan agreement with Oxford Finance LLC, with the remaining proceeds available for working capital and general corporate purposes. Under the 2021 Loan Agreement, the Company had the option to elect to

obtain a second term loan from SVB in a principal amount up to but not exceeding $5.0 million, provided certain revenue milestones are achieved.

In connection with the 2021 Loan Agreement, the Company issued to SVB a warrant to purchase a number of shares of preferred stock (the Preferred Warrant). The Preferred Warrant was exercisable into the number of preferred shares equal to approximately $0.2 million divided by the applicable warrant price. The Preferred Warrant also provides for the grant of additional shares upon the disbursement of an advance under the 2021 Loan Agreement. Such additional shares would be equal to 1.5% of the principal amount of the advance divided by the warrant price. The Preferred Warrant was exercisable at the original purchase price of the Series A-1 convertible preferred stock. When the Series A-1 convertible preferred stock, in which the warrant would have been exercisable into, was converted into common stock, the warrant holder gained the right to exercise the warrant for such number of shares of common stock into which the preferred shares would have converted into had they been exercised prior to the conversion. The Preferred Warrant was exercised in June 2021 in exchange for 51,409 shares of common stock.

The term loan bore interest at a per annum rate equal to the greater of (a) 4.0% above the prime rate and (b) 7.25%. The loan was secured by substantially all of the Company’s assets, other than intellectual property. The Company agreed not to encumber its intellectual property assets, except as permitted by the 2021 Loan Agreement.

A final payment (the Final Payment) equal to $0.4 million was due at the earlier of the maturity date, acceleration of the loans, or a voluntary or mandatory prepayment of the loan. The Final Payment was accrued through interest expense using the effective interest method.

The Company bifurcated a compound derivative liability related to the contingent interest feature and acceleration clause (contingent put option) under the 2021 Loan Agreement. The contingent put option liability was valued and separately accounted for in the Company’s condensed consolidated financial statements. The contingent put option liability was extinguished when the 2021 Loan Agreement was terminated in August 2022 and the loan fully repaid (Note 3) in connection with the Company entering into the 2022 Term Loan Agreement discussed below.

2022 Loan Agreements

On August 9, 2022, the Company entered into (i) a Credit, Security and Guaranty Agreement (the 2022 Term Loan Agreement), with Company and MidCap Financial Trust, and (ii) a Credit, Security and Guaranty Agreement (Revolving Loan) (the 2022 Revolving Loan Agreement, and together with the 2022 Term Loan Agreement, the 2022 Loan Agreements), with the Company and MidCap Funding IV Trust.

The 2022 Term Loan Agreement provides for a secured term loan facility in an aggregate principal amount of up to $30.0 million, comprised of (i) a tranche one term loan of up to $20.0 million (Tranche One) , (ii) a tranche two term loan of up to $5.0 million (Tranche Two), and (iii) a tranche three term loan of up to $5.0 million (Tranche Three). The 2022 Revolving Loan Agreement provides for a secured revolving loan facility in an aggregate principal amount of up to $10.0 million the (Revolving Loan), subject to a borrowing base equal to percentages of eligible accounts receivable and inventory as determined in accordance with the 2022 Revolving Credit Agreement. The Term Loans and Revolving Loans mature on August 1, 2027.

Tranche One was fully funded on August 9, 2022 to pay transaction fees incurred in connection with the 2022 Loan Agreements and to repay in full the Company’s borrowings under its existing loan facility under the 2021 Loan Agreement with Silicon Valley Bank, with the remaining amount to be used be for general corporate purposes. Subject to certain terms and conditions of the 2022 Term Loan Agreement, Tranche Two is available between January 1, 2023, and September 30, 2023, following the Company’s achievement of specified milestones relating to minimum net revenues and minimum net cash proceeds from equity financing. Subject to certain terms and conditions of the 2022 Term Loan Agreement, Tranche Three is available between September 30, 2024, and March 31, 2025. The proceeds of Tranche Two and Tranche Three may be used for working capital and general corporate purposes.

The Term Loan bears interest at a floating rate based on an adjusted term secured overnight financing rate (SOFR) plus 0.1% (subject to a floor of 1.50%) for a one-month interest period, plus a margin of 5.75%. Interest on the Term Loans is payable monthly in arrears on the first day of each month and at maturity. For the nine months ended September 30, 2022, the effective interest rate on outstanding borrowings was approximately 10.48%. Following an initial interest-only period, beginning on August 1, 2025, the outstanding principal amount of the term loans is repayable in twenty-four equal monthly principal payments, with all remaining outstanding principal, together with all accrued and unpaid interest, due at maturity. The Term Loans may be voluntarily prepaid in full, but not in part, at any time and are also subject to mandatory prepayments with the net proceeds of certain dispositions and casualty events, subject to specified thresholds and reinvestment rights. Prepayments are subject to prepayment premiums of 3.00%, 2.00%, and 1.00% of the amount prepaid for prepayments made during years one, two, and three of the term, respectively. Once repaid, the term loans may not be reborrowed. The Company is also obligated to pay an exit fee equal to 4.5% of the outstanding principal amount of the term loans borrowed and other customary fees for a credit facility of this size and type. The exit fee is being accrued through interest expense using the effective interest method.

The Company may borrow, repay and reborrow the Revolving Loans until August 1, 2027, at which time the revolving commitments will terminate and all outstanding revolving loans, together with all accrued and unpaid interest, must be repaid. The proceeds of the Revolving Loans may be used for working capital needs and general corporate purposes. As of the September 30, 2022, no amount of Revolving Loans was outstanding under the 2022 Revolving Loan Agreement.

The revolving loans bear interest at a floating rated based on an adjusted term SOFR (subject to a floor of 1.50%) for a one-month interest period, plus a margin of 3.00%. Interest on the Revolving Loans is payable monthly in arrears on the first day of each month and at maturity. The Company is obligated to pay an unused line fee equal to 0.50% per annum on the unused portion of the available revolving commitments, a fee for failure to maintain a minimum balance under the 2022 Revolving Loan Agreement, and other customary fees for a credit facility of this size and type.

The obligations of the Company and any future guarantors under the 2022 Loan Agreements are secured by liens on substantially all of the Company's assets.

The 2022 Loan Agreements require the Borrowers to comply with (i) a minimum net revenue covenant and (ii) a minimum cash covenant, which requires certain unrestricted cash to be greater than or equal to $7.0 million at all times.

The 2022 Loan Agreements contain customary affirmative and negative covenants, including covenants limiting the ability of the Company and its subsidiaries, among other things, to incur debt, grant liens, make distributions, enter certain restrictive agreements, pay or modify subordinated debt, dispose of assets, make investments and acquisitions, enter into certain transactions with affiliates, and undergo certain fundamental changes, in each case, subject to limitations and exceptions set forth in the 2022 Loan Agreements.

The 2022 Loan Agreements contain customary events of default that include, among other things, certain payment defaults, cross defaults to certain other contracts and indebtedness, covenant defaults, inaccuracy of representations and warranties, bankruptcy and insolvency defaults, judgment defaults, change of control defaults, defaults related to the failure to remain registered with the Securities and Exchange Commission and listed for trading on the Nasdaq Stock Market, and a material adverse change default.

Upon the occurrence and during the continuance of an event of default under the 2022 Loan Agreements, the respective administrative agent, if requested by the respective lenders, may, among other things, (i) suspend or terminate commitments, as well as obligations of the relevant administrative agent and lenders, (ii) declare all outstanding obligations under the applicable agreement (including principal and accrued and unpaid interest) immediately due and payable, and (iii) exercise the other rights and remedies provided for under the applicable agreement. The 2022 Loan Agreements provide that, under certain circumstances, a default interest rate will apply on all obligations under such agreement during the existence of an event of default, at a per annum rate equal to 2.0% above the applicable interest rate.

The Company bifurcated a derivative liability related to the acceleration clause triggered upon an event of default (contingent put option) under the 2022 Term Loan Agreement. The contingent put option liability is classified as a component of derivative liabilities on the condensed consolidated balance sheet. As of September 30, 2022, the estimated fair value of the contingent put option liability was $0.4 million, which was determined by using a risk-neutral valuation model wherein the fair value of the

underlying debt facility is estimated, both with and without the presence of the default provisions, holding all other assumptions constant (Note 3).

The estimated future principal payments due under the 2022 Loan Agreements were as follows:


	September 30, 2022
Estimated future principal payments due
2022	$	—
2023		—
2024		—
2025		4,167
2026		10,000
Thereafter		5,833
Total	$	20,000

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Inventory (Tables)

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventory

The components of inventory consisted of the following on September 30, 2022 and December 31, 2021 (in thousands):


	September 30, 2022		December 31, 2021
Raw materials	$	1,494	$	962
Work in process and sub-assemblies		169		896
Finished goods		532		510
Total	$	2,195	$	2,368

Notes Payable (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments


	September 30, 2022			December 31, 2021
Principal amount of loans payable	$	20,000		$	15,000
Less: Current portion of loans payable		—			(603	)
Loans payable, net of current portion		20,000			14,397
Accrued interest		140			94
Final debt payment liability		900			400
Debt discount and financing costs, net of accretion		(1,570	)		(803	)
Loans payable, net of discount and current portion	$	19,470		$	14,088

Schedule of Maturities of Long-term Debt

The estimated future principal payments due under the 2022 Loan Agreements were as follows:


	September 30, 2022
Estimated future principal payments due
2022	$	—
2023		—
2024		—
2025		4,167
2026		10,000
Thereafter		5,833
Total	$	20,000

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

Leases - Weighted-Average Lease Terms and Interest Rates (Details)	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Finance leases, weighted average remaining lease term (in years)	2 months 12 days	1 year 2 months 12 days
Operating leases, weighted average remaining lease term (in years)	3 years 10 months 24 days	1 year
Finance leases, weighted average discount rate (as a percent)	7.40%	7.70%
Operating leases, weighted average discount rate (as a percent)	8.60%	8.90%

Related Party Transactions (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Related Party Transactions [Abstract]
Payments to related parties	$ 0.4	$ 0.2

Notes Payable - Narrative (Details) - USD ($)				1 Months Ended	3 Months Ended
Notes Payable - Narrative (Details) - USD ($)	Aug. 09, 2022	Jun. 18, 2021	Mar. 04, 2021	Jun. 30, 2021	Jun. 30, 2021	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Final debt payment						$ 900,000	$ 400,000
Common Stock
Debt Instrument [Line Items]
Shares issued for warrant exercises (in shares)		51,409		51,409	15,079,329
Preferred Warrant
Debt Instrument [Line Items]
Value of securities called by warrants			$ 200,000
Percent of advanced principal			1.50%
Participation Rights
Debt Instrument [Line Items]
Warrants liability						$ 400,000
Line of Credit \| Secured Debt \| 2021 Loan Agreement
Debt Instrument [Line Items]
Proceeds from issuance of debt			$ 15,000,000.0
Stated percentage rate (as a percent)			7.25%
Effective interest rate (as a percent)						10.48%
Final debt payment			$ 400,000
Line of Credit \| Secured Debt \| 2021 Loan Agreement \| Prime Rate
Debt Instrument [Line Items]
Basis spread on variable rate			4.00%
Line of Credit \| Secured Debt \| 2021 Loan Agreement, Second Term Loan
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 5,000,000.0
Credit, Security and Guaranty Agreement \| 2022 Loan Agreements
Debt Instrument [Line Items]
Debt instrument, interest rate terms	The 2022 Loan Agreements provide that, under certain circumstances, a default interest rate will apply on all obligations under such agreement during the existence of an event of default, at a per annum rate equal to 2.0% above the applicable interest rate.
Credit, Security and Guaranty Agreement \| Secured Term Loan Facility \| SOFR
Debt Instrument [Line Items]
Stated percentage rate (as a percent)	5.75%
Credit, Security and Guaranty Agreement \| Secured Term Loan Facility \| 2022 Loan Agreements
Debt Instrument [Line Items]
Debt instrument, maturity date	Aug. 01, 2027
Basis spread on variable rate	1.50%
Exit fee percentage	4.50%
Credit, Security and Guaranty Agreement \| Secured Term Loan Facility \| 2022 Loan Agreements \| SOFR
Debt Instrument [Line Items]
Basis spread on variable rate	0.10%
Credit, Security and Guaranty Agreement \| Revolving Credit Facility \| 2022 Loan Agreements
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 10,000,000.0
Debt instrument, maturity date	Aug. 01, 2027
Basis spread on variable rate	1.50%
Stated percentage rate (as a percent)	3.00%
Loans outstanding						$ 0
Unused line fee percentage	0.50%
Credit, Security and Guaranty Agreement \| Minimum \| 2022 Loan Agreements
Debt Instrument [Line Items]
Debt instrument, cash covenant	$ 7,000,000.0
Credit, Security and Guaranty Agreement \| Maximum \| Secured Term Loan Facility \| 2022 Loan Agreements
Debt Instrument [Line Items]
Aggregate principal amount	30,000,000.0
Credit, Security and Guaranty Agreement \| Tranche 1 Term Loan \| Maximum \| Secured Term Loan Facility \| 2022 Loan Agreements
Debt Instrument [Line Items]
Aggregate principal amount	20,000,000.0
Credit, Security and Guaranty Agreement \| Tranche 2 Term Loan \| Maximum \| Secured Term Loan Facility \| 2022 Loan Agreements
Debt Instrument [Line Items]
Aggregate principal amount	5,000,000.0
Credit, Security and Guaranty Agreement \| Tranche 3 Term Loan \| Maximum \| Secured Term Loan Facility \| 2022 Loan Agreements
Debt Instrument [Line Items]
Aggregate principal amount	$ 5,000,000.0
Credit, Security and Guaranty Agreement \| Prepayments Made During Year One \| Secured Term Loan Facility \| 2022 Loan Agreements
Debt Instrument [Line Items]
Prepayment premium percentage	3.00%
Credit, Security and Guaranty Agreement \| Prepayments Made During Year Two \| Secured Term Loan Facility \| 2022 Loan Agreements
Debt Instrument [Line Items]
Prepayment premium percentage	2.00%
Credit, Security and Guaranty Agreement \| Prepayments Made During Year Three \| Secured Term Loan Facility \| 2022 Loan Agreements
Debt Instrument [Line Items]
Prepayment premium percentage	1.00%

Notes Payable - Schedule of Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
2022	$ 0
2023	0
2024	0
2025	4,167
2026	10,000
Thereafter	5,833
Principal amount of loans payable	$ 20,000	$ 15,000

Stock-Based Compensation - Classification of Expense Related to Expense Categories (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 915	$ 400	$ 2,481	$ 600
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	150		406
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	113		286
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 652		$ 1,789

Summary of Significant Accounting Policies - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accounting Policies [Abstract]
Impairment losses on investments	$ 0	$ 0	$ 0	$ 0

Net Loss Per Share - Antidilutive Securities (Details) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	4,966,276	2,369,696
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	4,561,605	2,369,696
Restricted stock units that vest into common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	272,601	0
Shares issuable under employee stock purchase plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	132,070	0

Goodwill and Other Intangible Assets - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of Intangible Assets, 2022	$ 129
Amortization of Intangible Assets, 2023	515
Amortization of Intangible Assets, 2024	510
Amortization of Intangible Assets, 2025	478
Amortization of Intangible Assets, 2026	103
Amortization of Intangible Assets, Thereafter	276
Net Carrying Value	$ 2,011	$ 2,397

Property and Equipment - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 300	$ 100	$ 773	$ 283

Retirement Plan (Details) - USD ($) $ in Thousands	9 Months Ended
Retirement Plan (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Retirement Benefits [Abstract]
Contribution costs	$ 0	$ 0

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Debt Securities, Available-for-sale

The following tables summarize the short-term investments held at September 30, 2022 (in thousands):


	September 30, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Assets
Commercial paper	$	6,607	$	—	$	—		$	6,607
U.S. Government agencies		18,427		1		(21	)		18,407
Total	$	25,034	$	1	$	(21	)	$	25,014

Leases (Tables)

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Lease, Cost

The components of lease cost under ASC 842 are as follows (in thousands):


	September 30,
	2022		2021
Lease costs
Finance lease cost:
Payment of finance lease liability	$	61	$	61
Interest on lease liabilities		3		8
Operating lease costs		966		690
Variable lease cost		477		363
Total lease cost	$	1,507	$	1,122

Supplemental disclosure of cash flow information related to leases are as follows (in thousands):


	September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,198	$	723
Operating cash flows from finance leases	$	3	$	8
Financing cash flows from finance leases	$	61	$	61

The weighted-average remaining lease term and discount rate were as follows:


	September 30,
	2022			2021
Weighted-average remaining lease term
Finance leases	0.2 years			1.2 years
Operating leases	3.9 years			1.0 years
Weighted-average discount rate
Finance leases		7.4	%		7.7	%
Operating leases		8.6	%		8.9	%

Lessee, Operating Lease and Finance Lease, Liability, Fiscal Year Maturity

The following table summarizes the minimum lease payments of the Company’s operating and finance lease liabilities as of September 30, 2022 (in thousands):


Year Ending December 31,	Operating			Finance
2022	$	406		$	18
2023		514			—
2024		323			—
2025		333			—
2026		343			—
Thereafter		307			—
Total future minimum lease payments		2,226			18
Less: imputed interest		(336	)		(1	)
Present value of operating lease liability	$	1,890		$	17

Less: current portion of lease liability		(716	)		(17	)
Non-current portion of lease liability		1,174			—

Retirement Plan	9 Months Ended
Retirement Plan	Sep. 30, 2022
Retirement Benefits [Abstract]
RETIREMENT PLAN	13. RETIREMENT PLAN The Company has a retirement saving plan (the 401(k) Plan) that allows participating employees to defer a portion of their annual compensation on a pretax basis. The Company made no contributions to the 401(k) Plan for the nine months ended September 30, 2022 and 2021.

Property and Equipment

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following on September 30, 2022 and December 31, 2021 (in thousands):


	September 30, 2022			December 31, 2021
Machinery and equipment	$	5,272		$	2,589
Furniture and fixtures		64			—
Computer hardware and software		1,531			29
Leasehold improvements		58			95
Construction in progress		922			1,536
Total		7,847			4,249
Less: Accumulated depreciation and amortization		(1,556	)		(793	)
Total property and equipment, net	$	6,291		$	3,456

Depreciation expense for the three months ended September 30, 2022 and 2021 was $0.3 million and $0.1 million, respectively, and depreciation expense for the nine months ended September 30, 2022 and 2021 was $0.8 million and $0.3 million, respectively, and is included in operating expenses.

Organization and Operations (Details) $ in Millions	Nov. 18, 2021 USD ($)
Eton
Business Acquisition [Line Items]
Payments to acquire businesses	$ 14.1

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and include the accounts of the Company and its wholly owned subsidiaries after the elimination of all significant intercompany accounts and transactions. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (ASC) and as amended by Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).
Principle of Consolidation	The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements as of and for the year ended December 31, 2021, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s condensed consolidated balance sheet as of September 30, 2022, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022 and 2021, condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) for the three and nine months ended September 30, 2022 and 2021 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC) on March 23, 2022 (the Annual Report). The condensed consolidated balance sheet data as of December 31, 2021 presented for comparative purposes was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by U.S. GAAP and Article 8 of Regulation S-X. The results for the three and nine months ended September 30, 2022 and 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period. The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2021 included in the Annual Report. Since the date of the audited consolidated financial statements for the year ended December 31, 2021 included in the Annual Report, there have been no changes to its significant accounting policies except as noted below.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods presented. Key estimates in the consolidated financial statements include the Company’s ability to continue as a going concern, revenue recognition, impairment assessment for goodwill and intangible assets, allowance for doubtful accounts, estimated useful lives of property and equipment, valuation of inventory, accrued expenses, valuation of deferred income tax assets, valuation of derivative liabilities, share-based compensation, fair value of common stock prior to the Company’s initial public offering and accrued warranty are subject to significant estimation. Actual results could differ from those estimates.
Inventory	Inventories include material, labor and overhead and are stated at the lower of cost (first-in and first-out method) or net realizable value
Short-term Investments	Short-term Investments As of September 30, 2022, short-term investments primarily consisted of commercial paper and U.S. Government securities. The Company classifies its investments in securities as available-for-sale because, for accounting purposes, they are not considered to be either held-to-maturity securities or trading securities. They are not considered to be held-to-maturity securities because the Company does not have the intent to hold those securities to maturity. They are not considered trading securities because they were not acquired with the intent of selling them within hours or days. The Company’s investments in securities are classified as current as they are available for use in current operations. Short-term investments are carried at fair value with the unrealized gains and losses included in other comprehensive loss as a component of stockholders’ equity until realized. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity and recorded as interest income. Realized gains and losses are determined using the specific identification method and are included in other expense, net. The Company evaluates its investments in securities that are in an unrealized loss position quarterly to determine if those securities are other-than-temporarily-impaired. If the Company intends to sell or if it is more likely than not that the Company will be required to sell those securities prior to the recovery of their book value, then those securities would be considered other-than-temporarily-impaired, and the Company would record this impairment as a loss through other expense, net. During the three and nine months ended September 30, 2022 and 2021, the Company concluded that none of its investments in securities were other-than-temporarily-impaired and thus recorded no impairment losses for its investments in securities.

- Definition

Disclosure of inventory accounting policy for inventory classes, including, but not limited to, basis for determining inventory amounts, methods by which amounts are added and removed from inventory classes, loss recognition on impairment of inventories, and situations in which inventories are stated above cost.

+ References + Details

Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table summarizes the fair values of the Company’s assets and liabilities on the condensed consolidated balance sheets which comprise of money market funds, commercial paper, U.S. government agencies and the contingent put option liability (in thousands):


	Fair value measurements as of September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	23,105	$	—	$	—	$	23,105
Commercial paper		—		6,607		—		6,607
U.S. Government agencies		—		18,407		—		18,407
Total	$	23,105	$	25,014	$	—	$	48,119

Liabilities
Contingent put option liability	$	—	$	—	$	396	$	396
Total	$	—	$	—	$	396	$	396


	Fair value measurements as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	79,893	$	—	$	—	$	79,893
Total	$	79,893	$	—	$	—	$	79,893

Liabilities
Contingent put option liability	$	—	$	—	$	108	$	108
Total	$	—	$	—	$	108	$	108

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table provides a roll-forward of the aggregate fair value of the Company’s derivative liabilities for which fair value is determined using Level 3 inputs (in thousands):


	Contingent Put Option Liability
Fair value at December 31, 2021	$	108
Change in fair value		(23	)
Fair value at March 31, 2022		85
Change in fair value		27
Fair value at June 30, 2022		112
Extinguishment of liability		(112	)
Issuance of liability		379
Change in fair value		17
Fair value at September 30, 2022	$	396


	Contingent Put Option Liability
Fair value at December 31, 2020	$	51
Extinguishment of liability		(51	)
Issuance of liability		303
Fair value at March 30, 2021		303
Change in fair value		(169	)
Fair value at June 30, 2021		134
Change in fair value		(15	)
Fair value at September 30, 2021	$	119

Stock-Based Compensation - Stock Option activity (Details) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares
Number of options
Outstanding at beginning of the period (in shares) \| shares	2,550,984
Options granted (in shares) \| shares	2,695,502
Options exercised (in shares) \| shares	(89,972)
Options cancelled (in shares) \| shares	(594,909)
Outstanding at end of the period (in shares) \| shares	4,561,605	2,550,984
Vested and expected to vest (in shares) \| shares	3,719,793
Exercisable (in shares) \| shares	836,659
Weighted average exercise price
Outstanding at beginning of period (in USD per share) \| $ / shares	$ 6.09
Options granted (in USD per share) \| $ / shares	5.81
Options exercised (in USD per share) \| $ / shares	1.08
Options cancelled (in USD per share) \| $ / shares	7.10
Outstanding at end of period (in USD per share) \| $ / shares	5.89	$ 6.09
Vested and expected to vest (in USD per share) \| $ / shares	5.82
Exercisable (in USD per share) \| $ / shares	$ 5.47
Weighted average remaining contractual term (in years)
Outstanding (in years)	9 years 1 month 6 days	9 years 1 month 6 days
Vested and expected to vest (in years)	9 years 1 month 6 days
Exercisable (in years)	8 years 3 months 18 days
Aggregate intrinsic value (in thousands)
Outstanding \| $	$ 258	$ 12,417
Vested and expected to vest \| $	251
Exercisable \| $	$ 171

Stock-Based Compensation - Narrative (Details) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 18, 2021	Jun. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Mar. 03, 2021	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income tax benefit					$ 0
Options granted (in shares)					2,695,502
Weighted average grant date fair value (in USD per share)					$ 3.33
Unrecognized compensation expense			$ 8,100,000		$ 8,100,000
Period for recognition (in years)					2 years 10 months 24 days
Stock-based compensation expense			$ 915,000	$ 400,000	$ 2,481,000	$ 600,000
2019 Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant (in shares)								5,544,187
2021 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance (in shares)							6,000,000
2021 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance (in shares)		3,500,000	2,442,960		2,442,960
Additional shares allowed under plan (in shares)		5,250,000
Percentage of outstanding shares, maximum		5.00%
2021 Stock Incentive Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance (in shares)		2,459,970
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant (in shares)	350,000		529,978		529,978
Additional shares allowed under plan (in shares)	1,050,000
Percentage of outstanding shares, maximum	1.00%
Common stock issued under ESPP (in shares)					113,207
Stock-based compensation expense			$ 107,000		$ 320,000

Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

16. SUBSEQUENT EVENTS

In November 2022, the Company changed its name from Codex DNA, Inc. to Telesis Bio Inc.

Collaboration (Details 1) - Pfizer [Member] - Research - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 $ in Millions	Dec. 31, 2021 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Milestone payments to be received	$ 7.7
Expected timing of revenue satisfaction (in years)	24 months

Net Loss Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

NET LOSS PER SHARE

12.

NET LOSS PER SHARE

Net loss per share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Numerator:
Net loss	$	(12,314	)	$	(9,824	)	$	(40,339	)	$	(26,467	)
Net loss attributable to common stockholders	$	(12,314	)	$	(9,824	)	$	(40,339	)	$	(26,467	)
Denominator:
Weighted average common stock outstanding - basic and diluted		29,518,955			29,299,769			29,429,393			14,485,161
Net loss per share attributable to common stockholders - basic and diluted	$	(0.42	)	$	(0.34	)	$	(1.37	)	$	(1.83	)

The Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following

potential common shares from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:


	September 30,
	2022		2021
Stock options to purchase common stock		4,561,605		2,369,696
Restricted stock units that vest into common stock		272,601		—
Shares issuable under employee stock purchase plan		132,070		—
Total		4,966,276		2,369,696

Notes Payable - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
Principal amount of loans payable	$ 20,000	$ 15,000
Less: Current portion of loans payable		(603)
Loans payable, net of current portion	20,000	14,397
Accrued interest	140	94
Final debt payment liability	900	400
Debt discount and financing costs, net of accretion	(1,570)	(803)
Loans payable, net of discount and current portion	$ 19,470	$ 14,088

Condensed Consolidated Balance Sheet - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 24,741,000	$ 82,806,000
Restricted cash	175,000
Short-term investments	25,014,000
Accounts receivable, net of allowance for bad debts of $13 and $0 at September 30, 2022 and December 31, 2021, respectively	5,661,000	3,665,000
Inventory	2,195,000	2,368,000
Prepaid expenses and other current assets	4,399,000	4,345,000
Total current assets	62,185,000	93,184,000
Property and equipment, net	6,291,000	3,456,000
Right-of-use assets	1,854,000	2,281,000
Long-term deposits	915,000	609,000
Goodwill	14,886,000	14,330,000
Other intangible assets, net	2,011,000	2,397,000
Total assets	88,142,000	116,257,000
Current liabilities:
Accounts payable	1,617,000	2,499,000
Accrued employee expenses	4,529,000	3,849,000
Finance lease liability, current portion	17,000	81,000
Operating lease liability, current portion	716,000	1,156,000
Deferred revenue, current portion	4,191,000	205,000
Notes payable, current portion		603,000
Other accrued liabilities	1,258,000	1,005,000
Other current liabilities	480,000	335,000
Total current liabilities	12,808,000	9,733,000
Operating lease liability, net of current portion	1,174,000	1,394,000
Notes payable, net of discount and current portion	19,470,000	14,088,000
Derivative liabilities	396,000	108,000
Deferred revenue, net of current portion	986,000	150,000
Total liabilities	34,834,000	25,473,000
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	0	0
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	5,000	5,000
Additional paid-in capital	158,932,000	156,049,000
Accumulated other comprehensive loss	(20,000)
Accumulated deficit	(105,609,000)	(65,270,000)
Total stockholders' equity	53,308,000	90,784,000
Total liabilities and stockholders' equity	$ 88,142,000	$ 116,257,000

Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

LEASES

As of September 30, 2022, the Company had six outstanding leases for office and laboratory space and scientific manufacturing equipment. The leases have remaining terms between one and 62 months.

Corporate Headquarters

In September 2021, the Company entered into the Wateridge Pointe lease for future office and laboratory space and concurrently signed a second amendment to the operating lease agreement for its corporate headquarters located at 9535 Waples Street, San Diego, California (the Second Amendment). Under the Second Amendment, the lease at 9535 Waples Street will terminate upon the occupancy of office and laboratory space at 10421 and 10431 Wateridge Circle, San Diego, California, which will occur subsequent to the renovation and build-out of the spaces. The Wateridge Pointe lease provides for a tenant improvement (TI) allowance for the renovation and build-out of the spaces up to $185.00 per square foot, or approximately $12.3 million, with an additional allowance of up to $10.00 per square foot, or approximately $0.7 million if properly requested by the Company. The lessor is solely responsible for the management and payment of the tenant improvements and these expenses will be recorded as lessor improvements per ASC 842 guidance. Rent for the Wateridge Pointe lease will be approximately $3.9 million per year beginning upon

lease commencement, subject to annual increases of 3%. The Wateridge Pointe lease provides for a 10 year and 3 month term and the Company is entitled to one option to extend the lease term for an additional five years. Occupancy of 10421 and 10431 Wateridge Circle and the corresponding termination of the lease at 9535 Waples Street are expected to occur in the first quarter of 2023.

Upon the execution of the Second Amendment, which was deemed to be a lease modification, the Company re-evaluated the assumptions made at the original lease commencement date. The Company determined the Second Amendment consists of a single contract under ASC 842. Accordingly, the Company bifurcated the components of the modified lease. Upon execution of the Second Amendment the Company adjusted the right-of-use asset and lease liability for the reduced term of the 9535 Waples Street lease component. In addition the Company will record a right-of-use asset and lease liability on the commencement date of the 10421 and 10431 Wateridge Circle lease components.

The components of lease cost under ASC 842 are as follows (in thousands):


	September 30,
	2022		2021
Lease costs
Finance lease cost:
Payment of finance lease liability	$	61	$	61
Interest on lease liabilities		3		8
Operating lease costs		966		690
Variable lease cost		477		363
Total lease cost	$	1,507	$	1,122

Supplemental disclosure of cash flow information related to leases are as follows (in thousands):


	September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,198	$	723
Operating cash flows from finance leases	$	3	$	8
Financing cash flows from finance leases	$	61	$	61

The weighted-average remaining lease term and discount rate were as follows:


	September 30,
	2022			2021
Weighted-average remaining lease term
Finance leases	0.2 years			1.2 years
Operating leases	3.9 years			1.0 years
Weighted-average discount rate
Finance leases		7.4	%		7.7	%
Operating leases		8.6	%		8.9	%

The following table summarizes the minimum lease payments of the Company’s operating and finance lease liabilities as of September 30, 2022 (in thousands):


Year Ending December 31,	Operating			Finance
2022	$	406		$	18
2023		514			—
2024		323			—
2025		333			—
2026		343			—
Thereafter		307			—
Total future minimum lease payments		2,226			18
Less: imputed interest		(336	)		(1	)
Present value of operating lease liability	$	1,890		$	17

Less: current portion of lease liability		(716	)		(17	)
Non-current portion of lease liability		1,174			—

The table above excludes an estimated $45.1 million of legally binding minimum lease payments to be made over a period of approximately 10 years for the lease at 10421 and 10431 Wateridge Circle, San Diego, California that has been executed but not yet commenced as of September 30, 2022. Commencement of the lease at 10421 and 10431 Wateridge Circle is expected to occur in the first quarter of 2023.

Stock-Based Compensation - Classification of Expense Related to Award Type Categories (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 915	$ 400	$ 2,481	$ 600
Stock options
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	713		1,935
Restricted Stock Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	95		226
Employee Stock Purchase Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 107		$ 320

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2022
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	15. RELATED PARTY TRANSACTIONS During the nine months ended September 30, 2022 and 2021, the Company made payments to related parties of approximately $0.4 million and $0.2 million, respectively, for services relating to intellectual property matters, including patent filings, patent prosecution, sequencing and oligo services, as well as payments to board members.

Collaboration (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Collaboration (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenue	$ 6,675	$ 2,786	$ 17,966	$ 7,965
Deferred revenue, current portion	4,191		4,191		$ 205
License
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenue	1,300		3,200
Pfizer
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upfront payment	4,700		4,700
Deferred revenue, current portion	3,800		$ 3,800
Pfizer \| License
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upfront payment					8,000
Additional amounts to be received					10,000
Pfizer \| Clinical \| Minimum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Milestone payments to be received					20,000
Pfizer \| Clinical \| Maximum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Milestone payments to be received					55,000
Pfizer \| Sales Milestones \| Minimum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Milestone payments to be received					60,000
Pfizer \| Sales Milestones \| Maximum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Milestone payments to be received					$ 180,000
Royalty percentage					1.00%
Pfizer \| Material Rights
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenue recognized	$ 300

Stock-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Restricted Stock Units
Beginning balance (in shares) \| shares	0
Granted (in shares) \| shares	310,901
Cancelled \| shares	(38,300)
Ending balance (in shares) \| shares	272,601
Weighted-Average Grant Date Fair Value
Beginning balance (USD per share) \| $ / shares	$ 0
Granted (USD per share) \| $ / shares	6.88
Cancelled (USD per share) \| $ / shares	10.20
Ending balance (USD per share) \| $ / shares	$ 6.41

STOCKHOLDER'S EQUITY (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended
STOCKHOLDER'S EQUITY (Details) - USD ($) $ in Millions	Jun. 18, 2021	Jun. 30, 2021	Jun. 30, 2021
Common Stock
Subsidiary, Sale of Stock [Line Items]
Shares issued for warrant exercises (in shares)	51,409	51,409	15,079,329
Conversion of Temporary Equity \| Common Stock
Subsidiary, Sale of Stock [Line Items]
Shares issued for warrant exercises (in shares)	15,079,329
Conversion of Warrants \| Common Stock
Subsidiary, Sale of Stock [Line Items]
Shares issued for warrant exercises (in shares)	1,201,059
IPO
Subsidiary, Sale of Stock [Line Items]
Number of shares sold in initial public offering (in shares)	7,666,664
Aggregate gross proceeds	$ 122.7
Net proceeds	$ 112.5
Over-Allotment Option
Subsidiary, Sale of Stock [Line Items]
Number of shares sold in initial public offering (in shares)	999,999

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consisted of the following on September 30, 2022 and December 31, 2021 (in thousands):


	September 30, 2022			December 31, 2021
Machinery and equipment	$	5,272		$	2,589
Furniture and fixtures		64			—
Computer hardware and software		1,531			29
Leasehold improvements		58			95
Construction in progress		922			1,536
Total		7,847			4,249
Less: Accumulated depreciation and amortization		(1,556	)		(793	)
Total property and equipment, net	$	6,291		$	3,456

Fair Value Measurement - Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets
Fair Value	$ 25,014
Commercial paper
Assets
Fair Value	6,607
U.S. Government agencies
Assets
Fair Value	18,407
Fair Value, Recurring
Assets
Total	48,119	$ 79,893
Liabilities
Total	396	108
Fair Value, Recurring \| Commercial paper
Assets
Fair Value	6,607
Fair Value, Recurring \| U.S. Government agencies
Assets
Fair Value	18,407
Fair Value, Recurring \| Contingent put option liability
Liabilities
Derivative liability	396	108
Fair Value, Recurring \| Money market funds
Assets
Derivative asset	23,105	79,893
Fair Value, Recurring \| Level 1
Assets
Total	23,105	79,893
Liabilities
Total	0	0
Fair Value, Recurring \| Level 1 \| Commercial paper
Assets
Fair Value	0
Fair Value, Recurring \| Level 1 \| U.S. Government agencies
Assets
Fair Value	0
Fair Value, Recurring \| Level 1 \| Contingent put option liability
Liabilities
Derivative liability	0	0
Fair Value, Recurring \| Level 1 \| Money market funds
Assets
Derivative asset	23,105
Total		79,893
Fair Value, Recurring \| Level 2
Assets
Total	25,014	0
Liabilities
Total	0	0
Fair Value, Recurring \| Level 2 \| Commercial paper
Assets
Fair Value	6,607
Fair Value, Recurring \| Level 2 \| U.S. Government agencies
Assets
Fair Value	18,407
Fair Value, Recurring \| Level 2 \| Contingent put option liability
Liabilities
Derivative liability	0	0
Fair Value, Recurring \| Level 2 \| Money market funds
Assets
Derivative asset	0	0
Fair Value, Recurring \| Level 3
Assets
Total	0	0
Liabilities
Total	396	108
Fair Value, Recurring \| Level 3 \| Commercial paper
Assets
Fair Value	0
Fair Value, Recurring \| Level 3 \| U.S. Government agencies
Assets
Fair Value	0
Fair Value, Recurring \| Level 3 \| Contingent put option liability
Liabilities
Derivative liability	396	108
Fair Value, Recurring \| Level 3 \| Money market funds
Assets
Derivative asset	$ 0	$ 0

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2022	Oct. 31, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-40497
Entity Registrant Name	Telesis Bio Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-1216839
Entity Address, Address Line One	9535 Waples Street
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92121
City Area Code	858
Local Phone Number	228-4115
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	DNAY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		29,521,757
Entity Central Index Key	0001850079
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue:
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)
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 stock holders
Basic (in dollars per share)	$ (0.42)	$ (0.34)	$ (1.37)	$ (1.83)
Diluted (in dollars per share)	$ (0.42)	$ (0.34)	$ (1.37)	$ (1.83)
Weighted average common stock outstanding
Basic (in shares)	29,518,955	29,299,769	29,429,393	14,485,161
Diluted (in shares)	29,518,955	29,299,769	29,429,393	14,485,161
Product sales
Revenue:
Total revenue	$ 4,723	$ 2,180	$ 12,943	$ 6,099
Royalties and other revenue
Revenue:
Total revenue	$ 1,952	$ 606	$ 5,023	$ 1,866

Fair Value Measurement - Narrative (Details)	3 Months Ended		9 Months Ended
Fair Value Measurement - Narrative (Details)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2021
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Change in fair value of derivative liabilities	$ (17,000)	$ 15,000	$ (21,000)	$ (1,532,000)
Measurement Input, Cost to Sell
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Long-term debt, measurement input	0.1258		0.1258		0.0424
Measurement Input, Default Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Long-term debt, measurement input	0.69		0.69		0.21
Contingent put option liability
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Change in fair value of derivative liabilities	$ (17,000)	$ 15,000	$ (21,000)	$ 200,000

Fair Value Measurement

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT


	Fair value measurements as of September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	23,105	$	—	$	—	$	23,105
Commercial paper		—		6,607		—		6,607
U.S. Government agencies		—		18,407		—		18,407
Total	$	23,105	$	25,014	$	—	$	48,119

Liabilities
Contingent put option liability	$	—	$	—	$	396	$	396
Total	$	—	$	—	$	396	$	396


	Fair value measurements as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	79,893	$	—	$	—	$	79,893
Total	$	79,893	$	—	$	—	$	79,893

Liabilities
Contingent put option liability	$	—	$	—	$	108	$	108
Total	$	—	$	—	$	108	$	108

During the nine months ended September 30, 2022 and the year ended December 31, 2021 there were no transfers between Level 1, Level 2 and Level 3.

Contingent Put Option Liability

The contingent put option liability consists of the fair value of the contingent interest feature and acceleration clause (contingent put option) under the 2019 Loan Agreement, 2021 Loan Agreement and the 2022 Term Loan Agreement (see Note 8). The fair value of the contingent put option liability was based on significant inputs not observable in the market, which represent a Level 3 measurement within the fair value hierarchy. The Company’s valuation of the contingent put option liability utilized a risk-neutral valuation model wherein the fair value of the underlying debt facility is estimated, both with and without the presence of the default

provisions, holding all other assumptions constant. The Company assesses these assumptions and estimates each reporting period as additional information impacting the assumptions are obtained. Changes in the fair value of the contingent put option liability are recognized in other income (expense) as part of the change in fair value of derivative liabilities in the condensed consolidated statements of operations and comprehensive loss. The significant inputs not observable in the market consist of the adjusted market rate of debt and the probability of default. As of September 30, 2022 and December 31, 2021, the adjusted market rate of debt was 12.58% and 4.24%, respectively, and the probability of default was 69% and 21%, respectively. A significant change in those inputs could cause a significant change in valuation.

The following table provides a roll-forward of the aggregate fair value of the Company’s derivative liabilities for which fair value is determined using Level 3 inputs (in thousands):


	Contingent Put Option Liability
Fair value at December 31, 2021	$	108
Change in fair value		(23	)
Fair value at March 31, 2022		85
Change in fair value		27
Fair value at June 30, 2022		112
Extinguishment of liability		(112	)
Issuance of liability		379
Change in fair value		17
Fair value at September 30, 2022	$	396


	Contingent Put Option Liability
Fair value at December 31, 2020	$	51
Extinguishment of liability		(51	)
Issuance of liability		303
Fair value at March 30, 2021		303
Change in fair value		(169	)
Fair value at June 30, 2021		134
Change in fair value		(15	)
Fair value at September 30, 2021	$	119

For the three months ended September 30, 2022 and 2021 and the nine months ended September 30, 2022 and 2021, the Company recorded a change in fair value of the contingent put option liability included in other expense of $17,000, other income of $15,000, other expense of $21,000, and other income of $0.2 million, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and include the accounts of the Company and its wholly owned subsidiaries after the elimination of all significant intercompany accounts and transactions. Any reference in these notes to

applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (ASC) and as amended by Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements as of and for the year ended December 31, 2021, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s condensed consolidated balance sheet as of September 30, 2022, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022 and 2021, condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) for the three and nine months ended September 30, 2022 and 2021 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC) on March 23, 2022 (the Annual Report). The condensed consolidated balance sheet data as of December 31, 2021 presented for comparative purposes was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by U.S. GAAP and Article 8 of Regulation S-X. The results for the three and nine months ended September 30, 2022 and 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period.

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2021 included in the Annual Report. Since the date of the audited consolidated financial statements for the year ended December 31, 2021 included in the Annual Report, there have been no changes to its significant accounting policies except as noted below.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods presented. Key estimates in the consolidated financial statements include the Company’s ability to continue as a going concern, revenue recognition, impairment assessment for goodwill and intangible assets, allowance for doubtful accounts, estimated useful lives of property and equipment, valuation of inventory, accrued expenses, valuation of deferred income tax assets, valuation of derivative liabilities, share-based compensation, fair value of common stock prior to the Company’s initial public offering and accrued warranty are subject to significant estimation. Actual results could differ from those estimates.

Short-term Investments

As of September 30, 2022, short-term investments primarily consisted of commercial paper and U.S. Government securities. The Company classifies its investments in securities as available-for-sale because, for accounting purposes, they are not considered to be either held-to-maturity securities or trading securities. They are not considered to be held-to-maturity securities because the Company does not have the intent to hold those securities to maturity. They are not considered trading securities because they were not acquired with the intent of selling them within hours or days. The Company’s investments in securities are classified as current as they are available for use in current operations. Short-term investments are carried at fair value with the unrealized gains and losses included in other comprehensive loss as a component of stockholders’ equity until realized. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity and recorded as interest income. Realized gains and losses are determined using the specific identification method and are included in other expense, net.

The Company evaluates its investments in securities that are in an unrealized loss position quarterly to determine if those securities are other-than-temporarily-impaired. If the Company intends to sell or if it is more likely than not that the Company will be required to sell those securities prior to the recovery of their book value, then those securities would be considered

other-than-temporarily-impaired, and the Company would record this impairment as a loss through other expense, net. During the three and nine months ended September 30, 2022 and 2021, the Company concluded that none of its investments in securities were other-than-temporarily-impaired and thus recorded no impairment losses for its investments in securities.

The following tables summarize the short-term investments held at September 30, 2022 (in thousands):


	September 30, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Assets
Commercial paper	$	6,607	$	—	$	—		$	6,607
U.S. Government agencies		18,427		1		(21	)		18,407
Total	$	25,034	$	1	$	(21	)	$	25,014

As of September 30, 2022, all short-term investments held by the Company had remaining contractual maturities of one year or less.

Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Finance lease cost:
Payment of finance lease liability	$ 61	$ 61
Interest on lease liabilities	3	8
Operating lease costs	966	690
Variable lease cost	477	363
Lease, Cost, Total	$ 1,507	$ 1,122

Commitment and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

11.

COMMITMENTS AND CONTINGENCIES

Litigation

The Company may become involved in various claims, suits, and legal proceedings from time to time in the ordinary course of its business. The Company accrues a liability when it believes that it is both probable and the amount of loss can be reasonably estimated. While the outcome of such claims, lawsuits or other proceedings cannot be predicted with certainty, management expects that any liability, to the extent not provided for by insurance or otherwise, will not have a material adverse effect on the Company’s consolidated financial position or results of operations.

Codexis Trademark Litigation

In May 2020 Codexis, Inc. (Codexis) filed a complaint against the Company relating to its CODEX DNA name based on Codexis’ rights in the CODEX and CODEXIS mark in the U.S. District Court, Northern District of California for federal and common law trademark infringement and unfair competition/false designation (the Complaint). Codexis seeks injunctive relief, including that the Company cease all use of the term CODEX and any other trademark confusingly similar to the marks CODEX and CODEXIS and not apply for registration of or register the CODEX mark or any other mark confusingly similar to the CODEX or CODEXIS marks, transfer to Codexis all domain names and social media accounts/user names that include the term “codex” and pay damages (consisting of Codexis’ actual damages, a disgorgement of the Company’s profits and punitive damages as permitted by California

common law) as well as attorneys’ fees and costs. In April 2022, Codexis and the Company reached a mutually agreeable resolution to the Codexis trademark litigation.

Eurofins Pharma Non-Competition/Non-Solicitation Litigationc

In October 2018, Eurofins Pharma US Holdings II, Inc. (EPUSH II) and Eurofins DiscoverX Corporation (Eurofins DiscoverX) (collectively, Plaintiffs) filed a complaint against Todd R. Nelson, the Company and Synthetic Genomics, Inc. (the Company’s former parent company, and together with Dr. Nelson and SGI-DNA, the Defendants) to enforce non-competition and non-solicitation provisions of an agreement.

The complaint, filed in the Superior Court of California, County of San Diego, charged Dr. Nelson with breach of contract, the Company with tortious interference, and both with unfair competition. The complaint sought permanent injunctive relief, monetary damages and other equitable relief (including restitution) against the Defendants. On April 9, 2021, the Defendants filed a motion for summary judgment, or in the alternative, summary adjudication, with regard to all causes of action. A hearing on this motion was held on June 25, 2021, at which time the court granted the motion in summary judgement on behalf of SGI-DNA and Dr. Nelson on three of the four claims. The court directed the parties back to mediation on the remaining claim but there was no resolution. On June 22, 2022, at the conclusion of a bench trial, the court ruled in favor of the Company and Dr. Nelson on the remaining claim.

Leases

The Company’s non-cancelable lease commitments are described in Note 7.

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 1,494	$ 962
Work in process and sub-assemblies	169	896
Finished goods	532	510
Total	$ 2,195	$ 2,368

Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

In 2019, SGI sold SGI-DNA to GATTACA Mining, LLC. As part of the transaction, the Company acquired its intangible assets with resulting goodwill. The goodwill carries a fair value of approximately $3.5 million. Due to the recent decline in global economic and labor market conditions caused by the global outbreak of the COVID-19 pandemic, the Company considered the effects on its goodwill and determined that there was no significant impact that would cause the goodwill to be impaired. There were no other events or circumstances that have changed since the last annual assessment that could reduce the fair value of the Company’s reporting segment below its carrying values.

In connection with the Eton acquisition in November 2021, the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired has been assigned to goodwill at a fair value of $11.4 million.

For the three and nine months ended September 30, 2022 and 2021, the Company did not record any impairment of goodwill.

Other Intangible Assets

Other intangible assets acquired in the sale of SGI-DNA to GATTACA Mining, LLC include the rights to technology and the SGIDNA trade name. The Company engaged an independent consultant to value the intangible assets and to determine their useful lives. The technology was valued at approximately $3.2 million with a seven year useful life.

Other intangible assets acquired in the Eton acquisition include the Eton trade name, customer relationships and non-competition agreements. The Company engaged an independent consultant to value the intangible assets and to determine their useful lives. The trade name was valued at $0.1 million with a three year useful life, the customer relationships at $0.4 million with a 15 year useful life and the non-competition agreements at approximately $30,000 with a three year useful life.

Other intangible assets, net consists of the following (in thousands):


	September 30, 2022
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intellectual property	$	3,150		(1,613	)	$	1,537
Trade name		80		(22	)		58
Customer relationships		420		(25	)		395
Non-competition agreements		30		(9	)		21
Total	$	3,680		(1,669	)	$	2,011


	December 31, 2021
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intellectual property	$	3,150		(1,275	)	$	1,875
Trade name		80		(3	)		77
Customer relationships		420		(4	)		416
Non-competition agreements		30		(1	)		29
Total	$	3,680		(1,283	)	$	2,397

Amortization expense for each of the three months ended September 30, 2022 and 2021 was approximately $0.1 million and for the nine months ended September 30, 2022 and 2021 was approximately $0.4 million and $0.3 million, respectively.

The following table summarizes the estimated future amortization expense of the intangible assets as of September 30, 2022 (in thousands):


Years ending December 31:	Amortization of Intangible Assets
2022	$	129
2023		515
2024		510
2025		478
2026		103
Thereafter		276
Total	$	2,011

Organization and Operations

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND OPERATIONS

Business

Telesis Bio Inc. (the Company) was incorporated in the state of Delaware in March 2011, as Synthetic Genomics Solution, Inc., a wholly owned subsidiary of Synthetic Genomics, Inc. (SGI). The Company changed its name to SGI-DNA, Inc. (SGI-DNA) in February 2013, and to Codex DNA, Inc. in March 2020, and then to Telesis Bio Inc. in November 2022. SGI-DNA Limited, a United Kingdom company focused on sales and marketing activities, is a wholly owned subsidiary of Telesis Bio Inc. The Company manufactures and sells laboratory equipment, specifically synthetic biology instruments, reagents and associated products and related services, primarily to pharmaceutical and academic laboratories worldwide.

On November 18, 2021, the Company entered into a Share Purchase Agreement, with the stockholders of EtonBio Inc., a California corporation (Eton), pursuant to which, the Company agreed to purchase all of the outstanding shares of capital stock of Eton (see Note 6). The total purchase price was approximately $14.1 million, which was funded with the Company’s existing cash on hand. Eton is a San Diego-based biotech company specializing in synthetic biology products and services, including DNA sequencing and oligo synthesis, for the global academic research, pharmaceutical, and biotechnology industries. Eton also markets DNA prep services and products such as antibodies, peptides, and metabolism assay kits.

Since its inception, the Company has devoted substantially all of its efforts to raising capital, commercializing its current products, and developing new product offerings. The Company is subject to a number of risks similar to those of other companies conducting high-risk, early-stage research and development of products. Principal among these risks are a dependence on key individuals and intellectual property, competition from other products and companies, and the technical risks associated with the successful research, development and manufacturing of its products. The Company’s success is dependent upon its ability to continue to raise additional capital in order to fund ongoing research and development, commercialize its products, generate revenue, meet its obligations, and, ultimately, become profitable.

Products currently under development will require significant additional research and development efforts. These efforts require significant amounts of additional capital, adequate personnel and infrastructure.

Since inception, the Company has incurred cumulative operating losses and negative cash flows from operations. These operating losses and negative cash flows have been financed principally from the issuance of equity securities and debt. The Company’s ability to continue as a going concern is dependent upon the ability to raise additional debt or equity capital. There can be no assurance that such capital will be available in sufficient amounts, on terms acceptable to the Company, or at all. Risks to which the Company is exposed include uncertainties related to the ability to achieve revenue-generating products; current and potential competitors with greater financial, technological, production, and marketing resources; dependence on key management personnel; and raising additional capital, as needed. Based upon the Company’s current plans, management believes it has sufficient financial resources to fund the Company’s operations for at least twelve months from the issuance date of these condensed consolidated financial statements.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Payment of offering costs	$ 226	$ 8,587

Inventory

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

INVENTORY

Inventories include material, labor and overhead and are stated at the lower of cost (first-in and first-out method) or net realizable value. The components of inventory consisted of the following on September 30, 2022 and December 31, 2021 (in thousands):


	September 30, 2022		December 31, 2021
Raw materials	$	1,494	$	962
Work in process and sub-assemblies		169		896
Finished goods		532		510
Total	$	2,195	$	2,368

Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

10.

STOCK-BASED COMPENSATION

For the three months ended September 30, 2022 and 2021 and the nine months ended September 30, 2022 and 2021, the Company recorded stock-based compensation expense of approximately $0.9 million, $0.4 million, $2.5 million and $0.6 million, respectively. No income tax benefit was recognized in the accompanying condensed consolidated statements of operations and comprehensive loss for the Company’s equity incentive plan.

The Company’s Board of Directors approved the adoption of the SGI-DNA, Inc. 2019 Stock Plan (the 2019 Plan) in March 2019. The 2019 Plan permitted the Company to grant up to 5,544,187 shares for options and restricted stock units of the Company’s common stock. On March 3, 2021, the Company’s Board of Directors and stockholders approved the termination of the 2019 Plan and the adoption of the 2021 Equity Incentive Plan (the 2021 Plan). 6,000,000 shares of common stock were reserved for issuance under the 2021 Plan.

In June 2021, the Company established the 2021 Stock Incentive Plan (the 2021 SIP). The 2021 SIP became effective on the effective date of the IPO, at which time the Company ceased granting awards under the 2021 Plan. The 2021 SIP allows the Company’s compensation committee to grant equity-based awards to the Company’s employees, directors and consultants. A total of 3,500,000 shares of common stock were initially reserved for issuance under the 2021 SIP, plus the number of shares (not to exceed 2,459,970 shares) consisting of (i) the shares of common stock that were available for the issuance of awards under the 2021 Plan at the time the 2021 SIP became effective, which ceased to be available for future issuance under the 2021 Plan at such time and (ii) any shares subject to outstanding options or other share awards that were granted under the 2019 Plan and the 2021 Plan that terminate or expire prior to exercise or settlement; are forfeited because of the failure to vest; or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price. In addition, the number of shares reserved and available for issuance under the 2021 SIP automatically increases each January 1, beginning on January 1, 2022 and each January 1 thereafter by the lesser of 5,250,000 shares or 5% of the outstanding number of shares of common stock on the immediately preceding December 31, or such

lesser number of shares as determined by the Company’s board of directors. As of September 30, 2022, the number of shares of common stock reserved for issuance under the 2021 SIP was 2,442,960.

Stock option activity under the 2019 Plan, the 2021 Plan and the 2021 SIP for the nine months ended September 30, 2022 is as follows:


	Number of options			Weighted average exercise price		Weighted average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Balances at December 31, 2021		2,550,984		$	6.09		9.1	$	12,417
Options granted		2,695,502			5.81
Options exercised		(89,972	)		1.08
Options cancelled		(594,909	)		7.10
Balances at September 30, 2022		4,561,605		$	5.89		9.1	$	258
Vested and expected to vest at September 30, 2022		3,719,793		$	5.82		9.1	$	251
Exercisable at September 30, 2022		836,659		$	5.47		8.3	$	171

There were 2,695,502 options granted during the nine months ended September 30, 2022. The weighted average grant date calculated fair value of options granted during the nine months ended September 30, 2022 was $3.33 per share.

The calculated value of option grants during the nine months ended September 30, 2022 was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:


	September 30, 2022
Risk free interest rate		2.4	%
Expected dividend yield		—	%
Expected term	5.06 years
Expected volatility		54.5	%

The Company has granted restricted stock units with vesting based conditions. Unvested shares of restricted common stock may not be sold or transferred by the holder. They are legally issued and outstanding. These restrictions lapse accordingly to the time-based vesting of each award.

A summary of the restricted stock unit activity during the nine months ended September 30, 2022 is as follows:


	Restricted Stock Units			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2021		—		$	—
Granted		310,901			6.88
Cancelled		(38,300	)		10.20
Unvested at September 30, 2022		272,601		$	6.41

No restricted stock units vested during the nine months ended September 30, 2022.

Effective in connection with the IPO, the Company established the 2021 Employee Stock Purchase Plan (the ESPP). The maximum number of shares of common stock that may be issued under the ESPP was initially 350,000. Additionally, the number of shares reserved and available for issuance under the ESPP automatically increases each January 1, beginning on January 1, 2022 and

each January 1 thereafter, by the lesser of (i) 1,050,000 shares of common stock, (ii) 1.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or (iii) such smaller number of shares of common stock as the Company’s board of directors may designate. As of September 30, 2022, the number of shares of common stock that may be issued under the ESPP is 529,978.

As of September 30, 2022, 113,207 shares of common stock have been issued under the ESPP.

The Company recorded stock-based compensation expense in the following award type categories included within the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Stock options	$	713	$	1,935
Restricted stock units		95		226
Employee stock purchase plan		107		320
Total	$	915	$	2,481

The Company recorded stock-based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Research and development	$	150	$	406
Sales and marketing		113		286
General and administrative		652		1,789
Total	$	915	$	2,481

As of September 30, 2022, total unrecognized stock-based compensation expense related to unvested stock-based awards was $8.1 million, which is expected to be recognized over a weighted average period of 2.9 years.

Net Loss Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerator:
Net loss	$ (12,314)	$ (14,831)	$ (13,194)	$ (9,824)	$ (9,201)	$ (7,442)	$ (40,339)	$ (26,467)
Net loss attributable to common stockholders	$ (12,314)			$ (9,824)			$ (40,339)	$ (26,467)
Denominator:
Weighted average common stock outstanding - basic (in shares)	29,518,955			29,299,769			29,429,393	14,485,161
Weighted average common stock outstanding - diluted (in shares)	29,518,955			29,299,769			29,429,393	14,485,161
Net loss per share attributable to common stockholders - basic (in USD per share)	$ (0.42)			$ (0.34)			$ (1.37)	$ (1.83)
Net loss per share attributable to common stockholders - diluted (in USD per share)	$ (0.42)			$ (0.34)			$ (1.37)	$ (1.83)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Share-based Payment Arrangement, Option, Activity

Stock option activity under the 2019 Plan, the 2021 Plan and the 2021 SIP for the nine months ended September 30, 2022 is as follows:


	Number of options			Weighted average exercise price		Weighted average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Balances at December 31, 2021		2,550,984		$	6.09		9.1	$	12,417
Options granted		2,695,502			5.81
Options exercised		(89,972	)		1.08
Options cancelled		(594,909	)		7.10
Balances at September 30, 2022		4,561,605		$	5.89		9.1	$	258
Vested and expected to vest at September 30, 2022		3,719,793		$	5.82		9.1	$	251
Exercisable at September 30, 2022		836,659		$	5.47		8.3	$	171

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The calculated value of option grants during the nine months ended September 30, 2022 was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:


	September 30, 2022
Risk free interest rate		2.4	%
Expected dividend yield		—	%
Expected term	5.06 years
Expected volatility		54.5	%

Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity

A summary of the restricted stock unit activity during the nine months ended September 30, 2022 is as follows:


	Restricted Stock Units			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2021		—		$	—
Granted		310,901			6.88
Cancelled		(38,300	)		10.20
Unvested at September 30, 2022		272,601		$	6.41

Summary of Share-based Compensation Expense


	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Stock options	$	713	$	1,935
Restricted stock units		95		226
Employee stock purchase plan		107		320
Total	$	915	$	2,481

The Company recorded stock-based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Research and development	$	150	$	406
Sales and marketing		113		286
General and administrative		652		1,789
Total	$	915	$	2,481

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Balance at beginning of period (in shares) at Dec. 31, 2020	15,079,329
Balance at beginning of period at Dec. 31, 2020	$ 38,914
Balance at end of period (in shares) at Mar. 31, 2021	15,079,329
Balance at end of period at Mar. 31, 2021	$ 38,914
Balance at beginning of period (in shares) at Dec. 31, 2020		5,023,957
Balance at beginning of period at Dec. 31, 2020	(25,459)	$ 2	$ 851	$ (26,312)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		223,216
Issuance of Common Stock upon exercise of stock options	133		133
Stock-based compensation expense	67		67
Net loss	(7,442)			(7,442)
Balance at end of period (in shares) at Mar. 31, 2021		5,247,173
Balance at end of period at Mar. 31, 2021	$ (32,701)	$ 2	1,051	(33,754)
Balance at beginning of period (in shares) at Dec. 31, 2020	15,079,329
Balance at beginning of period at Dec. 31, 2020	$ 38,914
Balance at beginning of period (in shares) at Dec. 31, 2020		5,023,957
Balance at beginning of period at Dec. 31, 2020	(25,459)	$ 2	851	(26,312)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(26,467)
Balance at end of period (in shares) at Sep. 30, 2021		29,307,088
Balance at end of period at Sep. 30, 2021	$ 102,762	$ 5	155,536	(52,779)
Balance at beginning of period (in shares) at Mar. 31, 2021	15,079,329
Balance at beginning of period at Mar. 31, 2021	$ 38,914
Balance at beginning of period (in shares) at Mar. 31, 2021		5,247,173
Balance at beginning of period at Mar. 31, 2021	(32,701)	$ 2	1,051	(33,754)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		45,929
Issuance of Common Stock upon exercise of stock options	25		25
Stock-based compensation expense	146		146
Payment of offering costs	(8,587)
Net loss	(9,201)			(9,201)
Issuance of common shares upon initial public offering, net of issuance costs (in shares)		7,666,664
Issuance of common shares upon initial public offering, net of issuance costs of $8,587	$ 112,484	$ 1	112,483
Conversion of convertible preferred shares into an equivalent number of common shares (in shares)	(15,079,329)
Conversion of shares of convertible preferred stock into an equivalent number of shares of common stock	$ (38,914)
Conversion of convertible preferred shares into an equivalents number of common shares (in shares)		15,079,329
Conversion of shares of convertible preferred stock into an equivalent number of shares of common stock	38,914	$ 2	38,912
Issuance of Common Stock upon exercise of stock options (in shares)		1,252,468
Issuance of warrant and conversion into shares of common stock	2,770		2,770
Balance at end of period (in shares) at Jun. 30, 2021		29,291,563
Balance at end of period at Jun. 30, 2021	112,437	$ 5	155,387	(42,955)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		15,525
Issuance of Common Stock upon exercise of stock options	10		10
Stock-based compensation expense	365		365
Payment of offering costs	(226)		(226)
Net loss	(9,824)			(9,824)
Balance at end of period (in shares) at Sep. 30, 2021		29,307,088
Balance at end of period at Sep. 30, 2021	$ 102,762	$ 5	155,536	(52,779)
Balance at beginning of period (in shares) at Dec. 31, 2021	29,318,578	29,318,578
Balance at beginning of period at Dec. 31, 2021	$ 90,784	$ 5	156,049	(65,270)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		70,534
Issuance of Common Stock upon exercise of stock options	78		78
Stock-based compensation expense	448		448
Unrealized gain (loss) on available- for-sale short-term investments	(16)				$ (16)
Net loss	(13,194)			(13,194)
Balance at end of period (in shares) at Mar. 31, 2022		29,389,112
Balance at end of period at Mar. 31, 2022	$ 78,100	$ 5	156,575	(78,464)	(16)
Balance at beginning of period (in shares) at Dec. 31, 2021	29,318,578	29,318,578
Balance at beginning of period at Dec. 31, 2021	$ 90,784	$ 5	156,049	(65,270)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)	89,972
Unrealized gain (loss) on available- for-sale short-term investments	$ (20)
Net loss	$ (40,339)
Balance at end of period (in shares) at Sep. 30, 2022	29,521,757	29,521,757
Balance at end of period at Sep. 30, 2022	$ 53,308	$ 5	158,932	(105,609)	(20)
Balance at beginning of period (in shares) at Mar. 31, 2022		29,389,112
Balance at beginning of period at Mar. 31, 2022	78,100	$ 5	156,575	(78,464)	(16)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		11,752
Issuance of Common Stock upon exercise of stock options	12		12
Issuance of Common Stock related to ESPP (in shares)		113,207
Issuance of Common Stock related to ESPP	339		339
Stock-based compensation expense	1,118		1,118
Unrealized gain (loss) on available- for-sale short-term investments	(18)				(18)
Net loss	(14,831)			(14,831)
Balance at end of period (in shares) at Jun. 30, 2022		29,514,071
Balance at end of period at Jun. 30, 2022	64,720	$ 5	158,044	(93,295)	(34)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		7,686
Issuance of Common Stock upon exercise of stock options	4		4
Stock-based compensation expense	915		915
Payment of financing costs	(31)		(31)
Unrealized gain (loss) on available- for-sale short-term investments	14				14
Net loss	$ (12,314)			(12,314)
Balance at end of period (in shares) at Sep. 30, 2022	29,521,757	29,521,757
Balance at end of period at Sep. 30, 2022	$ 53,308	$ 5	$ 158,932	$ (105,609)	$ (20)

Summary of Significant Accounting Policies - Summary of Short-Term Investments (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 25,034
Unrealized Gains	1
Unrealized Losses	(21)
Fair Value	25,014
Commercial paper
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	6,607
Unrealized Gains	0
Unrealized Losses	0
Fair Value	6,607
U.S. Government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	18,427
Unrealized Gains	1
Unrealized Losses	(21)
Fair Value	$ 18,407