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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2023

OR

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

For the transition period from ___________ to _____________

Commission file number 001-40497

Telesis Bio Inc.

(Exact name of registrant as specified in its charter)

Delaware

45-1216839

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

10431 Wateridge Circle, Suite 150, San Diego, CA

92121

(Address of Principal Executive Offices)

(Zip Code)

(858) 228-4115

Registrant's telephone number, including area code

 

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

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

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

TBIO

Nasdaq Global Select Market

 

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

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

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

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

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

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

The registrant had outstanding 29,983,709 shares of common stock as of November 9, 2023.

 

 

 


Table of Contents

 

Table of Contents

 

Page

Part I - Financial Information

 

Item 1. Financial Statements (Unaudited)

5

Condensed Consolidated Balance Sheets

6

Condensed Consolidated Statements of Operations and Comprehensive Loss

7

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity

8

Condensed Consolidated Statements of Cash Flows

10

Notes to Condensed Consolidated Financial Statements

11

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

34

Item 3. Quantitative and Qualitative Disclosures About Market Risk

50

Item 4. Controls and Procedures

50

Part II - Other Information

 

Item 1. Legal Proceedings

51

Item 1A. Risk Factors

51

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

87

Item 3. Defaults Upon Senior Securities

87

Item 4. Mine Safety Disclosures

87

Item 5. Other Information

87

Item 6. Exhibits

88

Signatures

89

 

2


Table of Contents

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

estimates of the synthetic biology market, market growth, and new market expansion;
our future revenue, expenses, capital requirements and our needs for additional financing;
our expectations regarding the rate and degree of market acceptance of our BioXp systems, BioXp kits and benchtop reagents;
the ability of our products to facilitate the design-build-test paradigm of synthetic biology;
the size and growth of the synthetic biology market and competitive companies and technologies and our industry;
our ability to manage and grow our business;
our ability to develop and commercialize new products; our ability to establish and maintain intellectual property protection for our products or avoid or defend claims of infringement;
the performance of third-party manufacturers and suppliers and our ability to qualify second-source suppliers;
the potential effects of government regulation;
our ability to hire and retain key personnel and to manage our future growth effectively;
our ability to obtain additional financing in future offerings;
the volatility of the trading price of our common stock;
the impact of local, regional, and national and international economic conditions and events, including the war between Russia and Ukraine;
our expectations about market trends;
our anticipated use of our existing resources; and
other risks and uncertainties, including those listed in the section titled “Risk Factors.”

3


Table of Contents

 

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements contained herein to reflect events or circumstances after the date of this Quarterly Report, whether as a result of any new information, future events or otherwise.

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

 

 

 

 

 

 

 

4


Table of Contents

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5


Table of Contents

 

Telesis Bio Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)

 

September 30,
2023

 

 

December 31,
2022

 

Assets

 

 

 

 

(Note 2)

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

17,395

 

 

$

30,419

 

Restricted cash

 

 

175

 

 

 

175

 

Short-term investments

 

 

24,059

 

 

 

13,159

 

Accounts receivable, net of allowance for credit losses of $913 and $343 at
   September 30, 2023 and December 31, 2022, respectively

 

 

5,358

 

 

 

5,851

 

Inventory

 

 

4,270

 

 

 

2,200

 

Prepaid expenses and other current assets

 

 

1,456

 

 

 

3,288

 

Total current assets

 

 

52,713

 

 

 

55,092

 

Property and equipment, net

 

 

7,364

 

 

 

6,861

 

Right-of-use assets

 

 

27,718

 

 

 

1,660

 

Other long-term assets

 

 

852

 

 

 

981

 

Goodwill

 

 

14,886

 

 

 

14,886

 

Other intangible assets, net

 

 

1,496

 

 

 

1,882

 

Total assets

 

$

105,029

 

 

$

81,362

 

Liabilities, redeemable convertible preferred stock and stockholders' equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,399

 

 

$

1,295

 

Accrued employee expenses

 

 

3,622

 

 

 

5,858

 

Finance lease liability, current portion

 

 

110

 

 

 

59

 

Operating lease liability, current portion

 

 

1,637

 

 

 

578

 

Notes payable, current portion

 

 

15,207

 

 

 

 

Deferred revenue, current portion

 

 

1,179

 

 

 

3,958

 

Other accrued liabilities

 

 

973

 

 

 

1,377

 

Other current liabilities

 

 

292

 

 

 

373

 

Total current liabilities

 

 

25,419

 

 

 

13,498

 

Finance lease liability, net of current portion

 

 

200

 

 

 

30

 

Operating lease liability, net of current portion

 

 

27,593

 

 

 

1,111

 

Notes payable, net of discount and current portion

 

 

5,169

 

 

 

19,649

 

Derivative liabilities

 

 

41

 

 

 

367

 

Deferred revenue, net of current portion

 

 

118

 

 

 

142

 

Total liabilities

 

$

58,540

 

 

$

34,797

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

Preferred stock, $.0001 par value; 5,000,000 shares authorized:

 

 

 

 

 

 

Redeemable convertible preferred stock, 280,000 and 0 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively; liquidation preference of $28,721 and $0 at September 30, 2023 and December 31, 2022, respectively

 

 

28,721

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Common stock, $.0001 par value; 100,000,000 shares authorized at
   September 30, 2023 and December 31, 2022;
29,981,139 and 29,647,091 shares
   issued and outstanding at September 30, 2023 and December 31, 2022, respectively

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

161,556

 

 

 

160,304

 

Accumulated other comprehensive loss

 

 

(15

)

 

 

(3

)

Accumulated deficit

 

 

(143,778

)

 

 

(113,741

)

Total stockholders' equity

 

 

17,768

 

 

 

46,565

 

Total liabilities, redeemable convertible preferred stock and stockholders' equity

 

$

105,029

 

 

$

81,362

 

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

 

6


Table of Contents

 

Telesis Bio Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue

 

$

2,435

 

 

$

2,672

 

 

$

8,106

 

 

$

7,432

 

Service revenue

 

 

1,466

 

 

 

2,052

 

 

 

4,853

 

 

 

5,512

 

Collaboration revenue

 

 

962

 

 

 

1,262

 

 

 

5,386

 

 

 

3,186

 

Royalties and other revenue

 

 

701

 

 

 

689

 

 

 

2,187

 

 

 

1,836

 

Total revenue

 

 

5,564

 

 

 

6,675

 

 

 

20,532

 

 

 

17,966

 

Cost of revenue

 

 

2,567

 

 

 

3,016

 

 

 

8,331

 

 

 

8,817

 

Gross profit

 

 

2,997

 

 

 

3,659

 

 

 

12,201

 

 

 

9,149

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

4,119

 

 

 

5,460

 

 

 

13,827

 

 

 

18,791

 

Sales and marketing

 

 

2,743

 

 

 

4,189

 

 

 

9,910

 

 

 

12,338

 

General and administrative

 

 

6,256

 

 

 

5,261

 

 

 

17,522

 

 

 

16,621

 

Total operating expenses

 

 

13,118

 

 

 

14,910

 

 

 

41,259

 

 

 

47,750

 

Loss from operations

 

 

(10,121

)

 

 

(11,251

)

 

 

(29,058

)

 

 

(38,601

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(683

)

 

 

(319

)

 

 

(1,265

)

 

 

(954

)

Change in fair value of derivative liabilities

 

 

167

 

 

 

(17

)

 

 

326

 

 

 

(21

)

Loss on extinguishment of debt

 

 

 

 

 

(727

)

 

 

 

 

 

(727

)

Other income (expense), net

 

 

20

 

 

 

6

 

 

 

(19

)

 

 

(18

)

Total other expense, net

 

 

(496

)

 

 

(1,057

)

 

 

(958

)

 

 

(1,720

)

Loss before provision for income taxes

 

 

(10,617

)

 

 

(12,308

)

 

 

(30,016

)

 

 

(40,321

)

Provision for income taxes

 

 

(14

)

 

 

(6

)

 

 

(21

)

 

 

(18

)

Net loss

 

$

(10,631

)

 

$

(12,314

)

 

$

(30,037

)

 

$

(40,339

)

Less: redeemable convertible preferred stock dividends

 

 

(568

)

 

 

 

 

 

(721

)

 

 

 

Net loss attributable to common stockholders

 

$

(11,199

)

 

$

(12,314

)

 

$

(30,758

)

 

$

(40,339

)

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

 

$

(0.37

)

 

$

(0.42

)

 

$

(1.03

)

 

$

(1.37

)

Weighted average common stock outstanding—basic and diluted

 

 

29,946,770

 

 

 

29,518,955

 

 

 

29,795,723

 

 

 

29,429,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(10,631

)

 

$

(12,314

)

 

$

(30,037

)

 

$

(40,339

)

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

 

 

1

 

 

 

14

 

 

 

4

 

 

 

(20

)

Foreign currency translation loss

 

 

(16

)

 

 

 

 

 

(16

)

 

 

 

Total comprehensive loss

 

$

(10,646

)

 

$

(12,300

)

 

$

(30,049

)

 

$

(40,359

)

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

7


Table of Contents

 

Telesis Bio Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity

(in thousands, except share data)

(Unaudited)

 

 

Redeemable Convertible
Preferred Stock

 

 

Common Stock

 

 

Additional
Paid-In
Capital

 

 

Accumulated
Deficit

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Total
Stockholders'
Equity

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2022

 

 

 

 

$

 

 

 

29,647,091

 

 

$

5

 

 

$

160,304

 

 

$

(113,741

)

 

$

(3

)

 

$

46,565

 

Issuance of common stock upon exercise of stock options

 

 

 

 

 

 

 

 

17,380

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

12

 

Vesting of restricted stock units

 

 

 

 

 

 

 

 

34,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,156

 

 

 

 

 

 

 

 

 

1,156

 

Unrealized gain on available-for-sale short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

5

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,119

)

 

 

 

 

 

(11,119

)

Balances at March 31, 2023

 

 

 

 

$

 

 

 

29,698,496

 

 

$

5

 

 

$

161,472

 

 

$

(124,860

)

 

$

2

 

 

$

36,619

 

Issuance of common stock upon exercise of stock options

 

 

 

 

 

 

 

 

51,778

 

 

 

 

 

 

46

 

 

 

 

 

 

 

 

 

46

 

Issuance of common stock upon exercise of ESPP

 

 

 

 

 

 

 

 

108,338

 

 

 

 

 

 

126

 

 

 

 

 

 

 

 

 

126

 

Issuance of redeemable convertible preferred stock, net of $1.0 million issuance costs

 

 

280,000

 

 

 

18,410

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of warrants, net of $0.4 million issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,122

 

 

 

 

 

 

 

 

 

8,122

 

Redeemable convertible preferred stock dividends

 

 

 

 

 

153

 

 

 

 

 

 

 

 

 

(153

)

 

 

 

 

 

 

 

 

(153

)

Accretion of preferred stock

 

 

 

 

 

9,590

 

 

 

 

 

 

 

 

 

(9,590

)

 

 

 

 

 

 

 

 

(9,590

)

Vesting of restricted stock units

 

 

 

 

 

 

 

 

61,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,035

 

 

 

 

 

 

 

 

 

1,035

 

Unrealized gain on available-for-sale short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

(2

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,287

)

 

 

 

 

 

(8,287

)

Balances at June 30, 2023

 

 

280,000

 

 

$

28,153

 

 

 

29,920,502

 

 

$

5

 

 

 

161,058

 

 

$

(133,147

)

 

$

 

 

$

27,916

 

Issuance of common stock upon exercise of stock options

 

 

 

 

 

 

 

 

35,269

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

 

25

 

Vesting of restricted stock units

 

 

 

 

 

 

 

 

25,368

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,156

 

 

 

 

 

 

 

 

 

1,156

 

Payment of warrant issuance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(115

)

 

 

 

 

 

 

 

 

(115

)

Redeemable convertible preferred stock dividends

 

 

 

 

 

568

 

 

 

 

 

 

 

 

 

(568

)

 

 

 

 

 

 

 

 

(568

)

Unrealized gain on available-for-sale short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

1

 

 

 

1

 

Foreign currency translation gain (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

(16

)

 

 

(16

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

(10,631

)

 

 

 

 

 

(10,631

)

Balances at September 30, 2023

 

 

280,000

 

 

$

28,721

 

 

 

29,981,139

 

 

$

5

 

 

 

161,556

 

 

$

(143,778

)

 

$

(15

)

 

$

17,768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8


Table of Contents

 

Telesis Bio Inc.

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

(in thousands, except share data)

(Unaudited)

 

Redeemable Convertible
Preferred Stock

 

 

Common Stock

 

 

Additional
Paid-In
Capital

 

 

Accumulated
Deficit

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Total
Stockholders'
Equity

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount