ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbols(s)
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Name of each exchange on which registered
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 9C.
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Item 10.
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Item 11.
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Item 12.
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Item 15.
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Item 16.
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the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and our ability to grow and
manage growth profitably and retain our key employees;
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the ability to maintain the listing of our Class A common stock on The Nasdaq Stock Market LLC (“Nasdaq”);
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changes in applicable laws or regulations;
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our ability to raise financing in the future;
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the success, cost and timing of our product development activities;
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the commercialization and adoption of our existing products and the success of any product we may offer in the future;
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the potential attributes and benefits of our products once commercialized;
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our ability to obtain and maintain regulatory approval for our products, and any related restrictions and limitations of any approved product;
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our ability to identify, in-license or acquire additional technology;
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our ability to maintain our existing license agreements and manufacturing arrangements;
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our ability to compete with other companies currently marketing or engaged in the development of products and services that serve customers engaged in proteomic
analysis, many of which have greater financial and marketing resources than us;
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the size and growth potential of the markets for our products, and the ability of each product to serve those markets once commercialized, either alone or in
partnership with others;
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our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
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our financial performance; and
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the impact of the COVID-19 pandemic on our business.
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We are an early-stage life sciences technology company with a history of net losses, which we expect to continue, and we may not be able to generate
meaningful revenues or achieve and sustain profitability in the future.
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We have a limited operating history, which may make it difficult to evaluate the prospects for our future viability and predict our future
performance.
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We may need to raise additional capital to fund commercialization plans for our products, including manufacturing, sales and marketing
activities, expand our investments in research, and development and commercialize new products and applications.
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We have identified material weaknesses in our internal control over financial reporting. If we are unable to develop and maintain an effective
system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business
and operating results.
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We have not yet commercially launched our products, and we may not be able to successfully commercially launch our products as planned.
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Because we are a “controlled company” within the meaning of the Nasdaq rules, our stockholders may not have certain corporate governance
protections that are available to stockholders of companies that are not controlled companies.
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The dual class structure of our common stock has the effect of concentrating voting power with Jonathan M. Rothberg, Ph.D., our Interim Chief
Executive Officer and Executive Chairman of the board of directors and Legacy Quantum-Si’s Founder, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control.
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Even if we commercially launch our products, our success depends on broad scientific and market acceptance, which we may fail to achieve.
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The size of the markets for our products may be smaller than estimated, and new market opportunities may not develop as quickly as we expect, or
at all, limiting our ability to successfully sell our products.
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The COVID-19 pandemic and efforts to reduce its spread have adversely impacted, and are expected to continue to materially and adversely impact,
our business and operations.
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If we do not sustain or successfully manage our anticipated growth, our business and prospects will be harmed.
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We are currently undergoing a leadership transition, and we depend on our key personnel and other highly qualified personnel, and
if we are unable to recruit, train and retain our personnel in the future, we may not achieve our goals.
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We expect to be dependent upon revenue generated from the sales of our initial products from the time they are commercialized through the
foreseeable future.
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We rely on a small number of contract manufacturers to manufacture and supply our instruments. If these manufacturers should fail or not perform
satisfactorily, our ability to commercialize and supply our instruments would be adversely affected.
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If we do not successfully develop and deploy our software, our commercialization efforts and therefore business and results of operations could
suffer.
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We have limited experience producing and supplying our products, and we may be unable to consistently manufacture or source our instruments and
consumables to the necessary specifications or in quantities necessary to meet demand on a timely basis and at acceptable performance and cost levels.
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The life sciences technology market is highly competitive. If we fail to compete effectively, our business and results of operations will
suffer.
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If we elect to label and promote any of our products as clinical diagnostics or medical devices, we would be required to obtain prior marketing
authorization from the U.S. Food and Drug Administration (“FDA”), which would take significant time and expense and could fail to result in FDA marketing authorization of the device for the intended use or uses we believe are commercially
attractive.
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Our products, if used for the diagnosis of disease, could be subject to government regulation, and the regulatory approval and maintenance
process for such products may be expensive, time-consuming, and uncertain both in timing and in outcome.
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Our research use only (“RUO”) products could become subject to government regulation as medical devices by the FDA and other regulatory agencies
even if we do not elect to seek regulatory authorization to market our products for diagnostic purposes, which would adversely impact our ability to market and sell our products and harm our business.
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If we are unable to obtain and maintain and enforce sufficient intellectual property protection for our products and technology, or if the scope
of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be impaired.
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We may not be able to protect our intellectual property rights throughout the world.
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Personalized medicine: tailoring of disease treatment based on genomic data and real-time proteomic data;
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Biomarker discovery: identification of protein markers for disease identification;
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Drug discovery and development: identification of potential drug candidates and aid in the development of the drug;
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Systems biology: system-wide investigations of disease pathways to identify biomarkers, drug action, toxicity, efficacy and
resistance;
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Industry / agriculture: bioproduction and study of plant-pathogen interaction (e.g. crop engineering for drought
resistance); and
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Food science: identification of allergies, understanding an improvement of nutritional values and food quality and safety
control.
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Lower-plex methods. Lower-plex proteomic analysis methods include immunoassay, Gel, and chromatography based methods.
Immunoassay based methods rely on the availability of antibodies targeting specific proteins or epitopes as a way to identify and quantify protein expression levels. Changes or modifications to the protein may prevent the antibody from
binding, resulting in missed identification. Gel based methods like Western blots were the first proteomic technique developed. They utilize an electric current to separate proteins in a gel based on their size and charge, prior to
further analysis by a mass spectrometer (MS) instrument. Chromatography based methods use ion-exchange chromatography to separate and purify proteins from complex biological mixtures. The purified proteins can then be analyzed using a
mass spectrometer.
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Higher-plex methods. Higher-plex proteomic analysis methods include protein microarrays and mass spectrometry instruments.
Existing high-plex proteomic technologies, however, often have tradeoffs between sensitivity and dynamic range — current technologies that are able to analyze the proteome at higher plex, often do so with lower sensitivity and resolution.
Protein microarrays apply small amounts of sample to a “glass chip” where specific antibodies are used to capture target proteins to measure the expression levels and binding affinities of proteins. The most common way researchers
currently analyze proteins is through the use of mass spectrometry. Mass spectrometry is a method for the mass determination and characterization of proteins, and its direct applications include protein identification and
post-translational modifications, elucidation of protein complexes, their subunits and functional interactions, as well as global measurement of proteins in proteomics. Some newer technologies have addressed certain limitations of these
methods, yet still require separate peptide drying or are reliant on existing mass spectrometry instruments. With an estimated 16,000 mass spectrometry instruments installed worldwide specifically for proteomics analysis, we believe the
cost of $250,000 to $1,000,000 or more per new instrument, according to research by DeciBio, LLC, limits access to proteomics research and we believe currently limits the size and growth of the overall proteomics industry.
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Limitations of biased approaches. Unlike with nucleic acids, there is no ability to amplify individual proteins for analysis.
Without an amplification method, typical workflows rely on analyte-specific reagents (ASRs) for protein detection. ASRs comprise a variety of molecules, such as antibodies or aptamers, that bind to specific regions, rather than individual
amino acids, and therefore may not detect the presence of a known protein variants. For instance, the average binding site of an ASR is an epitope with a length of five (5) to eight (8) amino acids, whereas the average length of a human
protein is approximately 470 amino acids. While ASRs are prevalent and readily available, inherent limitations in how these molecules interact with proteins for various detection platforms limit their use for resolving protein sequences at
single amino acid resolution.
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Mass spectrometry tools have a high cost of purchase and ownership. For more than a decade, mass spectrometry has been the
dominant tool for an unbiased approach to protein analysis. Shotgun proteomics, or studying pieces of proteins that have been broken apart, typically utilizes mass spectrometry and mass spectrometry workflows, allowing for the
interrogation of individual peptides and protein sequences. However, these techniques are generally complex, lengthy, expensive, laborious and require extensive data analysis. Taken together, these factors limit the scalability of this
approach and broad adoption of the technology in the market. Comparatively, targeted or biased methods are scalable but only enable interrogation of a small number of targeted proteins per sample. Biased approaches lack the breadth and
depth necessary to catalog new protein variants. Users are therefore forced to choose between breadth with mass spectrometry or scalability with other biased technologies, or limited alternatives that can address both needs.
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Low levels of resolution and sensitivity. We believe successful technologies for use in broad proteomic and clinical testing
generally require high levels of specificity and sensitivity as well as the ability to scale to reliably meet volume demand. Current sensitivity and dynamic range restrictions make legacy technologies, such as mass spectrometry, difficult
to use with liquid samples and restrict the ability to analyze at single molecule resolution.
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There is no method that allows for massively parallel proteomic sequencing. The ability to perform massively parallel
sampling in genomics has helped transform unbiased genomic analysis. Prior to NGS, large scale genomic analysis was limited, as it required expensive instruments and intensive labor for sample preparation and data analysis. The
introduction of NGS enabled massively parallel sampling of small fragments of DNA, enabling sequencing of tens of billions of DNA fragments per sample. By allowing the technology to scale analysis while also reducing costs, NGS enabled
numerous end-market opportunities, including routine cancer panel testing, clinical exomes and other DNA-based assays. Proteomics is currently facing similar limitations, with no existing technology that enables massively parallel sampling
of proteins.
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There is no end-to-end platform to enable a true sample to answer assay. While there have been some improvements to proteomic
technologies, there remain numerous key limitations in typical proteomic analysis. Experiments often require input and oversight from highly trained mass spectrometry technicians, which often requires specialty training for both mass
spectrometry instrument operation and data analysis. Further, these workflows can be tedious and require extensive hands-on-time to perform, inherently limiting sample throughput.
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Costly and complex data analysis. We believe the critical unmet needs remaining in proteomic analysis relate to cost,
accessibility and simplicity. Given the complex and dynamic aspects of proteins, proteomic analysis can generate vast amounts of data that can be difficult to analyze to arrive at a biologically relevant answer. Currently, the complexity
of the analysis is also costly, due to the data processing and analysis infrastructure that is often required.
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Transport and meter out small volumes of reagents/samples between reservoirs;
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Perform chemical or enzymatic incubations with or without temperature control;
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Purify target analyte; and
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Automate sample prep through to library creation.
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What protein is present? Amino acid resolution can provide insight into more than just whether a protein is present or
absent. The sequence information could also indicate what version of the protein is present and how it has been changed from the normal version.
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How much of the protein is present? A digital quantification provides precise protein abundance, not an analog theoretical
abundance based on a colorimetric or mass abundance readout.
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How has the protein been modified? Single-molecule sensitivity could show how the protein has been post-translationally
modified thus providing greater insights to its role in the context of biological processes within the cell.
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User management for secured data access;
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Light-weight library information management system for data management;
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Multi-tenancy to enable data sharing and collaborations; and
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Application store to power a new generation of applications.
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Addressing a large and growing proteomics market poised for technological disruption. We aim to transform single molecule
protein analysis and to democratize proteomic analysis by directly enabling users to unlock significant and unbiased biological insights through improved resolution and access to the proteome. We are developing products to serve customers
within the broader proteomics market, which was estimated to be $36.0 billion in 2020 according to Allied Market Research and is expected to grow to over $70.0 billion by 2025, which represents an approximate 14% CAGR. We believe that the
current addressable market for the products we are developing is $21.0 billion and comprises users across three core groups — users of legacy proteomics technologies, users of benchtop DNA sequencing technologies, and users of other protein
analyzers. Some of these technologies have existed for decades, yet have not provided users unbiased access to the proteome in a simple, cost effective, and scalable manner, which we believe our platform will provide. We believe that our
platform has the potential to enable users to study the proteome similar to the manner in which NGS technologies have transformed the study of the genome.
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Differentiated single molecule detection providing the ultimate level of protein sensitivity and specificity. Our platform is
based on our proprietary semiconductor chip designed to enable measurements at the ultimate level of sensitivity and specificity, single molecules. By enabling true single molecule detection, we are not reliant on ensemble measurements,
which can often vary from sample to sample and even run to run.
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Amino acid resolution and Post-Translational Modification (PTM) detection. Moving beyond simple confirmatory information
provided by affinity-based platforms, our platform delivers amino acid resolution shifting the output from analog to digital. The ability to also identify PTMs could provide novel insights into how pathways are turned on/off during in the
context of disease and ultimately improve our understanding of the estimated 1 million + proteoforms.
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Real-time data processing and open cloud platform provides fast, simple data analysis. During sequencing our Platinum
instrument is designed to stream data to the cloud in real-time, which could allow for real-time analysis to enable faster time to results. In addition, we have developed our cloud-based platform to provide key tools needed to streamline
use of the platform such as secure access, data management, and an open platform where developers can create new analytical workflows to run in our cloud and share them easily with other users.
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Innovative proprietary end-to-end proteomic platform offering differentiated full suite of protein sequencing solutions. We
believe that our platform will enable full end-to-end proteomics workflow solution spanning sample preparation through protein sequencing and analysis, allowing our customers a seamless opportunity to perform proteomic studies at scale. We
also believe that we are the first company to successfully enable NGPS on a semiconductor chip, thus digitizing a substantial proteomics opportunity. We believe the digital nature of our readout provides an accurate and repeatable
quantification of proteins in the sample and could scale to enable billions of data points working at the ultimate level of sensitivity — single molecule resolution.
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Platform to enable democratized access to proteomics tools. Our platform is designed to provide an easy-to-use workflow with
the potential to enable users the ability to better characterize and understand the full complexity of the proteome in an unbiased fashion. Current workflows are typically disaggregated, expensive, require significant training to operate,
and are often performed in a separate specialty laboratory. We aim for our technology platform to be broadly available across pharmaceutical and academic research centers, basic research labs, and other healthcare centers and clinical
laboratories (for RUO until appropriate regulatory authorization is secured to allow clinical or diagnostic uses) at a price point that is a significant discount to most legacy technologies. The reduction in both cost and complexity could
allow for rapid adoption, whether a user is replacing a legacy technology or buying a new instrument. In addition to appealing to users of existing proteomics tools, we believe that our proteomics platform will appeal to users of DNA
sequencing technologies who seek to augment their research and discovery of biomarkers and further deepen their understanding of biology.
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Business model that leverages growing install base of instruments. We have initiated our early access limited release phase to
first enable key thought leaders with early access to our platform in 2021 and we seek to broadly commercialize our platform, for RUO, in the second half of 2022. After our full commercial launch, we will aim to grow our install base,
optimize workflows, and expand our applications, which we expect will then generate revenues from our consumables. Our goal is that the integration of our instruments into our users’ projects will provide ongoing sales of consumables,
resulting in a growing recurring revenue stream.
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Robust patent protection. We have a strong intellectual property strategy in which we have 140 issued patents and 593 pending
applications as of December 31, 2021. Many from our management team worked directly with our Founder, Dr. Jonathan Rothberg, as he revolutionized the creation of next generation DNA sequencing while founding Ion Torrent, which was acquired
by Life Technologies in 2010. Our team has similarly devoted its efforts to revolutionizing unbiased proteomic analysis using a similar scientific and technical validation approach since our founding in 2013.
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Visionary founder backed by strong executive leadership team that has developed and commercialized multiple sequencing technologies
and experienced financial partners with deep experience in healthcare. Our Founder, Interim Chief Executive Officer and Executive Chairman, Dr. Jonathan Rothberg, has dedicated his career to developing breakthrough technologies
to revolutionize healthcare. He has founded more than 10 healthcare technology companies and has received numerous awards, including the Presidential Medal of Technology & Innovation in 2016. Dr. Rothberg previously founded 454 Life
Sciences, a high throughput DNA sequencing platform which was later sold to Roche, as well as founded Ion Torrent, a next generation sequencing platform which was later sold to Life Technologies. He is supported by a world-class management
team, including our executive officers and other senior management, with decades of cumulative experience in the healthcare and life sciences end-markets. Many members of the team worked directly with Dr. Rothberg to successfully
commercialize previous DNA sequencing technologies. We believe this leadership team positions us as a potentially disruptive force in creating a new market of next generation protein sequencing.
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Systematic and phased approach to broad commercialization and adoption, directed at potential customers we extensively know. We
intend to follow a systematic and phased approach to successfully launch and commercialize our platform, for RUO, in the second half of 2022. This strategy included partnering with key thought leaders to obtain initial evidence and
feedback in 2021 under an early access program. Members of our team have previously utilized this approach to successfully launch other disruptive sequencing technologies, including the roll out of Ion Torrent’s next generation DNA
sequencing technology. We believe this approach will allow us to introduce our platform in a structured manner to demonstrate its use and practicality, while working directly with our key potential customers and industry thought leaders to
help ensure a positive experience. Our core leadership team has decades of cumulative experience working directly in the life sciences industry with many of the companies and research centers that have the potential to become key customers
and that we will seek to build into our prospective customer pipeline.
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Rapidly build our commercial infrastructure to help ensure successful initial commercial launch in the U.S. We expect to
rapidly build out our commercial and operational infrastructure to sell and support our platform as we launch and commercialize our technology. We also have manufacturing partnerships that we believe will allow us to rapidly expand our
capacity, with the ability to create new manufacturing lines to meet potential customer demand. In November 2021, we acquired Majelac, a semiconductor packaging company based in Garnet Valley, Pennsylvania. The acquisition brings our
semiconductor chip assembly and packaging capabilities in-house in order to secure our supply chain and support scaling commercialization efforts.
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Invest in market development activities to increase awareness of the importance of the proteome and the strengths of our platform. We
believe our platform has the capability to enable users to generate significant amounts of proteomic information at speed, scale, and simplicity through a solution that is not available today. We believe the utility of our platform will
span basic and discovery applications and translational research in which there is a strong market need for proteomic analysis for novel discoveries and better insights into the complexity of disease. We plan to invest in market
development activities and partnerships to increase awareness of the importance and utility of proteomics to expand and accelerate demand for our products.
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Continued technical innovation to drive product enhancements, new products, and additional applications. Our leadership team
has deep expertise in scientific and technological development and commercialization. After we commercialize our initial products, we aim to continually innovate and develop new products, product enhancements, applications, workflows, and
other tools to enable our customers to generate unbiased proteomic information at scale on a benchtop platform.
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Accessibility and Enablement: Enable broad adoption of protein sequencing. Our mission is to democratize single molecule
proteomic analysis by providing a full workflow of solutions at an affordable cost. We believe that our platform will directly address many of the key bottlenecks that exist within legacy proteomic technologies, namely low sensitivity,
lack of dynamic range, complex workflow, complex analysis, and high cost. We believe our platform offers the potential for a more practical, affordable, and intuitive end-to-end workflow solution relative to many legacy proteomic
technologies. We have specifically developed our platform to be adopted and integrated into any existing lab. We believe that our platform will have wide utility across the study of proteins, including basic and discovery research and,
subject to regulatory authorization, clinical diagnostics, and potentially industrial applications like bioproduction. Our ability to develop our platform such that it will be offered at a significant discount to many legacy instruments
and other proteomic technologies, may allow proteomic analysis to reach new markets and new users, potentially enabling and accelerating innovative discoveries.
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Continue to strengthen our intellectual property portfolio for existing and new technologies. We
have a broad and deep patent protection strategy, which includes 140 issued patents and over 593 pending applications as of December 31, 2021. Protection of our intellectual property is a strategic priority for the business. We have
taken, and will continue to take, steps to protect our current and future intellectual property and proprietary technology. We believe our broad patent portfolio and continued rigorous patent protection strategy will help to allow us to
focus on our key priorities of commercializing our platform, continuing to innovate with new technologies, and preventing fast-followers.
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Foster extraordinary talent inspired and unified by our mission. With decades of cumulative experience in the healthcare and
life sciences markets among our executive officers and other senior management, our world-class management team is unified by our mission to democratize single molecule proteomic analysis by making protein sequencing accessible globally.
We seek to execute at scale the vision of our Founder, Interim Chief Executive Officer and Executive Chairman, Dr. Jonathan Rothberg. He has dedicated his career to enabling breakthrough technologies to revolutionize healthcare, including
a novel genome sequencing method brought to market through his company 454 Life Sciences and has founded more than 10 companies. Dr. Rothberg is supported by a leadership team with many years of sequencing, technology, and healthcare
experience at other leading companies, including Affymetrix, Becton Dickinson, Illumina, Ion Torrent, Life Technologies, Pacific Biosciences, and Thermo Fisher Scientific, among others. We plan to continue to add talented and experienced
members to our team and maintain our commitment to our mission of democratizing proteomic analysis by making protein sequencing accessible globally.
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resolution and sensitivity;
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cost of instruments and consumables;
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efficiency and speed of workflows;
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the scale required to address the complexity and dynamic range of the proteome;
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throughput to meet lab testing volume;
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reputation among customers and key thought leaders;
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innovation in product offerings;
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accuracy and reproducibility of results;
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strength of intellectual property portfolio;
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operational and manufacturing footprint;
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customer support infrastructure; and
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a leadership and commercial team with extensive execution and scientific background.
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Development of comprehensive product description and indications for use.
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Completion of extensive nonclinical tests and/or animal studies, performed in accordance with the FDA’s Good Laboratory Practice (“GLP”) regulations, as well as any
performance standards or other testing requirements established by the FDA through regulations or device-specific guidance.
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Comprehensive review of one or more predicate devices and development of data supporting the new product’s substantial equivalence to such predicate devices.
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the product may not be safe or effective for its intended use(s) to the FDA’s satisfaction;
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the data from the applicant’s nonclinical studies and clinical trials may be insufficient to support approval;
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the manufacturing process or facilities that the applicant uses may not meet applicable requirements; and
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changes in FDA approval policies or adoption of new regulations may require additional data to demonstrate the safety or effectiveness of the device.
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the FDA, the IRB(s), or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold;
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participants do not enroll in clinical trials at the expected rate;
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participants do not comply with trial protocols;
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participant follow-up is not at the expected rate;
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participants experience adverse side effects;
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participants die during a clinical trial, even though their death may not be related to the investigational products;
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third-party clinical investigators decline to participate in a trial or do not perform a trial on the sponsor’s anticipated schedule or consistent with the clinical
trial protocol, GCPs or other FDA requirements;
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the sponsor or third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the clinical trial
protocol or investigational or statistical plans;
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third-party clinical investigators have significant financial interests related to the sponsor or the study that the FDA deems to make the study results unreliable, or
the sponsor or investigators fail to disclose such interests;
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unfavorable regulatory inspections of the sponsor’s clinical trial sites or manufacturing facilities, which may, among other things, require the sponsor to undertake
corrective action or suspend or terminate the sponsor’s clinical trials;
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changes in governmental regulations or administrative actions applicable to the sponsor’s trial protocols;
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the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or effectiveness; and
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the FDA concludes that the results from the sponsor’s trial and/or trial design are inadequate to demonstrate safety and effectiveness of the product.
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establishment registration and device listing;
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the QSR, which requires manufacturers, including third-party manufacturers, to follow design, testing, control, storage, supplier/contractor selection, complaint
handling, documentation and other quality assurance procedures;
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labeling regulations, which govern the mandatory elements of the device labels and packaging (including Unique Device Identifier markings for certain categories of
products);
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FDA’s prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses and other requirements related to promotional activities;
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the MDR regulations, which require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a
way that would likely cause or contribute to a death or serious injury if it were to recur;
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voluntary and mandatory device recalls to address problems when a device is defective and/or could be a risk to health;
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correction and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to
reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; and
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post-market surveillance regulations, which apply to certain Class II or III devices when necessary to protect the public health or to provide additional safety and
effectiveness data for the device.
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Warning Letters or Untitled Letters that require corrective action;
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fines and civil penalties;
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unanticipated expenditures;
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delays in approving/clearing or refusal to approve/clear any of our future products;
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FDA refusal to issue certificates to foreign governments needed to export our products for sale in other countries;
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suspension or withdrawal of FDA approval or clearance (as may be applicable);
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product recall or seizure;
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partial suspension or total shutdown of production;
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operating restrictions;
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injunctions or consent decrees; and
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civil or criminal prosecution.
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the timing and amount of expenditures that we may incur to develop, commercialize or acquire additional products and technologies or for other
purposes, such as the expansion of our facilities;
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•
|
changes in governmental funding of life sciences research and development or changes that impact budgets or budget cycles;
|
•
|
seasonal spending patterns of our customers;
|
•
|
the timing of when we recognize any revenues;
|
•
|
future accounting pronouncements or changes in our accounting policies;
|
•
|
the outcome of any future litigation or governmental investigations involving us, our industry or both;
|
•
|
higher than anticipated service, replacement and warranty costs;
|
•
|
the impact of the COVID-19 pandemic on the economy, investment in life sciences and research industries, our business operations, and resources
and operations of our suppliers, distributors and potential customers; and
|
•
|
general industry, economic and market conditions and other factors, including factors unrelated to our operating performance or the operating
performance of our competitors.
|
•
|
the inability to establish the capabilities and value proposition of our products with key opinion leaders in a timely fashion;
|
•
|
the potential need or desire to modify aspects of our products prior to entering into the second or third phases of our commercial launch plan;
|
•
|
changing industry or market conditions, customer requirements or competitor offerings over the span of our commercial launch plan;
|
•
|
delays in building out our sales, customer support and marketing organization as needed for each of the phases of our commercial launch plan;
and
|
•
|
delays in ramping up manufacturing, either internally or through our suppliers to meet the expected demand in each of the phases of our
commercial launch plan.
|
•
|
our ability to market and increase awareness of the capabilities of our products;
|
•
|
the ability of our products to demonstrate comparable performance in intended use applications broadly in the hands of customers consistent with
the early access limited release phase of our commercialization plan;
|
•
|
our potential customers’ willingness to adopt new products and workflows;
|
•
|
our product’s ease of use and whether it reliably provides advantages over other alternative technologies;
|
•
|
the rate of adoption of our products by academic institutions, laboratories, biopharmaceutical companies and others;
|
•
|
the prices we charge for our products;
|
•
|
our ability to develop new products and workflows and solutions for customers;
|
•
|
if competitors develop and commercialize products that perform similar functions as our products; and
|
•
|
the impact of our investments in product innovation and commercial growth.
|
•
|
our ability to attract, retain and manage the sales, marketing and customer service and support force necessary to commercialize and gain market
acceptance of our products;
|
•
|
the time and cost of establishing a specialized sales, marketing and customer service and support force; and
|
•
|
our sales, marketing and customer service and support force may be unable to initiate and execute successful commercialization activities.
|
•
|
decreases in government funding of research and development;
|
•
|
changes to programs that provide funding to research laboratories and institutions, including changes in the amount of funds allocated to
different areas of research or changes that have the effect of increasing the length of the funding process;
|
•
|
macroeconomic conditions and the political climate;
|
•
|
potential changes in the regulatory environment;
|
•
|
differences in budgetary cycles, especially government- or grant-funded customers, whose cycles often coincide with government fiscal year ends;
|
•
|
competitor product offerings or pricing;
|
•
|
market-driven pressures to consolidate operations and reduce costs; and
|
•
|
market acceptance of relatively new technologies.
|
•
|
required compliance with existing and changing foreign regulatory requirements and laws that are or may be applicable to our business in the
future, such as the European Union’s General Data Protection Regulation (“GDPR”) and other data privacy requirements, labor and employment regulations, anti-competition regulations, the U.K. Bribery Act of 2010 and other anti-corruption
laws, regulations relating to the use of certain hazardous substances or chemicals in commercial products, and require the collection, reuse, and recycling of waste from products we manufacture;
|
•
|
required compliance with U.S. laws such as the Foreign Corrupt Practices Act, and other U.S. federal laws and regulations established by the
Office of Foreign Assets Control of the U.S. Department of the Treasury;
|
•
|
export requirements and import or trade restrictions;
|
•
|
laws and business practices favoring local companies;
|
•
|
foreign currency exchange, longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign
legal systems;
|
•
|
changes in social, economic, and political conditions or in laws, regulations and policies governing foreign trade, manufacturing, research and
development, and investment both domestically as well as in the other countries and jurisdictions in which we operate and into which it may sell our products including as a result of the separation of the United Kingdom from the European
Union (“Brexit”);
|
•
|
potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements, and other trade barriers;
|
•
|
difficulties and costs of staffing and managing foreign operations; and
|
•
|
difficulties protecting, maintaining, enforcing or procuring intellectual property rights.
|
•
|
a failure to achieve market acceptance for our products or expansion of our product sales;
|
•
|
loss of customer orders and delay in order fulfillment;
|
•
|
damage to our brand reputation;
|
•
|
loss of revenue;
|
•
|
increased warranty and customer service and support costs due to product repair or replacement;
|
•
|
product recalls or replacements;
|
•
|
inability to attract new customers;
|
•
|
diversion of resources from our manufacturing and research and development team into our service team; and
|
•
|
legal claims against us, including product liability claims, which could be costly and time consuming to defend and result in substantial
damages.
|
•
|
greater name and brand recognition;
|
•
|
greater financial and human resources;
|
•
|
broader product lines;
|
•
|
larger sales forces and more established distributor networks;
|
•
|
substantial intellectual property portfolios;
|
•
|
larger and more established customer bases and relationships; and
|
•
|
better established, larger scale and lower cost manufacturing capabilities.
|
•
|
the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering,
receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual or furnishing or arranging for a good or service, for which payment may be made, in whole or in part, under
federal healthcare programs, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
|
•
|
the federal civil and criminal false claims laws, including the federal civil False Claims Act, which prohibit, among other things, individuals
or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal healthcare programs that are false or fraudulent. Private individuals can bring False Claims Act “qui tam”
actions, on behalf of the government and such individuals, commonly known as “whistleblowers,” may share in amounts paid by the entity to the government in fines or settlement.
|
•
|
the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare
beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;
|
•
|
HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare
benefit program and making false statements relating to healthcare matters;
|
•
|
the federal Physician Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for
which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, to report annually to CMS, information related to payments and other transfers of value to physicians, which is defined broadly to include
doctors, dentists, optometrists, podiatrists and chiropractors teaching hospitals and certain advanced non-physician healthcare practitioners; and
|
•
|
analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to
items or services reimbursed by any third-party payor, including commercial insurers or patients.
|
• |
the scope of rights granted under the license agreement and other interpretation-related issues;
|
• |
our financial or other obligations under the license agreement;
|
• |
whether, and the extent to which, our products, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
|
• |
our diligence obligations under the license agreement and what activities satisfy those diligence obligations;
|
• |
the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensor(s); and
|
• |
the priority of invention of patented technology.
|
• |
others may be able to make products that are similar to products and technologies we may develop or utilize similar technology that are not covered by the claims of the patents that we own or license now
or in the future;
|
• |
we, or our licensor(s), might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future;
|
• |
we, or our licensor(s), might not have been the first to file patent applications covering certain of our or their inventions;
|
• |
others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating our owned or licensed intellectual
property rights;
|
• |
it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents;
|
• |
issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors;
|
• |
our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products
for sale in our major commercial markets;
|
• |
we may not develop additional proprietary technologies that are patentable;
|
• |
the patents of others may harm our business; and
|
• |
we may choose not to file a patent for certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
|
• |
the ability of our board of directors to issue one or more series of preferred stock;
|
• |
stockholder action by written consent only until the first time when Dr. Rothberg ceases to beneficially own a majority of the voting power of our capital stock;
|
• |
certain limitations on convening special stockholder meetings;
|
• |
advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;
|
• |
amendment of certain provisions of the organizational documents only by the affirmative vote of (i) a majority of the voting power of our capital stock so long as Dr. Rothberg beneficially owns shares
representing a majority of the voting power of our capital stock and (ii) at least two-thirds of the voting power of the capital stock from and after the time that Dr. Rothberg ceases to beneficially own shares representing a majority
of our voting power; and
|
• |
a dual-class common stock structure with 20 votes per share of our Class B common stock, the result of which is that Dr. Rothberg has the ability to control the outcome of matters requiring stockholder
approval, even though Dr. Rothberg owns less than a majority of the outstanding shares of our capital stock.
|
ITEM 2. |
PROPERTIES
|
ITEM 3. |
LEGAL PROCEEDINGS
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
ITEM 6. |
[RESERVED]
|
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Years ended December 31,
|
||||||||||||
(in thousands, except for % changes)
|
2021
|
2020
|
% Change
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$
|
46,575
|
$
|
27,555
|
69.0
|
%
|
||||||
General and administrative
|
46,377
|
7,984
|
480.9
|
%
|
||||||||
Sales and marketing
|
3,956
|
1,152
|
243.4
|
%
|
||||||||
Total operating expenses
|
96,908
|
36,691
|
164.1
|
%
|
||||||||
Loss from operations
|
(96,908
|
)
|
(36,691
|
)
|
164.1
|
%
|
||||||
Interest expense
|
(5
|
)
|
(9
|
)
|
(44.4
|
%)
|
||||||
Dividend income
|
2,549
|
97
|
2527.8
|
%
|
||||||||
Change in fair value of warrant liabilities
|
4,379
|
-
|
nm
|
|||||||||
Other (expense) income, net
|
(5,004
|
)
|
(10
|
)
|
49940.0
|
%
|
||||||
Loss before provision for income taxes
|
(94,989
|
)
|
(36,613
|
)
|
159.4
|
%
|
||||||
Provision for income taxes
|
-
|
-
|
nm
|
|||||||||
Net loss and comprehensive loss
|
$
|
(94,989
|
)
|
$
|
(36,613
|
)
|
159.4
|
%
|
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2021
|
2020
|
Amount
|
%
|
||||||||||||
Research and development
|
$
|
46,575
|
$
|
27,555
|
$
|
19,020
|
69.0
|
%
|
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2021
|
2020
|
Amount
|
%
|
||||||||||||
General and administrative
|
$
|
46,377
|
$
|
7,984
|
$
|
38,393
|
480.9
|
%
|
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2021
|
2020
|
Amount
|
%
|
||||||||||||
Sales and marketing
|
$
|
3,956
|
$
|
1,152
|
$
|
2,804
|
243.4
|
%
|
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2021
|
2020
|
Amount
|
%
|
||||||||||||
Interest expense
|
$
|
(5
|
)
|
$
|
(9
|
)
|
$
|
4
|
(44.4
|
%)
|
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2021
|
2020
|
Amount
|
%
|
||||||||||||
Dividend income
|
$
|
2,549
|
$
|
97
|
$
|
2,452
|
2527.8
|
%
|
Years Ended December 31, | Change | |||||||||||||||
(in thousands, except for % changes)
|
2021
|
2020
|
Amount
|
%
|
||||||||||||
Change in fair value of warrant liabilities
|
$
|
4,379
|
$
|
-
|
$
|
4,379
|
|
nm |
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2021
|
2020
|
Amount
|
%
|
||||||||||||
Other (expense), net
|
$
|
(5,004
|
)
|
$
|
(10
|
)
|
$
|
(4,994
|
)
|
49940.0
|
%
|
Years ended December 31,
|
||||||||||||
(in thousands, except for % changes)
|
2020
|
2019
|
% Change
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$
|
27,555
|
$
|
28,102
|
(1.9
|
%)
|
||||||
General and administrative
|
7,984
|
7,884
|
1.3
|
%
|
||||||||
Sales and marketing
|
1,152
|
634
|
81.7
|
%
|
||||||||
Total operating expenses
|
36,691
|
36,620
|
0.2
|
%
|
||||||||
Loss from operations
|
(36,691
|
)
|
(36,620
|
)
|
0.2
|
%
|
||||||
Interest expense
|
(9
|
)
|
-
|
nm
|
||||||||
Dividend income
|
97
|
823
|
(88.2
|
%)
|
||||||||
Change in fair value of warrant liabilities
|
-
|
-
|
nm
|
|||||||||
Other (expense) income, net
|
(10
|
)
|
5
|
(300.0
|
%)
|
|||||||
Loss before provision for income taxes
|
(36,613
|
)
|
(35,792
|
)
|
2.3
|
%
|
||||||
Provision for income taxes
|
-
|
-
|
nm
|
|||||||||
Net loss and comprehensive loss
|
$
|
(36,613
|
)
|
$
|
(35,792
|
)
|
2.3
|
%
|
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2020
|
2019
|
Amount
|
%
|
||||||||||||
Research and development
|
$
|
27,555
|
$
|
28,102
|
$
|
(547
|
)
|
(1.9
|
%)
|
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2020
|
2019
|
Amount
|
%
|
||||||||||||
General and administrative
|
$
|
7,984
|
$
|
7,884
|
$
|
100
|
1.3
|
%
|
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2020
|
2019
|
Amount
|
%
|
||||||||||||
Sales and marketing
|
$
|
1,152
|
$
|
634
|
$
|
518
|
81.7
|
%
|
Years Ended December 31,
|
Change
|
||||||||||||||||
(in thousands, except for % changes)
|
2020
|
2019
|
Amount
|
% |
|
||||||||||||
Interest expense
|
$
|
(9
|
)
|
$
|
-
|
$
|
(9
|
)
|
|
nm |
|
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2020
|
2019
|
Amount
|
%
|
||||||||||||
Dividend income
|
$
|
97
|
$
|
823
|
$
|
(726
|
)
|
(88.2
|
%)
|
Years Ended December 31,
|
Change
|
|||||||||||||||
(in thousands, except for % changes)
|
2020
|
2019
|
Amount
|
%
|
||||||||||||
Other (expense) income, net
|
$
|
(10
|
)
|
$
|
5
|
$
|
(15
|
)
|
(300.0
|
%)
|
Years Ended December 31,
|
||||||||||||
(in thousands)
|
2021
|
2020
|
2019
|
|||||||||
Net loss
|
$
|
(94,989
|
)
|
(36,613
|
)
|
(35,792
|
)
|
|||||
Interest expense
|
5
|
9
|
-
|
|||||||||
Dividend income
|
(2,549
|
)
|
(97
|
)
|
(823
|
)
|
||||||
Change in fair value of warrant liabilities
|
(4,379
|
)
|
-
|
-
|
||||||||
Other expense (income), net
|
5,004
|
10
|
(5
|
)
|
||||||||
Stock-based compensation expense
|
24,918
|
1,924
|
2,715
|
|||||||||
Depreciation
|
1,041
|
894
|
780
|
|||||||||
Transaction related costs - business combination
|
6,920
|
-
|
-
|
|||||||||
Adjusted EBITDA
|
$
|
(64,029
|
)
|
$
|
(33,873
|
)
|
$
|
(33,125
|
)
|
Years Ended December 31,
|
||||||||||||
(in thousands)
|
2021
|
2020
|
2019
|
|||||||||
Net cash (used in) provided by:
|
||||||||||||
Net cash used in operating activities
|
$
|
(66,813
|
)
|
$
|
(32,573
|
)
|
$
|
(30,708
|
)
|
|||
Net cash used in investing activities
|
(450,937
|
)
|
(461
|
)
|
(1,241
|
)
|
||||||
Net cash provided by financing activities
|
516,625
|
37,014
|
18,217
|
|||||||||
Net (decrease) increase in cash and cash equivalents
|
$
|
(1,125
|
)
|
$
|
3,980
|
$
|
(13,732
|
)
|
•
|
Risk-free interest rate: The risk-free interest rate for periods within the expected term of the awards is based on the U.S. Treasury yield curve in effect at the time of the grant;
|
•
|
Expected dividend yield: We have never declared or paid any cash dividends and do not expect to pay any cash dividends in the foreseeable future;
|
•
|
Expected term: For awards, we calculate the expected term using the “simplified” method, which is the simple average of the vesting period and the contractual term; and
|
•
|
Expected volatility: We determined expected annual equity volatility to be 70% based on the historical volatility of guideline public companies for the years ended December 31, 2019 and 2020 and from
January to June 10, 2021. After June 10, 2021, the volatility is calculated by a third-party professional services firm and reviewed by the Company.
|
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9B. |
OTHER INFORMATION
|
ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
|
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
Age
|
Position
|
||
Jonathan M. Rothberg, Ph.D.
|
58
|
Interim Chief Executive Officer and Executive Chairman of the Board
|
||
Claudia Drayton
|
54
|
Chief Financial Officer
|
||
Michael P. McKenna, Ph.D.
|
59
|
President and Chief Operating Officer
|
||
Matthew Dyer, Ph.D.
|
40
|
Chief Business Officer
|
||
Christian LaPointe, Ph.D.
|
51
|
General Counsel and Corporate Secretary
|
||
Marijn Dekkers, Ph.D.
|
64
|
Director
|
||
Ruth Fattori
|
69
|
Director
|
||
Brigid A. Makes
|
66
|
Director
|
||
Michael Mina, M.D., Ph.D.
|
38
|
Director
|
||
Kevin Rakin
|
61
|
Director
|
||
James Tananbaum, M.D.
|
58
|
Director
|
ITEM 11. |
EXECUTIVE COMPENSATION
|
Name
|
Principal Position
|
|
John Stark
|
Former Chief Executive Officer
|
|
Claudia Drayton
|
Chief Financial Officer
|
|
Michael P. McKenna, Ph.D.
|
President and Chief Operating Officer
|
|
Matthew Dyer, Ph.D.
|
Chief Business Officer
|
|
Christian LaPointe, Ph.D.
|
General Counsel and Corporate Secretary
|
•
|
Attract, motivate and retain executive officers of outstanding ability and potential;
|
•
|
Reinforce the execution of our business strategy and the achievement of our business objectives; and
|
•
|
Align the interests of our executive officers with the interests of our stockholders, with the ultimate objective of increasing stockholder value.
|
What We Do
|
What We Don’t Do
|
|
✓ Emphasize “at-risk” compensation and long-term equity incentives
|
× No guaranteed “single-trigger” change in control cash payments
|
|
✓ Tie performance bonus opportunities to defined corporate objectives
|
× No tax reimbursements or tax gross-ups on severance or change in control payments
|
|
✓ Structure severance payments as “double-trigger” requiring both a change in control and an involuntary termination for payout
|
× No special executive welfare or health benefits, or retirement plans not available to our employees generally
|
|
✓ Assess risks of our compensation program annually
|
× No guaranteed salary increases or bonuses
× No extensive perquisites
|
|
✓ Maintain a compensation committee comprised entirely of independent directors
|
||
✓ Retain an independent compensation advisor
|
•
|
Assisting in developing a peer group of publicly traded companies to be used to help assess executive compensation;
|
•
|
Assisting in developing a competitive compensation strategy and consistent executive compensation assessment practices relevant to a public company, including review and
recommendation of the target values of the annual performance-based cash incentive program as well as the equity strategy for the Company covering dilution, grant levels and type of equity; and
|
•
|
Meeting regularly with the compensation committee to review all elements of executive compensation including the competitiveness of the executive compensation program against
approved peer companies.
|
• Accelerate Diagnostics, Inc.
|
• Inovio Pharmaceuticals, Inc.
|
• Acutus Medical, Inc.
|
• Maravai LifeSciences Holdings, Inc.
|
• Berkeley Lights, Inc.
|
• NanoString Technologies, Inc.
|
• Bionano Genomics, Inc.
|
• Personalis, Inc.
|
• Butterfly Network, Inc.
|
• PureTech Health plc
|
• Castle Biosciences, Inc.
|
• Quanterix Corporation
|
• Cerevel Therapeutics Holdings, Inc.
|
• Seer, Inc.
|
• Co-Diagnostics, Inc.
|
• T2 Biosystems, Inc.
|
• Codexis, Inc.
|
• SeerVeracyte, Inc.
|
• Fluidigm Corporation
|
•
|
Base salary;
|
•
|
Annual performance-based cash incentive compensation; and
|
•
|
Equity incentive awards.
|
Name
|
2020 Base Salary
|
2021 Base Salary
|
% Increase
|
||||||||||
John Stark (2)
|
$
|
350,000
|
$
|
500,000
|
(1)
|
42.9
|
%
|
||||||
Claudia Drayton (3)
|
-
|
$
|
385,000
|
-
|
|||||||||
Michael P. McKenna, Ph.D.
|
$
|
262,500
|
$
|
440,000
|
(4)
|
67.6
|
%
|
||||||
Matthew Dyer, Ph.D.
|
$
|
262,500
|
$
|
400,000
|
(4)
|
52.4
|
%
|
||||||
Christian LaPointe, Ph.D.
|
$
|
240,000
|
$
|
375,000
|
(1)
|
56.3
|
%
|
(1)
|
The increases in base salaries for Mr. Stark and Dr. LaPointe were effective as of July 1, 2021.
|
(2)
|
Mr. Stark’s employment as our CEO terminated effective as of February 8, 2022.
|
(3)
|
Ms. Drayton joined Legacy Quantum-Si as its Chief Financial Officer in April 2021. Her initial base salary was $330,000, which was increased to $385,000 effective as of July 1, 2021.
|
(4)
|
The base salaries for Dr. McKenna and Dr. Dyer were increased to $275,625 effective as of January 1, 2021, and then were increased to the amounts shown in the table above effective as of July 1, 2021.
|
•
|
Achieve early access performance specifications
|
•
|
Establish/secure supply chain inventory to achieve 2022 revenue targets (instruments, chips and assays)
|
•
|
Enable (ship and train) more than ten early access customers
|
•
|
Execute on approved hiring plan and The Sarbanes–Oxley Act of 2002 compliance readiness
|
•
|
Establish development programs for single molecule methods/assays (nucleic acids/proteomics/digital analyte)
|
•
|
Establishment of a robust governance and communication protocol (applicable to our former CEO only)
|
Name
|
Incentive Target Amount
(as a % of Base Salary)
|
Annual Target Bonus (1)
|
Actual Award
|
|||||||||
John Stark
|
100
|
%
|
$
|
425,000
|
$
|
352,750
|
(2)
|
|||||
Claudia Drayton
|
50
|
%
|
$
|
129,062
|
$
|
115,000
|
||||||
Michael P. McKenna, Ph.D.
|
50
|
%
|
$
|
178,906
|
$
|
150,000
|
||||||
Matthew Dyer, Ph.D.
|
50
|
%
|
$
|
168,906
|
$
|
145,000
|
||||||
Christian LaPointe, Ph.D.
|
50
|
%
|
$
|
153,750
|
$
|
132,500
|
(1)
|
The annual target bonus takes into consideration salary adjustments made during 2021
|
(2)
|
Mr. Stark’s employment with the Company terminated effective as of February 8, 2022 and he received an amount equal to his 2021 bonus under the Stark Separation Agreement.
|
Name and Position
|
Year
|
Salary
($) |
Bonus
($) |
Stock Awards
($) (2) |
Option Awards
($) (3) |
Non-Equity Incentive Plan Compensation
($) |
All Other Compensation
($) |
Total
($) |
|||||||||||||||||||||
John Stark
|
2021
|
$
|
425,000
|
$
|
8,750
|
(1)
|
$
|
15,711,346
|
(10) |
$
|
-
|
$
|
352,750
|
$
|
43,096
|
(5)
|
$
|
16,540,942
|
|||||||||||
Former Chief Executive Officer and Director (4)
|
2020
|
$
|
58,333
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
7,564
|
$
|
65,897
|
||||||||||||||
2019
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||
|
|||||||||||||||||||||||||||||
Claudia Drayton
|
2021
|
$
|
247,500
|
$
|
-
|
$
|
905,322
|
$
|
1,119,239
|
$
|
115,000
|
$
|
-
|
$
|
2,387,061
|
||||||||||||||
Chief Financial Officer (6)
|
2020
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
2019
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||
|
|||||||||||||||||||||||||||||
Michael P. McKenna, PhD.
|
2021
|
$
|
357,813
|
$
|
250,000
|
(1)
|
$
|
680,268
|
$
|
492,946
|
$
|
150,000
|
$
|
100,000
|
(7)
|
$
|
2,031,027
|
||||||||||||
President and Chief Operating Officer
|
2020
|
$
|
262,500
|
$
|
75,000
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
337,500
|
||||||||||||||
2019
|
$
|
250,000
|
$
|
50,000
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
300,000
|
|||||||||||||||
|
|||||||||||||||||||||||||||||
Matthew Dyer, PhD.
|
2021
|
$
|
337,813
|
$
|
250,000
|
(1)
|
$
|
680,268
|
$
|
-
|
$
|
145,000
|
$
|
25,903
|
(8)
|
$
|
1,438,984
|
||||||||||||
Chief Business Officer
|
2020
|
$
|
262,500
|
$
|
75,000
|
$
|
-
|
$
|
257,500
|
$
|
-
|
$
|
58,868
|
$
|
653,868
|
||||||||||||||
2019
|
$
|
250,000
|
$
|
20,000
|
$
|
-
|
$
|
742,788
|
$
|
-
|
$
|
44,747
|
$
|
1,057,535
|
|||||||||||||||
|
|||||||||||||||||||||||||||||
Christian LaPointe, PhD.
|
2021
|
$
|
307,500
|
$
|
50,000
|
(1)
|
$
|
1,333,809
|
$
|
246,592
|
$
|
132,500
|
$
|
-
|
$
|
2,070,401
|
|||||||||||||
General Counsel and Corporate Secretary (9)
|
2020
|
$
|
36,000
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
36,000
|
||||||||||||||
2019
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
(1) |
The amount represents discretionary transaction bonuses paid in connection with the consummation of the Business Combination.
|
(2) |
The amount represents the aggregate grant date fair value for restricted stock unit (“RSU”) awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”). A
discussion of our methodology for determining grant date fair value may be found in Note 12 “Equity Incentive Plan” in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
|
(3) |
The amount represents the aggregate grant date fair value for option awards computed in accordance with ASC 718. A discussion of our methodology for determining grant date fair value may be found in Note 12 “Equity Incentive
Plan” in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
|
(4) |
Mr. Stark joined Legacy Quantum-Si as its Chief Executive Officer in November 2020 and his employment and service as a member of the Board ended effective as of February 8, 2022.
|
(5) |
Consists of a temporary housing allowance for housing and travel to our principal executive office in Connecticut.
|
(6) |
Ms. Drayton joined Legacy Quantum-Si as its Chief Financial Officer in April 2021. Her current annual base salary is $385,000.
|
(7)
|
Consists of a loan amount forgiven by us in 2021 prior to the Business Combination which was provided in connection with Dr. McKenna’s commencement of employment. The company forgave the loan
as consideration for Dr. McKenna’s performance throughout his time at Legacy Quantum-Si.
|
(8) |
Consists of a housing allowance of $12,437 provided to Dr. Dyer in January and February 2021 for housing and travel to our principal executive office in Connecticut and $13,466 provided to Dr. Dyer in February 2021 for
relocation expenses.
|
(9)
|
Dr. LaPointe joined Legacy Quantum-Si as its General Counsel and Corporate Secretary in November 2020.
|
(10)
|
Includes a performance-based RSU award granted to Mr. Stark in 2021. The maximum grant date fair value of this performance-based RSU award, assuming the performance conditions had been
achieved in full, is the same ($2,373,254) for Mr. Stark. These RSUs were forfeited in accordance with the Stark Separation Agreement (as defined below).
|
Name
|
Grant Date
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards: Target ($) (1)
|
Estimated Future Payouts Under Equity Incentive Plan Awards: Target (#)
|
All Other Stock Awards: Number of Shares of Stock or Units (#)
|
All Other Option Awards: Number of Securities Underlying Options (#)
|
Exercise or Base Price of Option Awards ($/Sh)
|
Grant Date Fair Value of Stock and Option Awards ($) (2)
|
|||||||||||||||||||||
John Stark
|
-
|
$
|
425,000
|
-
|
-
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||||||
2/17/2021
|
$
|
-
|
-
|
1,703,460
|
(3)
|
-
|
$
|
-
|
$
|
13,338,092
|
||||||||||||||||||
2/17/2021
|
$
|
-
|
453,777
|
(4)
|
-
|
-
|
$
|
-
|
$
|
2,373,254
|
(5)
|
|||||||||||||||||
Claudia Drayton
|
-
|
$
|
129,062
|
-
|
-
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||||||
4/20/2021
|
$
|
-
|
-
|
95,700
|
(6)
|
-
|
$
|
-
|
$
|
905,322
|
||||||||||||||||||
4/20/2021
|
$
|
-
|
-
|
-
|
191,399
|
(7)
|
$
|
9.46
|
$
|
1,119,239
|
||||||||||||||||||
Michael P. McKenna, Ph.D.
|
-
|
$
|
178,906
|
-
|
-
|
-
|
$
|
-
|
-
|
|||||||||||||||||||
3/12/2021
|
$
|
-
|
-
|
79,750
|
(8)
|
-
|
$
|
-
|
$
|
680,268
|
||||||||||||||||||
8/31/2021
|
$
|
-
|
-
|
-
|
100,000
|
(9)
|
$
|
9.72
|
$
|
492,946
|
||||||||||||||||||
Matthew Dyer, Ph.D.
|
-
|
$
|
168,906
|
-
|
-
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||||||
3/12/2021
|
$
|
-
|
-
|
79,750
|
(10)
|
-
|
$
|
-
|
$
|
680,268
|
||||||||||||||||||
Christian LaPointe, Ph.D.
|
-
|
$
|
153,750
|
-
|
-
|
-
|
$
|
-
|
-
|
|||||||||||||||||||
2/17/2021
|
$
|
-
|
-
|
170,346
|
(11)
|
-
|
$
|
-
|
$
|
1,333,809
|
||||||||||||||||||
8/31/2021
|
$
|
-
|
-
|
-
|
50,000
|
(12)
|
$
|
9.72
|
$
|
246,592
|
(1) |
Represents the potential 2021 cash incentive bonus payouts assuming target achievement of goals, based upon the NEO’s cash incentive
bonus target and base salary in effect on December 31, 2021. No minimum threshold amount or maximum amount beyond the target amount was established. See the column entitled “Non-Equity Incentive Plan Compensation” in the
Summary Compensation Table for the cash incentive bonuses earned by the NEOs in 2021. See “Compensation Discussion and Analysis — Components of Executive Compensation — Annual Performance-Based Cash Incentive Compensation” for
a description of our 2021 Plan.
|
(2)
|
The amount represents the grant date fair value for RSU awards and options computed in accordance with ASC 718. A discussion of our methodology for determining grant date fair value may be
found in Note 12 “Equity Incentive Plan” in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
|
(3) |
Represents the grant of RSUs made to Mr. Stark. The RSUs vested as to 25% on January 7, 2022, with the remainder vesting in 12 equal
quarterly installments thereafter beginning with the quarter ending March 31, 2022, subject to Mr. Stark’s continued service through the applicable vesting date. All of Mr. Stark’s unvested RSUs were forfeited on February 8,
2022 in connection with Mr. Stark’s separation.
|
(4)
|
Represents the grant of performance-based RSUs made to Mr. Stark. The performance-based RSUs vest (i) on the closing of a financing in excess of $50 million within three years of Mr. Stark’s
commencement of employment with Legacy Quantum-Si at a share price greater than $16.08, or (ii) if within three years of Mr. Stark’s commencement of employment with Legacy Quantum-Si the publicly-listed closing price of our
shares is $16.08 or more for any 20 trading days within any 30 consecutive trading day period, subject to Mr. Stark’s continued service through the applicable vesting date. These RSUs were forfeited in accordance with the
Stark Separation Agreement.
|
(5) |
The amount represents the maximum grant date fair value for the performance-based RSUs, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in
Note 12 “Equity Incentive Plan” in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The maximum grant date fair value of this performance-based RSU award, assuming that the performance
conditions are achieved in full, is the same ($2,373,254).
|
(6) |
Represents the grant of RSUs made to Ms. Drayton. The RSUs vest as to 25% on June 30, 2022, with the remainder vesting in 12 equal quarterly installments thereafter, subject to Ms. Drayton’s continued service through the
applicable vesting date.
|
(7) |
Represents the grant of stock options made to Ms. Drayton. The shares underlying this option vest as to 25% on June 30, 2022, with the remainder vesting in 36 equal monthly installments thereafter, subject to Ms. Drayton’s
continued service through the applicable vesting date.
|
(8) |
Represents the grant of RSUs made to Dr. McKenna. The RSUs vest as to 25% on March 12, 2022, with the remainder vesting in 12 equal quarterly installments thereafter, subject to Dr. McKenna’s continued service through the
applicable vesting date.
|
(9) |
Represents the grant of stock options made to Dr. McKenna. The shares underlying this option vest as to 2.083% for 48 months in equal installments beginning on August 31, 2021, thereafter, subject to McKenna’s continued
service through the applicable vesting date.
|
(10) |
Represents the grant of RSUs made to Dr. Dyer. The RSUs vest as to 25% on March 12, 2022, with the remainder vesting in 12 equal quarterly installments thereafter, subject to Dr. Dyer’s continued service through the
applicable vesting date.
|
(11) |
Represents the grant of RSUs made to Dr. LaPointe. The RSUs vested as to 25% on January 7, 2022, with the remainder vesting in 12 equal quarterly installments thereafter beginning with the quarter ending March 31, 2022,
subject to Dr. LaPointe’s continued service through the applicable vesting date.
|
(12) |
Represents the grant of stock options made to Dr. LaPointe. The shares underlying this option vest as to 25% on August 31, 2022, with the remainder vesting in 36 equal monthly installments thereafter, subject to Dr.
LaPointe’s continued service through the applicable vesting date.
|
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||
Name
|
Grant Date
|
Number of Securities Underlying Unexercised Options Exercisable (#)
|
Number of Securities Underlying Unexercised Options Unexercisable (#)
|
Option Exercise Price
|
Options Expiration Date
|
Number of Shares or Units That Have Not Vested
|
Market Value of Shares or Units of Stock That Have Not Vested (1)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Unit Rights That Have Not Vested
|
||||||||||||||||||||||||
John
Stark |
2/17/2021
|
-
|
-
|
$
|
-
|
-
|
1,703,460
|
(2)
|
$
|
13,406,230
|
-
|
-
|
|||||||||||||||||||||
2/17/2021
|
-
|
-
|
$
|
-
|
-
|
-
|
$
|
-
|
453,777
|
(3)
|
$
|
3,571,225
|
|||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
Claudia
Drayton |
4/20/2021
|
-
|
191,399
|
(4)
|
$
|
9.46
|
4/20/2031
|
-
|
$
|
-
|
-
|
-
|
|||||||||||||||||||||
4/20/2021
|
-
|
-
|
$
|
-
|
-
|
95,700
|
(5)
|
$
|
753,159
|
-
|
-
|
||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
Michael P.
McKenna, Ph.D. |
3/12/2021
|
-
|
-
|
$
|
-
|
-
|
79,750
|
(7)
|
$
|
627,633
|
-
|
-
|
|||||||||||||||||||||
8/31/2021
|
10,415
|
(6)
|
89,585
|
$
|
9.72
|
8/31/2031
|
-
|
$
|
-
|
-
|
-
|
||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
Matthew
Dyer, Ph.D. |
1/11/2018
|
7,490
|
(8)
|
-
|
$
|
2.56
|
1/11/2028
|
-
|
$
|
-
|
-
|
-
|
|||||||||||||||||||||
8/23/2019
|
159,506
|
(9)
|
79,744
|
$
|
3.03
|
8/23/2029
|
-
|
$
|
-
|
-
|
-
|
||||||||||||||||||||||
8/23/2019
|
115,135
|
(10)
|
39,886
|
$
|
3.03
|
8/23/2029
|
-
|
$
|
-
|
-
|
-
|
||||||||||||||||||||||
5/17/2020
|
60,766
|
(11)
|
73,228
|
$
|
2.90
|
5/17/2030
|
-
|
$
|
-
|
-
|
-
|
||||||||||||||||||||||
3/12/2021
|
-
|
-
|
$
|
-
|
-
|
79,750
|
(12)
|
$
|
627,633
|
-
|
-
|
||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
Christian
LaPointe, Ph.D. |
2/17/2021
|
-
|
-
|
$
|
-
|
-
|
170,346
|
(14)
|
$
|
1,340,623
|
-
|
-
|
|||||||||||||||||||||
8/31/2021
|
-
|
50,000
|
(13)
|
$
|
9.72
|
8/31/2031
|
-
|
$
|
-
|
-
|
-
|
(1) |
The market value of the stock awards is based on the closing price of our Class A common stock of $7.87 per share on December 31, 2021.
|
(2) |
25% of the RSUs vested on January 7, 2022 and the remainder vests, subject to continued service, in 12 equal quarterly installments
thereafter beginning with the quarter ending March 31, 2022. All of Mr. Stark’s unvested RSUs were forfeited on February 8, 2022 in connection with Mr. Stark’s separation.
|
(3) |
The RSUs vest, subject to continued service (i) on the closing of a financing in excess of $50 million within three years of Mr.
Stark’s commencement of employment with Legacy Quantum-Si at a share price greater than $16.08, or (ii) if within three years of Mr. Stark’s start date the publicly-listed closing price of our shares is $16.08 or more for any
20 trading days within any 30 consecutive trading day period. These RSUs were forfeited on February 8, 2022 in connection with Mr. Stark’s separation.
|
(4)
|
The shares underlying this option vest, subject to continued service, as follows: 25% on June 30, 2022, with the remainder vesting in 36 equal monthly installments thereafter.
|
(5) |
The RSUs vest, subject to continued service, as follows: 25% on June 30, 2022, with the remainder vesting in 12 equal quarterly installments thereafter.
|
(6)
|
The shares underlying this option vest, subject to continued service, in 48 equal monthly installments beginning on August 31, 2021.
|
(7) |
The RSUs vest, subject to continued service, as follows: 25% on March 12, 2022, with the remainder vesting in 12 equal quarterly installments thereafter.
|
(8) |
The shares underlying this option vest, subject to continued service, as follows: 25% of the shares vested on December 31, 2018, with the remainder vesting in equal monthly installments over the following 36 months.
|
(9) |
The shares underlying this option vest, subject to continued service, in 48 equal monthly installments beginning on January 31, 2019.
|
(10) |
The shares underlying this option vest, subject to continued service, in 48 equal monthly installments beginning on May 31, 2019.
|
(11) |
The shares underlying this option vest, subject to continued service, in 48 equal monthly installments beginning on January 31, 2020.
|
(12) |
The RSUs vest, subject to continued service, as follows: 25% on March 12, 2022, with the remainder vesting in 12 equal quarterly installments thereafter.
|
(13)
|
The shares underlying this option vest, subject to continued service, as follows: 25% on August 31, 2022, with the remainder vesting in 36 equal monthly installments thereafter.
|
(14) |
25% of the RSUs vested on January 7, 2022 and remainder vests, subject to continued service, in 12 equal quarterly installments thereafter beginning with the quarter ending March 31, 2022.
|
Option Awards
|
||||||||
Name
|
Number of Shares Acquired on Exercise (#)
|
Value Realized on Exercise ($) (1)
|
||||||
John Stark
|
-
|
$
|
-
|
|||||
Claudia Drayton
|
-
|
$
|
-
|
|||||
Michael P. McKenna, Ph.D.
|
-
|
$
|
-
|
|||||
Matthew Dyer, Ph.D.
|
142,114
|
$
|
987,744
|
|||||
Christian LaPointe, Ph.D.
|
-
|
$
|
-
|
(1)
|
The value realized on exercise is based on the difference between the closing price of our Class A common stock on Nasdaq on the date of exercise and the applicable exercise price of those
options and does not represent actual amounts received by the individual as a result of the option exercises.
|
•
|
Severance payable in the form of salary continuation or a lump sum payment. The severance amount is equal to participant’s then-current base salary times a multiplier determined based on the
participant’s title or role with us. The multiplier for our Chief Executive Officer is 1.0 and the multiplier for our other executive officers is 0.75.
|
•
|
The portion of any outstanding unvested equity award that would vest on an annual cliff vesting date in accordance with the terms of the award during the three months following the participant’s
termination date will vest as of the date the termination of such participant’s employment becomes effective.
|
•
|
We will pay for company contribution for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) during the severance period.
|
•
|
Severance payable in a single lump sum. The severance amount is equal to participant’s then-current base salary and then-current target annual bonus opportunity, times a change in control
multiplier determined based on the participant’s title or role with us. The multiplier for our Chief Executive Officer is 1.5 and the multiplier for our other executive officers is 1.0.
|
•
|
Any outstanding unvested equity awards held by the participant under any then-current outstanding equity incentive plan(s) will become fully vested as of the date the termination of such
participant’s employment becomes effective.
|
•
|
We will pay for company contribution for continuation coverage under COBRA during the severance period.
|
Name
|
Compensation Component
|
Termination Without Cause
Absent a Change in Control ($)
|
Termination Without Cause or
For Good Reason Within 12
Months Following a Change of
Control ($)
|
|||||||
John Stark (2)
|
Cash compensation
|
$ |
500,000
|
(3)
|
$
|
1,250,000
|
(5)
|
|||
Acceleration of unvested
options and RSUs |
$ |
3,351,565
|
(1)
|
$
|
16,757,787
|
(1)
|
||||
Benefits and Perquisites
|
$ |
26,905
|
$
|
40,357
|
||||||
|
|
|||||||||
Claudia Drayton
|
Cash compensation
|
$ |
288,750
|
(3)
|
$
|
577,500
|
(5)
|
|||
Acceleration of unvested
options and RSUs |
$ |
-
|
$
|
753,159
|
(1)
|
|||||
Benefits and Perquisites
|
$ |
14,457
|
(4)
|
$
|
19,275
|
(4)
|
||||
|
|
|||||||||
Michael P. McKenna, Ph.D.
|
Cash Compensation
|
$ |
330,000
|
(3)
|
$
|
660,000
|
(5)
|
|||
Acceleration of unvested
options and RSUs |
$ |
156,904
|
(1)
|
$
|
627,633
|
(1)
|
||||
Benefits and Perquisites
|
$ |
15,394
|
(4)
|
$
|
20,525
|
(4)
|
||||
|
|
|||||||||
Matthew Dyer, Ph.D.
|
Cash compensation
|
$ |
300,000
|
(3)
|
$
|
600,000
|
(5)
|
|||
Acceleration of unvested
options and RSUs |
$ |
156,904
|
(1)
|
$
|
1,570,585
|
(1)
|
||||
Benefits and Perquisites
|
$ |
20,179
|
(4)
|
$
|
26,905
|
(4)
|
||||
|
|
|||||||||
Christian LaPointe, Ph.D.
|
Cash compensation
|
$ |
281,250
|
(3)
|
$
|
562,500
|
(5)
|
|||
Acceleration of unvested
options and RSUs |
$ |
335,152
|
(1)
|
$
|
1,340,623
|
(1)
|
||||
Benefits and Perquisites
|
$ |
15,394
|
$
|
20,525
|
(1) |
Value attributable to accelerated vesting of (i) then unvested options, determined by multiplying the number of shares accelerated by the difference between the exercise price of the option
and the closing price of our shares on December 31, 2021, and (ii) then unvested RSUs, determined by multiplying the number of RSUs accelerated by the closing price of our shares on December 31, 2021. The closing price of
our shares on December 31, 2021 was $7.87.
|
(2) |
Mr. Stark’s employment with us, and his service as a member of the Board, terminated effective February 8, 2022. The terms of his separation agreement are discussed above under “Employment
Arrangements – John Stark.”
|
(3) |
Twelve months of 2021 base salary continuation for our former CEO and nine months of 2021 base salary continuation for our other NEOs.
|
(4) |
Payment of COBRA premiums during the base salary continuation period.
|
(5) |
Eighteen months of 2021 base salary continuation for our former CEO and twelve months of 2021 base salary continuation for our other NEOs including full bonus payout.
|
Name
|
Fees Earned or
Paid in Cash ($)(1) |
Stock Awards ($) (2)
|
Option Awards ($) (2)
|
All Other
Compensation ($) |
Total
|
|||||||||||||||
Jonathan M. Rothberg, Ph.D.
|
$
|
30,673
|
$
|
12,994,992
|
(3)
|
$
|
-
|
$
|
221,831
|
(3)
|
$
|
13,247,496
|
||||||||
Marijn Dekkers, Ph.D.
|
$
|
37,459
|
$
|
1,479,492
|
(5) |
$
|
-
|
$
|
-
|
$
|
1,516,951
|
|||||||||
Ruth Fattori
|
$
|
41,621
|
$
|
1,479,492
|
(5) |
$
|
-
|
$
|
-
|
$
|
1,521,113
|
|||||||||
Brigid A. Makes
|
$
|
38,846
|
$
|
199,992
|
$
|
-
|
$
|
-
|
$
|
238,838
|
||||||||||
Michael Mina, M.D., Ph.D. (4)
|
$
|
27,747
|
$
|
199,992
|
$
|
2,094,023
|
$
|
-
|
$
|
2,321,762
|
||||||||||
Kevin Rakin
|
$
|
30,522
|
$
|
199,992
|
$
|
-
|
$
|
-
|
$
|
230,514
|
||||||||||
James Tananbaum, M.D
|
$
|
31,909
|
$
|
199,992
|
$
|
-
|
$
|
-
|
$
|
231,901
|
(1) |
Amounts represent fees earned during 2021 under our Non-Employee Director Compensation Policy.
|
(2) |
Amount represents the aggregate grant date fair value for options and RSUs, computed in accordance with FASB ASC Topic 718. Each non-employee director was granted 20,512 RSUs upon their
appointment as directors of the Company following the Business Combination on June 11, 2021. A discussion of the assumptions used in determining grant date fair value may be found in Note 12 “Equity Incentive Plan” in our
consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The RSUs vest in equal annual installments over three years beginning on June 11, 2022, subject to the director’s continued service
through the applicable vesting date.
|
(3) |
In connection with the Business Combination Agreement, Legacy Quantum-Si and Dr. Rothberg, the founder of Legacy Quantum-Si,
Interim CEO and Executive Chairman of our Board, entered into the Executive Chairman Agreement, effective as of the Closing of the Business Combination pursuant to which Dr. Rothberg advised our CEO and provide guidance to
the Board. The amount included in the table represents the grant date fair value of a restricted stock unit award granted to Dr. Rothberg in connection with entering into the Executive Chairman Agreement and cash payments
paid pursuant to the Executive Chairman Agreement in 2021. A discussion of the terms of the Executive Chairman Agreement can be found below under “Item 13 - Certain Relationships and Related Transactions, and Director
Independence - Executive Chairman Agreement with Jonathan M. Rothberg, Ph.D.” Dr. Rothberg will not receive any additional compensation for serving as Interim CEO.
|
(4) |
On April 19, 2021, Michael Mina, M.D., Ph.D. entered into a consulting agreement with Quantum-Si to serve as Legacy Quantum-Si’s
Chief Medical Advisor. Under the terms of the consulting agreement, Dr. Mina was eligible to receive $22,500 per month for 60% of full-time service to us. Also pursuant to the terms of the consulting agreement, Dr. Mina
was granted an option to purchase shares of Legacy Quantum-Si common stock with an exercise price equal to the fair market value of the common stock on the grant date. The option to purchase 358,875 shares has a per share
exercise price of $9.46 and vests in equal monthly installments over three years beginning on May 31, 2021, subject to Dr. Mina’s continued service on each vesting date provided, however, that during any monthly period
when Dr. Mina’s commitment to us is less than 60% of full time service, the number of shares that vest that month would be reduced proportionately based on the reduction in service relative to Dr. Mina’s 60% of full time
service commitment, and those unvested shares will be forfeited back to us. During 2021, Dr. Mina did not provide any consulting services to us under the consulting agreement and therefore none of the shares underlying
his options have vested and he did not receive any cash compensation. The consulting agreement was terminated on February 14, 2022 and his options were cancelled in its entirety on February 14, 2022 and nothing was
exercisable.
|
(5) |
Each of Dr. Dekkers and Ms. Fattori received 150,000 RSUs in their capacity as directors of Legacy Quantum-Si. The RSUs vest in
equal annual installments over three years beginning on June 11, 2022, subject to continued service through the applicable vesting date.
|
Name
|
Number of Stock
Options Held at
Fiscal Year-End |
Number of Restricted
Stock Units Held at
Fiscal Year-End |
|||||||
Jonathan M. Rothberg, Ph.D.
|
-
|
1,520,512
|
|||||||
Marijn Dekkers, Ph.D.
|
-
|
170,512
|
|||||||
Ruth Fattori
|
-
|
170,512
|
|||||||
Brigid A. Makes
|
-
|
20,512
|
|||||||
Michael Mina, M.D., Ph.D.
|
279,123
|
20,512
|
|||||||
Kevin Rakin
|
-
|
20,512
|
|||||||
James Tananbaum, M.D.
|
-
|
20,512
|
Position
|
Retainer
|
|||
Audit committee chairperson
|
$
|
20,000
|
||
Audit committee member
|
$
|
10,000
|
||
Compensation committee chairperson
|
$
|
15,000
|
||
Compensation committee member
|
$
|
7,500
|
||
Nominating and corporate governance committee chairperson
|
$
|
10,000
|
||
Nominating and corporate governance committee member
|
$
|
5,000
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
• |
each person known to us to be the beneficial owner of more than 5% of our outstanding common stock;
|
• |
each of our executive officers and directors; and
|
• |
all of our executive officers and directors as a group.
|
Name and Address of Beneficial Owner
|
Number of
shares of
Class A
Common
Stock |
%
|
Number of
shares
Class B
Common
stock
|
%
|
% of Total
Voting Power**
|
|||||||||||||||
Directors and Executive Officers:
|
||||||||||||||||||||
Jonathan M. Rothberg, Ph.D. (1)
|
15,692,967
|
13.2
|
%
|
19,937,500
|
100.0
|
%
|
80.1
|
%
|
||||||||||||
John Stark (2)
|
245,996
|
*
|
-
|
-
|
*
|
|||||||||||||||
Claudia Drayton
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Michael P. McKenna, Ph.D. (3)
|
834,105
|
*
|
-
|
-
|
*
|
|||||||||||||||
Matthew Dyer, Ph.D. (4)
|
658,647
|
*
|
-
|
-
|
*
|
|||||||||||||||
Christian LaPointe, Ph.D. (5)
|
90,580
|
*
|
-
|
-
|
*
|
|||||||||||||||
Marijn Dekkers, Ph.D. (6)
|
549,980
|
*
|
-
|
-
|
*
|
|||||||||||||||
Ruth Fattori (7)
|
49,980
|
*
|
-
|
-
|
*
|
|||||||||||||||
Brigid A. Makes
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Michael Mina, M.D., Ph.D.
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Kevin Rakin (8)
|
1,890,000
|
1.6
|
%
|
-
|
-
|
*
|
||||||||||||||
James Tananbaum, M.D. (9)
|
8,403,805
|
7.1
|
%
|
-
|
-
|
1.6
|
%
|
|||||||||||||
All Current Directors and Executive Officers as a Group (11 Individuals) (10)
|
28,170,064
|
23.6
|
%
|
19,937,500
|
100.0
|
%
|
82.4
|
%
|
||||||||||||
Five Percent Holders:
|
||||||||||||||||||||
Jonathan M. Rothberg, Ph.D. (1)
|
15,692,967
|
13.2
|
%
|
19,937,500
|
100.0
|
%
|
8.1
|
%
|
||||||||||||
ARK Investment Management LLC (11)
|
13,067,150
|
11.0
|
%
|
-
|
-
|
2.5
|
%
|
|||||||||||||
Foresite Capital (9)
|
8,403,805
|
7.1
|
%
|
-
|
-
|
1.6
|
%
|
|||||||||||||
Glenview Capital Management, LLC (12)
|
6,000,000
|
5.1
|
%
|
-
|
-
|
1.2
|
%
|
* |
Indicates beneficial ownership of less than 1%.
|
** |
Percentage of total voting power represents voting power with respect to all shares of our Class A common stock and our Class B common stock as a single class. Each share of our Class B
common stock is entitled to 20 votes per share and each share of our Class A common stock is entitled to 1 vote per share.
|
(1) |
Consists of 15,692,967 shares of our Class A common stock and 19,937,500 shares of our Class B common stock held by Jonathan M. Rothberg, Ph.D., Dr. Rothberg’s spouse, 4C Holdings I, LLC, 4C
Holdings V, LLC, 2012 JMR Trust Common, LLC and 23rd Century Capital LLC. Dr. Rothberg, Legacy Quantum-Si’s founder and our Interim CEO and Executive Chairman, is the sole manager of 4C Holdings I, LLC, 4C Holdings V, LLC
and 2012 JMR Trust Common, LLC and has sole voting and investment control of our Class A common stock and our Class B common stock owned by those entities. Dr. Rothberg’s son is the manager of 23rd Century Capital LLC. Dr. Rothberg disclaims beneficial ownership of the shares held by his spouse and 23rd Century Capital LLC.
|
(2) |
Consists of shares of our Class A common stock held by Mr. Stark, our former CEO.
|
(3) |
Consists of (i) 797,500 shares of our Class A common stock held by Dr. McKenna, (ii) 19,939 shares of our Class A common stock issuable upon vesting of RSUs within 60 days of February 15, 2022
held by Dr. McKenna, and (iii) options to purchase 16,666 shares of our Class A common stock issuable upon the exercise of options to purchase shares of our Class A common stock exercisable within 60 days of February 15,
2022 held by Dr. McKenna.
|
(4) |
Consists of (i) 261,743 shares of our Class A common stock held by Dr. Dyer, (ii) 19,939 shares of our Class A common stock issuable upon vesting of RSUs within 60 days of February 15, 2022
held by Dr. Dyer, and (iii) options to purchase 376,965 shares of our Class A common stock issuable upon the exercise of options to purchase shares of our Class A common stock exercisable within 60 days of February 15, 2022
held by Dr. Dyer.
|
(5) |
Consists of (i) 79,933 shares of our Class A common stock held by Dr. LaPointe. and (ii) 10,647 shares of our Class A common stock issuable upon vesting of RSUs within 60 days of February 15,
2022 held by Dr. LaPointe.
|
(6) |
Consists of (i) 37,485 shares of our Class A common stock held by Dr. Dekkers, (ii) 12,495 shares of our Class A common stock issuable upon vesting of RSUs within 60 days of February 15, 2022
held by Dr. Dekkers, and (iii) 500,000 shares of our Class A common stock held by Novalis Lifesciences Investments I, LP (“Novalis”). Dr. Dekkers has sole voting and investment control over the shares held by Novalis.
|
(7) |
Consists of (i) 37,485 shares of our Class A common stock held by Ms. Fattori and (ii) 12,495 shares of our Class A common stock issuable upon vesting of RSUs within 60 days of February 15,
2022 held by Ms. Fattori.
|
(8) |
Consists of (i) 89,000 shares of our Class A common stock held by Mr. Rakin and the Kevin L. Rakin Irrevocable Trust, (ii) 601,000 shares of our Class A common stock held by HighCape Partners
QSI II Invest, L.P, (iii) 24,527 shares of our Class A common stock held by HighCape Partners II, L.P. and (iv) 1,175,473 shares of our Class A common stock held by HighCape Partners QP II, L.P. Mr. Rakin and Matt Zuga are
the managing members of HighCape Capital II GP, LLC, which is the general partner of HighCape Partners II GP, L.P., which is the general partner of each of HighCape Partners QSI II Invest, L.P, HighCape Partners II, L.P. and
HighCape Partners QP II, L.P., and as a result each may be deemed to share voting and investment discretion with respect to the common stock held by such entities. Mr. Rakin disclaims any beneficial ownership of the
securities to be held by HighCape Partners QSI II Invest, L.P, HighCape Partners II, L.P. and HighCape Partners QP II, L.P. other than to the extent of any pecuniary interest he may have therein, directly or indirectly. The
business address of each of these entities or individuals is 452 Fifth Avenue, 21st Floor, New York, NY 10018.
|
(9) |
Based on Schedule 13D filed by Foresite Capital Management, LLC on June 21, 20221. Consists of 4,463,619 shares of our Class A common stock held by Foresite Capital Fund IV, L.P. (“Foresite
IV”) 2,342,061 shares of our Class A common stock held by Foresite Capital Fund V, L.P. (“Foresite V”) and 1,598,125 shares of our Class A common stock held by Foresite Capital Opportunity Fund V, L.P. (“Foresite
Opportunity”). Foresite Capital Management IV, LLC (“FCM IV”) is the general partner of Foresite IV and may be deemed to have sole voting and dispositive power over shares held by Foresite IV. Foresite Capital Management
V, LLC (“FCM V”) is the general partner of Foresite V and Foresite Opportunity and may be deemed to have sole voting and dispositive power over shares held by Foresite V and Foresite Opportunity. Dr. James Tananbaum is the
sole managing member of FCM IV and FCM V and may be deemed to have sole voting and dispositive power over shares held by Foresite IV, Foresite V and Foresite Opportunity. Each of FCM IV, FCM V and Dr. Tananbaum disclaims
beneficial ownership of shares held by Foresite IV, Foresite V and Foresite Opportunity except to the extent of any pecuniary interest therein. The address of Foresite IV, Foresite V, Foresite Opportunity, FCM IV, FCM V and
Dr. Tananbaum is 600 Montgomery Street, Suite 4500, San Francisco, CA 94111.
|
(10) |
See footnotes 1 and 3 through 9.
|
(11) |
Based on Schedule 13G/A filed by ARK Investment Management LLC (“ARK”) on February 9, 2022. Consists of shares of our Class A common stock held by ARK. The business address of ARK is 3 East
28th Street, 7th Floor, New York, New York 10016.
|
(12) |
Based on Schedule 13G/A filed by Glenview Capital Management, LLC (“Glenview Capital Management”) on February 14, 2022. Consists of 261,362 shares of our Class A common stock held for the
account of Glenview Capital Partners, L.P. (“Glenview Capital Partners”), 1,913,372 shares of our Class A common stock held for the account of Glenview Capital Master Fund, Ltd., 641,271 shares of our Class A common stock
held for the account of Glenview Institutional Partners, L.P., 1,369,620 shares of our Class A common stock held for the account of Glenview Offshore Opportunity Master Fund, Ltd., 1,673,485 shares of our Class A common
stock held for the account of Glenview Capital Opportunity Fund, L.P., and 140,890 shares of our Class A common stock held for the account of Glenview Healthcare Master Fund (collectively, the Glenview Investment Funds).
Glenview Capital Management serves as investment manager to each of the Glenview Investment Funds. Larry Robbins is the Chief Executive Officer of Glenview Capital Management. The address of the principal business office
for Mr. Robbins, Glenview Capital Management and the Glenview Investment Funds is 767 Fifth Avenue, 44th Floor, New York, New York 10153.
|
(a) |
(b) |
(c) |
|||||||||||||||||||
Plan category
|
Plan category
Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise
price of outstanding
options,
warrants and rights
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
|
||||||||||||||||||
Equity compensation plans approved by security holders
|
12,313,944
|
(1)
|
$
|
5.14
|
(2)
|
11,891,127
|
(3)
|
||||||||||||||
Equity compensation plans not approved by security holders
|
-
|
-
|
-
|
||||||||||||||||||
Total
|
12,313,944
|
$
|
5.14
|
11,891,127
|
(4)
|
(1) |
Consists of (i) 10,935,482 shares to be issued upon exercise of outstanding options and RSUs under the 2013 Plan and (ii) 1,378,462 shares to be issued upon exercise of outstanding options and
RSUs under the 2021 Plan.
|
(2) |
Consists of the weighted-average exercise price of the $5.14 stock options outstanding on December 31, 2021.
|
(3) |
Consists of shares that remained available for future issuance under the 2021 Plan as of December 31, 2021. No shares remained available for future issuance under the 2013 Plan as of December
31, 2021.
|
(4) |
The 2021 Plan has an evergreen provision that allows for an annual increase in the number of shares available for issuance under the 2021 Plan to be added on the first day of each fiscal year,
beginning in fiscal year 2022 and ending on the second day of fiscal year 2031. The evergreen provides for an automatic increase in the number of shares available for issuance equal to the lesser of (i) 4% of the number of
outstanding shares of common stock on such date and (ii) an amount determined by the plan administrator.
|
Name
|
Shares
|
Aggregate
Purchase Price
|
Date of Issuance
|
||||||
Foresite Capital Fund IV, L.P.
|
1,865,672
|
$
|
10,000,002
|
February 21, 2020
|
|||||
Foresite Capital Fund IV, L.P.
|
3,731,343
|
$
|
19,999,998
|
December 29, 2020
|
|||||
Foresite Capital Fund V, L.P.
|
932,836
|
$
|
5,000,001
|
December 29, 2020
|
• |
any person who is or was an executive officer, director, or director nominee of ours at any time since the beginning of our last fiscal year;
|
• |
a person who is or was an Immediate Family Member (as defined below) of an executive officer, director, director nominee at any time since the beginning of our last fiscal year;
|
• |
any person who, at the time of the occurrence or existence of the transaction, is the beneficial owner of more than 5% of any class of our voting securities, or a Significant Stockholder; or
|
• |
any person who, at the time of the occurrence or existence of the transaction, is an Immediate Family Member of a Significant Stockholder of ours.
|
• |
the related person’s interest in the transaction;
|
• |
the approximate dollar value of the amount involved in the transaction;
|
• |
the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss;
|
• |
whether the transaction was undertaken in the ordinary course of our business;
|
• |
whether the transaction with the related person is proposed to be, or was, entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party;
|
• |
the purpose of, and the potential benefits to us of, the transaction; and
|
• |
any other information regarding the transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the
particular transaction.
|
|
2021
|
2020
|
||||||
Audit fees (1)
|
$
|
1,431,200
|
$
|
43,775
|
||||
Audit-related fees (2)
|
1,155,000
|
-
|
||||||
Tax fees (2)
|
-
|
-
|
||||||
All other fees (2)
|
-
|
-
|
||||||
Total
|
$
|
2,586,200
|
$
|
43,775
|
(1) |
Audit fees consisted of audit work performed in the preparation of consolidated financial statements, as well as work generally only the independent registered public accounting firm can
reasonably be expected to provide, such as quarterly review procedures and the provision of consents in connection with the filing of registration statements and related amendments, as well as other filings.
|
(2) |
Audited-related fees consisted of services related to the Business Combination in 2021. There were no tax and other related fees in 2021 or 2020, and audit-related fees in 2020.
|
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Page | |
(a). 1. Index to Consolidated Financial Statements as of December 31, 2021 and 2020 and for the years ended December 31, 2021, 2020
and 2019
|
|
|
|
Report of Independent Registered Public Accounting Firm (
|
130 |
132 | |
133 | |
134 | |
135 | |
136 |
Exhibit
Number
|
Exhibit Description
|
|
Filed Herewith |
|
Incorporated by
Reference Herein
from
Form or Schedule
|
|
Filing Date
|
SEC File/
Reg. Number
|
||
Business Combination Agreement, dated as of February 18, 2021, by and among Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.), Clay Merger Sub, Inc., and Q-SI Operations Inc. (formerly
Quantum-Si Incorporated)
|
Form 8-K
(Exhibit 2.1)
|
|
2/18/2021
|
001-39486
|
||||||
Second Amended and Restated Certificate of Incorporation of Quantum-Si Incorporated
|
Form 8-K
(Exhibit 3.1)
|
|
6/15/2021
|
001-39486
|
||||||
Amended and Restated Bylaws of Quantum-Si Incorporated
|
X
|
|||||||||
Description of Securities
|
X
|
|||||||||
Specimen Class A Common Stock Certificate
|
Form S-4/A
(Exhibit 4.1)
|
|
5/11/2021
|
333-253691
|
||||||
Warrant Agreement, dated as of September 3, 2020, by and between Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and Continental Stock Transfer & Trust Company
|
Form 8-K
(Exhibit 4.1)
|
|
9/9/2020
|
001-39486
|
Form of PIPE Investor Subscription Agreement for institutional investors, dated as of February 18, 2021, by and between Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and the
subscriber parties thereto
|
Form 8-K
(Exhibit 10.1)
|
|
2/18/2021
|
001-39486
|
||||||
Form of PIPE Investor Subscription Agreement for accredited investors, dated as of February 18, 2021, by and between Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and the subscriber
parties thereto
|
Form 8-K/A
(Exhibit 10.2)
|
|
2/19/2021
|
001-39486
|
||||||
Form of Subscription Agreement, dated as of February 18, 2021, by and between Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and the Foresite Funds
|
Form 8-K/A
(Exhibit 10.3)
|
|
2/19/2021
|
001-39486
|
||||||
Transaction Support Agreement, dated as of February 19, 2021, by and among Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.), and certain supporting stockholders of Q-SI Operations Inc.
(formerly Quantum-Si Incorporated)
|
Form 8-K
(Exhibit 10.1)
|
|
2/22/2021
|
001-39486
|
||||||
Sponsor Letter Agreement, dated as of February 18, 2021, by and among HighCape Capital Acquisition LLC, Deerfield Partners, L.P., Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and
Q-SI Operations Inc. (formerly Quantum-Si Incorporated)
|
Form 8-K
(Exhibit 10.4)
|
|
2/18/2021
|
001-39486
|
||||||
Executive Chairman Agreement, dated as of June 10, 2021, by and between Quantum-Si Incorporated and Jonathan M. Rothberg, Ph.D.
|
Form 8-K
(Exhibit 10.6)
|
|
6/15/2021
|
001-39486
|
||||||
10.7+
|
Offer Letter of Employment, dated as of October 28, 2020, by and between Q-SI Operations Inc. (formerly Quantum-Si Incorporated) and John Stark
|
|
Form S-4 (Exhibit 10.9) |
|
3/1/2021
|
333-253691
|
||||
Separation Agreement, dated as of February 11, 2022, by and between Quantum-Si Incorporated and John Stark
|
|
|
Form 8-K
(Exhibit 10.1)
|
|
2/14/2022
|
001-39486
|
||||
Offer Letter of Employment, dated as of March 23, 2021, by and between Q-SI Operations Inc. (formerly Quantum-Si Incorporated) and Claudia Drayton
|
Form S-4/A
(Exhibit 10.10)
|
|
5/11/2021
|
333-253691
|
||||||
Offer Letter of Employment, dated as of June 1, 2015, by and between Q-SI Operations Inc. (formerly Quantum-Si Incorporated) and Michael P. McKenna, Ph.D.
|
Form S-4
(Exhibit 10.10)
|
|
3/1/2021
|
333-253691
|
Offer Letter of Employment, dated as of March 16, 2016, by and between Q-SI Operations Inc. (formerly Quantum-Si Incorporated) and Matthew Dyer, Ph.D.
|
Form S-4
(Exhibit 10.11)
|
|
3/1/2021
|
333-253691
|
||||||
Offer Letter of Employment, dated as of November 4, 2020, by and between Q-SI Operations Inc. (formerly Quantum-Si Incorporated) and Christian LaPointe, Ph.D., as supplemented by the Letter Agreement, dated
as of February 16, 2021, by and between Q-SI Operations Inc. and Christian LaPointe, Ph.D.
|
X
|
|||||||||
Consulting Agreement, dated as of April 19, 2021, by and between Q-SI Operations Inc. (formerly Quantum-Si Incorporated) and Michael
Mina, M.D., Ph.D.
|
Form S-4/A
(Exhibit 10.13)
|
|
5/11/2021
|
333-253691
|
||||||
Technology and Services Exchange Agreement, dated as of February 17, 2021, by and among Q-SI Operations Inc. (formerly Quantum-Si Incorporated) and the participants named therein
|
|
Form 10-Q
(Exhibit 10.1)
|
|
11/15/2021
|
001-39486
|
|||||
Binders Collaboration Agreement, dated as of September 20, 2021, by and between Quantum-Si Incorporated and Protein Evolution, Inc.
|
|
Form 10-Q
(Exhibit 10.2)
|
|
11/15/2021
|
001-39486
|
|||||
Quantum-Si Incorporated 2021 Equity Incentive Plan
|
|
|
Form 8-K
(Exhibit 10.13.1)
|
|
6/15/2021
|
001-39486
|
||||
Form of Stock Option Agreement under 2021 Equity Incentive Plan
|
Form 8-K
(Exhibit 10.13.2)
|
6/15/2021
|
001-39486
|
|||||||
Form of Restricted Stock Unit Agreement under 2021 Equity Incentive Plan
|
|
|
Form S-8
(Exhibit 99.3)
|
|
9/2/2021
|
333-259271
|
||||
Q-SI Operations Inc. 2013 Employee, Director and Consultant Equity Incentive Plan, as amended
|
|
|
Form 8-K
(Exhibit 10.14.1)
|
|
6/15/2021
|
001-39486
|
||||
Form of Stock Option Agreement under 2013 Employee, Director and Consultant Equity Incentive Plan, as amended
|
Form 8-K
(Exhibit 10.14.2)
|
6/15/2021
|
001-39486
|
|||||||
Form of Restricted Stock Unit Agreement under 2013 Employee, Director and Consultant Equity Incentive Plan, as amended
|
|
|
Form 8-K
(Exhibit 10.14.3)
|
|
6/15/2021
|
001-39486
|
||||
Nonemployee Director Compensation Policy
|
|
|
Form 8-K
(Exhibit 10.15)
|
|
6/15/2021
|
001-39486
|
||||
Form of Indemnification Agreement
|
Form 8-K
(Exhibit 10.16)
|
6/15/2021
|
001-39486
|
Amended and Restated Registration Rights Agreement, dated as of June 10, 2021, by and among Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) and certain of its securityholders
|
Form 8-K
(Exhibit 10.17)
|
6/15/2021
|
001-39486
|
|||||||
Lease Agreement between Quantum-Si Incorporated and BP3-SD5 5510 Morehouse Drive LLC, dated June 18, 2021
|
Form 8-K
(Exhibit 10.1)
|
6/24/2021
|
001-39486
|
|||||||
Lease Agreement between Quantum-Si Incorporated and Winchester Office LLC, dated December 28, 2021
|
Form 8-K
(Exhibit 10.1)
|
1/24/2022
|
001-39486
|
|||||||
Quantum-Si Incorporated Executive Severance Plan
|
Form 8-K
(Exhibit 10.1)
|
7/6/2021
|
001-39486
|
|||||||
List of Subsidiaries
|
Form 8-K
(Exhibit 21.1)
|
6/15/2021
|
001-39486
|
|||||||
Consent of Deloitte & Touche LLP
|
X
|
|||||||||
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|||||
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|||||
Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
X
|
|
|
|
|
|
|||
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
|
X
|
|
|
|
|
|||
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|
X
|
|
|
|
|
|||
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
X
|
|
|
|
|
|||
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
X
|
|
|
|
||||
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
X
|
|
|
|
||||
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
X
|
|
|
|
||||
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
|
X
|
|
|
|
|
QUANTUM-SI INCORPORATED
|
|
March 1, 2022
|
|
|
By:
|
/s/ Jonathan M. Rothberg, Ph.D.
|
|
|
|
Jonathan M. Rothberg, Ph.D.
|
|
|
Interim Chief Executive Officer
|
Name
|
Title
|
Date
|
||
/s/ Jonathan M. Rothberg, Ph.D.
|
Interim Chief Executive Officer and Executive Chairman
|
March 1, 2022
|
||
Jonathan M. Rothberg, Ph.D.
|
(Principal Executive Officer) | |||
/s/ Claudia Drayton
|
Chief Financial Officer
|
March 1, 2022
|
||
Claudia Drayton
|
(Principal Financial and Accounting Officer) | |||
/s/ Marijn Dekkers, Ph.D.
|
Director
|
March 1, 2022
|
||
Marijn Dekkers, Ph.D.
|
||||
/s/ Ruth Fattori
|
Director
|
March 1, 2022
|
||
Ruth Fattori
|
||||
/s/ Brigid A. Makes
|
Director
|
March 1, 2022
|
||
Brigid A. Makes
|
||||
/s/ Michael Mina, M.D., Ph.D.
|
Director
|
March 1, 2022
|
||
Michael Mina, M.D., Ph.D.
|
||||
/s/ Kevin Rakin
|
Director
|
March 1, 2022
|
||
Kevin Rakin
|
||||
/s/ James Tananbaum, M.D.
|
Director
|
March 1, 2022
|
||
James Tananbaum, M.D.
|
• |
We tested management’s computation of the purchase price and determination of goodwill recognized focusing on the completeness and accuracy of the
assets acquired, and liabilities assumed and related fair value purchase price allocations made to identified assets acquired and liabilities assumed and the fair value of the consideration paid, specifically, equity instruments issued and
contingent payments.
|
• |
We obtained and evaluated the valuation estimates prepared by specialists engaged by the Company, and challenged management’s review of the
appropriateness of the valuations assessed and allocation to assets acquired and liabilities assumed. The procedures included but were not limited to, testing critical inputs, including discount rates and the valuation models utilized by the
Company’s specialists.
|
• |
With the assistance of our fair value specialists, we evaluated the
reasonableness of the (1) valuation models and (2) discount rates by:
|
– |
Testing the source information underlying the determination of the discount rates and testing the mathematical accuracy of the calculations.
|
– |
Developing a range of independent estimates and comparing those to the discount rates selected by management.
|
December 31,
2021
|
December 31,
2020
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Marketable securities
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Goodwill
|
|
|
||||||
Other assets
|
|
|
||||||
Other assets - related party
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities, convertible preferred stock and stockholders’ equity (deficit)
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses and other current liabilities
|
|
|
||||||
Short-term operating lease liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Long-term liabilities:
|
||||||||
Warrant liabilities
|
|
|
||||||
Notes payable
|
|
|
||||||
Other long-term liabilities
|
|
|
||||||
Operating lease liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Note 17)
|
||||||||
Convertible preferred stock
|
||||||||
Convertible preferred stock (Series A, B, C, D, and E) $
|
|
|
||||||
Stockholders’ equity (deficit)
|
||||||||
Class A Common stock, $
|
|
|
||||||
Class B Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity (deficit)
|
|
(
|
)
|
|||||
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)
|
$
|
|
$
|
|
Years ended December 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$
|
|
$
|
|
$
|
|
||||||
General and administrative
|
|
|
|
|||||||||
Sales and marketing
|
|
|
|
|||||||||
Total operating expenses
|
|
|
|
|||||||||
Loss from operations
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Interest expense
|
(
|
)
|
(
|
)
|
|
|||||||
Dividend income
|
|
|
|
|||||||||
Change in fair value of warrant liabilities
|
|
|
|
|||||||||
Other (expense) income, net
|
(
|
)
|
(
|
)
|
|
|||||||
Loss before provision for income taxes
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Provision for income taxes
|
|
|
|
|||||||||
Net loss and comprehensive loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Net loss per common share attributable to common stockholders, basic and diluted
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted
|
|
|
|
Convertible preferred stock
|
Class A
common stock
|
Class B
common stock
|
Additional
paid-in
|
Accumulated |
Total
stockholders’
equity
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
deficit
|
(deficit)
|
||||||||||||||||||||||||||||
Balance - January 1, 2019
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||||||||||||
Net loss
|
-
|
-
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Issuance of Series E convertible preferred stock, net of issuance costs
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Common stock issued upon exercise of stock options
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Stock-based compensation expense
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||
Balance - December 31, 2019
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Issuance of Series E convertible preferred stock, net of issuance costs
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Common stock issued upon exercise of stock options
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Stock-based compensation expense
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||
Balance - December 31, 2020
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
Issuance of Series E convertible preferred stock, net of issuance costs
|
|
(
|
)
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Common stock issued upon exercise of stock options and vesting of restricted stock units
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Conversion of the convertible preferred stock into Class A and Class B common stock
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net equity infusion from the Business Combination
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Majelac Technologies LLC Acquisition
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Stock-based compensation expense
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||
Balance - December 31, 2021
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Years ended December 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation
|
|
|
|
|||||||||
Unrealized losses of marketable securities
|
|
|
|
|||||||||
Loss on disposal of fixed assets
|
|
|
|
|||||||||
Change in fair value of warrant liabilities
|
(
|
)
|
|
|
||||||||
Change in fair value of contingent consideration
|
|
|
|
|||||||||
Stock-based compensation expense
|
|
|
|
|||||||||
Write-off of intellectual property
|
|
|
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Prepaid expenses and other current assets
|
(
|
)
|
(
|
)
|
|
|||||||
Other assets
|
(
|
)
|
|
|
||||||||
Other assets - related party
|
|
|
(
|
)
|
||||||||
Operating lease right-of-use assets
|
(
|
)
|
|
|
||||||||
Accounts payable
|
|
|
(
|
)
|
||||||||
Accrued expenses and other current liabilities
|
|
|
|
|||||||||
Short-term operating lease liabilities
|
|
|
|
|||||||||
Operating lease liabilities
|
|
|
|
|||||||||
Net cash used in operating activities
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Cash flows from investing activities:
|
||||||||||||
Purchases of property and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchases of marketable securities
|
(
|
)
|
|
|
||||||||
Business acquisition
|
(
|
)
|
|
|
||||||||
Net cash used in investing activities
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Cash flows from financing activities:
|
||||||||||||
Proceeds from exercise of stock options
|
|
|
|
|||||||||
Proceeds from issuance of Series E convertible preferred stock
|
|
|
|
|||||||||
Net proceeds from equity infusion from the Business Combination
|
|
|
|
|||||||||
Proceeds from issuance of notes payable
|
|
|
|
|||||||||
Payment of notes payable
|
(
|
)
|
|
|
||||||||
Stock issuance costs for Series E convertible preferred stock
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Principal payments under finance lease obligations
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net cash provided by financing activities
|
$
|
|
$
|
|
$
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(
|
)
|
|
(
|
)
|
|||||||
Cash and cash equivalents at beginning of period
|
|
|
|
|||||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
$
|
|
||||||
Supplemental disclosure of cash flow information:
|
||||||||||||
Cash received from exchange of research and development tax credits
|
$
|
|
$
|
|
$
|
|
||||||
Supplemental disclosure of noncash information:
|
||||||||||||
Noncash acquisition of property and equipment
|
$
|
|
$
|
|
$
|
|
||||||
Forgiveness of related party promissory notes
|
$
|
|
$
|
|
$
|
|
||||||
Noncash equity issuance - business acquisition
|
$
|
|
$
|
|
$
|
|
||||||
Noncash equity related warrants from the Business Combination
|
$
|
|
$
|
|
$
|
|
||||||
Conversion of the convertible preferred stock into Class A and Class B common stock
|
$
|
|
$
|
|
$
|
|
||||||
Noncash contingent consideration and holdbacks - business acquisition
|
$ |
$ |
$ |
• |
valuation allowances with respect to deferred tax assets;
|
• |
valuation for acquisitions;
|
• |
assumptions used for leases;
|
• |
valuation of warrant liabilities; and
|
• |
assumptions underlying the fair value used in the calculation of the stock-based compensation.
|
Property and equipment
|
Estimated useful life
|
|
Laboratory and production equipment
|
|
|
Computer equipment
|
|
|
Software
|
|
|
Furniture and fixtures
|
|
• |
each share of Legacy Quantum-Si capital stock (other than shares of Legacy Quantum-Si Series A preferred stock) that was issued and outstanding as of immediately prior to the Effective Time was
automatically cancelled and extinguished and converted into the right to receive a number of shares of the Company’s Class A common stock equal to the Exchange Ratio, rounded down to the nearest whole number of shares;
|
• |
each share of Legacy Quantum-Si Series A preferred stock that was issued and outstanding as of immediately prior to the Effective Time was automatically cancelled and extinguished and converted into the
right to receive a number of shares of the Company’s Class B common stock equal to the Exchange Ratio, rounded down to the nearest whole number of shares;
|
• |
each option to purchase shares of Legacy Quantum-Si common stock, whether vested or unvested, that was outstanding and unexercised as of immediately prior to the Effective Time was assumed by the Company
and became an option (vested or unvested, as applicable) to purchase a number of shares of the Company’s Class A common stock equal to the number of shares of Legacy Quantum-Si common stock subject to such option immediately prior to the
Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole number of shares, at an exercise price per share equal to the exercise price per share of such option immediately prior to the Effective Time divided by
the Exchange Ratio, rounded up to the nearest whole cent; and
|
• |
each Legacy Quantum-Si restricted stock unit outstanding immediately prior to the Effective Time was assumed by the Company and became a restricted stock unit with respect to a number of shares of the
Company’s Class A common stock equal to the number of shares of Legacy Quantum-Si common stock subject to such Legacy Quantum-Si restricted stock unit immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down
to the nearest whole share.
|
• |
|
• |
|
• |
|
• |
|
• |
|
• |
|
Purchase Price
Allocation
|
||||
Prepaid expenses and other current assets
|
$
|
|
||
Property and equipment, net
|
|
|||
Goodwill
|
|
|||
Total
|
$ |
|
• |
Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.
|
• |
Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable
data for substantially the full term of the assets or liabilities.
|
• |
Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Fair Value Measurement Level
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
December 31, 2021:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Mutual funds - Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Mutual funds - Marketable securities
|
|
|
|
|
||||||||||||
Total assets at fair value on a recurring basis
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Public Warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Private Warrants
|
|
|
|
|
||||||||||||
Total liabilities at fair value on a recurring basis
|
$
|
|
$
|
|
$
|
|
$
|
|
Fair Value Measurement Level
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
December 31, 2020:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Mutual funds - Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total assets at fair value on a recurring basis
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Notes payable
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total liabilities at fair value on a recurring basis
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31,
2021
|
December 31,
2020
|
|||||||
Laboratory and production equipment
|
$
|
|
$
|
|
||||
Computer equipment
|
|
|
||||||
Software
|
|
|
||||||
Furniture and fixtures
|
|
|
||||||
Leasehold improvements
|
|
|
||||||
Construction in process
|
|
|
||||||
|
|
|||||||
Less: Accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Property and equipment, net
|
$
|
|
$
|
|
December 31,
2021
|
December 31,
2020
|
|||||||
Employee compensation
|
$
|
|
$
|
|
||||
Contracted services
|
|
|
||||||
Business acquisition costs and contingencies
|
|
|
||||||
Legal fees
|
|
|
||||||
Other
|
|
|
||||||
Total accrued expenses and other current liabilities
|
$
|
|
$
|
|
Year Ended
December 31, 2021
|
||||
Operating lease cost
|
$
|
|
||
Short-term lease cost
|
|
|||
Variable lease cost
|
|
|||
Total lease cost
|
$
|
|
Operating Leases
|
||||
Weighted-average remaining lease term (years)
|
|
|||
Weighted-average discount rate
|
|
%
|
Operating Leases
|
||||
Operating cash paid to settle operating lease liabilities
|
$
|
|
||
Right-of-use assets obtained in exchange for lease liabilities
|
$
|
|
Operating Leases
|
||||
2022
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
Thereafter
|
|
|||
Total undiscounted lease payments
|
$
|
|
||
Less: Imputed interest
|
|
|||
Total lease liabilities
|
$
|
|
Three Months Ended
March 31, 2021
|
Three Months Ended
June 30, 2021
|
Three Months Ended
September 30, 2021
|
||||||||||
Operating lease cost
|
$
|
|
$
|
|
$
|
|
||||||
Short-term lease cost
|
|
|
|
|||||||||
Variable lease cost
|
|
|
|
|||||||||
Total lease cost
|
$
|
|
$
|
|
$
|
|
September 30, 2021
|
||||
Operating lease right-of-use assets
|
$
|
|
||
Short-term operating lease liabilities
|
|
|||
Operating lease liabilities
|
|
|||
Weighted-average remaining lease term (years)
|
|
|||
Weighted-average discount rate
|
|
%
|
Class
|
Year of
Class
Issuance
|
Issuance
Price per
Share
|
Shares
Authorized
|
Shares
Issued and
Outstanding
|
Total
Proceeds or
Exchange
Value
|
Issuance
Costs
|
Net
Carrying
Value
|
Initial
Liquidation
Price per
Share
|
|||||||||||||||||||||||
Series A
|
|
$
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Series B
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Series C
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Series D
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Series E
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
Number
of Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual Term
(Years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at December 31, 2020
|
|
$
|
|
|
$
|
|
||||||||||
Granted
|
|
|
||||||||||||||
Exercised
|
(
|
)
|
|
|||||||||||||
Forfeited
|
(
|
)
|
|
|||||||||||||
Outstanding at December 31, 2021
|
|
$
|
|
|
$
|
|
||||||||||
Options exercisable at December 31, 2021
|
|
|
|
$
|
|
|||||||||||
Vested and expected to vest at December 31, 2021
|
|
$
|
|
|
$
|
|
|
|
2021
|
|
2020
|
2019
|
|
Risk-free interest rate
|
|
|
|
|
|
|
Expected dividend yield
|
|
|
|
|
|
|
Expected term
|
|
|
|
|
|
|
Expected volatility
|
|
|
|
|
|
|
|
2019
|
Risk-free interest rate
|
|
|
Expected dividend yield
|
|
|
Expected term
|
|
|
Expected volatility
|
|
|
Number
of Shares
Underlying RSUs
|
Weighted Average
Grant-Date
Fair Value
|
|||||||
Outstanding non-vested RSUs at December 31, 2020
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Forfeited
|
|
|
||||||
Outstanding non-vested RSUs at December 31, 2021
|
|
$
|
|
Years ended December 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Research and development
|
$
|
|
$
|
|
$
|
|
||||||
General and administrative
|
|
|
|
|||||||||
Sales and marketing
|
|
|
|
|||||||||
Total stock-based compensation expense
|
$
|
|
$
|
|
$
|
|
Years ended December 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Numerator
|
||||||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Numerator for basic and diluted EPS - loss attributable to common stockholders
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Denominator
|
||||||||||||
Common stock
|
|
|
|
|||||||||
Denominator for basic and diluted EPS - weighted-average common stock
|
|
|
|
|||||||||
Basic and diluted net loss per share
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
Years ended December 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Outstanding options to purchase common stock
|
|
|
|
|||||||||
Outstanding restricted stock units
|
|
|
|
|||||||||
Outstanding warrants
|
|
|
|
|||||||||
Outstanding convertible preferred stock (Series A through E)
|
|
|
|
|||||||||
|
|
|
• |
in whole and not in part;
|
• |
at a price of $
|
• |
upon not less than
|
• |
if, and only if, the closing price of the Company’s common stock equals or exceeds $
|
Years Ended December 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Statutory tax rate
|
|
%
|
|
%
|
|
%
|
||||||
State taxes, net of federal benefit
|
|
|
|
|||||||||
Federal research and development credit
|
|
|
|
|||||||||
Stock-based compensation expense
|
|
(
|
)
|
(
|
)
|
|||||||
Other
|
|
(
|
)
|
|
||||||||
Valuation allowance
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Effective tax rate
|
|
%
|
|
%
|
|
%
|
As of December 31,
|
||||||||
2021
|
2020
|
|||||||
Deferred tax assets
|
||||||||
Net operating loss carryforwards
|
$
|
|
$
|
|
||||
Tax credit carryforwards
|
|
|
||||||
Stock-based compensation expense
|
|
|
||||||
Operating lease liabilities
|
|
|
||||||
Other
|
|
|
||||||
Total deferred tax assets
|
$
|
|
$
|
|
||||
Deferred tax liabilities
|
||||||||
Operating lease right-of-use assets
|
$
|
(
|
)
|
$
|
|
|||
Property and equipment
|
(
|
)
|
(
|
)
|
||||
Other
|
(
|
)
|
|
|||||
Total deferred tax liabilities
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Net deferred tax assets |
$ | $ | ||||||
Valuation allowance
|
(
|
)
|
(
|
)
|
||||
Net deferred tax assets (liabilities)
|
$
|
|
$
|
|
Amount
|
Begin to
Expire In
|
|||||||
Tax net operating loss carryforwards:
|
||||||||
Federal (pre-2018 NOLs)
|
$
|
|
|
|||||
Federal (post-2017 NOLs)
|
|
No Expiration
|
||||||
State
|
|
|
Tax credit carryforwards:
|
||||||||
Federal research and development
|
|
|
||||||
Connecticut research and development
|
|
N/A
|
||||||
Connecticut other credits
|
|
|
ARTICLE I.
|
STOCKHOLDERS
|
1
|
||
1.1.
|
Place of Meetings
|
1
|
||
1.2.
|
Annual Meeting
|
1
|
||
1.3.
|
Special Meetings
|
1
|
||
1.4.
|
Notice of Meetings
|
1
|
||
1.5.
|
Voting List
|
1
|
||
1.6.
|
Quorum
|
2
|
||
1.7.
|
Adjournments
|
2
|
||
1.8.
|
Voting and Proxies
|
2
|
||
1.9.
|
Action at Meeting
|
2
|
||
1.10.
|
Nomination of Directors
|
3 | ||
1.11.
|
Notice of Business to be Brought Before a Meeting
|
5
|
||
1.12.
|
Conduct of Meetings
|
7
|
||
ARTICLE II.
|
DIRECTORS
|
8
|
||
2.1.
|
General Powers
|
8
|
||
2.2.
|
Number, Election and Term
|
8
|
||
2.3.
|
Chairperson of the Board; Vice Chairperson of the Board
|
8
|
||
2.4.
|
Terms of Office
|
8
|
||
2.5.
|
Quorum
|
8
|
||
2.6.
|
Action at Meeting
|
8 | ||
2.7.
|
Removal
|
9
|
||
2.8.
|
Newly Created Directorships; Vacancies
|
9
|
||
2.9.
|
Resignation
|
9
|
||
2.10.
|
Regular Meetings
|
9
|
||
2.11.
|
Special Meetings
|
9
|
||
2.12.
|
Notice of Special Meetings
|
9
|
||
2.13.
|
Meetings by Conference Communications Equipment
|
9
|
||
2.14.
|
Action by Consent
|
9
|
||
2.15.
|
Committees
|
9
|
||
2.16.
|
Compensation of Directors
|
9 | ||
ARTICLE III.
|
OFFICERS
|
10
|
||
3.1.
|
Titles
|
10
|
||
3.2.
|
Election
|
10
|
||
3.3.
|
Qualification
|
10
|
||
3.4.
|
Tenure
|
10
|
||
3.5.
|
Resignation and Removal
|
10
|
||
3.6.
|
Vacancies
|
10
|
||
3.7.
|
Executive Chairman
|
10
|
||
3.8.
|
Chief Executive Officer
|
10
|
||
3.9.
|
Vice Presidents
|
10 | ||
3.10.
|
Secretary and Assistant Secretaries
|
11
|
||
3.11.
|
Treasurer and Assistant Treasurers
|
11
|
||
3.12.
|
Salaries
|
11
|
||
3.13.
|
Delegation of Authority
|
11
|
||
ARTICLE IV.
|
CAPITAL STOCK
|
11
|
||
4.1.
|
Stock Certificates; Uncertificated Shares
|
11
|
||
4.2.
|
Transfers
|
12
|
||
4.3.
|
Lost, Stolen or Destroyed Certificates
|
12
|
4.4.
|
Record Date
|
12
|
||
4.5.
|
Regulations
|
13
|
||
ARTICLE V.
|
GENERAL PROVISIONS
|
13
|
||
5.1.
|
Fiscal Year
|
13
|
||
5.2.
|
Corporate Seal
|
13
|
||
5.3.
|
Waiver of Notice
|
13
|
||
5.4.
|
Voting of Securities
|
13
|
||
5.5.
|
Evidence of Authority
|
13
|
||
5.6.
|
Certificate of Incorporation
|
13
|
||
5.7.
|
Severability
|
13
|
||
5.8.
|
Pronouns
|
13
|
||
5.9.
|
Electronic Transmission
|
13
|
||
ARTICLE VI.
|
AMENDMENTS
|
13
|
||
ARTICLE VII.
|
INDEMNIFICATION AND ADVANCEMENT
|
14
|
||
7.1.
|
Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation
|
14
|
||
7.2.
|
Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation
|
14
|
||
7.3.
|
Authorization of Indemnification
|
14
|
||
7.4.
|
Good Faith Defined
|
14
|
||
7.5.
|
Right of Claimant to Bring Suit
|
15
|
||
7.6.
|
Expenses Payable in Advance
|
15
|
||
7.7.
|
Nonexclusivity of Indemnification and Advancement of Expenses
|
15
|
||
7.8.
|
Insurance
|
15
|
||
7.9.
|
Certain Definitions
|
16
|
||
7.10.
|
Survival of Indemnification and Advancement of Expenses
|
16
|
||
7.11.
|
Limitation on Indemnification
|
16
|
||
7.12.
|
Contract Rights
|
16
|
(1) |
Any sale, assignment, transfer, conveyance, hypothecation, or other transfer or disposition, directly or indirectly, of any Class B common stock or any legal or beneficial interest in
such share, whether or not for value and whether voluntary or involuntary or by operation of law (including by merger, consolidation, or otherwise), including, without limitation the transfer of a share of Class B common stock to a broker or
other nominee or the transfer of, or entering into a binding agreement with respect to, voting control over such share by proxy or otherwise, other than a permitted transfer.
|
(2) |
Upon the first date on which Dr. Rothberg, together with all other qualified stockholders, collectively cease to beneficially own at least 20% of the number of Class B common stock (as
such number of shares is equitably adjusted in respect of any reclassification, stock dividend, subdivision, combination, or recapitalization of the Class B common stock) collectively beneficially owned by Dr. Rothberg and permitted
transferees of Class B common stock as of the effective time of the Merger (defined below).
|
(3) |
Upon the date specified by the affirmative vote of the holders of at least two-thirds (2/3) of the outstanding shares of Class B common stock, voting as a separate class.
|
• |
in whole and not in part;
|
• |
at a price of $0.01 per warrant;
|
• |
upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and
|
• |
if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before Quantum-Si sends the notice of redemption to the warrant holders.
|
• |
Registration rights. Promptly, but in any event within 60 days following the closing of the Business Combination, Quantum-Si was required to use its commercially reasonable efforts to
file a registration statement under the Securities Act to permit the public resale of all registrable securities as permitted by Rule 415 of the Securities Act and to cause such registration statement to be declared effective as soon as
practicable after the filing thereof, but in no event later than 60 days following the filing deadline (or 90 days following the filing deadline if the registration statement is reviewed by and receives comments from the SEC). At any time at
which Quantum-Si has an effective shelf registration statement with respect to a holder’s registrable securities, any such holder may request to sell all or a portion of their registrable securities pursuant to an underwritten offering
pursuant to such shelf registration statement, provided that such holder(s) reasonably expect any such sales to generate aggregate gross proceeds in excess of $25 million or reasonably expect to sell all of the registrable securities held by
such holder, but in no event for aggregate gross proceeds of less than $5 million in gross proceeds. Quantum-Si will enter into an underwriting agreement with a managing underwriter or underwriters selected by the initiating holder(s), after
consultation with Quantum-Si, and will take all such other reasonable actions as are requested by the managing underwriter to expedite or facilitate the disposition of such registrable securities.
|
• |
Demand registration rights. At any time after the closing of the Business Combination, if Quantum-Si does not have an effective registration statement outstanding, Quantum-Si will be
required, upon the written request of the holders of at least a majority-in-interest of the then-outstanding registrable securities held by the Sponsor Group Holders or the Quantum-Si Holders, as soon as practicable but not more than 45 days
after receipt of such written request, to file a registration statement and to effect the registration of all or part of their registrable securities. Quantum-Si is not obligated to effect more than an aggregate of three registrations
pursuant to a demand registration request.
|
• |
Piggyback registration rights. At any time after the closing of the Business Combination, if Quantum-Si proposes to file a registration statement under the Securities Act to register
any of its equity securities, or securities or other obligations exchangeable or convertible into equity securities, or to conduct a public offering, either for its own account or for the account of any other person, subject to certain
exceptions and reductions as described in the Amended and Restated Registration Rights Agreement, then Quantum-Si will give written notice of such proposed filing to the holders of registrable securities as soon as practicable but not less
than 10 days before the anticipated filing of such registration statement. Upon the written request of any holder of registrable securities in response to such written notice, Quantum-Si will, in good faith, cause such registrable securities
to be included in the registration statement and use its commercially reasonable efforts to cause the underwriters of any proposed underwritten offering to include such holders’ registrable securities on the same terms and conditions as any
similar securities of Quantum-Si included in such registration.
|
(1) |
prior to such time the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested
stockholder;
|
(2) |
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who
are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
|
(3) |
at or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent,
by the affirmative vote of at least 66 2∕3% of the outstanding voting stock which is not owned by the interested stockholder.
|
|
|
Sincerely,
|
||||
Quantum-Si, Incorporated
|
||||
By:
|
/s/ Alexander C. Magary | |||
Name:
|
Alexander C. Magary | |||
Title:
|
VP, Legal & Asst. Corp. Secretary | |||
ACCEPTED AND AGREED:
|
||||
Signature:
|
/s/ Christian LaPointe | |||
Name:
|
Christian LaPointe | |||
Address:
|
25 Northern Ave #1610 | |||
Boston, MA 02210
|
|
Sincerely,
|
Signed
|
Quantum-Si Incorporated
|
|
/s/ Christian LaPointe
|
|
/s/ Jonathan M. Rothberg, Ph.D.
|
Christian LaPointe
|
Jonathan M. Rothberg, Ph.D.
|
|
Chairman of the Board
|
Dated: March 1, 2022
|
/s/ Jonathan M. Rothberg, Ph.D.
|
|
Jonathan M. Rothberg, Ph.D.
|
|
Interim Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
Dated: March 1, 2022
|
/s/ Claudia Drayton
|
|
Claudia Drayton
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
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ORGANIZATION AND DESCRIPTION OF BUSINESS |
12 Months Ended |
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Dec. 31, 2021 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS |
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Quantum-Si Incorporated (“we”, “us”, “our”, the “Company” and “Quantum-Si”), formerly known as HighCape Capital Acquisition Corp. (“HighCape”),
was incorporated as a Delaware corporation on June 10, 2020. The Company’s legal name became Quantum-Si Incorporated in connection with the closing of the Business Combination on June 10, 2021 (the “Closing”), as defined and described in Note 3
“Business Combination”. In connection with the Closing, Quantum-Si Incorporated, a Delaware corporation (“Legacy Quantum-Si”), merged with and into a wholly-owned subsidiary of HighCape, became a wholly-owned subsidiary of the Company, and
changed its name to Q-SI Operations Inc. The prior period financial information represents the financial results and condition of Legacy Quantum-Si.
The Company is an innovative life sciences company with the mission of transforming single molecule analysis and democratizing its use by
providing researchers and clinicians access to the proteome, the set of proteins expressed within a cell. The Company has developed a proprietary universal single molecule detection platform that the Company is first applying to proteomics to
enable Next Generation Protein Sequencing (“NGPS”), the ability to sequence proteins in a massively parallel fashion (rather than sequentially, one at a time), and can be used for the study of nucleic acids. The Company’s platform is comprised of
the Carbon™ automated sample preparation instrument, the Platinum™ NGPS instrument, the Quantum-Si Cloud™ software service, and reagent kits and chips for use with its instruments.
Although the Company has incurred recurring losses in each year since inception, the Company expects its cash and cash equivalents, and
marketable securities will be able to fund its operations for at least the next twelve months.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and have been prepared in accordance with
accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”). All intercompany transactions
are eliminated.
COVID-19 Outbreak
The outbreak of the novel coronavirus (“COVID-19”), which was declared a pandemic by the World Health Organization on March 11, 2020
and declared a National Emergency by the President of the United States on March 13, 2020, has led to adverse impacts on the U.S. and global economies and created uncertainty regarding potential impacts on the Company’s operating
results, financial condition and cash flows. The COVID-19 pandemic had, and is expected to continue to have, an adverse impact on the Company’s operations, particularly as a result of preventive and precautionary measures that the
Company, other businesses, and governments are taking. Governmental mandates related to COVID-19 or other infectious diseases, or public health crises, have impacted, and the Company expects them to continue to impact, its personnel and
personnel at third-party manufacturing facilities in the United States and other countries, and the availability or cost of materials, which would disrupt or delay the Company’s receipt of instruments, components and supplies from the
third parties the Company relies on to, among other things, produce its products currently under development. The COVID-19 pandemic has also had an adverse effect on the Company’s ability to attract, recruit, interview and hire at the
pace the Company would typically expect to support its rapidly expanding operations. To the extent that any governmental authority imposes additional regulatory requirements or changes existing laws, regulations, and policies that apply
to the Company’s business and operations, such as additional workplace safety measures, the Company’s product development plans may be delayed, and the Company may incur further costs in bringing its business and operations into
compliance with changing or new laws, regulations, and policies. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including expenses
and research and development costs, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat COVID-19, as well
as the economic impacts.
The estimates of the impact on the Company’s business may change based on new information that may emerge concerning COVID-19 and the
actions to contain it or address its impact and the economic impact on local, regional, national and international markets. While the Company is unable to predict the full impact that the COVID-19 pandemic will have on the Company’s
future results of operations, liquidity and financial condition due to numerous uncertainties, including the duration of the pandemic, and the actions that may be taken by government authorities across the United States, it is not
expected to result in any significant changes in costs going forward.
The Company has not incurred any significant impairment losses in the carrying values of the Company’s assets as a result of the
COVID-19 pandemic and is not aware of any specific related event or circumstance that would require the Company to revise its estimates reflected in its consolidated financial statements.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash
equivalents and marketable securities. At December 31, 2021 and 2020, substantially all of the Company’s cash and cash equivalents and marketable securities were invested in mutual funds at one financial institution. The Company also
maintains balances in various operating accounts above federally insured limits. The Company has not experienced any losses on such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents
and marketable securities.
Reclassifications
Certain prior year amounts have been reclassified for consistency with the current year presentation.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and
assumptions about future events that affect the amounts reported in its consolidated financial statements and accompanying notes. Future events and their effects cannot be determined with certainty. On an ongoing basis, management
evaluates these estimates and assumptions. Significant estimates and assumptions included:
The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company
believes are reasonable under the circumstances, including assumptions as to future events. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates, and any such
differences may be material to the Company’s consolidated financial statements.
Cash and Cash Equivalents
All highly liquid investments purchased with a maturity of three months or less are cash equivalents. At December 31, 2021 and 2020,
cash and cash equivalents consist principally of cash and short-term money market accounts.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets include amounts paid in advance for operating expenses as well as monies to be received from
the State of Connecticut for research and development tax credits. These research and development tax credits are exchanged for a cash refund and are typically collected within one year from the date the tax return is filed with the
state. The credits are recognized as an offset to research and development expenses in the consolidated statements of operations and comprehensive loss in the annual period the corresponding expenses were incurred.
Investments in Marketable Securities
The Company’s investments in marketable securities are ownership interests in fixed income mutual funds. The securities are stated at
fair value, as determined by quoted market prices. As the securities have readily determinable fair value, unrealized gains and losses are reported as other (expense), net on the consolidated statements of operations and comprehensive
loss. Subsequent gains or losses realized upon redemption or sale of these securities are also recorded as other (expense) income, net on the consolidated statements of operations and comprehensive loss. The Company considers all of its
investments in marketable securities as available for use in current operations and therefore classifies these securities within current assets on the consolidated balance sheets. For the year ended December 31, 2021, the Company
recorded $5,023 of unrealized losses that relate to securities still held as of December 31, 2021.
Property and Equipment, net
Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line
method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the asset’s useful life or the life of the lease term.
Useful lives of property and equipment are as follows:
Expenditures for major renewals and improvements are capitalized. Expenditures for repairs and maintenance are expensed as incurred.
Costs for property and equipment not yet placed into service have been recorded as construction in process, and will be depreciated in accordance with the above guidelines once placed into service. When assets are retired or otherwise
disposed of, the cost of these assets and related accumulated depreciation is eliminated from the balance sheet, and any resulting gains or losses are included in the consolidated statements of operations and comprehensive loss in the
period of disposal.
Leases
As of January 1, 2021, the Company determines if an arrangement is a lease at inception and records right-of-use (“ROU”) assets and lease
liabilities on the consolidated balance sheets at lease commencement. Effective December 31, 2021, the Company lost its emerging growth company status which accelerated the adoption of Accounting Standards Update (“ASU”) 2016-02,
Leases (Topic 842). On January 1, 2021, the Company adopted ASU 2016-02. The capital lease became a finance lease by establishing the ROU asset and liability which was not material to the consolidated balance sheets as of January 1,
2021. Prior periods presented in the Company’s consolidated financial statements continue to be presented in accordance with the former lease standard, Topic 840, Leases (“ASC 840”).
The Company’s leases generally do not have a readily determinable implicit discount rate, as such the Company uses an incremental borrowing
rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company’s incremental borrowing rate is the estimated rate that would be required to pay for a
collateralized borrowing equal to the total lease payment over the lease term. The Company measures ROU assets based on the corresponding lease liability adjusted for (i) payments made to the lessor at or before the commencement date,
(ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Lease
expense for minimum lease payments is recognized on a straight-line basis over the lease term for operating leases. Finance leases will result in a front-loaded expense pattern. With respect to finance leases, amortization of the ROU
asset is presented separately from interest expense related to the finance lease liability. In addition, the Company does not have significant residual value guarantees or restrictive covenants in the lease portfolio.
For the years ended December 31, 2020
and 2019, leases are evaluated and classified as operating leases or capital leases for financial reporting purposes. Leases that meet one or more of the capital lease criteria under this guidance are recorded as capital leases. All other
leases are recorded as operating leases. The Company records each capital lease as an asset and an obligation at an amount that is equal to the present value of the minimum lease payments over the lease term. The Company’s operating
leases are short term in nature as they have month to month rental terms. The Company expenses monthly rental payments as incurred in general and administrative and in research and development in the consolidated statements of operations
and comprehensive loss. The Company’s lease agreements contain variable lease costs for common area maintenance, utilities, taxes and insurance, which are expensed as incurred. The Company had a capital lease which has been recorded on
the consolidated balance sheets as of December 31, 2020 and became a finance lease as of the transition date of January 1, 2021. The capital lease became a finance lease by establishing the ROU asset and liability which was not material
to the consolidated balance sheets. There were no finance leases as of December 31, 2021.
As a result of our adoption of the new lease standard, the Company has implemented new accounting policies and processes which changed the
Company’s internal controls over financial reporting for lease accounting.
See the “Accounting Pronouncements Adopted” section in this Note for further detail.
Goodwill
Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not
amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Beginning in 2022, the Company will review goodwill for possible impairment annually during the fourth quarter as of October 1, or
whenever events or circumstances indicate that the carrying amount may not be recoverable.
In order to test goodwill for impairment, an entity is permitted to first assess qualitative factors to determine whether a quantitative
assessment of goodwill is necessary. The qualitative factors considered by the Company may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted
financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further
impairment testing is required. If a quantitative assessment is required, the Company determines the fair value of its reporting unit using a combination of the income and market approaches. If the net book value of the reporting unit exceeds its
fair value, the Company recognizes a goodwill impairment charge for the reporting unit equal to the lesser of (i) the total goodwill allocated to that reporting unit and (ii) the amount by which that reporting unit’s carrying amount exceeds its
fair value. Assumptions and estimates used in the evaluation of impairment may affect the carrying value of long-lived assets, which could result in impairment charges in future periods. Such assumptions include projections of future cash flows
and the current fair value of the asset.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment at least annually or when the Company determines a triggering event has occurred. When
a triggering event has occurred, each impairment test is based on a comparison of the future expected undiscounted cash flow to the recorded value of the asset. If the recorded value of the asset is less than the undiscounted cash flow, the asset
is written down to its estimated fair value. No impairments were recorded for the years ended December 31, 2021, 2020 and 2019.
Capitalized Software Development Costs
The Company has considered costs of software to be sold, leased, or marketed. For the years ended December 31, 2021, 2020 and 2019, the Company
had not yet achieved technical feasibility and therefore, all costs were expensed in research and development. With respect to costs of software developed for internal use, the Company determined that all costs for the years ended December 31,
2021, 2020 and 2019 were in the preliminary project stage and not eligible for capitalization and therefore expensed as incurred in research and development.
Research and Development
Research and development expenses primarily consist of personnel costs and benefits, stock-based compensation, lab supplies, consulting and
professional fees, fabrication services, rent expense, software and other outsourced expenses. All of our research and development expenses are related to developing new products and services. Consulting expenses are related to general
development activities, while fabrication services include certain third-party engineering costs. Research and development expenses are expensed as incurred.
General and Administrative
General and administrative expenses primarily consist of personnel costs and benefits, stock-based compensation, patent and filing fees,
facilities costs, depreciation expense, office expenses and outside services. Outside services consist of professional services, legal and other professional fees.
Sales and Marketing
Sales and marketing expenses primarily consist of personnel costs and benefits, stock-based compensation as well as consulting, product
advertising and marketing. Advertising costs are expensed as incurred. For the years ended December 31, 2021, 2020 and 2019, advertising expenses were $0,
$87 and $15,
respectively.
Net Loss per Share
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock of the Company
outstanding during the period, without consideration of potentially dilutive securities.
Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common
shares plus the common equivalent shares of the period, including any dilutive effect from such shares. The Company’s diluted net loss per share is the same as basic net loss per share for all periods presented, since the effect of potentially
dilutive securities is anti-dilutive. Refer to Note 13, “Net Loss Per Share” for further discussion.
Convertible Preferred Stock
The Company applied the guidance in ASC Topic 480-10-S99-3A, SEC Staff Announcement: Classification and
Measurement of Redeemable Securities, and had therefore classified the Series A, Series B, Series C, Series D, and Series E Convertible Preferred Stock (“Convertible Preferred Stock”) (see Note 10) as mezzanine equity. The Convertible
Preferred Stock was recorded outside of stockholders’ equity (deficit) because the Convertible Preferred Stock included a redemption provision upon a change of control, which was deemed a liquidation event that was considered outside the
Company’s control. The Convertible Preferred Stock was recorded at their original issue price, net of issuance costs. The Company did not adjust the carrying values of the Convertible Preferred Stock to the liquidation price associated with a
change of control because a change of control of the Company was not considered probable as of December 31, 2020. Subsequent adjustments to increase or decrease the carrying values to their respective liquidation prices were made when the change
of control occurred in June 2021 (see Note 10).
Stock-Based Compensation
For 2021, the Company accounts for stock-based compensation to employees, non-employee directors and non-employees granted share-based payments
for services in accordance with ASU 2018-07, Compensation — Stock Compensation (Topic 718). After the Business Combination, the Company estimates the fair value of stock option awards using the
Black-Scholes option pricing model on the date of the grant. Restricted stock unit awards (“RSUs”) are based on the closing price of the Company’s common stock on the date of the grant. The fair value of time-based stock options is recognized and
amortized on a straight-line basis over the requisite service period of the award. Stock options granted to employees generally fully vest over four years and have a term of ten years. The fair value of RSUs and awards with market conditions is expensed on a
straight-line or graded accelerated basis over the requisite service period of the award. The Company accounts for all forfeitures when they occur.
Prior to adoption of ASU 2018-07 on January 1, 2020, stock options granted to nonemployees were accounted for based on their fair value on the
measurement date. Stock options granted to nonemployees are subject to periodic revaluation over their vesting terms. As a result, the charge to statements of operations and comprehensive loss for nonemployee options with vesting requirements is
affected in each reporting period by a change in the fair value of the option calculated under the Black-Scholes option pricing model.
The Company recognizes stock-based compensation expense for stock option grants with only service conditions on a straight-line basis over the
requisite service period of the individual grants, which is generally the vesting period, based on the estimated grant date fair values. The Company recognizes stock-based compensation expense for stock option grants subject to non-financing
event performance conditions on an accelerated basis as though each separately vesting portion of the award was, in substance, a separate award. On January 1, 2020, the Company adopted ASU 2018-07. ASU 2018-07 aligns the accounting for
share-based payment awards issued to employees and nonemployees. Under this new guidance, the existing employee guidance will now apply to nonemployee share-based transactions. This guidance was applied to all new awards granted after the date of
adoption, and adoption did not have a material impact on our consolidated financial statements or related disclosures. For nonemployee awards that had been issued prior to adoption of ASU 2018-07 and remained outstanding subsequent to adoption,
the Company utilized the adoption date fair value of the nonemployee awards as a substitute for grant date fair value for future compensation expense recognition as permitted under the transition guidance. The Company recognizes the effect of
forfeiture in compensation costs based on actual forfeitures when they occur.
The fair value of the shares of common stock underlying stock options has historically been determined by the Board of Directors (the “Board”),
with input from management and contemporaneous third-party valuations, as there was no public market for the common stock. Given the absence of a public trading market for the Company’s common stock, and in accordance with the American Institute
of Certified Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, the Board exercised reasonable judgment and considered numerous objective and
subjective factors to determine the best estimate of the fair value of the Company’s common stock at each option grant date.
In valuing the Company’s common stock for 2020 and 2019, the Board determined the value using the market approach-subject company transaction
method. Under this method, the Company “solved for” the total equity value which allocates a probability-weighted present value to the Series E convertible preferred stockholders consistent with the investment amount of the financing round that
was known at the respective valuation date.
Application of this approach involves the use of estimates, judgment and assumptions that are highly complex and subjective, such as market
multiples, the selection of comparable companies and the probability of possible future events. Changes in any or all these estimates and assumptions or the relationships among those assumptions could have a material impact on the valuation of
the Company’s common stock as of each valuation date.
Income Taxes
The Company utilizes the asset and liability method of accounting for income taxes, as set forth in ASC Topic 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities using
the enacted statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established against net deferred tax assets if, based on the
weight of available evidence, it is more likely than not that some or all of the net deferred tax assets will not be realized.
The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the
amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be
sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being
realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. As of December
31, 2021 and 2020, the Company had no uncertain tax positions.
Warrant Liabilities
The Company’s outstanding warrants include publicly-traded warrants (the “Public Warrants”) which were issued as Derivatives
and Hedging-Contracts in Entity’s Own Equity (“ASC 815-40”), and concluded that they do not meet the criteria to be classified in stockholders’ equity. Since the Public Warrants and Private Warrants meet the definition of a derivative
under ASC 815-40, the Company recorded these warrants as long-term liabilities on the balance sheet at fair value upon the Closing of the Business Combination, with subsequent changes in their respective fair values recognized in the consolidated
statements of operations and comprehensive loss at each reporting date.
of one redeemable warrant per unit issued during HighCape’s initial public offering on September 9, 2020, and warrants sold in a private
placement (the “Private Warrants”) to HighCape’s sponsor, HighCape Capital Acquisition LLC (the “Sponsor”). The Company evaluated its warrants under Accounting Standards Codification (“ASC”) 815-40, Subsequent Events
The Company has evaluated subsequent events through March 1, 2022.
Recently Issued Accounting Pronouncements
Accounting pronouncements adopted
In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation — Stock
Compensation (Topic 718). The amendments in this update expand the scope of Topic 718 (“ASC 718”) to include share-based payments to nonemployees. An entity is required to apply the requirements of ASC 718 to nonemployee awards except
for specific guidance related to option pricing models and the attribution of cost. The Company adopted such guidance on January 1, 2020 and there was no material effect of adoption on the consolidated financial statements.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which
amends the existing accounting standards for revenue recognition. The FASB has issued several updates to the standard which: (i) clarify the application of the principal versus agent guidance, (ii) clarify the guidance relating to performance
obligations and licensing, (iii) clarify the assessment of the collectability criterion, presentation of sales taxes, measurement date for non-cash consideration and completed contracts and (iv) clarify the narrow aspects of Topic 606 or correct
unintended application of the guidance (collectively, “ASC 606”). ASC 606 is based on principles that govern the recognition of revenue at an amount to which an entity expects to be entitled when products and/or services are transferred to
customers. The new revenue standard may be applied via the full retrospective method to each prior period presented or via the modified retrospective method with the cumulative effect recognized as of the date of adoption. The Company adopted ASU
2014-09 as of January 1, 2019. The Company has had no revenue and the adoption of this pronouncement had no impact on the Company’s consolidated financial statements. The Company will review this pronouncement again in the future when they start
to generate revenue.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize almost all their leases on the balance sheet by
recording a lease liability and corresponding right-of-use assets. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. As per the latest ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective
Dates for Certain Entities, issued by the FASB, entities that have not yet issued or made available for issuance the financial
statements as of June 3, 2020 can defer the new guidance for one year. For public entities, this guidance is effective for annual reporting periods beginning January 1, 2019, including interim periods within that annual reporting period.
Effective December 31, 2021, the Company lost its emerging growth company status which accelerated the adoption of Topic 842. On January 1, 2021, the Company adopted ASU 2016-02 using the modified retrospective transition method which includes
the ability to recognize the cumulative effect of the adoption being recorded as an adjustment to retained earnings on January 1, 2021. The Company elected to apply the package of practical expedients that allows entities to forgo reassessing
at the transition date: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) whether unamortized initial direct costs for existing leases meet the definition
of initial direct costs under the new guidance. The Company did not elect the hindsight practical expedient. The Company also elected to use the practical expedient that allows the combination of lease and non-lease contract components in all
of its underlying asset categories. The Company also elected a policy of not recording leases on its consolidated balance sheets when the leases have a term of 12 months or less and the Company is not reasonably certain to elect an option to
renew the leased asset. Due to the adoption of this guidance, the Company reclassed its capital leases to a finance lease classification. The Company did not have any operating leases at the time of adoption. The Company had a capital lease
which has been recorded on the consolidated balance sheets as of December 31, 2020 and became a finance lease as of the transition date of January 1, 2021. The capital lease became a finance lease by establishing the ROU asset and liability
which was not material to the consolidated balance sheets. The Company did not have any impact to opening retained earnings as a result of the adoption of the guidance. The adoption of this new guidance did not have a material impact on the
Company’s results of operations and comprehensive loss, cash flows and liquidity. See the “Leases” section in this Note for further detail.
In June 2016 the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which
have the same effective date and transition date of January 1, 2020. These standards require that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional
disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded instead of reducing the amortized cost of the investment. These standards limit the amount
of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. For the Company, this
guidance is effective December 31, 2021. The Company adopted the guidance on January 1, 2021. The Company evaluated the impact of the pronouncement, and it did not have a material impact on its consolidated financial statements. The Company
will review this pronouncement again in the future when they start to generate more significant receivables.
In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a
Cloud Computing Arrangement that Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing
implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). For public entities, this guidance is effective for fiscal years beginning January 1, 2020 and
interim periods within those fiscal years. For the Company, this guidance is effective December 31, 2021. The Company adopted the guidance on January 1, 2021. The Company evaluated the impact of the pronouncement, and it did not have a material
impact on its consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for
Income Taxes. ASU 2019-12 is intended to simplify various aspects related to accounting for income taxes. For public entities, this guidance is effective for annual reporting periods beginning January 1, 2021, including interim periods
within that annual reporting period. For the Company, this guidance is effective December 31, 2021. The Company adopted the guidance on January 1, 2021. The Company evaluated the impact of the pronouncement, and it did not have a material impact
on its consolidated financial statements.
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BUSINESS COMBINATION |
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HighCape [Member] | |||||||||||||||||||||||||||||||
BUSINESS COMBINATION [Abstract] | |||||||||||||||||||||||||||||||
BUSINESS COMBINATION |
3. BUSINESS COMBINATION
On June 10, 2021, Quantum-Si Incorporated, a Delaware corporation (“Legacy Quantum-Si”), consummated the previously announced business
combination (the “Business Combination”) with HighCape in which Legacy Quantum-Si merged with a wholly-owned subsidiary of HighCape (the “Merger”) and survived the Business Combination as a wholly-owned subsidiary of the Company. In connection
with the Business Combination, the Company changed its name to Quantum-Si Incorporated and Legacy Quantum-Si changed its name to Q-SI Operations Inc.
The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP primarily due to the fact that Legacy
Quantum-Si stockholders continued to control the Company following the Closing of the Business Combination. Under this method of accounting, HighCape is treated as the “acquired” company for accounting purposes and the Business Combination is
treated as the equivalent of Legacy Quantum-Si issuing stock for the net assets of HighCape, accompanied by a recapitalization. The net assets of HighCape are stated at historical cost, with no goodwill or other intangible assets recorded.
Reported shares and earnings per share available to holders of the Company’s capital stock and equity awards prior to the Business Combination have been retroactively restated reflecting the exchange ratio of 0.7975 (the “Exchange Ratio”) established pursuant to the Business Combination Agreement dated as of February 18, 2021 (the “Business Combination
Agreement”).
Pursuant to the Business Combination Agreement, at the effective time of the Merger (the “Effective Time”):
The Exchange Ratio was calculated based on the quotient resulting by dividing (i) the quotient of (x) $810,000 plus the excess of Legacy Quantum-Si cash over Legacy Quantum-Si debt as of immediately prior to the Effective Time plus the excess of certain HighCape expenses in
connection with the Business Combination over $8,025 divided by (y) the number of issued and outstanding shares of Legacy Quantum-Si as
of immediately prior to the Effective Time plus the number of issued vested Legacy Quantum-Si options at such time (where such number of vested options is calculated on net basis), by (ii) $10.00.
On June 10, 2021, HighCape filed the Second Amended and Restated Certificate of Incorporation (the “Restated Certificate”) with the Secretary of
State of the State of Delaware, which became effective simultaneously with the Effective Time. As a consequence of filing the Restated Certificate, the Company adopted a dual class structure, comprised of the Company’s Class A common stock,
which is entitled to one vote per share, and the Company’s Class B common stock, which is entitled to 20 votes per share. The Company’s Class B common stock has the same economic terms as the Company’s Class A common stock, but is subject to a
“sunset” provision if Jonathan M. Rothberg, Ph.D., the founder of Legacy Quantum-Si, Interim Chief Executive Officer and Executive Chairman of the Company (“Dr. Rothberg”), and other permitted holders of the Company’s Class B common stock
collectively cease to beneficially own at least twenty percent (20%) of the number of shares of the Company’s Class B common stock (as such number of shares is equitably adjusted in respect of any reclassification, stock dividend, subdivision,
combination or recapitalization of the Company’s Class B common stock) collectively held by Dr. Rothberg and permitted transferees of the Company’s Class B common stock as of the Effective Time.
Concurrently with the execution of the Business Combination Agreement, HighCape entered into subscription agreements (the “PIPE Investor
Subscription Agreements”) with certain institutional investors and accredited investors (the “PIPE Investors”), pursuant to which the PIPE Investors purchased, immediately prior to the Closing, an aggregate of 42,500,000 shares of HighCape Class A common stock at a purchase price of $10.00 per share (the “PIPE Financing”).
In addition, concurrently with the execution of the Business Combination Agreement, HighCape entered into subscription agreements (the
“Subscription Agreements”), with certain affiliates of Foresite Capital Management, LLC (the “Foresite Funds”), pursuant to which the Foresite Funds purchased immediately prior to the Closing, an aggregate of 696,250 shares of HighCape Class A common stock at a purchase price of $0.001 per share for aggregate gross proceeds of $1 after a corresponding
number of shares of HighCape Class B common stock was irrevocably forfeited by HighCape’s Sponsor to HighCape for no consideration and automatically cancelled.
The total number of shares of the Company’s Class A common stock outstanding immediately following the Closing was 116,463,160, comprising:
The total number of shares of the Company’s Class B common stock outstanding immediately following the Closing was 19,937,500 shares. As of February 15, 2022, Dr. Rothberg held 80.1%
of the combined voting power of the Company. Accordingly, Dr. Rothberg and his permitted transferees control the Company and the Company is a controlled company within the meaning of the Nasdaq Listing Rules.
The most significant change in the post-combination Company’s reported financial position and results was an increase in cash of $540,276 consisting of $425,001 from the
PIPE investors and $115,275 from HighCape. The increase in cash was offset by transaction costs of $17,824, payment of the Paycheck Protection Program (“PPP”) loan of $1,764 including interest, payments to redeeming Company shareholders of $5,712,
and payment of $3,800 to a third-party service provider, resulting in proceeds of $511,176 on the date of the Closing of the Business Combination on June 10, 2021. In addition, the post-combination balance sheet increased by the warrant liabilities of $11,618 and other insignificant assets and liabilities. Additional transaction costs were incurred prior to the Business Combination not settled on the
date of Closing. Transaction costs of $7,383 including $463 recorded in stock-based compensation expense, were expensed during year ended December 31, 2021 in the consolidated statements of operations and comprehensive loss.
On the date of Closing, the proceeds of $540,276
were offset against the warrant liabilities of $11,618, payments to redeeming Company shareholders of $5,712, and other liabilities and related transaction costs of $21,776, which resulted in an equity infusion from the Business Combination of $501,170
in the consolidated statements of changes in convertible preferred stock and stockholders’ equity (deficit) for the year ended December 31, 2021.
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ACQUISITION |
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Majelac Technologies LLC [Member] | ||||||||||||||||||||||||||
ACQUISITION [Abstract] | ||||||||||||||||||||||||||
ACQUISITION |
4. ACQUISITION
Majelac Technologies LLC
Pursuant to the terms and conditions of an Asset Purchase Agreement by and among the Company, Majelac Technologies LLC (“Majelac”), and certain other parties, on November 5, 2021 (the “Closing Date”), the Company acquired certain assets and assumed certain liabilities of Majelac, a privately-owned company
providing semiconductor chip assembly and packaging capabilities located in Pennsylvania, for $4,632 in cash including $132 in reimbursement for certain recently
purchased equipment, and 535,715 shares of Class A common stock, valued at $4,232, issued to Majelac subject to certain restrictions. An additional 59,523
shares of Class A common stock valued at $471 will
be issued to Majelac 12 months after the Closing Date less the number of shares of Class A common stock that may be required by
the buyer indemnitees to satisfy any unresolved claims for indemnification, if any. The Company also assumed the legal fees of Majelac of $50. Additional purchase price consideration of $500 in cash
will be paid 6 months after the Closing date less any amount that may be required by the buyer indemnitees to satisfy any
unresolved claims for indemnification, if any. We may pay up to an additional $800 valued at $531 subject to certain future milestones being met. The acquisition
brings semiconductor chip assembly and packaging capabilities in-house to secure our supply chain and support scaling commercialization efforts. Prior to the acquisition, Majelac was a vendor of the Company.
The following table summarizes the preliminary purchase price allocation at the acquisition date as follows:
The above estimated fair values of consideration transferred, assets acquired and liabilities assumed are provisional and are based on the information that was
available as of the acquisition date. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. Thus, the preliminary measurements of fair value set forth above
maybe subject to change. The Company is in the process of finalizing the fair value adjustments. The Company expects to finalize the valuation as soon as practicable but no later than one year from the acquisition date.
Goodwill represents the excess of the consideration transferred over the aggregate fair values of
assets acquired and liabilities assumed. The goodwill recorded in connection with this acquisition was based on operating synergies and other benefits expected to result from the combined operations. The goodwill acquired is amortizable for tax
purposes over a period of 15 years.
Acquisition-related costs recognized during the year ended December 31, 2021 including transaction costs such as legal, accounting, valuation
and other professional services, were $106 and are included in General and administrative on the consolidated statements of operations
and comprehensive loss.
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FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS |
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and
specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair
value.
The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an
orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
The carrying value of cash and cash equivalents, notes receivable, accounts payable and accrued expenses and other current liabilities
approximates their fair values due to the short-term or on demand nature of these instruments. There were no transfers between
fair value measurement levels during the years ended December 31, 2021 and 2020. The Company accounted for the warrants as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the consolidated balance sheets.
The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statements of operations and comprehensive loss.
Our Public Warrants and Private Warrants were carried at fair value as of December 31, 2021. The Public Warrants were valued using Level 1
inputs as they are traded in an active market. The Private Warrants were valued using a binomial lattice model, which results in a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the
Private Warrants was the expected volatility of the Company’s Class A common stock. The expected volatility was based on consideration of the implied volatility from the Company’s own public warrant pricing and on the historical volatility
observed at guideline public companies. As of December 31, 2021, the significant assumptions used in preparing the binomial lattice model for valuing the Private Warrants liability include (i) volatility of 51.4%, (ii) risk-free interest rate of 1.18%,
(iii) strike price ($11.50), (iv) fair value of common stock ($7.87), and (v) expected life of 4.4 years.
Mutual funds were valued using quoted market prices and accordingly were classified as Level 1.
The following table summarizes the Company’s assets and liabilities that are measured at fair value on
a recurring basis, by level, within the fair value hierarchy:
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PROPERTY AND EQUIPMENT, NET |
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PROPERTY AND EQUIPMENT, NET [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET |
6. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, are recorded at historical cost and consist of the following:
Depreciation expense amounted to $1,041,
$894 and $780 for the
years ended December 31, 2021, 2020 and 2019, respectively. The Company had disposals of $70 relating to property and equipment of $468 with accumulated depreciation of $398
for the year ended December 31, 2021. The disposals were
for the year ended December 31, 2020. |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
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NOTES PAYABLE |
12 Months Ended |
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Dec. 31, 2021 | |
NOTES PAYABLE [Abstract] | |
NOTES PAYABLE |
8. NOTES PAYABLE
In August 2020, the Company received loan proceeds of $1,749 under the PPP. The Company used the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The Company accounted for the loan as debt.
In connection with the Closing of the Business Combination as discussed in Note 3 “Business Combination”, the Company repaid the loan in full in
June 2021. The Company recognized an insignificant amount of interest expense in the consolidated statements of operations and comprehensive loss related to the loan.
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LEASES |
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LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES |
9. LEASES
We have commitments under lease arrangements for office and manufacturing space and office equipment. Our leases have initial lease terms
ranging from 1 year to 10
years. These leases include options to extend or renew the leases for an additional period of 1 to 10 years.
Operating leases are accounted for on the consolidated balance sheets with ROU assets being recognized in “Operating lease right-of-use assets” and
lease liabilities recognized in “Short-term operating lease liabilities” and “Operating lease liabilities”. The capital lease became a finance lease by establishing the ROU asset and liability which was not material to the consolidated balance
sheets as of January 1, 2021. There were no finance leases as of December 31, 2021. Lease-related costs are included in Research and
development and General and administrative in the consolidated statement of operations and comprehensive loss.
Lease-related costs for the year ended December 31, 2021 are as follows:
Other information related to leases as of December 31, 2021 is as follows:
The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the year ended December
31, 2021:
Future minimum lease payments under non-cancellable leases as of December 31, 2021 are as follows:
As of December 31,
2021, the value of our obligations under leases was $35,545, which includes a lease we entered into in December 2021 for a facility
in New Haven, Connecticut which commenced in January 2022. Future minimum lease payments under this non-cancellable lease as of December 31, 2021 is $25,688.
Rent expense under ASC 840 was $483 and $560 for the years ended December 31, 2020 and 2019, respectively.
Lease-related costs for the three months ended March 31, 2021, June 30, 2021 and September 30, 2021 are as follows:
Other information related to leases as of September 30, 2021 are as follows:
As of
March 31, 2021 and June 30, 2021, there was no activity and thus information is not reflected in the table above.
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CONVERTIBLE PREFERRED STOCK |
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CONVERTIBLE PREFERRED STOCK [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE PREFERRED STOCK |
10. CONVERTIBLE PREFERRED STOCK
The Company had issued five
series of convertible preferred stock, Series A through Series E (the “Convertible Preferred Stock”). The following table summarizes the authorized, issued and outstanding Convertible Preferred Stock of the Company immediately prior to the Business
Combination and as of December 31, 2020:
Prior to the Closing of the Business Combination, there were no significant changes to the terms of the Convertible Preferred Stock as compared to December 31, 2020.
Upon the Closing of the Business Combination, the Convertible Preferred Stock converted into Class A and Class B common stock based on the Business Combination’s Exchange Ratio of 0.7975 of the Company’s shares for each Legacy Quantum-Si share. The Company recorded the conversion at the carrying value of the Convertible Preferred Stock at the time
of the Closing. There are no shares of Convertible Preferred Stock authorized or outstanding as of December 31, 2021.
The powers, preferences, rights, qualifications, limitations and restrictions of the shares of Convertible Preferred Stock were as follows:
Dividends
Dividends were to accrue to holders of the Convertible Preferred Stock at the rate of 8% of the original issue price for the applicable series of Convertible Preferred Stock, per annum subject to appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization, reclassification and other similar events payable only when, and if, declared by the Board. The right to receive dividends on Convertible Preferred Stock was not cumulative, and therefore, if not
declared in any year, the right to such dividends was to terminate and not carry forward into the next year. There were no dividends declared on the Convertible Preferred Stock.
Liquidation Rights
In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary or a deemed liquidation event (which
includes a merger, the sale of all of the Company’s assets, or a change of control) (each a “Liquidation Event”), the holders of the Convertible Preferred Stock were entitled to be paid out of the assets of the Company available for distribution
to stockholders, pari passu, at a liquidation price per share equal to the greater of: (1) the Initial Liquidation Price of such Convertible Preferred Stock, plus any declared and unpaid dividends or (2) an amount that would have been payable had
all the shares of the Convertible Preferred Stock been converted into the Common Stock. These payments were to be made to or set aside prior to the holders of shares of any other class or series of capital stock that were not, by its terms,
senior to the Convertible Preferred Stock.
Voting Rights
The holders of shares of the Convertible Preferred Stock were entitled to vote on all matters on which the holders of shares of the Common Stock were
entitled to vote.
Each holder of record of shares of Series A Convertible Preferred Stock
were entitled to ten votes per share of Special-Voting Common Stock into which such Series A Convertible Preferred Stock were
convertible, as discussed below under Conversion, on all matters to be voted on by the Company’s stockholders. Each holder of record of shares of Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series D Convertible
Preferred Stock and Series E Convertible Preferred Stock were entitled to one vote per share of Common Stock into which such
Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series D Convertible Preferred Stock, and Series E Convertible Preferred Stock are convertible, as discussed below under Conversion, on all matters that were to be
voted on by the Company’s stockholders. The holders of Convertible Preferred Stock and the holders of Common Stock were to vote together and not as separate classes. There were no series voting.
Conversion
Each share of Series A Convertible Preferred Stock was convertible, at the option of the holder, at any time after the date of issuance of such
share, into shares of Special-Voting Common Stock on a 1 to 1 conversion rate subject to customary anti-dilution adjustments and upon
the issuance of additional common shares for no consideration or consideration less than the conversion price of the Series A Convertible Preferred Stock. Each share of Series B Convertible Preferred Stock, Series C Convertible Preferred Stock,
Series D Convertible Preferred Stock and Series E Convertible Preferred Stock were convertible, at the option of the holder, at any time after the date of issuance into shares of Common Stock on a 1 to 1 conversion rate subject to customary anti-dilution adjustments and upon the issuance of additional common shares for no consideration or consideration less than
the conversion price of the respective series of Convertible Preferred Stock, which was equal to the original issuance price for each series of Convertible Preferred Stock.
Upon the earlier to occur of (i) election of the Convertible Preferred Stock by (A) the consent or vote of the majority holders of the Convertible Preferred Stock
(voting together as a single class and not as separate series, and on an as-converted basis) and (B) the consent or vote of the majority holders of Series C Convertible Preferred Stock, Series D Convertible Preferred Stock and Series E
Convertible Preferred Stock (voting together as a single class, and on an as-converted basis) or (ii) the closing of a firm commitment underwritten initial public offering pursuant to an effective registration statement filed under the
Securities Act of 1933 covering the offer and sale of shares of Common Stock in which the aggregate gross proceeds to the Corporation are at least $80,000
at a public offering price per share equal to at least three times the Series D Convertible Preferred Stock Conversion Price of $4.71 (1) each share of Series A Convertible Preferred Stock were to be automatically be converted into shares of Special-Voting Common Stock on a 1 for 1 basis, (2) each share of Series B Convertible Preferred Stock were to automatically be converted into Common Stock on a 1 for 1 basis, (3) each share of Series C Convertible Preferred Stock were to automatically be converted into Common Stock on a 1 for 1 basis, (4) each share of Series D Convertible Preferred Stock were to
automatically be converted into Common Stock on a 1 for 1 basis and (5) each share of Series E Convertible Preferred Stock were to
automatically be converted into Common Stock on a 1 for 1 basis.
|
STOCKHOLDERS' EQUITY (DEFICIT) |
12 Months Ended |
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Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY (DEFICIT) [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) |
11. STOCKHOLDERS’ EQUITY (DEFICIT)
Class A Common stock
As of December 31, 2021 and 2020, the Company had authorized 600,000,000 and 90,000,000 shares of Class A common stock at $0.0001 par value per share, of which a total of 118,025,410
and 5,378,287 shares were outstanding, respectively.
Voting Rights
Holders of Class A common stock will be entitled to cast one vote per Class A share. Generally, holders of all classes of common stock vote together as a single class, and an action is approved by stockholders if a majority of votes cast affirmatively or negatively on
the action are cast in favor of the action, while directors are elected by a plurality of the votes cast. Holders of Class A common stock will not be entitled to cumulate their votes in the election of directors.
Dividend Rights
With limited exceptions in the case of certain stock dividends or disparate dividends approved by the affirmative vote of the holders of a
majority of the Class A common stock and Class B common stock, each voting separately as a class, holders of Class A common stock will share ratably (based on the number of shares of Class A common stock held), together with each holder of Class
B common stock, if and when any dividend is declared by the Board out of funds legally available therefore, subject to restrictions, whether statutory or contractual (including with respect to any outstanding indebtedness), on the declaration and
payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock or any class or series of stock having a preference over, or the right to participate with, the Class A common stock
with respect to the payment of dividends.
Class B Common stock
As of December 31, 2021 and 2020, the Company had authorized 27,000,000 and 0 shares of Class B common stock at $0.0001 par value per share, of which a total of 19,937,500
and 0 shares were outstanding, respectively.
Voting Rights
Holders of Class B common stock will be entitled to cast 20 votes per share of Class B common stock. Generally, holders of all classes of common stock vote together as a single class, and an action is approved by stockholders if a majority of votes cast affirmatively
or negatively on the action are cast in favor of the action, while directors are elected by a plurality of the votes cast. Holders of Class B common stock will not be entitled to cumulate their votes in the election of directors.
Dividend Rights
With limited exceptions in the case of certain stock dividends or disparate dividends approved by the affirmative vote of the holders of a
majority of the Class A common stock and Class B common stock, each voting separately as a class, holders of Class B common stock will share ratably (based on the number of shares of Class B common stock held), together with each holder of Class
A common stock, if and when any dividend is declared by the Board out of funds legally available therefor, subject to restrictions, whether statutory or contractual (including with respect to any outstanding indebtedness), on the declaration and
payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock or any class or series of stock having a preference over, or the right to participate with, the Class B common stock
with respect to the payment of dividends.
Preferred Stock
As of December 31, 2021 and 2020, the Company had authorized 1,000,000 and 0 shares of preferred stock at $0.0001 par value per share, respectively, of which a total of 0 shares were outstanding for both years.
Preferred stock may be issued from time to time in one or more series. Any shares of preferred stock which may be redeemed,
purchased or acquired by the Company may be reissued except as otherwise provided by law.
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EQUITY INCENTIVE PLAN |
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EQUITY INCENTIVE PLAN [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY INCENTIVE PLAN |
12. EQUITY INCENTIVE PLAN
The Company’s 2013 Employee, Director and Consultant Equity Incentive Plan, as amended on March 12, 2021 (the “2013 Plan”), was originally
adopted by its Board of Directors and stockholders in September 2013. In connection with the Closing of the Business Combination, the Company adjusted the equity awards as described in Note 3 “Business Combination”. The adjustments to the awards
did not result in incremental expense as the equitable adjustments were made pursuant to a preexisting nondiscretionary antidilution provision in the 2013 Plan, and the fair-value, vesting conditions, and classification are the same immediately
before and after the modification. In connection with the Business Combination, HighCape’s stockholders approved and adopted the Quantum-Si Incorporated 2021 Equity Incentive Plan (the “2021 Plan”) and the Company will no longer make issuances
under the 2013 Plan. The 2021 Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock or cash-based awards. Directors, officers and other employees of the Company and its
subsidiaries, as well as others performing consulting or advisory services for the Company, are eligible for grants under the 2021 Plan. As of December 31, 2021, there were 11,891,127 shares available for issuance until the 2021 Plan.
Stock option activity
During the year ended December 31, 2021, the Company granted 3,514,510 option awards subject to service and/or performance conditions. The service condition requires the participant’s continued employment with the Company through the applicable vesting date, and the
performance condition requires the consummation of a contemplated business combination defined in the option award agreement. For options with performance conditions, stock-based compensation expense is only recognized if the performance
conditions become probable to be satisfied. As the performance condition is a business combination, the performance condition would only become probable once a business combination was consummated. Accordingly, the Company recorded stock-based
compensation expense of $3,080 for options awards for the year ended December 31, 2021 as the Business Combination was consummated
during this time period. The stock-based compensation expense for stock options for the year ended December 31, 2021 was $6,059.
A summary of the stock option activity under the 2013 Plan and the 2021 Plan is presented in the table below:
The Company received cash proceeds from the exercise of stock options of $5,618, $63 and $116 during the years ended December 31, 2021, 2020 and 2019, respectively. The total intrinsic value (the amount by which the stock price exceeds the exercise price of the
option on the date of exercise) of the stock options exercised during the years ended December 31, 2021, 2020 and 2019, was $17,206, $323 and $554, respectively. The
weighted-average grant date fair value of options granted during the year ended December 31, 2021, 2020 and 2019, was $5.25, $1.43 and $1.57, respectively.
During the years ended December 31, 2020 and 2019, the Company granted 59,811 and 478,498 option awards subject to certain
performance conditions, respectively. The performance conditions required the Company to announce at the Advances in Genome Biology and Technology conference (“AGBT”) and commence commercial sales during the year ended December 31, 2020. For
options with performance conditions, stock-based compensation expense is only recognized if the performance conditions become probable to be satisfied. Upon becoming probable, the Company recognizes compensation expense equal to the grant date
fair value of the option awards over the associated service period. If there are changes in the number of option awards that are expected to vest due to changes in the probability of certain performance conditions being satisfied, an adjustment
to stock-based compensation expense will be recognized as a change in accounting estimate in the period that such probability changes. The Company accrued $295 of stock compensation expense during the year ended December 31, 2019 as it believed it was probable the performance conditions would be met. This stock compensation expense was then subsequently reversed
during the year ended December 31, 2020 as the performance conditions were determined to be improbable to be met. All of the performance-based awards granted during the years ended December 31, 2020 and 2019 were cancelled on December 31, 2020.
In addition to the awards discussed in the aforementioned paragraph, during the year ended December 31, 2019 the Company granted approximately 205,000 option awards subject to a single performance-based condition, the completion of a financing event as defined in the option award agreement.
The achievement of the performance condition was not deemed satisfied for the years ended December 31, 2020 and 2019, as the completion of a financing event was not deemed probable until consummated. Thus, the Company did not record stock-based
compensation expense with regards to these option awards. For the year ended December 31, 2021, the Company recorded stock-based compensation expense of $463 for these option awards as the Business Combination was consummated during this time period and the performance-based condition was met.
In accordance with ASC Topic 718, the Company estimates and records the compensation cost associated with the grants described above with an
offsetting entry to paid-in capital. The Company utilized the Black-Scholes option pricing model for determining the estimated fair value for service or performance-based stock-based awards. The Black-Scholes option pricing model requires the use
of subjective assumptions which determine the fair value of stock-based awards. The assumptions used to value option grants to employees and nonemployees for the years ended December 31, 2021 and 2020 and employees for the year ended December 31, 2019 were
as follows:
The assumptions used to value option grants to nonemployees for the year ended December 31, 2019 were as follows:
Risk-free interest rate
The risk-free interest rate for periods within the expected term of the awards is based on the U.S. Treasury yield curve in effect at the time
of the grant.
Expected dividend yield
We have never declared or paid any cash dividends and do not expect to pay any cash dividends in the foreseeable future.
Expected term
For awards, we calculate the expected term using the “simplified” method, which is the simple average of the vesting period and the contractual term.
Expected volatility
We determined expected annual equity volatility to be 70%
based on the historical volatility of guideline public companies for the years ended December 31, 2019 and 2020 and from January to June 10, 2021. After June 10, 2021, the volatility is calculated by a third-party professional services firm and
reviewed by the Company.
Exercise price
The exercise price is taken directly from the grant notice issued to employees and nonemployees.
Restricted stock unit activity
During the year ended December 31, 2021, the Company granted 4,861,315 restricted stock unit (“RSU”) awards subject to service, performance and/or market conditions. The RSU awards include 1,703,460 and 170,346 RSU awards to the Company’s former Chief Executive Officer and General
Counsel, respectively, subject to service and performance conditions, 1,800,000 RSU awards to the Interim Chief Executive Officer
and Executive Chairman of the Company and two members of the board of directors subject to service and/or performance conditions,
and 453,777 RSU awards to the Company’s former Chief Executive Officer subject to service, market and performance conditions. The
service condition requires the participant’s continued employment with the Company through the applicable vesting date, and the performance condition requires the consummation of a contemplated business combination or financing transaction
defined in the award agreement. The market condition requires that the Company’s Class A common stock subsequent to a business combination trades above a specified level for a defined period of time, or that a subsequent financing transaction
meets defined pricing thresholds and that the Company’s common stock subsequent to a business combination trades above a specified level for a defined period of time. For RSU awards with performance conditions, stock-based compensation expense
is only recognized if the performance conditions become probable to be satisfied. As the performance condition is a business combination or financing transaction, the performance condition would only become probable once a business combination
or financing transaction was consummated. Accordingly, the Company recorded stock-based compensation expense of $18,587 for the year
ended December 31, 2021 related to these RSU awards as the Business Combination was consummated during this time period. The stock-based compensation expense for RSU awards for the year ended December 31, 2021 was $18,859. The Company did not
issue RSU awards in 2020 or 2019.
A summary of the RSU activity under the 2013 Plan and the 2021 Plan is presented in the table below:
The Company’s stock-based compensation expense is allocated to the following operating expense categories as follows:
No related tax benefits of the stock-based compensation expense have been recognized and no related tax benefits have been realized from the
exercise of stock options due to the Company’s net operating loss carryforwards.
Total unrecognized stock-based compensation expense as of December 31, 2021 was $34,058, which will be recognized over the remaining weighted average vesting period of 2.1 years.
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NET LOSS PER SHARE |
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NET LOSS PER SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE |
13. NET LOSS PER SHARE
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock of the Company
outstanding during the period. Diluted net loss per share is computed by giving effect to all common share equivalents of the Company, including outstanding Convertible Preferred Stock and stock options, to the extent dilutive. Basic and diluted
net loss per share was the same for each period presented as the inclusion of all common share equivalents would have been anti-dilutive.
The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock:
Since the Company was in a net loss position for all periods presented, the basic net loss per shares calculation excludes preferred stock as it
does not participate in net losses of the Company. Additionally, net loss per share attributable to Class A and Class B common stockholders was the same on a basic and diluted basis, as the inclusion of all potential common equivalent shares
outstanding would have been anti-dilutive. Anti-dilutive
common equivalent shares were as follows:
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WARRANT LIABILITIES |
12 Months Ended | ||||||||||||
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Dec. 31, 2021 | |||||||||||||
WARRANT LIABILITIES [Abstract] | |||||||||||||
WARRANT LIABILITIES |
14. WARRANT LIABILITIES
Public Warrants
As of December 31, 2021, there were an aggregate of 3,833,319 outstanding Public Warrants, which entitle the holder to acquire Class A common stock. Each whole warrant entitles the registered holder to purchase one share of Class A common stock at an exercise price of $11.50
per share, subject to adjustment as discussed below, beginning on September 9, 2021. The warrants will expire on June 10, 2026 or earlier upon redemption or liquidation.
Redemptions
At any time while the warrants are exercisable, the Company may redeem not less than all of the outstanding Public Warrants:
If the foregoing conditions are satisfied and the Company issues a notice of redemption of the Public Warrants at $0.01 per warrant, each holder of Public Warrants will be entitled to exercise his, her or its Public Warrants prior to the scheduled redemption date.
If the Company calls the Public Warrants for redemption for $0.01 as described above, the Company’s Board of Directors may elect to require any holder that wishes to exercise his, her or its Public Warrants to do so on a “cashless basis.” If the
Company’s Board of Directors makes such election, all holders of Public Warrants would pay the exercise price by surrendering their warrants for that number of shares of Class A common
stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” over the exercise price of the warrants by (y) the
“fair market value”. For purposes of the redemption provisions of the warrants, the “fair market value” means the average last reported sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.
The Company evaluated the Public Warrants under ASC 815-40, in conjunction with the SEC Division of Corporation Finance’s April 12, 2021 Public
Statement, Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Statement”), and concluded that they do not meet the
criteria to be classified in stockholders’ equity. Specifically, the exercise of the warrants may be settled in cash upon the occurrence of a tender offer or exchange offer in which the maker of the tender offer or exchange offer, upon completion
of the tender offer or exchange offer, beneficially owns more than 50% of the outstanding shares of the Company’s Class A common
stock, even if it would not result in a change of control of the Company. This provision would preclude the warrants from being classified in equity and thus the warrants have been classified as a liability.
Private Warrants
As of December 31, 2021, there were 135,000
Private Warrants outstanding. The Private Warrants are identical to the Public Warrants, except that so long as they are held by the Sponsor or any of its permitted transferees, (i) the Private Warrants and the shares of Class A common stock
issuable upon the exercise of the Private Warrants were not transferable, assignable or saleable until 30 days after the completion of
the Business Combination, (ii) the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and (iii) the Private Warrants are not subject to the Company’s redemption option at the price of $0.01 per warrant. The Private Warrants are subject to the Company’s redemption option at the price of $0.01 per warrant, provided that the other conditions of such redemption are met, as described above. If the Private Warrants are held by a holder other than the Sponsor or
any of its permitted transferees, the Private Warrants will be redeemable by the Company in all redemption scenarios applicable to the Public Warrants and exercisable by such holders on the same basis as the Public Warrants.
The Company evaluated the Private Warrants under ASC 815-40, in conjunction with the SEC Statement, and
concluded that they do not meet the criteria to be classified in stockholders’ equity. Specifically, the terms of the warrants provide for potential changes to the settlement amounts depending upon the characteristics of the warrant holder, and,
because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude the warrant from being classified in equity and thus the warrant has been classified as a liability.
The fair value of warrant liabilities was $11,618
and $7,239 as of the Closing of the Business Combination and as of December 31, 2021, respectively. The Company recognized a gain of $4,379 as a change in fair value of warrant liabilities in the consolidated statement of operations and comprehensive loss for the year ended December
31, 2021. There were no exercises or redemptions of the Public Warrants or Private Warrants during the year ended December 31,
2021.
See Note 5 “Fair Value of Financial Instruments” for further detail.
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INCOME TAXES |
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INCOME TAXES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
15. INCOME TAXES
The Company had no income tax expense due to
federal and state net operating losses incurred for the years ended December 31, 2021, 2020, and 2019. The Company has also not recorded any income tax benefits for its federal and state net operating losses incurred in each period due to
uncertainty of realizing the benefit from those items. All of the Company’s losses before income taxes were generated in the United States.
The effective tax rate for the Company for the years ended December 31, 2021, 2020 and 2019 was zero percent. A reconciliation of the income tax expense at the federal statutory tax rate to the Company’s effective income tax rate follows:
The Company’s effective tax rate for December 31, 2021, 2020 and 2019 differs from the federal statutory tax rate of
21% mainly due to the effect of deferred state income tax benefits resulting from state net operating loss carryforwards and the tax
benefits related to research and development tax credits. These benefits to the effective tax rate are fully offset by the increase in the Company’s valuation allowance from the prior year.
Significant components of the Company’s deferred tax assets (liabilities) are as follows:
The Company has established a full valuation allowance against its net deferred tax assets due to the uncertainty of the Company’s ability to
generate sufficient taxable income to realize the deferred tax asset, and therefore has not recognized any benefits from the net operating losses, tax credits and other deferred tax assets. The Company’s valuation allowance was $82,744, $51,374 and $40,441 for the years ended December 31, 2021, 2020 and 2019, respectively. The Company’s valuation allowance increased $31,370, $10,933 and $10,352 for the years ended December 31, 2021, 2020 and 2019, respectively.
As of December 31, 2021, the Company had the following tax net operating loss carryforwards available to reduce future federal and Connecticut
taxable income, and tax credit carryforwards available to offset future federal and Connecticut income taxes:
Under Internal Revenue Code Section 382, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net
operating loss and tax credit carryforwards to offset its post-change income and tax liabilities may be limited. Generally, an ownership change occurs when certain shareholders increase their aggregated ownership by more than 50 percentage points
over their lowest ownership percentage in a testing period (typically three years). As a result of the Business Combination, as well as any other equity issuances during the year, the Company is currently performing a Section 382 analysis to
determine whether an ownership change has occurred and is expected to be completed in 2022. Any limitation may result in the expiration of a portion of the federal net operating loss or research and development credit carryforwards before
utilization, which would reduce the Company’s gross deferred tax assets and corresponding valuation allowance.
The Company has adopted the accounting guidance within ASC Topic 740 on uncertainties in income taxes. ASC Topic 740 prescribes a recognition
threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
As of December 31, 2021 and 2020, the Company did not have any unrecognized tax benefits. To the extent penalties and interest would be assessed on any underpayment of income tax, the Company’s policy is that such amounts would be accrued and classified as a
component of income tax expense in the consolidated financial statements. To date, the Company has not recorded any such interest or penalties.
The Company files income tax returns in the U.S. Federal and various state jurisdictions. As a result of the Company’s net operating loss
carryforwards, the Company’s federal and state statutes of limitations generally remain open for all tax years until its net operating loss and tax credit carryforwards are utilized or expire prior to utilization. The Company does not currently
have any federal or state income tax examinations in progress.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted which included provisions related to net
operating loss carryovers and carrybacks, refundable payroll tax credits, deferral of payroll taxes, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, and technical corrections to tax depreciation
methods for qualified improvement property. The Company has evaluated the relevant provisions of the CARES Act and has not recognized any benefit related to these provisions. Therefore, no related income tax effects have been recognized in the
financial statements for the years ended December 31, 2021 and 2020.
Additionally, as a result of legislation in the state of Connecticut, companies have the opportunity to exchange certain research and
development tax credit carryforwards for a cash payment of 65% of the research and development tax credit. The research and
development expenses that qualify for Connecticut credits are limited to those costs incurred within Connecticut. The Company has elected to participate in the exchange program and, as a result, has recognized net benefits of $872, $182 and $368 for the years ended December 31, 2021, 2020 and 2019, respectively, which is included in research and development expenses in the accompanying
statements of operations and comprehensive loss. As of December 31, 2021 and 2020, the Company has recorded $872 and $550 of the research and development tax credit receivables in Prepaid expenses and other current assets on the Company’s consolidated balance sheets,
respectively.
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RELATED PARTY TRANSACTIONS |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS |
16. RELATED PARTY TRANSACTIONS
The Company utilizes and subleases office and laboratory space in a building owned by a related party. The Company paid $322, $322 and $322 under month-to-month lease arrangements for this space for the years ended December 31, 2021, 2020 and 2019, respectively.
The Company utilizes and subleases other office and laboratory spaces from 4Catalyzer Corporation (“4C”), a company under common ownership under
month-to-month lease arrangements. The Company paid $148, $155 and $224 for these spaces for the years ended December 31, 2021, 2020 and
2019, respectively.
The Company also made payments to 4C to prefund the acquisition of certain shared capital assets, reflected in Other assets - related party on
the consolidated balance sheets of $0 and $738
at December 31, 2021 and 2020, respectively.
The Company was a party to an Amended and Restated Technology Services Agreement (the “ARTSA”), most recently amended on November 11, 2020, by
and among 4C, the Company and other participant companies controlled by the Rothberg family. The Company entered into a First Addendum to the ARTSA on February 17, 2021 pursuant to which the Company agreed to terminate its participation under the
ARTSA no later than immediately prior to the Effective Time of the Business Combination, resulting in the termination of the Company’s participation under the ARTSA on June 10, 2021. In connection with the termination of the Company’s
participation under the ARTSA, the Company terminated its lease agreement with 4C and negotiated an arm’s length lease agreement. As a result, the Company wrote off Other assets – related party of $700 which was recorded in General and administrative in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2021. Under the
ARTSA, the Company and the other participant companies had agreed to share certain non-core technologies, which means any technologies, information or equipment owned or otherwise controlled by the participant company that are not specifically
related to the core business area of the participant and subject to certain restrictions on use. The ARTSA also provided for 4C to perform certain services for the Company and each other participant company such as monthly administrative,
management and technical consulting services to the Company which were pre-funded approximately once per quarter. The Company incurred expenses of $2,009,
$1,516 and $2,214 during
the years ended December 31, 2021, 2020 and 2019, respectively. The amounts advanced and due from 4C at December 31, 2021 and 2020, related to operating expenses was $0 and $13, respectively, and are included in Prepaid expenses and other
current assets on the consolidated balance sheets. The amounts advanced and due to 4C at December 31, 2021 and 2020, related to operating expenses was $128
and $0, respectively, and are included in Accounts payable on the consolidated balance sheets.
The ARTSA also provided for the participant companies to provide other services to each other. The Company also had transactions with other
entities under common ownership, which included payments made to third parties on behalf of the Company. The amounts remaining payable at December 31, 2021 and 2020 were $17 and $28, respectively, and are included in the Accounts payable on the
consolidated balance sheets. In addition, the Company had transactions with these other entities under common ownership which included payments made by the Company to third parties on behalf of the other entities. The amounts remaining payable to
the Company at December 31, 2021 and 2020 are in the aggregate $15 and $69, respectively, and are reflected in the Prepaid expenses and other current assets on the consolidated balance sheets. All amounts were paid or received throughout the year within 30 days after the end of each month.
On September 20, 2021, the Company entered into a Binders Collaboration (the “Collaboration”) with Protein Evolution, Inc. (“PEI”) to develop
technology and methods in the field of nanobodies and potentially other binders to produce novel biological reagents and related data. The Collaboration is made pursuant to and governed by the Technology and Services Exchange Agreement, effective
as of June 10, 2021, by and among the Company and the participants named therein, including PEI. Dr. Rothberg serves as Chairman of the Board of Directors of PEI and the Rothberg family are controlling stockholders of PEI. The Company has not made any payments under the Collaboration for the year ended December 31, 2021.
The Company had promissory notes with the President and Chief Operating Officer and other Company employees in amounts totaling $0 and $150 as of December 31, 2021 and
2020, respectively.
Dr. Rothberg and the Company entered into an Executive Chairman Agreement as of June 10, 2021 (the “Executive Chairman Agreement”) in which Dr.
Rothberg provides consulting services to the Company for $400 annually. In addition to the Executive Chairman Agreement, Dr. Rothberg
also receives fees as the Company’s Chairman of the Board of Directors and a member of the Nominating and Corporate Governance Committee. Quantum-Si paid $139 to Dr. Rothberg for the year ended December 31, 2021 for the services that were provided to the Company.
|
COMMITMENTS AND CONTINGENCIES |
12 Months Ended |
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Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES |
17. COMMITMENTS AND CONTINGENCIES
Commitments
Licenses related to certain intellectual property:
The Company licenses certain intellectual property, some of which may be utilized in its future product offering. To preserve the right to use
such intellectual property, the Company is required to make annual minimum fixed payments totaling $220. Once the Company
commercializes its product and begins to generate revenues, there will be royalties payable by the Company based on the current anticipated utilization.
Other commitments:
The Company sponsors a 401(k) defined contribution plan covering all eligible U.S. employees. Contributions to the 401(k) plan are
discretionary. The Company did not make any matching contributions to the 401(k) plan for the years ended December 31, 2021, 2020
and 2019.
Contingencies
The Company is subject to claims in the ordinary course of business; however, the Company is not currently a party to any pending or threatened
litigation, the outcome of which would be expected to have a material adverse effect on its financial condition or the results of its operations. The Company accrues for contingent liabilities to the extent that the liability is probable and
estimable.
The Company enters into agreements that contain indemnification provisions with other parties in the ordinary course of business, including
business partners, investors, contractors, and the Company’s officers, directors and certain employees. The Company has agreed to indemnify and defend the indemnified party claims and related losses suffered or incurred by the indemnified party
from actual or threatened third-party claims because of the Company’s activities or non-compliance with certain representations and warranties made by the Company. It is not possible to determine the maximum potential loss under these
indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in any particular case. To date, losses recorded in the Company’s consolidated statements of
operations and comprehensive loss in connection with the indemnification provisions have not been material.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
12 Months Ended | |||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||
Basis of Presentation and Principles of Consolidation |
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and have been prepared in accordance with
accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”). All intercompany transactions
are eliminated.
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Concentration of Credit Risk |
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash
equivalents and marketable securities. At December 31, 2021 and 2020, substantially all of the Company’s cash and cash equivalents and marketable securities were invested in mutual funds at one financial institution. The Company also
maintains balances in various operating accounts above federally insured limits. The Company has not experienced any losses on such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents
and marketable securities.
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Reclassifications |
Reclassifications
Certain prior year amounts have been reclassified for consistency with the current year presentation.
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Use of Estimates |
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and
assumptions about future events that affect the amounts reported in its consolidated financial statements and accompanying notes. Future events and their effects cannot be determined with certainty. On an ongoing basis, management
evaluates these estimates and assumptions. Significant estimates and assumptions included:
The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company
believes are reasonable under the circumstances, including assumptions as to future events. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates, and any such
differences may be material to the Company’s consolidated financial statements.
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Cash and Cash Equivalents |
Cash and Cash Equivalents
All highly liquid investments purchased with a maturity of three months or less are cash equivalents. At December 31, 2021 and 2020,
cash and cash equivalents consist principally of cash and short-term money market accounts.
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Prepaid Expenses and Other Current Assets |
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets include amounts paid in advance for operating expenses as well as monies to be received from
the State of Connecticut for research and development tax credits. These research and development tax credits are exchanged for a cash refund and are typically collected within one year from the date the tax return is filed with the
state. The credits are recognized as an offset to research and development expenses in the consolidated statements of operations and comprehensive loss in the annual period the corresponding expenses were incurred.
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Investments in Marketable Securities |
Investments in Marketable Securities
The Company’s investments in marketable securities are ownership interests in fixed income mutual funds. The securities are stated at
fair value, as determined by quoted market prices. As the securities have readily determinable fair value, unrealized gains and losses are reported as other (expense), net on the consolidated statements of operations and comprehensive
loss. Subsequent gains or losses realized upon redemption or sale of these securities are also recorded as other (expense) income, net on the consolidated statements of operations and comprehensive loss. The Company considers all of its
investments in marketable securities as available for use in current operations and therefore classifies these securities within current assets on the consolidated balance sheets. For the year ended December 31, 2021, the Company
recorded $5,023 of unrealized losses that relate to securities still held as of December 31, 2021.
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Property and Equipment, Net |
Property and Equipment, net
Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line
method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the asset’s useful life or the life of the lease term.
Useful lives of property and equipment are as follows:
Expenditures for major renewals and improvements are capitalized. Expenditures for repairs and maintenance are expensed as incurred.
Costs for property and equipment not yet placed into service have been recorded as construction in process, and will be depreciated in accordance with the above guidelines once placed into service. When assets are retired or otherwise
disposed of, the cost of these assets and related accumulated depreciation is eliminated from the balance sheet, and any resulting gains or losses are included in the consolidated statements of operations and comprehensive loss in the
period of disposal.
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Leases |
Leases
As of January 1, 2021, the Company determines if an arrangement is a lease at inception and records right-of-use (“ROU”) assets and lease
liabilities on the consolidated balance sheets at lease commencement. Effective December 31, 2021, the Company lost its emerging growth company status which accelerated the adoption of Accounting Standards Update (“ASU”) 2016-02,
Leases (Topic 842). On January 1, 2021, the Company adopted ASU 2016-02. The capital lease became a finance lease by establishing the ROU asset and liability which was not material to the consolidated balance sheets as of January 1,
2021. Prior periods presented in the Company’s consolidated financial statements continue to be presented in accordance with the former lease standard, Topic 840, Leases (“ASC 840”).
The Company’s leases generally do not have a readily determinable implicit discount rate, as such the Company uses an incremental borrowing
rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company’s incremental borrowing rate is the estimated rate that would be required to pay for a
collateralized borrowing equal to the total lease payment over the lease term. The Company measures ROU assets based on the corresponding lease liability adjusted for (i) payments made to the lessor at or before the commencement date,
(ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Lease
expense for minimum lease payments is recognized on a straight-line basis over the lease term for operating leases. Finance leases will result in a front-loaded expense pattern. With respect to finance leases, amortization of the ROU
asset is presented separately from interest expense related to the finance lease liability. In addition, the Company does not have significant residual value guarantees or restrictive covenants in the lease portfolio.
For the years ended December 31, 2020
and 2019, leases are evaluated and classified as operating leases or capital leases for financial reporting purposes. Leases that meet one or more of the capital lease criteria under this guidance are recorded as capital leases. All other
leases are recorded as operating leases. The Company records each capital lease as an asset and an obligation at an amount that is equal to the present value of the minimum lease payments over the lease term. The Company’s operating
leases are short term in nature as they have month to month rental terms. The Company expenses monthly rental payments as incurred in general and administrative and in research and development in the consolidated statements of operations
and comprehensive loss. The Company’s lease agreements contain variable lease costs for common area maintenance, utilities, taxes and insurance, which are expensed as incurred. The Company had a capital lease which has been recorded on
the consolidated balance sheets as of December 31, 2020 and became a finance lease as of the transition date of January 1, 2021. The capital lease became a finance lease by establishing the ROU asset and liability which was not material
to the consolidated balance sheets. There were no finance leases as of December 31, 2021.
As a result of our adoption of the new lease standard, the Company has implemented new accounting policies and processes which changed the
Company’s internal controls over financial reporting for lease accounting.
See the “Accounting Pronouncements Adopted” section in this Note for further detail.
|
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Goodwill |
Goodwill
Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not
amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Beginning in 2022, the Company will review goodwill for possible impairment annually during the fourth quarter as of October 1, or
whenever events or circumstances indicate that the carrying amount may not be recoverable.
In order to test goodwill for impairment, an entity is permitted to first assess qualitative factors to determine whether a quantitative
assessment of goodwill is necessary. The qualitative factors considered by the Company may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted
financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further
impairment testing is required. If a quantitative assessment is required, the Company determines the fair value of its reporting unit using a combination of the income and market approaches. If the net book value of the reporting unit exceeds its
fair value, the Company recognizes a goodwill impairment charge for the reporting unit equal to the lesser of (i) the total goodwill allocated to that reporting unit and (ii) the amount by which that reporting unit’s carrying amount exceeds its
fair value. Assumptions and estimates used in the evaluation of impairment may affect the carrying value of long-lived assets, which could result in impairment charges in future periods. Such assumptions include projections of future cash flows
and the current fair value of the asset.
|
|||||||||||||||
Impairment of Long-Lived Assets |
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment at least annually or when the Company determines a triggering event has occurred. When
a triggering event has occurred, each impairment test is based on a comparison of the future expected undiscounted cash flow to the recorded value of the asset. If the recorded value of the asset is less than the undiscounted cash flow, the asset
is written down to its estimated fair value. No impairments were recorded for the years ended December 31, 2021, 2020 and 2019.
|
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Capitalized Software Development Costs |
Capitalized Software Development Costs
The Company has considered costs of software to be sold, leased, or marketed. For the years ended December 31, 2021, 2020 and 2019, the Company
had not yet achieved technical feasibility and therefore, all costs were expensed in research and development. With respect to costs of software developed for internal use, the Company determined that all costs for the years ended December 31,
2021, 2020 and 2019 were in the preliminary project stage and not eligible for capitalization and therefore expensed as incurred in research and development.
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Research and Development |
Research and Development
Research and development expenses primarily consist of personnel costs and benefits, stock-based compensation, lab supplies, consulting and
professional fees, fabrication services, rent expense, software and other outsourced expenses. All of our research and development expenses are related to developing new products and services. Consulting expenses are related to general
development activities, while fabrication services include certain third-party engineering costs. Research and development expenses are expensed as incurred.
|
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General, Administrative, Sales and Marketing |
General and Administrative
General and administrative expenses primarily consist of personnel costs and benefits, stock-based compensation, patent and filing fees,
facilities costs, depreciation expense, office expenses and outside services. Outside services consist of professional services, legal and other professional fees.
Sales and Marketing
Sales and marketing expenses primarily consist of personnel costs and benefits, stock-based compensation as well as consulting, product
advertising and marketing. Advertising costs are expensed as incurred. For the years ended December 31, 2021, 2020 and 2019, advertising expenses were $0,
$87 and $15,
respectively.
|
|||||||||||||||
Net Loss per Share |
Net Loss per Share
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock of the Company
outstanding during the period, without consideration of potentially dilutive securities.
Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common
shares plus the common equivalent shares of the period, including any dilutive effect from such shares. The Company’s diluted net loss per share is the same as basic net loss per share for all periods presented, since the effect of potentially
dilutive securities is anti-dilutive. Refer to Note 13, “Net Loss Per Share” for further discussion.
|
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Convertible Preferred Stock |
Convertible Preferred Stock
The Company applied the guidance in ASC Topic 480-10-S99-3A, SEC Staff Announcement: Classification and
Measurement of Redeemable Securities, and had therefore classified the Series A, Series B, Series C, Series D, and Series E Convertible Preferred Stock (“Convertible Preferred Stock”) (see Note 10) as mezzanine equity. The Convertible
Preferred Stock was recorded outside of stockholders’ equity (deficit) because the Convertible Preferred Stock included a redemption provision upon a change of control, which was deemed a liquidation event that was considered outside the
Company’s control. The Convertible Preferred Stock was recorded at their original issue price, net of issuance costs. The Company did not adjust the carrying values of the Convertible Preferred Stock to the liquidation price associated with a
change of control because a change of control of the Company was not considered probable as of December 31, 2020. Subsequent adjustments to increase or decrease the carrying values to their respective liquidation prices were made when the change
of control occurred in June 2021 (see Note 10).
|
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Stock-Based Compensation |
Stock-Based Compensation
For 2021, the Company accounts for stock-based compensation to employees, non-employee directors and non-employees granted share-based payments
for services in accordance with ASU 2018-07, Compensation — Stock Compensation (Topic 718). After the Business Combination, the Company estimates the fair value of stock option awards using the
Black-Scholes option pricing model on the date of the grant. Restricted stock unit awards (“RSUs”) are based on the closing price of the Company’s common stock on the date of the grant. The fair value of time-based stock options is recognized and
amortized on a straight-line basis over the requisite service period of the award. Stock options granted to employees generally fully vest over four years and have a term of ten years. The fair value of RSUs and awards with market conditions is expensed on a
straight-line or graded accelerated basis over the requisite service period of the award. The Company accounts for all forfeitures when they occur.
Prior to adoption of ASU 2018-07 on January 1, 2020, stock options granted to nonemployees were accounted for based on their fair value on the
measurement date. Stock options granted to nonemployees are subject to periodic revaluation over their vesting terms. As a result, the charge to statements of operations and comprehensive loss for nonemployee options with vesting requirements is
affected in each reporting period by a change in the fair value of the option calculated under the Black-Scholes option pricing model.
The Company recognizes stock-based compensation expense for stock option grants with only service conditions on a straight-line basis over the
requisite service period of the individual grants, which is generally the vesting period, based on the estimated grant date fair values. The Company recognizes stock-based compensation expense for stock option grants subject to non-financing
event performance conditions on an accelerated basis as though each separately vesting portion of the award was, in substance, a separate award. On January 1, 2020, the Company adopted ASU 2018-07. ASU 2018-07 aligns the accounting for
share-based payment awards issued to employees and nonemployees. Under this new guidance, the existing employee guidance will now apply to nonemployee share-based transactions. This guidance was applied to all new awards granted after the date of
adoption, and adoption did not have a material impact on our consolidated financial statements or related disclosures. For nonemployee awards that had been issued prior to adoption of ASU 2018-07 and remained outstanding subsequent to adoption,
the Company utilized the adoption date fair value of the nonemployee awards as a substitute for grant date fair value for future compensation expense recognition as permitted under the transition guidance. The Company recognizes the effect of
forfeiture in compensation costs based on actual forfeitures when they occur.
The fair value of the shares of common stock underlying stock options has historically been determined by the Board of Directors (the “Board”),
with input from management and contemporaneous third-party valuations, as there was no public market for the common stock. Given the absence of a public trading market for the Company’s common stock, and in accordance with the American Institute
of Certified Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, the Board exercised reasonable judgment and considered numerous objective and
subjective factors to determine the best estimate of the fair value of the Company’s common stock at each option grant date.
In valuing the Company’s common stock for 2020 and 2019, the Board determined the value using the market approach-subject company transaction
method. Under this method, the Company “solved for” the total equity value which allocates a probability-weighted present value to the Series E convertible preferred stockholders consistent with the investment amount of the financing round that
was known at the respective valuation date.
Application of this approach involves the use of estimates, judgment and assumptions that are highly complex and subjective, such as market
multiples, the selection of comparable companies and the probability of possible future events. Changes in any or all these estimates and assumptions or the relationships among those assumptions could have a material impact on the valuation of
the Company’s common stock as of each valuation date.
|
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Income Taxes |
Income Taxes
The Company utilizes the asset and liability method of accounting for income taxes, as set forth in ASC Topic 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities using
the enacted statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established against net deferred tax assets if, based on the
weight of available evidence, it is more likely than not that some or all of the net deferred tax assets will not be realized.
The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the
amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be
sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being
realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. As of December
31, 2021 and 2020, the Company had no uncertain tax positions.
|
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Warrant Liabilities |
Warrant Liabilities
The Company’s outstanding warrants include publicly-traded warrants (the “Public Warrants”) which were issued as Derivatives
and Hedging-Contracts in Entity’s Own Equity (“ASC 815-40”), and concluded that they do not meet the criteria to be classified in stockholders’ equity. Since the Public Warrants and Private Warrants meet the definition of a derivative
under ASC 815-40, the Company recorded these warrants as long-term liabilities on the balance sheet at fair value upon the Closing of the Business Combination, with subsequent changes in their respective fair values recognized in the consolidated
statements of operations and comprehensive loss at each reporting date.
of one redeemable warrant per unit issued during HighCape’s initial public offering on September 9, 2020, and warrants sold in a private
placement (the “Private Warrants”) to HighCape’s sponsor, HighCape Capital Acquisition LLC (the “Sponsor”). The Company evaluated its warrants under Accounting Standards Codification (“ASC”) 815-40, |
|||||||||||||||
Subsequent Events |
Subsequent Events
The Company has evaluated subsequent events through March 1, 2022.
|
|||||||||||||||
Recently Issued Accounting Pronouncements |
Recently Issued Accounting Pronouncements
Accounting pronouncements adopted
In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation — Stock
Compensation (Topic 718). The amendments in this update expand the scope of Topic 718 (“ASC 718”) to include share-based payments to nonemployees. An entity is required to apply the requirements of ASC 718 to nonemployee awards except
for specific guidance related to option pricing models and the attribution of cost. The Company adopted such guidance on January 1, 2020 and there was no material effect of adoption on the consolidated financial statements.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which
amends the existing accounting standards for revenue recognition. The FASB has issued several updates to the standard which: (i) clarify the application of the principal versus agent guidance, (ii) clarify the guidance relating to performance
obligations and licensing, (iii) clarify the assessment of the collectability criterion, presentation of sales taxes, measurement date for non-cash consideration and completed contracts and (iv) clarify the narrow aspects of Topic 606 or correct
unintended application of the guidance (collectively, “ASC 606”). ASC 606 is based on principles that govern the recognition of revenue at an amount to which an entity expects to be entitled when products and/or services are transferred to
customers. The new revenue standard may be applied via the full retrospective method to each prior period presented or via the modified retrospective method with the cumulative effect recognized as of the date of adoption. The Company adopted ASU
2014-09 as of January 1, 2019. The Company has had no revenue and the adoption of this pronouncement had no impact on the Company’s consolidated financial statements. The Company will review this pronouncement again in the future when they start
to generate revenue.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize almost all their leases on the balance sheet by
recording a lease liability and corresponding right-of-use assets. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. As per the latest ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective
Dates for Certain Entities, issued by the FASB, entities that have not yet issued or made available for issuance the financial
statements as of June 3, 2020 can defer the new guidance for one year. For public entities, this guidance is effective for annual reporting periods beginning January 1, 2019, including interim periods within that annual reporting period.
Effective December 31, 2021, the Company lost its emerging growth company status which accelerated the adoption of Topic 842. On January 1, 2021, the Company adopted ASU 2016-02 using the modified retrospective transition method which includes
the ability to recognize the cumulative effect of the adoption being recorded as an adjustment to retained earnings on January 1, 2021. The Company elected to apply the package of practical expedients that allows entities to forgo reassessing
at the transition date: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) whether unamortized initial direct costs for existing leases meet the definition
of initial direct costs under the new guidance. The Company did not elect the hindsight practical expedient. The Company also elected to use the practical expedient that allows the combination of lease and non-lease contract components in all
of its underlying asset categories. The Company also elected a policy of not recording leases on its consolidated balance sheets when the leases have a term of 12 months or less and the Company is not reasonably certain to elect an option to
renew the leased asset. Due to the adoption of this guidance, the Company reclassed its capital leases to a finance lease classification. The Company did not have any operating leases at the time of adoption. The Company had a capital lease
which has been recorded on the consolidated balance sheets as of December 31, 2020 and became a finance lease as of the transition date of January 1, 2021. The capital lease became a finance lease by establishing the ROU asset and liability
which was not material to the consolidated balance sheets. The Company did not have any impact to opening retained earnings as a result of the adoption of the guidance. The adoption of this new guidance did not have a material impact on the
Company’s results of operations and comprehensive loss, cash flows and liquidity. See the “Leases” section in this Note for further detail.
In June 2016 the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which
have the same effective date and transition date of January 1, 2020. These standards require that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional
disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded instead of reducing the amortized cost of the investment. These standards limit the amount
of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. For the Company, this
guidance is effective December 31, 2021. The Company adopted the guidance on January 1, 2021. The Company evaluated the impact of the pronouncement, and it did not have a material impact on its consolidated financial statements. The Company
will review this pronouncement again in the future when they start to generate more significant receivables.
In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a
Cloud Computing Arrangement that Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing
implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). For public entities, this guidance is effective for fiscal years beginning January 1, 2020 and
interim periods within those fiscal years. For the Company, this guidance is effective December 31, 2021. The Company adopted the guidance on January 1, 2021. The Company evaluated the impact of the pronouncement, and it did not have a material
impact on its consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for
Income Taxes. ASU 2019-12 is intended to simplify various aspects related to accounting for income taxes. For public entities, this guidance is effective for annual reporting periods beginning January 1, 2021, including interim periods
within that annual reporting period. For the Company, this guidance is effective December 31, 2021. The Company adopted the guidance on January 1, 2021. The Company evaluated the impact of the pronouncement, and it did not have a material impact
on its consolidated financial statements.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
12 Months Ended | |||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||
Useful Lives of Property and Equipment |
Useful lives of property and equipment are as follows:
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ACQUISITION (Tables) |
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Dec. 31, 2021 | ||||||||||||||||||||||||||
BUSINESS COMBINATION/ACQUISITION [Abstract] | ||||||||||||||||||||||||||
Purchase Price Allocation for Majelac Technologies LLC |
The following table summarizes the preliminary purchase price allocation at the acquisition date as follows:
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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis |
The following table summarizes the Company’s assets and liabilities that are measured at fair value on
a recurring basis, by level, within the fair value hierarchy:
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PROPERTY AND EQUIPMENT, NET (Tables) |
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PROPERTY AND EQUIPMENT, NET [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net |
Property and equipment, net, are recorded at historical cost and consist of the following:
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) |
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities |
Accrued expenses and other current liabilities consist of the following:
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LEASES (Tables) |
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LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease-Related Costs |
Lease-related costs for the year ended December 31, 2021 are as follows:
Lease-related costs for the three months ended March 31, 2021, June 30, 2021 and September 30, 2021 are as follows:
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Other Information Related to Leases |
Other information related to leases as of December 31, 2021 is as follows:
The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the year ended December
31, 2021:
Other information related to leases as of September 30, 2021 are as follows:
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Future Minimum Lease Payments Under Non-Cancellable Leases |
Future minimum lease payments under non-cancellable leases as of December 31, 2021 are as follows:
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CONVERTIBLE PREFERRED STOCK (Tables) |
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CONVERTIBLE PREFERRED STOCK [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock | The following table summarizes the authorized, issued and outstanding Convertible Preferred Stock of the Company immediately prior to the Business
Combination and as of December 31, 2020:
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EQUITY INCENTIVE PLAN (Tables) |
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EQUITY INCENTIVE PLAN [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Activity |
A summary of the stock option activity under the 2013 Plan and the 2021 Plan is presented in the table below:
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Assumptions Used to Value Option Grants | The assumptions used to value option grants to employees and nonemployees for the years ended December 31, 2021 and 2020 and employees for the year ended December 31, 2019 were
as follows:
The assumptions used to value option grants to nonemployees for the year ended December 31, 2019 were as follows:
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Restricted Stock Activity |
A summary of the RSU activity under the 2013 Plan and the 2021 Plan is presented in the table below:
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Stock-Based Compensation Expense |
The Company’s stock-based compensation expense is allocated to the following operating expense categories as follows:
|
NET LOSS PER SHARE (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Net Loss Per Share |
The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock:
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Anti-Dilutive Common Equivalent Shares | Anti-dilutive
common equivalent shares were as follows:
|
INCOME TAXES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory to Effective Income Tax Rate Reconciliation | A reconciliation of the income tax expense at the federal statutory tax rate to the Company’s effective income tax rate follows:
|
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Deferred Tax Assets (Liabilities) |
Significant components of the Company’s deferred tax assets (liabilities) are as follows:
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Tax Net Operating Loss Carryforwards |
As of December 31, 2021, the Company had the following tax net operating loss carryforwards available to reduce future federal and Connecticut
taxable income, and tax credit carryforwards available to offset future federal and Connecticut income taxes:
|
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Tax Credit Carryforwards |
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Investments in Marketable Securities (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Investments in Marketable Securities [Abstract] | |
Unrealized losses on marketable securities | $ (5,023) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Property and Equipment, net (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Laboratory and Production Equipment [Member] | |
Property and Equipment, Net [Abstract] | |
Estimated useful life | 5 years |
Computer Equipment [Member] | Minimum [Member] | |
Property and Equipment, Net [Abstract] | |
Estimated useful life | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property and Equipment, Net [Abstract] | |
Estimated useful life | 5 years |
Software [Member] | |
Property and Equipment, Net [Abstract] | |
Estimated useful life | 3 years |
Furniture and Fixtures [Member] | |
Property and Equipment, Net [Abstract] | |
Estimated useful life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Leases (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
Finance leases | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Impairment of Long-Lived Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Impairment of Long-Lived Assets [Abstract] | |||
Impairments | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Sales and Marketing (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Sales and Marketing [Abstract] | |||
Advertising expense | $ 0 | $ 87 | $ 15 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Stock-Based Compensation (Details) - Stock Options [Member] |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Stock-Based Compensation [Abstract] | |
Vesting period | 4 years |
Term | 10 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Income Taxes [Abstract] | ||
Uncertain tax positions | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Warrant Liabilities (Details) |
Sep. 09, 2020
shares
|
---|---|
Warrant Liabilities [Abstract] | |
Number of warrants issued per unit issued during IPO (in shares) | 0.33 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounts Expenses and Other Current Liabilities [Abstract] | ||
Employee compensation | $ 2,680 | $ 511 |
Contracted services | 2,606 | 399 |
Business acquisition costs and contingencies | 1,331 | 0 |
Legal fees | 636 | 447 |
Other | 23 | 68 |
Total accrued expenses and other current liabilities | $ 7,276 | $ 1,425 |
NOTES PAYABLE (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Aug. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
NOTES PAYABLE [Abstract] | ||||
Loan proceeds received | $ 1,749 | $ 0 | $ 1,749 | $ 0 |
LEASES, Lease Terms (Details) |
Dec. 31, 2021 |
---|---|
Minimum [Member] | |
Operating Lease, Description [Abstract] | |
Lease term | 1 year |
Renewal term | 1 year |
Maximum [Member] | |
Operating Lease, Description [Abstract] | |
Lease term | 10 years |
Renewal term | 10 years |
LEASES, Lease-Related Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
LEASES [Abstract] | ||||
Finance lease | $ 0 | |||
Lease-Related Costs [Abstract] | ||||
Operating lease cost | $ 240 | $ 0 | $ 0 | 630 |
Short-term lease cost | 133 | 127 | 122 | 524 |
Variable lease cost | 21 | 0 | 0 | 63 |
Total lease cost | $ 394 | $ 127 | $ 122 | $ 1,217 |
LEASES, Other Information Related to Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Assets and Liabilities [Abstract] | |||
Operating lease right-of-use assets | $ 6,973 | $ 6,443 | $ 0 |
Short-term operating lease liabilities | 859 | 609 | 0 |
Operating lease liabilities | $ 7,219 | $ 6,842 | $ 0 |
Weighted Average Remaining Term and Discount Rate [Abstract] | |||
Weighted-average remaining lease term | 5 years 10 months 24 days | 6 years 2 months 12 days | |
Weighted-average discount rate | 7.00% | 7.00% | |
Cash Flow and Supplemental Noncash Information [Abstract] | |||
Operating cash paid to settle operating lease liabilities | $ 293 | ||
Right-of-use assets obtained in exchange for lease liabilities | $ 7,388 |
LEASES, Future Minimum Lease Payments Under Non-Cancellable Leases (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Future Minimum Lease Payments [Abstract] | |
2022 | $ 1,373 |
2023 | 1,650 |
2024 | 1,694 |
2025 | 1,739 |
2026 | 1,754 |
Thereafter | 1,647 |
Total undiscounted lease payments | 9,857 |
Less: Imputed interest | 1,779 |
Lease liabilities | 8,078 |
New Haven, Connecticut [Member] | |
Future Minimum Lease Payments [Abstract] | |
Total undiscounted lease payments | 25,688 |
Lease liabilities | $ 35,545 |
LEASES, Rent Expense Prior to Adoption of Topic 842 (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
LEASES [Abstract] | ||
Rent expense | $ 483 | $ 560 |
STOCKHOLDERS' EQUITY (DEFICIT) (Details) |
Dec. 31, 2021
Vote
$ / shares
shares
|
Dec. 31, 2020
$ / shares
shares
|
---|---|---|
Preferred Stock [Abstract] | ||
Preferred stock, shares authorized (in shares) | 1,000,000 | 0 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Class A [Member] | ||
Common Stock [Abstract] | ||
Common stock, shares authorized (in shares) | 600,000,000 | 90,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Common stock, shares outstanding (in shares) | 118,025,410 | 5,378,287 |
Number of votes per share | Vote | 1 | |
Common Class B [Member] | ||
Common Stock [Abstract] | ||
Common stock, shares authorized (in shares) | 27,000,000 | 0 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Common stock, shares outstanding (in shares) | 19,937,500 | 0 |
Number of votes per share | Vote | 20 |
EQUITY INCENTIVE PLAN, Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense | $ 24,918 | $ 1,924 | $ 2,715 |
Total unrecognized stock-based compensation expense | $ 34,058 | ||
Remaining weighted average vesting period | 2 years 1 month 6 days | ||
Research and Development [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense | $ 5,718 | 1,290 | 2,163 |
General and Administrative [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense | 18,365 | 324 | 354 |
Sales and Marketing [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense | $ 835 | $ 310 | $ 198 |
INCOME TAXES, Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
INCOME TAXES [Abstract] | |||
Provision for income taxes | $ 0 | $ 0 | $ 0 |
Effective Income Tax Rate Reconciliation [Abstract] | |||
Statutory tax rate | 21.00% | 21.00% | 21.00% |
State taxes, net of federal benefit | 7.00% | 6.70% | 6.50% |
Federal research and development credit | 2.80% | 3.00% | 2.00% |
Stock-based compensation expense | 1.60% | (0.70%) | (0.90%) |
Other | 0.60% | (0.10%) | 0.40% |
Valuation allowance | (33.00%) | (29.90%) | (29.00%) |
Effective tax rate | 0.00% | 0.00% | 0.00% |
INCOME TAXES, Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Deferred Tax Assets [Abstract] | |||
Net operating loss carryforwards | $ 63,819 | $ 42,589 | |
Tax credit carryforwards | 10,203 | 7,178 | |
Stock-based compensation expense | 6,673 | 1,586 | |
Operating lease liabilities | 2,184 | 0 | |
Other | 2,218 | 182 | |
Total deferred tax assets | 85,097 | 51,535 | |
Deferred Tax Liabilities [Abstract] | |||
Operating lease right-of-use assets | (2,093) | 0 | |
Fixed assets | (245) | (161) | |
Other | (15) | 0 | |
Total deferred tax liabilities | (2,353) | (161) | |
Net deferred tax assets | 82,744 | 51,374 | |
Valuation allowance | (82,744) | (51,374) | $ (40,441) |
Net deferred tax assets (liabilities) | 0 | 0 | |
Increase in valuation allowance | $ 31,370 | $ 10,933 | $ 10,352 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Licenses Related to Certain Intellectual Property [Abstract] | |||
Annual minimum fixed payments | $ 220 | ||
Other Commitments [Abstract] | |||
Employer matching contributions to 401(k) plan | $ 0 | $ 0 | $ 0 |
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