UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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TQUANTERIX CORPORATION
INDEX TO FORM 10-Q
2
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, forward-looking statements can be identified by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words, or other comparable terminology. These forward-looking statements include, but are not limited to, statements related to our financial performance, and are subject to a number of risks, uncertainties, and assumptions, including those further described elsewhere in this Quarterly Report on Form 10-Q, in the section titled “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 6, 2023, or in other filings that we make with the SEC. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Readers should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in any forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to new information, actual results, or to changes in our expectations, except as required by law.
Readers should read this Quarterly Report on Form 10-Q and any documents referenced herein that we have filed with the SEC as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.
Service Marks, Trademarks and Trade Names
Unless the context otherwise requires, the terms “Quanterix,” the “Company,” “we,” “it,” “us,” and “our” in this Quarterly Report on Form 10-Q refer to Quanterix Corporation and its consolidated subsidiaries. “Quanterix,” “Simoa,” “Simoa HD-X,” “Simoa HD-1,” “SR-X,” “SP-X,” “HD-X,” “LucentAD,” and our logo are our trademarks. All other service marks, trademarks, and trade names appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, endorsement, or sponsorship of us by these other companies.
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PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
QUANTERIX CORPORATION
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share data)
September 30, 2023 |
| December 31, 2022 | |||
ASSETS | |||||
Current assets: |
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Cash and cash equivalents | $ | | $ | | |
Marketable securities | | — | |||
Accounts receivable (net of allowance for expected credit losses of $ |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets | |
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Restricted cash |
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Property and equipment, net |
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Intangible assets, net |
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Operating lease right-of-use assets | | | |||
Other non-current assets |
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Total assets | $ | | $ | | |
LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable | $ | | $ | | |
Accrued compensation and benefits |
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Accrued expenses and other current liabilities |
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Deferred revenue |
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Operating lease liabilities | | | |||
Total current liabilities |
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Deferred revenue, net of current portion |
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Operating lease liabilities, net of current portion | | | |||
Other non-current liabilities |
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Total liabilities | | | |||
Commitments and contingencies (Note 13) | |||||
Stockholders’ equity: |
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Common stock, $ |
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Authorized shares: |
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Additional paid-in capital |
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Accumulated other comprehensive loss | ( | ( | |||
Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
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QUANTERIX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||
2023 |
| 2022 | 2023 |
| 2022 | ||||||
Revenues: | |||||||||||
Product revenue | $ | | $ | | $ | | $ | | |||
Service revenue |
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Collaboration and license revenue |
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Grant revenue | | | | | |||||||
Total revenues |
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Costs of goods sold and services: |
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Cost of product revenue |
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Cost of service and other revenue |
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Total costs of goods sold and services |
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Gross profit | | | | | |||||||
Operating expenses: |
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Research and development |
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Selling, general, and administrative |
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Other lease costs | | | | | |||||||
Impairment and restructuring | — | | ( | | |||||||
Total operating expenses |
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Loss from operations |
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Interest income, net |
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Other income (expense), net |
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Loss before income taxes | ( | ( | ( | ( | |||||||
Income tax expense | ( | ( | ( | ( | |||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||
Net loss per common share, basic and diluted | ( | ( | ( | ( | |||||||
Weighted-average common shares outstanding, basic and diluted |
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The accompanying notes are an integral part of these Consolidated Financial Statements.
5
QUANTERIX CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(amounts in thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2023 |
| 2022 | 2023 |
| 2022 | ||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||
Other comprehensive loss, net of tax: | |||||||||||
Unrealized losses on marketable securities | ( | — | ( | — | |||||||
Foreign currency translation | ( | ( | ( | ( | |||||||
Total other comprehensive loss | ( | ( | ( | ( | |||||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
The accompanying notes are an integral part of these Consolidated Financial Statements.
6
QUANTERIX CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(amounts in thousands)
Three Months Ended September 30, 2023 | ||||||||||||||||
Common stock | ||||||||||||||||
Shares |
| Value |
| Additional paid-in capital |
| Accumulated other comprehensive loss |
| Accumulated deficit |
| Total stockholders' equity | ||||||
Balance at June 30, 2023 | | $ | | $ | | $ | ( | $ | ( |
| $ | | ||||
Issuance of common stock under stock plans, including tax effects | | | | — | — | | ||||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||
Unrealized loss on marketable securities, net of tax | ( | ( | ||||||||||||||
Foreign currency translation | — | — | — | ( | — | ( | ||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||
Balance at September 30, 2023 | |
| $ | |
| $ | |
| $ | ( | $ | ( |
| $ | | |
Three Months Ended September 30, 2022 | ||||||||||||||||
Common stock | ||||||||||||||||
Shares |
| Value |
| Additional paid-in capital |
| Accumulated other comprehensive loss |
| Accumulated deficit |
| Total stockholders' equity | ||||||
Balance at June 30, 2022 | | $ | | $ | | $ | ( | $ | ( |
| $ | | ||||
Issuance of common stock under stock plans, including tax effects | | — | | — | — | | ||||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||
Foreign currency translation | — | — | — | ( | — | ( | ||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||
Balance at September 30, 2022 | |
| $ | |
| $ | |
| $ | ( | $ | ( |
| $ | |
Nine Months Ended September 30, 2023 | ||||||||||||||||
Common stock | ||||||||||||||||
Shares |
| Value |
| Additional paid-in capital |
| Accumulated other comprehensive loss |
| Accumulated deficit |
| Total stockholders' equity | ||||||
Balance at December 31, 2022 | | $ | | $ | | $ | ( | $ | ( |
| $ | | ||||
Issuance of common stock under stock plans, including tax effects | | | | — | — | | ||||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||
Unrealized loss on marketable securities, net of tax | — | — | — | ( | — | ( | ||||||||||
Foreign currency translation | — | — | — | ( | — | ( | ||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||
Balance at September 30, 2023 | |
| $ | |
| $ | |
| $ | ( | $ | ( |
| $ | | |
Nine Months Ended September 30, 2022 | ||||||||||||||||
Common stock | ||||||||||||||||
Shares |
| Value |
| Additional paid-in capital |
| Accumulated other comprehensive loss |
| Accumulated deficit |
| Total stockholders' equity | ||||||
Balance at December 31, 2021 | | $ | | $ | | $ | | $ | ( |
| $ | | ||||
Issuance of common stock under stock plans, including tax effects | | — | | — | — | | ||||||||||
Stock-based compensation expense | — | — | | — | — | | ||||||||||
Foreign currency translation | — | — | — | ( | — | ( | ||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||
Balance at September 30, 2022 | |
| $ | |
| $ | |
| $ | ( | $ | ( |
| $ | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
7
QUANTERIX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
Nine Months Ended September 30, | |||||
2023 |
| 2022 | |||
Cash flows from operating activities: |
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Net loss | $ | ( | $ | ( | |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization expense |
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Credit losses on accounts receivable | | | |||
Foreign currency losses | | | |||
Unrealized losses on marketable securities | ( | — | |||
Amortization of (discount) premium on marketable securities | ( | — | |||
Operating lease right-of-use asset amortization | | | |||
Stock-based compensation expense |
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Impairment | — | | |||
Deferred income taxes | | ( | |||
Loss on disposal of fixed assets | | | |||
Changes in assets and liabilities: |
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Accounts receivable |
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Inventory |
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Prepaid expenses and other current assets |
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Other non-current assets |
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Accounts payable |
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Accrued compensation and benefits, accrued expenses, and other current liabilities |
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Deferred revenue |
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Operating lease liabilities | ( | ( | |||
Other non-current liabilities | ( | | |||
Net cash used in operating activities | ( | ( | |||
Cash flows from investing activities: |
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Purchases of marketable securities | ( | — | |||
Purchases of property and equipment |
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Proceeds from RADx grant on assets purchased | — | | |||
Net cash used in investing activities | ( | ( | |||
Cash flows from financing activities: |
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Proceeds from common stock issued under stock plans |
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Payments for employee taxes withheld on stock-based compensation awards | ( | — | |||
Net cash provided by financing activities | | | |||
Net decrease in cash, cash equivalents, and restricted cash |
| ( |
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Effect of exchange rate changes on cash, cash equivalents, and restricted cash | ( | ( | |||
Cash, cash equivalents, and restricted cash at beginning of period |
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Cash, cash equivalents, and restricted cash at end of period | $ | | $ | | |
Supplemental disclosure of cash flow information: | |||||
Cash paid for taxes | $ | | $ | | |
Operating lease right-of-use assets obtained in exchange for lease liabilities | $ | — | $ | | |
Shares received as consideration under product sales agreement (Note 3, 6) | $ | | $ | — |
The accompanying notes are an integral part of these Consolidated Financial Statements.
8
QUANTERIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Organization and Nature of Business
Quanterix Corporation (“Quanterix” or the “Company”) is a life sciences company that has developed next generation, ultra-sensitive digital immunoassay platforms that advance precision health for life sciences research and diagnostics. The Company’s platforms are based on its proprietary digital “Simoa” detection technology. The Company’s Simoa bead-based and planar array platforms enable customers to reliably detect protein biomarkers in extremely low concentrations in blood, serum, and other fluids that, in many cases, are undetectable using conventional, analog immunoassay technologies, and also allow researchers to define and validate the function of novel protein biomarkers that are only present in very low concentrations. The Company is currently focusing on protein detection, but its Simoa platforms have also demonstrated applicability across other testing applications, including detection of nucleic acids and small molecules.
The Company also provides contract research services for customers and Laboratory Developed Test (“LDT”) services through its CLIA-certified Accelerator Laboratory (the “Accleerator Laboratory”). The Accelerator Laboratory provides customers with access to Simoa technology and supports multiple projects and services, including sample testing, homebrew assay development, custom assay development, and blood-based biomarker testing. To date, the Company has completed over
Note 2. Significant Accounting Policies
Basis of Presentation
The Consolidated Financial Statements have been prepared in accordance with the generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting on Form 10-Q. Accordingly, certain information and disclosures required for complete financial statements prepared in accordance with U.S. GAAP are not included herein. The Consolidated Balance Sheet and related information as of December 31, 2022 included herein was derived from the audited Consolidated Financial Statements as of December 31, 2022, but does not include all disclosures required by U.S. GAAP on an annual reporting basis. Certain prior period amounts have been reclassified to conform to the current period presentation.
These Consolidated Financial Statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 6, 2023. Since the date of that filing, there have been no changes or updates to the Company’s significant accounting policies, other than those described below.
In the opinion of management, the Consolidated Financial Statements contain all normal, recurring adjustments necessary for a fair statement of financial position, results of operations, comprehensive loss, and cash flows as of the dates and for the interim periods presented. The results of operations for the three and nine months ended September 30, 2023 may not be indicative of the results for the full year ended December 31, 2023 or any other period.
The Company’s fiscal year is the twelve-month period from January 1 through December 31.
Use of Estimates
The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenues, and expenses reported and disclosures in the financial statements and accompanying notes. Such estimates include, but are not limited to, revenue recognition, valuation of inventory, leases, valuation of intangible and other long-lived assets, recoverability of deferred
9
tax assets, ongoing impairment reviews, and stock-based compensation expense. The Company bases its estimates on historical experience, known trends, market specific information, or other relevant factors it believes to be reasonable. On an ongoing basis, management evaluates its estimates and changes in estimates are recorded in the period in which they become known. Actual results may differ from these estimates.
Foreign Currency
The functional currency of the Company’s subsidiaries is their respective local currencies. These subsidiary financial statements are translated into U.S. dollars using the period-end exchange rates for assets and liabilities, average exchange rates during the corresponding period for revenue and expenses, and historical rates for equity. The effects of foreign currency translation adjustments are recorded in accumulated other comprehensive income (loss), a component of stockholders’ equity on the Consolidated Balance Sheets.
Foreign currency transaction gains (losses) are included in other income (expense), net on the Consolidated Statements of Operations. Foreign exchange losses were not material during the nine months ended September 30, 2023, and were $
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Quanterix and its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation.
In accordance with Accounting Standards Codification (“ASC”) 810 – Consolidation, the Company assesses the terms of its investment interests in entities to determine if any meet the definition of a variable interest entity (“VIE”) and require consolidation into its Consolidated Financial Statements. Refer to Note 16 − Variable Interest Entities for further discussion.
Presentation of Restricted Cash
The following table summarizes the period ending cash and cash equivalents as presented on the Consolidated Balance Sheets and the total cash, cash equivalents, and restricted cash as presented on the Consolidated Statements of Cash Flows (in thousands):
As of September 30, | |||||
2023 |
| 2022 | |||
Cash and cash equivalents | $ | | $ | | |
Restricted cash (1) | | | |||
Cash, cash equivalents, and restricted cash | $ | | $ | |
(1) Restricted cash consists of collateral for a letter of credit issued as security for several of the Company’s leased facilities and to secure the Company’s corporate credit card program. The short-term or long-term classification is determined in accordance with the expiration of the underlying letter of credit and security.
Marketable Securities
The Company’s current portfolio of marketable securities is entirely debt securities and may at any time include commercial paper, U.S. Treasuries, corporate notes and bonds, U.S. Government agency bonds, certificates of deposit, and similar types of debt securities. Marketable debt securities with original maturities of three months or less at the time of purchase are recorded in cash equivalents on the Consolidated Balance Sheets as they are considered highly liquid and readily convertible into cash. All other marketable securities, including those with maturities beyond one year, are recorded as current assets on the Consolidated Balance Sheets based on their highly liquid nature and because such securities are available for use in current operations.
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The Company classifies its marketable securities as either held to maturity, available-for-sale, or trading at the time of purchase and re-evaluates such classification at each balance sheet date. All of the Company’s marketable securities are currently classified as available-for-sale as it may use them in current operations. Available-for-sale securities are recorded at fair value (refer to Note 6 − Fair Value of Financial Instruments).
Unrealized gains and losses (other than impairment or credit related losses) are recorded in accumulated other comprehensive income (loss), net of tax, a component of stockholders’ equity on the Consolidated Balance Sheets. Realized gains and losses are determined using the specific identification method and are recorded in other income (expense), net on the Consolidated Statements of Operations.
Quarterly, or more frequently if circumstances warrant, the Company monitors its marketable securities for impairment. In the event a security’s fair value is less than its amortized cost basis, the Company evaluates whether an impairment exists and if the impairment is a result of credit loss or other factors. For a security in an unrealized loss position, if the Company intends to sell the security in an unrealized loss position, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, an impairment loss equal to the difference between the security’s fair value and amortized cost basis is recorded in other income (expense), net. Additionally, the Company determines if a credit loss exists by considering information about the collectability of the security, current market conditions, and the issuer’s financial condition. If a decline in fair value is a result of a credit loss, an allowance for credit losses is recorded in other income (expense), net, limited to the portion attributed to the credit loss.
Recent Accounting Pronouncements
There are no new accounting pronouncements issued or effective in the current or future periods that are expected to have a material impact on the Company’s Consolidated Financial Statements or accompanying notes.
Note 3. Revenue and Related Matters
Disaggregated Revenue
The following tables disaggregate the Company’s revenue from contracts with customers by geography, based on the location products and services are consumed, and revenue type (in thousands):
Three Months Ended September 30, 2023 |
| Three Months Ended September 30, 2022 | |||||||||||||||||||||
North America |
| EMEA |
| Asia Pacific |
| Total | North America |
| EMEA |
| Asia Pacific |
| Total | ||||||||||
Product revenue | |||||||||||||||||||||||
Instruments | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
| $ | | ||||||
Consumable and other products | | | | | | | |
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Total | $ | | $ | | $ | | $ | | $ | |
| $ | |
| $ | |
| $ | | ||||
Service revenue | |||||||||||||||||||||||
Service-type warranties | $ | | $ | | $ | | $ | | $ | | $ | | $ | |
| $ | | ||||||
Research services | | | |
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Other services | | | | | | | |
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Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Collaboration and license revenue | $ | | $ | — | $ | — | $ | | $ | | $ | | $ | — | $ | | |||||||
Grant revenue | $ | | $ | — | $ | — | $ | | $ | | $ | — | $ | — | $ | | |||||||
Total revenues | $ | |
| $ | |
| $ | |
| $ | | $ | |
| $ | |
| $ | |
| $ | |
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Nine Months Ended September 30, 2023 |
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||
North America |
| EMEA |
| Asia Pacific |
| Total | North America |
| EMEA |
| Asia Pacific |
| Total | ||||||||||
Product revenue | |||||||||||||||||||||||
Instruments | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Consumable and other products | | | | | | | | | |||||||||||||||
Total | $ | |
| $ | |
| $ | |
| $ | | $ | |
| $ | |
| $ | |
| $ | | |
Service revenue |