UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended September 30, 2021
or
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
Commission File Number: 001-39486
(Exact name of registrant as specified in its charter)
|
|
|
|
|
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification No.)
|
|
|
||
|
|
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
(203 ) 458-7100
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
Trading Symbols(s)
|
Name of each exchange on which registered
|
||
|
|
|
|
||
|
|
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
|
|
☒
|
Smaller reporting company
|
|
|
Emerging growth company
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 9, 2021, the registrant had 117,478,783
shares of Class A common stock outstanding and 19,937,500 shares of Class B common stock outstanding.
QUANTUM-SI INCORPORATED
FORM 10-Q
For the quarterly period ended September 30, 2021
|
Page
|
||
|
3
|
||
|
Part I
|
4
|
|
|
Item 1.
|
4
|
|
|
4
|
||
|
5
|
||
|
6
|
||
|
8
|
||
| 9 | ||
|
Item 2.
|
21 | |
|
Item 3.
|
28 | |
|
Item 4.
|
28 | |
|
Part II
|
30 | |
|
Item 1.
|
30 | |
|
Item 1A.
|
30 | |
|
Item 2.
|
30 | |
|
Item 3.
|
30 | |
|
Item 4.
|
30 | |
|
Item 5.
|
30 | |
|
Item 6.
|
31 | |
| 32 | ||
In this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” the “Company” and “Quantum-Si” mean Quantum-Si Incorporated (formerly HighCape Capital Acquisition
Corp.) and our subsidiaries. On June 10, 2021 (the “Closing Date”), HighCape Capital Acquisition Corp., a Delaware corporation (“HighCape” and after the Business Combination described herein, the “Company”), consummated a business combination (the
“Business Combination”) pursuant to the terms of the Business Combination Agreement, dated as of February 18, 2021 (the “Business Combination Agreement”), by and among HighCape, Tenet Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and
Quantum-Si Incorporated, a Delaware corporation (“Legacy Quantum-Si”). Immediately upon the consummation of the Business Combination and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”,
and such completion, the “Closing”), Merger Sub merged with and into Legacy Quantum-Si, with Legacy Quantum-Si surviving the Business Combination as a wholly-owned subsidiary of HighCape (the “Merger”). In connection with the Transactions, HighCape
changed its name to “Quantum-Si Incorporated” and Legacy Quantum-Si changed its name to “Q-SI Operations Inc.”
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that relate to future events, our future operations or financial performance, or our plans, strategies and prospects. These statements are based on the
beliefs and assumptions of our management team. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure that we will achieve or realize these
plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions,
business strategies, events or performance, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,”
“plans,” “scheduled,” “anticipates” or “intends” or the negative of these terms, or other comparable terminology intended to identify statements about the future, although not all forward-looking statements
contain these identifying words. The forward-looking statements are based on projections prepared by, and are the responsibility of, the Company’s management. Forward-looking statements contained in this Quarterly Report on Form 10-Q
include, but are not limited to, statements about:
| ● |
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;
|
| ● |
the ability to maintain the listing of our Class A common stock on The Nasdaq Stock Market LLC (“Nasdaq”);
|
| ● |
changes in applicable laws or regulations;
|
| ● |
our ability to raise financing in the future;
|
| ● |
the success, cost and timing of our product development activities;
|
| ● |
the commercialization and adoption of our existing products and the success of any product we may offer in the future;
|
| ● |
the potential attributes and benefits of our products once commercialized;
|
| ● |
our ability to obtain and maintain regulatory approval for our products, and any related restrictions and limitations of any approved product;
|
| ● |
our ability to identify, in-license or acquire additional technology;
|
| ● |
our ability to maintain our existing license agreements and manufacturing arrangements;
|
| ● |
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;
|
| ● |
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;
|
| ● |
our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
|
| ● |
our financial performance; and
|
| ● |
the impact of the COVID-19 pandemic on our business.
|
These forward-looking statements are based on information available as of the date of this report, and current expectations,
forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Important factors could cause actual results, performance or achievements to differ materially from those indicated or implied by forward-looking statements
such as those described under the caption “Risk Factors” in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021 and this Quarterly Report on Form 10-Q and in other filings that we make with
the Securities and Exchange Commission. The risks described under the heading “Risk Factors” are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can we assess the impact of all
such risk 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. Forward-looking statements are not guarantees of
performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing
cautionary statements. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
QUANTUM-SI INCORPORATED
(in thousands, except share and per share amounts)
(Unaudited)
|
September 30,
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
|
|
|
||||||
| Other assets | ||||||||
|
Other assets - related party
|
|
|
||||||
|
Total assets
|
$
|
|
$
|
|
||||
|
Liabilities, convertible preferred stock and stockholders’ equity (deficit)
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$
|
|
$
|
|
||||
|
Accrued expenses and other current liabilities
|
|
|
||||||
|
Total current liabilities
|
|
|
||||||
|
Long-term liabilities:
|
||||||||
|
Warrant liabilities
|
|
|
||||||
| Notes payable | ||||||||
|
Other long-term liabilities
|
|
|
||||||
|
Total liabilities
|
|
|
||||||
|
Commitments and contingencies (Note 14)
|
||||||||
|
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)
|
$
|
|
$
|
|
||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
QUANTUM-SI INCORPORATED
(in thousands, except share and per share amounts)
(Unaudited)
|
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||||
|
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), 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 attibutable to common stockholders, basic and diluted
|
|
|
|
|
||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
QUANTUM-SI INCORPORATED
STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands, except share amounts)
(Unaudited)
|
Convertible preferred stock
|
Class A
common stock
|
Class B
common stock
|
Additional paid-in capital
|
Accumulated deficit
|
Total stockholders’
equity (deficit)
|
|||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
|
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 - March 31, 2020
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||||||||||||
|
Net loss
|
-
|
-
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
|
Issuance of Series E convertible preferred stock, net of issuance costs
|
|
(
|
)
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
Stock-based compensation expense
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||
|
Balance - June 30, 2020
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||||||||||||
|
Net loss
|
-
|
-
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
|
Common stock issued upon exercise of stock options
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Stock-based compensation expense
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||
|
Balance - September 30, 2020
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
QUANTUM-SI INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND
(in thousands, except share amounts)
(Unaudited)
|
Convertible preferred stock
|
Class A
common stock
|
Class B
common stock
|
Additional paid-in capital
|
Accumulated deficit
|
Total stockholders’ equity (deficit)
|
|||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
|
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
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Stock-based compensation expense
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||
|
Balance - March 31, 2021
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||||||||||||
|
Net loss
|
-
|
-
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
|
Common stock issued upon exercise of stock options
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Conversion of the convertible preferred stock into Class A and Class B common stock
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
Net equity infusion from the Business Combination
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Stock-based compensation expense
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||
|
Balance - June 30, 2021
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||||||||||
|
Net loss
|
-
|
-
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
|
Common stock issued upon exercise of stock options
|
-
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Net equity infusion from the Business Combination
|
-
|
-
|
|
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||||||
|
Stock-based compensation expense
|
-
|
-
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||||
|
Balance - September 30, 2021
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
QUANTUM-SI INCORPORATED
(in thousands)
(Unaudited)
|
Nine months ended September 30,
|
||||||||
|
2021
|
2020
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
|
Depreciation and amortization
|
|
|
||||||
|
Unrealized losses of marketable securities
|
||||||||
|
Loss on disposal of fixed assets
|
|
|
||||||
|
Change in fair value of warrant liabilities
|
(
|
)
|
|
|||||
|
Stock-based compensation expense
|
|
|
||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Prepaid expenses and other current assets
|
(
|
)
|
(
|
)
|
||||
| Other assets | ( |
) | ||||||
|
Other assets - related party
|
|
|
||||||
|
Accounts payable
|
|
|
||||||
|
Accrued expenses and other current liabilities
|
|
|
||||||
| Other long-term liabilities | ||||||||
|
Net cash used in operating activities
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Cash flows from investing activities:
|
||||||||
|
Purchases of property and equipment
|
(
|
)
|
(
|
)
|
||||
| Purchases of marketable securities | ( |
) | ||||||
|
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 capital lease obligations
|
(
|
)
|
(
|
)
|
||||
|
Net cash provided by financing activities
|
$
|
|
$
|
|
||||
|
Net increase (decrease) 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 related transaction costs from the Business Combination
|
$
|
|
$
|
|
||||
|
Noncash equity related warrants from the Business Combination
|
$ | $ | ||||||
|
Conversion of the convertible preferred stock into Class A and Class B common stock
|
$ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
QUANTUM-SI INCORPORATED
(in thousands, except share and per share amounts)
(Unaudited)
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Quantum-Si Incorporated (“Quantum-Si”, the “Company”, “we”, “us” and “our”), 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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying condensed 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”) regarding interim financial reporting. Certain information and
note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.
These condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Legacy Quantum-Si audited
financial statements as of and for the years ended December 31, 2020 and 2019. The condensed consolidated balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date, but does not include
all disclosures, including certain notes required by U.S. GAAP, on an annual reporting basis.
In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the
financial position, results of operations, and cash flows for the interim periods. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for any subsequent quarter, the year
ending December 31, 2021, or any other period.
Except as described elsewhere in this Note 2 under the heading “Recently Issued Accounting Pronouncements” and Note 3 “Business Combination”, there have been no
material changes to the Company’s significant accounting policies as described in the Legacy Quantum-Si audited financial statements as of and for the years ended December 31, 2020 and 2019.
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 condensed 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 September 30, 2021 and December 31, 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.
Use of Estimates
The preparation of the condensed 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 condensed 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:
|
•
|
valuation allowances with respect to deferred tax assets;
|
|
•
|
valuation of warrant liabilities; and
|
|
•
|
assumptions underlying the fair value used in the calculation of the stock-based compensation.
|
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 condensed consolidated financial statements.
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 condensed
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), net on the condensed 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 condensed consolidated balance sheets.
For the three and nine months ended September 30, 2021, the Company recognized $634
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
Warrant Liabilities
The Company’s outstanding warrants include publicly-traded warrants (the “Public Warrants”) which were issued as of one redeemable warrant per unit issued during the Company’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, 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 condensed consolidated statements of
operations and comprehensive loss at each reporting date.
Recently Issued Accounting Pronouncements
Accounting pronouncements issued but not yet adopted
In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“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. For the Company, this guidance is effective December 31, 2021. The Company is in the process of evaluating the impact that the adoption of this pronouncement will have on its
condensed consolidated financial statements.
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 is in the process of evaluating the impact that the adoption of this pronouncement will have
on its condensed 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 is in the process of evaluating the impact that the adoption of this
pronouncement will have on its condensed consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Debt-Debt
with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40):
Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by removing the separation models for convertible debt with a cash conversion feature and
convertible instruments with a beneficial conversion feature. These changes will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that was bifurcated according to previously
existing rules. ASU 2020-06 also requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. For public entities, this guidance is effective for annual
reporting periods beginning January 1, 2022, including interim periods within that annual reporting period. For the Company, this guidance is effective beginning January 1, 2022. The Company is in the process of evaluating the impact that the
adoption of this pronouncement will have on its condensed consolidated financial statements.
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”):
• 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.
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 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:
• 59,754,288 shares of the Company’s Class A common stock issued to Legacy Quantum-Si stockholders (other than holders of Legacy Quantum-Si Series A preferred stock) in the Business
Combination,
• 42,500,000 shares of the Company’s Class A
common stock issued in connection with the Closing to the PIPE Investors pursuant to the PIPE Financing,
• 696,250
• 2,178,750 shares of the Company’s Class A common stock
issued to the initial stockholders holding the 2,178,750 shares of HighCape Class B common stock outstanding at the Effective Time,
after reflecting the irrevocable forfeiture by the Sponsor to HighCape of 696,250 shares of HighCape Class B common stock for no
consideration and automatic cancellation as of immediately prior to, and subject to the consummation of, the Closing;
• 405,000 shares of the Company’s Class A common stock held
by the Sponsor holding shares of HighCape Class A common stock outstanding at the Effective Time, and
• 10,928,872 shares of the Company’s Class A common stock
held by public stockholders holding shares of HighCape Class A common stock outstanding at the Effective Time, after reflecting redemptions of 571,128
shares of HighCape Class A common stock.
The total number of shares of the Company’s Class B common stock outstanding immediately following the Closing was 19,937,500 shares. Immediately following the Closing, Dr. Rothberg held approximately 80.4 % 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 were expensed during the nine months ended September 30, 2021 in the condensed 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 condensed consolidated statements of changes in convertible preferred stock and stockholders’ equity (deficit) for the nine
months ended September 30, 2021.
4. 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:
• 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.
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
Our Public Warrants and Private Warrants were carried at fair value as of September 30, 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 September 30, 2021, the significant assumptions used in preparing the binomial lattice model for valuing the Private Warrants liability include (i) volatility of 52.3 %, (ii) risk-free interest rate of 0.91 %, (iii) strike price ($11.50 ), (iv) fair value of common stock ($8.34 ),
and (v) expected life of 4.7 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 as
of September 30, 2021:
|
Fair Value Measurement Level
|
||||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
|
September 30, 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
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The Company had $36,040 of money market funds included
in cash and cash equivalents as of December 31, 2020. These assets were valued using quoted market prices and accordingly were classified as Level 1. The fair value of the notes payable using Level 2 inputs was deemed to approximate the carrying
value as of December 31, 2020. There were no
5. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, are recorded at historical cost and consist of the following:
|
September 30,
2021 |
December 31,
2020 |
|||||||
|
Laboratory equipment
|
$
|
|
$
|
|
||||
|
Computer equipment
|
|
|
||||||
|
Software
|
|
|
||||||
|
Furniture and fixtures
|
|
|
||||||
| Leasehold improvements | ||||||||
|
Construction in process
|
|
|
||||||
|
|
|
|||||||
|
Less: Accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
|
Property and equipment, net
|
$
|
|
$
|
|
||||
Depreciation expense amounted to $264 and $222 for the three months ended September 30, 2021 and 2020, respectively, and $712 and $676 for the nine months ended September 30, 2021 and 2020,
respectively.
6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
|
September 30,
2021 |
December 31,
2020 |
|||||||
|
Employee compensation
|
$
|
|
$
|
|
||||
|
Contracted services
|
|
|
||||||
|
Legal fees
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total accrued expenses and other current liabilities
|
$
|
|
$
|
|
||||
7. 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 condensed consolidated statements of operations and comprehensive loss related to the loan.
8. 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:
|
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
|
-
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||
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 no shares of Convertible Preferred Stock outstanding as of September 30, 2021.
9. 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”). 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.
Stock option activity
During the nine months ended September 30, 2021, the Company granted 3,104,585 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 $2,381 for the nine months ended September 30, 2021 including $1,343 related to these option awards during the six months ended June 30, 2021, as the Business Combination was consummated during this time period. The
stock-based compensation expense for stock options for the three and nine months ended September 30, 2021 was $1,556 and $4,608 , respectively.
A summary of the stock option activity under the 2013 Plan and the 2021 Plan is
presented in the table below:
|
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 September 30, 2021
|
|
$
|
|
|
$
|
|
||||||||||
|
Options exercisable at September 30, 2021
|
|
|
|
$
|
|
|||||||||||
|
Vested and expected to vest at September 30, 2021
|
|
$
|
|
|
$
|
|
||||||||||
Restricted stock unit activity
During the nine months ended September 30, 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 Chief Executive Officer and General Counsel, respectively, subject to service and performance conditions, 1,800,000 RSU awards
to the 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 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 $13,089 for the nine months ended September 30, 2021
including $7,393 related to these RSU awards during the six months ended June 30, 2021, as the Business Combination was consummated
during this time period. The stock-based compensation expense for RSU awards for the three and nine months ended September 30,2021 was $5,840
and $13,232 , respectively.
A summary of the RSU activity under the 2013 Plan and the 2021 Plan is presented
in the table below:
|
Number of
Shares
Underlying
RSUs
|
Weighted
Average Grant-
Date Fair Value
|
|||||||
|
Outstanding non-vested RSUs at December 31, 2020
|
|
$ | ||||||
|
Granted
|
|
|
|
|||||
|
Repurchased
|
|
|
||||||
|
Restrictions lapsed
|
|
|
||||||
|
Outstanding non-vested RSUs at September 30, 2021
|
|
$
|
|
|||||
The Company’s stock-based compensation expense is allocated to the following
operating expense categories as follows:
|
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||||
|
Research and development
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
General and administrative
|
|
|||||||||||||||