UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2023
or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ________ to _________
Commission File Number: 001-39486
(Exact name of registrant as specified in its charter)
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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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(866 ) 688-7374
(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:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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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. 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.
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Large accelerated filer
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Accelerated filer
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☐
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☒
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Smaller reporting company
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Emerging growth company
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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 August 2, 2023, the registrant had 121,778,988
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 June 30, 2023
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Page
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Part I
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Item 1.
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Item 2.
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21 |
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Item 3.
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29 |
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Item 4.
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29 |
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Part II
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30 |
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Item 1.
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30 |
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Item 1A.
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Item 2.
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30 |
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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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In this Quarterly Report on Form 10-Q, the terms “we”, “us”, “our”, the “Company” or “Quantum-Si” mean Quantum-Si Incorporated (formerly HighCape
Capital Acquisition Corp.) and our subsidiaries. Quantum-Si Incorporated was incorporated in Delaware on June 10, 2020. The Company’s legal name became Quantum-Si Incorporated
following a business combination between the Company and Q-SI Operations Inc. (formerly Quantum-Si Incorporated) on June 10, 2021 (the “Business Combination”).
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, our management. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
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the potential attributes and benefits of our commercialized PlatinumTM protein sequencing instrument and our other products once commercialized;
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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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our manufacturing capabilities;
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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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the ability to maintain the listing of our Class A common stock on The Nasdaq Stock Market LLC (“Nasdaq”);
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our ongoing leadership transition;
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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;
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changes in applicable laws or regulations;
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our ability to raise financing in the future; and
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the impact of the COVID-19 pandemic on our business.
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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 I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, in Item 1A of Part II of 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)
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June 30,
2023 |
December 31,
2022 |
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Assets
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Current assets:
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Cash and cash equivalents
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$
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$
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Marketable securities
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Accounts receivable, net of allowance for estimated credit losses of $
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Inventory, net
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Prepaid expenses and other current assets
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Total current assets
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Property and equipment, net
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| Internally developed software |
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Operating lease right-of-use assets
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Total assets
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$
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$
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Liabilities and stockholders’ equity
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Current liabilities:
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Accounts payable
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$
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$
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Accrued expenses and other current liabilities
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Short-term operating lease liabilities
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Total current liabilities
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Warrant liabilities
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Other long-term liabilities
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Operating lease liabilities
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Total liabilities
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Commitments and contingencies (Note 15)
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Stockholders’ equity
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Class A Common stock, $
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Class B Common stock, $
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Additional paid-in capital
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Accumulated deficit
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(
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(
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Total stockholders’ equity
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Total liabilities and stockholders’ equity
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$
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$
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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)
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Three months ended June 30,
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Six months ended June 30,
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2023
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2022
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2023
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2022
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Revenue:
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Product
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$ | $ | $ | $ | ||||||||||||
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Service
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Total revenue
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Cost of revenue
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Operating expenses:
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Research and development
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Selling, general and administrative
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Total operating expenses
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Loss from operations
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(
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(
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(
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(
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| Dividend income | ||||||||||||||||
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Change in fair value of warrant liabilities
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(
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Other income (expense), net
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(
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(
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(
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Loss before provision for income taxes
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(
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(
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(
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(
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Provision for income taxes
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Net loss and comprehensive loss
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$
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(
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$
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(
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$
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(
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$
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(
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Net loss per common share attributable to common stockholders, basic and diluted
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$
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(
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$
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(
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$
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(
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$
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(
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Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
QUANTUM-SI INCORPORATED
(in thousands, except share amounts)
(Unaudited)
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Class A
common stock
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Class B
common stock
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Additional
paid-in
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Accumulated |
Total stockholders’
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||||||||||||||||||||||||
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Shares
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Amount
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Shares
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Amount
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capital
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deficit
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equity
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Balance - December 31, 2022
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$
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$
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$
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$
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(
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$
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Net loss
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-
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-
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(
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(
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Common stock issued upon vesting of restricted stock units
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Stock-based compensation
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-
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-
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Balance - March 31, 2023
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$
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$
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$
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$
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(
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$
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Net loss
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-
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-
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(
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(
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Common stock issued upon vesting of restricted stock units
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Stock-based compensation
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-
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-
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Balance - June 30, 2023
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$
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$
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$
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$
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(
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)
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$
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Class A
common stock
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Class B
common stock
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Additional
paid-in
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Accumulated |
Total stockholders’
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||||||||||||||||||||||||
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Shares
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Amount
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Shares
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Amount
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capital
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deficit
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equity
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Balance - December 31, 2021
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$
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$
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$
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$
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(
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)
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$
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Net loss
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-
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-
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(
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(
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Common stock issued upon exercise of stock options and vesting of restricted stock units
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Stock-based compensation
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-
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-
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(
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)
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(
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)
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Balance - March 31, 2022
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$
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$
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$
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$
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(
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)
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$
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Net loss
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-
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-
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(
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(
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Common stock issued upon exercise of stock options and vesting of restricted stock units
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Stock-based compensation
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-
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-
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Balance - June 30, 2022
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$
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$
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$
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$
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(
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)
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$
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
QUANTUM-SI INCORPORATED
(in thousands)
(Unaudited)
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Six Months Ended June 30,
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2023
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2022
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Cash flows from operating activities:
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Net loss
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$
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(
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)
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$
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(
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation and amortization
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Non-cash lease expense
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(Gain) loss on marketable securities
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( |
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(Gain) loss on disposal of fixed assets
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( |
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Change in fair value of warrant liabilities
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(
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)
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(
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Change in fair value of contingent consideration
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( |
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Stock-based compensation
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Changes in operating assets and liabilities:
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Accounts receivable, net
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( |
) | ||||||
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Inventory, net
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( |
) | ||||||
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Prepaid expenses and other current assets
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(
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)
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| Operating lease right-of-use assets | ( |
) | ( |
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| Other assets |
( |
) | ||||||
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Accounts payable
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(
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)
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Accrued expenses and other current liabilities
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(
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)
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Other long-term liabilities
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||||||||
| Operating lease liabilities | ( |
) | ||||||
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Net cash used in operating activities
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$
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(
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)
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$
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(
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)
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Cash flows from investing activities:
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Purchases of property and equipment
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(
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)
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(
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)
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Internally developed software - capitalized costs
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( |
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| Purchases of marketable securities | ( |
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Sales of marketable securities
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Net cash provided by investing activities
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$
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$
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Cash flows from financing activities:
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Proceeds from exercise of stock options
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Payment of contingent consideration - business acquisition
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( |
) | ||||||
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Payment of deferred consideration - business acquisition
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( |
) | ||||||
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Net cash provided by financing activities
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$
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|
$
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|
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Net increase in cash and cash equivalents
|
|
|
||||||
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Cash and cash equivalents at beginning of period
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Cash and cash equivalents at end of period
|
$
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$
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Supplemental disclosure of non-cash investing and financing activities:
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||||||||
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Property and equipment purchased but not paid
|
$
|
|
$
|
|
||||
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 (including its subsidiaries, the “Company” or “Quantum-Si”) (formerly HighCape Capital Acquisition Corp. (“HighCape”)) was
incorporated in Delaware on June 10, 2020. The Company’s legal name became Quantum-Si Incorporated following a business combination between the Company and Q-SI Operations Inc. (formerly Quantum-Si Incorporated) on June 10, 2021 (the “Business
Combination”).
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 each year since its 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. All intercompany transactions are eliminated. Certain information and note disclosures normally included in 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 audited consolidated financial
statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The condensed consolidated balance sheet as of December 31, 2022 included herein was derived from the audited consolidated
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 six months ended June 30, 2023 are not necessarily indicative of the results to be expected for any subsequent quarter, the year ending December 31, 2023, or any other period.
Except for revenue, inventory and capitalized software development costs discussed elsewhere in this note, there have been no material changes
to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
COVID-19
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 United States and global economies and created uncertainty regarding potential impacts on the Company’s operating results, financial condition and cash flows. On May 11, 2023, the federal public
health emergency for COVID-19, declared under Section 319 of the Public Health Service Act, expired.
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. The Company will continue to evaluate the impact of the COVID-19 pandemic on its industry and the Company and has concluded that while it is possible that the virus could have a future negative effect
on the Company’s financial position, results of operations and cash flows in its condensed consolidated financial statements, the specific future impact is not readily determinable as of the date of the filing of this Quarterly Report on Form
10-Q. The Company’s financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Other Global Developments
In 2022, various central banks around the world (including the Federal Reserve in the United States) raised interest rates. These rate increases have caused
an overall decline in the fair value of the Company’s fixed income mutual funds to date. The impact of such rate changes on the overall financial markets and the economy may continue to impact the Company in the future, including by making
capital more difficult and costly to obtain on reasonable terms and when needed. In addition, the global economy has experienced and is continuing to experience high levels of inflation and global supply chain disruptions. The Company continues
to monitor these supply chain, inflation and interest rate factors, as well as the uncertainty resulting from the overall economic environment.
In addition, although the Company has no operations in or direct exposure to Russia or Ukraine, the Company has experienced some constraints in product and
material availability and increasing costs required to obtain some materials and supplies as a result of the impact of the Russia-Ukraine military conflict on the global economy, which has contributed to the global supply chain disruptions. To
date, the Company’s business has not been materially impacted by the conflict. However, as the conflict continues or worsens, it may adversely impact the Company’s business, financial condition, results of operations or cash flows.
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. As of June 30, 2023 and December 31, 2022, substantially all of the Company’s marketable securities were invested in fixed
income mutual funds at one financial institution. See Note 5 “Investments in Marketable Securities” in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information regarding our realized losses on such accounts. The Company also maintains balances in certain operating accounts above federally insured limits and, as a result, the Company is exposed to credit risk in the event of
default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation.
Segment Reporting
The Company’s Chief Operating Decision Maker, its Chief Executive Officer, reviews the Company’s financial information on a consolidated
basis for purposes of allocating resources and evaluating its financial performance. Accordingly, the Company has determined that it operates as a single reportable segment.
Reclassifications
Certain prior year amounts have been reclassified for consistency with the current year’s presentation.
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 include:
| ● |
valuation allowance with respect to deferred tax assets;
|
| ● |
inventory valuation;
|
| ● |
assumptions used for leases;
|
| ● |
valuation of warrant liabilities;
|
| ● |
assumptions associated with revenue
recognition; and
|
| ● |
assumptions underlying the fair value used in the calculation of 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.
Inventory, Net
Inventory is stated at the lower of
cost or net realizable value with cost determined using the first-in, first-out method. Inventory primarily consists of raw materials and finished goods of $1,134 and $834 , respectively, as of June 30, 2023.
Materials that may be utilized for either research and development or, alternatively, for commercial purposes, are classified as inventory. Amounts in inventory that are used for research and development
purposes are charged to research and development expense when the product enters the research and development process and can no longer be used for commercial purposes and, therefore, does not have an “alternative future use” as defined in
authoritative guidance.
The Company performs an assessment of the recoverability of capitalized
inventory during each reporting period and, if needed, writes down any excess and obsolete inventory to its estimated net realizable value in the period it is identified. As of June 30, 2023, there were no write-downs recorded against inventory.
Capitalized Software Development Costs
The Company capitalizes certain internal use software development costs related to its SaaS platform incurred during the application
development stage when management with the relevant authority authorizes and commits to the funding of the project, it is probable that the project will be completed, and the software will be used as intended. The Company also capitalizes
costs related to specific upgrades and enhancements when it is probable that the expenditure will result in additional functionality. Costs related to preliminary project activities and to post-implementation activities are expensed as
incurred. Internal use software is amortized on a straight-line basis over its estimated useful life, which is generally two years .
Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of the assets. Capitalized costs are recorded as
Internally developed software in the condensed consolidated balance sheets. Amortization expense related to Internally developed software was $46 180 for the remainder of the year ending December 31, 2023 and $360
and $133 for the years ending December 31, 2024 and 2025,
respectively.
Revenue Recognition
The Company’s revenue is derived from sales of products and services. Product revenue is primarily generated from the sales
of instruments and consumables used in protein sequencing and analysis.
Service revenue is primarily generated from service maintenance contracts including cloud access, proof of concept services and advanced training for instrument use. The Company recognizes revenue when or as a customer obtains control
of the promised goods and services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for these goods and services. This process involves identifying the contract with
a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue as the performance
obligations have been satisfied. Revenue recognition for contracts with multiple deliverables is based on the separate satisfaction of each distinct performance obligation within the contract. A performance obligation is considered
distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company allocates transaction price to the performance obligations in a contract with a customer based on the relative standalone selling price of
each performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold
separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking
into account available information and specific factors such as competitive positioning, internal costs, profit objectives, and internally approved pricing guidelines related to the performance obligation.
The Company considers performance obligation for
sales of products is satisfied upon shipment of the goods to the customer in accordance with the shipping terms (either upon shipment or delivery), which is when control of the product is deemed to be transferred; this would include
instruments and consumables. Customers generally do not have a right of return, except for defective or damaged products during the warranty period or unless prior written consent is provided. In instances where right of payment or
transfer of title is contingent upon the customer’s acceptance of the product, revenue is deferred until all acceptance criteria have been met. Revenues for service maintenance contracts, which start after the first year of purchase and
are considered as service type warranties that effectively extend the standard first-year warranty coverage at the customer’s option, are recognized ratably over the contract service period as these services are performed evenly over
time. Revenues for proof of concept services and advanced training is recognized upon satisfaction of the underlying performance obligation. The Company typically provides a standard warranty which covers defects in materials and workmanship and manufacturing or performance conditions under normal use and service for the first year. The
first year of the warranty of the products is considered an assurance-type warranty. The Company has determined that this standard first-year warranty is not a distinct performance obligation.
The Company disaggregates
revenue from contracts with customers by type of revenue – products and services. The Company believes that product revenue and service revenue aggregate the payor types by nature, amount, timing and uncertainty of its revenue streams. Total
revenue generated from domestic sales for the three and six months ended June 30, 2023 was $102 and $356 , respectively. Total revenue generated from international sales for the three and six months ended June 30, 2023 was $103
Deferred Revenue
Deferred revenue is a contract liability that consists of customer payments received in advance of performance or billings in excess of revenue
recognized, net of revenue recognized from the balance at the beginning of the period.
Deferred revenue primarily consists of billings and payments received in advance of revenue
recognition from service maintenance contracts including software subscription, proof of concept services and advanced training, and is reduced as the revenue recognition criteria are met. Deferred revenue also includes proof of concept
services and advanced training provided to customers until the service has been performed. Deferred revenue is classified as current or non-current based on expected revenue recognition timing. Specifically, deferred revenue that will be
recognized as revenue within the succeeding 12-month period is recorded as current and is included within Accrued expenses and other current liabilities, and the portion of deferred revenue where revenue is expected to be recognized beyond
12 months from the reporting date is recorded as non-current deferred revenue and is included in Other long-term liabilities in the Company’s condensed consolidated balance sheets.
As of June 30, 2023, the Company had remaining performance obligations amounting to $176 , $144 of which is included
within Accrued expenses and other current liabilities and $32 is included within Other long-term liabilities in the Company’s
condensed consolidated balance sheets. The Company expects to recognize approximately 78 % of its remaining performance
obligations as revenue for the of the year ending December 31, 2023, and an additional 22 % for the year ending December 31, 2024 and .
The
amount of revenue recognized during the three and six months ended June 30, 2023 that was included in the deferred revenue balance of $73
at December 31, 2022 was $1 and $70 ,
respectively.
Warranty
The Company provides a free 12-month assurance-type warranty to customers with the initial purchase of a PlatinumTM instrument. The cost of the warranty is accrued upon the initial sale of an
instrument in Accrued expenses and other current liabilities on the condensed consolidated balance sheets.
Shipping and Handling Costs
Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as
fulfillment costs and are included in Cost of revenue in the condensed consolidated statements of operations and comprehensive loss. Shipping and handling costs billed to customers are considered part of the transaction price and are recognized
as revenue with the underlying product sales.
Recently Issued Accounting Pronouncements
Accounting
pronouncements issued but not yet adopted
No new accounting pronouncements issued or effective during the three and six months ended June
30, 2023 had, or are expected to have, a material impact on the Company’s condensed consolidated financial statements.
3. 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 “Majelac 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
were issued to Majelac 12 months after the Majelac Closing Date on November 7, 2022. The Company also assumed the legal fees of Majelac
of $50 . Additional purchase price consideration of $500 in cash was to be paid six months after the Majelac Closing Date less any amount that could be
required by the buyer indemnitees to satisfy any unresolved claims for indemnification, if any. The Company agreed to pay additional milestone-based consideration of up to $800 , which was fair valued at $531 on the Majelac Closing Date.
On May 4, 2022, the Company paid Majelac $900 in cash, which consisted of $500 for the additional purchase price consideration and $400 (fair value of $348 at the Majelac Closing Date) for the of two milestones that was met. As of June 30, 2023, the Company determined that the estimated fair value of the contingent consideration was de minimis as the probability of the second milestone being met by
November 1, 2023 was remote. As a result, the Company recorded a gain of $400
The acquisition brought
semiconductor chip assembly and packaging capabilities in-house and secured the Company’s supply chain to support its commercialization efforts. Prior to the acquisition, Majelac was a vendor of the Company.
The following table summarizes the final purchase price allocation at the Majelac Closing Date as
follows:
|
Purchase Price
Allocation
|
||||
|
Prepaid expenses and other current assets
|
$
|
|
||
|
Property and equipment, net
|
|
|||
|
Goodwill
|
|
|||
|
Total
|
$
|
|
||
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. During the fourth quarter ended December 31, 2022, the Company concluded the goodwill from the Majelac acquisition was fully
impaired and recorded a charge of $9,483 on the consolidated statements of operations and comprehensive loss.
Acquisition-related costs recognized during the three and six months ended June 30, 2022 including
transaction costs such as legal, accounting, valuation and other professional services, were $1 and $26 , respectively, and are included in Selling, general and administrative on the condensed consolidated statements of operations and comprehensive loss.
There were no
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, 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. Fixed income mutual funds were valued using quoted market prices and accordingly were classified as Level 1. There were no
The Company’s outstanding warrants include publicly traded warrants (the “Public Warrants”) which were issued as 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 Company accounted for the warrants as liabilities in accordance with ASC 815-40 and are presented as Warrant liabilities on the condensed consolidated balance sheets. The
warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented as Change in fair value of warrant liabilities in the condensed consolidated statements of operations and comprehensive loss.
The Public Warrants and Private Warrants
were carried at fair value as of June 30, 2023 and December 31, 2022. 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 June 30, 2023, the significant assumptions used in preparing the
binomial lattice model for valuing the Private Warrants liability include (i) volatility of 80.7 %, (ii) risk-free interest rate of 4.50 %, (iii) strike price of $11.50 ,
(iv) fair value of common stock of $1.79 , and (v) expected life of 2.9 years. As of December 31, 2022, the significant assumptions used in preparing the binomial lattice model for valuing the Private Warrants liability include (i) volatility
of 75.1 %, (ii) risk-free interest rate of 4.10 %, (iii) strike price of $11.50 , (iv) fair value of common stock of $1.83 , and (v) expected life of 3.4
years.
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:
|
Fair Value Measurement Level
|
||||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
|
June 30, 2023:
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Cash and cash equivalents - Money Market
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
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, 2022:
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Cash and cash equivalents - Money Market
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
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
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
5. INVESTMENTS IN MARKETABLE SECURITIES
For the
three and six months ended June 30, 2023, the Company reported unrealized gains of $1,239 and $6,349 , respectively, related to securities held as of June 30, 2023. Realized losses related to securities that were sold during the three and six months ended June 30, 2023
were $2,420 and $4,588 ,
respectively. For the three and six months ended June 30, 2023, the Company recognized $2,483 and $4,702 , respectively, in dividend income from marketable securities. For the three and six months ended June 30, 2022, the Company reported unrealized
losses of $4,633 and $16,144 ,
respectively, related to securities held as of June 30, 2022. Realized losses related to securities that were sold during the three and six months ended June 30, 2022 were $1,001 and $1,051 , respectively. For the three and six months ended June 30,
2022, the Company recognized $1,052 and $1,907 ,
respectively, in dividend income from marketable securities.
6. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, are recorded at historical cost and consist of the following:
|
June 30,
2023 |
December 31,
2022 |
|||||||
|
Laboratory and production equipment
|
$
|
|
$
|
|
||||
|
Computer equipment
|
|
|
||||||
|
Purchased software
|
|
|
||||||
|
Furniture and fixtures
|
|
|
||||||
| Leasehold improvements | ||||||||
|
Construction in process
|
|
|
||||||
| Property and equipment, gross |
|
|
||||||
|
Less: Accumulated depreciation and amortization
|
(
|
)
|
(
|
)
|
||||
|
Property and equipment, net
|
$
|
|
$
|
|
||||
Depreciation and amortization expense associated with Property and equipment amounted to $1,044 and $608 for the three months ended June 30, 2023 and 2022,
respectively, and $1,847 and $1,060
for the six months ended June 30, 2023 and 2022, respectively. No
7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
|
June 30,
2023 |
December 31,
2022 |
|||||||
|
Employee compensation and benefits
|
$
|
|
$
|
|
||||
|
Contracted services
|
|
|
||||||
| Business acquisition costs and contingencies | ||||||||
|
Legal fees
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total accrued expenses and other current liabilities
|
$
|
|
$
|
|
||||
8. LEASES
The Company has commitments under lease arrangements for office and manufacturing space and office equipment. The Company’s leases have initial lease terms ranging
from one year to 10
years. These leases include options to extend or renew the leases for an additional period of to 10 years.
Operating leases are accounted for on the condensed consolidated balance sheets with right-of-use (“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”.
Lease-related costs for the three and six months ended June 30, 2023 and 2022 are as follows:
|
Three months ended June 30,
|
Six months ended June 30, | |||||||||||||||
|
2023
|
2022
|
2023 |
2022 |
|||||||||||||
|
Operating lease cost
|
$
|
|
$
|
|
$ | $ | ||||||||||
|
Short-term lease cost
|
|
|
||||||||||||||
|
Variable lease cost
|
|
|
||||||||||||||
|
Total lease cost
|
$
|
|
$
|
|
$ | $ | ||||||||||
Other information related to operating leases as of June 30, 2023 and December 31, 2022 is as follows:
|
June 30,
|
December 31,
|
|||||||
|
2023
|
2022
|
|||||||
|
Weighted-average remaining lease term (years)
|
|
|
||||||
|
Weighted-average discount rate
|
|
%
|
|
%
|
||||
The following table provides certain cash flow and supplemental cash flow information related to the Company’s lease liabilities for the six months ended June 30,
2023 and 2022:
|
Six months ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Operating cash paid to settle operating lease liabilities
|
$
|
|
$
|
|
||||
|
Right-of-use assets obtained in exchange for lease liabilities
|
$
|
|
$
|
|
||||
Future minimum lease payments under non-cancellable leases as of June 30, 2023 are as follows:
|
Operating Leases
|
||||
|
Remainder of 2023
|
$
|
|
||
|
2024
|
|
|||
|
2025
|
|
|||
|
2026
|
|
|||
|
2027
|
|
|||
|
Thereafter
|
|
|||
|
Total undiscounted lease payments
|
$
|
|
||
|
Less: Imputed interest
|
|
|||
|
Less: Lease incentives (1)
|
|
|||
|
Total lease liabilities
|
$
|
|
||
|
(1)
|
|
In December 2021, the
Company signed a 10 -year lease for approximately 67,000 square feet of space located at 115 Munson Street in New Haven, Connecticut. The lease commenced on January 8, 2022 with rent payments beginning on July 7, 2022. Under the lease,
the landlord contractually agreed to reimburse the Company for up to $9,104 in improvements to the space, to be used for such
improvements as the Company deems “necessary or desirable”. On September 13, 2022, the Company filed a lawsuit against the landlord, alleging that the landlord has: (i) refused to reimburse the Company for costs related to improvements already
incurred and submitted; (ii) delayed the Company’s completion of improvements, in order to avoid reimbursing the costs of those improvements; and (iii) improperly rejected the Company’s proposed improvement plans.
The Company accounted for the $9,104
of lease incentives as an offset to the lease liability recorded at the inception of the lease. From the total lease incentives, the Company has incurred and recognized leasehold improvements of approximately $1,100 related to reimbursable construction costs included in construction in progress within Property and equipment, net on the condensed
consolidated balance sheets as of June 30, 2023 and December 31, 2022. Although the Company believes it is contractually entitled to the $9,104
of lease incentives, based on the current status of the litigation, the Company cannot determine the likely outcome or estimate the impact on such carrying values.
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. 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 no longer makes 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 June 30, 2023 and December 31, 2022, there were 8,886,743 and 9,133,702 shares, respectively, available for
issuance under the 2021 Plan.
On
November 9, 2022, the Company granted inducement awards consisting of 2,780,000
performance-based stock options to purchase Class A common stock pursuant to Nasdaq Rule 5635(c)(4). These awards were not granted pursuant to the 2013 Plan or the 2021 Plan.
On May 8, 2023, the Company adopted the 2023 Inducement Equity Incentive Plan (the “2023 Inducement Plan”) to reserve 3,000,000
shares of its common stock to be used exclusively for grants of awards to individuals that were not previously employees or directors of the Company as a material inducement to such individuals’ entry into employment with the Company within the
meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The terms and conditions of the 2023 Inducement Plan are substantially similar to those of the 2021 Plan. On May 15, 2023, the Company
granted inducement awards under the 2023 Inducement Plan consisting of 1,000,000 time-based stock options and 1,000,000 performance-based stock options. As of June 30, 2023, there were 1,000,000 shares available for issuance under the 2023 Inducement Equity Incentive Plan.
Stock option activity
During the six months ended June 30, 2023, the Company granted an aggregate of 9,131,580 stock option awards to participants, with vesting subject to the participant’s continued employment with the Company through the applicable
vesting dates. Stock-based compensation related to stock options for the three months ended June 30, 2023 and 2022 was $2,316 and $1,807 , respectively. Stock-based compensation related to stock options for the six months ended June 30, 2023 and 2022 was $4,595 and $3,301 , respectively.
A summary of the stock option activity 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, 2022
|
|
$
|
|
|
$
|
|
||||||||||
|
Granted
|
|
|
||||||||||||||
|
Exercised
|
|
|
||||||||||||||
|
Forfeited
|
(
|
)
|
|
|||||||||||||
|
Outstanding at June 30, 2023
|
|
$
|
|
|
$
|
|
||||||||||
|
Options exercisable at June 30, 2023
|
|
$ |
|
|
$
|
|
||||||||||
|
Vested and expected to vest at June 30, 2023
|
|
$
|
|
|
$
|
|
||||||||||
Restricted stock unit activity
During the six months ended June 30, 2023, the
Company granted 256,128 restricted stock unit (“RSU”) awards. Stock-based compensation related to RSU awards for the three months
ended June 30, 2023 and 2022 was $(451 ) and $1,963 , respectively. Stock-based compensation related to RSU awards for the six months ended June 30, 2023 and 2022 was $1,178 and $(245 ), respectively. The $(451 ) for the three months ended June 30, 2023 included a reversal of stock-based compensation for the Company’s
former Chief Financial Officer and members of the Board of Directors as the service condition of certain awards previously granted were not met. The $(245 ) for the six months ended June 30, 2022 included a reversal of stock-based compensation
for the Company’s former Chief Executive Officer as the service condition of certain awards previously granted were not met.
A summary of the RSU activity is presented in the table below:
|
Number of
Shares
Underlying
RSUs
|
Weighted
Average Grant-
Date Fair Value
|
|||||||
|
Outstanding non-vested RSUs at December 31, 2022
|
|
$ | ||||||
|
Granted
|
|
|
||||||
|
Vested
|
(
|
)
|
|
|||||
|
Forfeited
|
(
|
)
|
|
|||||
|
Outstanding non-vested RSUs at June 30, 2023
|
|
$
|
|
|||||
The Company’s stock-based compensation is allocated to the following operating
expense categories as follows:
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
|||||||||||||
|
Research and development
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Selling, general and administrative
|
|
|
|
|
||||||||||||
|
Total stock-based compensation
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
10. 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 those presented in the table below, 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:
|
|
Three months ended June 30,
|
Six months ended June 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
|||||||||||||
|
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
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
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:
|
June 30,
|
|||||||||
| 2023 |
2022 |
||||||||
|
Outstanding options to purchase common stock
|
|||||||||
|
Outstanding restricted stock units
|
|||||||||
|
Outstanding warrants
|
|||||||||
|
|
|||||||||
11. WARRANT LIABILITIES
Public Warrants
As of June 30, 2023 and December 31, 2022, there were an aggregate of 3,833,319 one 11.50
Redemptions
At any time while the warrants are exercisable, the Company may redeem not less than all of the outstanding Public Warrants:
| ● |
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 $
|
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 held 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 should be classified as a liability.
Private Warrants
As of June 30, 2023 and December 31, 2022, there were 135,000 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 $915
and $996 as of June 30, 2023 and December 31, 2022, respectively. The Company recognized losses of $310 and gains of $81 as a Change in fair
value of warrant liabilities in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2023, respectively. The Company recognized gains of $2,337 and $4,984 as a Change in fair value of warrant liabilities in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2022, respectively. There
were no
12. INCOME TAXES
Income taxes for the three and six months ended June 30, 2023 and 2022 are recorded at the Company’s estimated annual effective income tax rate,
subject to adjustments for discrete events, if they occur. The Company’s estimated annual effective tax rate was 0.0 21.0 0.0
A valuation allowance is required when it is more likely than not that some portion or all of the Company’s deferred tax assets will not be realized. The realization
of deferred tax assets depends on the generation of sufficient future taxable income during the period in which the Company’s related temporary differences become deductible. The Company has recorded a full valuation allowance against its net
deferred tax assets as of June 30, 2023 and December 31, 2022 since management believes that based on the earnings history of the Company, it is more likely than not that the benefits of these assets will not be realized.
13. RELATED PARTY TRANSACTIONS
The Company utilized and subleased office and laboratory space in a building owned by a related party. The Company paid $76 and $81 under month-to-month lease
arrangements for this space for the three months ended June 30, 2023 and 2022, respectively, and $156 and $161 for the six months ended June 30, 2023 and 2022, respectively. The Company no longer subleases this space as of June 30, 2023.
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 4Catalyzer Corporation (“4C”), the Company and other participant companies controlled by Dr. Jonathan Rothberg, the Chairman of the Company’s Board of Directors. 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. 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 $132 and $158 , which included $21 and $47 under
month-to-month sublease arrangements for office and laboratory spaces from 4C, during the three months ended June 30, 2023 and 2022, respectively. The Company incurred expenses of $258 and $368 , which included $48 and $97 under month-to-month
sublease arrangements for office and laboratory spaces from 4C, during the six months ended June 30, 2023 and 2022, respectively. The amounts advanced and due to 4C at June 30, 2023 and December 31, 2022 related to operating
expenses were $36 and $70 ,
respectively, which are included in Accrued expenses and other current liabilities on the condensed consolidated balance sheets. The amounts advanced and due from 4C at June 30, 2023 and December 31, 2022, related to
operating expenses were $0 and $37 ,
respectively, and are included in Prepaid expenses and other current assets on the condensed 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 and payments made by the Company to third parties on behalf of the other entities. There were no
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 was 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. Effective March 31, 2022, the Collaboration with PEI was terminated, and the Company paid a final payment of $1,135 under the
Collaboration for all services rendered.
Effective October 1, 2022, the Company entered into a Protein Engineering Collaboration (the “New Collaboration”) with PEI to develop
technology and methods in the field of nanobodies and potentially other binders to produce novel biological reagents and related data. The New Collaboration was 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 incurred expenses of $52 and $125
during the three and six months ended June 30, 2023, respectively, related to the New Collaboration. The amounts advanced and due from PEI at June 30, 2023 and December 31, 2022 related to operating expenses were $170 and $45 , respectively, and are
included in Prepaid expenses and other current assets on the condensed consolidated balance sheets.
Effective
November 1, 2022, the Company entered into an Advisory Agreement with Dr. Rothberg (the “Advisory Agreement”), pursuant to which Dr. Rothberg serves as Chairman of the Board, advises the Chief Executive Officer and the Board on strategic
matters, and provides consulting, business development and similar services on matters relating to our current, future and potential scientific and strategic initiatives and such other consulting services reasonably requested from time to
time. Pursuant to the Advisory Agreement, as compensation for the services provided thereunder, in March 2023, the Company granted Dr. Rothberg an option to purchase 250,000 shares of Class A common stock pursuant to the 2021 Plan. In connection with the Advisory Agreement, Dr. Rothberg’s title was changed from Executive Chairman to Chairman of
the Board.
Dr.
Rothberg also receives fees as the Chairman of the Company’s Board of Directors and a member of the Board and Nominating and Corporate Governance Committee. The Company paid $28 and $114 to Dr. Rothberg for the three months ended June 30, 2023
and 2022, respectively, and
$60 and $228
for the six months ended June 30, 2023 and 2022, respectively, for all services provided to the Company.
14. RESTRUCTURING
During the quarter ended March 31, 2023, the Company committed to an organizational
restructuring designed to decrease its costs and create a more streamlined organization to support its business. During the three and six months ended June 30, 2023, the Company recognized $1,067 and $1,880 of restructuring costs, respectively, primarily for cash
severance costs and other severance benefits. For the three months ended June 30, 2023, $500 and $567 were recognized in Research and development and in Selling, general and administrative, respectively, and for the six months ended June 30,
2023, $1,136 and $744
were recognized in Research and development and in Selling, general and administrative, respectively, in the condensed consolidated statements of operations and comprehensive loss. As of June 30, 2023, the Company has recorded a $1,044 restructuring liability, which is included in Accrued expenses and other current liabilities in the condensed consolidated balance sheets.
15. COMMITMENTS AND CONTINGENCIES
Commitments
Licenses related to certain intellectual property:
The Company licenses certain intellectual property, some of which may be utilized in its current or future product offerings. To preserve the right to use such
intellectual property, the Company is required to make annual minimum fixed payments totaling $213 as well as royalties based on net sales if the royalties exceed annual minimum fixed payments. As of
June 30, 2023, the Company recorded $112 in Accrued expenses and other current liabilities on the condensed consolidated balance
sheets.
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 no
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, results of operations, or cash flows. The Company accrues 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 condensed consolidated statements of operations and comprehensive
loss in connection with the indemnification provisions have not been material.
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of
operations and financial condition. The discussion should be read in conjunction with (i) the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q, (ii) the consolidated financial
statements and notes thereto for the year ended December 31, 2022 contained in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on March 17, 2023 and (iii) our
other public reports filed with the SEC. This discussion contains forward looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of our Annual Report on Form
10-K for the year ended December 31, 2022, and this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”,
“our”, the “Company” or “Quantum-Si” are intended to mean the business and operations of Quantum-Si Incorporated and its consolidated subsidiaries. The unaudited condensed consolidated financial statements for the three and six months ended June
30, 2023 and 2022, respectively, present the financial position and results of operations of Quantum-Si Incorporated and its consolidated subsidiaries.
Overview
We are 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. We have developed a proprietary universal single-molecule detection platform that we are 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), that can be used for the study of nucleic acids. We believe that with the ability to sequence proteins in a massively parallel fashion and offer a simplified workflow with a
faster turnaround time, NGPS has the potential to unlock significant biological information through improved resolution and unbiased access to the proteome at a speed and scale that is not available today. Traditionally, proteomic workflows to
sequence proteins required days or weeks to complete. Our platform is designed to offer a single-day workflow including both sample preparation and sequencing. Our 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 our instruments. We intend to follow a systematic, phased approach to continue to successfully launch our platform, for research use only
(“RUO”). We believe we are the first company to successfully enable NGPS on a semiconductor chip, thus digitizing a massive proteomics opportunity, which allows for a massively parallel solution at the ultimate level of
sensitivity —single-molecule detection.
We believe that our platform offers a differentiated end-to-end workflow solution in a rapidly evolving proteomics tools market. Within our initial focus market of proteomics, our workflow is
designed to provide users a seamless opportunity to gain key insights into the immediate state of biological pathways and cell state. Our platform aims to address many of the key challenges and bottlenecks with legacy proteomic solutions, such as
mass spectrometry (“MS”), which are complicated and often limited by manual sample preparation workflows, high instrument costs both in terms of acquisition and ownership and complexity with data analysis, which together prevent broad adoption.
We believe our platform, which is designed to streamline sample preparation, sequencing, and data analysis at a lower instrument cost than legacy proteomic solutions, could allow our product to have wide utility across the study of the proteome.
For example, our platform could be used for biomarker discovery and disease detection, pathway analysis, immune response, and vaccine development, among other applications.
In 2021, we introduced our Platinum early access program to sites with participation from leading academic centers and key industry
partners. The early access program introduced the Platinum single-molecule sequencing system to key opinion leaders across the globe, for both expansion and development of applications and workflows. We launched the PlatinumTM instrument
and started to take orders in December 2022, and subsequently began commercial shipments of Platinum™ in January 2023.
Total revenue for the three and six months ended June 30, 2023 was $0.2 million and $0.5 million, respectively. We define backlog as
purchase orders or signed contracts from our customers for which we have not fulfilled and therefore have not yet recognized the associated revenue. We anticipate converting this backlog to revenue in the subsequent quarters; however, our ability
to do so is subject to customers who may seek to cancel or delay their orders even if we are prepared to fulfill them. As of June 30, 2023, our backlog was approximately
$0.1 million.
COVID-19
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 United States and global economies and created uncertainty regarding potential impacts on our operating results, financial condition and cash flows. On May 11, 2023, the federal public
health emergency for COVID-19, declared under Section 319 of the Public Health Service Act, expired.
We have not incurred any impairment losses in the carrying values of our assets as a result of the COVID-19 pandemic and are not aware of any specific related event or circumstance
that would require us to revise our estimates reflected in our condensed consolidated financial statements. We will continue to evaluate the impact of the COVID-19 pandemic on our industry and have concluded that while it is possible
that the virus could have a future negative effect on our financial position, results of operations and cash flows in our condensed consolidated financial statements, the specific future impact is not readily determinable as of the date of the
filing of this Quarterly Report on Form 10-Q. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Other Global Developments
In 2022, various central banks around the world (including the Federal Reserve in the United States) raised interest rates. These rate increases have caused a decline in the fair value of our fixed income mutual
funds to date. The impact of such rate changes on the overall financial markets and the economy may continue to impact us in the future, including by making capital more difficult and costly to obtain on reasonable terms and when needed. In
addition, the global economy has experienced and is continuing to experience high levels of inflation and global supply chain disruptions. We continue to monitor these supply chain, inflation and interest rate factors, as well as the uncertainty
resulting from the overall economic environment.
In addition, although we have no operations in or direct exposure to Russia or Ukraine, we have experienced some constraints in product and material availability and increasing costs required to obtain some
materials and supplies as a result of the impact of the Russia-Ukraine military conflict on the global economy, which has contributed to the global supply chain disruptions. To date, our business has not been materially impacted by the conflict.
However, as the conflict continues or worsens, it may adversely impact our business, financial condition, results of operations or cash flows.
Recent Developments
In April 2023, we informed the contract manufacturer who manufactures our Platinum and Carbon instruments that we intend to wind down the
relationship and transition to a different contract manufacturer. We intend to complete the process of winding down this relationship by the end of the fourth quarter
2023.
Description of Certain Components of Financial Data
Revenue
Revenue is derived from sales of products and services. Product revenue is generated from the following sources: (i) instrument sales of our Platinum instrument and (ii) consumables,
which consist of sales of our sequencing reagents, chips, and library reagents. Service revenue is generated from service maintenance contracts including cloud access, proof of concept services and advanced training for instrument use. Freight
revenue is recognized as Product revenue in the condensed consolidated statements of operations and comprehensive loss upon product shipment.
See Note 2 “Summary of Significant Accounting Policies” in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further
information regarding our revenue recognition policies.
Cost of revenue
Cost of revenue primarily consists of product and service costs including material costs, personnel costs and benefits, inbound and
outbound freight, packaging, warranty replacement costs, royalty costs, facilities costs, depreciation and amortization expense, and inventory obsolescence
and write-offs.
Research and development
Research and development expenses primarily consist of personnel costs and benefits, stock-based compensation, lab supplies, consulting and professional services, fabrication services, facilities
costs, depreciation and amortization expense, software, and other outsourced expenses. Research and development expenses are expensed as incurred. All of our research and development expenses are related to developing new products and services.
Selling, general and administrative
Selling, general and administrative expenses primarily consist of personnel costs and benefits, stock-based compensation, patent and filing fees, consulting and professional services, legal and
accounting services, facilities costs, depreciation and amortization expense, insurance and office expenses, product advertising and marketing.
Dividend income
Dividend income primarily consists of dividends earned on fixed income mutual funds classified as marketable securities.
Change in fair value of warrant liabilities
Change in fair value of warrant liabilities primarily consists of the change in the fair value of our publicly traded warrants (the “Public Warrants”) and our warrants sold in a private placement
(the “Private Warrants”).
Other income (expense), net
Other income (expense), net primarily consists of realized and unrealized losses on fixed income mutual funds in marketable securities.
Provision for income taxes
We utilize the asset and liability method of accounting for income taxes where 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. We recorded a full valuation
allowance as of June 30, 2023 and 2022. Based on the available evidence, we believe that it is more likely than not that we will be unable to utilize all of our deferred tax assets in the future.
Results of Operations
The following is a discussion of our results of operations for the three and six months ended June 30, 2023 and 2022 and our accounting policies are described in Note 2 “Summary of Significant
Accounting Policies” in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
% Change
|
2023
|
2022
|
% Change
|
||||||||||||||||||
|
Revenue:
|
||||||||||||||||||||||||
|
Product
|
$
|
187
|
$
|
-
|
nm
|
$
|
438
|
$
|
-
|
nm
|
||||||||||||||
|
Service
|
18
|
-
|
nm
|
21
|
-
|
nm
|
||||||||||||||||||
|
Total revenue
|
205
|
-
|
nm
|
459
|
-
|
nm
|
||||||||||||||||||
|
Cost of revenue
|
127
|
-
|
nm
|
257
|
-
|
nm
|
||||||||||||||||||
|
Gross profit
|
78
|
-
|
nm
|
202
|
-
|
nm
|
||||||||||||||||||
|
Operating expenses:
|
||||||||||||||||||||||||
|
Research and development
|
15,834
|
18,459
|
(14.2
|
)%
|
34,001
|
37,230
|
(8.7
|
)%
|
||||||||||||||||
|
Selling, general and administrative
|
11,136
|
11,741
|
(5.2
|
)%
|
22,314
|
20,110
|
11.0
|
%
|
||||||||||||||||
|
Total operating expenses
|
26,970
|
30,200
|
(10.7
|
)%
|
56,315
|
57,340
|
(1.8
|
)%
|
||||||||||||||||
|
Loss from operations
|
(26,892
|
)
|
(30,200
|
)
|
(11.0
|
)%
|
(56,113
|
)
|
(57,340
|
)
|
(2.1
|
)%
|
||||||||||||
|
Dividend income
|
2,483
|
1,052
|
136.0
|
%
|
4,702
|
1,907
|
146.6
|
%
|
||||||||||||||||
|
Change in fair value of warrant liabilities
|
(310
|
)
|
2,337
|
(113.3
|
)%
|
81
|
4,984
|
(98.4
|
)%
|
|||||||||||||||
|
Other income (expense), net
|
(854
|
)
|
(5,603
|
)
|
(84.8
|
)%
|
2,146
|
(17,140
|
)
|
(112.5
|
)%
|
|||||||||||||
|
Loss before provision for income taxes
|
(25,573
|
)
|
(32,414
|
)
|
(21.1
|
)%
|
(49,184
|
)
|
(67,589
|
)
|
(27.2
|
)%
|
||||||||||||
|
Provision for income taxes
|
-
|
-
|
nm
|
-
|
-
|
nm
|
||||||||||||||||||
|
Net loss and comprehensive loss
|
$
|
(25,573
|
)
|
$
|
(32,414
|
)
|
(21.1
|
)%
|
$
|
(49,184
|
)
|
$
|
(67,589
|
)
|
(27.2
|
)%
|
||||||||
Comparison of the Three Months Ended June 30, 2023 and 2022
Revenue, Cost of revenue and Gross profit
|
Three months ended June
30,
|
Change
|
||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
|||||||||
|
Total revenue
|
$
|
205
|
$
|
-
|
$
|
205
|
nm
|
||||||
|
Cost of revenue
|
127
|
-
|
127
|
nm
|
|||||||||
|
Gross profit
|
78
|
-
|
78
|
nm
|
|||||||||
|
Gross profit margin
|
38.0
|
%
|
nm
|
||||||||||
We launched the PlatinumTM instrument and started to take orders in December 2022, and subsequently began commercial shipments of Platinum™ in January 2023. Total revenue recognized in the three months ended June 30, 2023 was $0.2 million for the sale of PlatinumTM
instruments and kits. No revenue was recognized in 2022. Gross profit was $0.1 million for the three months ended June 30, 2023.
Research and development
|
Three months ended June
30,
|
Change
|
|||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
||||||||||||
|
Research and development
|
$
|
15,834
|
$
|
18,459
|
$
|
(2,625
|
)
|
(14.2
|
)%
|
|||||||
Research and development expenses decreased by $2.6 million, or 14.2%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The decrease was primarily due to
refined research and development activities coupled with restructuring activities initiated in the first quarter of 2023.
Selling, general and administrative
|
Three months ended June
30,
|
Change
|
|||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
||||||||||||
|
Selling, general and administrative
|
$
|
11,136
|
$
|
11,741
|
$
|
(605
|
)
|
(5.2
|
)%
|
|||||||
Selling, general and administrative expenses decreased by $0.6 million, or 5.2%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The decrease was primarily
due to a decrease of $1.8 million of stock-based compensation, partially offset by an increase of $0.9 million in personnel costs primarily due to increased headcount for the ramp up of commercial sales.
Dividend income
|
Three months ended June
30,
|
Change
|
|||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
||||||||||||
|
Dividend income
|
$
|
2,483
|
$
|
1,052
|
$
|
1,431
|
136.0
|
%
|
||||||||
Dividend income increased by $1.4 million, or 136.0%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022 as a result of higher dividends earned on invested
marketable securities.
Change in fair value of warrant liabilities
|
Three months ended June
30,
|
Change
|
|||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
||||||||||||
|
Change in fair value of warrant liabilities
|
$
|
(310
|
)
|
$
|
2,337
|
$
|
(2,647
|
)
|
(113.3
|
)%
|
||||||
The change in fair value of warrant liabilities decreased by $2.6 million, or 113.3%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022 primarily due to a
decline in the Company’s underlying common stock price.
Other income (expense), net
|
Three months ended June
30,
|
Change
|
|||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
||||||||||||
|
Other income (expense), net
|
$
|
(854
|
)
|
$
|
(5,603
|
)
|
$
|
4,749
|
(84.8
|
)%
|
||||||
Other income (expense), net decreased by $4.7 million, or 84.8%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022 primarily as a result of a decrease in
unrealized losses of $5.9 million as a result of the market adjustments of investments in marketable securities, which consist of fixed income mutual funds, partially offset by an increase in realized losses of $1.4 million from sales of
marketable securities.
Comparison of the Six Months Ended June 30, 2023 and 2022
Revenue, Cost of revenue and Gross profit
|
Six months ended June 30,
|
Change
|
||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
|||||||||
|
Total revenue
|
$
|
459
|
$
|
-
|
$
|
459
|
nm
|
||||||
|
Cost of revenue
|
257
|
-
|
257
|
nm
|
|||||||||
|
Gross profit
|
202
|
-
|
202
|
nm
|
|||||||||
|
Gross profit margin
|
44.0
|
%
|
nm
|
||||||||||
Total revenue recognized in the six months ended June 30, 2023 was $0.5 million for the sale of PlatinumTM
instruments and kits. No revenue was recognized in 2022. Gross profit was $0.2 million for the six months ended June 30, 2023.
Research and development
|
Six months ended June 30,
|
Change
|
|||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
||||||||||||
|
Research and development
|
$
|
34,001
|
$
|
37,230
|
$
|
(3,229
|
)
|
(8.7
|
)%
|
|||||||
Research and development expenses decreased by $3.2 million, or 8.7%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The decrease was primarily due to refined
research and development activities coupled with restructuring activities initiated in the first quarter of 2023 and collaboration fees, which includes $1.1 million paid to Protein Evolution, Inc. in 2022.
Selling, general and administrative
|
Six months ended June 30,
|
Change
|
|||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
||||||||||||
|
Selling, general and administrative
|
$
|
22,314
|
$
|
20,110
|
$
|
2,204
|
11.0
|
%
|
||||||||
Selling, general and administrative expenses increased by $2.2 million, or 11.0%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The increase was primarily
due to an increase of $3.0 million of stock-based compensation and $0.7 million in personnel costs primarily due to increased headcount for the ramp up of commercial sales, partially offset by a reduction of $1.5 million of expenses primarily for
consulting, professional fees and insurances.
Dividend income
|
Six months ended June 30,
|
Change
|
|||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
||||||||||||
|
Dividend income
|
$
|
4,702
|
$
|
1,907
|
$
|
2,795
|
146.6
|
%
|
||||||||
Dividend income increased by $2.8 million, or 146.6%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 as a result of higher dividends earned on invested
marketable securities.
Change in fair value of warrant liabilities
|
Six months ended June 30,
|
Change
|
|||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
||||||||||||
|
Change in fair value of warrant liabilities
|
$
|
81
|
$
|
4,984
|
$
|
(4,903
|
)
|
(98.4
|
)%
|
|||||||
The change in fair value of warrant liabilities decreased by $4.9 million, or 98.4%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 primarily due to a decline
in the Company’s underlying common stock price.
Other income (expense), net
|
Six months ended June 30,
|
Change
|
|||||||||||||||
|
(in thousands, except for % changes)
|
2023
|
2022
|
Amount
|
%
|
||||||||||||
|
Other income (expense), net
|
$
|
2,146
|
$
|
(17,140
|
)
|
$
|
19,286
|
(112.5
|
)%
|
|||||||
Other income (expense), net increased by $19.3 million, or 112.5%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 primarily as a result of a decrease in
unrealized losses of $22.5 million as a result of the market adjustments of investments in marketable securities, which consist of fixed income mutual funds, partially offset by an increase in realized losses of $3.5 million from sales of
marketable securities.
Liquidity and Capital Resources
Since our inception, we have funded our operations primarily with proceeds from the issuance of equity to private investors, as well as on June 10, 2021, we completed the Business Combination, and
as a result we received proceeds of approximately $511.2 million on the day of the closing of the Business Combination. Additionally, we began to generate revenue during 2023. Our primary uses of liquidity have been operating expenses, capital
expenditures and our acquisition of certain assets of Majelac. Cash flows from operations have been historically negative as we continue to invest in the development of our technology in NGPS. We expect to incur negative operating cash flows on
an annual basis for the foreseeable future until such time that we can scale our revenue growth.
We expect that our existing cash and cash equivalents and investments in marketable securities, together with revenue from the sale
of our products and services, will be sufficient to meet our liquidity, capital expenditure, and anticipated working capital requirements and fund our operations for at least the next 12 months. We expect to use our cash and cash equivalents
and investments in marketable securities and funds from revenue generated to invest in our continued commercialization efforts, to further invest in research
and development, for other operating expenses, business acquisitions and for working capital and general corporate purposes.
As of June 30, 2023, we had cash and cash equivalents and investments in marketable securities totaling $297.2 million. Our future capital requirements may vary from those currently planned and will
depend on various factors including the pace and success of product commercialization.
We launched the PlatinumTM instrument and started to take orders in December 2022, and subsequently began commercial shipments of Platinum™ in January 2023. In addition, we are continuing
further research and development efforts to enhance our Platinum™ instrument as well as completing a business case evaluation surrounding our CarbonTM sample preparation solution. Based on these initiatives and activities, our business will require an accelerated amount of spending to enhance the sales and
marketing teams, continue to drive development, and build inventory. Other factors that could accelerate cash needs include: (i) delays in achieving scientific and technical milestones; (ii) unforeseen capital expenditures and fabrication costs
related to manufacturing for commercialization; (iii) changes we may make in our business or commercialization strategy; (iv) the impact of the COVID-19 pandemic; (v) costs of running a public company; (vi) other items affecting our forecasted
level of expenditures and use of cash resources, including potential acquisitions; and (vii) increased product and service costs.
In the future, we may be unable to obtain any required additional financing on terms favorable to us, if at all. If adequate funds are not available to us on acceptable terms or otherwise, we may be
unable to successfully develop or enhance products and services, respond to competitive pressure or take advantage of acquisition opportunities, any of which could have a material adverse effect on our business, financial condition, operating
results and cash flows.
Cash flows
The following table summarizes our cash flows for the periods indicated:
|
Six months ended June 30,
|
||||||||
|
(in thousands)
|
2023
|
2022
|
||||||
|
Net cash (used in) provided by:
|
||||||||
|
Net cash used in operating activities
|
$
|
(51,623
|
)
|
$
|
(49,174
|
)
|
||
|
Net cash provided by investing activities
|
55,238
|
94,515
|
||||||
|
Net cash provided by financing activities
|
-
|
146
|
||||||
|
Net increase in cash and cash equivalents
|
$
|
3,615
|
$
|
45,487
|
||||
Net cash used in operating activities
The net cash used in operating activities of $51.6 million for the six months ended June 30, 2023 was due primarily to a net loss of $49.2 million resulting from continued spend on
research and development efforts and commercialization ramp up and net cash outflows from changes in operating assets and liabilities of $8.8 million, partially offset by depreciation and amortization of
$1.9 million.
The net cash used in operating activities of $49.2 million for the six months ended June 30, 2022 was due primarily to a net loss of $67.6 million resulting from continued spend on research and
development efforts and commercialization ramp up and a change in fair value of warrant liabilities of $5.0 million, partially offset by unrealized losses of marketable securities of $16.1 million.
Net cash provided by investing activities
The net cash provided by investing activities of $55.2 million in the six months ended June 30, 2023 was due primarily to sales of marketable securities of $59.5 million, offset by purchases of
property and equipment of $3.5 million and capitalized internally developed software costs of $0.7 million.
The net cash provided by investing activities of $94.5 million in the six months ended June 30, 2022 was due primarily to sales of marketable securities of $100.1 million, partially offset by purchases of property and
equipment of $5.5 million.
Net cash provided by financing activities
There were no financing activities in the six months ended June 30, 2023.
The net cash provided by financing activities of $0.1 million in the six months ended June 30, 2022 was due primarily from $1.0 million from proceeds from exercise of stock options, offset by $0.5 million from
payment of deferred consideration and $0.3 million from payment of contingent consideration related to the Majelac acquisition.
Contractual Obligations
We lease certain facilities and equipment under non-cancellable lease agreements that expire at various dates through 2032. As of June 30, 2023, the future payments, before adjustments for tenant incentives, under
leases was $33.3 million, which includes a lease we entered into in December 2021 for a facility in New Haven, Connecticut, which commenced in January 2022, and a lease that commenced in April 2022 for a facility in Branford, Connecticut.
Licenses related to certain intellectual property
We license certain intellectual property, some of which may be utilized in our current or future product offerings. To preserve the right to use such intellectual property, we are required to make
annual minimum fixed payments totaling approximately $0.2 million as well as royalties based on net sales if the royalties exceed annual minimum fixed payments.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with
U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at
the date of the condensed consolidated financial statements, as well as expenses incurred during the reporting periods. Our estimates are based on our historical experience and various other factors that we believe are reasonable under the
circumstances, the results of which form the basis for making judgments about items that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Revenue Recognition
Revenue is derived from sales of products and services. Product revenue is primarily generated from the sales of instrument and consumables used in protein sequencing and analysis.
Service revenue is primarily generated from service maintenance contracts including cloud access, proof of concept services and advanced training for instrument use. Freight revenue is recognized as Product revenue in the condensed consolidated statements of operations and comprehensive loss upon product shipment.
We recognize revenue when control of our products and services is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for
those products and services. This process involves identifying the contract with a customer, determining the distinct performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct
performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. Revenue recognition for contracts with multiple deliverables is based on the separate satisfaction of each distinct performance
obligation within the contract. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the
customer and is separately identified in the contract. We consider a performance obligation satisfied once we have transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the
good or service. We allocate transaction price to the performance obligations in a contract with a customer, based on the relative standalone selling price of each performance obligation. We determine standalone selling price based on the price
at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information and specific factors such as
competitive positioning, internal costs, profit objectives, and internally approved pricing guidelines related to the performance obligation.
Our performance obligation for sales of products is considered satisfied upon shipment of the goods to the customer in accordance with the shipping terms (either upon shipment or delivery), which is
when control of the product is deemed to be transferred; this would include instruments and consumables. Customers generally do not have a right of return, except for defective or damaged products during the warranty period or unless prior
written consent is provided. In instances where right of payment or transfer of title is contingent upon the customer’s acceptance of the product, revenue is deferred until all acceptance criteria have been met. Shipping and handling costs
associated with outbound freight after control of a product has transferred to a customer are accounted for as fulfillment costs and are included in Cost of revenue in the condensed consolidated statements of operations and comprehensive loss.
Shipping and handling costs billed to customers are considered part of the transaction price and are recognized as revenue with the underlying product sales. Revenues for service maintenance contracts, which start after the first year of purchase
and are considered as service type warranties that effectively extend the standard first-year warranty coverage at the customer’s option, are recognized ratably over the contract service period as these services are performed evenly over time.
Revenues for proof of concept services and advanced training is recognized upon satisfaction of the underlying performance obligation. We typically provide a standard one-year warranty which covers defects in materials and workmanship and
manufacturing or performance conditions including bug fixes under normal use and service for the first year. The first year of the warranty of our products is considered an assurance-type warranty and we have determined that this standard
first-year warranty is not a distinct performance obligation. Deferred revenue primarily consists of billings and payments received in advance of revenue recognition from service maintenance contracts including cloud access, proof of concept
services and advanced training, and is reduced as the revenue recognition criteria are met.
There have been no additional material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our Annual
Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 17, 2023.
See Note 2 “Summary of Significant Accounting Policies” in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information regarding
our significant accounting policies and estimates.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 “Summary of Significant Accounting
Policies – Recently Issued Accounting Pronouncements” in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Inflation risk
We do not believe that inflation has had a material effect on our business, financial condition, results of operations or cash flows, other than its impact on the general economy. Nonetheless, to
the extent our costs are impacted by general inflationary pressures, we may not be able to fully offset such higher costs through price increases or manufacturing efficiencies. Our inability or failure to do so could harm our business, financial
condition, results of operations or cash flows.
Interest rate risk
Our marketable securities are comprised primarily of investments in fixed income mutual funds. The primary objective of our investments is the preservation of capital to fulfill
liquidity needs. We do not enter into investments for trading or speculative purposes. Interest rate increases have resulted in changes in the fair value of our fixed income mutual funds to date. As of June 30, 2023, this cumulative
impact is a net unrealized loss of $14.8 million. The impact of such rate changes on the overall financial markets and the economy may continue to impact us in the future.
Foreign Currency Risk
Presently, we operate our business primarily within the United States and currently execute the majority of our transactions in U.S. dollars. This limited foreign currency translation risk is not
expected to have a material impact on our condensed consolidated financial statements. To date, we have not entered into any hedging arrangements with respect to foreign currency risk. As our international operations grow, we will continue to
reassess our approach to managing our risk relating to fluctuations in currency rates.
| Item 4. |
Controls and Procedures
|
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and
operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports
filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure
controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2023.
Changes in Internal Control over Financial Reporting
We began commercial shipments of the Platinum™ protein sequencing instrument in the first quarter of 2023. We are in the process of evaluating and implementing additional controls over the processes
that are associated with the commercial launch of Platinum including but not limited to revenue recognition and inventory. There were no additional changes in our internal control over financial reporting during the quarter that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| ITEM 1. |
LEGAL PROCEEDINGS.
|
We are not currently a party to any material legal proceedings.
Our business, results of operations and financial
condition are subject to various risks and uncertainties including the risk factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 17, 2023, in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 filed, with the SEC on May 11, 2023, and the risk factor described below.
Product orders included in our backlog may be cancelled or delayed and may not be indicative of future revenues.
We define backlog as purchase orders or signed contracts from our customers for which we have not fulfilled and therefore have not
yet recognized the associated revenue. We anticipate converting this backlog to revenue in the subsequent quarters; however, our ability to do so is subject to customers who may seek to cancel or delay their orders even if we are prepared to
fulfill them. No assurance can be given that these amounts will be recovered after cancellation. Any cancellation or delay of orders may result in revenues that are lower than expected. As a result, we cannot provide assurances as to the
portion of backlog orders to be filled in a given quarter or year, and our order backlog as of any particular date may not be representative of actual revenues for any subsequent period. As of June 30, 2023, our backlog was approximately $0.1 million.
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
Unregistered Sales of Equity Securities
Not applicable.
Issuer Purchases of Equity Securities
Not applicable.
| ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES.
|
Not applicable.
| ITEM 4. |
MINE SAFETY DISCLOSURES.
|
Not applicable.
| ITEM 5. |
OTHER INFORMATION.
|
Not applicable.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
|
Exhibit
Number
|
|
Exhibit Description
|
|
Filed Herewith
|
|
Incorporated by
Reference Herein from
Form or Schedule
|
|
Filing Date
|
|
SEC File/
Reg. Number
|
|
Second Amended and Restated Certificate of Incorporation of Quantum-Si Incorporated, as amended.
|
X
|
|||||||||
|
Offer Letter of Employment, dated April 27, 2023, by and between the Registrant and Jeffry Keyes.
|
Form 8-K
(Exhibit 10.1)
|
5/2/2023
|
001-39486
|
|||||||
|
Separation Agreement, dated as of June 1, 2023, by and between the Registrant and Claudia Drayton.
|
Form 8-K
(Exhibit 10.1)
|
6/7/2023
|
001-39486
|
|||||||
|
2023 Inducement Equity Incentive Plan.
|
Form S-8
(Exhibit 99.1)
|
7/20/2023
|
333-273350
|
|||||||
|
Form of Stock Option Agreement under the 2023 Inducement Equity Incentive Plan.
|
Form S-8
(Exhibit 99.2)
|
7/20/2023
|
333-273350
|
|||||||
|
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
|
|
|
|
|||
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101.CAL
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Inline XBRL Taxonomy Extension Calculation Linkbase Document
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X
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101.DEF
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Inline XBRL Taxonomy Extension Definition Linkbase Document
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X
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||||||||
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101.LAB
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Inline XBRL Taxonomy Extension Label Linkbase Document
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X
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||||||||
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101.PRE
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Inline XBRL Taxonomy Extension Presentation Linkbase Document
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X
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||||||||
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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X
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+ Management contract or compensatory plan or arrangement.
* The certifications attached as Exhibit 32 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by
reference into any filing of Quantum-Si Incorporated under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of such Form 10-Q), irrespective of any general
incorporation language contained in such filing.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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QUANTUM-SI INCORPORATED
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Date: August 7, 2023
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By:
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/s/ Jeffrey Hawkins
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Jeffrey Hawkins
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Chief Executive Officer
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Date: August 7, 2023
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By:
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/s/ Jeffry Keyes
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Jeffry Keyes
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Chief Financial Officer
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32
Exhibit 3.1
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
HIGHCAPE CAPITAL ACQUISITION CORP.
HighCape Capital Acquisition Corp., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies as follows:
1. The name of this
corporation is HighCape Capital Acquisition Corp. The date of the filing of its original certificate of incorporation with the Secretary of State of the State of Delaware was June 10, 2020.
2. This Second Amended and
Restated Certificate of Incorporation, which restates, integrates and further amends the certificate of incorporation of this corporation as heretofore amended and restated, has been duly adopted by the corporation in accordance with Sections 242
and 245 of the DGCL and shall be effective at 10:00 a.m. Eastern time on June 10, 2021.
3. The certificate of
incorporation of this corporation is hereby amended and restated in its entirety to read as follows:
ARTICLE II
NAME
The name of the corporation is “Quantum-Si Incorporated” (hereinafter called the “Corporation”).
ARTICLE III
REGISTERED OFFICE AND AGENT
The address of the Corporation’s registered office in the State of Delaware is c/o Corporation Service Company, 251 Little Falls Drive, Wilmington New
Castle County, Delaware 19808. The name of its registered agent at such address is Corporation Service Company.
ARTICLE IV
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of
the State of Delaware or any applicable successor act thereto, as the same may be amended from time to time (the “DGCL”).
1
ARTICLE V
CAPITAL STOCK
The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 628,000,000 shares, consisting of
600,000,000 shares of Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”), 27,000,000 shares of Class B Common Stock, par value $0.0001 per share (“Class B Common Stock”), and 1,000,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”).
The number of authorized shares of Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased (but not below (i) the number of shares thereof then outstanding and (ii) with respect to the Class A Common Stock, the
number of shares of Class A Common Stock reserved pursuant to Section 8 of Part A of this Article IV) by the affirmative vote of the holders of capital stock representing a
majority of the voting power of all the then-outstanding shares of capital stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL.
The following is a statement of the designations and the powers, preferences, privileges and rights, and the qualifications, limitations or
restrictions thereof in respect of each class of capital stock of the Corporation.
| A. |
CLASS A COMMON STOCK AND CLASS B COMMON STOCK.
|
Unless otherwise indicated, references to “Sections” or “Subsections” in this Part A of this Article IV refer to sections and subsections of Part A of this Article IV.
1. Equal Status; General. Except as otherwise provided in this Second Amended and Restated Certificate of Incorporation (as amended and/or restated from time to time, including
pursuant to any Preferred Stock Designation (as defined below), this “Amended and Restated Certificate of Incorporation”) or required by applicable law, shares of Class A Common Stock and Class B Common Stock shall have the same rights, privileges
and powers, rank equally (including as to dividends and distributions, and upon any liquidation, dissolution, distribution of assets or winding up of the Corporation), share ratably and be identical in all respects and as to all matters. The
voting, dividend, liquidation and other rights, powers and preferences of the holders of Class A Common Stock and Class B Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock of any
series as may be designated by the Board of Directors of the Corporation (the “Board”) upon any issuance of the Preferred Stock of any series.
2. Voting. Except as otherwise required by applicable law, at all meetings of stockholders and on all matters submitted to a vote of stockholders of the Corporation generally, each holder of
Class A Common Stock, as such, shall have the right to one (1) vote per share of Class A Common Stock held of record by such holder and each holder of Class B Common Stock, as such, shall have the right to twenty (20) votes per share of Class B
Common Stock held of record by such holder. Except as otherwise required by applicable law or provided in this Amended and Restated Certificate of Incorporation, the holders of shares of Class A Common Stock and Class B Common Stock, as such,
shall (a) at all times vote together as a single class on all matters (including the election of directors) submitted to a vote of the stockholders of the Corporation generally, (b) be entitled to notice of any stockholders’ meeting in accordance
with the Amended and Restated Bylaws of the Corporation, as the same may be amended and/or restated from time to time (the “Bylaws”), and (c) be entitled to vote upon such matters and in such manner as may be provided by applicable law; provided, however, that, except as otherwise required by applicable law, holders of Class A Common Stock and Class B Common Stock, as such, shall not be entitled
to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected
series of Preferred Stock are exclusively entitled, either separately or together with the holders of one or more other such series of Preferred Stock, to vote thereon pursuant to this Amended and Restated Certificate of Incorporation or applicable
law. There shall be no cumulative voting.
2
3. Dividend and Distribution Rights. Shares of Class A Common Stock and Class B Common Stock shall be treated equally, identically and ratably, on a per share basis, with
respect to any dividends or distributions as may be declared and paid from time to time by the Board out of any assets of the Corporation legally available therefor; provided, however, that in the event a dividend is paid in the form of shares of Class A Common Stock or Class B Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares), then holders of
Class A Common Stock shall be entitled to receive shares of Class A Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares, as the case may be), and holders of Class B Common Stock shall be entitled to
receive shares of Class B Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares, as the case may be), with holders of shares of Class A Common Stock and Class B Common Stock receiving, on a per share
basis, an identical number of shares of Class A Common Stock or Class B Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares, as the case may be), as applicable. Notwithstanding the foregoing, the
Board may pay or make a disparate dividend or distribution per share of Class A Common Stock or Class B Common Stock (whether in the amount of such dividend or distribution payable per share, the form in which such dividend or distribution is
payable, the timing of the payment, or otherwise) if such disparate dividend or distribution is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting
separately as a class.
4. Subdivisions, Combinations or Reclassifications. Shares of Class A Common Stock or Class B Common Stock may not be subdivided, combined or reclassified unless the shares of
the other class is concurrently therewith proportionately subdivided, combined or reclassified in a manner that maintains the same proportionate equity ownership between the holders of the outstanding Class A Common Stock and Class B Common Stock
on the record date for such subdivision, combination or reclassification; provided, however, that shares of one such class may be subdivided, combined or
reclassified in a different or disproportionate manner if such subdivision, combination or reclassification is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock,
each voting separately as a class.
5. Liquidation, Dissolution or Winding Up. Subject to the preferential or other rights of any holders of Preferred Stock then outstanding, upon the dissolution, distribution of
assets, liquidation or winding up of the Corporation, whether voluntary or involuntary, holders of Class A Common Stock and Class B Common Stock will be entitled to receive ratably all assets of the Corporation available for distribution to its
stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution, distribution of assets or winding up is approved by the affirmative vote of the holders of a
majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.
3
6. Certain Transactions.
6.1 Merger or Consolidation. In the case of any distribution or payment in respect of the shares of Class A Common Stock or Class B Common Stock, or any consideration into which
such shares are converted, upon the consolidation or merger of the Corporation with or into any other entity, such distribution, payment or consideration that the holders of shares of Class A Common Stock or Class B Common Stock have the right to
receive, or the right to elect to receive, shall be made ratably on a per share basis among the holders of the Class A Common Stock and Class B Common Stock as a single class; provided, however, that shares of such classes may receive, or have the right to elect to receive, different or disproportionate distribution, payment or consideration in connection with such consolidation, merger or
other transaction in order to reflect the special rights, powers and privileges of holders of shares of Class B Common Stock under this Amended and Restated Certificate of Incorporation (which may include, without limitation, securities
distributable to the holders of, or issuable upon the conversion of, each share of Class B Common Stock outstanding immediately prior to such transaction having not more than twenty (20) times the voting power of any securities distributable to the
holders of, or issuable upon the conversion of, each share of Class A Common Stock outstanding immediately prior to such transaction or any other share of stock then outstanding) or such other rights, powers, privileges or other terms that are no
more favorable, in the aggregate, to the holders of the Class B Common Stock relative to the holders of the Class A Common Stock than those contained in this Amended and Restated Certificate of Incorporation.
6.2 Third-Party Tender or Exchange Offers. The Corporation may not enter into any agreement pursuant to which a third party may by tender or exchange offer acquire any shares of
Class A Common Stock or Class B Common Stock unless the holders of (a) the Class A Common Stock shall have the right to receive, or the right to elect to receive, the same form of consideration and the same amount of consideration on a per share
basis as the holders of the Class B Common Stock would receive, or have the right to elect to receive, and (b) the Class B Common Stock shall have the right to receive, or the right to elect to receive, the same form of consideration and the same
amount of consideration on a per share basis as the holders of the Class A Common Stock would receive, or have the right to elect to receive; provided, however,
that shares of such classes may receive, or have the right to elect to receive, different or disproportionate consideration in connection with such tender or exchange offer in order to reflect the special rights, powers and privileges of the
holders of shares of the Class B Common Stock under this Amended and Restated Certificate of Incorporation (which may include, without limitation, securities exchangeable for each share of Class B Common Stock having twenty (20) times the voting
power of any securities exchangeable for each share of Class A Common Stock or any other share of stock then outstanding) or such other rights, powers, privileges or other terms that are no more favorable, in the aggregate, to the holders of the
Class B Common Stock relative to the holders of the Class A Common Stock than those contained in this Amended and Restated Certificate of Incorporation.
4
7. Conversion.
7.1 Optional Conversion of Class B Common Stock. Each share of Class B Common Stock shall be convertible into one (1) fully paid and nonassessable share of Class A Common Stock
at the option of the holder thereof at any time upon written notice to the Corporation (an “Optional Class B Conversion Event”). Before any holder of Class B Common Stock
shall be entitled to convert any shares of Class B Common Stock into shares of Class A Common Stock, such holder shall surrender the certificate or certificates therefor (if any), duly endorsed, at the principal corporate office of the Corporation
or of any transfer agent for the Class B Common Stock, and shall provide written notice to the Corporation at its principal corporate office, of such conversion election and shall state therein the name or names (i) in which the certificate or
certificates representing the shares of Class A Common Stock into which the shares of Class B Common Stock are so converted are to be issued (if such shares of Class A Common Stock are certificated) or (ii) in which such shares of Class A Common
Stock are to be registered in book-entry form (if such shares of Class A Common Stock are uncertificated). If the shares of Class A Common Stock into which the shares of Class B Common Stock are to be converted are to be issued in a name or names
other than the name of the holder of the shares of Class B Common Stock being converted, such notice shall be accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder. The
Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates representing the number of shares of Class A Common Stock to which
such holder shall be entitled upon such conversion (if such shares of Class A Common Stock are certificated) or shall register such shares of Class A Common Stock in book-entry form (if such shares of Class A Common Stock are uncertificated). Such
conversion shall be deemed to be effective immediately prior to the close of business on the date of such surrender of the shares of Class B Common Stock to be converted following or contemporaneously with the provision of written notice of such
conversion election as required by this Subsection 7.1, the shares of Class A Common Stock issuable upon such conversion shall be deemed to be outstanding as of such time, and the Person or Persons entitled to receive the shares of Class A Common
Stock issuable upon such conversion shall be deemed to be the record holder or holders of such shares of Class A Common Stock as of such time. Notwithstanding anything herein to the contrary, shares of Class B Common Stock represented by a lost,
stolen or destroyed stock certificate may be converted pursuant to an Optional Class B Conversion Event if the holder thereof notifies the Corporation or its transfer agent that such certificate has been lost, stolen or destroyed and makes an
affidavit of that fact acceptable to the Corporation and executes an agreement acceptable to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificate.
7.2 Automatic Conversion of Class B Common Stock. To the extent set forth below, each applicable share of Class B Common Stock shall automatically convert into one (1) fully paid
and nonassessable share of Class A Common Stock upon the occurrence of an event described below (a “Mandatory Class B Conversion Event”):
(a) Transfers. Each share of Class B Common Stock that is subject to a Transfer (as defined in Section 11), other than a Permitted Transfer (as defined in Section 11), shall
automatically, without further action by the Corporation or the holder thereof, convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the occurrence of such Transfer (other than a Permitted Transfer).
5
(b) Reduction in Voting Power. Each outstanding share of Class B Common Stock shall automatically, without further action by the Corporation or the holder thereof, convert into
one (1) fully paid and nonassessable share of Class A Common Stock upon the first date on which the Founder, together with all other Qualified Stockholders, collectively cease to beneficially own at least 20% of the number of shares 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 held by the Founder and his Permitted
Transferees as of the Effective Date.
(c) Affirmative Vote. Each outstanding share of Class B Common Stock shall automatically, without further action by the Corporation or the holder thereof, convert into one (1)
fully paid and nonassessable share of Class A Common Stock upon the date specified by the affirmative vote of the holders of at least two-thirds (2/3) of the then outstanding shares of Class B Common Stock, voting as a separate class.
7.3 Certificates. Each outstanding stock certificate (if shares are in certificated form) that, immediately prior to the occurrence of a Mandatory Class B Conversion Event,
represented one or more shares of Class B Common Stock subject to such Mandatory Class B Conversion Event shall, upon such Mandatory Class B Conversion Event, be deemed to represent an equal number of shares of Class A Common Stock, without the
need for surrender or exchange thereof. The Corporation shall, upon the request of any holder whose shares of Class B Common Stock have been converted into shares of Class A Common Stock as a result of an Optional Class B Conversion Event or a
Mandatory Class B Conversion Event (either of the foregoing, a “Conversion Event”) and upon surrender by such holder to the Corporation of the outstanding certificate(s)
formerly representing such holder’s shares of Class B Common Stock, if any (or, in the case of any lost, stolen or destroyed certificate, upon such holder providing an affidavit of that fact acceptable to the Corporation and executing an agreement
acceptable to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificate), issue and deliver to such holder (or such other Person specified pursuant to Subsection 7.1) certificate(s) representing
the shares of Class A Common Stock into which such holder’s shares of Class B Common Stock were converted as a result of such Conversion Event (if such shares are certificated) or, if such shares are uncertificated, register such shares in
book-entry form. Each share of Class B Common Stock that is converted pursuant to Subsection 7.1 or 7.2 shall thereupon automatically be retired and shall not be available for reissuance.
7.4 Policies and Procedures. The Corporation may, from time to time, establish such administrative policies and procedures, not in violation of applicable law or the other
provisions of this Amended and Restated Certificate of Incorporation or Bylaws of the Corporation, relating to the conversion of the Class B Common Stock into Class A Common Stock, as it may deem necessary or advisable in connection therewith (it
being understood, for the avoidance of doubt, that this sentence shall not authorize or empower the Corporation to expand upon the events that constitute a Mandatory Class B Conversion Event).
6
8. Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose
of effecting the conversion of the shares of Class B Common Stock, such number of shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock into shares of
Class A Common Stock.
9. Protective Provisions. Unless such action is first approved by the affirmative vote (or written consent) of the holders of two-thirds (2/3rd) of the
then-outstanding shares of Class B Common Stock, voting as a separate class, in addition to any other vote required by applicable law, this Amended and Restated Certificate of Incorporation or the Bylaws, prior to the Final Conversion Date, the
Corporation shall not, whether by merger, consolidation, certificate of designation or otherwise (i) amend, alter, repeal or waive any provision of Part A of this Article IV (or adopt any provision inconsistent therewith), or (ii) except for the
shares of Class B Common Stock issued pursuant to the Merger and as provided in Section 10 below, authorize, or issue any shares of, any class or series of capital stock of the Corporation entitling the holder thereof to more than (1) vote for each
share thereof or entitling any class or series of securities to designate or elect directors as a class or series separate from the Class A Common Stock and Class B Common Stock.
10. Issuance of Additional Shares. From and after the Effective Date, additional shares of Class B Common Stock may be issued only to a Qualified Stockholder.
11. Definitions. For purposes of this Amended and Restated Certificate of Incorporation:
“Change of Control Transaction” means (i) the sale,
lease, exchange, or other disposition (other than liens and encumbrances created in the ordinary course of business, including liens or encumbrances to secure indebtedness for borrowed money that are approved by the Board, so long as no foreclosure
occurs in respect of any such lien or encumbrance) of all or substantially all of the Corporation’s property and assets (which shall for such purpose include the property and assets of any direct or indirect subsidiary of the Corporation), provided that any sale, lease, exchange or other disposition of property or assets exclusively between or among the Corporation and any direct or indirect
subsidiary or subsidiaries of the Corporation shall not be deemed a “Change of Control Transaction”; (ii) the merger, consolidation, business combination, or other similar
transaction of the Corporation with any other entity, other than a merger, consolidation, business combination, or other similar transaction that would result in the voting securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) more than fifty percent (50%) of the total voting power represented by the voting securities of the
Corporation and more than fifty percent (50%) of the total number of outstanding shares of the Corporation’s capital stock, in each case as outstanding immediately after such merger, consolidation, business combination, or other similar transaction,
and the stockholders of the Corporation immediately prior to the merger, consolidation, business combination, or other similar transaction continuing to own voting securities of the Corporation, the surviving entity or its parent immediately
following the merger, consolidation, business combination, or other similar transaction in substantially the same proportions (vis a vis each other) as such stockholders owned of the voting securities of the Corporation immediately prior to the
transaction; and (iii) a recapitalization, liquidation, dissolution, or other similar transaction involving the Corporation, other than a recapitalization, liquidation, dissolution, or other similar transaction that would result in the voting
securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity or its parent) more than fifty percent (50%) of the total
voting power represented by the voting securities of the Corporation and more than fifty percent (50%) of the total number of outstanding shares of the Corporation’s capital stock, in each case as outstanding immediately after such recapitalization,
liquidation, dissolution or other similar transaction, and the stockholders of the Corporation immediately prior to the recapitalization, liquidation, dissolution or other similar transaction continuing to own voting securities of the Corporation,
the surviving entity or its parent immediately following the recapitalization, liquidation, dissolution or other similar transaction in substantially the same proportions (vis a vis each other) as such stockholders owned of the voting securities of
the Corporation immediately prior to the transaction.
7
“Effective Date” means the date on which this Amended
and Restated Certificate of Incorporation is first effective.
“Family Member” means with respect to any natural
person who is a Qualified Stockholder (a) the spouse of such Qualified Stockholder, (b) the parents, grandparents, lineal descendants, siblings or lineal descendants of siblings of such Qualified Stockholder or (c) the parents, grandparents, lineal
descendants, siblings or lineal descendants of siblings of the spouse of such Qualified Stockholder. Lineal descendants shall include adopted persons, but only so long as they are adopted during minority.
“Fiduciary” means a Person who (a) is an executor,
personal representative, administrator, trustee, manager, managing member, general partner, director, officer or any other agent of a Person and (b) manages, controls or otherwise has decision-making authority with respect to such Person, but, in
each case, only to the extent that such Person may be removed, directly or indirectly, by one or more Qualified Stockholders and replaced with another Fiduciary selected, directly or indirectly, by one or more Qualified Stockholders.
“Final Conversion Date” means the date on which no
shares of Class B Common Stock shall remain outstanding.
“Founder” means Dr. Jonathan M. Rothberg.
“Liquidation Event” means any liquidation,
dissolution, or winding up of the Corporation, whether voluntary or involuntary, or any Change of Control Transaction.
“Merger” means the merger of Tenet Merger Sub, Inc.
with and into Quantum-Si Incorporated pursuant to that certain Business Combination Agreement, dated as of February 18, 2021, by and among the Corporation, Tenet Merger Sub, Inc., a Delaware corporation, and Quantum-Si Incorporated.
8
“Parent” of an entity means any entity that directly
or indirectly owns or controls a majority of the voting power of the voting securities of such entity.
“Permitted Entity” means:
(a) a
Permitted Trust for so long as such Permitted Trust is solely for the current benefit of a Qualified Beneficiary (and, for the avoidance of doubt, notwithstanding that a remainder interest in such Permitted Trust is for the benefit of any Person
other than a Qualified Beneficiary);
(b) any
general partnership, limited partnership, limited liability company, corporation, public benefit corporation or other entity, in each case, for so long as such entity is exclusively owned, by (1) one or more Qualified Stockholders, (2) one or more
Family Members of such Qualified Stockholders and/or (3) any other Permitted Entity of such Qualified Stockholders;
(c) any
foundation or similar entity or any Qualified Charity for so long as (i) one or more Qualified Stockholders continues to, directly or indirectly, exercise Voting Control over any shares of Class B Common Stock from time to time Transferred to such
foundation or similar entity or Qualified Charity, and/or (ii) a Fiduciary of such foundation or similar entity or Qualified Charity exercises Voting Control over such shares of Class B Common Stock;
(d) an
Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, or a pension, profit sharing, stock bonus or other type of plan or trust of which such Qualified Stockholder is a participant or beneficiary and which
satisfies the requirements for qualification under Section 401 of the Internal Revenue Code for so long as such Qualified Stockholder has sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held in
such account, plan or trust;
(e) the
executor or personal representative of the estate of a Qualified Stockholder upon the death of such Qualified Stockholder solely to the extent the executor or personal representative is acting in the capacity of executor or personal representative
of such estate;
(f) a
revocable living trust, which revocable living trust is itself both a Permitted Trust and a Qualified Stockholder, during the lifetime of the natural person grantor of such trust; or
(g) a
revocable living trust (including any irrevocable administrative trust resulting from the death of the natural person grantor of such trust) which trust is itself both a Permitted Trust and a Qualified Stockholder, following the death of the
natural person grantor of such trust, solely to the extent that such shares are held in such trust pending distribution to the beneficiaries designated in such trust.
9
Except as explicitly provided for herein, a Permitted Entity of a Qualified Stockholder shall not cease to be a Permitted Entity
solely by reason of the death of that Qualified Stockholder.
“Permitted Transfer” means, and is restricted to, any
Transfer of a share of Class B Common Stock:
(a) by
a Qualified Stockholder that is not a Permitted Entity to (i) one or more Family Members of such Qualified Stockholder, (ii) any Permitted Entity of such Qualified Stockholder, or (iii) any Permitted Entity of one or more Family Members of such
Qualified Stockholder;
(b) by
a Permitted Entity of a Qualified Stockholder to (i) such Qualified Stockholder or one or more Family Members of such Qualified Stockholder, (ii) any other Permitted Entity of such Qualified Stockholder, or (iii) any Permitted Entity of one or more
Family Members of such Qualified Stockholder; or
(c) any
Transfer approved in advance by the Board, or a duly authorized committee of the Board, upon a determination that such Transfer is not inconsistent with the purposes of the foregoing provisions of this definition of “Permitted Transfer.”
For the avoidance of doubt, the direct Transfer of any share or shares of Class B Common Stock by a holder thereof to any other
Person shall qualify as a “Permitted Transfer” within the meaning of this Section, if such Transfer could have been completed indirectly through one or more transactions involving more than one Transfer, so long as each Transfer in such transaction
or transactions would otherwise have qualified as a “Permitted Transfer” within the meaning of this Section. For the further avoidance of doubt, a Transfer may qualify as a “Permitted Transfer” within the meaning of this Section under any one or
more than one of the clauses of this Section as may be applicable to such Transfer, without regard to any proviso in, or requirement of, any other clause(s) of this Section.
“Permitted Transferee” means, as of any date of
determination, a Person that is entitled to be a transferee of shares of Class B Common Stock in a Transfer that, as of such date, would constitute a Permitted Transfer.
“Permitted Trust” means a bona fide trust where each
trustee is (a) a Qualified Stockholder; (b) a Family Member of a Qualified Stockholder; or (c) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies, accounting, legal or financial
advisor, or bank trust departments.
“Person” means any individual, corporation, limited
liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization or other entity, whether domestic or foreign.
10
“Qualified Beneficiary” means (i) one or more
Qualified Stockholders, (ii) one or more Family Members of a Qualified Stockholder and/or (iii) any other Permitted Entities of one or more Qualified Stockholders.
“Qualified Charity” means a domestic U.S. charitable
organization, contributions to which are deductible for federal income, estate, gift and generation skipping transfer tax purposes.
“Qualified Stockholder” means (i) the Founder, (ii)
any Person that receives Class B Common Stock in the Merger, and (iii) any Person that is a Permitted Transferee.
“Requisite Stockholder Consent” means (i) prior to the
Voting Threshold Date, the action at a meeting or by written consent (to the extent permitted under this Amended and Restated Certificate of Incorporation) of the holders of a majority in voting power of the shares of capital stock of the Corporation
that would then be entitled to vote in the election of directors at an annual meeting of stockholders, and (ii) on and after the Voting Threshold Date, the action at a meeting or by written consent (to the extent permitted under this Amended and
Restated Certificate of Incorporation) of the holders of two-thirds (2/3rds) of the voting power of the shares of capital stock of the Corporation that would then be entitled to vote in the election of directors at an annual meeting of stockholders.
“Transfer” of a share of Class B Common Stock means,
directly or indirectly, any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share 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. A Transfer shall also be deemed to have occurred with respect to a share of Class B Common Stock beneficially held by a Person that received shares in a Permitted Transfer if there occurs any act
or circumstance that causes such Person to no longer be a Permitted Transferee. In addition, for the avoidance of doubt, a Transfer shall be deemed to have occurred if a holder that is a partnership, limited partnership, limited liability company or
corporation distributes or otherwise transfers its shares of Class B Common Stock to its partners, stockholders, members or other equity owners. Notwithstanding the foregoing, the following shall not be considered a Transfer:
(a) the
granting of a revocable proxy to officers or directors of the Corporation at the request of the Board in connection with (i) actions to be taken at an annual or special meeting of stockholders, or (ii) any other action of the stockholders permitted
by this Amended and Restated Certificate of Incorporation;
(b) entering
into a voting trust, agreement or arrangement (with or without granting a proxy) solely with stockholders who are holders of Class B Common Stock, which voting trust, agreement or arrangement does not involve any payment of cash, securities or
other property to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner; for the avoidance of doubt, any voting trust, agreement or arrangement entered into prior to the Effective Date shall
not constitute a Transfer;
11
(c) the
pledge of shares of Class B Common Stock by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction for so long as such stockholder continues to exercise Voting Control over such
pledged shares; provided, however, that a foreclosure on such shares or other similar action by the pledgee shall constitute a Transfer unless such
foreclosure or similar action qualifies as a Permitted Transfer at such time;
(d) any
change in the trustee(s) or the Person(s) and/or entity(ies) having or exercising Voting Control over shares of Class B Common Stock held by a Permitted Entity, provided
that following such change such Permitted Entity continues to be a Permitted Entity;
(e) (1)
the assignment, transfer, conveyance, hypothecation or other transfer or disposition of shares of Class B Common Stock by a Qualified Stockholder to a grantor retained annuity trust (a “GRAT”)
for which the trustee is (A) such Qualified Stockholder, (B) a Family Member of such Qualified Stockholder, (C) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies, accounting,
legal or financial advisors, or bank trust departments, (D) an employee of the Corporation or a member of the Board or (E) solely in the case of any such trust established by a natural Person grantor, any other bona fide trustee; (2) the change in
trustee for such a GRAT from one of the Persons identified in the foregoing subclauses (A) through (E) to another Person identified in the foregoing subclauses (A) through (E); and (3) the distribution of such shares of Class B Common Stock from
such GRAT to such Qualified Stockholder (provided, however, that the distribution of shares of Class B Common Stock to any beneficiary of such GRAT except
such Qualified Stockholder shall constitute a Transfer unless such distribution qualifies as a Permitted Transfer at such time);
(f) any
Transfer of shares of Class B Common Stock, whether by a Qualified Stockholder or a Permitted Entity, to a broker or other nominee for so long as the transferor retains (i) Voting Control, (ii) sole dispositive power over such shares of Class B
Common Stock, and (iii) the economic consequences of ownership of such shares of Class B Common Stock;
(g) entering
into a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, with a broker or other nominee;
provided, however, that a sale of such shares of Class B Common
Stock pursuant to such plan shall constitute a “Transfer” at the time of such sale;
(a) in
connection with a Change of Control Transaction (1) the entering into a support, voting, tender or similar agreement or arrangement, (2) the granting of any proxy and/or (3) the tendering of any shares in any tender or exchange offer for all of the
outstanding shares of Class A Common Stock and Class B Common Stock;
12
(b) due
to the fact that the spouse of any holder of shares of Class B Common Stock possesses or obtains an interest in such holder’s shares of Class B Common Stock arising solely by reason of the application of the community property laws of any
jurisdiction, so long as no other event or circumstance shall exist or have occurred that constitutes a “Transfer” of such shares of Class B Common Stock; provided
that any transfer of shares by any holder of shares of Class B Common Stock to such holder’s spouse, including a transfer in connection with a divorce proceeding, domestic relations order or similar legal requirement, shall constitute a “Transfer”
of such shares of Class B Common Stock unless (1) otherwise exempt from the definition of Transfer, or (2) in connection with such divorce proceeding, domestic relations order or similar legal requirement, a Qualified Stockholder is entitled to
retain (and for so long as a Qualified Stockholder does actually retain) either (x) the exclusive right to exercise the power to vote or direct the voting of such shares of Class B Common Stock, or (y) sole dispositive power over such shares of
Class B Common Stock; and
(c) entering
into a support, voting, tender or similar agreement, arrangement or understanding (with or without granting a proxy) in connection with a Liquidation Event or consummating the actions or transactions contemplated therein (including, without
limitation, tendering shares of Class B Common Stock in connection with a Liquidation Event, the consummation of a Liquidation Event or the sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of shares of Class B
Common Stock or any legal or beneficial interest in shares of Class B Common Stock in connection with a Liquidation Event), provided that such Liquidation
Event was approved by the Board.
“Voting Control” means, with respect to a share of
Class B Common Stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.
“Voting Threshold Date” means the first date on which
the issued and outstanding shares of Class B Common Stock represents less than 50% of the total voting power of the then outstanding shares of capital stock of the Corporation that would then be entitled to vote in the election of directors at an
annual meeting of stockholders.
| B. |
PREFERRED STOCK
|
Subject to Article IV, Part A Section 9, Preferred Stock may be issued
from time to time in one or more series, each of such series to have such terms as stated or expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the Board as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation may be reissued except as otherwise provided by law.
13
Subject to Article IV, Part A Section 9, authority is hereby expressly
granted to the Board from time to time to issue the Preferred Stock in one or more series, and in connection with the creation of any such series, by adopting a resolution or resolutions providing for the issuance of the shares thereof and by filing
a certificate of designations relating thereto in accordance with the DGCL (a “Preferred Stock Designation”), to determine and fix the number of shares of such series and
such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof,
dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in such resolutions, all to the full extent now or hereafter permitted by the DGCL. Without limiting the generality of the
foregoing, the resolutions providing for issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law.
ARTICLE VI
AMENDMENT OF THE CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend, alter, change, adopt or repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation; provided,
however, that, notwithstanding any other provision of this Amended and Restated Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any vote of the holders of shares
of any class or series of capital stock of the Corporation required by law or by this Amended and Restated Certificate of Incorporation, the affirmative vote of the holders of a majority of the voting power of the then-outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to amend or repeal any provision of this Amended and Restated Certificate of Incorporation, or adopt any provision
of this Amended and Restated Certificate of Incorporation inconsistent therewith; provided further, so long as any shares of Class B Common Stock remain
outstanding, the Corporation shall not, without the prior affirmative vote of the holders of two-thirds (2/3rds) of the outstanding shares of Class B Common Stock, voting as a separate class, in addition to any other vote required by applicable law
or this Amended and Restated Certificate of Incorporation, directly or indirectly, whether by amendment, or through merger, recapitalization, consolidation or otherwise amend, alter, change, repeal or adopt any provision of this Amended and Restated
Certificate of Incorporation (1) in a manner that is inconsistent with, or that otherwise alters or changes, any of the voting, conversion, dividend or liquidation provisions of the shares of Class B Common Stock or other rights, powers, preferences
or privileges of the shares of Class B Common Stock; (2) to provide for each share of Class A Common Stock or Preferred Stock to have more than one (1) vote per share or any rights to a separate class vote of the holders of shares of Class A Common
Stock other than as provided by this Amended and Restated Certificate of Incorporation or required by the DGCL; or (3) to otherwise adversely impact or affect the rights, powers, preferences or privileges of the shares of Class B Common Stock in a
manner that is disparate from the manner in which it affects the rights, powers, preferences or privileges of the shares of Class A Common Stock; provided further,
so long as any shares of Class A Common Stock remain outstanding, the Corporation shall not, without the prior affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock, voting as a separate class, in addition to
any other vote required by applicable law or this Amended and Restated Certificate of Incorporation, directly or indirectly, whether by amendment, or through merger, recapitalization, consolidation or otherwise amend, alter, change, repeal or adopt
any provision of this Amended and Restated Certificate of Incorporation (1) in a manner that is inconsistent with, or that otherwise alters or changes the powers, preferences, or special rights of the shares of Class A Common Stock so as to affect
them adversely; or (2) to provide for each share of Class B Common Stock to have more than twenty (20) votes per share or any rights to a separate class vote of the holders of shares of Class B Common Stock other than as provided by this Amended and
Restated Certificate of Incorporation or required by the DGCL. For the avoidance of doubt, (i) nothing in the immediately preceding provisos shall limit the rights of the Board as specified in Article IV, Part B (as qualified by Article IV, Part A, Section 9) or Article VI
of this Amended and Restated Certificate of Incorporation, and (ii) notwithstanding anything in this Article V to the contrary, any amendment to a provision that
contemplates a specific approval requirement by the stockholders (or any class of capital stock of the Corporation) in this Amended and Restated Certificate of Incorporation (including the definition of Requisite Stockholder Consent and Voting
Threshold Date) shall require the greater of (x) the specific approval requirement by the stockholders (or any class of capital stock of the Corporation) contemplated in such provision, and (y) the approval requirements contemplated by this Article V.
14
ARTICLE VII
AMENDMENT OF THE BYLAWS
In furtherance and not in limitation of the powers conferred upon it by the DGCL, and subject to the terms of any series of Preferred Stock, the Board
shall have the power to adopt, amend, alter or repeal the Bylaws of the Corporation by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board at which a quorum is present in any manner not
inconsistent with the laws of the State of Delaware or this Amended and Restated Certificate of Incorporation. The stockholders may not adopt, amend, alter or repeal the Bylaws of the Corporation, or adopt any provision inconsistent therewith,
unless such action is approved, in addition to any other vote required by this Amended and Restated Certificate of Incorporation, by the Requisite Stockholder Consent.
ARTICLE VIII
CORPORATE OPPORTUNITIES
The Corporation renounces any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, any Excluded
Opportunity. An “Excluded Opportunity” is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the
possession of, any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries (a “Covered Person”), unless such matter, transaction or
interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person’s capacity as a director of the Corporation.
15
ARTICLE IX
BOARD OF DIRECTORS
This Article VIII is inserted for the management of the business and for
the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders.
(A) General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, except as otherwise provided by law.
(B) Number of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the number of the directors of the Corporation shall be fixed from time to time solely by
the Board; provided, however, that prior to the Voting Threshold Date, unless otherwise approved by the Requisite Stockholder Consent, the number of the
directors shall not exceed nine (9). For the avoidance of doubt, no decrease in the number of directors constituting the Board shall shorten the term of any incumbent director.
(C) Tenure. The directors shall be elected or appointed for a term of office continuing until the next annual meeting of stockholders of the Corporation. Each director shall hold office until such
director’s successor is elected and qualified, or until such director’s earlier death, resignation, disqualification or removal from office. Any director may resign at any time upon notice to the Corporation given in writing by any electronic
transmission permitted in the Corporation’s Bylaws or in accordance with applicable law.
(D) Vacancies; Newly Created Directorships. Subject to the rights of holders of any series of Preferred Stock, any newly created directorship that results from an increase in the number of directors or
any vacancy on the Board that results from the death, disability, resignation, disqualification or removal of any director or from any other cause shall be filled: (i) prior to the Voting Threshold Date, (x) if the number of directors fixed
pursuant to Section B of this Article VIII does not exceed nine (9), by the affirmative vote of a majority of the total number of directors then in office, even if less
than a quorum, or by a sole remaining director, or by the stockholders of the Corporation with the Requisite Stockholder Consent, and (y) if the number of directors fixed pursuant to Section B of this Article VIII exceeds nine (9), solely by the stockholders of the Corporation with the Requisite Stockholder Consent; or (ii) on or after the Voting Threshold Date solely by the affirmative vote of a majority of
the total number of directors then in office, even if less than a quorum, or by a sole remaining director.
(E) Removal. Subject to the rights of the holders of any series of Preferred Stock expressly set forth in a Preferred Stock Designation adopted in compliance with this Amended and Restated Certification
of Incorporation, any director or the entire Board may be removed from office at any time with or without cause and for any or no reason only with and immediately upon the Requisite Stockholder Consent.
16
(F) Committees. Pursuant to the Bylaws of the Corporation, the Board may establish one or more committees to which may be delegated any or all of the powers and duties of the Board to the full extent
permitted by law.
(G) Stockholder Nominations and Introduction of Business. Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders before a meeting of
stockholders shall be given in the manner provided by the Bylaws.
(H) Preferred Stock Directors. During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to and in accordance
with the provisions of Article IV hereof or any Preferred Stock Designation, then upon commencement and for the duration of the period during which such right continues:
(i) the then otherwise total number of authorized directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so
provided for or fixed pursuant to said provisions, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant
to said provisions, whichever occurs earlier, subject to his earlier death, disqualification, resignation or removal. Except as otherwise provided for or fixed pursuant to and in accordance with the provisions of Article IV hereof or any Preferred Stock Designation, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the
provisions of such stock, all such additional directors elected by the holders of such stock, or elected or appointed to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors shall
automatically cease to be qualified as directors, the terms of office of all such directors shall forthwith terminate and the total authorized number of directors of the Corporation shall be reduced accordingly.
ARTICLE X
ELECTION OF DIRECTORS
Unless and except to the extent that the Bylaws shall so require, the election of directors of the Corporation need not be by written ballot. The
vote required for election of a director by the stockholders at a meeting of stockholders shall, except in a contested election, be the affirmative vote of a majority of the votes cast in favor or against the election of a nominee at a meeting of
stockholders. In a contested election, (i) the directors shall be elected by a plurality of the votes cast at a meeting of stockholders by the holders of stock entitled to vote in such election, and (ii) stockholders shall not be permitted to vote
against a nominee. An election shall be considered contested if, as of the tenth (10th) day preceding the date the Corporation first mails its notice of meeting for such meeting to the stockholders of the Corporation, there are more
nominees for election than directorships on the Board to be filled by election at the meeting.
17
ARTICLE XI
LIMITATION OF DIRECTOR LIABILITY
To the fullest extent permitted by the DGCL as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director; provided, however, that nothing contained in
this Article X shall eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to the provisions of Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal
benefit. No repeal or modification of this Article X shall apply to or have any adverse effect on any right or protection of, or any limitation of the liability of, a
director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
ARTICLE XII
INDEMNIFICATION
The Corporation may indemnify, and advance expenses to, to the fullest extent permitted by law, any person who was or is a party to or is threatened
to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that the person is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.
ARTICLE XIII
CONSENT OF STOCKHOLDERS IN LIEU OF MEETING
Subject to the terms of any series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be
effected at an annual or special meeting of the stockholders and may not be effected by written consent in lieu of a meeting; provided, that prior to the
Voting Threshold Date, any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing,
setting forth the action so taken, shall be signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the books in which
proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be made by hand, overnight courier or by certified or registered mail, return receipt requested.
18
ARTICLE XIV
SPECIAL MEETING OF STOCKHOLDERS
Special meetings of stockholders for any purpose or purposes may be called at any time by the Board, the Chairperson of the Board or the Chief
Executive Officer of the Corporation, and may not be called by another other Person or Persons; provided that, prior to the Final Conversion Date, special
meetings of stockholders for any purpose or purposes may also be called by or at the request of stockholders of the Corporation collectively holding shares of capital stock of the Corporation with voting power sufficient to provide the Requisite
Stockholder Consent. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.
ARTICLE XV
FORUM SELECTION
Unless the Corporation consents in writing to the selection of an alternative forum, (i) the Court of Chancery (the “Chancery Court”) of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the
State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Corporation, (2) any action asserting a claim of breach of a fiduciary duty owed
by, or any other wrongdoing by, any current or former director, officer, other employee or stockholder of the Corporation, (3) any action asserting a claim against the Corporation arising pursuant to any provision of the DGCL, this Amended and
Restated Certificate of Incorporation or the Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery, (4) any action to interpret, apply, enforce or determine the validity of any provisions of this Amended and Restated
Certificate of Incorporation or the Bylaws, or (5) any other action asserting a claim governed by the internal affairs doctrine and (ii) notwithstanding anything to the contrary herein, but subject to the foregoing provisions of this Article XIV, the federal district courts of the United States shall be the exclusive forum for the resolution of any action, suit or proceeding asserting a cause of action
arising under the Securities Act of 1933, as amended. If any action the subject matter of which is within the scope of the preceding sentence is filed in a court other than the applicable courts specified in the immediately preceding sentence (a “Foreign Action”) in the name of any stockholder, such stockholder shall, to the fullest extent permitted by applicable law, be deemed to have consented to (a) the personal
jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the preceding sentence and (b) having service of process made upon such stockholder in any such
action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder. This provision will not apply to claims arising under the Securities Exchange Act of 1934, as amended, or other federal securities laws for which
there is exclusive federal jurisdiction. Any Person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XIV.
19
ARTICLE XVI
MISCELLANEOUS
If any provision or provisions of this Amended and Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as
applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended and Restated Certificate of Incorporation (including,
without limitation, each portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible and without limiting any other provisions of this Amended and Restated Certificate of Incorporation (or any other provision of the Bylaws or any agreement
entered into by the Corporation), the provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any
such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to, or for the
benefit of, the Corporation to the fullest extent permitted by law.
To the fullest extent permitted by law, each and every Person purchasing or otherwise acquiring any interest (of any nature whatsoever) in any shares
of the capital stock of the Corporation shall be deemed, by reason of and from and after the time of such purchase or other acquisition, to have notice of and to have consented to all of the provisions of (a) this Amended and Restated Certificate of
Incorporation, (b) the Bylaws and (c) any amendment to this Amended and Restated Certificate of Incorporation or the Bylaws enacted or adopted in accordance with this Amended and Restated Certificate of Incorporation, the Bylaws and applicable law.
[Remainder of Page Intentionally Left Blank]
20
IN WITNESS WHEREOF, the undersigned has executed this Second Amended and Restated Certificate of Incorporation on June 10, 2021.
|
HIGHCAPE CAPITAL ACQUISITION CORP.
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||
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By:
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/s/ Kevin Rakin
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|
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Name: Kevin Rakin
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Title: Chief Executive Officer
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Signature Page to Amended and Restated Certificate of Incorporation
21
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
QUANTUM-SI INCORPORATED
It is hereby certified that:
| FIRST: |
The name of the corporation is Quantum-Si Incorporated (the “Corporation”).
|
| SECOND: |
The Second Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”), is hereby further amended by striking out
Article X in its entirety and by substituting in lieu of the following:
|
LIMITATION OF DIRECTOR AND OFFICER LIABILITY
To the fullest extent permitted by the DGCL as the same exists or as may hereafter be amended, a director or officer of the
Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or an officer; provided,
however, that nothing contained in this Article X shall eliminate or limit the liability of a director or an officer (i) for any breach of the director’s or
officer’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to the provisions of Section 174 of the DGCL, (iv)
for any transaction from which the director or officer derived an improper personal benefit, or (v) with respect to an officer, in any action by or in the right of the Corporation. No repeal or modification of this Article X shall apply to or have any adverse effect on any right or protection of, or any limitation of the liability of, a director or officer of the Corporation existing at the time of such repeal or
modification with respect to acts or omissions occurring prior to such repeal or modification. All references in this paragraph to an officer shall mean only a person who at the time of an act or omission as to which liability is asserted is deemed
to have consented to service by the delivery of process to the registered agent of the Corporation pursuant to § 3114(b) of Title 10 (for purposes of this sentence only, treating residents of the State of Delaware as if they were nonresidents to
apply of § 3114(b) of Title 10 to this sentence).
| THIRD: |
The amendment of the Certificate of Incorporation herein certified has been duly adopted in accordance with the provisions of Section 242 of the General Corporation
Law of the State of Delaware.
|
EXECUTED, effective as of this 12th day of May, 2023.
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QUANTUM-SI INCORPORATED
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By:
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/s/ Jeffrey Hawkins
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Jeffrey Hawkins
|
||
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Chief Executive Officer
|
||
22
Exhibit 31.1
CERTIFICATIONS UNDER SECTION 302
I, Jeffrey Hawkins, certify that:
| 1. |
I have reviewed this quarterly report on Form 10-Q of Quantum-Si Incorporated;
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
|
| 4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
| a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
| c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
|
| d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
|
| a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
| b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
| Date: August 7, 2023 | |
|
/s/ Jeffrey Hawkins
|
|
|
Jeffrey Hawkins
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Exhibit 31.2
CERTIFICATIONS UNDER SECTION 302
I, Jeffry Keyes, certify that:
| 1. |
I have reviewed this quarterly report on Form 10-Q of Quantum-Si Incorporated;
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
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| 4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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| a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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| b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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| c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
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| d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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| 5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
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| a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
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| b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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| Date: August 7, 2023 | |
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/s/ Jeffry Keyes
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Jeffry Keyes
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Chief Financial Officer
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(Principal Financial Officer)
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Exhibit 32
CERTIFICATIONS UNDER SECTION 906
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Quantum-Si
Incorporated, a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:
The Quarterly Report for the quarter ended June 30, 2023 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the
information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated: August 7, 2023
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/s/ Jeffrey Hawkins
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Jeffrey Hawkins
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||
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Chief Executive Officer
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(Principal Executive Officer)
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Dated: August 7, 2023
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/s/ Jeffry Keyes
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Jeffry Keyes
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||
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Chief Financial Officer
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||
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(Principal Financial Officer)
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