0001140361-24-025201 | 10-Q | XBRL Viewer

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Allowance for estimated credit losses	$ 0	$ 0
Class A Common Stock [Member]
Stockholders' equity
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	600,000,000	600,000,000
Common stock, shares issued (in shares)	121,878,989	121,832,417
Common stock, shares outstanding (in shares)	121,878,989	121,832,417
Class B Common Stock [Member]
Stockholders' equity
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	27,000,000	27,000,000
Common stock, shares issued (in shares)	19,937,500	19,937,500
Common stock, shares outstanding (in shares)	19,937,500	19,937,500

Accrued Expenses and Other Current Liabilities

3 Months Ended

Mar. 31, 2024

Accrued Expenses and Other Current Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

Note 8. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024		December 31, 2023
Restructuring costs	$	222	$	519
Legal fees		1,330		979
Royalties		93		123
Other		238		194
Total accrued expenses and other current liabilities	$	1,883	$	1,815

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2024
Income Taxes [Abstract]
Income Taxes	Note 13. Income Taxes Income taxes for the three months ended March 31, 2024 and 2023 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% for the three months ended March 31, 2024 and 2023. The primary reconciling items between the federal statutory rate of 21.0% for these periods and the Company’s overall effective tax rate of 0.0% were related to the effects of deferred state income taxes, stock-based compensation, changes in the fair value of warrant liabilities, research and development credits, and the valuation allowance recorded against the full amount of its net deferred tax assets. 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. 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, and therefore, a full valuation allowance has been recorded against the Company’s net deferred tax assets as of March 31, 2024 and December 31, 2023.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Other Commitments [Abstract]
Employer matching contributions to 401(k) plan	$ 0	$ 0
Licenses Related to Certain Intellectual Property [Member]
Licenses Related to Certain Intellectual Property [Abstract]
Annual minimum fixed payments	100
Licenses Related to Certain Intellectual Property [Member] \| Accrued Expenses and Other Current Liabilities [Member]
Licenses Related to Certain Intellectual Property [Abstract]
Accrued payments	$ 100		$ 100

Leases (Tables)

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Lease-Related Costs

Lease-related costs for the three months ended March 31, 2024 and 2023 are as follows (in thousands):

	2024		2023
Operating lease cost	$	864	$	982
Variable lease cost		436		394
Total lease cost	$	1,300	$	1,376

Maturities of Operating Lease Liabilities

As of March 31, 2024, the maturities of the operating lease liabilities and a reconciliation to the present value of lease liabilities were as follows (in thousands):

	Remaining Lease Payments
Remainder of 2024	$	3,339
2025		4,527
2026		4,585
2027		4,549
2028		2,975
Thereafter		10,053
Total remaining undiscounted lease payments	$	30,028
Less: Imputed interest		(6,441	)
Less: Lease incentives ⁽¹⁾		(9,104	)
Total operating lease liabilities		14,483
Less: current portion		(1,610	)
Long-term operating lease liabilities	$	12,873
Weighted-average remaining lease term (in years)		6.2
Weighted-average discount rate		7.9	%

(1)	Includes lease incentives that may be realized in 2024 for the costs of leasehold improvements.

Supplemental Cash Flow Information

The following table provides certain cash flow and supplemental cash flow information related to the Company’s lease liabilities for the three months ended March 31, 2024 and 2023 (in thousands):

		2024				2023
Operating cash paid to settle operating lease liabilities		$	1,097			$	1,059

Investments in Marketable Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Unrealized and Realized Gain, Dividend and Interest Income from Marketable Securities [Abstract]
Dividend and interest income from marketable securities	$ 3,574	$ 2,219
Gain on marketable securities, net	0	2,942
Available-for-Sale Securities [Abstract]
Amortized costs	182,296		$ 123,854
Gross unrealized gains	0	0	22
Gross unrealized losses	(28)	$ 0	0
Fair value	182,268		123,876
Available-for-Sale Securities by Remaining Contractual Maturity [Abstract]
One year or less	182,268		123,876
Over one year through five years	0		0
Over five years	0		0
Total	182,268		123,876
Maximum [Member]
Available-for-Sale Securities [Abstract]
Gross unrealized losses	(100)
US Treasury Securities [Member]
Available-for-Sale Securities [Abstract]
Amortized costs	151,538		82,625
Gross unrealized gains	0		15
Gross unrealized losses	(14)		0
Fair value	151,524		82,640
Available-for-Sale Securities by Remaining Contractual Maturity [Abstract]
One year or less	151,524		82,640
Over one year through five years	0		0
Over five years	0		0
Total	151,524		82,640
Commercial Paper [Member]
Available-for-Sale Securities [Abstract]
Amortized costs	30,758		41,229
Gross unrealized gains	0		7
Gross unrealized losses	(14)		0
Fair value	30,744		41,236
Available-for-Sale Securities by Remaining Contractual Maturity [Abstract]
One year or less	30,744		41,236
Over one year through five years	0		0
Over five years	0		0
Total	$ 30,744		$ 41,236

Restructuring (Tables)

3 Months Ended

Mar. 31, 2024

Restructuring [Abstract]

Restructuring Costs

The Company’s restructuring costs, primarily for cash severance and other severance costs, are allocated to the following operating expense categories as follows (in thousands):

	Research and Development			Selling, general and administrative			Total
Balance as of December 31, 2023	$	513		$	6		$	519
Restructuring charges incurred⁽¹⁾		131			-			131
Cash payments and other adjustments⁽¹⁾		(422	)		(6	)		(428	)
Balance as of March 31, 2024	$	222		$	-		$	222
Current liabilities							$	222
Long-term liabilities								-
Total liabilities as of March 31, 2024							$	222

(1)	Restructuring charges incurred and Cash payments and other adjustments include non-cash charges related to stock-based compensation expenses.

Leases, Maturities of Operating Lease Liabilities (Details) - USD ($)
$ in Thousands

Mar. 31, 2024

Dec. 31, 2023

Future Minimum Lease Payments [Abstract]

$ 3,339

4,527

4,585

4,549

2,975

10,053

Total remaining undiscounted lease payments

30,028

Less: Imputed interest

(6,441)

Less: Lease incentives

^[1]

(9,104)

Total operating lease liabilities

14,483

Less: current portion

(1,610)

$ (1,566)

Long-term operating lease liabilities

$ 12,873

$ 13,737

Weighted-average remaining lease term

6 years 2 months 12 days

Weighted-average discount rate

7.90%

[1]	Includes lease incentives that may be realized in 2024 for the costs of leasehold improvements.

Restructuring

3 Months Ended

Mar. 31, 2024

Restructuring [Abstract]

Restructuring

Note 12. Restructuring

The Company committed to organizational restructurings during the first and third quarters of 2023, designed to decrease its costs and create a more streamlined organization to support its business. As of March 31, 2024 and December 31, 2023, the Company recorded a restructuring liability of $0.2 million and $0.5 million, respectively, which is included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

The Company’s restructuring costs, primarily for cash severance and other severance costs, are allocated to the following operating expense categories as follows (in thousands):

	Research and Development			Selling, general and administrative			Total
Balance as of December 31, 2023	$	513		$	6		$	519
Restructuring charges incurred⁽¹⁾		131			-			131
Cash payments and other adjustments⁽¹⁾		(422	)		(6	)		(428	)
Balance as of March 31, 2024	$	222		$	-		$	222
Current liabilities							$	222
Long-term liabilities								-
Total liabilities as of March 31, 2024							$	222

(1)	Restructuring charges incurred and Cash payments and other adjustments include non-cash charges related to stock-based compensation expenses.

The Company’s restructuring activities are complete as of March 31, 2024 and the Company does not expect to incur material additional charges associated with these activities.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue:
Revenue	$ 457	$ 254
Cost of revenue	188	130
Gross profit	269	124
Operating expenses:
Research and development	12,101	18,167
Selling, general and administrative	11,528	11,178
Total operating expenses	23,629	29,345
Loss from operations	(23,360)	(29,221)
Dividend and interest income	3,574	2,219
Gain on marketable securities, net	0	2,942
Change in fair value of warrant liabilities	319	391
Other (expense) income, net	(7)	58
Loss before provision for income taxes	(19,474)	(23,611)
Provision for income taxes	0	0
Net loss	$ (19,474)	$ (23,611)
Net loss per common share attributable to common stockholders, basic (in dollars per share)	$ (0.14)	$ (0.17)
Net loss per common share attributable to common stockholders, diluted (in dollars per share)	$ (0.14)	$ (0.17)
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic (in shares)	141,773	140,280
Weighted-average shares used to compute net loss per share attributable to common stockholders, diluted (in shares)	141,773	140,280
Other comprehensive loss:
Net unrealized loss on marketable securities, net of tax	$ (28)	$ 0
Foreign currency translation adjustment	(5)	0
Total other comprehensive loss, net of tax	(33)	0
Comprehensive loss	(19,507)	(23,611)
Product [Member]
Revenue:
Revenue	428	251
Service [Member]
Revenue:
Revenue	$ 29	$ 3

Leases, Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash Flow and Supplemental Noncash Information [Abstract]
Operating cash paid to settle operating lease liabilities	$ 1,097	$ 1,059

Income Taxes (Details)	3 Months Ended
Income Taxes (Details)	Mar. 31, 2024	Mar. 31, 2023
Income Taxes [Abstract]
Estimated annual effective tax rate	0.00%	0.00%
Federal statutory rate	21.00%	21.00%

Stock-based Compensation

3 Months Ended

Mar. 31, 2024

Stock-based Compensation [Abstract]

Stock-based Compensation

Note 9. Stock-based Compensation

Equity Incentive Plan

The Quantum-Si Incorporated 2021 Equity Incentive 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 March 31, 2024 there were 14,661,839 shares available for future grant under the 2021 Plan.

Inducement Equity Incentives

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 Class A common stock to be used exclusively for grants of awards to employees 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. As of March 31, 2024, there were 60,250 shares remaining available for issuance under the 2023 Inducement Plan.

Stock Options

During the three months ended March 31, 2024, the Company did not grant any stock options to participants. Stock-based compensation related to stock options for the three months ended March 31, 2024 and 2023 was $1.3 million and $2.3 million, respectively.

A summary of the stock option activity is presented in the table below:

	Number of Options			Weighted Average Exercise Price (per share)		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2023		22,511,900		$	2.79		8.22	$	3,194
Granted		-			-
Exercised		-			-
Forfeited		(384,573	)		3.78
Expired		(25,520	)		0.06
Outstanding at March 31, 2024		22,101,807		$	2.78		8.01	$	2,832
Exercisable at March 31, 2024		7,918,930		$	3.52		6.65	$	610
Vested and expected to vest at March 31, 2024		18,615,698		$	2.85		7.86	$	2,286

Modification of Performance Stock Options

In November 2022 and May 2023, the Company granted 2,780,000 and 1,000,000 performance-based stock option awards to its Chief Executive Officer and Chief Financial Officer, respectively. The vesting of these awards are subject to continued service to the Company and certain market conditions. The market conditions require the Company’s Class A common stock trade above specified levels for a certain periods of time. The fair values of the awards were estimated at the grant date using the Monte Carlo simulation model.

On March 15, 2024, the market conditions that trigger the vesting of these performance-based stock option awards were modified. The modified market conditions require the Company’s Class A common stock to trade above specified levels for certain defined periods of time that are different from the original awards. The Company accounted for the modifications as modifications of market conditions. The total incremental stock-based compensation expense to be recognized for these awards is $2.4 million within Selling, general and administrative operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Incremental stock-based compensation expense for the three months ended March 31, 2024 was immaterial. There were no such modifications to performance-based stock option awards for the three months ended March 31, 2023.

Restricted Stock Units

During the three months ended March 31, 2024, the Company granted 5,406,164 restricted stock unit (“RSU”) awards. Stock-based compensation related to RSU awards for the three months ended March 31, 2024 and 2023 was $0.3 million and $1.6 million, respectively.

A summary of the RSU activity is presented in the table below:

	Number of Shares Underlying RSUs			Weighted Average Grant-Date Fair Value (per share)
Nonvested RSUs at December 31, 2023		847,169		$	2.68
Granted		5,406,164			1.73
Vested		(46,572	)		6.66
Forfeited		(54,417	)		2.11
Nonvested RSUs at March 31, 2024		6,152,344			1.82

Stock-based compensation is allocated to Research and development and Selling, general and administrative operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Stock-based compensation expense for the three months ended March 31, 2024 and 2023 is as follows (in thousands):

	2024		2023
Research and development	$	490	$	967
Selling, general and administrative		1,155		2,941
Total stock-based compensation	$	1,645	$	3,908

As of March 31, 2024 total unrecognized stock-based compensation related to stock options and RSUs was $24.4 million, which is expected to be recognized over the remaining weighted average vesting period of 3.3 years.

Inventory, Net (Details) - USD ($) $ in Thousands	3 Months Ended
Inventory, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Inventory, Net [Abstract]
Raw materials	$ 5,461		$ 4,951
Work in progress	2,039		784
Finished goods	1,470		1,592
Total inventory	8,970		7,327
Inventory reserves	(4,024)		(3,382)
Total inventory, net	4,946		$ 3,945
Inventory, Net [Member]
Reserve recorded		$ 0
Research and Development Expenses [Member]
Inventory, Net [Member]
Reserve recorded	$ 600

Organization and Description of Business	3 Months Ended
Organization and Description of Business	Mar. 31, 2024
Organization and Description of Business [Abstract]
Organization and Description of Business	Note 1. Organization and Description of Business Quantum-Si Incorporated (including its subsidiaries, the “Company” or “Quantum-Si”) was incorporated in Delaware on June 10, 2020 as HighCape Capital Acquisition Corp. The Company’s legal name became Quantum-Si Incorporated following a business combination on June 10, 2021 between the Company and Q-SI Operations Inc. (formerly Quantum-Si Incorporated), which was founded in 2013. 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^TM(“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 currently comprised of the Platinum^® NGPS instrument, the Platinum Analysis Software service, reagent kits and semiconductor chips for use with its instruments.

Stock-based Compensation, Restricted Stock Units (Details) - RSU Awards [Member] - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Restricted Stock Units [Abstract]
Stock-based compensation	$ 0.3	$ 1.6
Number of Shares Underlying RSUs [Roll Forward]
Nonvested RSUs, beginning balance (in shares)	847,169
Granted (in shares)	5,406,164
Vested (in shares)	(46,572)
Forfeited (in shares)	(54,417)
Non-vested RSUs, ending balance (in shares)	6,152,344
Weighted Average Grant-Date Fair Value [Abstract]
Non-vested RSUs, beginning balance (in dollars per share)	$ 2.68
Granted (in dollars per share)	1.73
Vested (in dollars per share)	6.66
Forfeited (in dollars per share)	2.11
Non-vested RSUs, ending balance (in dollars per share)	$ 1.82

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Stock-based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Stock-based Compensation [Abstract]

Stock Option Activity

A summary of the stock option activity is presented in the table below:

	Number of Options			Weighted Average Exercise Price (per share)		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2023		22,511,900		$	2.79		8.22	$	3,194
Granted		-			-
Exercised		-			-
Forfeited		(384,573	)		3.78
Expired		(25,520	)		0.06
Outstanding at March 31, 2024		22,101,807		$	2.78		8.01	$	2,832
Exercisable at March 31, 2024		7,918,930		$	3.52		6.65	$	610
Vested and expected to vest at March 31, 2024		18,615,698		$	2.85		7.86	$	2,286

RSU Activity

A summary of the RSU activity is presented in the table below:

	Number of Shares Underlying RSUs			Weighted Average Grant-Date Fair Value (per share)
Nonvested RSUs at December 31, 2023		847,169		$	2.68
Granted		5,406,164			1.73
Vested		(46,572	)		6.66
Forfeited		(54,417	)		2.11
Nonvested RSUs at March 31, 2024		6,152,344			1.82

Stock-Based Compensation

	2024		2023
Research and development	$	490	$	967
Selling, general and administrative		1,155		2,941
Total stock-based compensation	$	1,645	$	3,908

Related Party Transactions	3 Months Ended
Related Party Transactions	Mar. 31, 2024
Related Party Transactions [Abstract]
Related Party Transactions	Note 14. Related Party Transactions Effective as of February 17, 2021, legacy Quantum-Si entered into a Master Services Agreement (“MSA”) with 4Catalyzer Corporation (“4C”), a company controlled by Dr. Jonathan Rothberg, the Chairman of the Board, pursuant to which the Company may engage 4C to provide services such as general administration, facilities, information technology, financing, legal, human resources and other services, through future statements of work and under terms and conditions to be determined by the parties with respect to any services to be provided. For the three months ended March 31, 2024 and 2023, the Company incurred $0.1 million of expenses payable to 4C. These expenses included amounts for month-to-month sublease arrangements for office and laboratory spaces from 4C and certain administrative expenses. These amounts are included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Effective October 1, 2022, the Company entered into a Protein Engineering Collaboration (the “New 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. Dr. Rothberg serves as Chairman of the board of directors of PEI and the Rothberg family are controlling stockholders of PEI. As of March 31, 2024, the amount due from PEI to the Company related to the New Collaboration was $0.2 million. As of December 31, 2023, the amount due from PEI to the Company related to the New Collaboration was $0.3 million. 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 the Company’s 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.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
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+ Details

Investments in Marketable Securities

3 Months Ended

Mar. 31, 2024

Investments in Marketable Securities [Abstract]

Investments in Marketable Securities

Note 3. Investments in Marketable Securities

As of March 31, 2024 and December 31, 2023, the Company’s investments in marketable securities were determined to be available-for-sale securities. Gross unrealized gains or losses resulting from changes in the fair value of available-for-sale securities for the three months ended March 31, 2024 were less than $0.1 million. There were no such gains or losses for the three months ended March 31, 2023.

Dividend and interest income from marketable securities and realized and unrealized gain on marketable securities, net, related to the Company’s available-for sale securities for the three months ended March 31, 2024 and trading securities for the three months ended March 31, 2023 were as follows (in thousands):


	2024		2023
Dividend and interest income from marketable securities	$	3,574	$	2,219
Gain on marketable securities, net	$	-	$	2,942

The following is a summary of the Company’s available-for-sale securities recorded within Marketable securities in the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Financial Assets:
Short-term marketable securities:
U.S. Treasury securities	$	151,538	$	-	$	(14	)	$	151,524
Commercial paper		30,758		-		(14	)		30,744
Total	$	182,296	$	-	$	(28	)	$	182,268

	December 31, 2023
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Financial Assets:
Short-term marketable securities:
U.S. Treasury securities	$	82,625	$	15	$	-	$	82,640
Commercial paper		41,229		7		-		41,236
Total	$	123,854	$	22	$	-	$	123,876

The fair values of the Company’s available-for-sale securities included within Marketable securities in the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, by remaining contractual maturity, are as follows (in thousands):

	March 31, 2024
	One Year or Less		Over One Year Through Five Years		Over Five Years		Total
Financial Assets:
Short-term marketable securities:
U.S. Treasury securities	$	151,524	$	-	$	-	$	151,524
Commercial paper		30,744		-		-		30,744
Total	$	182,268	$	-	$	-	$	182,268

	December 31, 2023
	One Year or Less		Over One Year Through Five Years		Over Five Years		Total
Financial Assets:
Short-term marketable securities:
U.S. Treasury securities	$	82,640	$	-	$	-	$	82,640
Commercial paper		41,236		-		-		41,236
Total	$	123,876	$	-	$	-	$	123,876

Net Loss Per Share

3 Months Ended

Mar. 31, 2024

Net Loss Per Share [Abstract]

Net Loss Per Share

Note 10. Net Loss Per Share

The Company presents both basic earnings per share (“EPS”) and diluted EPS. Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss per share is computed by giving effect to all common share equivalents to the extent they are 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 calculations for the three months ended March 31, 2024 and 2023 of basic and diluted net loss per share for the Company’s common stock (in thousands, except per share amounts):

	2024			2023
Numerator
Net loss	$	(19,474	)	$	(23,611	)
Numerator for basic and diluted EPS - loss attributable to common stockholders	$	(19,474	)	$	(23,611	)
Denominator
Common stock		141,773			140,280
Denominator for basic and diluted EPS - weighted-average common stock		141,773			140,280
Basic and diluted net loss per share	$	(0.14	)	$	(0.17	)

Additionally, net loss per share attributable to Class A and Class B common stockholders was the same on a basic and diluted basis, as the inclusion of all potential common equivalent shares outstanding would have been anti-dilutive.

The following potential dilutive shares were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive for the three months ended March 31, 2024 and 2023:

	2024		2023
Outstanding options to purchase common stock		22,101,807		24,218,892
Outstanding restricted stock units		6,152,344		465,866
Outstanding warrants		3,968,319		3,968,319
		32,222,470		28,653,077

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies [Abstract]

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”). All intercompany transactions are eliminated.

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, 2023. The Condensed Consolidated Balance Sheets as of December 31, 2023 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 months ended March 31, 2024 are not necessarily indicative of the results to be expected for any subsequent quarter, the year ending December 31, 2024, or any other period.

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, 2023.

Concentration of Business 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 March 31, 2024, the Company’s marketable securities consist of mutual funds, U.S. Treasury securities and commercial paper. 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.

The Company sources certain key materials and components utilized in the Company’s products from single or limited suppliers. Historically, the Company has not experienced significant issues sourcing these materials and components. However, if these suppliers were not able to supply the requested amount of materials or components, it could take a considerable length of time to obtain alternative sources, which could affect the Company’s development efforts and commercial operations.

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 recorded 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 allowances with respect to deferred tax assets;

●

inventory valuation;

●

valuation of excess and obsolete inventory reserves;

●

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 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 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. Materials that may be utilized for either commercial or, alternatively, for research and development purposes, are classified as inventory. Amounts in inventory 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, records an excess and obsolete reserve against inventory to its estimated net realizable value in the period it is identified. For further discussion related to inventory, please refer to Note 5. Inventory, Net.

Warrant Liabilities

The Company’s outstanding warrants include publicly traded warrants (the “Public Warrants”) and warrants sold in a private placement (the “Private Warrants”). The Public Warrants and Private Warrants meet the definition of a derivative and the Company recorded these warrants as long-term liabilities in the Condensed Consolidated Balance Sheets at fair value upon initial recognition, with subsequent changes in their respective fair values recognized in the Condensed Consolidated Statements of Operations and Comprehensive Loss at each reporting date. For further discussion related to the Public Warrants and Private Warrants, please refer to Note 11. Warrant Liabilities.

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 access to analysis software 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. The Company has made the accounting policy election allowed for under ASC 606-10-32-2A to exclude all sales taxes from transaction price. 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 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 includes instruments and consumables. Customers generally do not have a right to return products, 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 service coverage at the customer’s option are recognized ratably over the contract service period as these services are performed evenly over time. Revenues for advanced training is recognized at a point in time upon satisfaction of the underlying performance obligation. The Company typically provides a standard one-year warranty which covers defects in materials, workmanship and manufacturing or performance conditions under normal use and service. The first year of the warranty of the products is considered an assurance-type warranty and is recorded as Cost of revenue within the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company has determined the standard first-year warranty is not a distinct performance obligation.

The Company disaggregates revenue from contracts with customers by type of revenue. The Company believes product revenue and service revenue aggregate the payor types by nature, amount, timing and uncertainty of its revenue streams. Total revenue generated from domestic and international sales was approximately $0.3 million and $0.2 million, respectively, for the three months ended March 31, 2024. All revenue generated for the three months ended March 31, 2023 resulted from domestic sales.

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 March 31, 2024, the Company had deferred revenue of $0.1 million included within Accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets. As of March 31, 2024, amounts included within Other long-term liabilities in the Company’s Condensed Consolidated Balance Sheets were immaterial. The Company expects to recognize approximately 30% of its remaining performance obligations as revenue for the remainder of the year ending December 31, 2024.

Stock-Based Compensation

Stock-based compensation expense for stock option grants with only service conditions is recognized on a straight-line basis over the requisite service period of the individual grants, which is generally the vesting period, based on the estimated grant date fair values. Stock-based compensation expense for stock option grants subject to non-financing event performance conditions on an accelerated basis is recognized as though each vesting portion of the award was, in substance, a separate award.

Prior to the business combination between HighCape Capital Acquisition LLC and Quantum-Si Incorporated in June 2021 (the “Business Combination”), the fair value of the shares of common stock underlying stock options had historically been determined by the Company’s board of directors (the “Board”), with input from management and contemporaneous third-party valuations, as there was no public market for the common stock. Given the absence of a public trading market for the Company’s common stock, the Board exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of the Company’s common stock at each option grant date.

After the completion of the Business Combination, the Company measures compensation expense for stock-based awards to employees, non-employees and directors based upon the awards’ initial grant-date fair values. Stock-based compensation expense for stock options, restricted stock units and performance awards is recorded over the requisite service period. For awards with only a service condition, the Company expenses stock-based compensation using the straight-line method over the requisite service period for the entire award. For awards with a market condition, the Company expenses the grant date fair value at the target over the vesting period regardless of the value the award recipients ultimately receive. The fair value of restricted stock without a market condition is estimated using the current market price of the Company’s Class A common stock on the date of grant. The fair value of stock option grants with a market condition is estimated at the date of grant using the Monte Carlo simulation model (“Monte Carlo”). The fair values of stock option grants are estimated as of the date of grant by applying the Black-Scholes option valuation model (“Black-Scholes”). The Black-Scholes and Monte Carlo models incorporate assumptions as to stock price volatility, the expected life of options or restricted stock, a risk-free interest rate and dividend yield. The effect of forfeiture in compensation costs is recognized based on actual forfeitures when they occur.

Black-Scholes is affected by the stock price on the date of the grant as well as assumptions regarding a number of highly complex and subjective variables. These variables include the expected term of the option, expected risk-free interest rate, the expected volatility of Class A common stock, and expected dividend yield; each of which is described below. The assumptions for expected term and expected volatility are the two assumptions that significantly affect the grant date fair value.

●

Expected Term: The expected term using the “simplified” method, which is the simple average of the vesting period and the contractual term.

●

Risk-free Interest Rate: The risk-free interest rate for periods within the expected term of the awards is based on the U.S. Treasury yield curve in effect at the time of the grant.

●

Expected Stock Price Volatility: The Company determined expected annual equity volatility based on the historical volatility of its Class A common stock.

●

Dividend Yield: Because the Company has never paid a dividend and does not expect to begin doing so in the foreseeable future, the Company assumes no dividend yield in valuing the stock-based awards.

●

Exercise Price: The exercise price is taken directly from the grant notice issued to employees and nonemployees.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands income tax disclosure requirements to include additional information related to the rate reconciliation of effective tax rates to statutory rates, as well as additional disaggregation of taxes paid in both U.S. and foreign jurisdictions. The amendments in ASU 2023-09 also remove disclosures related to certain unrecognized tax benefits and deferred taxes. The amendments are effective for fiscal years beginning after December 31, 2024. The amendments may be applied prospectively or retrospectively. The Company is currently evaluating the effect ASU 2023-09 may have on its Consolidated Financial Statements and disclosures.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosures about significant segment expenses. In addition, the ASU clarified that single reportable segment entities must apply Topic 280 in its entirely. The ASU does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The ASU is required to be applied retrospectively to all periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the effect ASU 2023-07 may have on its Consolidated Financial Statements and disclosures.

Property and Equipment, Net

3 Months Ended

Mar. 31, 2024

Property and Equipment, Net [Abstract]

Property and Equipment, Net

Note 6. Property and Equipment, Net

Property and equipment, net, consists of the following as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024			December 31, 2023
Laboratory and production equipment	$	15,696		$	14,727
Computer equipment		1,721			1,707
Purchased software		188			188
Furniture and fixtures		325			310
Leasehold improvements		7,226			6,948
Construction in process		2,133			2,438
Subtotal		27,289			26,318
Less: Accumulated depreciation and amortization		(11,120	)		(10,043	)
Property and equipment, net	$	16,169		$	16,275

Depreciation and amortization expense was $1.1 million and $0.8 million for the three months ended March 31, 2024 and 2023, respectively. The Company had no disposals of property and equipment for the three months ended March 31, 2024. Losses on disposals of property and equipment were immaterial for three months ended March 31, 2023. No impairments of property and equipment were recorded during the three months ended March 31, 2024 and 2023.

Stock-based Compensation, Equity Incentive Plan and Inducement Equity Incentives (Details) - shares	Mar. 31, 2024	May 08, 2023
2021 Plan [Member]
Stock-based Compensation [Abstract]
Shares available for issuance (in shares)	14,661,839
2023 Inducement Plan [Member]
Stock-based Compensation [Abstract]
Shares available for issuance (in shares)	60,250
Common stock reserved for issuance (in shares)		3,000,000

Property and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Property and Equipment, Net [Abstract]
Property and equipment	$ 27,289		$ 26,318
Less: Accumulated depreciation and amortization	(11,120)		(10,043)
Property and equipment, net	16,169		16,275
Depreciation and amortization expense	1,100	$ 800
Loss on disposal of property and equipment	0	(3)
Impairments	0	$ 0
Laboratory and Production Equipment [Member]
Property and Equipment, Net [Abstract]
Property and equipment	15,696		14,727
Computer Equipment [Member]
Property and Equipment, Net [Abstract]
Property and equipment	1,721		1,707
Purchased Software [Member]
Property and Equipment, Net [Abstract]
Property and equipment	188		188
Furniture and Fixtures [Member]
Property and Equipment, Net [Abstract]
Property and equipment	325		310
Leasehold Improvements [Member]
Property and Equipment, Net [Abstract]
Property and equipment	7,226		6,948
Construction in Process [Member]
Property and Equipment, Net [Abstract]
Property and equipment	$ 2,133		$ 2,438

Stock-based Compensation, Modification of Performance Stock Options (Details) - USD ($)	1 Months Ended		3 Months Ended		36 Months Ended
	May 31, 2023	Nov. 30, 2022	Mar. 31, 2024	Mar. 31, 2023	Mar. 15, 2027
Stock-based Compensation [Abstract]
Incremental stock-based compensation expense				$ 0
Plan [Member]
Stock-based Compensation [Abstract]
Incremental stock-based compensation expense					$ 2,400,000
Chief Executive Officer [Member]
Stock-based Compensation [Abstract]
Granted (in shares)		2,780,000
Chief Financial Officer [Member]
Stock-based Compensation [Abstract]
Granted (in shares)	1,000,000

Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2024

Accrued Expenses and Other Current Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024		December 31, 2023
Restructuring costs	$	222	$	519
Legal fees		1,330		979
Royalties		93		123
Other		238		194
Total accrued expenses and other current liabilities	$	1,883	$	1,815

Investments in Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2024

Investments in Marketable Securities [Abstract]

Dividend and Interest Income and Realized and Unrealized Gain on Marketable Securities, Net


	2024		2023
Dividend and interest income from marketable securities	$	3,574	$	2,219
Gain on marketable securities, net	$	-	$	2,942

Available-for-Sale Securities

	March 31, 2024
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Financial Assets:
Short-term marketable securities:
U.S. Treasury securities	$	151,538	$	-	$	(14	)	$	151,524
Commercial paper		30,758		-		(14	)		30,744
Total	$	182,296	$	-	$	(28	)	$	182,268

	December 31, 2023
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Financial Assets:
Short-term marketable securities:
U.S. Treasury securities	$	82,625	$	15	$	-	$	82,640
Commercial paper		41,229		7		-		41,236
Total	$	123,854	$	22	$	-	$	123,876

Available-for-Sale Securities by Remaining Contractual Maturity

	March 31, 2024
	One Year or Less		Over One Year Through Five Years		Over Five Years		Total
Financial Assets:
Short-term marketable securities:
U.S. Treasury securities	$	151,524	$	-	$	-	$	151,524
Commercial paper		30,744		-		-		30,744
Total	$	182,268	$	-	$	-	$	182,268

	December 31, 2023
	One Year or Less		Over One Year Through Five Years		Over Five Years		Total
Financial Assets:
Short-term marketable securities:
U.S. Treasury securities	$	82,640	$	-	$	-	$	82,640
Commercial paper		41,236		-		-		41,236
Total	$	123,876	$	-	$	-	$	123,876

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2024
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 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 approximately $0.1 million as well as royalties based on net sales if the royalties exceed annual minimum fixed payments. As of March 31, 2024 and December 31, 2023, the Company had accrued royalties of approximately $0.1 million included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. Other commitments: The Company sponsors a 401(k) defined contribution plan covering all eligible U.S. employees (the “401(k) Plan”). Contributions to the 401(k) Plan are discretionary. The Company did not make any matching contributions to the 401(k) Plan for the three months ended March 31, 2024 and 2023. Contingencies The Company is subject to claims in the ordinary course of business. Except as discussed below, 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 the liability is probable and estimable. In April 2023, the Company informed the contract manufacturer that had manufactured its Platinum® and Carbon™ instruments that it intended to wind down the relationship and transition to a different contract manufacturer. In October 2023, the former contract manufacturer filed a complaint against the Company in the State of Texas alleging breach of contract and made claims for economic damage and attorney costs. In January 2024, the suit was withdrawn and refiled in the State of Minnesota alleging similar claims. Although it is not possible to determine the potential financial exposure associated with the alleged claim at this time given its early stage, the Company believes it has a meritorious defense and intends to vigorously defend against all claims asserted in the complaint. 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 Condensed Consolidated Statements of Operations and Comprehensive Loss in connection with the indemnification provisions have not been material.

Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

Note 7. Leases

Lease-related costs for the three months ended March 31, 2024 and 2023 are as follows (in thousands):

	2024		2023
Operating lease cost	$	864	$	982
Variable lease cost		436		394
Total lease cost	$	1,300	$	1,376

As of March 31, 2024, the maturities of the operating lease liabilities and a reconciliation to the present value of lease liabilities were as follows (in thousands):

	Remaining Lease Payments
Remainder of 2024	$	3,339
2025		4,527
2026		4,585
2027		4,549
2028		2,975
Thereafter		10,053
Total remaining undiscounted lease payments	$	30,028
Less: Imputed interest		(6,441	)
Less: Lease incentives ⁽¹⁾		(9,104	)
Total operating lease liabilities		14,483
Less: current portion		(1,610	)
Long-term operating lease liabilities	$	12,873
Weighted-average remaining lease term (in years)		6.2
Weighted-average discount rate		7.9	%

(1)	Includes lease incentives that may be realized in 2024 for the costs of leasehold improvements.

The following table provides certain cash flow and supplemental cash flow information related to the Company’s lease liabilities for the three months ended March 31, 2024 and 2023 (in thousands):

		2024				2023
Operating cash paid to settle operating lease liabilities		$	1,097			$	1,059

In December 2021, the Company signed a 10-year lease for approximately 67,000 square feet of space in New Haven, Connecticut. The lease commenced on January 8, 2022 with rent payments beginning on July 7, 2022. Under the lease, the landlord agreed to reimburse the Company for up to $9.1 million 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 these lease incentives as an offset to the lease liability recorded at the inception of the lease. Although the Company believes it is contractually entitled to the $9.1 million 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.

The Company incurred and recognized total leasehold improvements of approximately $1.6 million related to reimbursable construction costs which were included in construction in progress within Property and equipment, net, in the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023.

Leases, New Haven, Connecticut (Details)
$ in Thousands

Mar. 31, 2024

USD ($)

ft²

Dec. 31, 2023

USD ($)

Leases [Abstract]

Lease incentives

^[1]

$ 9,104

Space Located in New Haven, Connecticut [Member]

Leases [Abstract]

Lease term

10 years

Area of leased space | ft²

67,000

Lease incentives

$ 9,100

Leasehold improvements

$ 1,600

[1]	Includes lease incentives that may be realized in 2024 for the costs of leasehold improvements.

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue Recognition [Abstract]
Warranty period	1 year
Revenue	$ 457	$ 254
Stock-Based Compensation [Abstract]
Expected dividend yield	0.00%
Accrued Expenses and Other Current Liabilities [Member]
Deferred Revenue [Abstract]
Deferred revenue	$ 100
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01
Transaction Price Allocated to Remaining Performance Obligations [Abstract]
Remaining performance obligation, percentage to be recognized	30.00%
Remaining performance obligation, expected timing of satisfaction	9 months
Domestic [Member]
Revenue Recognition [Abstract]
Revenue	$ 300
International [Member]
Revenue Recognition [Abstract]
Revenue	$ 200

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

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, 2023.

Global Developments

Throughout 2023, various central banks around the world, including the Federal Reserve in the United States, raised interest rates. While these rate increases have not had a significant adverse impact on the Company to date, the impact of such rate increases on the overall financial markets and the economy may adversely impact the Company in the future. 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.

Although the Company does not expect to be significantly impacted by the conflicts in Ukraine or Israel and Gaza, 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 these conflicts on the global economy. To date, the Company’s business has not been materially impacted by the conflicts, however, as the conflicts continue or worsen, it may impact the Company’s business, financial condition, results of operations and cash flows.

Concentration of Business Risk

Segment Reporting

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current year’s presentation.

Use of Estimates

●

valuation allowances with respect to deferred tax assets;

●

inventory valuation;

●

valuation of excess and obsolete inventory reserves;

●

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.

Inventory, Net

Warrant Liabilities

Revenue Recognition

Deferred Revenue

Stock-Based Compensation

●

Expected Term: The expected term using the “simplified” method, which is the simple average of the vesting period and the contractual term.

●

Risk-free Interest Rate: The risk-free interest rate for periods within the expected term of the awards is based on the U.S. Treasury yield curve in effect at the time of the grant.

●

Expected Stock Price Volatility: The Company determined expected annual equity volatility based on the historical volatility of its Class A common stock.

●

Dividend Yield: Because the Company has never paid a dividend and does not expect to begin doing so in the foreseeable future, the Company assumes no dividend yield in valuing the stock-based awards.

●

Exercise Price: The exercise price is taken directly from the grant notice issued to employees and nonemployees.

Recently Issued Accounting Pronouncements

Inventory, Net

3 Months Ended

Mar. 31, 2024

Inventory, Net [Abstract]

Inventory, Net

Note 5. Inventory, Net

Inventory, net, consists of the following as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024			December 31, 2023
Raw materials	$	5,461		$	4,951
Work in progress		2,039			784
Finished goods		1,470			1,592
Total inventory		8,970			7,327
Inventory reserves		(4,024	)		(3,382	)
Total inventory, net	$	4,946		$	3,945

As of March 31, 2024 and December 31, 2023, the Company included $4.0 million and $3.4 million, respectively, of reserves against inventory in the Condensed Consolidated Balance Sheets related to product that was considered to not have an alternative future use. For the three months ended March 31, 2024, the Company recorded $0.6 million reserve against inventory in Research and Development expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss related to product that was considered to not have an alternative future use. There was no such reserve recorded against inventory for the three months ended March 31, 2023.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (19,474)	$ (23,611)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,061	803
Non-cash lease expense	588	536
(Gain) loss on marketable securities, net	0	(2,942)
(Accretion) amortization on marketable securities	(2,119)	0
(Gain) loss on disposal of fixed assets	0	3
Change in fair value of warrant liabilities	(319)	(391)
Change in fair value of contingent consideration	0	34
Stock-based compensation	1,645	3,908
Other	22	0
Changes in operating assets and liabilities:
Accounts receivable, net	126	(82)
Inventory, net	(228)	(1,708)
Prepaid expenses and other current assets	31	738
Accounts payable	(633)	(730)
Accrued expenses and other current liabilities	(3,094)	(4,537)
Operating lease liabilities	(820)	(743)
Other long-term liabilities	6	24
Net cash used in operating activities	(23,208)	(28,698)
Cash flows from investing activities:
Purchases of property and equipment	(1,046)	(2,574)
Internally developed software - capitalized costs	(59)	(887)
Purchases of marketable securities	(78,823)	0
Sales of marketable securities	22,500	29,500
Net cash (used in) provided by investing activities	(57,428)	26,039
Cash flows from financing activities:
Deferred offering costs	(70)	0
Refund of issuance costs from 2021 Business Combination	14	0
Net cash used in financing activities	(56)	0
Effect of exchange rate changes on cash and cash equivalents	(5)	0
Net decrease in cash and cash equivalents	(80,697)	(2,659)
Cash and cash equivalents at beginning of period	133,860	84,319
Cash and cash equivalents at end of period	53,163	81,660
Supplemental disclosure of cash flow information:
Cash paid for income taxes	16	0
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment purchased but not paid	231	847
Deferred offering costs payable	$ 75	$ 0

Inventory, Net (Tables)

3 Months Ended

Mar. 31, 2024

Inventory, Net [Abstract]

Inventory, Net

Inventory, net, consists of the following as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024			December 31, 2023
Raw materials	$	5,461		$	4,951
Work in progress		2,039			784
Finished goods		1,470			1,592
Total inventory		8,970			7,327
Inventory reserves		(4,024	)		(3,382	)
Total inventory, net	$	4,946		$	3,945

Property and Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2024

Property and Equipment, Net [Abstract]

Property and Equipment, Net

Property and equipment, net, consists of the following as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024			December 31, 2023
Laboratory and production equipment	$	15,696		$	14,727
Computer equipment		1,721			1,707
Purchased software		188			188
Furniture and fixtures		325			310
Leasehold improvements		7,226			6,948
Construction in process		2,133			2,438
Subtotal		27,289			26,318
Less: Accumulated depreciation and amortization		(11,120	)		(10,043	)
Property and equipment, net	$	16,169		$	16,275

Fair Value of Financial Instruments, Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Assets [Abstract]
Marketable securities	$ 182,268	$ 123,876
Liabilities [Abstract]
Warrants	955	1,274
Recurring [Member]
Assets [Abstract]
Total assets	227,738	253,192
Liabilities [Abstract]
Total liabilities	955	1,274
Recurring [Member] \| Public Warrants [Member]
Liabilities [Abstract]
Warrants	920	1,227
Recurring [Member] \| Private Warrants [Member]
Liabilities [Abstract]
Warrants	35	47
Recurring [Member] \| Money Market Funds [Member]
Assets [Abstract]
Cash equivalents	45,470	50,226
Recurring [Member] \| US Treasury Securities [Member]
Assets [Abstract]
Cash equivalents		59,654
Marketable securities	151,524	82,640
Recurring [Member] \| Commercial Paper [Member]
Assets [Abstract]
Cash equivalents		19,436
Marketable securities	30,744	41,236
Recurring [Member] \| Level 1 [Member]
Assets [Abstract]
Total assets	196,994	192,520
Liabilities [Abstract]
Total liabilities	920	1,227
Recurring [Member] \| Level 1 [Member] \| Public Warrants [Member]
Liabilities [Abstract]
Warrants	920	1,227
Recurring [Member] \| Level 1 [Member] \| Private Warrants [Member]
Liabilities [Abstract]
Warrants	0	0
Recurring [Member] \| Level 1 [Member] \| Money Market Funds [Member]
Assets [Abstract]
Cash equivalents	45,470	50,226
Recurring [Member] \| Level 1 [Member] \| US Treasury Securities [Member]
Assets [Abstract]
Cash equivalents		59,654
Marketable securities	151,524	82,640
Recurring [Member] \| Level 1 [Member] \| Commercial Paper [Member]
Assets [Abstract]
Cash equivalents		0
Marketable securities	0	0
Recurring [Member] \| Level 2 [Member]
Assets [Abstract]
Total assets	30,744	60,672
Liabilities [Abstract]
Total liabilities	0	0
Recurring [Member] \| Level 2 [Member] \| Public Warrants [Member]
Liabilities [Abstract]
Warrants	0	0
Recurring [Member] \| Level 2 [Member] \| Private Warrants [Member]
Liabilities [Abstract]
Warrants	0	0
Recurring [Member] \| Level 2 [Member] \| Money Market Funds [Member]
Assets [Abstract]
Cash equivalents	0	0
Recurring [Member] \| Level 2 [Member] \| US Treasury Securities [Member]
Assets [Abstract]
Cash equivalents		0
Marketable securities	0	0
Recurring [Member] \| Level 2 [Member] \| Commercial Paper [Member]
Assets [Abstract]
Cash equivalents		19,436
Marketable securities	30,744	41,236
Recurring [Member] \| Level 3 [Member]
Assets [Abstract]
Total assets	0	0
Liabilities [Abstract]
Total liabilities	35	47
Recurring [Member] \| Level 3 [Member] \| Public Warrants [Member]
Liabilities [Abstract]
Warrants	0	0
Recurring [Member] \| Level 3 [Member] \| Private Warrants [Member]
Liabilities [Abstract]
Warrants	35	47
Recurring [Member] \| Level 3 [Member] \| Money Market Funds [Member]
Assets [Abstract]
Cash equivalents	0	0
Recurring [Member] \| Level 3 [Member] \| US Treasury Securities [Member]
Assets [Abstract]
Cash equivalents		0
Marketable securities	0	0
Recurring [Member] \| Level 3 [Member] \| Commercial Paper [Member]
Assets [Abstract]
Cash equivalents		0
Marketable securities	$ 0	$ 0

Leases, Lease-Related Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Lease-Related Costs [Abstract]
Operating lease cost	$ 864	$ 982
Variable lease cost	436	394
Total lease cost	$ 1,300	$ 1,376

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member] Class A Common Stock [Member]	Common Stock [Member] Class B Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2022	$ 12	$ 2	$ 758,366		$ (399,674)	$ 358,706
Balance (in shares) at Dec. 31, 2022	120,006,757	19,937,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued upon vesting of restricted stock units	$ 0	$ 0	0		0	0
Common stock issued upon vesting of restricted stock units (in shares)	1,552,583	0
Stock-based compensation	$ 0	$ 0	3,908		0	3,908
Net unrealized loss on marketable securities, net of tax						0
Foreign currency translation						0
Net loss	0	0	0		(23,611)	(23,611)
Balance at Mar. 31, 2023	$ 12	$ 2	762,274		(423,285)	339,003
Balance (in shares) at Mar. 31, 2023	121,559,340	19,937,500
Balance at Dec. 31, 2023	$ 12	$ 2	767,239	$ 0	(495,634)	271,619
Balance (in shares) at Dec. 31, 2023	121,832,417	19,937,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued upon vesting of restricted stock units	$ 0	$ 0	0	0	0	0
Common stock issued upon vesting of restricted stock units (in shares)	46,572	0
Stock-based compensation	$ 0	$ 0	1,645	0	0	1,645
Net unrealized loss on marketable securities, net of tax	0	0	0	(28)	0	(28)
Refund of issuance costs from 2021 Business Combination	0	0	14	0	0	14
Foreign currency translation	0	0	0	(5)	0	(5)
Net loss	0	0	0	0	(19,474)	(19,474)
Balance at Mar. 31, 2024	$ 12	$ 2	$ 768,898	$ (33)	$ (515,108)	$ 253,771
Balance (in shares) at Mar. 31, 2024	121,878,989	19,937,500

Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2024

Net Loss Per Share [Abstract]

Basic and Diluted Net Loss Per Share

	2024			2023
Numerator
Net loss	$	(19,474	)	$	(23,611	)
Numerator for basic and diluted EPS - loss attributable to common stockholders	$	(19,474	)	$	(23,611	)
Denominator
Common stock		141,773			140,280
Denominator for basic and diluted EPS - weighted-average common stock		141,773			140,280
Basic and diluted net loss per share	$	(0.14	)	$	(0.17	)

Potential Dilutive Shares Excluded from Diluted Net Loss Per Share

	2024		2023
Outstanding options to purchase common stock		22,101,807		24,218,892
Outstanding restricted stock units		6,152,344		465,866
Outstanding warrants		3,968,319		3,968,319
		32,222,470		28,653,077

Warrant Liabilities

3 Months Ended

Mar. 31, 2024

Warrant Liabilities [Abstract]

Warrant Liabilities

Note 11. Warrant Liabilities

Public Warrants

As of March 31, 2024 and December 31, 2023, there were an aggregate of 3,833,319 Public Warrants outstanding, which entitle the holder to acquire Class A common stock. Each whole warrant entitles the registered holder to purchase one share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment as discussed below, beginning on September 9, 2021. The warrants will expire on June 10, 2026 or earlier upon redemption or liquidation.

Redemptions

At any time while the Public 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 $0.01 per warrant;

●

upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and

●

if, and only if, the closing price of the Company’s Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders.

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 their Public Warrants prior to the scheduled redemption date.

If the Company calls the Public Warrants for redemption for $0.01 as described above, the Board may elect to require any holder that wishes to exercise their Public Warrants to do so on a “cashless basis.” If the Board makes such election, all holders of Public Warrants would pay the exercise price by surrendering their warrants for the 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 Public Warrants do not meet the criteria to be classified in stockholders’ equity as the exercise of the Public 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 precludes the Public Warrants from being classified in equity and thus they are classified as long-term liabilities in the Condensed Consolidated Balance Sheets.

Private Warrants

As of March 31, 2024 and December 31, 2023, there were 135,000 Private Warrants outstanding. The Private Warrants are identical to the Public Warrants, except that so long as they are held by HighCape Capital Acquisition LLC or any of its permitted transferees, (i) the Private Warrants and the shares of Class A common stock issuable upon the exercise of the Private Warrants were not transferable, assignable or saleable until 30 days after the completion of the Business Combination, (ii) the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and (iii) the Private Warrants are not subject to the Company’s redemption option at the price of $0.01 per warrant. The Private Warrants are subject to the Company’s redemption option at the price of $0.01 per warrant, provided the other conditions of such redemption are met, as described above. If the Private Warrants are held by a holder other than HighCape Capital Acquisition LLC 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 Private Warrants do not meet the criteria to be classified in stockholders’ equity as 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. This provision precludes the Private Warrants from being classified in equity and thus they are classified as long-term liabilities in the Condensed Consolidated Balance Sheets.

The fair value of warrant liabilities was $1.0 million and $1.3 million as of March 31, 2024 and December 31, 2023, respectively. The Company recognized gains of $0.3 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively, as a Change in fair value of warrant liabilities in the Condensed Consolidated Statements of Operations and Comprehensive Loss. There were no exercises or redemptions of the Public Warrants or Private Warrants during the three months ended March 31, 2024 or 2023.

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accounts Expenses and Other Current Liabilities [Abstract]
Restructuring costs	$ 222	$ 519
Legal fees	1,330	979
Royalties	93	123
Other	238	194
Total accrued expenses and other current liabilities	$ 1,883	$ 1,815

Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2024

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

Note 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 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.

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. At March 31, 2024 and December 31, 2023, the Company’s investment portfolio included available-for-sale securities which were comprised of money market funds, U.S. treasury bills and commercial paper. The majority of the Company’s cash equivalents and short-term investments consist of instruments classified as Level 1. However, the Company has commercial paper that is classified as Level 2 due to the fair value for these instruments being determined by utilizing observable inputs in similar assets or identical assets in non-active markets. There were no transfers between fair value measurement levels for the three months ended March 31, 2024 and 2023.

Warrants are recorded as Warrant liabilities in 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 March 31, 2024 and December 31, 2023. 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. 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 March 31, 2024, the significant assumptions used in preparing the binomial lattice model for valuing the Private Warrants liability include (i) volatility of 89.9%, (ii) risk-free interest rate of 4.50%, (iii) strike price of $11.50, (iv) fair value of Class A common stock of $1.97, and (v) expected life of 2.2 years. As of December 31, 2023, the significant assumptions used in preparing the binomial lattice model for valuing the Private Warrants liability include (i) volatility of 92.1%, (ii) risk-free interest rate of 4.10%, (iii) strike price of $11.50, (iv) fair value of Class A common stock of $2.01, and (v) expected life of 2.4 years. There were no exercises or redemptions of the Public Warrants or Private Warrants during the three months ended March 31, 2024 or 2023.

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 (in thousands):

	March 31, 2024
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	45,470	$	-	$	-	$	45,470
Marketable securities:
U.S. Treasury securities		151,524		-		-		151,524
Commercial paper		-		30,744		-		30,744
Total assets at fair value on a recurring basis	$	196,994	$	30,744	$	-	$	227,738

Liabilities:
Public Warrants	$	920	$	-	$	-	$	920
Private Warrants		-		-		35		35
Total liabilities at fair value on a recurring basis	$	920	$	-	$	35	$	955

	December 31, 2023
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	50,226	$	-	$	-	$	50,226
U.S. Treasury securities		59,654		-		-		59,654
Commercial paper		-		19,436		-		19,436
Marketable securities:
U.S. Treasury securities		82,640		-		-		82,640
Commercial paper		-		41,236		-		41,236
Total assets at fair value on a recurring basis	$	192,520	$	60,672	$	-	$	253,192

Liabilities:
Public Warrants	$	1,227	$	-	$	-	$	1,227
Private Warrants		-		-		47		47
Total liabilities at fair value on a recurring basis	$	1,227	$	-	$	47	$	1,274

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value of Financial Instruments [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy (in thousands):

	March 31, 2024
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	45,470	$	-	$	-	$	45,470
Marketable securities:
U.S. Treasury securities		151,524		-		-		151,524
Commercial paper		-		30,744		-		30,744
Total assets at fair value on a recurring basis	$	196,994	$	30,744	$	-	$	227,738

Liabilities:
Public Warrants	$	920	$	-	$	-	$	920
Private Warrants		-		-		35		35
Total liabilities at fair value on a recurring basis	$	920	$	-	$	35	$	955

	December 31, 2023
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	50,226	$	-	$	-	$	50,226
U.S. Treasury securities		59,654		-		-		59,654
Commercial paper		-		19,436		-		19,436
Marketable securities:
U.S. Treasury securities		82,640		-		-		82,640
Commercial paper		-		41,236		-		41,236
Total assets at fair value on a recurring basis	$	192,520	$	60,672	$	-	$	253,192

Liabilities:
Public Warrants	$	1,227	$	-	$	-	$	1,227
Private Warrants		-		-		47		47
Total liabilities at fair value on a recurring basis	$	1,227	$	-	$	47	$	1,274

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2024	May 03, 2024
Entity Listings [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Document Transition Report	false
Entity File Number	001-39486
Entity Registrant Name	QUANTUM-SI INCORPORATED
Entity Central Index Key	0001816431
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-1388175
Entity Address, Address Line One	29 Business Park Drive
Entity Address, City or Town	Branford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06405
City Area Code	866
Local Phone Number	688-7374
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Common Class A [Member]
Entity Listings [Line Items]
Title of 12(b) Security	Class A common stock, $0.0001 per share
Trading Symbol	QSI
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		121,878,989
Common Class B [Member]
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		19,937,500
Redeemable Warrants [Member]
Entity Listings [Line Items]
Title of 12(b) Security	Redeemable warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share
Trading Symbol	QSIAW
Security Exchange Name	NASDAQ

Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Numerator [Abstract]
Net loss	$ (19,474)	$ (23,611)
Numerator for basic EPS - loss attributable to common stockholders	(19,474)	(23,611)
Numerator for diluted EPS - loss attributable to common stockholders	$ (19,474)	$ (23,611)
Denominator [Abstract]
Common stock (in shares)	141,773	140,280
Denominator for basic EPS - weighted-average common stock (in shares)	141,773,000	140,280,000
Denominator for diluted EPS - weighted-average common stock (in shares)	141,773,000	140,280,000
Basic net loss per share (in dollars per share)	$ (0.14)	$ (0.17)
Diluted net loss per share (in dollars per share)	$ (0.14)	$ (0.17)
Net Loss per Share [Abstract]
Anti-dilutive common equivalent shares (in shares)	32,222,470	28,653,077
Outstanding Options to Purchase Common Stock [Member]
Net Loss per Share [Abstract]
Anti-dilutive common equivalent shares (in shares)	22,101,807	24,218,892
Outstanding Restricted Stock Units [Member]
Net Loss per Share [Abstract]
Anti-dilutive common equivalent shares (in shares)	6,152,344	465,866
Outstanding Warrants [Member]
Net Loss per Share [Abstract]
Anti-dilutive common equivalent shares (in shares)	3,968,319	3,968,319

Warrant Liabilities (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Warrants [Abstract]
Fair value of warrant liabilities	$ 955		$ 1,274
Change in fair value of warrant liabilities	$ 319	$ 391
Public Warrants [Member]
Warrants [Abstract]
Warrants outstanding (in shares)	3,833,319		3,833,319
Number of shares of Class A common stock to be issued upon exercise of warrant (in shares)	1		1
Exercise price of warrant (in dollars per share)	$ 11.5		$ 11.5
Warrant redemption price (in dollars per share)	$ 0.01
Notice period to redeem warrants	30 days
Share price (in dollars per share)	$ 18
Threshold trading days	20 days
Threshold consecutive trading days	30 days
Period prior to notice of redemption	3 days
Trading day period to calculate fair market value over exercise price of warrants	10 days
Beneficial ownership percentage	50.00%
Warrants exercised (in shares)	0	0
Warrants redeemed (in shares)	0	0
Private Warrants [Member]
Warrants [Abstract]
Warrants outstanding (in shares)	135,000		135,000
Warrant redemption price (in dollars per share)	$ 0.01
Limitation period to transfer, assign or sell warrants	30 days
Warrants exercised (in shares)	0	0
Warrants redeemed (in shares)	0	0

Related Party Transactions (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Related Party [Member] \| PEI [Member] \| Protein Engineering Collaboration [Member]
Related Party Transactions [Abstract]
Due from related parties		$ 0.2		$ 0.3
Dr. Rothberg [Member] \| 2021 Plan [Member]
Related Party Transactions [Abstract]
Number of shares that can be purchased with option granted (in shares)	250,000
Dr. Rothberg [Member] \| 4C [Member]
Related Party Transactions [Abstract]
Operating expenses		$ 0.1	$ 0.1

Stock-based Compensation, Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Stock-Based Compensation [Abstract]
Stock-based compensation	$ 1,645	$ 3,908
Remaining weighted average vesting period	3 years 3 months 18 days
Stock Options [Member]
Stock-Based Compensation [Abstract]
Total unrecognized stock-based compensation expense	$ 24,400
Restricted Stock Units [Member]
Stock-Based Compensation [Abstract]
Total unrecognized stock-based compensation expense	24,400
Research and Development [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation	490	967
Selling, General and Administrative [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation	$ 1,155	$ 2,941

Stock-based Compensation, Stock Options (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Stock Options [Abstract]
Stock-based compensation	$ 1,300	$ 2,300
Number of Options [Roll Forward]
Outstanding, beginning balance (in shares)	22,511,900
Granted (in shares)	0
Exercised (in shares)	0
Forfeited (in shares)	(384,573)
Expiration (in shares)	(25,520)
Outstanding, ending balance (in shares)	22,101,807		22,511,900
Exercisable (in shares)	7,918,930
Vested and expected to vest (in shares)	18,615,698
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 2.79
Granted (in dollars per share)	0
Exercised (in dollars per share)	0
Forfeited (in dollars per share)	3.78
Expiration (in dollars per share)	0.06
Outstanding, ending balance (in dollars per share)	2.78		$ 2.79
Exercisable (in dollars per share)	3.52
Vested and expected to vest (in dollars per share)	$ 2.85
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value [Abstract]
Weighted average remaining contractual term, outstanding	8 years 3 days		8 years 2 months 19 days
Weighted average remaining contractual term, exercisable	6 years 7 months 24 days
Weighted average remaining contractual term, vested and expected to vest	7 years 10 months 9 days
Aggregate intrinsic value, outstanding, beginning balance	$ 3,194
Aggregate intrinsic value, outstanding, ending balance	2,832		$ 3,194
Aggregate intrinsic value, exercisable	610
Aggregate intrinsic value, vested and expected to vest	$ 2,286

Fair Value of Financial Instruments, Significant Assumptions (Details)	3 Months Ended
	Mar. 31, 2024 $ / shares shares	Mar. 31, 2023 shares	Dec. 31, 2023 $ / shares
Public Warrants [Member]
Warrants [Abstract]
Warrants exercised (in shares)	0	0
Warrants redeemed (in shares)	0	0
Private Warrants [Member]
Warrants [Abstract]
Warrants exercised (in shares)	0	0
Warrants redeemed (in shares)	0	0
Private Warrants [Member] \| Volatility [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants measurement input	0.899		0.921
Private Warrants [Member] \| Risk-Free Interest Rate [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants measurement input	0.045		0.041
Private Warrants [Member] \| Strike Price [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants measurement input \| $ / shares	11.5		11.5
Private Warrants [Member] \| Share Price [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants measurement input \| $ / shares	1.97		2.01
Private Warrants [Member] \| Expected Life [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Term of warrants	2 years 2 months 12 days		2 years 4 months 24 days

Restructuring (Details) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Restructuring Reserve [Roll Forward]

Beginning balance

$ 519

Restructuring charges incurred

^[1]

131

Cash payments and other adjustments

^[1]

(428)

Ending balance

222

Current liabilities

222

$ 519

Long-term liabilities

Total liabilities

222

519

Additional restructuring charges expected to be incurred

Accrued Expenses and Other Current Liabilities [Member]

Restructuring Reserve [Roll Forward]

Current liabilities

222

500

Research and Development [Member]

Restructuring Reserve [Roll Forward]

Beginning balance

513

Restructuring charges incurred

^[1]

131

Cash payments and other adjustments

^[1]

(422)

Ending balance

222

Total liabilities

222

513

Selling, General and Administrative [Member]

Restructuring Reserve [Roll Forward]

Beginning balance

Restructuring charges incurred

^[1]

Cash payments and other adjustments

^[1]

(6)

Ending balance

Total liabilities

$ 0

$ 6

[1]	Restructuring charges incurred and Cash payments and other adjustments include non-cash charges related to stock-based compensation expenses.

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 53,163	$ 133,860
Marketable securities	182,268	123,876
Accounts receivable, net of allowance of $0 and $0, respectively	242	368
Inventory, net	4,946	3,945
Prepaid expenses and other current assets	3,756	4,261
Total current assets	244,375	266,310
Property and equipment, net	16,169	16,275
Internally developed software	496	532
Operating lease right-of-use assets	13,850	14,438
Other assets	695	695
Total assets	275,585	298,250
Current liabilities:
Accounts payable	1,164	1,766
Accrued payroll and payroll-related costs	2,103	4,943
Accrued contracted services	1,212	1,519
Accrued expenses and other current liabilities	1,883	1,815
Current portion of operating lease liabilities	1,610	1,566
Total current liabilities	7,972	11,609
Warrant liabilities	955	1,274
Operating lease liabilities	12,873	13,737
Other long-term liabilities	14	11
Total liabilities	21,814	26,631
Commitments and contingencies (Note 15)
Stockholders' equity
Additional paid-in capital	768,898	767,239
Accumulated other comprehensive loss	(33)	0
Accumulated deficit	(515,108)	(495,634)
Total stockholders' equity	253,771	271,619
Total liabilities and stockholders' equity	275,585	298,250
Class A Common Stock [Member]
Stockholders' equity
Common Stock	12	12
Class B Common Stock [Member]
Stockholders' equity
Common Stock	$ 2	$ 2