Singular Genomics Systems, Inc. [OMIC] Filings

10-Q 1 omic-20220930.htm 10-Q 10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-40443

Singular Genomics Systems, Inc.

(Exact name of Registrant as specified in its charter)


Delaware		81-2948451
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

3010 Science Park Road
San Diego, California 92121

(858) 333-7830

(Registrant’s address of principal executive offices

and telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	OMIC	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 71,396,110 shares of common stock, $0.0001 par value, outstanding as of October 31, 2022.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This filing contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, future revenue, business strategy, prospects, products, research and development costs, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that are in some cases beyond our control and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

The words “anticipate,” “believe,” contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these terms or other similar expressions are intended to identify forward-looking statements. Forward-looking statements contained in this report include, but are not limited to, statements about:

•

estimates of our addressable market, market growth, future revenue, expenses, capital requirements and our needs for additional financing;

•

our ability to timely and successfully complete the development and implement our commercialization plan for the G4 and planned PX;

•

the implementation of our business model and strategic plans for the G4 and planned PX;

•

our expectations regarding the rate and degree of market acceptance of the G4 and planned PX;

•

our ability to compete with competitive companies and technologies in our industry;

•

our ability to manage and grow our business and commercialize the G4 and planned PX;

•

our ability to develop and commercialize new products and product enhancements;

•

the impact of the COVID-19 pandemic and recent downward macroeconomic pressures on our business;

•

our ability to establish and maintain intellectual property protection for our products or avoid or defend claims of infringement;

•

our ability to fulfill our contractual commitments;

•

the performance of third-party manufacturers and suppliers;

•

our ability to effectively manufacture our products;

•

the potential effects of government regulation;

•

our ability to hire and retain key personnel and to manage our future growth effectively;

•

our ability to obtain additional financing on favorable terms to us or at all;

•

our expectations regarding use of proceeds from our initial public offering;

•

the impact of local, regional, national and international economic conditions and events;

•

our expectations about market trends; and

•

our expectations regarding the period during which we will qualify as an emerging growth company under the JOBS Act.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled “Risk Factors” elsewhere in this report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, advancements, discoveries, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations.

You should read this report and the documents that we reference in this report and have filed with the SEC as exhibits to this report with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

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Summary of Material Risks Associated with Our Business

Our business is subject to a number of risks that if realized could materially affect our business, prospects, operating results and financial condition. These risks are discussed more fully in the “Risk Factors” section of this Quarterly Report on Form 10-Q. These risks include the following:

•

Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.

•

We have incurred significant losses since inception, we expect to incur significant losses in the future and we may not be able to generate sufficient revenue to achieve and maintain profitability.

•

We are a pre-revenue life science technology company and have very limited history in developing and commercializing our products or technology, which makes it difficult to evaluate our prospects and predict our future performance.

•

The life sciences technology market is highly competitive. If we fail to compete effectively, our business and operating results will suffer.

•

If we are sued for infringing, misappropriating or otherwise violating intellectual property rights of third parties, such litigation could be costly and time-consuming and could prevent or delay us from developing or commercializing our products.

•

We could have disputes with contractual counterparties regarding our or their performance under those contracts, we could be unable to fulfill such contractual commitments, or our contractual obligations may exceed our current expectations.

•

If our products fail to achieve early customer and scientific acceptance, we may not be able to achieve broader market acceptance for our products, and our revenues and prospects may be harmed.

•

We expect to be highly dependent upon revenue generated from the sale of the G4 and planned PX, and any delay or failure by us to successfully develop and commercialize the G4 or PX could have a substantial adverse effect on our business and results of operations.

•

The COVID-19 pandemic and efforts to reduce its spread have adversely impacted and may materially and adversely impact our business and operations in the future; recent macroeconomic pressures could also materially and adversely impact our business and operations.

•

Our business will depend significantly on research and development spending by academic institutions and other research institutions, and any reduction in spending could limit demand for our products and adversely affect our business, results of operations, financial condition and prospects.

•

Our operating results may fluctuate significantly in the future, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.

•

We have only launched one commercial product, the G4, and we may not be able to successfully commercially launch our planned PX or other products as planned.

•

The G4 is sold as a research-use-only product; changes in the regulatory landscape could affect the market for such a product.

•

If we are unable to obtain and maintain sufficient intellectual property protection for our products and technology, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be impaired.

•

We may require substantial additional funding, which may not be available to us on acceptable terms, or at all, and, if not available, may require us to delay, scale back or cease our product development programs or operations.

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TABLE OF CONTENTS


Part I. Financial Information	2
Item 1. Financial Statements (Unaudited)	2
Condensed Balance Sheets	2
Condensed Statements of Operations	3
Condensed Statements of Comprehensive Loss	4
Condensed Statement of Stockholders’ Equity (Deficit)	5
Condensed Statement of Preferred Stock and Stockholders’ Equity (Deficit)	6
Condensed Statements of Cash Flows	7
Notes to Condensed Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures about Market Risk	35
Item 4. Controls and Procedures	35
Part II. Other Information	36
Item 1. Legal Proceedings	36
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	71
Item 3. Defaults Upon Senior Securities	71
Item 4. Mine Safety Disclosures	71
Item 5. Other Information	71
Item 6. Exhibits	72
Signatures	73

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Singular Genomics Systems, Inc.

Condensed Balance Sheets

(In thousands, except share and par value amounts)


	September 30,			December 31,
	2022			2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	93,262		$	201,049
Short-term investments		170,578			138,174
Inventory		16,700			3,011
Prepaid expenses and other current assets		5,574			5,526
Total current assets		286,114			347,760
Right-of-use lease assets		46,895			-
Property and equipment, net		9,589			6,072
Restricted cash		1,711			687
Other noncurrent assets		1,166			1,129
Total assets	$	345,475		$	355,648

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,975		$	2,348
Accrued expenses		5,480			4,278
Lease liabilities, current		5,703			-
Other current liabilities		20			118
Total current liabilities		14,178			6,744
Lease liabilities, noncurrent		43,323			-
Long-term debt, net of issuance costs		10,026			9,904
Other noncurrent liabilities		1,023			2,827
Total liabilities		68,550			19,475
Commitments and contingencies (Note 9)
Stockholders’ equity:
Series A Common Stock Equivalent Convertible Preferred Stock, $0.0001 par value; 7,000 shares authorized, 2,500 and 0 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		-			-
Common stock, $0.0001 par value; 400,000,000 shares authorized, 71,306,526 and 72,438,742 shares outstanding at September 30, 2022 and December 31, 2021, respectively		7			7
Additional paid-in capital		500,010			488,200
Accumulated other comprehensive loss		(1,418	)		(138	)
Accumulated deficit		(221,674	)		(151,896	)
Total stockholders’ equity		276,925			336,173
Total liabilities and stockholders’ equity	$	345,475		$	355,648

See accompanying notes to these unaudited condensed financial statements.

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Singular Genomics Systems, Inc.

Condensed Statements of Operations

(Unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Operating expenses:
Research and development	$	12,732		$	8,910		$	35,439		$	23,200
Selling, general and administrative		11,962			8,551			35,518			18,406
Total operating expenses		24,694			17,461			70,957			41,606

Loss from operations		(24,694	)		(17,461	)		(70,957	)		(41,606	)

Other income (expense):
Interest and other income		1,115			84			1,699			628
Interest expense		(211	)		(234	)		(520	)		(654	)
Change in fair value of convertible promissory notes		-			-			-			(35,199	)
Change in fair value of warrant liability		-			-			-			(2,180	)
Net loss	$	(23,790	)	$	(17,611	)	$	(69,778	)	$	(79,011	)

Net loss per share:
Basic and diluted net loss per share	$	(0.33	)	$	(0.25	)	$	(0.98	)	$	(2.05	)
Weighted-average shares used to compute basic and diluted net loss per share		71,216,292			71,721,861			71,001,441			38,553,685

See accompanying notes to these unaudited condensed financial statements.

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Singular Genomics Systems, Inc.

Condensed Statements of Comprehensive Loss

(Unaudited)

(In thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net loss	$	(23,790	)	$	(17,611	)	$	(69,778	)	$	(79,011	)
Other comprehensive loss:
Unrealized (loss) gain on available-for-sale securities		(405	)		(22	)		(1,280	)		(22	)
Comprehensive loss	$	(24,195	)	$	(17,633	)	$	(71,058	)	$	(79,033	)

See accompanying notes to these unaudited condensed financial statements.

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Singular Genomics Systems, Inc.

Condensed Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share data)


	Preferred Stock				Common Stock					Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount		Capital		Loss			Deficit			Equity
Balance at December 31, 2021		-	$	-		72,438,742		$	7	$	488,200	$	(138	)	$	(151,896	)	$	336,173
Exchange of common stock for Series A Common Stock Equivalent		2,500		-		(2,500,000	)		-		-		-			-			-
Vesting of common stock issued for early exercise of stock options		-		-		505,322			-		344		-			-			344
Issuance of common stock in connection with exercise of stock options		-		-		65,399			-		34		-			-			34
Stock-based compensation		-		-		-			-		3,566		-			-			3,566
Unrealized loss on available- for-sale marketable securities		-		-		-			-		-		(629	)		-			(629	)
Net loss		-		-												(22,006	)		(22,006	)
Balance at March 31, 2022		2,500	$	-		70,509,463		$	7	$	492,144	$	(767	)	$	(173,902	)	$	317,482
Vesting of common stock issued for early exercise of stock options		-		-		219,743			-		151		-			-			151
Issuance of common stock in connection with exercise of stock options		-		-		162,644			-		62		-			-			62
Issuance of common stock in connection with Employee Stock Purchase Program		-		-		174,019			-		489		-			-			489
Stock-based compensation		-		-		-			-		3,605		-			-			3,605
Unrealized loss on available- for-sale marketable securities		-		-		-			-		-		(246	)		-			(246	)
Net loss		-		-		-			-		-		-			(23,982	)		(23,982	)
Balance at June 30, 2022		2,500	$	-		71,065,869		$	7	$	496,451	$	(1,013	)	$	(197,884	)	$	297,561
Vesting of common stock issued for early exercise of stock options		-		-		156,397			-		109		-			-			109
Issuance of common stock in connection with exercise of stock options		-		-		84,260			-		51		-			-			51
Stock-based compensation		-		-		-			-		3,399		-			-			3,399
Unrealized loss on available- for-sale marketable securities		-		-		-			-		-		(405	)		-			(405	)
Net loss		-		-												(23,790	)		(23,790	)
Balance at September 30, 2022		2,500	$	-		71,306,526		$	7	$	500,010	$	(1,418	)	$	(221,674	)	$	276,925

See accompanying notes to these unaudited condensed financial statements.

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Singular Genomics Systems, Inc.

Condensed Statements of Preferred Stock and Stockholders’ Equity (Deficit)

(Unaudited)

(In thousands, except share data)


	Series Seed Convertible Preferred Stock				Series A Convertible Preferred Stock				Series B Convertible Preferred Stock				Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Gain (Loss)			Deficit			(Deficit) / Equity
Balance at December 31, 2020		6,520,790	$	4,486		12,932,429	$	19,908		19,373,169	$	44,790		10,816,937	$	1	$	1,552	$	17		$	(53,125	)	$	(51,555	)
Vesting of common stock issued for early exercise of stock options		-		-		-		-		-		-		151,343		-		92		-			-			92
Issuance of common stock in connection with exercise of stock options		-		-		-		-		-		-		1,855,904		-		995		-			-			995
Stock-based compensation		-		-		-		-		-		-		-		-		1,096		-			-			1,096
Unrealized loss on available- for-sale marketable securities		-		-		-		-		-		-		-		-		-		(49	)		-			(49	)
Net loss		-		-		-		-		-		-

Singular Genomics Systems, Inc. [OMIC] Filings
10-Q	[2022-11-07]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-03-14]
10-Q	[2021-11-09]
10-Q	[2021-08-03]
S-1	[2021-05-07]