Absci Corp 10-Q for FY2022 Q3

Absci Corp (ABSI)

10-Q 2022-11-09 For: 2022-09-30

Added on April 11, 2026

About this 10-Q

Absci Corp filed this 10-Q on November 9, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.37M; up 53.9% from $1.54M a year earlier
Net loss: $27.26M; compared with a net loss of $23.63M a year earlier
Diluted EPS: -$0.30; compared with -$0.33 a year earlier

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Delaware						85-3383487
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

18105 SE Mill Plain Blvd Vancouver, WA						98683
(Address of Principal Executive Offices)						(Zip Code)


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


		Page No.
Part I Financial Information (Unaudited)		6
Item 1.	Condensed Consolidated Financial Statements	6
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	6
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2022 and 2021	7
	Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2022 and 2021	8
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	10
	Notes to Unaudited Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	41
Item 4.	Controls and Procedures	41

Part II Other Information		42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	44
Signatures		46



	September 30,		December 31,
(In thousands, except for share and per share data)	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	107,324	$	252,569
Restricted cash	15,020		10,513
Short-term investments	73,988		—
Receivables under development arrangements, net	210		1,425
Prepaid expenses and other current assets	4,839		8,572
Total current assets	201,381		273,079
Operating lease right-of-use assets	5,597		6,538
Property and equipment, net	55,466		52,114
Intangibles, net	52,465		54,992
Goodwill	21,335		21,335
Restricted cash, long-term	1,852		16,844
Other long-term assets	1,291		1,293
TOTAL ASSETS	$	339,387	$	426,195
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	1,858	$	8,385
Accrued expenses	20,981		17,434
Long-term debt, current	2,354		2,400
Operating lease obligations	1,643		1,502
Financing lease obligations	2,513		2,785
Deferred revenue	679		1,353
Total current liabilities	30,028		33,859
Long-term debt - net of current portion	6,517		1,124
Operating lease obligations - net of current portion	7,848		8,969
Finance lease obligations - net of current portion	1,263		3,231
Deferred tax, net	756		743

Other long-term liabilities	33		12,162
TOTAL LIABILITIES	46,445		60,088
Commitments (See Note 8)
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021	—		—
Common stock, $0.0001 par value; 500,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 92,884,775 and 92,648,036 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	9		9
Additional paid-in capital	569,365		557,136
Accumulated deficit	(276,458)		(191,025)
Accumulated other comprehensive income (loss)	26		(13)
TOTAL STOCKHOLDERS' EQUITY	292,942		366,107
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	339,387	$	426,195



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands, except for share and per share data)	2022		2021		2022		2021
Revenues
Technology development revenue	$	2,004	$	1,390	$	3,094	$	2,922
Collaboration revenue	365		149		1,096		408
Total revenues	2,369		1,539		4,190		3,330
Operating expenses
Research and development	15,525		10,730		47,593		28,820
Selling, general and administrative	11,407		9,733		32,803		19,597
Depreciation and amortization	3,404		2,218		9,451		3,895
Total operating expenses	30,336		22,681		89,847		52,312
Operating loss	(27,967)		(21,142)		(85,657)		(48,982)
Other income (expense)
Interest expense	(279)		(768)		(685)		(3,232)
Other income (expense), net	675		(3,427)		948		(31,377)
Total other income (expense), net	396		(4,195)		263		(34,609)
Loss before income taxes	(27,571)		(25,337)		(85,394)		(83,591)
Income tax (expense) benefit	312		1,703		(39)		7,797
Net loss	(27,259)		(23,634)		(85,433)		(75,794)

Cumulative undeclared preferred stock dividends	—		(242)		—		(2,284)
Net loss applicable to common stockholders	$	(27,259)	$	(23,876)	$	(85,433)	$	(78,078)

Net loss per share attributable to common stockholders: Basic and diluted	$	(0.30)	$	(0.33)	$	(0.94)	$	(2.16)

Weighted-average common shares outstanding: Basic and diluted	91,105,265		73,291,288		90,686,517		36,177,105

Comprehensive loss:
Net loss	$	(27,259)	$	(23,634)	$	(85,433)	$	(75,794)
Foreign currency translation adjustments	(27)		(4)		(77)		(15)
Unrealized gain on investments	114		—		116		—
Comprehensive loss	$	(27,172)	$	(23,638)	$	(85,394)	$	(75,809)


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


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



(In thousands, except for share and per share data)	Redeemable Convertible Preferred Stock				Common Stock	Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss			Condensed Total Stockholders’ Equity
		Shares	Amount				Shares					Amount
Balances - December 31, 2021		—	$	—		92,648,036		$	9	$	557,136		$	(191,025)	$	(13)	$	366,107
Issuance of shares under stock plans, net of shares withheld for tax payments		—	—			187,151				213			—		—		213

Stock-based compensation		—	—			—		—		3,680			—		—		3,680
Foreign currency translation adjustments		—	—			—		—		—			—		(10)		(10)
Net loss		—	—			—		—		—			(29,494)		—		(29,494)
Balances - March 31, 2022		—	$	—		92,835,187		$	9	$	561,029		$	(220,519)	$	(23)	$	340,496

Issuance of shares under stock plans, net of shares withheld for tax payments		—	—			195,418		—		215			—		—		215
Issuance of restricted stock		—	—			—		—		—			—		—		—
Stock-based compensation		—	—			—		—		4,200			—		—		4,200
Repurchase of common stock		—	—			(249,618)		—		—			—		—		—
Foreign currency translation adjustments		—	—			—		—		—			—		(40)		(40)
Unrealized gain on investments		—	—			—		—		—			—		2		2
Other		—	—			1		—		—			—		—		—
Net loss		—	—			—		—		—			(28,680)		—		(28,680)
Balances - June 30, 2022		—	—			92,780,988		$	9	$	565,444		$	(249,199)	$	(61)	$	316,193
Issuance of shares under stock plans, net of shares withheld for tax payments		—	—			103,787		—		162			—		—		162

Stock-based compensation		—	—			—		—		3,759			—		—		3,759

Foreign currency translation adjustments		—	—			—		—		—			—		(27)		(27)
Unrealized gain on investments		—	—			—		—		—			—		114		114

Net loss		—	—			—		—		—			(27,259)		—		(27,259)
Balances - September 30, 2022		—	—			92,884,775		$	9	$	569,365		$	(276,458)	$	26	$	292,942



	For the Nine Months Ended September 30,
(In thousands)	2022		2021
Cash Flows From Operating Activities
Net loss	(85,433)		(75,794)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	9,451		3,895




Deferred income taxes	13		(7,797)
Stock-based compensation	11,516		7,376
Change in fair value of convertible promissory notes	—		30,722
Change in fair value of contingent consideration	750		—
Gain on extinguishment of loan payable	—		(636)
Other	103		4



Preferred stock warrant liability expense	—		4,124
Changes in operating assets and liabilities:
Receivables under development arrangements	965		940
Prepaid expenses and other current assets	3,436		(8,472)
Operating lease right-of-use assets and liabilities	(467)		2,570
Other long-term assets	—		110
Accounts payable	(1,224)		1,545
Accrued expenses and other liabilities	(1,207)		(1,567)
Deferred revenue	(674)		(539)
Net cash used in operating activities	(62,771)		(43,519)
Cash Flows From Investing Activities
Purchases of property and equipment	(15,615)		(29,731)
Acquisitions, net of cash acquired	(8,000)		(28,130)
Investment in equity securities	—		(1,200)
Investment in short-term investments	(73,853)		—

Proceeds from property insurance settlements	665		—
Net cash used in investing activities	(96,803)		(59,061)
Cash Flows From Financing Activities
Proceeds from issuance of redeemable convertible preferred units and stock, net of issuance costs	—		4,944
Proceeds from issuance of long-term debt	9,407		—

Principal payments on long-term debt	(4,086)		(1,000)
Principal payments on finance lease obligations	(2,067)		(1,780)
Proceeds from issuance of common stock, net of issuance costs	590		210,325
Proceeds from issuance of convertible promissory notes	—		125,000
Net cash provided by financing activities	3,844		337,489
Net (decrease) increase in cash, cash equivalents, and restricted cash	(155,730)		234,909
Cash, cash equivalents and restricted cash - Beginning of year	279,926		71,708
Cash, cash equivalents, and restricted cash - End of period	$	124,196	$	306,617

Supplemental Disclosure of Cash Flow Information

Supplemental Disclosure of Non-Cash Investing and Financing Activities
Property and equipment purchased under finance lease	$	—	$	4,313
Right-of-use assets obtained in exchange for operating lease obligation	109		3,330
Cash paid for amounts included in the measurement of operating lease liabilities	1,717		1,069
Property and equipment purchases included in accounts payable	261		3,580



Cash consideration	$	2,670
Equity consideration	368
Total purchase consideration	$	3,038



Cash and cash equivalents	$	158
Accounts receivable	59
Other current assets	1
Intangible assets	2,507
Goodwill	1,055
TOTAL ASSETS	3,780
Accounts payable and accrued expenses	109
Deferred tax liability	633
TOTAL LIABILITIES	742
Fair value of net assets acquired and liabilities assumed	$	3,038



	Estimated Fair Value (in thousands)		Estimated Amortization Period (years)
Denovium Engine	$	2,507	5
	$	2,507



Estimated cash payment to Totient stockholders	$	35,368	(i)
Estimated stock payment to Totient stockholders	13,891		(ii)
Estimated cash payment contingent on achieving specified milestone	12,000		(iii)
Total	$	61,259



Current assets:
Cash and cash equivalents	$	1,751
Prepaid expenses and other current assets	189
Total current assets	1,940
Operating lease right-of-use assets	266
Property and equipment, net	118
Goodwill	20,280		(i)
Intangible assets	54,600		(ii)
Other long-term assets	23
TOTAL ASSETS	77,227
Current liabilities:
Accounts payable	78
Accrued expenses	6,588
Operating lease obligations	122
Total current liabilities	6,788
Operating lease obligations - net of current portion	144
Deferred tax, net	9,012
Other long-term liabilities	24
TOTAL LIABILITIES	15,968
Fair value of net assets acquired and liabilities assumed	$	61,259


	Estimated fair value (in thousands)(i)		Estimated useful lives (in years)(ii)
Monoclonal antibody library	$	46,300	20
Developed software platform and the related methods patents	8,300		15
Total	$	54,600



	September 30, 2022
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair market value
Assets
Money market funds	$	1,476	$	—	$	—	$	1,476
Certificates of deposit	27,560		—		—		27,560
U.S. treasury bills	76,198		116		—		76,314
Total	$	105,234	$	116	$	—	$	105,350
Classified as:
Cash equivalents							$	31,362
Short-term investments							73,988
Long-term investments							—
Total							$	105,350



	September 30,		December 31,
	2022		2021
Construction in progress	$	200	$	933
Lab Equipment	35,257		27,776
Software	312		311
Furniture, Fixtures and Other	6,362		4,804
Leasehold Improvements	26,619		24,671
Total Cost	68,750		58,495
Less accumulated depreciation and amortization	(13,284)		(6,381)
Property and equipment, net	$	55,466	$	52,114


Years ending December 31:
2022 (three months remaining)	$	754
2023	3,019
2024	3,019
2025	2,617
2026	852
Thereafter	—
Total future payments	10,261
Less: Imputed interest	(1,390)
Total long-term debt	$	8,871


			Number of shares
Unvested as of December 31, 2021			2,585,670

Repurchased			(249,618)
Vested			(646,606)
Unvested as of September 30, 2022			1,689,446


	Number of Units	Weighted Average Strike Price
Unvested as of December 31, 2020	1,202,435	$	0.47
Granted	—	—
Vested	—	—
Exchange of Phantom Units for Cash Payment Rights, SARs, and/or Stock Options	(1,202,435)	$	0.47
Unvested as of September 30, 2021	—	$	—


	Number of Options	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands $)
Outstanding at December 31, 2021	7,757,401	$	3.72	9.2	$	40,939
Granted	5,321,384	6.48
Exercised	(473,706)	1.28
Canceled/ Forfeited	(2,021,245)	5.82
Expired	(19,671)	2.77
Outstanding at September 30, 2022	10,564,163	4.82		8.2	7,267
Exercisable at September 30, 2022	3,027,480	$	2.97	7.3	$	4,075
Vested and expected to vest as of September 30, 2022	10,564,163			8.2	$	7,267



	September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Debt Securities:
Money market funds	$	1,476	$	—	$	—	$	1,476
Certificates of deposit	27,560		—		—		27,560
U.S. treasury bills	76,314		—		—		76,314
Equity Securities:
Equity securities without RDFV	—		—		1,200		1,200
Total assets	$	105,350	$	—	$	1,200	$	106,550
Liabilities:



Contingent consideration	$	—	$	—	$	12,750	$	12,750
Total liabilities	$	—	$	—	$	12,750	$	12,750



	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Equity securities without RDFV	$	—	$	—	$	1,200	$	1,200
Total assets	$	—	$	—	$	1,200	$	1,200
Liabilities:
Contingent consideration	$	—	$	—	$	12,000	$	12,000
Total liabilities	$	—	$	—	$	12,000	$	12,000



	Contingent consideration		Total liabilities
Balance at December 31, 2021	$	12,000	$	12,000

Change in fair value during 2022	750		750

Balance at September 30, 2022	$	12,750	$	12,750



	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Redeemable convertible preferred stock	—	10,560,783	—	34,079,466
Redeemable convertible preferred stock warrants	—	146,927	—	253,196

Stock options	11,125,698	7,949,582	10,471,807	5,880,640
Restricted stock units	52,942	—	50,056	—
Unvested restricted stock	1,745,926	3,055,422	2,110,865	2,558,809


Exhibit No.						Description
3.1						Amended and Restated Certificate of Incorporation of Absci Corporation (filed as Exhibit 3.1 to the Form 8-K, File No. 001-40646, filed by Absci Corporation on July 26, 2021 and incorporated herein by reference).
3.2						Amended and Restated Bylaws of the Absci Corporation (filed as Exhibit 3.2 to the Form 8-K, File No. 001-40646, filed by Absci Corporation on July 26, 2021 and incorporated herein by reference).
4.1						Investors’ Rights Agreement by and among the Registrant and certain of its stockholders dated October 19, 2020 (filed as Exhibit 4.2 to the Form S-1, File No. 333-257553, filed by Absci Corporation on June 30, 2021 and incorporated herein by reference).
10.1*#						2021 Stock Option and Incentive Plan and forms of award agreements thereunder.
10.2*#						Separation Agreement by and between the Company and Matthew Weinstock dated September 30, 2022.
10.3*#						Consulting Agreement by and between the Company and Matthew Weinstock dated October 4, 2022.
31.1*						Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1+						Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2+						Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*						XBRL Instance Document
101.SCH*						XBRL Taxonomy Extension Schema Document
101.CAL*						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*						XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						XBRL Taxonomy Extension Presentation Linkbase Document
104*						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


	ABSCI CORPORATION

Date: November 9, 2022	By:	/s/ Gregory Schiffman
		Gregory Schiffman
		Chief Financial Officer (Principal Financial Officer)

Date: November 9, 2022	By:	/s/ Todd Bedrick
		Todd Bedrick
		Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)


Incremental Number of Option Shares Exercisable*			Exercisability Date
_____________ (___%)			____________
_____________ (___%)			____________
_____________ (___%)			____________
_____________ (___%)			____________
_____________ (___%)			____________


Incremental Number of Restricted Stock Units Vested			Vesting Date
_____________ (___%)			_______________
_____________ (___%)			_______________
_____________ (___%)			_______________
_____________ (___%)			_______________


Incremental Number of Shares Vested			Vesting Date
_____________ (___%)			____________
_____________ (___%)			____________
_____________ (___%)			____________
_____________ (___%)			____________
_____________ (___%)			____________



						ABSCI CORPORATION
						By:			/s/ Sean McClain
									Name: Sean McClain
									Title: Founder and CEO
									Date: September 30, 2022

						CONSULTANT
						By:			/s/ Matthew Weinstock
									Name: Matthew Weinstock
									Date: September 30, 2022


Date: November 9, 2022	By:	/s/ Sean McClain
		Sean McClain
		Founder and Chief Executive Officer