Absci Corp 10-Q for FY2022 Q2

Absci Corp (ABSI)

10-Q 2022-08-11 For: 2022-06-30

Added on April 11, 2026

About this 10-Q

Absci Corp filed this 10-Q on August 11, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

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

Revenue: $1M; up 37.6% from $728K a year earlier
Net loss: $28.68M; compared with a net loss of $41.2M a year earlier
Diluted EPS: -$0.32; compared with -$2.39 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 June 30, 2022 and December 31, 2021	6
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021	7
	Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2022 and 2021	8
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 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	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	45
Item 6.	Exhibits	45
Signatures		46



	June 30,		December 31,
(In thousands, except for share and per share data)	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	206,021	$	252,569
Restricted cash	15,017		10,513
Receivables under development arrangements	310		1,425
Prepaid expenses and other current assets	6,540		8,572
Total current assets	227,888		273,079
Operating lease right-of-use assets	5,708		6,538
Property and equipment, net	54,890		52,114
Intangibles, net	53,308		54,992
Goodwill	21,335		21,335
Restricted cash, long-term	1,845		16,844
Other long-term assets	1,341		1,293
TOTAL ASSETS	$	366,315	$	426,195
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	5,470	$	8,385
Accrued expenses	17,054		17,434
Long-term debt, current	2,135		2,400
Operating lease obligations	1,584		1,502
Financing lease obligations	2,651		2,785
Deferred revenue	2,798		1,353
Total current liabilities	31,692		33,859
Long-term debt - net of current portion	7,125		1,124
Operating lease obligations - net of current portion	8,175		8,969
Finance lease obligations - net of current portion	1,818		3,231
Deferred tax, net	1,085		743

Other long-term liabilities	227		12,162
TOTAL LIABILITIES	50,122		60,088
Commitments (See Note 8)
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021	—		—
Common stock, $0.0001 par value; 500,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 92,780,988 and 92,648,036 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	9		9
Additional paid-in capital	565,444		557,136
Accumulated deficit	(249,199)		(191,025)
Accumulated other comprehensive loss	(61)		(13)
TOTAL STOCKHOLDERS' EQUITY	316,193		366,107
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	366,315	$	426,195



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In thousands, except for share and per share data)	2022		2021		2022		2021
Revenues
Technology development revenue	$	636	$	592	$	1,090	$	1,532
Collaboration revenue	366		136		731		259
Total revenues	1,002		728		1,821		1,791
Operating expenses
Research and development	16,241		11,040		32,068		18,090
Selling, general and administrative	10,507		5,179		21,396		9,864
Depreciation and amortization	3,141		1,201		6,047		1,677
Total operating expenses	29,889		17,420		59,511		29,631
Operating loss	(28,887)		(16,692)		(57,690)		(27,840)
Other expense
Interest expense	(211)		(2,009)		(406)		(2,464)
Other income (expense), net	148		(28,114)		273		(27,950)
Total other expense, net	(63)		(30,123)		(133)		(30,414)
Loss before income taxes	(28,950)		(46,815)		(57,823)		(58,254)
Income tax (expense) benefit	270		5,617		(351)		6,094
Net loss	(28,680)		(41,198)		(58,174)		(52,160)

Cumulative undeclared preferred stock dividends	—		(1,047)		—		(2,042)
Net loss applicable to common stockholders	$	(28,680)	$	(42,245)	$	(58,174)	$	(54,202)

Net loss per share attributable to common stockholders: Basic and diluted	$	(0.32)	$	(2.39)	$	(0.64)	$	(3.13)

Weighted-average common shares outstanding: Basic and diluted	90,669,499		17,641,147		90,471,950		17,312,437

Comprehensive loss:
Net loss	$	(28,680)	$	(41,198)	$	(58,174)	$	(52,160)
Foreign currency translation adjustments	(40)		(11)		(50)		(11)
Unrealized gain on investments	2		—		2		—
Comprehensive loss	$	(28,718)	$	(41,209)	$	(58,222)	$	(52,171)


☒			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 upon option exercise		—	—			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 upon option exercise		—	—			195,418		—		215			—		—		215

Repurchase of common stock		—	—			(249,618)		—		—			—		—		—
Stock-based compensation		—	—			—		—		4,200			—		—		4,200
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



	For the Six Months Ended June 30,
(In thousands)	2022		2021
Cash Flows From Operating Activities
Net loss	(58,174)		(52,160)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	6,047		1,677



Deferred income taxes	342		(6,094)
Stock-based compensation	7,949		3,593
Change in fair value of convertible promissory notes	—		25,107
Change in fair value of contingent consideration	750		—
Gain on extinguishment of loan payable	—		(636)
Other	(105)		(11)



Preferred stock warrant liability expense	—		3,440
Changes in operating assets and liabilities:
Receivables under development arrangements	1,115		1,109
Prepaid expenses and other current assets	1,701		(921)
Operating lease right-of-use assets and liabilities	(277)		2,653
Other long-term assets	(47)		(1,853)
Accounts payable	659		2,744
Accrued expenses and other liabilities	(5,132)		(404)
Deferred revenue	1,444		(16)
Net cash used in operating activities	(43,728)		(21,772)
Cash Flows From Investing Activities
Purchases of property and equipment	(10,745)		(24,111)
Acquisitions, net of cash acquired	(8,000)		(28,130)


Proceeds from property insurance settlements	665		—
Net cash used in investing activities	(18,080)		(52,241)
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	(3,698)		(139)
Principal payments on finance lease obligations	(1,372)		(772)
Proceeds from issuance of common stock, net of issuance costs	428		69
Proceeds from issuance of convertible promissory notes	—		125,000
Net cash (used in) provided by financing activities	4,765		129,102
Net (decrease) increase in cash, cash equivalents, and restricted cash	(57,043)		55,089
Cash, cash equivalents and restricted cash - Beginning of year	279,926		71,708
Cash, cash equivalents, and restricted cash - End of period	$	222,883	$	126,797

Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest	$	360	$	315
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Property and equipment purchased under finance lease	$	—	$	1,729
Right-of-use assets obtained in exchange for operating lease obligation	—		3,330
Cash paid for amounts included in the measurement of operating lease liabilities	1,141		508
Property and equipment purchases included in accounts payable	1,990		4,187
Deferred offering costs included in accounts payable	—		825



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



	June 30, 2022
	Amortized cost		Gross unrealized gains		Fair market value
Assets
Money market funds	$	169	$	—	$	169
U.S. treasury bills	49,831		2		49,833
Total	$	50,000	$	2	$	50,002
Classified as:
Cash equivalents					$	50,002
Short-term investments					—
Long-term investments					—
Total					$	50,002



	June 30,		December 31,
	2022		2021
Construction in progress	$	134	$	933
Lab Equipment	34,161		27,776
Software	315		311
Furniture, Fixtures and Other	5,043		4,804
Leasehold Improvements	25,958		24,671
Total Cost	65,611		58,495
Less accumulated depreciation and amortization	(10,721)		(6,381)
Property and equipment, net	$	54,890	$	52,114


Years ending December 31:
2022 (six months remaining)	$	1,339
2023	3,019
2024	3,019
2025	2,617
2026	852
Thereafter	—
Total future payments	10,846
Less: Imputed interest	(1,586)
Total long-term debt	$	9,260


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

Repurchased			(249,618)
Vested			(514,738)
Unvested as of June 30, 2022			1,821,314


	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 June 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	4,281,834	7.23
Exercised	(382,569)	1.12
Canceled/ Forfeited	(806,439)	4.60
Expired	(9,747)	1.12
Outstanding at June 30, 2022	10,840,480	5.14		8.8	8,313
Exercisable at June 30, 2022	2,629,096	$	2.22	8.1	$	4,185
Vested and expected to vest as of June 30, 2022	10,840,480			8.8	$	8,313



	June 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Debt Securities:
Money market funds	$	169	$	—	$	—	$	169
U.S. treasury bills	49,833		—		—		49,833
Equity Securities:
Equity securities without RDFV	—		—		1,200		1,200
Total assets	$	50,002	$	—	$	1,200	$	51,202
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 June 30, 2022	$	12,750	$	12,750



	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Redeemable convertible preferred stock outstanding	—	46,266,256	—	46,033,714
Redeemable convertible preferred stock warrants	—	307,211	—	307,211

Stock options	10,785,909	6,038,919	10,139,442	4,677,249
Restricted stock units	68,175	—	48,589	—
Unvested restricted stock	2,123,409	2,554,598	2,296,359	2,138,146


Period	Total Number of Shares (or units) Purchased(1)	Average Price Paid per Share (or unit)	Total Number of Shares (or units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or units) That May Yet Be Purchased Under the Plans or Programs
April 1 2022, through April 30, 2022	—	—	—	—

May 1 2022, through May 31, 2022	—	—	—	—
June 1, 2022, through June 30, 2022	249,618	$0.00	—	—
Total	249,618		—	—


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).
4.2*#						Amended and Restated Non-Employee Director Compensation Policy
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: August 11, 2022	By:	/s/ Gregory Schiffman
		Gregory Schiffman
		Chief Financial Officer (Principal Financial Officer)

Date: August 11, 2022	By:	/s/ Todd Bedrick
		Todd Bedrick
		Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)


Date: August 11, 2022	By:	/s/ Sean McClain
		Sean McClain
		Founder and Chief Executive Officer