UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark one)
For the quarterly period ended
or
For the transition period from___ to___
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
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N/A
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | 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 13(a) of the Exchange Act.
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As of August 2, 2024, the registrant had
Table of Contents
2
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
MaxCyte, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
June 30, | December 31, | |||||
| 2024 |
| 2023 | |||
(Unaudited) | (See Note 2) | |||||
Assets |
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Current assets: |
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Cash and cash equivalents | $ | | $ | | ||
Short-term investments, at amortized cost |
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Accounts receivable, net |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Investments, non-current, at amortized cost | | |||||
Property and equipment, net |
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Right-of-use asset - operating leases |
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Other assets |
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Total assets | $ | | $ | | ||
Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable | $ | | $ | | ||
Accrued expenses and other |
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Operating lease liability, current |
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Deferred revenue, current portion |
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Total current liabilities |
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Operating lease liability, net of current portion |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies (Note 7) |
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Stockholders’ equity |
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Preferred stock, $ | ||||||
Common stock, $ | | | ||||
Additional paid-in capital |
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Accumulated deficit |
| ( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
See accompanying notes to unaudited condensed consolidated financial statements.
3
MaxCyte, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||||
Revenue | $ | | $ | | $ | | $ | | |||||
Cost of goods sold |
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Gross profit |
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Operating expenses: |
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Research and development |
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Sales and marketing |
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General and administrative |
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Depreciation and amortization | | | | | |||||||||
Total operating expenses |
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Operating loss |
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Other income: |
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Interest income |
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Total other income |
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Loss before income taxes | ( | ( | ( | ( | |||||||||
Provision for income taxes | — | — | — | — | |||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Basic and diluted net loss per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Weighted average shares outstanding, basic and diluted |
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See accompanying notes to unaudited condensed consolidated financial statements.
4
MaxCyte, Inc.
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity
(in thousands, except share amounts)
Total | ||||||||||||||
Common Stock | Additional | Accumulated | Stockholders’ | |||||||||||
| Shares |
| Amount |
| Paid-in Capital |
| Deficit |
| Equity | |||||
Balance at January 1, 2023 |
| | $ | | $ | | $ | ( | $ | | ||||
Stock-based compensation expense |
| — |
| — |
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| — |
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Exercise of stock options | | | | — | | |||||||||
Net loss |
| — |
| — |
| — |
| ( |
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Balance at March 31, 2023 |
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Stock-based compensation expense | — | — | | — | | |||||||||
Exercise of stock options |
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Net loss |
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| — |
| ( |
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Balance at June 30, 2023 |
| | $ | | $ | | $ | ( | $ | |
Total | ||||||||||||||
Common Stock | Additional | Accumulated | Stockholders’ | |||||||||||
| Shares |
| Amount |
| Paid-in Capital |
| Deficit |
| Equity | |||||
Balance at January 1, 2024 |
| | $ | | $ | | $ | ( | $ | | ||||
Stock-based compensation expense |
| — |
| — |
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Exercise of stock options | | | | — | | |||||||||
Vesting of restricted stock units | | | ( | — | — | |||||||||
Net loss |
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| ( |
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Balance at March 31, 2024 |
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Stock-based compensation expense |
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Exercise of stock options | | | | — | | |||||||||
Vesting of restricted stock units | | — | — | — | — | |||||||||
Issuance of common stock under employee stock purchase plan | | | | — | | |||||||||
Net loss |
| — |
| — |
| — |
| ( |
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Balance at June 30, 2024 |
| | $ | | $ | | $ | ( | $ | |
See accompanying notes to unaudited condensed consolidated financial statements.
5
MaxCyte, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
| Six Months Ended June 30, | ||||||
2024 |
| 2023 | |||||
Cash flows from operating activities: |
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Net loss | $ | ( | $ | ( | |||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Non-cash lease expense | | | |||||
Net book value of consigned equipment sold |
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Loss on disposal of fixed assets | | — | |||||
Stock-based compensation |
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Credit loss (recovery) expense | ( | | |||||
Change in excess/obsolete inventory reserve | | — | |||||
Amortization of discounts on investments |
| ( |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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Accounts receivable - TIA | — | | |||||
Inventory |
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Prepaid expense and other current assets |
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Other assets |
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Accounts payable, accrued expenses and other |
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Operating lease liability |
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Deferred revenue |
| ( |
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Other liabilities |
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Net cash used in operating activities |
| ( |
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Cash flows from investing activities: |
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Purchases of investments |
| ( | ( | ||||
Maturities of investments |
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Purchases of property and equipment |
| ( | ( | ||||
Proceeds from sale of equipment | — | | |||||
Net cash provided by investing activities |
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Cash flows from financing activities: |
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Proceeds from exercise of stock options |
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Proceeds from issuance of common stock under employee stock purchase plan | | — | |||||
Net cash provided by financing activities |
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Net (decrease) increase in cash and cash equivalents |
| ( |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period | $ | | $ | | |||
Supplemental disclosure of non-cash investing and financing activities: |
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Property and equipment purchases included in accounts payable and accrued expenses | $ | | $ | |
See accompanying notes to unaudited condensed consolidated financial statements.
6
MaxCyte, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(in thousands, except par value, share and per share amounts)
1. Organization and Description of Business
MaxCyte, Inc. (the “Company” or “MaxCyte”) was incorporated as a majority-owned subsidiary of EntreMed, Inc. (“EntreMed”) on July 31, 1998, under the laws and provisions of the state of Delaware and commenced operations on July 1, 1999. In November 2002, MaxCyte was recapitalized, and EntreMed was no longer deemed to control the Company.
MaxCyte is a global life sciences company focused on advancing the discovery, development and commercialization of next-generation cell therapies. MaxCyte leverages its proprietary cell engineering technology platform to enable the programs of its biotechnology and pharmaceutical company customers who are engaged in cell therapy, including gene editing and immuno-oncology, as well as in drug discovery and development and biomanufacturing. The Company licenses and sells its instruments and technology and sells its consumables to developers of cell therapies and pharmaceutical and biotechnology companies for use in drug discovery and development and biomanufacturing.
The Company’s registration statement on Form S-1 related to its initial public offering of common stock (the “IPO”) in the United States of America (the “U.S.”) was declared effective on July 29, 2021, and the Company’s common stock began trading on the Nasdaq Global Select Market on July 30, 2021. On August 3, 2021, the Company sold
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”). In the Company’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations, and cash flows as of and for the periods presented. The condensed consolidated balance sheet at December 31, 2023 has been derived from audited consolidated financial statements as of that date. The unaudited condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year or any other future year or period. Certain information and notes disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 12, 2024 (the “2023 Form 10-K”).
Significant Accounting Policies
The Company’s significant accounting policies are disclosed in the notes to its audited consolidated financial statements for the year ended December 31, 2023 included in the 2023 Form 10-K and have not materially changed during the three and six months ended June 30, 2024.
Basis of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, CCTI, Inc. All significant intercompany balances have been eliminated in consolidation.
7
Reclassifications
Certain reclassifications have been made to prior years’ financial statements to conform to current year presentation. These reclassifications had no effect on previously reported results of operations or accumulated deficit.
Concentration of Risk
The Company maintains its cash and cash equivalents with
Significant customers are those that accounted for 10% or more of the Company’s total revenue for the period or accounts receivable as of the end of a reporting period. During both the three and six months ended June 30, 2024,
Certain components included in the Company’s products are obtained from a single source or a limited group of suppliers. During the three and six months ended June 30, 2024,
Accounts Receivable
Accounts receivable are reduced by an allowance for credit losses, if needed. The Company maintains an allowance for credit losses of an amount equal to anticipated future write-offs. The Company determined that
Foreign Currency
The Company’s functional currency is the U.S. dollar; transactions denominated in foreign currencies are subject to currency risk. The Company recognized $
Leases
For transactions in which the Company is the lessee, at the inception of a contract, the Company determines if the arrangement is, or contains, a lease. See Note 7 for additional details about leases under which the Company is the lessee.
All transactions in which the Company is the lessor are short-term (one year or less) and have been classified as operating leases. All leases require upfront payments covering the full period of the lease and thus, there are no future payments expected to be received from existing leases. See Note 3 for details on revenue recognition related to lease agreements.
Comprehensive Loss
For the three and six months ended June 30, 2024 and 2023, comprehensive loss equaled net loss; therefore, a separate statement of comprehensive loss is not included in the accompanying condensed consolidated financial statements.
8
Loss Per Share
Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period.
For periods of net income, and when the effects are not anti-dilutive, diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options, restricted stock units, performance stock units and shares under employee stock purchase plans using the treasury stock method.
For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all dilutive potential common shares is anti-dilutive. The number of anti-dilutive shares excluded from the computation of diluted loss per share, consisting of shares underlying stock options, restricted stock units, performance stock units, and shares under employee stock purchase plans was
Recent Accounting Pronouncements
The Company has evaluated all issued and unadopted Accounting Standards Updates and believes the adoption of these standards will not have a material impact on its results of operations, financial position, or cash flows.
3. Revenue
Revenue is principally from the sale of instruments and processing assemblies, extended warranties, and the lease of instruments, which lease agreements also include customer-specific milestone payments. In some arrangements, products and services have been sold together representing distinct performance obligations. In these arrangements, the Company allocates the sale price to the various performance obligations in the arrangement on a relative selling price basis. Under this basis, the Company determines the estimated selling price of each performance obligation in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis.
Revenue is recognized at the time control is transferred to the customer and the performance obligation is satisfied. Revenue from the sale of instruments and processing assemblies is generally recognized at the time of shipment to the customer, provided that no significant vendor obligations remain and collectability is reasonably assured. Revenue from equipment leases is recognized ratably over the contractual term of the lease agreement and when specific milestones are achieved by a customer. Licensing fee revenue is recognized ratably over the license period. Revenue from fees for research services is recognized when services have been provided.
Disaggregation of Revenue
The following table depicts the disaggregation of revenue by type of contract:
Three months ended June 30, 2024 | Six months ended June 30, 2024 | |||||||||||||||||
Revenue from | Revenue | |||||||||||||||||
Contracts | from | Revenue from | Revenue | |||||||||||||||
with | Lease | Total | Contracts with | from Lease | Total | |||||||||||||
| Customers |
| Elements |
| Revenue |
| Customers |
| Elements |
| Revenue | |||||||
Product sales | $ | | $ | — | $ | | $ | | $ | — | $ | | ||||||
Lease elements |
| — |
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| — |
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Other |
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| — |
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| — |
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Total | $ | | $ | | $ | | $ | | $ | | $ | |
9
Three months ended June 30, 2023 | Six months ended June 30, 2023 | |||||||||||||||||
Revenue from | Revenue | |||||||||||||||||
Contracts | from | Revenue from | Revenue | |||||||||||||||
with | Lease | Total | Contracts with | from Lease | Total | |||||||||||||
| Customers |
| Elements |
| Revenue |
| Customers |
| Elements |
| Revenue | |||||||
Product sales | $ | | $ | — | $ | | $ | | $ | — | $ | | ||||||
Lease elements |
| — |
| |
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| — |
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Other |
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| — |
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| — |
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Total | $ | | $ | | $ | | $ | | $ | | $ | |
Additional Disclosures Relating to Revenue from Contracts with Customers
Deferred revenue represents payments received for performance obligations not yet satisfied and is presented as current or long-term in the accompanying condensed consolidated balance sheets based on the expected timing and satisfaction of the underlying goods or services. Deferred revenue was $
Remaining contract consideration for which revenue has not been recognized due to unsatisfied performance obligations with a duration greater than one year as of June 30, 2024 was $
For the three and six months ended June 30, 2024 and 2023, the Company did not incur, and therefore did not defer, any material incremental costs to obtain contracts or costs to fulfill contracts.
4. Stockholders’ Equity
Common Stock
During the six months ended June 30, 2024, the Company issued
Preferred Stock
The Company’s certificate of incorporation authorizes the issuance of up to
Stock Incentive Plans
The Company adopted the MaxCyte, Inc. Long-Term Incentive Plan (the “2016 Plan”) in January 2016 to provide for the awarding of (i) stock options, (ii) restricted stock, (iii) incentive shares, and (iv) performance awards, in each case, to employees, officers, and directors of the Company and to other individuals as determined by the Board of Directors.
In December 2021, the Company adopted the MaxCyte, Inc. 2021 Inducement Plan (the “Inducement Plan”) to provide for the awarding of (i) non-qualified stock options; (ii) stock appreciation rights; (iii) restricted stock awards; (iv) restricted stock unit awards; (v) performance awards; and (vi) other awards, in each case, only to persons eligible to receive grants of awards who satisfy the standards for inducement grants under Nasdaq Marketplace Rule 5635(c)(4) or 5635(c)(3), if applicable, and the related guidance under Nasdaq IM 5635-1. The Board of Directors reserved
10
In May 2022, the Company’s Board of Directors adopted, and in June 2022, the Company’s stockholders approved, the MaxCyte, Inc. 2022 Equity Incentive Plan (the “2022 Plan”) to provide for the awarding of (i) incentive stock options, (ii) non-qualified stock options, (iii) stock appreciation rights, (iv) restricted stock awards, (v) restricted stock unit awards, (vi) performance awards, and (vii) other awards. Following the approval of the 2022 Plan, no additional awards can be granted under the 2016 Plan or the Inducement Plan, but all outstanding awards will continue to remain subject to the terms of the applicable plan.
Upon the effectiveness of the 2022 Plan, a total of
At June 30, 2024 and December 31, 2023, there were
The value of an equity award is recognized as expense on a straight-line basis over the requisite service period. At June 30, 2024, total unrecognized compensation expense was $
Stock Options
The weighted-average fair value of the stock options granted during the three months ended June 30, 2024 and 2023 was estimated to be $
Restricted Stock Units (“RSUs”)
The weighted-average fair value of the RSUs granted during the three months ended June 30, 2024 and 2023 was estimated to be $
Performance Stock Units (“PSUs”)
During the six months ended June 30, 2024,
Employee Stock Purchase Plan (“ESPP”)
In May 2023, the Company commenced the initial offering under the ESPP. The ESPP provides an offering period of
11
Period began on May 20, 2024. The weighted-average fair value of the shares under the ESPP for the three and six months ended June 30, 2024 was $
Stock-based Compensation Expense
The Company recorded stock-based compensation expense in the following expense categories of its unaudited condensed consolidated statements of operations:
| Three months ended June 30, | Six months ended June 30, | ||||||||||
2024 |
| 2023 |
| 2024 |
| 2023 | ||||||
General and administrative | $ | | $ | | $ | | $ | | ||||
Sales and marketing |
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Research and development |
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Total | $ | | $ | | $ | | $ | |
5. Consolidated Balance Sheet Components
Inventory
Inventory is carried at the lower of cost or net realizable value. The following tables show the components of inventory:
| June 30, |
| December 31, | ||||
2024 | 2023 | ||||||
Raw materials inventory | $ | | $ | | |||
Finished goods inventory |
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Work in progress | | | |||||
Total inventory | $ | | $ | |
The Company reserved $
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using the straight-line method. Leasehold improvements are amortized over the shorter of the estimated lease term or useful life.
Property and equipment include capitalized costs to develop internal-use software. Applicable costs are capitalized during the development stage of the project and include direct internal costs, third-party costs and allocated interest expense as appropriate.
Property and equipment consisted of the following:
| June 30, |
| December 31, | ||||
2024 | 2023 | ||||||
Leasehold improvements | $ | | $ | | |||
Furniture and equipment | | | |||||
Internal-use software |
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Instruments |
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Construction in process |
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Accumulated depreciation and amortization |
| ( |
| ( |
12
Property and equipment, net | $ | | $ | |
During the six months ended June 30, 2024 and 2023, the Company transferred $
For the three and six months ended June 30, 2024, the Company incurred depreciation and amortization expense of $
6. Fair Value
The Company’s condensed consolidated balance sheets include various financial instruments (primarily cash and cash equivalents, accounts receivable and accounts payable) that are carried at cost, which approximates fair value due to the short-term nature of the instruments.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company had
Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Money market funds, U.S. Treasury securities and government agency bonds, commercial paper, and corporate debt instruments classified as held-to-maturity are measured at fair value on a non-recurring basis when they are deemed to be impaired on an other-than-temporary basis. The Company periodically reviews investments to assess for credit impairment. Based on its assessment, all unrecognized holding losses were due to factors other than credit loss, such as changes in interest rates. Therefore,
The following table summarizes the Company’s financial instruments that were measured at fair value on a non-recurring basis as of June 30, 2024:
Gross | Gross | |||||||||||||
Amortized | unrecognized | unrecognized | Aggregate | |||||||||||
Description |
| Classification |
| cost |
| holding gains |
| holding losses |
| fair value | ||||
Money market funds and cash equivalents |
| Cash equivalents | $ | $ | — | $ | — | $ | | |||||
Commercial paper | Cash equivalents | — | — | | ||||||||||
Commercial paper |
| Short-term investments |
| | ( |
| | |||||||
U.S. Treasury securities and government agency bonds | Short-term investments | | ( | | ||||||||||
Corporate debt |
| Short-term investments |
| — | ( |
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U.S. Treasury securities and government agency bonds | Long-term investments | | ( | | ||||||||||
Corporate debt |
| Long-term investments |
| | — |
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Total cash equivalents, short-term investments and long-term investments |
|
| $ | | $ | | $ | ( | $ | |
The following table summarizes the Company’s financial instruments that were measured at fair value on a non-recurring basis as of December 31, 2023:
Gross | Gross | |||||||||||||
Amortized | unrecognized | unrecognized | Aggregate | |||||||||||
Description |
| Classification |
| cost |
| holding gains |
| holding losses |
| fair value | ||||
Money market funds and cash equivalents |
| Cash equivalents | $ | $ | — | $ | — | $ | |
13
U.S. Treasury securities and government agency bonds | Cash equivalents | | — | | ||||||||||
Commercial paper |
| Short-term investments |
|
| |
| ( |
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U.S. Treasury securities and government agency bonds | Short‑term investments |
|
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| ( |
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U.S. Treasury securities and government agency bonds | Long-term investments | | ( | | ||||||||||
Total cash equivalents, short-term investments and long-term investments |
|
| $ | | $ | | $ | ( | $ | |
Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company has no non-financial assets and liabilities that are measured at fair value on a recurring basis.
Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The Company measures its long-lived assets, including property and equipment, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be impaired.
7. Commitments and Contingencies
Operating Leases
In May 2021, the Company entered into a lease for its headquarters (the “Headquarters Lease”), consisting of an operating lease agreement, as amended, for new office, laboratory, manufacturing, and other space. The lease term expires on August 31, 2035. Under the Headquarters Lease, the Company has
The Company had
The components of lease cost and supplemental balance sheet information for the Company’s lease portfolio were as follows:
Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2024 |
| 2023 | 2024 |
| 2023 | ||||||
Operating lease cost | $ | | $ | | $ | | $ | | ||||
Short-term lease cost |
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Variable lease cost |
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Total lease cost | $ | | $ | | $ | | $ | |
As of June 30, | As of December 31, | |||||
| 2024 |
| 2023 | |||
Operating leases | ||||||
Assets: | ||||||
Right-of-use asset - operating leases | $ | | $ | | ||
Liabilities | ||||||
Operating lease liability, current | $ | | $ | | ||
Operating lease liabilities, net of current portion |
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| |
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Total operating lease liabilities | $ | | $ | | ||
Other information | ||||||
Weighted-average remaining lease term (in years) | ||||||
Weighted-average incremental borrowing rate |
The following table reconciles the remaining minimum lease payments to lease liabilities as of June 30, 2024:
| Operating Leases | ||
Remainder of 2024 | $ | | |
2025 |
| | |
2026 | | ||
2027 | | ||
2028 | | ||
2029 and thereafter | | ||
Total undiscounted lease payments | | ||
Discount factor |
| ( | |
Present value of lease liabilities | $ | |
8. Related Party Transactions
Effective January 1, 2024, the Company entered into a consulting agreement with a member of the Board of Directors to provide consulting services to the Company for a
During the three and six months ended June 30 2024, the Company sold $
During the three and six months ended June 30, 2024, the Company sold less than $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our audited consolidated financial statements and related notes for the year ended December 31, 2023 included in the 2023 Form 10-K, as well as the information contained under Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, “Risk Factors” contained in the 2023 Form 10-K and other information provided from time to time in our other filings with the SEC.
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements about us and our industry involve substantial risks, uncertainties, and assumptions, including those described elsewhere in this report. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations or financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
•our expected future growth and the success of our business model;
•the potential payments we may receive pursuant to our Strategic Platform Licenses (“SPLs”);
• | the size and growth potential of the markets for our products, and our ability to serve those markets, increase our market share and achieve and maintain industry leadership; |
• | the market acceptance and demand for our technology and products, including in the cell therapeutics and bioprocessing application markets; |
•the expected future growth of our manufacturing capabilities and sales, support and marketing capabilities;
•our ability to expand our customer base and enter into additional SPL partnerships;
• | our ability to accurately forecast and manufacture appropriate quantities of our products to meet clinical or commercial demand; |
• | our expectations regarding development of the cell therapy market, including projected growth in adoption of non-viral delivery approaches and gene editing manipulation technologies; |
• | our expectation that our partners will have access to capital markets to develop and commercialize their cell therapy programs; |
• | our ability to maintain our Master File with the U.S. Food and Drug Administration (the “FDA”) and Master and Technical Files in other countries and expand Master and Technical Files into additional countries; |
• | our research and development for any future products, including our intention to introduce new instruments and processing assemblies and move into new applications; |
• | the development, regulatory approval and commercialization of competing products and our ability to compete with the companies that develop and sell such products; |
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• | risks associated with our management transition and our ability to retain and hire senior management and key personnel; |
• | regulatory developments in the U.S. and foreign countries; |
• | our expectations regarding the period during which we qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”); |
• | our ability to develop and maintain our corporate infrastructure, including our internal controls; |
• | our financial performance and capital requirements; |
• | the adequacy of our cash resources and availability of financing on commercially reasonable terms; |
• | our expectations regarding our ability to obtain and maintain intellectual property protection for our products, as well as our ability to operate our business without infringing the intellectual property rights of others; |
• | general market and economic conditions that may impact investor confidence in the biopharmaceutical industry and affect the amount of capital such investors provide to our current and potential partners; and |
•our use of available capital resources.
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described under the caption “Risk Factors” and elsewhere in the 2023 Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. Given these uncertainties, you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions or joint ventures.
You should read this Quarterly Report on Form 10-Q and the documents that we file from time to time with the SEC with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.
In this Quarterly Report on Form 10-Q, unless the context requires otherwise, all references to “we,” “our,” “us,” “MaxCyte” and the “Company” refer to MaxCyte, Inc.
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Trademarks
We have applied for various trademarks that we use in connection with the operation of our business. This Quarterly Report on Form 10-Q includes trademarks, service marks, and trade names owned by us or other companies. All trademarks, service marks, and trade names included in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this report may be referred to without the ® or TM symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.
Overview
We are a leading commercial cell engineering company focused on providing enabling platform technologies to advance the discovery, development, and commercialization of next-generation cell therapeutics including cell and gene therapies and to support innovative cell-based research and development. Over more than two decades, we have developed and commercialized our proprietary Flow Electroporation® technology, which is used by biopharmaceutical companies to facilitate complex engineering of a wide variety of cells. Electroporation is a method of transfection, or the process of deliberately introducing molecules into cells, that involves applying an electric field in order to temporarily increase the permeability of the cell membrane. This precisely controlled increase in permeability allows the intracellular delivery of molecules, such as genetic material and proteins, that would not normally be able to cross the cell membrane as easily.
Our ExPERT platform, which is based on our Flow Electroporation technology, has been designed to address this rapidly expanding cell therapy market and can be utilized across the continuum of the high-growth cell therapy sector, from discovery and development through commercialization of next-generation, cell-based medicines. The ExPERT™ family of products includes four instruments, which we call the ATx™, STx™, GTx™ and VLx™, as well as a portfolio of proprietary related disposables and consumables. Our disposables and consumables include processing assemblies (“PAs”) designed for use with our instruments, as well as accessories supporting PAs such as electroporation buffer solution and software protocols. We have garnered meaningful expertise in cell engineering via our internal research and development efforts as well as our customer-focused commercial approach, which includes a growing application scientist team. Our platform is also supported by a robust intellectual property portfolio with more than 150 granted U.S. and foreign patents and more than 95 pending patent applications worldwide.
From leading commercial cell therapy drug and biologic developers and top biopharmaceutical companies to top academic and government research institutions, including the U.S. National Institutes of Health, our customers have extensively validated our technology. We believe the features and performance of our platform have led to sustained customer engagement. Our existing customer base, which includes but is not limited to our 28 SPL partners, ranges from large biopharmaceutical companies, including a majority of the top 25 pharmaceutical companies based on 2023 global revenue, to hundreds of biotechnology companies and academic centers focused on translational research. Our Flow Electroporation technology is used by one of our SPL partners to engineer the first ex-vivo cell therapy approved by the FDA in December 2023.
Since our inception, we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve profitability will depend on the successful further development, commercialization adoption, and market acceptance of our products. We generated revenue of $21.8 million and incurred a net loss of $18.9 million for the six months ended June 30, 2024. As of June 30, 2024, we had an accumulated deficit of $194.7 million. We expect to continue to incur net losses as we focus on growing commercial sales of our products in both the U.S. and international markets, including growing our sales force, scaling our manufacturing operations, and continuing research and development efforts to develop new products and further enhance our existing products.
Recent Developments
Throughout the first half of 2024, we have continued to enter into SPL agreements with our cell therapy customers. These agreements, which are discussed in more detail under the caption “Results of Operations” below, provide us with revenue from instrument sales and leases and disposables sales as well as pre-commercial milestones based on progress of our partners’ programs through the clinic and sales-based payments upon commercialization of our partners’ programs. In the
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first half of 2024, we signed SPL agreements with five new partners: Lion TCR, Imugene, Wugen, Be Biopharma, and Legend Biotech. We continue to grow our SPL pipeline and, while the specific timing of any agreement is uncertain, we look forward to continuing to build on our existing SPL partnerships and develop additional SPL partnerships in the future.
Results of Operations
Comparison of the Three Months Ended June 30, 2024 and 2023
The following table sets forth our results of operations for the periods presented:
Three Months Ended | ||||||
June 30, | ||||||
| 2024 |
| 2023 | |||
(in thousands) | ||||||