10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2021

OR

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: 001-40632

 

CYTEK BIOSCIENCES, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

47-2547526

(State or other jurisdiction of incorporation or organization)

47215 Lakeview Blvd

(I.R.S. Employer Identification No.)

Fremont, California

94538

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (877) 922-9835

 

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

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.001 par value per share

 

CTKB

 

The 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 13(a) of the Exchange Act.

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

As of November 5, 2021, there were 133,725,908 outstanding shares of the registrant’s common stock, par value $0.001 per share.

 


 

Table of Contents

 

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

1

Item 1.

Consolidated Financial Statements (Unaudited)

1

 

Consolidated Balance Sheets

1

 

Consolidated Statements of Operations and Comprehensive Income

2

 

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)

3

 

Consolidated Statements of Cash Flows

4

 

Notes to Consolidated Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

30

Item 4.

Controls and Procedures

30

PART II.

OTHER INFORMATION

32

Item 1.

Legal Proceedings

32

Item 1A.

Risk Factors

32

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

61

Item 3.

Defaults Upon Senior Securities

61

Item 4.

Mine Safety Disclosures

61

Item 5.

Other Information

62

Item 6.

Exhibits

63

Signatures

 

64

 

i


 

PART I-FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited)

Cytek Biosciences, Inc.

Consolidated Balance Sheets

 

(In thousands, except share and per share data)

 

September 30,
2021

 

 

December 31,
2020

 

 

 

(unaudited)

 

 

(audited)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

   Cash and cash equivalents

 

$

376,771

 

 

$

165,231

 

   Trade accounts receivable, net

 

 

29,450

 

 

 

16,990

 

   Restricted cash

 

 

-

 

 

 

888

 

   Inventories

 

 

27,511

 

 

 

23,018

 

   Prepaid expenses and other current assets

 

 

6,094

 

 

 

2,495

 

Total current assets

 

 

439,826

 

 

 

208,622

 

Deferred income tax assets, noncurrent

 

 

7,378

 

 

 

7,378

 

Property and equipment, net

 

 

4,982

 

 

 

2,140

 

Goodwill

 

 

476

 

 

 

476

 

Intangible assets, net

 

 

361

 

 

 

274

 

Other noncurrent assets

 

 

1,297

 

 

 

1,089

 

     Total assets

 

$

454,320

 

 

$

219,979

 

Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

 

 

 

 

 

 

    Current liabilities:

 

 

 

 

 

 

   Trade accounts payable

 

$

3,927

 

 

$

2,944

 

   Legal settlement liability, current

 

 

7,405

 

 

 

6,253

 

   Accrued expenses

 

 

10,753

 

 

 

9,048

 

   Other current liabilities

 

 

2,044

 

 

 

4,626

 

   Deferred revenue, current

 

 

5,885

 

 

 

3,665

 

Total current liabilities

 

 

30,014

 

 

 

26,536

 

Legal settlement liability, noncurrent

 

 

12,633

 

 

 

10,959

 

Deferred revenue, noncurrent

 

 

7,741

 

 

 

3,456

 

Other noncurrent liabilities

 

 

737

 

 

 

737

 

Total liabilities

 

$

51,125

 

 

$

41,688

 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

Redeemable convertible preferred stock, $0.001 par value; 10,000,000 and 87,268,694 shares authorized, zero and 87,268, 694 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of zero and $199,230 as of September 30, 2021 and December 31, 2020, respectively.

 

 

-

 

 

 

194,319

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

Common stock, $0.001 par value; 1,000,000,000 and 153,329,500 authorized shares as of September 30, 2021 and December 31, 2020, respectively; 133,725,741 and 31,241,916 issued and outstanding shares as of September 30, 2021 and December 31, 2020, respectively.

 

 

125

 

 

 

23

 

Additional paid-in capital

 

 

420,600

 

 

 

6,491

 

Accumulated deficit

 

 

(18,415

)

 

 

(22,607

)

Accumulated other comprehensive income

 

 

570

 

 

 

65

 

Noncontrolling interest in consolidated subsidiary

 

 

315

 

 

 

-

 

   Total stockholders’ equity (deficit)

 

$

403,195

 

 

$

(16,028

)

      Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

 

$

454,320

 

 

$

219,979

 

 

The accompanying notes are an integral part of these unaudited interim consolidated financial statements

1


 

Cytek Biosciences, Inc.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

 

 

 

Three months ended

 

 

Nine months ended

 

(In thousands, except share and per share data)

 

September 30,
2021

 

 

September 30,
2020

 

 

September 30,
2021

 

 

September 30,
2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue, net:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

32,191

 

 

$

23,153

 

 

$

83,567

 

 

$

56,688

 

Service

 

 

2,185

 

 

 

1,943

 

 

 

5,489

 

 

 

5,532

 

Total revenue, net

 

 

34,376

 

 

 

25,096

 

 

 

89,056

 

 

 

62,220

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

 

10,024

 

 

 

7,556

 

 

 

25,264

 

 

 

23,644

 

Service

 

 

3,075

 

 

 

1,924

 

 

 

8,284

 

 

 

6,315

 

Total cost of sales

 

 

13,099

 

 

 

9,480

 

 

 

33,548

 

 

 

29,959

 

Gross profit

 

 

21,277

 

 

 

15,616

 

 

 

55,508

 

 

 

32,261

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

6,078

 

 

 

3,376

 

 

 

17,366

 

 

 

9,308

 

Sales and marketing

 

 

6,553

 

 

 

3,838

 

 

 

16,406

 

 

 

10,428

 

General and administrative

 

 

5,749

 

 

 

1,691

 

 

 

13,896

 

 

 

6,742

 

Total operating expenses

 

 

18,380

 

 

 

8,905

 

 

 

47,668

 

 

 

26,478

 

Income from operations

 

 

2,897

 

 

 

6,711

 

 

 

7,840

 

 

 

5,783

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(441

)

 

 

(2

)

 

 

(1,249

)

 

 

(3

)

Interest income

 

 

12

 

 

 

3

 

 

 

31

 

 

 

105

 

Other income (expense), net

 

 

(393

)

 

 

185

 

 

 

(1,128

)

 

 

543

 

Total other income (expense), net

 

 

(822

)

 

 

186

 

 

 

(2,346

)

 

 

645

 

Income before income taxes

 

 

2,075

 

 

 

6,897

 

 

 

5,494

 

 

 

6,428

 

Provision for (benefit from) income taxes

 

 

655

 

 

 

357

 

 

 

1,302

 

 

 

(7,384

)

Net income

 

$

1,420

 

 

$

6,540

 

 

$

4,192

 

 

$

13,812

 

Less: net income allocated to participating securities

 

 

(1,074

)

 

 

(5,094

)

 

 

(4,192

)

 

 

(11,171

)

Net income attributable to common stockholders, basic and diluted

 

$

346

 

 

$

1,446

 

 

$

-

 

 

$

2,641

 

Net income attributable to common stockholders per share, basic

 

$

-

 

 

$

0.05

 

 

$

-

 

 

$

0.09

 

Net income attributable to common stockholders per share diluted

 

$

-

 

 

$

0.05

 

 

$

-

 

 

$

0.09

 

Weighted-average shares used in calculating net income per share, basic

 

 

108,322,433

 

 

 

28,700,005

 

 

 

57,534,080

 

 

 

28,551,126

 

Weighted-average shares used in calculating net income per share, diluted

 

 

113,637,377

 

 

 

31,058,757

 

 

 

62,095,275

 

 

 

30,763,586

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

1,420

 

 

$

6,540

 

 

$

4,192

 

 

$

13,812

 

Foreign currency translation adjustment, net of tax

 

 

34

 

 

 

145

 

 

 

505

 

 

 

49

 

Net comprehensive income

 

$

1,454

 

 

$

6,685

 

 

$

4,697

 

 

$

13,861

 

 

The accompanying notes are an integral part of these unaudited interim consolidated financial statements

2


 

Cytek Biosciences, Inc

Consolidated Statements of Redeemable Convertible

Preferred Stock and Stockholders’ Equity (Deficit)

(Unaudited)

 

 

 

Redeemable convertible

 

 

 

 

 

Additional

 

 

 

 

 

Accumulated other

 

 

Noncontrolling

 

 

Total

 

 

preferred stock

 

 

Common stock

 

 

paid-in

 

 

Accumulated

 

 

comprehensive

 

 

interest in consolidated

 

 

stockholders’

 

(In thousands, except share data)

Shares

 

Amount

 

 

Shares

 

Amount

 

 

capital

 

 

deficit

 

 

income

 

 

subsidiary

 

 

equity (deficit)

 

Balances at December 31, 2020

 

87,268,694

 

$

194,319

 

 

 

31,241,916

 

$

23

 

 

$

6,491

 

 

$

(22,607

)

 

$

65

 

 

$

-

 

 

$

(16,028

)

Exercise of stock options

 

 

 

 

 

 

533,540

 

 

1

 

 

 

195

 

 

 

 

 

 

 

 

 

 

 

 

196

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

456

 

 

 

 

 

 

 

 

 

 

 

 

456

 

Foreign currency translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

202

 

 

 

 

 

 

202

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

102

 

 

 

 

 

 

 

 

 

102

 

Noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

315

 

 

 

315

 

Balances at March 31, 2021

 

87,268,694

 

$

194,319

 

 

 

31,775,456

 

$

24

 

 

$

7,142

 

 

$

(22,505

)

 

$

267

 

 

$

315

 

 

$

(14,757

)

Exercise of stock options

 

 

 

 

 

 

321,130

 

 

-

 

 

 

166

 

 

 

 

 

 

 

 

 

 

 

 

166

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

667

 

 

 

 

 

 

 

 

 

 

 

 

667

 

Foreign currency translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

269

 

 

 

 

 

 

269

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,670

 

 

 

 

 

 

 

 

 

2,670

 

Noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

Balances at June 30, 2021

 

87,268,694

 

$

194,319

 

 

 

32,096,586

 

$

24

 

 

$

7,975

 

 

$

(19,835

)

 

$

536

 

 

$

315

 

 

$

(10,985

)

Exercise of stock options

 

 

 

 

 

 

411,060

 

 

-

 

 

 

264

 

 

 

 

 

 

 

 

 

 

 

 

264

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

2,455

 

 

 

 

 

 

 

 

 

 

 

 

2,455

 

Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other offering costs

 

 

 

 

 

 

13,949,401

 

 

14

 

 

 

215,675

 

 

 

 

 

 

 

 

 

 

 

 

215,689

 

Conversion of redeemable convertible preferred stock to common stock upon initial public offering

 

(87,268,694

)

 

(194,319

)

 

 

87,268,694

 

 

87

 

 

 

194,231

 

 

 

 

 

 

 

 

 

 

 

 

194,318

 

Foreign currency translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34

 

 

 

 

 

 

34

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,420

 

 

 

 

 

 

 

 

 

1,420

 

Noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

Balances at September 30, 2021

 

-

 

$

-

 

 

 

133,725,741

 

$

125

 

 

$

420,600

 

 

$

(18,415

)

 

$

570

 

 

$

315

 

 

$

403,195

 

 

 

Redeemable convertible

 

 

 

 

 

Additional

 

 

 

 

 

Accumulated other

 

 

Total

 

 

preferred stock

 

 

Common stock

 

 

paid-in

 

 

Accumulated

 

 

comprehensive

 

 

stockholders’

 

(In thousands, except share data)

Shares

 

Amount

 

 

Shares

 

Amount

 

 

capital

 

 

deficit

 

 

income (loss)

 

 

deficit

 

Balances at December 31, 2019

 

69,516,626

 

$

74,653

 

 

 

28,397,955

 

$

21

 

 

$

443

 

 

$

(42,018

)

 

$

(147

)

 

$

(41,701

)

Exercise of stock options

 

 

 

 

 

 

97,801

 

 

1

 

 

 

12

 

 

 

 

 

 

 

 

 

13

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

105

 

 

 

 

 

 

 

 

 

105

 

Foreign currency translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(77

)

 

 

(77

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(839

)

 

 

 

 

 

(839

)

Balances at March 31, 2020

 

69,516,626

 

$

74,653

 

 

 

28,495,756

 

$

22

 

 

$

560

 

 

$

(42,857

)

 

$

(224

)

 

$

(42,499

)

Exercise of stock options

 

 

 

 

 

 

2,511

 

 

-

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

109

 

 

 

 

 

 

 

 

 

109

 

Foreign currency translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19

)

 

 

(19

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,111

 

 

 

 

 

 

8,111