10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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, 2022

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)

(I.R.S. Employer

Identification No.)

47215 Lakeview Blvd. 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, par value $0.001 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 October 31, 2022, there were 134,853,359 outstanding shares of the Registrant’s common stock, par value $0.001 per share.

 

 

 


1

Table of Contents

 

 

 

Page

PART I

 FINANCIAL INFORMATION

 

Item 1.

Consolidated Financial Statements (Unaudited)

2

 

Consolidated Balance Sheets

2

 

Consolidated Statements of Operations and Comprehensive Income (Loss)

3

 

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

4

 

Consolidated Statements of Cash Flows

6

 

Notes to Consolidated Financial Statements

7

Item 2.

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

29

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

Item 4.

Controls and Procedures

 

 

 

 

PART II

OTHER INFORMATION

 

Item 1.

Legal Proceedings

42

Item 1A.

Risk Factors

43

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

82

Item 3.

Defaults Upon Senior Securities

83

Item 4.

Mine Safety Disclosures

83

Item 5.

Other Information

83

Item 15.

Exhibits

84

 

 

 

Signatures

 

85

 

1


2

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,
2022

 

 

December 31,
2021

 

 

 

(unaudited)

 

 

(audited)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

341,523

 

 

$

364,618

 

Trade accounts receivable, net

 

 

39,636

 

 

 

29,760

 

Inventories

 

 

49,369

 

 

 

32,171

 

Prepaid expenses and other current assets

 

 

13,331

 

 

 

5,184

 

Total current assets

 

 

443,859

 

 

 

431,733

 

Deferred income tax assets, noncurrent

 

 

13,988

 

 

 

9,173

 

Property and equipment, net

 

 

7,844

 

 

 

5,851

 

Operating lease right-of-use assets

 

 

14,416

 

 

 

-

 

Goodwill

 

 

10,144

 

 

 

10,144

 

Intangible assets, net

 

 

4,485

 

 

 

4,739

 

Other noncurrent assets

 

 

4,559

 

 

 

1,665

 

Total assets

 

$

499,295

 

 

$

463,305

 

Liabilities, redeemable convertible preferred stock and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Trade accounts payable

 

$

5,640

 

 

$

3,034

 

Legal settlement liability, current

 

 

2,175

 

 

 

1,463

 

Accrued expenses

 

 

16,637

 

 

 

15,251

 

Other current liabilities

 

 

4,949

 

 

 

6,352

 

Deferred revenue, current

 

 

12,093

 

 

 

7,081

 

Total current liabilities

 

 

41,494

 

 

 

33,181

 

Legal settlement liability, noncurrent

 

 

15,122

 

 

 

13,745

 

Deferred revenue, noncurrent

 

 

10,407

 

 

 

9,790

 

Operating lease liability, noncurrent

 

 

14,326

 

 

 

-

 

Other noncurrent liabilities

 

 

1,437

 

 

 

1,204

 

Total liabilities

 

$

82,786

 

 

$

57,920

 

Commitments and contingencies (Note 17)

 

 

 

 

 

 

Redeemable convertible preferred stock, $0.001 par value; 10,000,000 shares authorized, zero issued and outstanding as of September 30, 2022 and December 31, 2021; aggregate liquidation preference of zero as of September 30, 2022 and December 31, 2021.

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value; 1,000,000,000 authorized shares as of September 30, 2022 and December 31, 2021, respectively; 134,849,139 and 133,749,663 issued and outstanding shares as of September 30, 2022 and December 31, 2021, respectively.

 

 

135

 

 

 

126

 

Additional paid-in capital

 

 

437,401

 

 

 

423,625

 

Accumulated deficit

 

 

(20,559

)

 

 

(19,606

)

Accumulated other comprehensive (loss) income

 

 

(530

)

 

 

897

 

Noncontrolling interest in consolidated subsidiary

 

 

62

 

 

 

343

 

Total stockholders’ equity

 

$

416,509

 

 

$

405,385

 

Total liabilities, redeemable convertible preferred stock and stockholders’ equity

 

$

499,295

 

 

$

463,305

 

 

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

2


3

Cytek Biosciences, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

 

 

 

Three months ended

 

 

Nine months ended

 

(In thousands, except share and per share data)

 

September 30,
2022

 

 

September 30,
2021

 

 

September 30,
2022

 

 

September 30,
2021

 

Revenue, net:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

36,389

 

 

$

32,191

 

 

$

104,963

 

 

$

83,567

 

Service

 

 

4,088

 

 

 

2,185

 

 

 

10,737

 

 

 

5,489

 

Total revenue, net

 

 

40,477

 

 

 

34,376

 

 

 

115,700

 

 

 

89,056

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

 

10,606

 

 

 

10,024

 

 

 

34,153

 

 

 

25,264

 

Service

 

 

3,009

 

 

 

3,075

 

 

 

9,947

 

 

 

8,284

 

Total cost of sales

 

 

13,615

 

 

 

13,099

 

 

 

44,100

 

 

 

33,548

 

Gross profit

 

 

26,862

 

 

 

21,277

 

 

 

71,600

 

 

 

55,508

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

8,650

 

 

 

6,078

 

 

 

25,111

 

 

 

17,366

 

Sales and marketing

 

 

8,810

 

 

 

6,553

 

 

 

24,201

 

 

 

16,406

 

General and administrative

 

 

8,042

 

 

 

5,749

 

 

 

24,176

 

 

 

13,896

 

Total operating expenses

 

 

25,502

 

 

 

18,380

 

 

 

73,488

 

 

 

47,668

 

Income (loss) from operations

 

 

1,360

 

 

 

2,897

 

 

 

(1,888

)

 

 

7,840

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(649

)

 

 

(441

)

 

 

(1,886

)

 

 

(1,249

)

Interest income

 

 

1,584

 

 

 

12

 

 

 

1,993

 

 

 

31

 

Other expense, net

 

 

(445

)

 

 

(393

)

 

 

(1,073

)

 

 

(1,128

)

Total other income (expense), net

 

 

490

 

 

 

(822

)

 

 

(966

)

 

 

(2,346

)

Income (loss) before income taxes

 

 

1,850

 

 

 

2,075

 

 

 

(2,854

)

 

 

5,494

 

Provision for (benefit from) income taxes

 

 

224

 

 

 

655

 

 

 

(1,620

)

 

 

1,302

 

Net income (loss)

 

$

1,626

 

 

$

1,420

 

 

$

(1,234

)

 

$

4,192

 

Less: net loss allocated to noncontrolling interests

 

 

40

 

 

 

-

 

 

 

281

 

 

 

-

 

Less: net income allocated to participating securities

 

 

-

 

 

 

(1,074

)

 

 

-

 

 

 

(4,192

)

Net income (loss) attributable to common stockholders, basic and diluted

 

$

1,666

 

 

$

346

 

 

$

(953

)

 

$

-

 

Net income (loss) attributable to common stockholders per share, basic

 

$

0.01

 

 

$

-

 

 

$

(0.01

)

 

$

-

 

Net income (loss) attributable to common stockholders per share, diluted

 

$

0.01

 

 

$

-

 

 

$

(0.01

)

 

$

-

 

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

 

 

134,711,701

 

 

 

108,322,433

 

 

 

134,342,059

 

 

 

57,534,080

 

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

 

 

138,709,335

 

 

 

113,637,377

 

 

 

134,342,059

 

 

 

62,095,275

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,626

 

 

$

1,420

 

 

$

(1,234

)

 

$

4,192

 

Foreign currency translation adjustment, net of tax

 

 

(758

)

 

 

34

 

 

 

(1,427

)

 

 

505

 

Net comprehensive income (loss)

 

$

868

 

 

$

1,454

 

 

$

(2,661

)

 

$

4,697

 

 

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

3


4

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 (loss)

 

 

subsidiary

 

 

equity

 

Balances at December 31, 2021

 

-

 

$

-

 

 

 

133,749,663

 

$

126

 

 

$

423,625

 

 

$

(19,606

)

 

$

897

 

 

$

343

 

 

$

405,385

 

Exercise of stock options

 

 

 

 

 

 

493,267

 

 

8

 

 

 

356

 

 

 

 

 

 

 

 

 

 

 

 

364

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

3,837

 

 

 

 

 

 

 

 

 

 

 

 

3,837

 

Foreign currency translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,021

)

 

 

 

 

 

 

 

 

(2,021

)

Noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(137

)

 

 

(137

)

Balances at March 31, 2022

 

-

 

$

-

 

 

 

134,242,930

 

$

134

 

 

$

427,818

 

 

$

(21,627

)

 

$

911

 

 

$

206

 

 

$

407,442

 

Shares issued in connection with employee stock plans

 

 

 

 

 

 

365,649

 

 

1

 

 

 

1,204

 

 

 

 

 

 

 

 

 

 

 

 

1,205

 

Shares of Common Stock withheld related to net share settlement

 

 

 

 

 

 

(6,908

)

 

-

 

 

 

(67

)

 

 

 

 

 

 

 

 

 

 

 

(67

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

3,934

 

 

 

 

 

 

 

 

 

 

 

 

3,934

 

Foreign currency translation adjustment, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(683

)

 

 

 

 

 

(683

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(598

)

 

 

 

 

 

 

 

 

(598

)

Noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(104

)

 

 

(104

)

Balances at June 30, 2022

 

-

 

$

-

 

 

 

134,601,671

 

$

135

 

 

$

432,889

 

 

$

(22,225

)

 

$

228

 

 

$

102

 

 

$

411,129

 

Shares issued in connection with employee stock plans

 

 

 

 

 

 

252,496

 

 

-

 

 

 

224

 

 

 

 

 

 

 

 

 

 

 

 

224

 

Shares of Common Stock withheld related to net share settlement

 

 

 

 

 

 

(5,028

)

 

-

 

 

 

(71

)

 

 

 

 

 

 

 

 

 

 

 

(71

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

4,359

 

 

 

 

 

 

 

 

 

 

 

 

4,359

 

Foreign currency translation adjustment, net of tax