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 June 30, 2023

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

The number of shares of Registrant’s Common Stock outstanding as of July 31, 2023 was 136,360,208.

 

 

 


 

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 Loss

3

 

Consolidated Statements of Stockholders' Equity

4

 

Consolidated Statements of Cash Flows

5

 

Notes to Consolidated Financial Statements

6

Item 2.

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

25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

36

Item 4.

Controls and Procedures

37

 

 

 

PART II

OTHER INFORMATION

 

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

77

Item 3.

Defaults Upon Senior Securities

78

Item 4.

Mine Safety Disclosures

78

Item 5.

Other Information

78

Item 6.

Exhibits

79

Signatures

 

80

 

1


 

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited).

Cytek Biosciences, Inc.

Consolidated Balance Sheets

 

(In thousands, except share and per share data)

 

June 30,
2023

 

 

December 31,
2022

 

 

 

(unaudited)

 

 

(audited)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

131,544

 

 

$

296,601

 

Restricted cash

 

 

-

 

 

 

2,899

 

Marketable securities

 

 

167,294

 

 

 

44,548

 

Trade accounts receivable, net

 

 

49,624

 

 

 

48,864

 

Inventories

 

 

65,731

 

 

 

48,154

 

Prepaid expenses and other current assets

 

 

10,628

 

 

 

12,954

 

Total current assets

 

 

424,821

 

 

 

454,020

 

Deferred income tax assets, noncurrent

 

 

26,387

 

 

 

20,459

 

Property and equipment, net

 

 

15,588

 

 

 

13,682

 

Operating lease right-of-use assets

 

 

12,423

 

 

 

13,883

 

Goodwill

 

 

19,143

 

 

 

10,144

 

Intangible assets, net

 

 

23,683

 

 

 

4,331

 

Other noncurrent assets

 

 

3,009

 

 

 

2,957

 

Total assets

 

$

525,054

 

 

$

519,476

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Trade accounts payable

 

$

3,082

 

 

$

4,805

 

Legal settlement liability, current

 

 

1,918

 

 

 

2,163

 

Accrued expenses

 

 

19,591

 

 

 

21,126

 

Other current liabilities

 

 

8,388

 

 

 

7,960

 

Deferred revenue, current

 

 

20,612

 

 

 

12,986

 

Total current liabilities

 

 

53,591

 

 

 

49,040

 

Legal settlement liability, noncurrent

 

 

16,462

 

 

 

15,596

 

Deferred revenue, noncurrent

 

 

16,054

 

 

 

13,124

 

Operating lease liability, noncurrent

 

 

10,833

 

 

 

12,312

 

Long term debt

 

 

1,882

 

 

 

2,271

 

Other noncurrent liabilities

 

 

2,053

 

 

 

1,587

 

Total liabilities

 

$

100,875

 

 

$

93,930

 

Commitments and contingencies (Note 18)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value; 1,000,000,000 authorized shares as of June 30, 2023 and December 31, 2022, respectively; 136,344,908 and 135,365,381 issued and outstanding shares as of June 30, 2023 and December 31, 2022, respectively.

 

 

136

 

 

 

135

 

Additional paid-in capital

 

 

454,027

 

 

 

442,887

 

Accumulated deficit

 

 

(28,225

)

 

 

(17,030

)

Accumulated other comprehensive loss

 

 

(1,759

)

 

 

(697

)

Noncontrolling interest in consolidated subsidiary

 

 

-

 

 

 

251

 

Total stockholders’ equity

 

$

424,179

 

 

$

425,546

 

Total liabilities and stockholders’ equity

 

$

525,054

 

 

$

519,476

 

 

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

2


 

Cytek Biosciences, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(In thousands, except share and per share data)

 

June 30,
2023

 

 

June 30,
2022

 

 

June 30,
2023

 

 

June 30,
2022

 

Revenue, net:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

40,452

 

 

$

37,093

 

 

$

71,624

 

 

$

68,574

 

Service

 

 

9,241

 

 

 

3,066

 

 

 

15,157

 

 

 

6,649

 

Total revenue, net

 

 

49,693

 

 

 

40,159

 

 

 

86,781

 

 

 

75,223

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

 

16,675

 

 

 

11,780

 

 

 

29,352

 

 

 

23,547

 

Service

 

 

4,856

 

 

 

3,818

 

 

 

8,229

 

 

 

6,938

 

Total cost of sales

 

 

21,531

 

 

 

15,598

 

 

 

37,581

 

 

 

30,485

 

Gross profit

 

 

28,162

 

 

 

24,561

 

 

 

49,200

 

 

 

44,738

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

12,136

 

 

 

8,436

 

 

 

22,110

 

 

 

16,461

 

Sales and marketing

 

 

14,367

 

 

 

8,431

 

 

 

25,512

 

 

 

15,391

 

General and administrative

 

 

10,786

 

 

 

8,585

 

 

 

22,867

 

 

 

16,134

 

Total operating expenses

 

 

37,289

 

 

 

25,452

 

 

 

70,489

 

 

 

47,986

 

Loss from operations

 

 

(9,127

)

 

 

(891

)

 

 

(21,289

)

 

 

(3,248

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(409

)

 

 

(647

)

 

 

(1,082

)

 

 

(1,237

)

Interest income

 

 

1,201

 

 

 

391

 

 

 

3,344

 

 

 

409

 

Other income (expense), net

 

 

1,740

 

 

 

(254

)

 

 

3,392

 

 

 

(628

)

Total other income (expense), net

 

 

2,532

 

 

 

(510

)

 

 

5,654

 

 

 

(1,456

)

Loss before income taxes

 

 

(6,595

)

 

 

(1,401

)

 

 

(15,635

)

 

 

(4,704

)

Benefit from income taxes

 

 

(2,207

)

 

 

(699

)

 

 

(4,440

)

 

 

(1,844

)

Net loss

 

$

(4,388

)

 

$

(702

)

 

$

(11,195

)

 

$

(2,860

)

Less: net loss allocated to noncontrolling interests

 

 

-

 

 

 

104

 

 

 

-

 

 

 

241

 

Net loss attributable to common stockholders, basic and diluted

 

$

(4,388

)

 

$

(598

)

 

$

(11,195

)

 

$

(2,619

)

Net loss attributable to common stockholders per share, basic and diluted

 

$

(0.03

)

 

$

(0.00

)

 

$

(0.08

)

 

$

(0.02

)

Weighted-average shares used in calculating net loss per share, basic and diluted

 

 

135,918,707

 

 

 

134,403,059

 

 

 

135,705,139

 

 

 

134,154,171

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,388

)

 

$

(702

)

 

$

(11,195

)

 

$

(2,860

)

Foreign currency translation adjustment, net of tax

 

 

(980

)

 

 

(683

)

 

 

(1,022

)

 

 

(669

)

Unrealized loss on marketable securities

 

 

(192

)

 

 

-

 

 

 

(40

)

 

 

-

 

Net comprehensive loss

 

$

(5,560

)

 

$

(1,385

)

 

$

(12,257

)

 

$

(3,529

)

 

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

3


 

Cytek Biosciences, Inc

Consolidated Statements of Stockholders’ Equity

(unaudited)

 

 

 

 

 

Additional

 

 

 

 

 

Accumulated other

 

 

Noncontrolling

 

 

Total

 

 

Common stock

 

 

paid-in

 

 

Accumulated

 

 

comprehensive

 

 

interest in consolidated

 

 

stockholders’

 

(In thousands, except share data)

Shares

 

Amount

 

 

capital

 

 

deficit

 

 

income (loss)

 

 

subsidiary

 

 

equity

 

Balances at December 31, 2022

 

135,365,381

 

$

135

 

 

$

442,887

 

 

$

(17,030

)

 

$

(697

)

 

$

251

 

 

$

425,546

 

Shares issued in connection with employee stock plans

 

283,856

 

 

1

 

 

 

203

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

204

 

Shares of Common Stock withheld related to net share settlement

 

(5,182

)

 

-

 

 

 

(57

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(57

)

Stock-based compensation

 

-

 

 

-

 

 

 

4,699

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,699

 

Unrealized gain on marketable securities

 

-

 

 

-

 

 

 

-

 

 

 

-

 

 

 

152

 

 

 

-

 

 

 

152

 

Foreign currency translation adjustment, net of tax

 

-

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(42

)

 

 

-

 

 

 

(42

)

Net loss

 

-

 

 

-

 

 

 

-

 

 

 

(6,807

)

 

 

-

 

 

 

-

 

 

 

(6,807

)

Noncontrolling interest

 

-

 

 

-

 

 

 

16

 

 

 

-

 

 

 

-

 

 

 

(251

)

 

 

(235

)

Balances at March 31, 2023

 

135,644,055

 

$

136

 

 

$

447,748

 

 

$

(23,837

)

 

$

(587

)

 

$

-

 

 

$

423,460

 

Shares issued in connection with employee stock plans

 

697,670

 

 

-

 

 

 

483

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

483

 

Proceeds from Employee Stock Purchase Plan

 

145,569

 

 

-

 

 

 

966

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

966

 

Shares of Common Stock withheld related to net share settlement

 

(16,604

)

 

-

 

 

 

(111

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(111

)

Repurchase of shares

 

(125,782

)

 

-

 

 

 

(981

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(981

)

Stock-based compensation

-

 

 

-

 

 

 

5,922

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,922

 

Unrealized loss on marketable securities

 

-

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(192

)

 

 

-

 

 

 

(192

)

Foreign currency translation adjustment, net of tax

 

-

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(980

)

 

 

-

 

 

 

(980

)

Net loss

 

-

 

 

-

 

 

 

-

 

 

 

(4,388

)

 

 

-

 

 

 

-

 

 

 

(4,388

)

Balances at June 30, 2023

 

136,344,908

 

$

136

 

 

$

454,027

 

 

$

(28,225

)

 

$

(1,759

)

 

$

-

 

 

$

424,179

 

 

 

 

 

 

Additional

 

 

 

 

 

Accumulated other

 

 

Noncontrolling

 

 

Total

 

 

Common stock

 

 

paid-in

 

 

Accumulated

 

 

comprehensive

 

 

interest in consolidated

 

 

stockholders’

 

(In thousands, except share data)

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

 

 

 

-

 

 

 

-

 

 

 

-