Core Viewpoint - Singular Genomics Systems, Inc. has received an unsolicited non-binding acquisition proposal from Concentra Biosciences, LLC to acquire all outstanding shares for $12.00 per share in cash [1] Group 1: Acquisition Proposal - Concentra has proposed to acquire Singular Genomics for $12.00 per share in cash, with an alternative option for stockholders to receive a contingent value right [1] - The proposal was disclosed in a Schedule 13D filed with the SEC, indicating that Tang Capital, the controlling stockholder of Concentra, owns approximately 14.9% of Singular Genomics' outstanding common stock [2] Group 2: Special Committee - Singular Genomics' board of directors has formed a special committee of independent directors to evaluate the acquisition proposal from Concentra along with other potential proposals [3] Group 3: Advisors - TD Cowen is serving as the financial advisor to the Special Committee, while Richards, Layton & Finger, P.A. and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP are providing legal advisory services [5] Group 4: Company Overview - Singular Genomics is a life science technology company focused on next-generation sequencing and multiomics technologies, with products like the G4® Sequencing Platform and the upcoming G4X™ Spatial Sequencer [6]

Company Overview - Singular Genomics is a life science technology company focused on developing next-generation sequencing and multiomics technologies [2] - The G4® Sequencing Platform is a benchtop genomic sequencer that delivers fast and accurate results [2] - The company is also developing the G4X™ Spatial Sequencer, which will utilize proprietary sequencing technology for in situ readouts in various biological contexts [2] Financial Reporting - Singular Genomics will report its financial results for the second quarter ended June 30, 2024, after market close on August 13, 2024 [3] - A conference call to discuss the financial results will take place at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time [3]

Core Insights - Singular Genomics Systems, Inc. will report its financial results for Q2 2024 on August 13, 2024, after market close [1] - A conference call to discuss the results will take place at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time [1] Company Overview - Singular Genomics is a life science technology company focused on next-generation sequencing (NGS) and multiomics technologies [4] - The G4® Sequencing Platform is a key product, designed for fast and accurate genomic sequencing [4] - The company is developing the G4X™ Spatial Sequencer, which will enhance transcriptomics, proteomics, and fluorescent H&E analysis in tissue with spatial context [4] - The mission of Singular Genomics is to empower researchers and clinicians to advance science and medicine [4]

Core Viewpoint - Singular Genomics Systems, Inc. will implement a 1-for-30 reverse stock split to comply with Nasdaq's minimum bid price requirement, effective June 26, 2024 [1][5]. Group 1: Reverse Stock Split Details - The reverse stock split will convert 30 shares of common stock into one new share, reducing the outstanding shares from approximately 74.7 million to about 2.5 million [6]. - No fractional shares will be issued; holders entitled to a fractional share will receive an additional fraction to round up to the next whole share [6]. - The reverse stock split will not affect the number of Series A Preferred Stock shares, which will remain at 2,500, but will adjust the conversion ratio proportionally [6][10]. Group 2: Company Overview - Singular Genomics is a life science technology company focused on next-generation sequencing and multiomics technologies, with products like the G4® Sequencing Platform and the upcoming G4X™ Spatial Sequencer [3]. - The company's mission is to empower researchers and clinicians to advance science and medicine [3]. Group 3: Administrative Information - Continental Stock Transfer & Trust Company will act as the exchange agent for the reverse stock split, providing stockholders with information regarding their ownership [2]. - The company plans to file an amendment to its certificate of incorporation with the Secretary of State of Delaware around June 25, 2024 [10]. - Additional information regarding the reverse stock split can be found in the definitive proxy statement and current report filed with the SEC [11].

Core Viewpoint - Singular Genomics Systems, Inc. will implement a 1-for-30 reverse stock split effective June 26, 2024, to comply with Nasdaq's minimum bid price requirement [1][2]. Group 1: Reverse Stock Split Details - The reverse stock split will convert 30 shares of common stock into one new share, reducing the outstanding shares from approximately 74.7 million to about 2.5 million [4]. - The number of authorized shares will remain at 400 million, and the par value will stay at $0.0001 per share [3]. - No fractional shares will be issued; stockholders entitled to a fractional share will receive an additional fraction to round up to the next whole share [4]. Group 2: Compliance and Approval - The reverse stock split was approved by stockholders at the Annual Meeting on May 29, 2024, with the final ratio determined by the Board of Directors [2]. - The company plans to file an amendment to its certificate of incorporation around June 25, 2024 [3]. Group 3: Company Overview - Singular Genomics is a life science technology company focused on next-generation sequencing and multiomics technologies [7]. - The G4® Sequencing Platform is a key product, designed for fast and accurate genomic sequencing [7]. - The company is also developing the G4X™ Spatial Sequencer for advanced applications in transcriptomics and proteomics [7].

Financial Data and Key Metrics Changes - Operating expenses in Q1 2024 totaled $26.4 million, up from $25.4 million in Q1 2023, primarily due to severance costs [13] - Net loss for Q1 2024 was $25 million or $0.34 per share, compared to a net loss of $23.6 million or $0.33 per share in Q1 2023 [13] - Cash burn for Q1 2024 was approximately $23.2 million, higher than the previous quarter, but expected to decrease in Q2 due to cost-saving measures [50] Business Line Data and Key Metrics Changes - Six G4 instruments were shipped in Q1 2024, generating $0.4 million in revenue, with a total of 30 G4 shipments as of March 31 [21][49] - Gross profit was negative $0.4 million in Q1 2024, compared to a positive $0.1 million in Q1 2023, attributed to initial discounts and higher support costs [27] Market Data and Key Metrics Changes - The demand for spatial sequencing solutions is strong and growing, with a focus on addressing throughput limitations in various customer segments [19] - The company is seeing a strong pipeline of new customer opportunities for the G4X across academic, biopharma, and CRO sectors [10] Company Strategy and Development Direction - The company is shifting its focus to spatial sequencing and multiomics, with plans to bring the G4X spatial sequencer to market [8] - The G4X is designed to offer unprecedented throughput for spatial profiling of tissue, with capabilities including Direct-Seq for in situ RNA sequencing [44] - The company aims to launch a 300-gene immuno-oncology panel and expand its Technology Access Services program [25][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the G4X opportunity, highlighting the unique positioning of the company to leverage its sequencing technology in spatial applications [14] - The company anticipates a ramp-up in service projects in the second half of the year, which will be crucial for generating commercial demand for G4X instruments [11] Other Important Information - The company hosted a customer event to foster relationships and discuss opportunities for collaboration on the G4X [10] - The weighted average share count for Q1 2024 was approximately 73.9 million [50] Q&A Session Summary Question: What capabilities need to be added to G4X for its 2025 launch? - The company is focused on product development work to optimize and harden the service offerings before transitioning to a commercial product [53] Question: How is the company balancing support for existing G4 customers while ramping up G4X? - The current installed base of 30 systems is manageable, and the systems are performing well, allowing for minimal support resources [32][33] Question: What is the expected cash burn trend for 2024? - Cash burn in Q2 is expected to be lower sequentially, with a projected reduction in operating expenses of 10% to 15% [34] Question: Can you provide an update on the Technology Access Program (TAP)? - The company has a deep funnel for service projects across academic, biopharma, and CRO segments, with a focus on minimizing customization [36] Question: When can we expect the first publications related to G4X? - The company anticipates starting to see publications later this year, particularly after the 300-gene panel is operational [41] Question: How does the G4 chemistry differentiate the platform from competitors? - The G4X offers speed, flexibility, and a large imaging area, which are enhanced by the optimized chemistry developed over the past five years [63]

[General Information & Forward-Looking Statements](index=1&type=section&id=General%20Information%20%26%20Forward-Looking%20Statements) [Special Note Regarding Forward-Looking Statements](index=2&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section highlights forward-looking statements, cautioning that actual results may differ due to known and unknown risks and uncertainties - The report contains forward-looking statements regarding future results, financial position, revenue, business strategy, products, and R&D costs[6](index=6&type=chunk) - These statements involve known and unknown risks, uncertainties, and other important factors that may cause actual results to differ materially from expectations[6](index=6&type=chunk) - Readers should not rely on forward-looking statements as predictions of future events, and the company undertakes no obligation to update them[8](index=8&type=chunk) [Summary of Material Risks Associated with Our Business](index=4&type=section&id=Summary%20of%20Material%20Risks%20Associated%20with%20Our%20Business) This section summarizes material risks including **limited operating history**, accumulated losses, **intense competition**, and **dependence** on future product commercialization - The company has a **limited operating history**, making future prospects and risk evaluation difficult[12](index=12&type=chunk) - **Significant losses** have been incurred since inception, with expectations of continued losses and uncertainty in achieving profitability[12](index=12&type=chunk) - The life sciences technology market is **highly competitive**, posing risks to business and operating results if the company fails to compete effectively[12](index=12&type=chunk) - **High dependence** on revenue from G4 consumables, G4X, spatial biology services, and future products means delays or failures in commercialization could severely impact the business[12](index=12&type=chunk) Part I [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents unaudited financial statements for Singular Genomics Systems, Inc. for Q1 2024, including Balance Sheets, Statements of Operations, Comprehensive Loss, Equity, Cash Flows, and Notes [Balance Sheets](index=6&type=section&id=Balance%20Sheets) The balance sheets show total assets decreased from **$265.5 million** to **$239.1 million**, with stockholders' equity declining from **$179.0 million** to **$156.7 million** | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | | Total Assets | $239,101 | $265,467 | | Total Liabilities | $82,403 | $86,461 | | Total Stockholders' Equity | $156,698 | $179,006 | | Current Assets (in thousands) | March 31, 2024 | December 31, 2023 | | :---------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $24,109 | $16,233 | | Short-term investments | $126,629 | $157,708 | | Accounts receivable | $137 | $565 | | Inventory, net | $13,081 | $13,572 | | Prepaid expenses and other | $2,519 | $4,150 | | **Total current assets** | **$166,475** | **$192,228** | [Statements of Operations](index=7&type=section&id=Statements%20of%20Operations) The statements of operations show a net loss of **$25.0 million** for Q1 2024, up from **$23.6 million** in Q1 2023, with revenue decreasing **49%** and gross margin turning **negative** | Metric (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $442 | $863 | | Cost of revenue | $861 | $807 | | Gross margin | $(419) | $56 | | Operating expenses | $26,429 | $25,434 | | Loss from operations | $(26,848) | $(25,378) | | Net loss | $(25,024) | $(23,633) | | Basic and diluted EPS | $(0.34) | $(0.33) | - Revenue decreased by **49%** from **$863 thousand** in Q1 2023 to **$442 thousand** in Q1 2024[20](index=20&type=chunk) - Gross margin turned **negative**, from **$56 thousand** in Q1 2023 to **$(419) thousand** in Q1 2024[20](index=20&type=chunk) [Statements of Comprehensive Loss](index=8&type=section&id=Statements%20of%20Comprehensive%20Loss) Comprehensive loss increased from **$23.2 million** in Q1 2023 to **$25.2 million** in Q1 2024, driven by higher net loss and unrealized loss on available-for-sale securities | Metric (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(25,024) | $(23,633) | | Unrealized gain (loss) on available-for-sale securities | $(206) | $446 | | Comprehensive loss | $(25,230) | $(23,187) | [Statements of Preferred Stock and Stockholders' Equity](index=9&type=section&id=Statement%20of%20Preferred%20Stock%20and%20Stockholders'%20Equity) Total stockholders' equity decreased from **$179.0 million** to **$156.7 million**, mainly due to net loss and unrealized loss on available-for-sale securities | Metric (in thousands) | Balance at December 31, 2023 | Balance at March 31, 2024 | | :-------------------- | :--------------------------- | :------------------------ | | Additional Paid-In Capital | $516,439 | $519,361 | | Accumulated Other Comprehensive Gain (Loss) | $155 | $(51) | | Accumulated Deficit | $(337,595) | $(362,619) | | Total Stockholders' Equity | $179,006 | $156,698 | - Net loss of **$25.0 million** and an unrealized loss on available-for-sale securities of **$0.2 million** contributed to the decrease in stockholders' equity[25](index=25&type=chunk) [Statements of Cash Flows](index=10&type=section&id=Statements%20of%20Cash%20Flows) Net cash increased by **$7.9 million** in Q1 2024, significantly lower than **$55.0 million** in Q1 2023, driven by investing activities offsetting operating cash use | Cash Flow Activity (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(23,703) | $(17,934) | | Net cash provided by investing activities | $31,579 | $72,945 | | Net cash provided by financing activities | $- | $6 | | Net increase in cash and cash equivalents and restricted cash | $7,876 | $55,017 | - Cash used in operating activities increased to **$23.7 million** in Q1 2024 from **$17.9 million** in Q1 2023[27](index=27&type=chunk) - Cash provided by investing activities decreased significantly to **$31.6 million** in Q1 2024 from **$72.9 million** in Q1 2023[27](index=27&type=chunk) [Notes to Financial Statements](index=11&type=section&id=Notes%20to%20Financial%20Statements) Notes detail business, accounting policies, financial instruments, debt, commitments, equity, and workforce reduction, with liquidity deemed **sufficient for at least 12 months** [1. Business](index=11&type=section&id=1.%20Business) Singular Genomics develops NGS and multiomics technologies, with an accumulated deficit of **$362.6 million**, but believes current cash is **sufficient for at least 12 months** - **The company develops next-generation sequencing (NGS) and multiomics technologies**, including the G4 Sequencing Platform and the G4X Spatial Sequencer[29](index=29&type=chunk) - **Accumulated deficit reached $362.6 million** as of March 31, 2024, up from **$337.6 million** at December 31, 2023[31](index=31&type=chunk) - **Cash, cash equivalents, and short-term investments totaled $150.7 million** as of March 31, 2024, believed to be **sufficient for at least 12 months** of operations[31](index=31&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Financial statements follow U.S. GAAP with management estimates; **no significant policy changes** in Q1 2024, revenue recognized upon customer acceptance or shipment - **Financial statements are prepared under U.S. GAAP** for interim information, with management estimates and assumptions[33](index=33&type=chunk)[34](index=34&type=chunk) - **No significant changes to accounting policies occurred in Q1 2024**, other than specific details on cash, cash equivalents, restricted cash, and short-term investments[35](index=35&type=chunk) - Revenue from instrument sales is recognized upon customer acceptance, consumables upon shipment, and services over the service period[40](index=40&type=chunk) | Cash, Cash Equivalents and Restricted Cash (in thousands) | March 31, 2024 | December 31, 2023 | | :-------------------------------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $24,109 | $16,233 | | Restricted cash | $600 | $600 | | **Total** | **$24,709** | **$16,833** | | Short-term Investments (in thousands) | March 31, 2024 | December 31, 2023 | | :------------------------------------ | :------------- | :---------------- | | U.S. treasury securities | $125,456 | $149,287 | | Corporate debt securities | $1,173 | $8,252 | | Asset-backed securities | $- | $169 | | **Total** | **$126,629** | **$157,708** | [3. Fair Value Measurements](index=15&type=section&id=3.%20Fair%20Value%20Measurements) Assets are measured at fair value using a three-tier hierarchy, primarily cash, equivalents, and short-term investments, mostly classified as Level 1 or Level 2 - Fair value is defined as an exit price in an orderly transaction between market participants, using a three-tier hierarchy (Level 1, 2, 3)[49](index=49&type=chunk) - Cash, cash equivalents, and short-term investments are measured at fair value on a recurring basis, with most classified as Level 1 or Level 2[50](index=50&type=chunk)[52](index=52&type=chunk) | Fair Value Measurements (in thousands) | March 31, 2024 Total | December 31, 2023 Total | | :------------------------------------- | :------------------- | :---------------------- | | Cash and cash equivalents | $24,109 | $16,233 | | Short-term investments | $126,629 | $157,708 | | **Total** | **$150,738** | **$173,941** | [4. Inventory](index=16&type=section&id=4.%20Inventory) Total inventory decreased from **$13.6 million** to **$13.1 million**, mainly due to reduced raw materials, partially offset by increased work in process | Inventory (in thousands) | March 31, 2024 | December 31, 2023 | | :----------------------- | :------------- | :---------------- | | Raw materials | $10,596 | $11,627 | | Work in process | $2,046 | $1,276 | | Finished goods | $439 | $669 | | **Total inventory** | **$13,081** | **$13,572** | [5. Prepaid Expenses and Other Current Assets](index=16&type=section&id=5.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid expenses and other current assets decreased from **$4.2 million** to **$2.5 million**, primarily due to reduced prepaid expenses and current deposits | Prepaid Expenses and Other Current Assets (in thousands) | March 31, 2024 | December 31, 2023 | | :------------------------------------------------------- | :------------- | :---------------- | | Prepaid expenses | $1,116 | $1,672 | | Interest receivable | $1,039 | $1,019 | | Current deposits and other current assets | $364 | $1,459 | | **Total** | **$2,519** | **$4,150** | [6. Property and Equipment, Net](index=18&type=section&id=6.%20Property%20and%20Equipment,%20Net) Net property and equipment increased slightly from **$13.7 million** to **$13.9 million**, driven by a rise in instruments at customer sites | Property and Equipment, Net (in thousands) | March 31, 2024 | December 31, 2023 | | :----------------------------------------- | :------------- | :---------------- | | Equipment | $12,837 | $12,837 | | Computers and software | $3,445 | $3,445 | | Leasehold improvements | $2,244 | $2,244 | | Furniture and fixtures | $660 | $660 | | Instruments at customer sites | $3,707 | $2,527 | | Total property and equipment, gross | $22,893 | $21,713 | | Less: accumulated depreciation | $(9,039) | $(8,021) | | **Total property and equipment, net** | **$13,854** | **$13,692** | [7. Accrued Expenses](index=18&type=section&id=7.%20Accrued%20Expenses) Accrued expenses decreased significantly from **$6.1 million** to **$3.3 million**, mainly due to a substantial reduction in accrued compensation and employee benefits | Accrued Expenses (in thousands) | March 31, 2024 | December 31, 2023 | | :------------------------------ | :------------- | :---------------- | | Accrued compensation and other employee benefits | $1,982 | $5,229 | | Accrued research and development expenses | $278 | $264 | | Accrued professional services | $361 | $178 | | Accrued other expenses | $644 | $408 | | **Total accrued expenses** | **$3,265** | **$6,079** | [8. Long-term Debt](index=19&type=section&id=8.%20Long-term%20Debt) Long-term debt consists of the **$10.5 million** SVB Loan, maturing in September 2026 with a **9.25%** interest rate, with the company in compliance with covenants - **The SVB Loan has an aggregate principal amount of $10.5 million**, maturing on September 1, 2026[58](index=58&type=chunk)[62](index=62&type=chunk) - **As of March 31, 2024, the SVB Loan bears an annual interest rate of 9.25%**[58](index=58&type=chunk) - **The draw period for additional tranches totaling $25.0 million under the SVB Loan expired without being drawn**[59](index=59&type=chunk) - The company was in compliance with all covenants under the SVB Loan as of March 31, 2024[65](index=65&type=chunk) | SVB Loan Balances (in thousands) | March 31, 2024 | December 31, 2023 | | :------------------------------- | :------------- | :---------------- | | Total debt | $10,500 | $10,500 | | Less: issuance costs | $(248) | $(287) | | Total debt, net of issuance costs | $10,252 | $10,213 | | Less: current portion of long-term debt | $2,625 | $1,312 | | **Total long-term debt** | **$7,627** | **$8,901** | [9. Commitments and Contingencies](index=21&type=section&id=9.%20Commitments%20and%20Contingencies) Commitments include a license agreement with Columbia University and operating lease obligations totaling **$116.9 million** extending to 2036; **no material legal proceedings** are pending - **The company has an Exclusive License Agreement with Columbia University**, requiring annual license fees, royalties on net sales of Patent Products (low to mid-single digits) and Other Products (low single-digit), and milestone payments up to **$3.9 million**[66](index=66&type=chunk) - **Operating lease agreements for office, laboratory, and manufacturing spaces in San Diego extend to October 2036**[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) | Future Minimum Lease Payments (in thousands) | Amount | | :------------------------------------------- | :----- | | 2024 (9 months remaining) | $6,097 | | 2025 | $5,716 | | 2026 | $8,607 | | 2027 | $8,580 | | 2028 | $8,837 | | Thereafter | $79,058 | | **Total lease liabilities** | **$65,914** | - The company is **not currently a party to any material legal proceedings**[73](index=73&type=chunk) [10. Preferred Stock](index=24&type=section&id=10.%20Preferred%20Stock) Series A Preferred Stock is non-voting, convertible to common stock (subject to **4.9%** ownership limit), classified as permanent equity and a participating security for EPS - **The company has 2,500 shares of Series A Common Stock Equivalent Convertible Preferred Stock**, convertible into **1,000 shares** of common stock per preferred share[74](index=74&type=chunk) - **Conversion is prohibited if it would result in the holder exceeding 4.9% of total outstanding common stock**[74](index=74&type=chunk) - **The preferred stock is classified as permanent equity and is a participating security for EPS calculation**[75](index=75&type=chunk) [11. Stock Incentive Plans](index=24&type=section&id=11.%20Stock%20Incentive%20Plans) The company operates 2021 Equity Incentive Plan and ESPP, with **6.3 million** and **1.3 million** shares available respectively; Q1 2024 stock-based compensation was **$2.9 million** - **As of March 31, 2024, 6,318,044 shares of common stock remained available for future grants under the 2021 Equity Incentive Plan**[76](index=76&type=chunk)[79](index=79&type=chunk) - **As of March 31, 2024, 1,278,910 shares of common stock remained available for future issuance under the Employee Stock Purchase Plan (ESPP)**[79](index=79&type=chunk)[85](index=85&type=chunk) | Stock-based Compensation Expense (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $918 | $923 | | Selling, general and administrative | $1,978 | $2,158 | | **Total stock-based compensation expense** | **$2,896** | **$3,081** | - **Total unrecognized stock-based compensation expense was $16.7 million** as of March 31, 2024, with a weighted-average recognition period of approximately **2.2 years**[87](index=87&type=chunk) [12. Net Loss per Share](index=28&type=section&id=12.%20Net%20Loss%20per%20Share) Basic and diluted net loss per share was **$(0.34)** for Q1 2024, with anti-dilutive common stock equivalents excluded from diluted EPS calculation | Net Loss per Share | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------- | :-------------------------------- | :-------------------------------- | | Basic and diluted net loss per share | $(0.34) | $(0.33) | | Weighted-average shares used | 73,925,966 | 71,926,412 | - **Common stock equivalents (stock options, RSUs, Series A Preferred Stock) totaling 19.3 million shares in 2024 and 16.1 million in 2023 were excluded from diluted EPS as they were anti-dilutive**[90](index=90&type=chunk) [13. Workforce Reduction](index=28&type=section&id=13.%20Workforce%20Reduction) A **20%** workforce reduction in March 2024 incurred **$1.5 million** in Q1 expenses for termination benefits and accelerated stock-based compensation, with **$0.2 million** expected in Q2 - A **workforce reduction of approximately 20% of headcount** was approved in March 2024 to focus on the spatial sequencing roadmap[91](index=91&type=chunk) - **Expenses for these activities totaled $1.5 million in Q1 2024**, comprising **$1.2 million** for termination benefits and **$0.3 million** for accelerated stock-based compensation[91](index=91&type=chunk) - An additional **$0.2 million** in expenses related to the workforce reduction is expected in Q2 2024[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial condition, performance, liquidity, capital resources, and accounting policies, focusing on G4X development and market challenges [Overview](index=29&type=section&id=Overview) Singular Genomics specializes in NGS and multiomics, offering the G4 Sequencing Platform and developing the G4X Spatial Sequencer for in situ multiomic analysis - **The company develops NGS and multiomics technologies**, including the G4 Sequencing Platform and the G4X Spatial Sequencer[94](index=94&type=chunk) - **The G4X Spatial Sequencer is designed for in situ multiomic analysis**, offering high-throughput direct sequencing of RNA, targeted transcriptomics, proteomics, and fluorescent H&E profiling[97](index=97&type=chunk) - **The G4X is expected to be the first dual-purpose instrument** offering both traditional NGS and tissue-based spatial sequencing capabilities, with an early access program planned by the end of 2024[97](index=97&type=chunk) [Corporate and Financial Overview](index=29&type=section&id=Corporate%20and%20Financial%20Overview) Since 2016, the company incurred **significant losses** and negative cash flows, with an accumulated deficit of **$362.6 million**, funded by equity and debt, holding **$150.7 million** in cash - **The company has incurred significant losses and negative cash flows from operations since 2016**, with a net loss of **$25.0 million** in Q1 2024 and an accumulated deficit of **$362.6 million**[98](index=98&type=chunk) - **Operations are primarily financed through equity sales and debt**, raising approximately **$447.4 million** in net proceeds since inception[99](index=99&type=chunk) - As of March 31, 2024, the company had **$150.7 million** in cash, cash equivalents, and short-term investments[99](index=99&type=chunk) - **Operating expenses are expected to be slightly down in the near term but increase in the longer term** due to continued development of G4X, spatial biology services, and other strategic investments[100](index=100&type=chunk)[103](index=103&type=chunk) [The Macroeconomic Environment](index=31&type=section&id=The%20Macroeconomic%20Environment) Downward macroeconomic pressures, including volatility and rising interest rates, impact the company's capital raising ability and could weaken product demand - **Global markets face downward pressure, volatility, and rising interest rates**, impacting the company's ability to raise capital[101](index=101&type=chunk) - **Geopolitical conflicts** (Russia-Ukraine, Middle East) and potential energy crises could adversely affect capital and credit markets[101](index=101&type=chunk) - A severe or prolonged economic downturn could weaken demand for products and cause delays in customer payments[101](index=101&type=chunk) [Results and Components of Operations](index=32&type=section&id=Results%20and%20Components%20of%20Operations) Q1 2024 saw significant revenue decline and **negative** gross margin; R&D expenses decreased slightly, while SG&A increased, leading to a higher operating loss | Metric (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | $ Change | % Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Revenue | $442 | $863 | $(421) | -49% | | Cost of revenue | $861 | $807 | $54 | 7% | | Gross margin | $(419) | $56 | $(475) | -848% | | Research and development | $11,494 | $12,230 | $(736) | -6% | | Selling, general and administrative | $14,935 | $13,204 | $1,731 | 13% | | Loss from operations | $(26,848) | $(25,378) | $(1,470) | 6% | | Net loss | $(27,132) | $(25,637) | $(1,495) | -6% | [Revenue, Cost of Revenue and Gross Margin](index=32&type=section&id=Revenue,%20Cost%20of%20Revenue%20and%20Gross%20Margin) Revenue decreased **49%** to **$0.4 million** in Q1 2024 due to fewer instrument purchases, resulting in a **negative** gross margin of **$(0.4) million** | Metric (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | $ Change | % Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Revenue | $442 | $863 | $(421) | -49% | | Cost of revenue | $861 | $807 | $54 | 7% | | Gross margin | $(419) | $56 | $(475) | -848% | - **Revenue decreased due to fewer instrument capital purchases**, offset by higher consumables pull-through[108](index=108&type=chunk) - **Gross margin was negative due to additional discounts and higher costs** associated with system placements and support[111](index=111&type=chunk) [Research and Development Expense](index=34&type=section&id=Research%20and%20Development%20Expense) R&D expense decreased **6%** to **$11.5 million** in Q1 2024 due to lower compensation from reduced headcount, partially offset by severance costs | Metric (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | $ Change | % Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Research and development | $11,494 | $12,230 | $(736) | -6% | - **Decrease primarily due to a $1.0 million reduction in employee compensation costs** (excluding stock-based compensation) from reduced headcount, partially offset by **$0.3 million** in severance costs[113](index=113&type=chunk) - **R&D expenses are expected to be roughly flat to slightly down in the near term and increase in the longer term** as the company invests in its product development pipeline, including the G4X and spatial biology service offerings[113](index=113&type=chunk) [Selling, General and Administrative Expense](index=35&type=section&id=Selling,%20General%20and%20Administrative%20Expense) SG&A expenses increased **13%** to **$14.9 million** in Q1 2024, driven by higher employee compensation (including severance) and increased marketing/legal costs | Metric (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | $ Change | % Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Selling, general and administrative | $14,935 | $13,204 | $1,731 | 13% | - **Increase due to $1.7 million in employee compensation costs** (excluding stock-based compensation), including **$0.8 million** for severance, and **$0.6 million** for increased marketing, legal, and other G&A expenses[116](index=116&type=chunk) - **Partially offset by a $0.4 million decrease in stock-based compensation expense and a $0.4 million decrease in insurance costs**[116](index=116&type=chunk) [Other Income (Expense)](index=35&type=section&id=Other%20Income%20(Expense)) Total other income remained relatively flat, increasing slightly by **$0.1 million** to **$1.8 million** in Q1 2024 due to consistent interest rates | Metric (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | $ Change | % Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Interest income | $2,108 | $2,004 | $104 | 5% | | Interest expense | $(284) | $(259) | $(25) | 10% | | **Total other income** | **$1,824** | **$1,745** | **$79** | **5%** | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Accumulated deficit of **$362.6 million** and **$150.7 million** in cash are expected to fund operations for at least 12 months, but substantial additional financing may be required - **Accumulated deficit of $362.6 million and $150.7 million in cash, cash equivalents, and short-term investments as of March 31, 2024**[118](index=118&type=chunk) - Existing capital is believed to be **sufficient for at least 12 months**, but additional financing may be required for future operations, R&D, and commercialization[120](index=120&type=chunk)[121](index=121&type=chunk) - **Capital obligations include minimum lease payments of $116.9 million and SVB Loan payments of $12.5 million** (including interest and fees) over the next few years, plus Columbia License Agreement payments[119](index=119&type=chunk) - **A shelf registration statement allows for up to $250 million in securities offerings**, but the company is subject to 'Baby Shelf Limitations' due to its **public float being below $75 million**, **restricting offerings to one-third of its public float over any 12-month period**[122](index=122&type=chunk) [Cash Flows](index=38&type=section&id=Cash%20Flows) Net cash increased by **$7.9 million** in Q1 2024, significantly lower than Q1 2023, driven by investing activities offsetting **$23.7 million** used in operations | Cash Flow Activity (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(23,703) | $(17,934) | | Net cash provided by investing activities | $31,579 | $72,945 | | Net cash provided by financing activities | $- | $6 | | **Net increase in cash and cash equivalents and restricted cash** | **$7,876** | **$55,017** | [Operating Activities](index=38&type=section&id=Operating%20Activities) Cash used in operating activities increased to **$23.7 million** in Q1 2024, primarily due to a **$25.0 million** net loss and working capital changes - **Cash used in operating activities was $23.7 million in Q1 2024**, driven by a **$25.0 million** net loss and **$2.6 million** in working capital changes[125](index=125&type=chunk) - **Non-cash charges offsetting the loss included $2.9 million in stock-based compensation**, **$0.7 million** in ROU lease asset amortization, and **$1.0 million** in depreciation[125](index=125&type=chunk) [Investing Activities](index=38&type=section&id=Investing%20Activities) Cash provided by investing activities decreased significantly to **$31.6 million** in Q1 2024, mainly from sales and maturities of available-for-sale securities - **Cash provided by investing activities was $31.6 million in Q1 2024**, primarily from **$50.8 million** in sales and maturities of available-for-sale securities, offset by **$19.2 million** in purchases[127](index=127&type=chunk) [Financing Activities](index=38&type=section&id=Financing%20Activities) **No cash was provided by financing activities** in Q1 2024, compared to less than **$0.1 million** in Q1 2023 from common stock issuance - **No cash was provided by financing activities in Q1 2024**[129](index=129&type=chunk) - **In Q1 2023, cash provided by financing activities was less than $0.1 million**, from common stock issuance under equity incentive plans[129](index=129&type=chunk) [Indebtedness](index=39&type=section&id=Indebtedness) The **$10.5 million** SVB Loan, secured by company assets (excluding IP), was refinanced in 2021; additional tranches expired undrawn, and the company is in compliance - **The company has $10.5 million outstanding under the SVB Loan**, refinanced in 2021 and amended in 2022[132](index=132&type=chunk) - **The draw period for additional tranches of up to $25.0 million under the SVB Loan expired without being utilized**[133](index=133&type=chunk) - **Obligations under the SVB Loan are secured by a first priority security interest** in substantially all current and future assets, excluding intellectual property[134](index=134&type=chunk) [Critical Accounting Policies, Significant Judgments and Use of Estimates](index=40&type=section&id=Critical%20Accounting%20Policies,%20Significant%20Judgments%20and%20Use%20of%20Estimates) Financial statements require management estimates; **no material changes** to critical accounting policies since the December 31, 2023 Annual Report on Form 10-K - **Financial statements require management estimates and judgments** based on historical experience and assumptions[136](index=136&type=chunk) - **No material changes to critical accounting policies and estimates** since the December 31, 2023 Annual Report on Form 10-K[137](index=137&type=chunk) [Recent Accounting Pronouncements](index=40&type=section&id=Recent%20Accounting%20Pronouncements) **No new accounting pronouncements** adopted in Q1 2024 are expected to materially impact the company's financial statements - **No additions to new accounting pronouncements not yet adopted** as described in the Annual Report on Form 10-K for 2023[48](index=48&type=chunk) - **Other amendments to GAAP not yet adopted are not expected to have a material impact** on financial statements[48](index=48&type=chunk) [Off–Balance Sheet Arrangements](index=40&type=section&id=Off%E2%80%93Balance%20Sheet%20Arrangements) **The company has not engaged in any off-balance sheet arrangements since its inception** - **The company has not engaged in any off-balance sheet arrangements since inception**[139](index=139&type=chunk) [JOBS Act](index=40&type=section&id=JOBS%20Act) As an 'emerging growth company' under the JOBS Act, the company uses reduced reporting requirements and an extended transition period for new accounting standards - **The company is an 'emerging growth company' under the JOBS Act**, allowing it to use reduced reporting requirements[140](index=140&type=chunk) - **It has elected to use the extended transition period** for complying with new or revised financial accounting standards, adopting them when required for private companies[142](index=142&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) **No substantial changes** to the company's market risks occurred during Q1 2024 compared to the disclosures in its 2023 Annual Report on Form 10-K - **No substantial changes to market risks occurred during Q1 2024** compared to the previous Annual Report on Form 10-K[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were **effective** as of March 31, 2024, with **no material changes** in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=41&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Principal executive and financial officers deemed disclosure controls **effective** as of March 31, 2024, ensuring timely and accurate information reporting - **Disclosure controls and procedures were evaluated and deemed effective** as of March 31, 2024[144](index=144&type=chunk) [Changes in Internal Control Over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) **No material changes** in internal control over financial reporting occurred during the period covered by this report - **No material changes in internal control over financial reporting occurred during the period**[145](index=145&type=chunk) [Inherent Limitations on Effectiveness of Disclosure Controls and Procedures](index=41&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Disclosure%20Controls%20and%20Procedures) Management acknowledges control systems have **inherent limitations**, such as faulty judgments, errors, circumvention, and management override, preventing absolute assurance - **Control systems provide only reasonable, not absolute, assurance** due to **inherent limitations**[146](index=146&type=chunk) - **Limitations include faulty judgments, simple errors, circumvention by individuals or collusion, and management override**[146](index=146&type=chunk) Part II [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is **not currently involved in material legal proceedings**, but litigation could negatively impact it due to costs, resource diversion, and reputational harm - **The company is not currently a party to any material legal proceedings**[149](index=149&type=chunk) - Litigation can have an adverse impact due to defense and settlement costs, diversion of management resources, and negative publicity[149](index=149&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks across business, product development, financial position, manufacturing, IP, regulatory compliance, and common stock ownership [Risks Related to Our Business and Industry](index=43&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Risks include **limited operating history**, accumulated losses, **intense competition**, **dependence** on G4/G4X commercialization, R&D spending, and macroeconomic pressures - **Limited operating history** makes it difficult to evaluate future prospects and challenges[152](index=152&type=chunk) - **Significant losses** incurred since inception (**$362.6 million** accumulated deficit as of March 31, 2024) are expected to continue, with no guarantee of profitability[153](index=153&type=chunk) - The life sciences technology market is **highly competitive**, with larger, more established competitors having significant advantages[157](index=157&type=chunk)[158](index=158&type=chunk) - **Dependence on G4, G4X, and spatial biology service offerings** means any delays or failures in development and commercialization could have a substantial adverse effect[162](index=162&type=chunk) - Business depends significantly on R&D spending by academic and research institutions, which is subject to government funding fluctuations[164](index=164&type=chunk)[167](index=167&type=chunk) - Operating results may fluctuate significantly due to various factors, making future results difficult to predict[168](index=168&type=chunk)[170](index=170&type=chunk) - Recent macroeconomic pressures, including market volatility and instability in the global banking system, could adversely affect the business[175](index=175&type=chunk)[176](index=176&type=chunk) [Risks Related to the Development and Commercialization of Our Products](index=52&type=section&id=Risks%20Related%20to%20the%20Development%20and%20Commercialization%20of%20Our%20Products) Risks involve delays in G4X development, failure to meet performance, challenges in sales/marketing, inaccurate market estimates, and international commercialization risks - Efforts to support the G4 and complete development/commercialization of G4X and spatial biology services may not be successful due to various factors, including meeting target specifications and manufacturing efficiency[177](index=177&type=chunk)[178](index=178&type=chunk) - Failure to establish adequate sales, marketing, or laboratory services capabilities could hinder successful commercialization of G4X and spatial biology services[181](index=181&type=chunk)[183](index=183&type=chunk) - Products and service offerings could fail to achieve key performance metrics, adversely affecting market adoption and revenue[184](index=184&type=chunk) - Failure to continue improving planned products/services or introduce compelling new ones could harm revenue and prospects[187](index=187&type=chunk) - Market size estimates for products, services, and technologies may be smaller or grow slower than anticipated, limiting sales ability[188](index=188&type=chunk)[189](index=189&type=chunk) - Commercializing products outside the U.S. exposes the company to business, regulatory, political, operational, financial, and economic risks[190](index=190&type=chunk)[192](index=192&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=58&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) **Substantial additional funding** is required, which may not be available, risking program delays; **inaccurate demand forecasting** and existing debt also pose risks - **Substantial additional funding may be required**, which may not be available on acceptable terms, potentially leading to delays or cessation of product development/commercialization[191](index=191&type=chunk)[195](index=195&type=chunk) - **Inaccurate forecasting of customer demand** for products and services could lead to inventory write-downs, write-offs, or inability to meet customer requirements[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - **Existing indebtedness** (**$10.5 million** principal under SVB Loan) may limit financial flexibility and operating capacity due to restrictive covenants[199](index=199&type=chunk) - Ability to use net operating loss carryforwards and other tax attributes **may be limited** by ownership changes (Sections 382 and 383 of the Code) or state tax laws[200](index=200&type=chunk) - U.S. federal income tax reform (TCJA, CARES Act) and its implementation could **adversely affect** the company's tax position[201](index=201&type=chunk)[202](index=202&type=chunk) [Risks Related to Manufacturing Our Products](index=62&type=section&id=Risks%20Related%20to%20Our%20Products) Challenges include manufacturing G4/G4X timely and cost-effectively, reliance on single-source suppliers, product defects, and facility disruptions - **Inability to manufacture G4 or G4X to meet commercialization plans** on a timely or cost-effective basis due to complex processes, hiring needs, and component sourcing challenges[203](index=203&type=chunk) - **Dependence on single-source suppliers** for some components creates risk of supply disruption if suppliers fail to meet specifications or cease provision[204](index=204&type=chunk)[205](index=205&type=chunk) - **Limited manufacturing experience** and complexity of products may lead to inability to consistently produce to necessary specifications or quantities, resulting in defects, recalls, and increased costs[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) - **Profitability depends on reducing per-unit manufacturing costs**, which requires increased volumes, improved efficiency, and leveraging overhead[213](index=213&type=chunk) - **Disruption to facilities** (San Diego) or third-party suppliers' facilities due to natural disasters, pandemics, or other catastrophic events could severely impact R&D, commercialization, and manufacturing[214](index=214&type=chunk)[215](index=215&type=chunk) - **Costs to maintain and provide customer support for G4 and future products** (G4X, spatial biology services) may exceed expectations, negatively impacting gross margin and results[216](index=216&type=chunk) [Risks Related to Our Intellectual Property](index=69&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Risks include IP litigation, insufficient patent protection, trade secret challenges, disputes with licensees, inadequate patent terms, and evolving U.S. patent law - **Risk of being sued for infringing, misappropriating, or violating third-party intellectual property rights**, leading to costly and time-consuming litigation, and potential delays in product development/commercialization[228](index=228&type=chunk)[229](index=229&type=chunk) - **Inability to obtain and maintain sufficient intellectual property protection** (patents, trademarks, trade secrets) could allow competitors to develop similar products, impairing commercialization[234](index=234&type=chunk)[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) - **Difficulty in protecting the confidentiality of trade secrets**, which could be disseminated through independent development or personnel movement, harming competitive position[240](index=240&type=chunk)[241](index=241&type=chunk)[243](index=243&type=chunk) - **Disputes with contractual counterparties**, such as Columbia University regarding the License Agreement, could lead to breach of contract claims, termination of licenses, or adverse financial impacts[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) - Patent terms may be inadequate to protect competitive position for a sufficient duration, especially for products requiring extended development or regulatory review[247](index=247&type=chunk) - **Uncertainty and rapid changes in U.S. patent law** for life sciences technology (e.g., America Invents Act, Supreme Court decisions) may negatively impact existing patents or future patentability[249](index=249&type=chunk)[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - **Inability to license necessary third-party technologies** on reasonable terms could prevent commercialization of new products[253](index=253&type=chunk)[254](index=254&type=chunk) - **Use of open source software may pose risks**, including requirements to make source code public or claims of intellectual property infringement[256](index=256&type=chunk) [Risks Related to Regulatory and Legal Compliance Matters](index=80&type=section&id=Risks%20Related%20to%20Regulatory%20and%20Legal%20Compliance%20Matters) Products may face FDA medical device regulations, increased LDT scrutiny, evolving data privacy laws, and non-compliance risks with environmental, export, and anti-corruption laws - If products are labeled or promoted as clinical diagnostics or medical devices, **prior FDA approval/clearance would be required**, which is time-consuming, expensive, and uncertain[257](index=257&type=chunk)[259](index=259&type=chunk) - **Changes in regulatory landscape could subject RUO products** (G4, G4X) to government regulation as medical devices, even without seeking diagnostic approval, impacting marketing and sales[262](index=262&type=chunk) - **Increased FDA regulation of Laboratory Developed Tests** (LDTs), including a proposed rule to treat LDTs as medical devices, could impact product sales and customer usage[263](index=263&type=chunk)[264](index=264&type=chunk) - **Subject to U.S. federal and state laws** (e.g., CCPA, CPRA, HIPAA) and foreign regulations (e.g., GDPR) regarding personal information collection, storage, and processing, with non-compliance risking fines, litigation, and reputational harm[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) - **Failure to comply with environmental, health, and safety laws** (hazardous materials) could lead to fines, penalties, and substantial costs[275](index=275&type=chunk)[277](index=277&type=chunk) - **Subject to U.S. and foreign export/import controls**, sanctions, embargoes, anti-corruption laws (FCPA), and anti-money laundering laws, with violations leading to criminal liability and severe consequences[279](index=279&type=chunk) [Risks Related to Ownership of Our Common Stock](index=87&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Nasdaq non-compliance risks delisting; stock price **volatility**, concentrated ownership, no dividends, and corporate provisions making mergers difficult are also risks - **Not in compliance with Nasdaq's minimum bid price rule ($1.00)**, risking **delisting if compliance is not regained by July 15, 2024**, **potentially through a reverse stock split**[280](index=280&type=chunk)[281](index=281&type=chunk)[282](index=282&type=chunk) - The common stock price has been and may continue to be **volatile** or decline, regardless of operating performance, due to numerous factors including commercialization timing, financial results, competition, and macroeconomic conditions[283](index=283&type=chunk)[284](index=284&type=chunk) - Concentration of stock ownership (**officers, directors, >5% holders own ~41%**) limits other stockholders' ability to influence corporate matters[285](index=285&type=chunk) - **The company does not intend to pay dividends for the foreseeable future**, requiring stockholders to rely on stock price appreciation for gains[291](index=291&type=chunk) - **Delaware law and provisions in the company's charter/bylaws** (e.g., classified board, preferred stock issuance, restrictions on stockholder action) could make mergers, tender offers, or proxy contests difficult[292](index=292&type=chunk)[293](index=293&type=chunk) - **Exclusive forum provisions in the certificate of incorporation** could limit stockholders' ability to choose a favorable judicial forum for disputes[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk) - **Sales of a substantial number of common stock shares in the public market**, including through shelf registration or equity plans, could cause the stock price to fall and result in dilution[298](index=298&type=chunk)[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk) [General Risk Factors](index=95&type=section&id=General%20Risk%20Factors) General risks include potential stock price decline from analyst coverage, securities class action litigation, increased public company compliance costs, and internal control failures - **Stock price and trading volume could decline if securities or industry analysts cease publishing research** or publish inaccurate/unfavorable research[302](index=302&type=chunk) - **Risk of securities class action litigation**, especially given past stock price volatility, which could result in substantial costs and diversion of management's attention[303](index=303&type=chunk) - **Being a public company increases costs** and diverts significant resources and management attention due to reporting requirements and compliance[304](index=304&type=chunk)[305](index=305&type=chunk) - **Failure to maintain proper and effective internal controls** over financial reporting could impair the ability to produce accurate and timely financial statements, leading to sanctions and harm to the business[306](index=306&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=96&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) **The June 2021 IPO generated $237.2 million in net proceeds** from **11,730,000** common stock shares, with **no material change** in the planned use of these proceeds - **IPO in June 2021 resulted in approximately $237.2 million in net proceeds** from the sale of **11,730,000** common stock shares[309](index=309&type=chunk) - **No material change in the planned use of IPO proceeds**[309](index=309&type=chunk) [Item 3. Defaults Upon Senior Securities](index=96&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were **no defaults** upon senior securities during the reporting period - **No defaults upon senior securities**[310](index=310&type=chunk) [Item 4. Mine Safety Disclosures](index=96&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) There are **no mine safety disclosures** to report - **No mine safety disclosures**[311](index=311&type=chunk) [Item 5. Other Information](index=96&type=section&id=Item%205.%20Other%20Information) There is **no other information** to report in this section - **No other information to report**[312](index=312&type=chunk) [Item 6. Exhibits](index=97&type=section&id=Item%206.%20Exhibits) This section lists exhibits including organizational documents, executive officer certifications (Sarbanes-Oxley Act), and Inline XBRL documents - Exhibits include Amended and Restated Certificate of Incorporation and Bylaws, Certificate of Designation of Series A Preferred Stock[313](index=313&type=chunk) - Certifications of Principal Executive Officer and Principal Financial Officer are included, as required by Sections 302 and 906 of the Sarbanes-Oxley Act[313](index=313&type=chunk) - Inline XBRL Instance Document, Taxonomy Extension Schema Document, and Cover Page Interactive Data File are also filed[313](index=313&type=chunk) [Signatures](index=98&type=section&id=Signatures) **The Quarterly Report on Form 10-Q was signed by Andrew Spaventa (CEO) and Dalen Meeter (CFO) on May 14, 2024** - **The report was signed by Andrew Spaventa (CEO) and Dalen Meeter (CFO) on May 14, 2024**[317](index=317&type=chunk)

Financial Performance - Revenue for Q1 2024 was $0.4 million, primarily from one G4 instrument capital purchase and consumables sales[3] - Gross profit was negative $0.4 million, with a gross margin of -100% compared to a gross profit of $0.1 million in Q1 2023[4] - Operating expenses totaled $26.4 million, an increase from $25.4 million in Q1 2023, including non-cash stock-based compensation of $2.9 million[5] - Net loss for Q1 2024 was $25.0 million, or a loss of $0.34 per share, compared to a net loss of $23.6 million, or a loss of $0.33 per share in Q1 2023[5] Cash and Assets - Cash, cash equivalents, and short-term investments totaled $150.7 million as of March 31, 2024[6] - Total assets decreased to $239.1 million as of March 31, 2024, from $265.5 million at the end of 2023[16] - Accumulated deficit increased to $362.6 million as of March 31, 2024, compared to $337.6 million at the end of 2023[16] Operations and Development - Six G4 systems were shipped in Q1 2024, bringing the total number of commercial systems shipped to 30[9] - The company plans to expand its spatial services offering and prepare for the G4X launch in 2025[2] - Research and development expenses were $11.5 million in Q1 2024, down from $12.2 million in Q1 2023[14]

Financial Performance - The net loss for Singular Genomics was $94.8 million and $90.9 million for the years ended December 31, 2023 and 2022, respectively, with an accumulated deficit of $337.6 million as of December 31, 2023[86]. - Total revenue for 2023 was $2,911,000, compared to $765,000 in 2022, representing a significant increase of 280%[339]. - Gross margin for 2023 was negative $558,000, compared to negative $24,000 in 2022, indicating a decline in profitability[339]. - Net loss for 2023 was $94,820,000, compared to a net loss of $90,879,000 in 2022, showing a slight increase in losses of 4.3%[339]. - Basic and diluted net loss per share for 2023 was $1.30, compared to $1.28 in 2022, indicating a marginal increase in loss per share[339]. - The company reported a net loss of $94.82 million for the year ended December 31, 2023, compared to a net loss of $90.88 million in 2022, indicating a 4.3% increase in losses year-over-year[348]. - As of December 31, 2023, the company had an accumulated deficit of $337.6 million, up from $242.8 million in 2022, reflecting a 39% increase in the accumulated deficit[353]. - The company experienced a net cash used in operating activities of $73.65 million in 2023, a decrease from $87.09 million in 2022, representing a 15.4% improvement[348]. Product Development and Commercialization - The G4 product was commercially launched in December 2021, with revenue recognition beginning in Q4 2022[87]. - Singular Genomics expects to continue incurring significant losses as it invests in the commercialization of the G4 and the development of the G4X[86]. - The G4X is being developed to target the spatial multiomics market, with expectations to generate substantial revenue from both the G4 and G4X in the near term[93]. - The company is currently developing the G4X, which will share the same platform as the G4, but faces risks related to development timelines and market acceptance[103][104]. - The company is developing the G4X Spatial Sequencer, which will enhance its G4 Sequencing Platform by providing in situ readouts for various biological analyses[351]. Financial Condition and Funding - The company may require substantial additional funding to support operations and product development, with current cash expected to last at least 12 months[115]. - The company has limited experience in manufacturing and commercializing its products, which may impact its ability to meet customer expectations and market acceptance[87]. - The company has only recently begun generating revenue, making it difficult to predict future performance and profitability[87]. - The company’s ability to draw down on its Second Tranche under the SVB Loan is uncertain and contingent on meeting specific revenue hurdles[101]. - The company reported a total stockholders' equity of $179,006,000 in 2023, down from $260,321,000 in 2022, a decrease of 31.2%[337]. Market and Competition - The company faces significant competition from established players in the life sciences technology market, including Illumina Inc. and Thermo Fisher Scientific Inc.[89]. - Future financial performance will depend on the rate of commercial adoption of the G4 and G4X, as well as customer utilization of these products[94]. - Market acceptance of the G4 and G4X is critical, particularly among early adopters and key opinion leaders (KOLs), and the company faces risks in establishing these relationships[104][106]. Operational Risks - The company is transitioning from a research-focused entity to one capable of robust manufacturing and commercial activities, facing risks associated with this transition[88]. - The company may encounter unforeseen expenses and delays in product development, which could adversely affect its financial condition and results of operations[86]. - The company faces risks related to international business, including compliance with foreign regulations and potential adverse tax consequences[113]. - The company is vulnerable to natural disasters and other catastrophic events that could impair operations and manufacturing capabilities[139]. - The company faces challenges in attracting and retaining highly skilled employees in a competitive labor market, particularly in the San Diego area, which may affect its growth and operational efficiency[144]. Intellectual Property and Legal Risks - The company operates in a crowded technology area with numerous patents, increasing the risk of litigation related to intellectual property rights, which could delay product development[152]. - The company has over 30 issued patents covering various aspects of its proprietary NGS and spatial multiomics technologies[158]. - The company may incur substantial litigation costs in attempts to recover or restrict use of its intellectual property[158]. - The company faces risks related to the enforcement of its intellectual property rights, which could harm its ability to compete and reduce demand for its products[157]. Regulatory Environment - The company is subject to ongoing FDA obligations and regulatory oversight, which could increase costs and divert resources from other projects[186]. - The regulatory environment related to data privacy and security is increasingly rigorous, which may complicate compliance efforts and impact revenue[195]. - The company must ensure compliance with various healthcare laws, which could result in substantial penalties if not adhered to[191]. Stock and Corporate Governance - The company is currently not in compliance with the minimum bid price rule of the Nasdaq Capital Market, with the closing bid price per share below $1.00 for 30 consecutive business days[207]. - The company has been granted an additional 180-day compliance period until July 15, 2024, to regain compliance with the Minimum Bid Price Requirement[208]. - As of March 31, 2023, officers, directors, and holders of more than 5% of the outstanding common stock collectively owned approximately 43% of the common stock, indicating significant influence over corporate matters[213]. - The company is classified as an "emerging growth company," which allows it to take advantage of reduced reporting requirements, potentially affecting its attractiveness to investors[215].

Financial Performance - For the nine months ended September 30, 2023, the company incurred a net loss of $71.6 million and used $54.7 million in cash for operations, with an accumulated deficit of $314.3 million[101]. - The company recognized revenue of $1.83 million for the three months ended September 30, 2023, with a gross margin of -$65,000, indicating a 100% change from the previous year[109]. - Operating expenses totaled $77.4 million for the three months ended September 30, 2023, with research and development expenses at $11.2 million and selling, general, and administrative expenses at $13.3 million[109]. - Revenue for the three months ended September 30, 2023, was $0.3 million for instruments, $0.1 million for consumables, and $0.1 million for services, compared to no revenue recognized in the same period of 2022[113]. - Total revenue for the nine months ended September 30, 2023, was $1.6 million for instruments and approximately $0.2 million for consumables and services, with no revenue recognized in the same period of 2022[116]. - The company reported a net loss of $71.6 million for the nine months ended September 30, 2023, compared to a net loss of $69.8 million for the same period in 2022[139][140]. Cash Flow and Financing - Cash used in operating activities for the nine months ended September 30, 2023, was $54.7 million, compared to $67.2 million for the same period in 2022, reflecting a decrease of approximately 18.5%[138][140]. - Cash provided by investing activities for the nine months ended September 30, 2023, was $13.2 million, compared to cash used of $39.7 million in the same period in 2022[141][142]. - Cash provided by financing activities for the nine months ended September 30, 2023, was approximately $0.6 million, an increase from $0.2 million in the same period in 2022[143][144]. - The company may need to seek additional financing in the future if it cannot generate sufficient revenue or if the $35.5 million available under the SVB Loan is insufficient[135]. - As of September 30, 2023, the SVB Loan bears interest at an annual rate of 9.25% and matures on September 1, 2026[146]. - The company has a shelf registration statement allowing it to offer up to $250 million in various securities, providing flexibility for future capital raising[136]. Research and Development - The PX system is currently in development, targeting markets for single-cell analysis and proteomics, leveraging the company's proprietary Sequencing Engine[100]. - The company is actively evaluating additional product development opportunities to accelerate the commercialization of its multiomics technologies[97]. - Research and development expenses decreased by $1.5 million, or 12%, for the three months ended September 30, 2023, compared to the same period in 2022[121]. Operational Challenges - The company expects to continue incurring significant losses and does not anticipate positive cash flows from operations in the foreseeable future[101]. - The macroeconomic environment presents challenges, including rising interest rates and market volatility, which could impact the company's liquidity and operations[105]. - The company is exposed to credit risk due to deposits exceeding FDIC insurance limits, particularly in light of recent developments with Silicon Valley Bank[107]. Capital Obligations - Capital obligations include minimum lease payments of $2.0 million for the remainder of 2023, $8.1 million in 2024, $5.7 million in 2025, and $105.1 million thereafter[133]. - The company has obligations under a License Agreement with Columbia, which could total up to $3.9 million based on development and commercialization milestones[133]. Product Launch and Revenue Recognition - The G4 Sequencing Platform was commercially launched in December 2021, with revenue recognition beginning in the fourth quarter of 2022[99]. - Cost of revenue for the three months ended September 30, 2023, was approximately $0.5 million, primarily related to materials, labor, and overhead for G4 instruments and consumables[114]. - Cost of revenue for the nine months ended September 30, 2023, was approximately $1.9 million, primarily related to G4 instruments and consumables[117]. - Gross margin for the three months ended September 30, 2023, was impacted by customer incentives and higher direct costs, with expectations for improvement over time as incentives phase out and manufacturing efficiency increases[115]. - Other income increased by $1.3 million for the three months ended September 30, 2023, primarily due to rising interest rates, resulting in an additional $1.4 million of interest income[130].