Standard BioTools(LAB) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements The H1 2025 financial statements reflect the company's position, operations, and cash flows, with the SomaScan Business reclassified as discontinued, reporting a $59.5 million net loss Condensed Consolidated Balance Sheets As of June 30, 2025, total assets decreased to $557.0 million, with SomaScan Business assets and liabilities reclassified as 'held for sale' Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $158,617 | $166,728 | | Short-term investments | $78,468 | $126,146 | | Current assets held for sale | $223,089 | $42,963 | | Total Assets | $556,965 | $612,345 | | Liabilities | | | | Total current liabilities | $98,024 | $65,895 | | Total Liabilities | $132,430 | $140,623 | | Total Stockholders' Equity | $424,535 | $471,722 | Condensed Consolidated Statements of Operations For H1 2025, total revenue from continuing operations decreased to $42.0 million, resulting in a total net loss of $59.5 million Statement of Operations Summary (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenue | $41,984 | $44,145 | | Gross Profit | $21,677 | $21,399 | | Loss from continuing operations | ($52,667) | ($74,705) | | Net loss from continuing operations | ($41,043) | ($41,848) | | Loss from discontinued operations, net of tax | ($18,449) | ($36,027) | | Net Loss | ($59,492) | ($77,875) | Net Loss Per Share (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net loss per share from continuing operations | ($0.11) | ($0.26) | | Net loss per share from discontinued operations | ($0.05) | ($0.11) | | Net loss per share attributable to common stockholders | ($0.16) | ($0.37) | Condensed Consolidated Statements of Cash Flows For H1 2025, net cash used in operating activities improved to $51.0 million, with overall cash decreasing by $7.6 million Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($50,951) | ($101,526) | | Net cash provided by investing activities | $42,130 | $368,331 | | Net cash provided by (used in) financing activities | $62 | ($48,094) | | Net (decrease) increase in cash | ($7,614) | $218,601 | Notes to Condensed Consolidated Financial Statements Notes detail significant accounting policies and events, including the SomaScan Business sale to Illumina and its reclassification as discontinued operations - On June 22, 2025, the Company entered into a Stock Purchase Agreement with Illumina to sell its SomaScan Business, which includes SomaLogic and Sengenics[30] - The SomaScan Business met the criteria for held-for-sale and discontinued operations in Q2 2025, with its results now reported separately for all periods presented[32] - The company reassessed its operating segments in Q1 2025 and now operates as a single reportable segment, managing the business on a consolidated basis as a multi-omics company[36] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, highlighting the SomaScan Business divestiture, a 5% revenue decrease for continuing operations, and sufficient liquidity of $237.1 million Recent Developments The key recent development is the June 22, 2025 agreement to sell the SomaScan Business to Illumina for up to $425 million in cash consideration - Standard BioTools agreed to sell its SomaScan Business (SomaLogic and Sengenics subsidiaries) to Illumina[111] Illumina Transaction Terms | Component | Amount/Details | | :--- | :--- | | Upfront Cash Payment | $350 million | | Earnout Payments | Up to $75 million (based on 2025-2026 revenue targets) | | Additional Consideration | Royalty and license agreements for SOMAmer-based products | | Expected Closing | First half of 2026 | Results of Operations For H1 2025, revenue from continuing operations decreased by 5% to $42.0 million, while total operating expenses fell 23% Revenue from Continuing Operations (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Instruments | $11,861 | $11,950 | ($89) | (1)% | | Consumables | $18,593 | $19,258 | ($665) | (3)% | | Services and other | $11,530 | $12,937 | ($1,407) | (11)% | | Total Revenue | $41,984 | $44,145 | ($2,161) | (5)% | Operating Expenses from Continuing Operations (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $11,662 | $14,852 | ($3,190) | (21)% | | Selling, general and administrative | $57,929 | $51,274 | $6,655 | 13% | | Restructuring and related charges | $3,279 | $10,033 | ($6,754) | (67)% | | Transaction and integration expenses | $1,474 | $19,945 | ($18,471) | (93)% | | Total Operating Expenses | $74,344 | $96,104 | ($21,760) | (23)% | - The loss from discontinued operations decreased by 49% for the six months ended June 30, 2025, primarily due to cost reductions from restructuring activities completed in 2024[151] Liquidity and Capital Resources As of June 30, 2025, the company had $237.1 million in liquidity and an accumulated deficit of $1.25 billion, with improved operating cash flow - As of June 30, 2025, the company had $237.1 million in cash, cash equivalents, and short-term investments[155] - The company has an accumulated deficit of $1.245 billion as of June 30, 2025, and has historically funded operations through equity offerings, loans, and preferred stock[152] Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($50,951) | ($101,526) | | Net cash provided by investing activities | $42,130 | $368,331 | | Net cash provided by (used in) financing activities | $62 | ($48,094) | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks from interest rates and foreign currency, recognizing a $5.5 million foreign currency exchange gain in H1 2025 - Primary market risks include interest rate fluctuations on cash and investments, and foreign currency risk from international operations[166][167][168] - The company recognized a $5.5 million foreign currency exchange gain in the first six months of 2025 due to favorable rate changes[168] Item 4. Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[171] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[172] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is subject to various legal proceedings, detailed in Note 6, but does not anticipate a material adverse effect from pending matters - Information regarding legal proceedings is detailed in Note 6 of the financial statements[175] Item 1A. Risk Factors Risks relate to the pending SomaScan Business divestiture to Illumina, including transaction consummation, business disruption, and benefit realization - There is no assurance that the proposed sale of the SomaScan Business to Illumina will be consummated, which could adversely affect the company's stock price and business[178][179] - The announcement and pendency of the Illumina transaction could disrupt business by causing employee uncertainty, diverting management attention, and affecting relationships with vendors and suppliers[179][181] - The company may be unable to fully realize the expected benefits, such as substantial operating and capital cost savings, from the transaction[180] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales or common stock repurchases occurred under the $50.0 million program during the quarter, with $9.5 million remaining - No shares of common stock were repurchased during the three months ended June 30, 2025[185] - As of June 30, 2025, the company has repurchased an aggregate of $40.5 million of its common stock under the $50.0 million 2024 Share Repurchase Program[185] Item 5. Other Information No officers or directors adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No officers or directors adopted, modified, or terminated any 10b5-1 trading arrangements during the quarter[188]