Nautilus Biotechnology(NAUT) - 2022 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Nautilus Biotechnology, Inc.'s unaudited condensed consolidated financial statements and management's analysis Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, with detailed explanatory notes Condensed Consolidated Balance Sheets The balance sheets show a decrease in total assets and stockholders' equity from December 31, 2021, to June 30, 2022, primarily due to a reduction in short-term investments and an increase in accumulated deficit Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | Change ($) | | :--------------------------- | :--------------------------- | :-------------------------- | :--------- | | Total Assets | $371,707 | $398,450 | $(26,743) | | Total Liabilities | $34,149 | $34,874 | $(725) | | Total Stockholders' Equity | $337,558 | $363,576 | $(26,018) | | Accumulated Deficit | $(111,092) | $(80,640) | $(30,452) | Condensed Consolidated Statements of Operations The statements of operations reveal increased operating expenses and a larger net loss for both the three and six months ended June 30, 2022, compared to the same periods in 2021 Net Loss (Three and Six Months Ended June 30) (in thousands) | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :------------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Loss | $(14,689) | $(10,713) | $(30,452) | $(19,122) | - Research and development expenses increased by $7.3 million (65%) for the six months ended June 30, 2022, primarily due to higher salaries, benefits, stock-based compensation, development services, and facilities costs[23][137] - General and administrative expenses increased by $5.1 million (64%) for the six months ended June 30, 2022, mainly due to increased salaries, benefits, stock-based compensation, insurance, and facilities costs[23][138] Condensed Consolidated Statements of Comprehensive Loss The comprehensive loss increased for both the three and six months ended June 30, 2022, compared to 2021, reflecting the higher net loss and a notable increase in unrealized losses on available-for-sale securities Comprehensive Loss (Three and Six Months Ended June 30) (in thousands) | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :----------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Comprehensive Loss | $(14,903) | $(10,725) | $(31,036) | $(19,135) | - Unrealized loss on securities available-for-sale increased from $(13) thousand in 2021 to $(584) thousand in 2022 for the six-month period[25] Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity This statement shows that all redeemable convertible preferred stock was converted to common stock in June 2021, resulting in no preferred stock outstanding as of June 30, 2022 Stockholders' Equity and Accumulated Deficit (in thousands) | Metric | June 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :------------------------- | :--------------------------- | :-------------------------- | | Total Stockholders' Equity | $337,558 | $363,576 | | Accumulated Deficit | $(111,092) | $(80,640) | - Stock-based compensation expense for the six months ended June 30, 2022, was $4,677 thousand, an increase from $3,156 thousand in the prior year[28][91] - As of June 30, 2022, 124,562,745 shares of common stock were issued and outstanding[27][28][78] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2022, net cash provided by investing activities significantly increased, while net cash provided by financing activities sharply decreased compared to 2021 Cash Flow Summary (Six Months Ended June 30) (in thousands) | Cash Flow Activity | 2022 (in thousands) | 2021 (in thousands) | Change ($) | | :---------------------------------------- | :------------------ | :------------------ | :--------- | | Net cash used in operating activities | $(25,864) | $(14,545) | $(11,319) | | Net cash provided by (used in) investing activities | $50,258 | $(61,048) | $111,306 | | Net cash provided by financing activities | $341 | $327,373 | $(327,032) | | Net increase in cash, cash equivalents and restricted cash | $24,735 | $251,780 | $(227,045) | - Cash, cash equivalents and restricted cash at the end of the period was $211,196 thousand as of June 30, 2022[30] Notes to Condensed Consolidated Financial Statements These notes provide comprehensive details on business, accounting policies, recapitalization, fair value, equity, income tax, stock compensation, and commitments 1. Description of Business and Basis of Presentation Nautilus is a development-stage biotechnology company focused on its proteomics platform, with significant capital raised but an accumulated deficit and ongoing COVID-19 impacts - Nautilus Biotechnology, Inc. is a development-stage company incorporated in 2016, focused on research and development of its proteomics platform[31][110] - The company consummated a Business Combination (reverse recapitalization) and PIPE Financing on June 9, 2021, raising approximately $345.5 million in gross proceeds[32][33][115] - As of June 30, 2022, the company had an accumulated deficit of $111.1 million and cash, cash equivalents, and short-term investments of $299.3 million, which are expected to fund operations for the next 12 months[36][37][115] - The COVID-19 pandemic has led to supply disruptions (e.g., extended chip lead times, diverted lab materials, lower reagent availability) and economic volatility, with its full impact on the business remaining unpredictable[39][119] 2. Significant Accounting Policies This section details significant accounting policies, including estimates, credit risk, segment reporting, investments, leases, and comprehensive loss, noting no material impact from recent pronouncements - The preparation of financial statements requires management to make significant estimates and assumptions, which are evaluated on an ongoing basis[41][42] - The company relies on single-source suppliers for certain components, reagents, and antibodies used in its Nautilus platform, posing concentration of credit risk[44] - Nautilus operates in one operating and one reportable segment, with all long-lived assets located in the United States[46] - Investments are classified as available-for-sale and reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss)[49] - The company adopted ASU 2020-04 (Reference Rate Reform) effective January 1, 2022, with no material impact on its financial statements, and does not anticipate a material impact from ASU 2016-13 (Credit Losses) and ASU 2019-12 (Income Taxes) upon future adoption[59](index=