QuantumSi(QSI) - 2021 Q2 - Quarterly Report

Part I – Financial Information Item 1. Financial Statements Presents Quantum-Si's unaudited condensed consolidated financial statements, covering balance sheets, operations, equity, cash flows, and notes Condensed Consolidated Balance Sheets | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :----- | :--------------------------- | :------------------------------- | | Cash and cash equivalents | $521,936 | $36,910 | | Total current assets | $524,093 | $37,858 | | Total assets | $526,950 | $40,592 | | Total current liabilities | $7,864 | $2,754 | | Warrant liabilities | $15,150 | $- | | Total liabilities | $23,014 | $4,503 | | Total stockholders' equity (deficit) | $503,936 | $(159,725) | Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric (in thousands) | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $13,114 | $6,595 | $21,086 | $14,519 | | General and administrative | $17,805 | $1,306 | $21,222 | $3,526 | | Sales and marketing | $1,245 | $300 | $1,635 | $559 | | Total operating expenses | $32,164 | $8,201 | $43,943 | $18,604 | | Loss from operations | $(32,164) | $(8,201) | $(43,943) | $(18,604) | | Change in fair value of warrant liabilities | $(3,533) | $- | $(3,533) | $- | | Net loss and comprehensive loss | $(35,697) | $(8,197) | $(47,476) | $(18,511) | | Net loss per common share, basic and diluted | $(3.05) | $(1.53) | $(5.50) | $(3.46) | Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity (Deficit) | Metric (in thousands) | Balance - December 31, 2020 | Balance - June 30, 2021 | | :-------------------- | :-------------------------- | :---------------------- | | Convertible preferred stock | $195,814 | $- | | Class A common stock | $1 | $12 | | Class B common stock | $- | $2 | | Additional paid-in capital | $12,517 | $723,641 | | Accumulated deficit | $(172,243) | $(219,719) | | Total stockholders' equity (deficit) | $(159,725) | $503,936 | - Conversion of 90,789,268 shares of convertible preferred stock into Class A and Class B common stock, valued at $195,810 thousand[22] - Net equity infusion from the Business Combination of $501,172 thousand[22] Condensed Consolidated Statements of Cash Flows | Metric (in thousands) | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(29,875) | $(17,192) | | Net cash used in investing activities | $(1,229) | $(332) | | Net cash provided by financing activities | $516,130 | $11,150 | | Net increase (decrease) in cash and cash equivalents | $485,026 | $(6,374) | | Cash and cash equivalents at end of period | $521,936 | $26,556 | - Net proceeds from equity infusion from the Business Combination amounted to $514,187 thousand in 2021[25] Notes to Condensed Consolidated Financial Statements Provides detailed explanations and disclosures for financial statements, covering organization, accounting policies, Business Combination, fair value, and key accounts 1. Organization and Description of Business - Quantum-Si Incorporated (formerly HighCape Capital Acquisition Corp.) completed a business combination on June 10, 2021, with Legacy Quantum-Si becoming a wholly-owned subsidiary[27] - The company's mission is to transform single molecule analysis and democratize access to the proteome using its proprietary universal single molecule detection platform for Next Generation Protein Sequencing (NGPS)[28] - The NGPS platform includes the Carbon™ automated sample preparation instrument, Platinum™ NGPS instrument, Quantum-Si Cloud™ software service, and reagent kits and chips[28] 2. Summary of Significant Accounting Policies - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC interim reporting rules, reflecting all normal recurring adjustments[30][32] - The COVID-19 pandemic has adversely impacted operations, personnel, supply chain, and hiring, but no significant impairment losses on assets have been incurred[34][36] - Warrants are classified as long-term liabilities at fair value, with changes recognized in the statements of operations, due to criteria under ASC 815-40[40] 3. Business Combination - The Business Combination, completed on June 10, 2021, was accounted for as a reverse recapitalization, with Legacy Quantum-Si stockholders retaining control[45][46] - The transaction resulted in a significant increase in cash of $540,276 thousand, offset by transaction costs and other payments, leading to an equity infusion of $501,172 thousand[56][57] - A dual-class stock structure was adopted, with Class B common stock having 20 votes per share, giving Dr. Rothberg approximately 80.4% of the combined voting power and making the company a 'controlled company'[50][54] 4. Fair Value of Financial Instruments - Fair value measurements are categorized into a three-tier hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[59][60] | Asset/Liability (in thousands) | Total Fair Value (June 30, 2021) | Level 1 | Level 2 | Level 3 | | :----------------------------- | :------------------------------- | :------ | :------ | :------ | | Money market accounts | $518,051 | $518,051 | $- | $- | | Warrant liabilities - Public Warrants | $14,413 | $14,413 | $- | $- | | Warrant liabilities - Private Warrants | $737 | $- | $- | $737 | | Total assets at fair value | $518,051 | $518,051 | $- | $- | | Total liabilities at fair value | $15,150 | $14,413 | $- | $737 | - Private Warrants are valued using a binomial lattice model with a volatility of 49.0%, risk-free rate of 0.86%, strike price of $11.50, common stock fair value of $12.26, and expected life of 4.9 years[62] 5. Property and Equipment, Net | Category (in thousands) | June 30, 2021 | December 31, 2020 | | :---------------------- | :------------ | :---------------- | | Laboratory equipment | $5,322 | $4,245 | | Computer equipment | $903 | $765 | | Software | $156 | $136 | | Furniture and fixtures | $47 | $47 | | Construction in process | $109 | $35 | | Less: Accumulated depreciation | $(3,680)