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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

Or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission File Number 001-34899

 

Pacific Biosciences of California, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

16-1590339

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1305 O’Brien Drive

Menlo Park, CA

94025

(Address of principal executive offices)

(Zip Code)

(650521-8000

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

PACB

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes T   No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  T No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

T

Smaller reporting company

T

Emerging growth company

o


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No   T

Number of shares outstanding of the issuer’s common stock as of July 31, 2021: 198,998,538.  


2


TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

PAGE No

Item 1. Financial Statements (unaudited):

Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020

4

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2021 and 2020

5

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020

6

Condensed Consolidated Statements of Cash Flows for the SixMonths Ended June 30, 2021 and 2020

7

Notes to Condensed Consolidated Financial Statements

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3. Quantitative and Qualitative Disclosures About Market Risk

34

Item 4. Controls and Procedures

34

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

35

Item 1A. Risk Factors

35

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

63

Item 3. Default Upon Senior Securities

63

Item 4. Mine Safety Disclosures

63

Item 5. Other Information

63

Item 6. Exhibits

64

3


PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

June 30,

December 31,

(in thousands, except per share amounts)

2021

2020

Assets

Current assets

Cash and cash equivalents

$

459,794

$

81,611

Investments

684,579

237,203

Accounts receivable

19,936

16,837

Inventory

17,985

14,230

Prepaid expenses and other current assets

6,542

4,870

Short-term restricted cash

300

836

Total current assets

1,189,136

355,587

Property and equipment, net

25,000

24,899

Operating lease right-of-use assets, net

28,580

29,951

Long-term restricted cash

3,000

3,500

Other long-term assets

65

43

Total assets

$

1,245,781

$

413,980

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

$

4,761

$

3,579

Accrued expenses

22,907

17,350

Deferred revenue, current

9,534

8,722

Operating lease liabilities, current

4,644

4,332

Other liabilities, current

3,587

4,519

Total current liabilities

45,433

38,502

Deferred revenue, non-current

10,158

1,568

Operating lease liabilities, non-current

35,431

37,667

Convertible senior notes, net

895,762

Other liabilities, non-current

752

752

Total liabilities

987,536

78,489

Commitments and contingencies

 

 

Stockholders’ equity

Preferred stock, $0.001 par value:

Authorized 50,000 shares; No shares issued or outstanding

Common stock, $0.001 par value:

Authorized 1,000,000 shares; issued and outstanding 198,917 shares and 192,294 shares at June 30, 2021 and December 31, 2020, respectively

199

192

Additional paid-in capital

1,423,357

1,372,083

Accumulated other comprehensive income (loss)

(6)

85

Accumulated deficit

(1,165,305)

(1,036,869)

Total stockholders’ equity

258,245

335,491

Total liabilities and stockholders’ equity

$

1,245,781

$

413,980

See accompanying notes to the condensed consolidated financial statements.

4


PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands, except per share amounts)

2021

2020

2021

2020

Revenue:

Product revenue

$

26,533

13,756

$

51,836

$

26,049

Service and other revenue

4,077

3,321

7,771

6,626

Total revenue

30,610

17,077

59,607

32,675

Cost of revenue:

Cost of product revenue

13,222

8,225

25,919

13,646

Cost of service and other revenue

3,635

2,239

6,958

4,928

Total cost of revenue

16,857

10,464

32,877

18,574

Gross profit

13,753

6,613

26,730

14,101

Operating expense:

Research and development

22,266

15,010

42,815

30,260

Sales, general and administrative

29,060

15,127

55,198

40,074

Total operating expense

51,326

30,137

98,013

70,334

Operating loss

(37,573)

(23,524)

(71,283)

(56,233)

Gain (loss) from Continuation Advances

(52,000)

34,000

Interest expense

(3,589)

(5,378)

(267)

Other income, net

161

438

225

676

Net loss

(41,001)

(23,086)

(128,436)

(21,824)

Other comprehensive income (loss):

Unrealized income (loss) on investments

(80)

213

(91)

238

Comprehensive loss

$

(41,081)

$

(22,873)

$

(128,527)

$

(21,586)

Net loss per share:

Basic

$

(0.21)

$

(0.15)

$

(0.65)

$

(0.14)

Diluted

$

(0.21)

$

(0.15)

$

(0.65)

$

(0.14)

Weighted average shares outstanding used in computing net loss per share

Basic

198,568

154,172

196,690

153,229

Diluted

198,568

154,172

196,690

153,229

See accompanying notes to the condensed consolidated financial statements.


5


PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

Accumulated

Additional

Other

Total

Paid-in

Comprehensive

Accumulated

Stockholders'

(in thousands)

Common Stock

Capital

Income (Loss)

Deficit

Equity

For the three months ended June 30, 2021

Balance at March 31, 2021

198,340 

$

198 

$

1,404,585 

$

74 

$

(1,124,304)

$

280,553 

Net loss

(41,001)

(41,001)

Other comprehensive loss

(80)

(80)

Issuance of common stock in conjunction with equity plans

577

1

2,967

2,968

Stock-based compensation expense

15,805

15,805

Balance at June 30, 2021

198,917

$

199

$

1,423,357

$

(6)

$

(1,165,305)

$

258,245

For the three months ended June 30, 2020

Balance at March 31, 2020

153,953 

$

154 

$

1,125,229 

$

30 

$

(1,065,010)

$

60,403 

Net loss

(23,086)

(23,086)

Other comprehensive income

213 

213 

Issuance of common stock in conjunction with equity plans

365 

628 

628 

Stock-based compensation expense

3,234 

3,234 

Balance at June 30, 2020

154,318 

$

154 

$

1,129,091 

$

243 

$

(1,088,096)

$

41,392 

For the six months ended June 30, 2021

Balance at December 31, 2020

192,294 

$

192 

$

1,372,083 

$

85 

$

(1,036,869)

$

335,491 

Net loss

(128,436)

(128,436)

Other comprehensive loss

(91)

(91)

Issuance of common stock in conjunction with equity plans

6,623

7

25,304

25,311

Stock-based compensation expense

25,970

25,970

Balance at June 30, 2021

198,917

$

199

$

1,423,357

$

(6)

$

(1,165,305)

$

258,245

For the six months ended June 30, 2020