Strategic Alternatives Process Continuing; Board Focused on Maximizing Stockholder Value
EMERYVILLE, Calif., Aug. 14, 2023 /PRNewswire/ — PhenomeX, Inc. (Nasdaq: CELL), a life sciences tools company, today reported financial results for the second quarter ended June 30, 2023.
On July 7, 2023, PhenomeX announced that its Board of Directors, with the support of management and legal advisors, launched a process to explore, review and evaluate a range of potential strategic alternatives focused on addressing capital requirements and maximizing stockholder value.
Dr. Kadia added, “The Board is continuing in its ongoing review of strategic alternatives and capital raising, and we are focused on arriving at an outcome that addresses our capital requirements and maximizes shareholder value.”
In light of this ongoing process, the Company will not host a financial results conference call this quarter. Additional operational and financial details are included in this release and will be available in the Form 10-Q accessible on the Company’s website at http://investors.phenomex.com.
About PhenomeX
PhenomeX is empowering scientists to leverage the full potential of each cell and drive the next era of functional cell biology that will advance human health. We enable scientists to reveal the most complete insights on cell function and obtain a full view of the behavior of each cell. Our unique suite of proven high-throughput tools and services offer unparalleled resolution and speed, accelerating the insights that are key to advancing discoveries that can profoundly improve the prevention and treatment of disease. Our award-winning platforms are used by researchers across the globe, including those at the top 15 global pharmaceutical companies and approximately 85% of leading U.S. comprehensive cancer centers.
Non-GAAP Financial Measures
To supplement the Company’s financial statements, which are presented on the basis of U.S. generally accepted accounting principles (GAAP), the non-GAAP measures of adjusted gross profit, adjusted gross margin and adjusted operating expenses are included in this press release. Adjusted gross profit is gross profit adjusted to exclude one-time charges such as excess and obsolete inventory reserve adjustment and amortization expenses which the Company believes provide a more meaningful representation of the Company’s profit. Adjusted operating expenses are operating expenses adjusted to exclude one-time charges such as goodwill impairment charge and restructuring charge that the Company does not consider to be part of its core operating results when assessing its performance. A reconciliation of GAAP to adjusted non-GAAP financial measures is included as an attachment to this press release.
The Company believes these non-GAAP financial measures are useful to investors in assessing its operating performance. The Company uses these financial measures internally to evaluate its operating performance and for planning and forecasting of future periods. PhenomeX believes that both management and investors benefit from referring to the non-GAAP financial measures in assessing the Company’s performance and when planning, forecasting and analyzing future periods. The Company believes its non-GAAP financial measures are useful to investors because they allow for greater transparency with respect to key financial measures that it uses in making operating decisions and because its investors and analysts use them to help assess the health of the Company’s business.
While the Company believes these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures may not be reported by competitors, and they may not be directly comparable to similarly titled measures of other companies due to differences in calculation methodologies. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the Company’s GAAP financial statements. They should be used only as a supplement to GAAP information and should be considered only in conjunction with the consolidated financial statements prepared in accordance with GAAP.
Forward Looking Statements
This press release contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements contained in this release other than statements of historical fact are forward-looking statements, including statements regarding expectations of future operating results or financial performance, our guidance for the full year 2023, the exploration, review and evaluation of a range of potential strategic alternatives focused on addressing capital requirements and maximizing stockholder value, expectations regarding acquisition-cost reductions and estimated annualized cost synergies as a result of our acquisition of IsoPlexis, management’s estimates and expectations regarding growth of our business and market, including statements regarding the Company’s ability and timing to introduce new product offerings, including the PhoeniX, and other matters regarding our business strategies, use of capital, results of operations and financial position, and plans and objectives for future operations.
In some cases, you can identify forward-looking statements by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “target,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. There are a significant number of factors that could cause our actual results to differ materially from statements made in this press release, including: our ability to successfully integrate the businesses and operations of Berkeley Lights and IsoPlexis; our ability to raise additional capital; our ability to attract new and retain existing customers, or renew and expand our relationships with them; the failure to timely develop and achieve market acceptance of new products and services as well as existing products and services offerings; our limited operating history; our history of losses since inception; and general market, political, economic, and business conditions, including those related to the continuing impact of COVID-19 and geopolitical uncertainty. Additional risks and uncertainties are described under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in the documents we file with the Securities and Exchange Commission from time to time. We caution you that forward-looking statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. As a result, the forward-looking statements may not prove to be accurate. The forward-looking statements in this press release represent our views as of the date hereof. We undertake no obligation to update any forward-looking statements for any reason, except as required by law.
PhenomeX Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except share and per share data)
Three months ended June 30,
Six months ended June 30,
2023
2022
2023
2022
Revenue:
Product revenue
$ 10,304
$ 9,468
$ 18,682
$ 19,242
Service and other revenue
3,758
9,682
13,896
20,114
Total revenue
14,062
19,150
32,578
39,356
Cost of sales:
Product cost of sales
7,089
2,614
11,001
5,309
Service cost of sales
930
3,610
2,106
7,294
Total cost of sales
8,019
6,224
13,107
12,603
Gross profit
6,043
12,926
19,471
26,753
Operating expenses:
Research and development
9,342
18,178
17,763
35,751
Selling, general and administrative
26,258
20,295
52,805
37,822
Restructuring
1,093
—
2,383
—
Loss on impairment of goodwill
16,557
—
16,557
—
Total operating expenses
53,250
38,473
89,508
73,573
Loss from operations
(47,207)
(25,547)
(70,037)
(46,820)
Other income (expense):
Interest expense
(1,632)
(227)
(2,016)
(451)
Interest income
694
53
1,521
87
Other income (expense), net
(2,049)
(22)
(3,061)
35
Loss before income taxes
(50,194)
(25,743)
(73,593)
(47,149)
Provision for income taxes
51
4
71
24
Net loss
$ (50,245)
$ (25,747)
$ (73,664)
$ (47,173)
Net loss attributable to common stockholders per share, basic and diluted
$ (0.51)
$ (0.38)
$ (0.84)
$ (0.70)
Weighted-average shares used in calculating net loss per share, basic and diluted
98,900,780
67,985,664
87,394,201
67,842,372
PhenomeX Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
Assets
June 30, 2023
December 31, 2022
Current assets:
Cash and cash equivalents
$ 30,964
$ 86,522
Short-term marketable securities
—
46,252
Trade accounts receivable, net
14,375
18,534
Inventory
41,455
18,861
Prepaid expenses and other current assets
7,992
6,783
Total current assets
94,786
176,952
Restricted cash
93
—
Property and equipment, net
32,710
23,847
Operating lease right-of-use assets
26,224
23,326
Intangible assets, net
22,499
—
Other assets
2,020
1,969
Total assets
$ 178,332
$ 226,094
Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable
$ 18,631
$ 10,092
Accrued expenses and other current liabilities
13,946
21,340
Current portion of long-term debt
—
4,966
Deferred revenue
9,648
9,092
Total current liabilities
42,225
45,490
Long-term debt
—
14,860
Deferred revenue, net of current portion
876
963
Lease liability, long-term
23,950
22,726
Total liabilities
67,051
84,039
Stockholders’ equity:
Common stock
5
4
Additional paid-in capital
546,538
503,708
Accumulated deficit
(435,312)
(361,648)
Accumulated other comprehensive Income (loss)
50
(9)
Total stockholders’ equity
111,281
142,055
Total liabilities and stockholders’ equity
$ 178,332
$ 226,094
PhenomeX Inc. Reconciliation of GAAP to Non-GAAP financial measures
(Unaudited in $ thousands)
Three Months Ended
Three Months Change
June 30, 2023
June 30, 2022 (1)
Amount
%
GAAP Gross Profit
6,043
12,926
(6,883)
(53) %
GAAP Gross Margin
43 %
67 %
(24) %
Excess and obsolete inventory reserve
1,742
—
1,742
NM
Amortization inventory step up from IsoPlexis acquisition
939
—
939
NM
Amortization intangible assets acquired in IsoPlexis acquisition
232
—
232
NM
Non-GAAP Gross Profit
8,956
12,926
(3,970)
(31) %
Non-GAAP Gross Margin
64 %
67 %
(3) %
Three Months Ended
Three Months Change
June 30, 2023
June 20, 2022
Amount
%
GAAP Operating Expenses
53,250
38,473
14,777
38 %
Goodwill impairment
16,557
—
16,557
NM
Restructuring charge
1,093
—
1,093
NM
Non-GAAP Operating Expenses
35,600
38,473
(2,873)
(7) %
(1) Three months ended June 30, 2022 reflect the stand-alone Berkeley Lights consolidated financial statements.