free
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
截至季度結束
或
根據1934年證券交易法第13或15(d)條款的過渡報告 |
在過渡期從___________到___________期間
委員會文件號
（依據其憲章指定的註冊名稱）
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（註冊或組織的）提起訴訟的州或其他司法管轄區（如適用） 組建國的駐地 |
（IRS僱主 唯一識別號碼） |
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(主要領導機構的地址) |
(郵政編碼) |
(
註冊人電話號碼，包括區號。
在法案第12(b)條的規定下注冊的證券：
每個類別的標題 |
交易標的 |
在其上註冊的交易所的名稱 |
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請勾選是否註冊人（1）在前12個月內（或註冊人被要求提交這些報告的較短期間內）已提交根據1934年證券交易法第13節或第15(d)節要求提交的所有報告，以及（2）在過去90天內一直受此提交要求的約束。
請在勾選標誌處表示註冊人是否已經在過去12個月內（或者在註冊人要求提交這些文件的較短時期內）按照規則405 of協議S-T（本章節的§232.405）提交了每個交互式數據文件。 ☒ 沒有 ☐
用勾選表示註冊人是大型加速報告人、加速報告人、非加速報告人、小型報告公司還是新興成長公司。請參見《交易所法》第120億.2條中對「大型加速報告人」、「加速報告人」、「小型報告公司」和「新興成長公司」的定義。
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加速文件提交人 |
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非加速文件提交人 |
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較小的報告公司 |
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新興成長公司 |
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如果是新興成長型公司，請勾選是否已選擇不使用根據交易所法案第13(a)條款提供的任何新的或修訂的財務會計準則的延長過渡期來遵守。
請勾選註冊人是否爲空殼公司（根據交易法第120億.2條的定義）： 是 ☐ 否
截至2024年11月12日，註冊人的普通股流通股份數量爲
1
目錄
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頁面 |
第一部分 - 綜述 |
財務信息 |
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項目1。 |
基本報表 |
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3 |
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4 |
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7 |
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8 |
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項目2。 |
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31 |
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項目3。 |
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40 |
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項目4。 |
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40 |
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第二部分 - 業務細節 |
其他信息 |
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項目1。 |
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42 |
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項目1A。 |
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項目2。 |
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項目3。 |
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42 |
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項目4。 |
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項目5。 |
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42 |
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項目6。 |
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43 |
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44 |
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2
第一部分——財務信息形成
項目 1. 財務財務報表
repligen公司
CONDENSED CONSOLIDATED BAL資產負債表
(未經審計，金額以千爲單位，除每股數據外)
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9月30日, |
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2023年12月31日, |
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2024 |
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2023 |
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（經調整） |
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資產 |
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流動資產： |
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現金及現金等價物 |
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$ |
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$ |
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應收賬款淨額，減去2024年2月29日的儲備金爲$ |
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淨存貨 |
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預付費用及其他流動資產 |
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總流動資產 |
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非流動資產: |
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物業、廠房和設備，淨值 |
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無形資產-淨額 |
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商譽 |
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遞延稅款資產 |
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資產：租賃資產 |
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其他非流動資產 |
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非流動資產總額 |
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總資產 |
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$ |
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$ |
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負債和股東權益 |
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流動負債: |
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應付賬款 |
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$ |
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$ |
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經營租賃負債 |
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目前的或可能的事項負債 |
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應計負債 |
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到期日爲2024年的可轉換高級票據淨額 |
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總流動負債 |
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( |
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到期日爲2028年的可轉換高級票據淨額 |
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遞延所得稅負債 |
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非流動經營租賃負債 |
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非流動的其他應計資產 |
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其他非流動負債 |
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非流動負債合計 |
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總負債 |
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股東權益: |
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優先股，$0.0001 |
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普通股，每股面值爲 $0.0001； |
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追加實收資本 |
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累計其他綜合損失 |
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留存收益 |
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股東權益總額 |
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總負債和股東權益 |
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$ |
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$ |
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附帶的說明是這些簡明合併財務報表不可或缺的一部分。
3
repligen公司
簡化合並財務報表綜合收益（虧損）綜合收益（虧損）
(未經審計，金額以千爲單位，除每股數據外)
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截至9月30日的三個月 |
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截至九個月 |
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2024 |
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2023 |
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2024 |
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2023 |
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（經調整） |
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（經調整） |
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收入： |
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產品 |
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$ |
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$ |
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$ |
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$ |
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特許權和其他營業收入 |
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總營業收入 |
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費用和營業費用： |
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銷售成本 |
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研發 |
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銷售、一般及行政費用 |
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附帶條件 |
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總成本和營業費用 |
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（損失）營業利潤 |
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其他收入（支出）： |
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投資收益 |
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利息支出 |
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債務發行成本的攤銷 |
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( |
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其他收入（費用） |
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其他收入，淨額 |
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稅前(損失)收入 |
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所得稅（收益）費用 |
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淨利潤（虧損） |
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$ |
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$ |
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$ |
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$ |
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每股（虧損）盈利： |
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基本 |
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$ |
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$ |
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$ |
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$ |
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稀釋（備註13） |
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$ |
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$ |
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$ |
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$ |
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加權平均流通股數: |
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基本 |
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稀釋（備註13） |
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淨利潤（虧損） |
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$ |
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$ |
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$ |
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其他全面收益（損失）： |
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外幣兌換調整 |
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綜合收益 |
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$ |
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$ |
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$ |
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$ |
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隨附的附註是這些簡明合併財務報表的組成部分。
4
repligen公司
綜合捷報表股東權益
(未經審計，金額以千爲單位，除每股數據外)
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截至2024年9月30日的三個月 |
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普通股 |
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數量 |
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面值 |
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額外的 |
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累計 |
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保留 |
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總計 |
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於2024年6月30日的結存，經重新調整後 |
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$ |
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$ |
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$ |
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$ |
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$ |
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淨虧損 |
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— |
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— |
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— |
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— |
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( |
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$ |
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債務轉換 |
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( |
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— |
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— |
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$ |
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行使股票期權和解除股票限制 |
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— |
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— |
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$ |
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解禁受限制股份單位時的稅款代扣 |
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( |
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( |
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— |
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— |
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$ |
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基於股票的薪酬費用 |
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— |
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— |
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— |
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— |
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$ |
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翻譯調整 |
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— |
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— |
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— |
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— |
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$ |
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2024年9月30日的結餘 |
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$ |
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$ |
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$ |
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$ |
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$ |
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截至2023年9月30日的三個月 |
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普通股 |
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數量 |
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面值 |
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額外的 |
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累計 |
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保留 |
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總計 |
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截至2023年6月30日的餘額，已重新計述 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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重新表述後的淨利潤 |
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— |
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— |
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— |
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— |
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債務轉換 |
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— |
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— |
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— |
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期權的行使和股票的歸屬 |
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— |
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— |
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解禁受限制股份單位時的稅款代扣 |
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( |
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( |
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— |
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— |
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根據收購FlexBiosys, Inc.發佈普通股 |
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— |
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— |
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— |
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— |
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基於股票的薪酬費用 |
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— |
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— |
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— |
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調整翻譯，已重新表述 |
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— |
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— |
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— |
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( |
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— |
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( |
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截至2023年9月30日的餘額，已重新表述 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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截至2024年9月30日的九個月 |
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普通股 |
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的數量 |
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面值 |
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額外 |
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累積 |
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已保留 |
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總計 |
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重報後的2023年12月31日餘額 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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淨收入 |
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— |
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— |
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— |
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— |
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債務轉換 |
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( |
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— |
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— |
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( |
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行使股票期權和股票歸屬 |
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— |
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— |
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限制性股票單位的歸屬預扣稅 |
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( |
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( |
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( |
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— |
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— |
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( |
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根據或有對價發行普通股的收益支付 |
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— |
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— |
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股票薪酬支出 |
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— |
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— |
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— |
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— |
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||
翻譯調整 |
|
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— |
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— |
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|
— |
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|
|
|
— |
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|
|
|
||
截至 2024 年 9 月 30 日的餘額 |
|
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|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
5
|
|
截至2023年9月30日的九個月 |
|
|||||||||||||||||||||
|
|
普通股 |
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|||||||||
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|
數量 |
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|
面值 |
|
|
額外的 |
|
|
累計 |
|
|
保留 |
|
|
總計 |
|
||||||
2022年12月31日的餘額 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
重新表述後的淨利潤 |
|
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— |
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— |
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— |
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— |
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||
債務轉換 |
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( |
) |
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— |
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— |
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( |
) |
||
期權的行使和股票的歸屬 |
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— |
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— |
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||||
解禁受限制股份單位時的稅款代扣 |
|
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( |
) |
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|
( |
) |
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|
( |
) |
|
|
— |
|
|
|
— |
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|
( |
) |
根據收購FlexBiosys, Inc.發佈普通股 |
|
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|
|
|
|
|
|
— |
|
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|
— |
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|
||||
根據或有對價的收益支付發行普通股 |
|
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|
|
|
|
|
|
— |
|
|
|
— |
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|
||||
基於股票的薪酬費用 |
|
|
— |
|
|
|
— |
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|
|
|
|
— |
|
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|
— |
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||
調整翻譯，已重新表述 |
|
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— |
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|
— |
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|
|
— |
|
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|
( |
) |
|
|
— |
|
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|
( |
) |
截至2023年9月30日的餘額，已重新表述 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
附帶的說明是這些簡明合併財務報表不可或缺的一部分。
6
repligen公司
簡明綜合陳述現金流量表
(未經審計，金額以千爲單位)
|
|
截至九個月 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
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|
|
|
（經調整） |
|
||
經營活動現金流量： |
|
|
|
|
|
|
||
淨利潤 |
|
$ |
|
|
$ |
|
||
調整淨利潤以計入經營活動現金流量: |
|
|
|
|
|
|
||
折舊和攤銷 |
|
|
|
|
|
|
||
攤銷債務折扣和發行成本 |
|
|
|
|
|
|
||
基於股票的補償 |
|
|
|
|
|
|
||
遞延所得稅，淨額 |
|
|
( |
) |
|
|
( |
) |
附帶條件 |
|
|
|
|
|
( |
) |
|
非貨幣利息收入 |
|
|
|
|
|
( |
) |
|
經營租賃權利使用資產攤銷* |
|
|
|
|
|
|
||
其他 |
|
|
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|
|
|
||
經營資產和負債變動，不包括收購的影響: |
|
|
|
|
|
|
||
應收賬款 |
|
|
( |
) |
|
|
|
|
存貨 |
|
|
|
|
|
|
||
預付費用及其他流動資產 |
|
|
( |
) |
|
|
( |
) |
其他非流動資產 |
|
|
|
|
|
( |
) |
|
應付賬款 |
|
|
|
|
|
( |
) |
|
應計負債 |
|
|
|
|
|
( |
) |
|
營運租賃負債 |
|
|
( |
) |
|
|
( |
) |
非流動負債 |
|
|
( |
) |
|
|
|
|
業務收購 |
|
|
|
|
|
|
||
投資活動現金流量： |
|
|
|
|
|
|
||
收購，淨現金收購 |
|
|
|
|
|
( |
) |
|
持有到期市場證券到期的收益 |
|
|
|
|
|
|
||
增加資本化軟件成本 |
|
|
( |
) |
|
|
( |
) |
購買固定資產 |
|
|
( |
) |
|
|
( |
) |
出售固定資產 |
|
|
|
|
|
|
||
投資活動提供的現金淨額 |
|
|
( |
) |
|
|
|
|
融資活動的現金流： |
|
|
|
|
|
|
||
行使股票期權所得 |
|
|
|
|
|
|
||
支付限制性股票解禁時的稅款代扣義務 |
|
|
( |
) |
|
|
( |
) |
可轉換高級票據的償還 |
|
|
( |
) |
|
|
( |
) |
支付盈利分成考慮 |
|
|
( |
) |
|
|
( |
) |
其他融資活動 |
|
|
|
|
|
( |
) |
|
籌資活動所支付的現金總額 |
|
|
( |
) |
|
|
( |
) |
匯率變動對現金及現金等價物的影響 |
|
|
|
|
|
( |
) |
|
現金及現金等價物淨增加額 |
|
|
|
|
|
|
||
期初現金及現金等價物 |
|
|
|
|
|
|
||
現金及現金等價物期末餘額 |
|
$ |
|
|
$ |
|
||
非現金投資和籌資活動的補充披露: |
|
|
|
|
|
|
||
在經營租約下獲得的資產 |
|
$ |
|
|
$ |
|
||
以待錄入的可變報酬將發行的普通股的公允價值 |
|
$ |
|
|
$ |
|
||
物業公允價值 $9,035.6 $8,808.1 |
|
$ |
|
|
$ |
|
||
將一部分從「經營性資產和負債變動」中重新分類至「用於調節淨利潤的調整」部分。這種重新分類並未導致經營活動現金淨額髮生變化。
附帶的說明是這些簡明合併財務報表不可或缺的一部分。
7
repligen公司
基本報表附註
(未經審計)
在 2024 年第三季，雷普利根公司（「公司」、「雷普利根」、「我們」或「我們」）發現一個與收入記錄時間有關的重大會計錯誤，這影響公司截至 2023 年 12 月 31 日以及截至 2023 年 9 月 30 日止的三個月和九個月期間的簡明綜合財務報表。在本表格 10-Q 的季度報告中，公司重新列出了受錯誤影響的所有受影響的財務信息和註腳披露。以下是有關錯誤及其對先前發行的財務報表的影響的描述。
重新陳述調整說明
在 2023 年第一季度，一位客戶取消了兩個與 COVID 相關的不可取消的產品採購單（「已取消的採購單」），以換取 $
在 2024 年第三季，公司重新評估付款的會計處理，並結論取消的採購單位和公開採購單位代表合同，因此 2023 年 2 月的交易應該被分析並視為合約修訂，這要求付款被延期並視為根據公開採購單位交付的產品單位（「錯誤」）。在 2024 年 6 月 30 日前，所有 Open PO 產品單元都完全交付給客戶。
錯誤修正影響截至 2023 年 9 月截至 2023 年 9 月止的某些財務報表明細行項目，包括在這些簡明綜合財務報表中包括但不限於產品收入、所得稅供應、外幣轉換、延期收入、預付費用、遞延稅和每股收益。
綜合財務報表-重新對帳表
以下表列出財務報表調整對公司之前報告的簡明合併財務報表的影響。下表中的「先前報告」金額是我們截至 2023 年 12 月 31 日止財政年度的 10-k 表格年報的金額，最初於 2024 年 2 月 22 日向美國證券交易委員會（「SEC」）提交的金額，以及截至 2023 年 9 月 30 日止三個月和九個月的表格 10-Q 季度報告，最初於 2023 年 10 月 31 日向證券交易委員會提交。標有「收入調整」的資料欄中的金額代表因更正與「付款」相關稅款相關的收入過度陳述而產生的調整效果。標記為「其他調整」欄中的金額代表其他調整與之前已提交的財務報表中其他不相關錯誤的相關錯誤（不論個別或整體）都對這些已提交的財務報表有關的影響。在所有受影響的表格和註腳中，對收入調整和其他調整的重新報表的影響都已更正在這些簡明合併財務報表中。
8
|
|
12月31日, |
|
|||||||||||||
|
|
2023 |
|
|||||||||||||
|
|
如先前報告 |
|
|
營業收入調整 |
|
|
其他調整 |
|
|
依據修訂 |
|
||||
資產 |
|
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|
||||
流動資產: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
現金及現金等價物 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
持有至到期的可交易證券 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
應收帳款，扣除儲備的$ |
|
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|
|
|
|
|
|
|
||||
存貨，淨額 |
|
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|
|
|
||||
預付費用及其他流動資產 |
|
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|
|
|
|
|
|
|
|
||||
流動資產總額 |
|
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|
||||
非流動資產： |
|
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|
||||
不動產、廠房及設備淨值 |
|
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|
||||
無形資產，扣除累計攤銷 |
|
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|
||||
商譽 |
|
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|
||||
遞延所得稅資產 |
|
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|
||||
營業租賃權使用資產 |
|
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|
||||
其他非流動資產 |
|
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|
||||
所有非流動資產總額 |
|
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|
|
|
|
|
|
|
||||
總資產 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
負債和股東權益 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
流動負債： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
應付賬款 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
營業租賃負債 |
|
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|
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|
||||
當前或有對價 |
|
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|
||||
應計負債 |
|
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|
|
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|
|
|
|
|
||||
2024年到期的可轉換高級票據，淨額 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
流動負債總額 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
非流動負債： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
到期於2028年的可轉換優先票據，淨額 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
遞延所得稅負債 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
非流動經營租賃負債 |
|
|
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|
|
|
|
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|
|
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|
||||
非流動或有安排對價 |
|
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|
||||
其他非流動負債 |
|
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|
|
|
|
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|
|
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|
||||
總非流動負債 |
|
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|
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|
( |
) |
|
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|
|||
總負債 |
|
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|
||||
|
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|
|||||
股東權益： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
優先股，面額$0.01，授權股數為5,000,000股，發行且流通股數為截至2024年6月30日和2023年12月31日之184,668,188股和181,364,180股。 |
|
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|
||||
0.01 |
|
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|
||||
資本公積額額外增資 |
|
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|
||||
累積其他全面損失 |
|
|
( |
) |
|
|
( |
) |
|
|
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|
|
( |
) |
|
累積盈餘 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
股東權益總額 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
負債和股東權益總額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
9
|
|
截至2023年9月30日的三個月 |
|
|
2023年9月30日止九個月 |
|
||||||||||||||||||||||||||
|
|
如先前報告 |
|
|
營業收入調整 |
|
|
其他調整 |
|
|
依據修訂 |
|
|
如先前報告 |
|
|
營業收入調整 |
|
|
其他調整 |
|
|
依據修訂 |
|
||||||||
營業收入: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
產品 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
版稅和其他營業收入 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
總營業收入 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||||||
成本與營業費用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||||||
產品收入成本 |
|
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|
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|
||||||||
研發 |
|
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|
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|
||||||||
銷售、一般及行政 |
|
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|
|
|
|
|
|
|
|
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|
|
|
|
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|
||||||||
條件購買 |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||||
總成本和營業費用 |
|
|
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營業收入 |
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其他收入(支出): |
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投資收益 |
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利息支出 |
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債務發行成本攤銷 |
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其他收入（費用） |
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其他收入（支出），淨額 |
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稅前收入 |
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所得稅（濟）規定 |
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凈利潤 |
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每股盈餘： |
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基本 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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攤薄（註13） |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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加權平均流通普通股股數: |
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基本 |
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攤薄（註13） |
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凈利潤 |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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其他綜合損益： |
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外幣翻譯調整 |
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( |
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綜合收益 |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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累積其他綜合損失 |
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累積收益 |
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股東權益合計 |
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如先前報告 |
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營業收入調整 |
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其他調整 |
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依據修訂 |
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如先前報告 |
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營業收入調整 |
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其他調整 |
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依據修訂 |
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如先前報告 |
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營業收入調整 |
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其他調整 |
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依據修訂 |
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||||||||||||
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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||||||||||||
2023年6月30日結餘 |
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( |
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— |
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( |
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( |
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( |
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( |
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( |
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凈利潤 |
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— |
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— |
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— |
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— |
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( |
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( |
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( |
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( |
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翻譯調整 |
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( |
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— |
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( |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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2023年9月30日的結餘 |
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( |
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— |
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( |
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( |
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( |
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( |
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( |
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10
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累積其他綜合損失 |
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累積收益 |
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股東權益合計 |
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|||||||||||||||||||||||||||||||||||||||
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如先前報告 |
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營業收入調整 |
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其他調整 |
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依據修訂 |
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|
如先前報告 |
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|
營業收入調整 |
|
|
其他調整 |
|
|
依據修訂 |
|
|
如先前報告 |
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|
營業收入調整 |
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其他調整 |
|
|
依據修訂 |
|
||||||||||||
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|
$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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2022年12月31日結餘 |
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( |
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— |
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— |
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( |
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— |
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— |
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— |
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— |
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凈利潤 |
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— |
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— |
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— |
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— |
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( |
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( |
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( |
) |
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( |
) |
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翻譯調整 |
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( |
) |
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— |
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( |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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||
2023年9月30日的結餘 |
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( |
) |
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— |
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( |
) |
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( |
) |
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( |
) |
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( |
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( |
) |
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|||||
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2023年9月30日止九個月 |
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如先前報告 |
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|
營業收入調整 |
|
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其他調整 |
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|
依據修訂 |
|
||||
經營活動現金流量： |
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凈利潤 |
|
$ |
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$ |
( |
) |
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$ |
( |
) |
|
$ |
|
||
調整淨利潤以達經營活動所提供之淨現金流量： |
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折舊及攤銷 |
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債務發行成本攤銷 |
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基於股票的薪酬 |
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递延所得稅，淨額 |
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( |
) |
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( |
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( |
) |
|
條件購買 |
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( |
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( |
) |
||
非現金利息收入 |
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( |
) |
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( |
) |
||
營運租賃使用權資產攤銷 |
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其他 |
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營運資產和負債的變動，不包括收購的影響： |
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應收賬款 |
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存貨 |
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預付費用及其他資產 |
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( |
) |
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( |
) |
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( |
) |
|
其他資產 |
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( |
) |
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( |
) |
||
應付賬款 |
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( |
) |
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( |
) |
||
應計費用 |
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( |
) |
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( |
) |
||
租賃負債 |
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( |
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( |
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長期負債 |
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營運活動提供之總現金 |
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投資活動之現金流量: |
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||||
併購，扣除所得現金淨額 |
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( |
) |
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( |
) |
||
持至到期的可流通證券的到期收益 |
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||||
資本化軟體成本的增加 |
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( |
) |
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( |
) |
||
固定資產購入 |
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( |
) |
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( |
) |
||
知識產權的購買 |
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其他投資活動 |
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||||
投資活動提供（使用）的總現金 |
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來自籌資活動的現金流量: |
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行使股票期權所得 |
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||||
支付限制性股票歸屬的稅款扣繳義務 |
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( |
) |
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( |
) |
||
可轉換高級票據的償還 |
|
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( |
) |
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( |
) |
||
支付績效獎金 |
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( |
) |
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( |
) |
||
普通股票的發行所得，扣除淨額 |
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( |
) |
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( |
) |
||
融資活動使用的現金總額 |
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( |
) |
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( |
) |
||
匯率變動對現金及現金等價物的影響 |
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( |
) |
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( |
) |
||
現金及現金等價物的淨增加（減少） |
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||||
本期期初現金、現金及受限制的現金餘額為 |
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||||
現金及現金等價物期末餘額 |
|
$ |
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$ |
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|
$ |
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|
$ |
|
||||
補充揭露與非現金投資及融資活動有關之事項： |
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|
||||
根據經營租賃獲得的資產 |
|
$ |
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|
$ |
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$ |
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$ |
|
||||
公允價值 |
|
$ |
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|
$ |
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$ |
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$ |
|
||||
公允價值 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
11
報告基礎
本文中所包含的簡明綜合中期基本報表已由Repligen Corporation根據美國通行會計原則（“GAAP”）和美國證券交易委員會（“SEC”）的規則和法規，為第10-Q表格的季度報告和法規第10條以及不包含所有所需的資產和負債金額以及應披露於年度財務報表的附註。應該閱讀這些簡明綜合財務報表，並與公司於2023年12月31日結束的財政年度提交給SEC的附有註釋的綜合財務報表相結合的年度報告10-K/A一同閱讀。
按照GAAP準則編製的財務報表要求管理層對在財務報表日期的資產和負債金額進行估計和假設，以及揭示當期財務報表中應披露的應收資產和負債金額以及收入和費用金額。全球地緣政治衝突、供應鏈挑戰和客戶購買模式的成本壓力等商業和經濟不確定性使得這些估計更加困難計算。因此，實際結果可能與這些估計有所不同。
這份簡明綜合財務報表包含公司及其全資子公司的賬戶。所有重要的公司內部賬號和交易已經在合併中予以消除。
待售資產
可轉換優先股
公司根據會計標準編碼（“ASC”）815評估可轉換債務工具中的嵌入式轉換功能，即“衍生金融工具和套期保值”。 “衍生金融工具和套期保值。” 公司參照ASC 815-15和ASC 815-40來判斷轉換功能是否符合衍生金融工具的定義，如果是，則決定是否將轉換功能進行分開核算，並將其作為單獨衍生負債核算。根據公司的分析，其可轉換優先票據不具有根據ASC 815-15需要進行分開核算的嵌入式轉換功能，因此，按ASC 470，“債務”下的單一單元核算，作為一筆負債。債務。”
最近的會計指引
公司考慮所有會計準則更新（“ASU”或“ASUs”）以及其他最近發布的指引或規則對其簡明綜合財務報表的適用性和影響。未在下文列出的更新已經評估並判定為不適用，或預計對公司的簡明綜合財務狀況或營運結果影響較小。公司認為可能適用於其的最近發布的會計指引如下：
最近發布的會計指引-尚未採納
2024年3月，SEC根據SEC發佈33-11275號最終規則，要求上市公司在其注冊申明書和年度報告中提供某些與氣候有關的信息。作為披露的一部分，登記公司將
12
在其審計過的基本報表備註中，要求對極端天氣事件和其他自然情況的某些影響進行量化。這些規定立即遭到許多訴訟的挑戰，隨後被美國第八巡回上訴法院合並處理。2024年4月，證券交易委員會宣布停止實施新規則，等待第八巡回法庭的合併訴訟解決。公司正在評估遵守新規則對其簡明總合財務報表及相關披露的影響。
於2023年12月，財務會計準則委員會（FASB）發布ASU 2023-09，“所得稅（專題740）-所得稅披露改進。” ASU 2023-09通過要求在稅率協調和按司法管轄區分解支付的收入稅方面提供一致的類別和更大的分解，增加了所得稅披露的透明度和決策有用性。ASU 2023-09將於公司2025年度10-K表的所得稅披露中生效，並將按照前瞻性的方法應用。但是，允許追溯適用。亦允許提前採納。除所得稅披露的變更外，公司不認為採用ASU 2023-09對其簡明總合財務報表產生實質影響。
於2023年11月，FASB發布ASU 2023-07，“Segment Reporting（專題820）-演變至可報告部門披露的改進。” ASU 2023-07將通過增強每年和間隔時段關於定期提供給首席營運決策者（CODM）的重要部門支出的披露，改進可報告部門披露要求。依ASU 2023-07所要求的披露，也適用於只有一個可報告部門的公共機構。ASU 2023-07將在2024年1月1日開始的年度時期和2025年1月1日開始的間隔時期對公司生效。該指南的修訂對所有過去期間的呈現均可追溯適用。亦允許提前採納。除部門腳註呈現變更外，公司不認為採用ASU 2023-07對其簡明總合財務報表產生實質影響。
公司在確定其資產和負債的公允價值時使用各種評價方法。公司對用於測量公允價值的輸入建立了層級，該層級最大化可觀察輸入的使用並最小化不可觀察輸入的使用，要求在可用時使用可觀察輸入。可觀察輸入是市場參與者根據從公司獨立的來源獲得的市場數據來定價資產或負債時會使用的輸入。不可觀察輸入是反映公司對市場參與者在定價資產或負債時會使用的輸入的假設的輸入，並且是基於當前情況下可用的最佳信息來開發的。公允價值層級根據輸入的來源分為三個層級，如下所示：
第1級- |
基於公司能夠接觸的活躍市場中相同資產或負債的未經調整的報價價格的評價。 |
|
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第2級- |
基於活躍市場中類似資產或負債的報價價格、相同或類似資產或負債的報價價格的評價。 |
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第3級- |
基於對整體公允價值測量不可觀察或重要的輸入的評價。 |
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可觀察的輸入的可用性在各種金融資產和負債之間可能會有所不同。在對估值基於模型或市場中不那麼可觀察或無法觀察的輸入的程度上，公允價值的確定需要更多的判斷。在某些情況下，用於衡量公允價值的輸入可能會落入公允價值的不同級別中。
13
在這些情況下，就財務報表披露而言，公平值層級中分類公平值衡量的基礎，乃基於對整體公平值衡量具有重大意義之最低層級輸入。
以重複基礎衡量的公允價值
以重複基礎衡量的財務資產和財務負債包括以下內容，截至2024年9月30日和2023年12月31日（金額以千為單位）： 現金及現金等價物衡量之公平值
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截至2024年9月30日 |
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第1級 |
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第2級 |
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Level 3 |
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總計 |
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資產： |
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||||
貨幣市場賬戶 |
|
$ |
|
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$ |
— |
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$ |
— |
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$ |
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||
負債： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
當前或有對價 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
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||
|
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|
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||||
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截至2023年12月31日 |
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|||||||||||||
|
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第1級 |
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第2級 |
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Level 3 |
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總計 |
|
||||
資產： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
貨幣市場賬戶 |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
負債： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
當前或有對價 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
非流動或有安排對價 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
現金及現金等價物
截至2024年9月30日和2023年12月31日，公司的簡明合併資產負債表中包括現金及現金等價物$
條件性對價 – 達成條款
截至2024年9月30日，未來可能需要支付的最大未來條件性對價（未折扣）$
附帶條件購買義務-賺取權公平價值變化的調和包括在以下表中（金額以千美元計）：
截至2023年12月31日的餘額 |
|
$ |
|
|
附帶條件購買義務賺取支付 |
|
|
( |
) |
附帶條件購買義務賺取公平價值減少 |
|
|
|
|
2024年9月30日的賬面 |
|
$ |
|
14
我們對Avitide、FlexBiosys和Metenova的條件性考慮負債的Level 3公平價值衡量是重複性的，包括以下重要的 不可觀察的輸入數據（以千位為單位，除了百分比數據）：
條件性考慮Earnout |
|
公允價值為 |
|
|
估值技巧 |
|
不可觀察的輸入 |
|
區間 |
|
加權平均(1) |
||
|
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機率 |
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|
|
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成功 |
|
|
|||
以商業化為基礎的付款 |
|
$ |
|
|
|
蒙特卡羅 |
|
Earnout 折扣率 |
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波動率 |
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營業收入和成交量- |
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$ |
|
|
|
蒙特卡羅 |
|
營業收入及成交量 |
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|||
|
|
|
|
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未來獎金折扣率 |
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|||
|
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機率 |
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|
|||
製造業生產線擴展 |
|
$ |
|
|
|
加權概率現值 |
|
Earnout折現率 |
|
|
|||
以非週期性基礎測定的公平價值
截至2024年9月30日止三個月和九個月內，沒有對以非週期性基礎測定的金融資產和負債的公平價值進行重新計量。
可轉換債券
2019年7月，公司發行了$
2024收購
等待收購Tantti Laboratory Inc.
於2024年7月29日，該公司宣布已簽署一項最終協議，以收購私人持有的Tantti Laboratory Inc.（“Tantti”）。Tantti的總部位於台灣桃園市，預計將加速該公司進入新型態市場，提供針對大型分子生物製品的獨特且可擴展的淨化解決方案。
15
公司預期將在2024年第四季度完成對Tantti的收購，條件是滿足例行的交割條件，包括通過臺灣監管渠道的批准。
2023年收購事項
Metenova Holding AB
於2023年10月2日，公司子公司Repligen Sweden Ab根據2023年9月23日簽署的股份出售和購買協議（該收購為“Metenova收購”）收購Metenova，受讓方為Metenova的前股東（“Metenova賣方”），當中參與方包括Repligen Sweden Ab、Metenova賣方以及公司，後者以擔保人的身份擔保Repligen Sweden Ab在股份購買協議下的義務。
Metenova總部位於瑞典莫爾達爾，提供廣泛應用於全球生物製藥公司及合約開發和製造組織的磁性攪拌和驅動系統技術。Metenova收購進一步強化了我們的流體管理產品組合。
已轉移的考量
公司將Metenova收購列為ASC 805“企業組合下的購買業務”業務組合 公司聘請第三方估值公司協助評估Metenova。根據股份購買協議，Metenova的所有優先股權利均以總值為$進行收購。
根據會計並購方法，Metenova所獲資產及擔負的負債於收購日按其各自的公平價值記錄，並與公司合併。所收購淨負債的公平價值為$百萬，所收購無形資產的公平價值為$百萬，剩餘商譽為$。
取得資產淨值的公平價值
購買價格的分配是基於所收購資產和所承擔負債的公允價值，並根據Metenova的最終評估進行。公司已在測量期間內（截至2024年10月2日）對購買價格分配進行適當調整。
購買價格的元件和最終分配如下（金額以千元計）：
現金及現金等價物 |
|
$ |
|
|
應收賬款 |
|
|
|
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存貨 |
|
|
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預付費用及其他流動資產 |
|
|
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財產和設備 |
|
|
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營業租賃權利資產 |
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客戶關係 |
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開發出的科技 |
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商標和商號 |
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非競爭協議 |
|
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商譽 |
|
|
|
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應付賬款 |
|
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( |
) |
應計負債 |
|
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( |
) |
營業租賃負債 |
|
|
( |
) |
非流動递延税负 |
|
|
( |
) |
非流動經營租賃負債 |
|
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( |
) |
取得資產的公允價值 |
|
$ |
|
|
|
|
|
|
|
取得商誉
16
這$的商譽代表公司預期將因將Metenova整合進公司而產生的未來經濟利益。這些協同效益包括預計通過Metenova收購實現的營運效率和戰略利益。錄得的商譽中，相當大部分預計將不可扣除用於所得稅目的。
無形資產
這$的商譽代表未來經濟利益，預計將因將Metenova整合進公司而產生的協同效益。這些協同效益包括預計通過Metenova收購實現的營運效率和戰略利益。預計大部分的商譽將不可扣除用於所得稅目的。
|
|
有用壽命 |
|
公允價值 |
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|
|
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|
（金額以千為單位） |
|
|
|
|
|
|
|
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|
客戶關係 |
|
|
$ |
|
||
開發出的科技 |
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商標和商號 |
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非競爭協議 |
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||
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$ |
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|
FlexBiosys, Inc.
於2022年3月17日，法院發出了一份訂單，暫停州級衍生訴訟，等候下文所述的聯邦衍生訴訟解決。
FlexBiosys總部位於新澤西州Branchburg，提供專家設計和定制製造的一次性生物加工產品，以及包括生物加工袋、瓶子和管路組件等全面產品範圍。這些產品將完善和擴展我們的流體管理產品組合。
轉讓對價
根據ASC 805的規定，FlexBiosys收購事項被歸為企業購併，本公司聘請了第三方估值機構協助對FlexBiosys進行估值。根據FlexBiosys協議的條款，FlexBiosys的所有優先股權益均以價值總計為$
根據會計方法中的收購法，FlexBiosys所取得的資產和承擔的負債於收購日被記錄為各自的公平值，並與公司合併。所取得淨資產的公平值為
取得淨資產的公允價值
收購價格的配置基於收購日期的資產公允價值和承擔的負債，根據對FlexBiosys的最終估值。公司在衡量期間內進行了對購買價格分配的適當調整，該期限至2024年4月17日結束。購買價格分配截至2024年3月31日完成。
購買價格的元件和最終分配如下（金額以千為單位）：
17
Cash and cash equivalents |
|
$ |
|
|
Accounts receivable |
|
|
|
|
Inventory |
|
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|
|
Prepaid expenses and other current assets |
|
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Property and equipment |
|
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Operating lease right of use asset |
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Customer relationships |
|
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Developed technology |
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Trademark and tradename |
|
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Non-competition agreements |
|
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Goodwill |
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Other noncurrent assets |
|
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|
|
Accounts payable |
|
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( |
) |
Accrued liabilities |
|
|
( |
) |
Operating lease liability |
|
|
( |
) |
Noncurrent operating lease liability |
|
|
( |
) |
Fair value of net assets acquired |
|
$ |
|
|
|
|
|
|
|
Acquired Goodwill
The goodwill of $
Intangible Assets
The following table sets forth the components of the identified intangible assets associated with the FlexBiosys Acquisition and their estimated useful lives:
|
|
Useful life |
|
Fair Value |
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(Amounts in thousands) |
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Customer relationships |
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$ |
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Developed technology |
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Trademark and tradename |
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Non-competition agreements |
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||
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$ |
|
|
In July 2023, the Board of Directors authorized the Company's management team to undertake restructuring activities to simplify and streamline our organization and strengthen the overall effectiveness of our operations. Since the initial streamlining and re-balancing efforts contemplated in July, the Company continues to undertake further restructuring activities (collectively, the “2023 Restructuring Plan”) which has included consolidating a portion of our manufacturing operations between certain U.S. locations, discontinuing the sale of certain product SKUs, and evaluating the fair value of finished goods and raw materials, mostly secured during the 2020-2022 COVID-19 pandemic period (the “COVID-19 Period”) to meet increasing demand during a challenging supply chain environment in the industry.
The Company recorded pre-tax restructuring activity of $
The following tables summarize the charges related to restructuring activities by type of cost for the periods presented on the Company’s condensed consolidated statements of comprehensive income (loss):
|
|
Three Months Ended September 30, 2024 |
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|
Severance and Employee-Related Costs |
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|
Facility and Other Exit Costs |
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Total |
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|||
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|
(Amounts in thousands) |
|
|||||||||
Cost of goods sold |
|
$ |
|
|
$ |
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|
$ |
|
|||
Selling, general and administrative |
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|
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Other (income) expenses |
|
|
|
|
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( |
) |
|
|
( |
) |
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|
|
$ |
|
|
$ |
|
|
$ |
|
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18
|
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Nine Months Ended September 30, 2024 |
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Severance and Employee-Related Costs |
|
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Accelerated Depreciation |
|
|
Facility and Other Exit Costs |
|
|
Total |
|
||||
|
|
(Amounts in thousands) |
|
|||||||||||||
Cost of goods sold |
|
$ |
|
|
$ |
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|
$ |
|
|
$ |
|
||||
Research and development |
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|
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Selling, general and administrative |
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|
||||
Other (income) expenses |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three and Nine Months Ended September 30, 2023 |
|
|||||||||||||||||
|
|
Severance and Employee-Related Costs |
|
|
Inventory Write-Off |
|
|
Accelerated Depreciation |
|
|
Facility and Other Exit Costs |
|
|
Total |
|
|||||
|
|
(Amounts in thousands) |
|
|||||||||||||||||
Cost of goods sold |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Severance and employee-related costs under the Restructuring Plan are primarily associated with actual headcount reductions. Costs incurred include cash severance and non-cash severance, including other termination benefits. Severance and other termination benefit packages are based on established benefit arrangements or local statutory requirements and we recognized the contractual component of these benefits when payment was probable and could be reasonably estimated.
The inventory write-off in 2023 includes the impact of the Company discontinuing the sale of certain product SKUs and the impact of having proactively secured materials during the COVID-19 Period to meet accelerated demand during a challenging supply chain environment in the industry. Where demand has reduced, finished goods and raw materials, the value of which exceeded the projected requirements to be used before reaching their expiration date, were written down to their realizable value. The 2023 Restructuring Plan also includes the closing of manufacturing facilities and production lines, which include inventory that could not be re-purposed.
Non-cash charges for accelerated depreciation were recognized on long-lived assets that were taken out of service before the end of their normal service due to the shutdown of manufacturing facilities and production lines, in which case depreciation estimates were revised to reflect the use of the assets over their shortened useful life.
The restructuring accrual is included in accrued liabilities in the condensed consolidated balance sheet as of September 30, 2024.
|
|
Restructuring Liability |
|
|
Restructuring Costs |
|
|
Amounts Paid in 2024 |
|
|
Noncash Restructuring Items |
|
|
Restructuring Liability |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Severance & employee-related costs |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
Accelerated depreciation |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Facility and other exit costs |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Disaggregation of Revenue
Revenues for the three and nine months ended September 30, 2024 and 2023 were as follows:
19
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(Amounts in thousands) |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
(As Restated) |
|
||||
Product revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Royalty and other income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
When disaggregating revenue, the Company considered all of the economic factors that may affect its revenues. Because its revenues are from bioprocessing customers, there are no differences in the nature, timing and uncertainty of the Company’s revenues and cash flows from any of its product lines. However, given that the Company’s revenues are generated in different geographic regions, factors such as regulatory, economic and geopolitical developments within those regions could impact the nature, timing and uncertainty of the Company’s revenues and cash flows.
Disaggregated revenue from contracts with customers by geographic region and revenue from significant customers can be found in Note 15, “Segment Reporting,” included in this report.
For more information regarding our product revenue, see Note 8, “Revenue Recognition” included in Part II, Item 8, “Financial Statements and Supplementary Data” to the Company’s Form 10-K/A.
Contract Balances from Contracts with Customers
The following table provides information about receivables and deferred revenue from contracts with customers as of September 30, 2024 and December 31, 2023 (amounts in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
(As Restated) |
|
||
Balances from contracts with customers only: |
|
|
|
|
|
|
||
Accounts receivable |
|
$ |
|
|
$ |
|
||
Deferred revenue (included in accrued liabilities and |
|
$ |
|
|
$ |
|
||
Revenue recognized during periods presented relating to: |
|
|
|
|
|
|
||
The beginning deferred revenue balance |
|
$ |
|
|
$ |
|
||
The timing of revenue recognition, billings and cash collections results in the accounts receivable and deferred revenue balances on the Company’s condensed consolidated balance sheets.
Goodwill
The following table represents the change in the carrying value of goodwill for the nine months ended September 30, 2024 (amounts in thousands):
Balance at December 31, 2023 |
|
$ |
|
|
Measurement period adjustment - Metenova |
|
|
( |
) |
Cumulative translation adjustment |
|
|
|
|
Balance at September 30, 2024 |
|
$ |
|
The Company has not identified any “triggering” events which indicate an impairment of goodwill in the three and nine months ended September 30, 2024.
Intangible assets (As Restated)
Indefinite-lived intangible assets are reviewed for impairment at least annually. There has been
Intangible assets, net, consisted of the following at September 30, 2024:
20
|
|
September 30, 2024 |
|
|||||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Weighted |
|
||||
|
|
(Amounts in thousands) |
|
|
|
|
||||||||||
Finite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Technology – developed |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Patents |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Customer relationships |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Trademarks |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Other intangibles |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total finite-lived intangible assets |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Indefinite-lived intangible asset: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Trademarks |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Intangible assets, net, consisted of the following at December 31, 2023:
|
|
December 31, 2023 |
|
|||||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Weighted |
|
||||
|
|
(Amounts in thousands) |
|
|
|
|
||||||||||
Finite-lived intangible assets: |
|
(As Restated) |
|
|
(As Restated) |
|
|
(As Restated) |
|
|
|
|
||||
Technology – developed |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Patents |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Customer relationships |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Trademarks |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Other intangibles |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total finite-lived intangible assets |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Indefinite-lived intangible asset: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Trademarks |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|||
Amortization expense for finite-lived intangible assets was $
|
|
Estimated |
|
|
|
|
Amortization |
|
|
For the Years Ended December 31, |
|
Expense |
|
|
2024 (remaining three months) |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 and thereafter |
|
|
|
|
Total |
|
$ |
|
|
Inventories, net
Inventories, net consists of the following:
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Amounts in thousands) |
|
|||||
Raw materials |
|
$ |
|
|
$ |
|
||
Work-in-process |
|
|
|
|
|
|
||
Finished products |
|
|
|
|
|
|
||
Total inventories, net |
|
$ |
|
|
$ |
|
||
21
Assets held for sale
During the first quarter of 2024, the Company’s management decided it would explore a sale of the Company’s property located at 119 Fredon Springdale Road, Fredon, New Jersey (the “BioFlex Property”) and engaged a broker to assist with the sale process. As a result of these actions, the Company determined that the sale of the BioFlex Property met the criteria to be classified as assets held-for-sale pursuant to ASC 360, “Impairment and Disposal of Long-Lived Assets” beginning in the first quarter of 2024. The Company recorded $
Property, plant and equipment, net
Property, plant and equipment, net consist of the following:
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Amounts in thousands) |
|
|||||
Land |
|
$ |
|
|
$ |
|
||
Buildings |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Equipment |
|
|
|
|
|
|
||
Furniture, fixtures and office equipment |
|
|
|
|
|
|
||
Computer hardware and software |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total property, plant and equipment |
|
|
|
|
|
|
||
Less - Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Total property, plant and equipment, net |
|
$ |
|
|
$ |
|
||
Accrued liabilities
Accrued liabilities consist of the following:
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Amounts in thousands) |
|
|||||
|
|
|
|
|
(As Restated) |
|
||
Employee compensation |
|
$ |
|
|
$ |
|
||
Deferred revenue |
|
|
|
|
|
|
||
Income taxes payable |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued liabilities |
|
$ |
|
|
$ |
|
||
The carrying value of the Company's Convertible Senior Notes is as follows:
|
|
|
|
|
|
|
||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
(Amounts in thousands) |
|
|||||
1.00% Convertible Senior Notes due 2028: |
|
|
|
|
|
|
||
Principal amount |
|
$ |
|
|
$ |
|
||
Unamortized debt discount |
|
|
( |
) |
|
|
( |
) |
Unamortized debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Carrying amount - Convertible Senior Notes due 2028, net |
|
$ |
|
|
$ |
|
||
0.375% Convertible Senior Notes due 2024: |
|
|
|
|
|
|
||
Principal amount |
|
$ |
|
|
$ |
|
||
Unamortized debt issuance costs |
|
|
|
|
|
( |
) |
|
Carrying amount - Convertible Senior Notes due 2024, net |
|
$ |
|
|
$ |
|
||
1.00% Convertible Senior Notes due 2028
On December 14, 2023, the Company issued $
22
buyers pursuant to Rule 144A under the Securities Act. Pursuant to the Exchange and Subscription Agreements and to the Exchange Transaction, the Company issued $
The Company evaluated the Exchange Transaction and determined approximately $
Proceeds from the Subscription Transactions were $
The Company used $
The 2023 Notes are senior, unsecured obligations of the Company, and bear interest at a rate of
23
but excluding the redemption date, if certain conditions are met in accordance to the 2023 Notes Indenture. For more information on the 2023 Notes, see Note 15, “Convertible Senior Notes,” included in Part II, Item 8, “Financial Statements and Supplementary Data,” to the Company’s Form 10-K/A.
The following table sets forth total interest expense recognized related to the 2023 Notes for the three and nine months ended September 30, 2024 for which there were no comparable amounts for the same periods of 2023:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||
|
|
2024 |
|
|
2024 |
|
||
|
|
(Amounts in thousands, except percentage data) |
|
|||||
Contractual interest expense – 2023 Notes |
|
$ |
|
|
$ |
|
||
Amortization of debt discount – 2023 Notes |
|
|
|
|
|
|
||
Amortization of debt issuance costs – 2023 Notes |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Effective interest rate of the liability component |
|
|
% |
|
|
% |
||
At September 30, 2024 and December 31, 2023, the carrying value of the 2023 Notes was $
0.375% Convertible Senior Notes due 2024
The Company issued $
The following table sets forth total interest expense recognized related to the 2019 Notes:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(Amounts in thousands, except percentage data) |
|
|||||||||||||
Contractual interest expense – 2019 Notes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Amortization of debt issuance costs – 2019 Notes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Effective interest rate of the liability component |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
At December 31, 2023, the carrying value of the 2019 Notes was $
Stock Option and Incentive Plans
Under the Company’s current 2018 Stock Option and Incentive Plan (the “2018 Plan”), the number of shares of the Company’s common stock that were reserved and available for issuance is
24
available for issuance under the Company’s previous equity plans. The shares of common stock underlying any awards under the 2018 Plan and previous equity plans (together, the “Plans”) that are forfeited, canceled or otherwise terminated (other than by exercise) shall be added back to the shares of stock available for issuance under the 2018 Plan. At September 30, 2024,
Former Chief Executive Officer Accounting Modifications
On June 12, 2024, upon approval by the Board, the Company entered into the Fourth Amended and Restated Employment Agreement (the “Transition Agreement”) with the Company's former Chief Executive Officer (“CEO”), Tony J. Hunt, which amends and restates Mr. Hunt's Third Amended and Restated Employment Agreement with the Company dated as of May 26, 2022. Under the terms of the Transition Agreement, Mr. Hunt relinquished his position as the Company's CEO effective September 1, 2024 (the “Transition Date”) and transitioned to a new role as Executive Chair of the Board beginning on the Transition Date (the “CEO Transition”). It is anticipated that Mr. Hunt will continue to be involved in the business as the Executive Chair of the Board until March 2026 and will continue to be employed by the Company as an advisor thereafter, until March 2027.
Under the terms of the Transition Agreement and the award agreements governing Mr. Hunt’s outstanding equity awards, Mr. Hunt’s unvested stock awards will continue to vest in accordance with their original terms. Furthermore, on June 28, 2024, the Company entered into an amendment (the “2024 Award Amendment”) to the equity awards granted to Mr. Hunt in 2024, which consisted of a stock option, restricted stock units (“RSUs”) and performance stock units (“PSUs” and together the “2024 Grants”). Pursuant to the terms of the 2024 Award Amendment, two-thirds of the 2024 Grants were forfeited, which equates to
Although Mr. Hunt’s unvested equity awards continue to vest in accordance with their original terms and there has been no amendment to Mr. Hunt’s outstanding equity awards other than the 2024 Award Amendment, the Company determined that under ASC 718, ”Compensation - Stock Compensation”, the CEO Transition represented a significant reduction in Mr. Hunt’s operating role with the Company for accounting purposes. This determination resulted in a Type III accounting modification of certain of Mr. Hunt’s unvested stock awards (improbable to probable) under ASC 718 (the “Equity Modification”) on June 12, 2024. As a result, for accounting purposes only, Mr. Hunt’s unvested awards were deemed cancelled and a new grant issued for his unvested shares with the value of these awards recalculated using a price of $
As a result of the Equity Modification, the Company recognized stock-based compensation expense for the modified awards of $
The Company determined that the PSUs granted to Mr. Hunt in 2022 and 2023 should be accounted for as a Type IV accounting modification (improbable to improbable) in accordance with ASC 718, because vesting conditions before and after June 12, 2024 were improbable of being achieved.
As a result of the Equity Modification and the forfeiture of the pro-rata portion of Mr. Hunt’s 2024 Grants, the Company recognized $
Stock Issued for Earnout Payments
In April 2024, the Company issued
In March 2024, the Company issued
See Note 5, “Acquisitions”, included in Part II, Item 8, “Financial Statements and Supplementary Data,” to the Company’s Form 10-K/A for additional information on the acquisitions of Avitide and FlexBiosys and the contingent consideration. The shares issued to FlexBiosys represent
25
Agreement) and the shares issued to Avitide represents
Stock-Based Compensation
The following table presents stock-based compensation expense in the Company’s condensed consolidated statements of comprehensive income (loss):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(Amounts in thousands) |
|
|||||||||||||
Cost of goods sold |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock Options
Information regarding option activity for the nine months ended September 30, 2024 under the Plans is summarized below:
|
|
Shares |
|
|
Weighted |
|
|
Weighted- |
|
|
Aggregate |
|
||||
Options outstanding at December 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Granted |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Exercised |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Forfeited/expired/cancelled(1) |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Options outstanding at September 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Options exercisable at September 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Vested and expected to vest at September 30, 2024(2) |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
The weighted average grant date fair value of options granted during the nine months ended September 30, 2024 and 2023 was $
Stock Units
The fair value of stock units is calculated using the closing price of the Company’s common stock on the date of grant. The Company recognizes expense on awards with service-based vesting over the employee’s requisite service period on a straight-line basis. The Company recognizes expense on performance-based awards over the vesting period based on the probability that the
26
performance metrics will be achieved.
|
|
Shares |
|
|
Weighted Average |
|
|
||
Unvested at December 31, 2023 |
|
|
|
|
$ |
|
|
||
Awarded |
|
|
|
|
$ |
|
|
||
Vested(1) |
|
|
( |
) |
|
$ |
|
|
|
Forfeited/cancelled(2) |
|
|
( |
) |
|
$ |
|
|
|
Unvested at September 30, 2024 |
|
|
|
|
$ |
|
|
||
Vested and expected to vest at September 30, 2024(3) |
|
|
|
|
$ |
|
|
||
The aggregate intrinsic value of stock units vested during the nine months ended September 30, 2024 and 2023 was $
The weighted average grant date fair value of stock units granted during the nine months ended September 30, 2024 and 2023 was $
Collaboration Agreements
The Company licenses certain technologies that are, or may be, incorporated into its technology under several agreements and also has entered into several clinical research agreements that require the Company to fund certain research projects. Generally, the license agreements require the Company to pay annual maintenance fees and royalties on product sales once a product has been established using the technologies. Research and development expenses associated with license agreements were immaterial amounts for the three and nine months ended September 30, 2024 and 2023.
In June 2018, the Company secured an agreement with Navigo Proteins GmbH (“Navigo”) for the exclusive co-development of multiple affinity ligands for which the Company holds commercialization rights. The Company is manufacturing and supplying the first of these ligands, NGL-Impact®, exclusively to Purolite Life Sciences, an Ecolab Inc. company (“Purolite”), who is pairing the Company’s high-performance ligand with Purolite’s agarose jetting base bead technology used in their Jetted A50 Protein A resin product. The Company also signed a long-term supply agreement with Purolite for NGL-Impact and other potential additional affinity ligands that may advance from the Company’s Navigo collaboration. In September 2020, the Company and Navigo successfully completed co-development of an affinity ligand targeting the SARS-CoV-2 spike protein, that was used in the purification of vaccines for the COVID-19 pandemic, including emerging variants of the SARS-CoV-2 coronavirus. The Company has proceeded with scaling up and manufacturing this ligand and the development and validation of the related affinity chromatography resin, which is marketed by the Company. In September 2021, the Company and Navigo successfully completed co-development of a novel affinity ligand that addresses aggregation issues associated with pH sensitive antibodies and Fc-fusion proteins. The Company is manufacturing and supplying this ligand, NGL-Impact® HipH, to Purolite. The Navigo and Purolite agreements are supportive of the Company’s strategy to secure and reinforce the Company’s proteins business. The Company made royalty payments to Navigo of $
Legal Proceedings
27
From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims relating to employee relations, business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company's view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probably that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial results.
For the three and nine months ended September 30, 2024, the Company recorded an income tax benefit of $(
A reconciliation of basic and diluted weighted average shares outstanding is as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(Amounts in thousands, except per share data) |
|
|||||||||||||
Numerator: |
|
|
|
|
(As Restated) |
|
|
|
|
|
(As Restated) |
|
||||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares used in computing net (loss) income per share - basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive shares: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Options and stock units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Convertible senior notes(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive potential common shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator for diluted (loss) earnings per share - adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Loss) earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Diluted |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
As the Company was in a net loss position for the three months ended September 30, 2024,
In July 2019, the Company issued $
28
million aggregate principal amount of its 2019 Notes. As provided by the terms of the Second Supplemental Indenture underlying the 2019 Notes, upon conversion of the 2019 Notes, the Company will use a combination of cash and shares of the Company's common stock, settling the par value of the 2019 Notes in cash and any excess conversion premium in shares. On December 14, 2023, the Company exchanged, in a privately negotiated exchange, $
As mentioned above and as provided by the terms of the Second Supplemental Indenture underlying the 2019 Notes, the Company irrevocably elected to settle the conversion obligation for the 2019 Notes in a combination of cash and shares of the Company’s common stock. This means the Company settled the par value of the 2019 Notes in cash and any excess conversion premium in shares. The Company is required to reflect the dilutive effect of the convertible securities by application of the “if-converted” method, which means the denominator of the EPS calculation would include the total number of shares assuming the 2019 Notes had been fully converted at the beginning of the period. Accordingly, the par value of the 2019 Notes was not included in the calculation of diluted earnings per share, but the dilutive effect of the conversion premium was considered in the calculation of diluted earnings per share for any period the 2019 Notes were not matured, using the treasury stock method. The dilutive impact of the 2019 Notes was based on the difference between the Company’s current period average stock price and the conversion price of the 2019 Notes, provided there was a premium. Because the remaining 2019 Notes were redeemed at September 30, 2024 as mentioned above, there was
Certain facilities leased by our subsidiary, Spectrum LifeSciences LLC (“Spectrum”) are owned by the Roy Eddleman Living Trust (the “Trust”). As of September 30, 2024, the Trust owned greater than
Operating segments are components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the CODM in deciding how to allocate resources and assess performance. Our CEO has been identified as the CODM.
The Company views its operations, makes decisions regarding how to allocate resources and manages its business as
The following table represents the Company’s total revenue by customers’ geographic locations:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
(As Restated) |
|
||||
Revenue by customers' geographic locations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
North America |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Europe |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
APAC/Other |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Total revenue |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Concentrations of Credit Risk and Significant Customers
Financial instruments that subject the Company to significant concentrations of credit risk primarily consist of cash and cash equivalents and accounts receivable. Per the Company’s investment policy, cash equivalents and marketable securities are
29
invested in financial instruments with high credit ratings, and credit exposure to any one issue, issuer (with the exception of U.S. Treasury obligations) and type of instrument is limited. At September 30, 2024 and December 31, 2023, the Company had no investments associated with foreign exchange contracts, options contracts or other foreign hedging arrangements.
Concentration of credit risk with respect to accounts receivable is limited to customers to whom the Company makes significant sales. While a reserve for the potential write-off of accounts receivable is maintained, the Company has not written off any significant accounts to date. To control credit risk, the Company performs regular credit evaluations of its customers’ financial condition.
There was
No accounts receivable balance from a specific customer represented
30
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Repligen and its subsidiaries, collectively doing business as Repligen Corporation (“Repligen”, “we”, “our”, or the “Company”) is a global life sciences company that develops and commercializes highly innovative bioprocessing technologies and systems that increase efficiencies and flexibility in the process of manufacturing biological drugs.
As the overall market for biologics continues to grow and expand, our customers – primarily large biopharmaceutical companies and contract development and manufacturing organizations and other life sciences companies (integrators) – face critical production cost, capacity, quality and time pressures. Built to address these concerns, our products help set new standards for the way biologics are manufactured. We are committed to inspiring advances in bioprocessing as a trusted partner in the production of critical biologic drugs – including monoclonal antibodies, recombinant proteins, vaccines and cell and gene therapies – that are improving human health worldwide. Increasingly, our technologies are being implemented to overcome challenges in processing plasmid DNA (a starting material for the production of mRNA) and gene delivery vectors such as lentivirus and adeno-associated viral vectors. For more information regarding our business, products and acquisitions, see Part I, Item 1, “Business”, included in our 2023 Annual Report on Form 10-K, as amended, which was filed with the Securities and Exchange Commission (“SEC”) on November 18, 2024 (“Form 10-K/A”).
We currently operate as one bioprocessing business, with a comprehensive suite of products to serve both upstream and downstream processes in biological drug manufacturing. Building on over 40 years of industry expertise, we have developed a broad and diversified product portfolio that reflects our passion for innovation and the customer-first culture that drives our entire organization. We continue to capitalize on opportunities to maximize the value of our product platform through both organic growth initiatives (internal innovation and leveraging commercial opportunities) and targeted acquisitions.
Restatement
As previously described in the Note 1 to our unaudited condensed consolidated financial statements, we have restated our previously issued unaudited condensed consolidated financial statements and related notes as of December 31, 2023 and for the three and nine months ended September 30, 2023. As a result, the previously reported financial information as of December 31, 2023 and for the three and nine months ended September 30, 2023 in this Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” has been updated to reflect the relevant restatement. Refer to Note 1 in our unaudited condensed consolidated financial statements for additional information related to the restatement, including descriptions of the adjustments and the impacts on our unaudited condensed consolidated financial statements.
Macroeconomic Trends
As a result of our global presence, a significant portion of our revenue and expenses is denominated in currencies other than the U.S. dollar. We are therefore subject to non-U.S. exchange exposure. Exchange rates can be volatile and a substantial weakening or strengthening of foreign currencies against the U.S. dollar could increase or reduce our revenue and gross profit margin and impact the comparability of results from period to period.
We have experienced, and expect to continue to experience, cost inflation, primarily in raw materials, and other supply chain costs, as a result of global macroeconomic trends, including global geopolitical conflicts and labor shortages. Actions taken to mitigate supply chain disruptions and inflation, including price increases and productivity improvements, have generally been successful in offsetting the impact of these trends. In addition, decreasing demand for vaccines for the COVID-19 pandemic, including all subsequent variants of the SARS-CoV-1 coronavirus is driving a reduction in future demand of our products related to these vaccines.
2024 Acquisition
Pending Acquisition of Tantti Laboratory Inc.
On July 29, 2024, we announced that we entered into a definitive agreement to acquire privately-held Tantti Laboratory Inc. (“Tantti”). Tantti, which is headquartered in Taoyuan City, Taiwan, is expected to accelerate our expansion into new modality markets with unique, scalable purification solutions for large molecule biologics.
31
We expect the acquisition of Tantti to be completed in the fourth quarter of 2024 subject to the satisfaction of customary closing conditions, including clearance through the Taiwanese regulatory channel.
2023 Acquisitions
Acquisition of FlexBiosys, Inc.
On April 17, 2023, we completed the acquisition of all of the outstanding equity interests in FlexBiosys, Inc. (“FlexBiosys”), pursuant to an Equity Purchase Agreement with FlexBiosys, TSAP Holdings Inc. (“NJ Seller”), Gayle Tarry and Stanley Tarry, as individuals (collectively with NJ Seller, the “Sellers”), and Stanley Tarry, in his capacity as the representative of the Sellers (the “FlexBiosys Acquisition”).
FlexBiosys, which is headquartered in Branchburg, New Jersey, offers expert design and custom manufacturing of single-use bioprocessing products and a comprehensive range of products that include bioprocessing bags, bottles, and tubing assemblies. These products will complement and expand our fluid management portfolio of offerings.
Acquisition of Metenova Holding AB
On October 2, 2023, we completed the acquisition of all of the outstanding equity interests in Metenova Holding AB (“Metenova”), pursuant to a Share Sale and Purchase Agreement with, inter alia, Metenova for approximately $173 million in cash and the Company's equity. Metenova will further strengthen our fluid management portfolio with its magnetic mixing and drive train technologies that are widely used by global biopharmaceutical companies and contract development and manufacturing organizations.
Critical Accounting Policies and Estimates
A “critical accounting policy” is one which is both important to the portrayal of our financial condition and results and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. For a description of our critical accounting policies that affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations and our significant accounting policies in Note 3, “Summary of Significant Accounting Policies”, to the consolidated financial statements included in our Form 10-K/A.
Results of Operations
The following discussion of the financial condition and results of operations should be read in conjunction with the accompanying condensed consolidated financial statements and the related footnotes thereto.
Revenues (As Restated)
Total revenue for the three and nine months ended September 30, 2024 and 2023 were as follows:
|
|
Three Months Ended |
|
|
Increase/(Decrease) |
|
|
Nine Months Ended |
|
|
Increase/(Decrease) |
|
||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
|
||||||||
|
|
(Amounts in thousands, except for percentage data) |
|
|||||||||||||||||||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(As Restated) |
|
|
|
|
|
|
|
||||||||
Products |
|
$ |
154,834 |
|
|
$ |
141,156 |
|
|
$ |
13,678 |
|
|
|
9.7 |
% |
|
$ |
466,784 |
|
|
$ |
465,630 |
|
|
$ |
1,154 |
|
|
|
0.2 |
% |
Royalty and other |
|
|
37 |
|
|
|
36 |
|
|
|
1 |
|
|
|
2.8 |
% |
|
|
108 |
|
|
|
111 |
|
|
|
(3 |
) |
|
|
(2.7 |
%) |
Total revenue |
|
$ |
154,871 |
|
|
$ |
141,192 |
|
|
$ |
13,679 |
|
|
|
9.7 |
% |
|
$ |
466,892 |
|
|
$ |
465,741 |
|
|
$ |
1,151 |
|
|
|
0.2 |
% |
Product revenues
During the three and nine months ended September 30, 2024, product revenue increased by $13.7 million, or 9.7%, and $1.2 million, or 0.2%, respectively, as compared to the same periods of 2023. The increase in the three-month period is mainly due to the increase in revenue of $12.3 million from our filtration franchise. The increase in the nine-month period is primarily driven by growth in our filtration franchise of $27.5 million, offset by decreasing revenue in our Proteins and Chromatography franchises of $21.9 million and $6.6 million, respectively.
32
Royalty and other revenues
Royalty and other revenues in the three and nine months ended September 30, 2024 and 2023 relate to royalties received from a third-party systems manufacturer associated with our OPUS® chromatography columns. Royalty revenues are variable and are dependent on sales generated by our partners.
Costs of goods sold and operating expenses (As Restated)
Total costs and operating expenses for the three and nine months ended September 30, 2024 and 2023 were comprised of the following:
|
|
Three Months Ended |
Increase/(Decrease) |
|
|
Nine Months Ended |
Increase/(Decrease) |
|
||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
|
||||||||
|
|
(Amounts in thousands, except for percentage data) |
|
|||||||||||||||||||||||||||||
|
|
|
|
|
(As Restated) |
|
|
|
|
|
|
|
|
|
|
|
(As Restated) |
|
|
|
|
|
|
|
||||||||
Cost of goods sold |
|
$ |
77,383 |
|
|
$ |
104,634 |
|
|
$ |
(27,251 |
) |
|
|
(26.0 |
%) |
|
$ |
231,088 |
|
|
$ |
265,786 |
|
|
$ |
(34,698 |
) |
|
|
(13.1 |
%) |
Research and development |
|
|
9,710 |
|
|
|
10,577 |
|
|
|
(867 |
) |
|
|
(8.2 |
%) |
|
|
31,523 |
|
|
|
32,437 |
|
|
|
(914 |
) |
|
|
(2.8 |
%) |
Selling, general and administrative |
|
|
75,610 |
|
|
|
55,582 |
|
|
|
20,028 |
|
|
|
36.0 |
% |
|
|
202,894 |
|
|
|
160,954 |
|
|
|
41,940 |
|
|
|
26.1 |
% |
Contingent consideration |
|
|
— |
|
|
|
(34,292 |
) |
|
|
34,292 |
|
|
|
(100.0 |
%)) |
|
|
— |
|
|
|
(31,266 |
) |
|
|
31,266 |
|
|
|
(100.0 |
%) |
Total costs and operating expenses |
|
$ |
162,703 |
|
|
$ |
136,501 |
|
|
$ |
26,202 |
|
|
|
19.2 |
% |
|
$ |
465,505 |
|
|
$ |
427,911 |
|
|
$ |
37,594 |
|
|
|
8.8 |
% |
Cost of goods sold
Cost of goods sold decreased $27.3 million, or 26.0%, and $34.7 million, or 13.1% for the three and nine months ended September 30, 2024, compared to the same periods of 2023.
During the three and nine months ended September 30, 2023, the Company incurred specific restructuring charges, including a $17.2 million inventory write-off to adjust inventory to net realizable value, a $3.8 million charge for accelerated depreciation on equipment related to manufacturing facilities to be closed and $3.0 million in severance and other charges, as a result of the restructuring activities, which commenced in July 2023, for a total of $24.0 million. See Note 5, “Restructuring Plan” for more information on the Restructuring Plan. Cost of goods decreased further due to less materials consumed in the production process and reduction in overhead costs as a direct result of the restructuring activities.
For the three months ended September 30, 2024, excluding the impact of the restructuring charges accounted for in the three months ended September 30, 2023, material and overhead costs decreased by $5.0 million and labor costs increased by $1.7 million, compared to the same period in 2023. For the nine months ended September 30, 2024, excluding the impact of the restructuring charges accounted for in the three months ended September 30, 2023, material and overhead costs and labor costs decreased by $10.0 million and $0.7 million, respectively.
Gross margin was 50.0% and 25.9% in the three months ended September 30, 2024 and 2023, respectively and gross margin was 50.5% and 42.9% in the nine months ended September 30, 2024 and 2023, respectively. The primary driver of the margin improvement is the non-recurring restructuring charges incurred in the prior year, discussed earlier. In addition, we benefited from higher volume and year-over-year productivity, with some offset from inflation.
Research and development expenses
Research and development (“R&D”) expenses are related to the development of products supporting bioprocessing operations. The expenses include personnel compensation, supplies, and other research expenses. Due to the fact that these various programs share personnel and fixed costs, we have not provided historical costs incurred by project.
R&D expenses decreased $0.9 million, or 8.2%, during the three months ended September 30, 2024, compared to the same period of 2023. The decrease is primarily due to the reduction in product development and R&D research services of $0.6 million.
R&D expenses decreased $0.9 million, or 2.8%, during the nine months ended September 30, 2024, as compared to the same period of 2023, due to the reduction in R&D research services of $1.6 million and laboratory and other R&D supplies of $1.2 million, offset by increased payroll and consulting costs of $1.5 million.
33
R&D expense also includes payments made to expand our proteins product offering through our agreement with Navigo Proteins GmbH (“Navigo”). Such expenses were $1.1 million and $2.9 million for the three and nine months ended September 30, 2024, as compared to $0.8 million and $3.1 million, respectively, for the same periods in 2023, in the form of milestone payments to Navigo.
Selling, general and administrative expenses
Selling, general and administrative (“SG&A”) expenses include the costs associated with selling our commercial products and costs required to support our marketing efforts. It also includes legal, accounting, patent, shareholder services, amortization of intangible assets and other administrative functions.
SG&A costs increased by $20.0 million, or 36.0%, during the three months ended September 30, 2024 and increased $41.9 million, or 26.1%, during the nine months ended September 30, 2024, as compared to the same periods of 2023.
One of the primary drivers of this increase was the incremental stock compensation expense of $17.4 million for the three months ended September 30, 2024 and $22.4 million for the nine months ended September 30, 2024, associated with the modification of our former Chief Executive Officer’s (“CEO”) unvested equity awards resulting from the announcement of his transition from CEO to Executive Chair of our Board, which was announced on June 12, 2024 and effective September 1, 2024. For more information on the former CEO’s transition to Executive Chair of our Board, see Note 10, “Stockholders’ Equity - Chief Executive Officer Accounting Modifications” included in this report.
Excluding the impact of the incremental stock compensation expense mentioned above, SG&A expenses for the three months ended September 30, 2024 increased by $2.6 million which is predominantly driven by increased incentive and commission expenses of $2.1 million and incremental intangible asset amortization of $1.0 million.
Excluding the impact of the incremental stock compensation expense mentioned above, SG&A expenses for the nine months ended September 30, 2024 increased by $19.5 million which is predominantly driven by increased incentive and commission expenses of $9.8 million, incremental salary expense of $5.2 million and incremental intangible asset amortization of $3.2 million.
The increase in SG&A costs also reflects the results of the operations of FlexBiosys and Metenova, which have been included in our consolidated results of operations since the acquisition dates in April 2023 and October 2023, respectively.
Contingent consideration
Contingent consideration expense represents the change in fair value of the contingent consideration obligation included in current and noncurrent contingent consideration on the condensed consolidated balance sheets as of the end of each period. Remeasurement of the contingent consideration obligation is done each quarter and the carrying value of the obligation is adjusted to the current fair value through our condensed consolidated statements of comprehensive income (loss). Expected results and a change in market inputs used to calculate the discount rate, resulted in a change reported for the three and nine months ended September 30, 2023 of $(34.3) million and $(31.3) million, respectively. No adjustment was recorded for the three and nine months ended September 30, 2024 as management’s assessment was that the balances of the contingent consideration obligations already represented fair value.
34
Other income, net
The table below provides detail regarding our other income, net:
|
|
Three Months Ended |
|
|
Increase/(Decrease) |
|
|
Nine Months Ended |
|
|
Increase/(Decrease) |
|
||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
|
||||||||
|
|
(Amounts in thousands, except for percentage data) |
|
|||||||||||||||||||||||||||||
|
|
|
|
|
(As Restated) |
|
|
|
|
|
|
|
|
|
|
|
(As Restated) |
|
|
|
|
|
|
|
||||||||
Investment income |
|
$ |
9,130 |
|
|
$ |
6,662 |
|
|
$ |
2,468 |
|
|
|
37.0 |
% |
|
$ |
27,534 |
|
|
$ |
18,112 |
|
|
$ |
9,422 |
|
|
|
52.0 |
% |
Interest expense |
|
|
(5,122 |
) |
|
|
(408 |
) |
|
|
(4,714 |
) |
|
|
1155.4 |
% |
|
|
(15,269 |
) |
|
|
(1,227 |
) |
|
|
(14,042 |
) |
|
|
1144.4 |
% |
Amortization of debt issuance costs |
|
|
(429 |
) |
|
|
(459 |
) |
|
|
30 |
|
|
|
(6.5 |
%) |
|
|
(1,432 |
) |
|
|
(1,373 |
) |
|
|
(59 |
) |
|
|
4.3 |
% |
Other (expenses) income |
|
|
3,104 |
|
|
|
895 |
|
|
|
2,209 |
|
|
|
246.8 |
% |
|
|
(647 |
) |
|
|
1,500 |
|
|
|
(2,147 |
) |
|
|
(143.1 |
%) |
Total other income, net |
|
$ |
6,683 |
|
|
$ |
6,690 |
|
|
$ |
(7 |
) |
|
|
(0.1 |
%) |
|
$ |
10,186 |
|
|
$ |
17,012 |
|
|
$ |
(6,826 |
) |
|
|
(40.1 |
%) |
Investment income
Investment income includes income earned on invested cash balances. Our investment income increased by $2.5 million and $9.4 million for the three and nine months ended September 30, 2024, as compared to the same periods of 2023 due to an increase in interest rates on higher average invested cash balances since September 30, 2023. Offsetting this increase was a decrease in interest earned on U.S. treasury bills purchased at the end of 2022, for which there was no comparable amount recorded in 2024. We expect investment income to vary based on changes in the amount of funds invested and fluctuation of interest rates.
Interest expense
Interest expense for the three and nine months ended September 30, 2024 is primarily from contractual coupon interest on the convertible debt outstanding as of September 30, 2024. On December 14, 2023, we entered into a privately negotiated exchange and subscription agreement with certain holders of our 0.375% Convertible Senior Notes due 2024 (the “2019 Notes”) and certain new investors pursuant to which we issued $600.0 million aggregate principal amount of 1.00% Convertible Senior Notes due 2028 (the “2023 Notes”). Interest expense of the 2019 Notes for the three months ended September 30, 2024 was immaterial. Interest expense for the nine months ended September 30, 2024 was $0.1 million of interest on the 2019 Notes, compared to $0.3 million and $0.8 million, respectively of interest expense on the 2019 Notes in the same periods of 2023. Interest expense for the three and nine months ended September 30, 2024 also includes $1.5 million and $4.5 million, respectively, of contractual coupon interest on the 2023 Notes as well as $3.5 million and $10.2 million, respectively, in accretion of the $82.1 million debt discount on the modified notes, which includes the accretion of an increase in principal and the accretion of increased fair value of the conversion option for the three and nine months ended September 30, 2024, for which there were no comparable costs in the same periods of 2023. See Note 9, “Convertible Senior Notes,” to our condensed consolidated financial statements included in this report for more information on this transaction.
Amortization of debt issuance costs
Transaction costs related to the issuance of the 2019 Notes and the 2023 Notes are amortized to amortization of debt issuance costs on the condensed consolidated statements of comprehensive income (loss). For the nine months ended September 30, 2024, amortization of debt issuance costs included $0.2 million of amortization of costs related to the 2019 Notes. For the three and nine months ended September 30, 2024, amortization of debt issuance costs included $0.4 million and $1.2 million, respectively, of amortization of costs related to the 2023 Notes. For the three and nine months ended September 30, 2023, amortization of debt issuance costs included $0.5 million and $1.4 million, respectively, of amortization related to the 2019 Notes.
Other (expenses) income
The change in other (expenses) income for the three and nine months ended September 30, 2024, compared to the same periods of 2023, is primarily attributable to realized and unrealized foreign currency gains and losses related to transactions with customers and vendors, as well as the revaluation impact of intercompany loans with subsidiaries.
Income tax provision (As Restated)
Income tax provision for the three and nine months ended September 30, 2024 and 2023 was as follows:
35
|
|
Three Months Ended |
|
|
Increase/(Decrease) |
|
|
Nine Months Ended |
|
|
Increase/(Decrease) |
|
||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|
% Change |
|
||||||||
|
|
(Amounts in thousands, except for percentage data) |
|
|||||||||||||||||||||||||||||
|
|
|
|
|
(As Restated) |
|
|
|
|
|
|
|
|
|
|
|
(As Restated) |
|
|
|
|
|
|
|
||||||||
Income tax provision |
|
$ |
(495 |
) |
|
$ |
(5,542 |
) |
|
$ |
5,047 |
|
|
|
(91.1 |
%) |
|
$ |
3,218 |
|
|
$ |
2,796 |
|
|
$ |
422 |
|
|
|
15.1 |
% |
Effective tax rate |
|
|
43.0 |
% |
|
|
(48.7 |
%) |
|
|
|
|
|
|
|
|
27.8 |
% |
|
|
5.1 |
% |
|
|
|
|
|
|
||||
For the three and nine months ended September 30, 2024, we recorded an income tax benefit of $(0.5) million and an income tax expense of $3.2 million, respectively. The effective tax rate was 43.0% and 27.8% for the three and nine months ended September 30, 2024, respectively, and is based upon the estimated income for the year ending December 31, 2024 and the composition of income in different jurisdictions. The difference in effective tax rates between the periods was primarily due to lower income before income taxes, nondeductible stock compensation and nonrecurring tax benefits from nontaxable contingent consideration and a deductible foreign exchange loss on certain long-term intercompany debt. Our effective tax rates for the three and nine months ended September 30, 2024 were higher than the U.S. statutory rate of 21% primarily due to nondeductible stock compensation partially offset by stock windfall tax benefits.
For the three and nine months ended September 30, 2023, we recorded an income tax benefit of $(5.5) million and an income tax expense of $2.8 million, respectively. The effective tax rate was (48.7%) and 5.1% for the three and nine months ended September 30, 2023, respectively, and is based upon the estimated income for the year ending December 31, 2023 and the composition of income in different jurisdictions. The difference in effective tax rates between the periods was primarily due to lower income before income taxes and increased benefits from business tax credits, nontaxable contingent consideration and a deductible foreign exchange loss on certain long-term intercompany debt, partially offset by lower foreign-derived intangible income and nondeductible executive compensation. Our effective tax rates for three and nine months ended September 30, 2023 were lower than the U.S. statutory rate of 21% primarily due to business tax credits, foreign-derived intangible income, windfall tax benefits on stock option exercise and the vesting of stock units, nontaxable contingent consideration and a deductible foreign exchange loss on certain long-term intercompany debt.
In 2021, the Organization of Economic Co-operation and Development announced an Inclusive Framework on Base Erosion and Profit Sharing with the goal of achieving consensus around substantial changes to international tax policies, including the implementation of a minimum global effective tax rate of 15%. We continue to evaluate the impacts of enacted legislation and pending legislation in the tax jurisdictions in which we operate. While various countries have implemented the legislation as of January 1, 2024, we do not expect a resulting material impact to our income tax provision for the 2024 fiscal year.
Liquidity and Capital Resources (Restated)
We have financed our operations primarily through revenues derived from product sales, the issuance of the 2019 Notes in July 2019, the 2023 Notes in December 2023 and the issuance of common stock in our December 2020, July 2019 and May 2019 public offerings. Our revenue for the foreseeable future will primarily be limited to our bioprocessing product revenue.
On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. Subsequently, the U.S. Treasury, Federal Reserve and FDIC announced that SVB depositors would have access to all of their money. We have a banking relationship with SVB and hold cash, cash equivalents and marketable securities of $0.3 million as of September 30, 2024 in SVB depository accounts to cover short-term operational payments. While we have not experienced any losses in such accounts, the failure of SVB in 2023 caused us to utilize our accounts at other financial institutions in order to mitigate potential operational risks stemming from the temporary inability to access funds in our SVB operating accounts. As a result of bank failures, such as SVB, our access to funding sources in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired and could negatively impact the financial institutions with which we have direct arrangements, or the financial services industry or economy in general.
At September 30, 2024, we had cash and cash equivalents of $784.0 million compared to cash and cash equivalents of $751.3 million at December 31, 2023.
Working capital increased by $76.8 million to $1,023.2 million at September 30, 2024 from $946.4 million at December 31, 2023 due to the various changes noted below.
36
On December 14, 2023, the Company issued $600.0 million aggregate principal amount of its 2023 Notes in a private placement pursuant to separate, privately negotiated exchange and subscription agreements (the “Exchange and Subscription Agreements”) with a limited number of holders of its outstanding 2019 Notes and certain other qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (“Securities Act”). Pursuant to the Exchange and Subscription Agreements, the Company exchanged $217.7 million of its 2019 Notes for $309.9 million aggregate principal amount of the 2023 Notes (the “Exchange Transaction”) and issued $290.1 million aggregate principal amount of the 2023 Notes (the “Subscription Transactions”) for $290.1 million in cash. Proceeds from the Subscription Transactions amounted to $276.1 million after debt issuance costs of $13.9 million. The 2023 Notes are senior, unsecured obligations of the Company, and bear interest at a rate of 1.00% per year. Interest is payable semi-annually in arrears on each June 15 and December 15, commencing on June 15, 2024. The 2023 Notes will mature on December 15, 2028, unless earlier redeemed, repurchased or converted. During the third quarter of 2024, the closing price of the Company's common stock did not exceed 130% of the conversion price of the 2023 Notes for more than 20 trading days of the last 30 consecutive trading days of the quarter. As a result, the 2023 Notes are not convertible at the option of the holders of the 2023 Notes during the fourth quarter of 2024, the quarter immediately following the quarter when the conditions are met, as stated in the indenture governing the 2023 Notes. For more information on the 2023 Notes, see Note 9, "Convertible Senior Notes," to this report.
The remaining 2019 Notes matured and were paid off in full on July 15, 2024. As mentioned above, the Company used net proceeds from the Exchange Transaction to fund the repayment of the 2019 Notes at maturity and to pay accrued and unpaid interest with respect to such notes. The Company irrevocably elected to settle the conversion of the 2019 Notes using a combination of cash and the Company’s common stock, settling the par value of the 2019 Notes in cash and any excess conversion premium in shares. In connection with the conversion, the Company paid $69.6 million in cash, which included principal and accrued interest, and issued 100,942 shares of the Company’s common stock representing the conversion premium.
Cash Flows
|
|
Nine Months Ended |
|
|
Increase/(Decrease) |
|
||||||
|
|
2024 |
|
|
2023 |
|
|
$ Change |
|
|||
|
|
(Amounts in thousands) |
|
|||||||||
Cash provided by (used in): |
|
|
|
|
(As Restated) |
|
|
|
|
|||
Operating activities |
|
$ |
136,218 |
|
|
$ |
84,853 |
|
|
$ |
51,365 |
|
Investing activities |
|
|
(21,621 |
) |
|
|
46,630 |
|
|
|
(68,251 |
) |
Financing activities |
|
|
(84,351 |
) |
|
|
(19,166 |
) |
|
|
(65,185 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
2,395 |
|
|
|
(4,996 |
) |
|
|
7,391 |
|
Net increase in cash and cash equivalents |
|
$ |
32,641 |
|
|
$ |
107,321 |
|
|
$ |
(74,680 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Operating activities (As Restated)
For the nine months ended September 30, 2024, our operating activities provided cash of $136.2 million reflecting net income of $8.4 million and non-cash charges totaling $113.3 million primarily related to depreciation and intangible amortization, amortization of debt discount and issuance costs, stock-based compensation, deferred income taxes and operating lease right of use asset amortization. Accounts receivable increased by $4.6 million, while inventory manufactured decreased by $20.1 million. Accounts payable and accrued liabilities had a net increase of $7.1 million, primarily due to an increase in unearned revenue and accrued employee payroll and bonuses, and there was a net increase in operating lease liability due to new operating leases entered into during 2024 providing cash of $5.8 million. Prepaid expenses increased by $1.8 million, primarily related to prepayment of corporate taxes. The remaining cash used in operating activities resulted from unfavorable changes in various other working capital accounts.
For the nine months ended September 30, 2023, our operating activities provided cash of $84.9 million reflecting net income of $52.0 million and non-cash charges totaling $40.7 million primarily related to depreciation and amortization, contingent consideration fair value adjustments, deferred income taxes, non-cash interest income, stock-based compensation charges and operating lease right of use asset amortization. A decrease in accounts receivable provided $8.3 million of cash and was primarily driven by lower revenue. Additionally, we had a decrease in inventory manufactured that provided $26.0 million of which $17.2 million was related to the Restructuring Plan. An increase in prepaid expenses, primarily related to prepaid taxes and subscriptions consumed $12.7 million. A decrease in accounts payable and accrued expenses consumed $21.3 million and was due to the timing of payments to vendors as well as the payment of employee bonuses related to 2022 during the nine months
37
ended September 30, 2023. The remaining cash provided by operating activities resulted from favorable changes in various other working capital accounts.
Investing activities
Our investing activities consumed $21.6 million of cash during the nine months ended September 30, 2024, which was primarily driven by capital expenditures of $22.9 million during 2024. Included in this amount were capitalized costs related to our internal-use software for the nine months ended September 30, 2024.
Our investing activities provided $46.6 million of cash during the nine months ended September 30, 2023, primarily due to the maturity of our short-term investment in U.S. treasury securities in June 2023, which provided cash of $102.3 million. We used $27.8 million in cash (net of cash received) for the FlexBiosys Acquisition. Capital expenditures consumed $27.8 million in 2023 as we continue to increase our manufacturing capacity worldwide. Of these expenditures, $2.7 million represented capitalized costs related to our internal-use software for the nine months ended September 30, 2023.
Financing activities
Our financing activities consumed $84.4 million of cash for the nine months ended September 30, 2024, driven primarily by the settlement of the 2019 Notes of $69.9 million, of which $69.6 million occurred in the three months ended September 30, 2024. A further $9.4 million was disbursed in cash for shares withheld to cover employee income tax due upon the vesting and release of restricted stock units, and the payments of $2.2 million and $5.2 million to settle the cash portion of the contingent earnout obligations related to our acquisition of FlexBiosys in April 2023 and Avitide in September 2021, respectively. These payments were partially offset by proceeds received from stock option exercises during the period.
Our financing activities consumed $19.2 million of cash for the nine months ended September 30, 2023, primarily for $12.2 million in cash disbursed for shares withheld to cover employee income tax due upon the vesting and release of restricted stock units and the payment of $7.3 million to settle the cash portion of the First Earnout Year contingent earnout obligation related to our acquisition of Avitide in September 2021. This was partially offset by proceeds received from stock option exercises during the period.
Effect of exchange rate changes on cash and cash equivalents
The effect of exchange rate changes on cash during the nine months ended September 30, 2024 is a result of using multiple currencies across the group, with the Euro and Swedish Krona being significant currencies for the group outside of the US Dollar.
Our future capital requirements will depend on many factors, including the following:
Absent acquisitions of additional products, product candidates or intellectual property and absent the need to satisfy any debt conversions, we believe our current cash balances are adequate to meet our cash needs for at least the next 24 months from the
38
date of this filing. We expect operating expenses for the remainder of the fiscal year to increase as we continue to expand our bioprocessing business. We expect to incur continued spending related to the development and expansion of our bioprocessing product lines and expansion of our commercial capabilities for the foreseeable future. Our future capital requirements may include, but are not limited to, purchases of property, plant and equipment, the acquisition of additional bioprocessing products and technologies to complement our existing manufacturing capabilities and continued investment in our intellectual property portfolio.
We plan to continue to invest in our bioprocessing business and in key R&D activities associated with the development of new bioprocessing products. We actively evaluate various strategic transactions on an ongoing basis, including acquiring products, technologies or businesses that would complement our existing portfolio. We continue to seek to acquire such potential assets that may offer us the best opportunity to create value for our shareholders. In order to acquire such assets, we may need to seek additional financing to fund these investments. If our available cash balances and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, including because of any such acquisition-related financing needs, the need to fund debt conversions, or due to lower demand for our products, we may seek to sell common or preferred equity or convertible debt securities, enter into a credit facility or another form of third-party funding, or seek other debt funding. The sale of equity and convertible debt securities may result in dilution to our shareholders, and those securities may have rights senior to those of our common shares. If we raise additional funds through the issuance of preferred stock, convertible debt securities or other debt financing, these securities or other debt could contain covenants that would restrict our operations. Any other third-party funding arrangement could require us to relinquish valuable rights. We may require additional capital beyond our currently anticipated amounts. Additional capital may not be available on reasonable terms, if at all.
Net Operating Loss Carryforwards (As Restated)
At December 31, 2023, the Company had federal net operating loss carryforwards of $31.1 million, state net operating loss carryforwards of $4.8 million and foreign net operating loss carryforwards of $4.9 million. The state net operating loss carryforwards will expire at various dates through 2043, while the federal and foreign net operating loss carryforwards have unlimited carryforward periods and do not expire. We had federal and state business tax credits carryforwards of $5.8 million available to reduce future federal and state income taxes. The business tax credits carryforwards will expire at various dates through December 2043. Net operating loss carryforwards and available tax credits are subject to review and possible adjustment by the Internal Revenue Service, state and foreign jurisdictions and may be limited in the event of certain changes in the ownership interest of significant shareholders.
Effects of Inflation
Our assets are primarily monetary, consisting mainly of cash and cash equivalents. Because of their liquidity, these assets are not directly affected by inflation. Since we intend to retain and continue to use our equipment, furniture, fixtures and office equipment, computer hardware and software and leasehold improvements, we believe that the incremental inflation related to replacement costs of such items will not materially affect our operations. However, the rate of inflation affects our expenses, such as those for employee compensation and contract services, which could increase our level of expenses and the rate at which we use our resources.
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements in this Quarterly Report on Form 10-Q do not constitute guarantees of future performance. Investors are cautioned that statements in this Quarterly Report on Form 10-Q which are not strictly historical statements, including, without limitation, express or implied statements or guidance regarding current or future financial performance and position, potential impairment of future earnings, management’s strategy, plans and objectives for future operations or acquisitions, expectations and beliefs for recently-completed acquisitions, product development and sales, restructuring activities and the expected results thereof, product candidate research, development and regulatory approval, SG&A expenditures, intellectual property, development and manufacturing plans, availability of materials and product and adequacy of capital resources, our financing plans and the projected continued impact of, and response to, the COVID-19 pandemic constitute forward-looking statements. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which the Company operates, and management’s beliefs and assumptions. The
39
Company undertakes no obligation to publicly update or revise the statements in light of future developments. In addition, other written and oral statements that constitute forward-looking statements may be made by the Company or on the Company’s behalf. Words such as “expect,” “seek,” “anticipate,” “intend,” “plan,” “believe,” “could,” “estimate,” “may,” “target,” “project,” or variations of such words and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including, without limitation, risks associated with the following: the success of current and future collaborative or supply relationships, including our agreements with Cytiva, MilliporeSigma and Purolite Life Sciences, an Ecolab Inc. company; our ability to successfully grow our bioprocessing business, including as a result of acquisitions, commercialization or partnership opportunities, and our ability to develop and commercialize products; our ability to obtain required regulatory approvals; our compliance with all U.S. Food and Drug Administration regulations, our ability to obtain, maintain and protect intellectual property rights for our products; the risk of litigation regarding our patent and other intellectual property rights; the risk of litigation with collaborative partners; our manufacturing capabilities and our dependence on third-party manufacturers and value-added resellers; our ability to hire and retain skilled personnel; the market acceptance of our products, reduced demand for our products that adversely impacts our future revenues, cash flows, results of operations and financial condition; our ability to integrate acquired businesses successfully into our business and achieve the expected benefits of the acquisitions; our ability to compete with larger, better financed life sciences companies; our history of losses and expectation of incurring losses; our ability to generate future revenues; our ability to successfully integrate our recently acquired businesses; our ability to raise additional capital to fund potential acquisitions; risks related to the restatement of our consolidated financial statements included in our Form 10-K/A and for other periods impacted by the restatement identified in our Current Report on Form 8-K filed with the SEC on September 18, 2024; our plans to mitigate our material weaknesses in our internal controls over financial reporting; the impact of the restatement on our reputation and investor confidence in us and the increased possibility of legal proceedings and regulatory inquiries; our volatile stock price; and the effects of our anti-takeover provisions. Further information on potential risk factors that could affect our financial results are included in the filings made by us from time to time with the SEC including under the sections entitled “Risk Factors” in our Form 10-K/A.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For information regarding our exposure to certain market risks, see Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K/A for the year ended December 31, 2023. There were no material changes to our market risk exposure during the three months ended September 30, 2024.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company’s management is responsible for establishing and maintaining adequate DCPs (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). DCPs are those controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company carried out an evaluation as of September 30, 2024 of the effectiveness of the design and operation of the Company’s DCPs pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). Based on such evaluation, the principal executive officer and principal financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective because of the previously reported material weaknesses in our internal control over financial reporting, which are described in Part II, Item 9A, “Controls and Procedures” of our Annual Report on Form 10-K/A for the year ended December 31, 2023.
Material Weaknesses in Internal Control Over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be
40
prevented or detected on a timely basis. As of December 31, 2023 and disclosed in the Company’s Form 10-K/A, the Company identified the following material weaknesses in internal control over financial reporting:
As of September 30, 2024, the Company has not remediated these material weaknesses.
Remediation Plan for Material Weaknesses
As previously disclosed in the Form 10-K/A, management is implementing remedial actions under the oversight of the Audit Committee of the Board of Directors to address the identified deficiencies.
Our income tax remediation efforts include the following activities:
Our revenue recognition remediation efforts include the following activities:
We will continue to monitor the design and operating effectiveness of these and other processes, procedures and controls and make any further changes management determines appropriate.
Changes in Internal Control
Except for the material weaknesses described above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
41
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations, nor are we aware of any governmental proceedings involving potential monetary sanctions of $0.3 million or more.
ITEM 1A. RISK FACTORS
The matters discussed in this Quarterly Report on Form 10-Q (“Form 10-Q”) include forward-looking statements that involve risks or uncertainties. These statements are neither promises nor guarantees, but are based on various assumptions by management regarding future circumstances, over many of which Repligen has little or no control. A number of important risks and uncertainties, including those identified under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K/A for the period ended December 31, 2023 (“Form 10-K/A”) and in subsequent filings, could cause our actual results to differ materially from those in the forward-looking statements.
As contemplated in Item 1A, entitled “Risk Factors,” in the Company's Form 10-K/A, the Company has in the past and may in the future experience data security incidents. If successful, these attacks could affect service reliability and threaten the confidentiality, integrity, and availability of information. The Company is updating the risk factor captioned ”Our internal computer systems, or those of our customers, collaborators or other contractors, may be subject to cyber-attacks or security breaches, which could result in a material disruption of our product development programs” to reference the following incident:
As described on the Current Report on Form 8-K filed on July 15, 2024, on July 9, 2024, the Company discovered that an unauthorized third party had accessed certain files on the Company’s information systems. Based on information currently known as of the date of this Form 10-Q and management’s current assessment of quantitative and qualitative factors (including reputational harm, adverse impacts on relationships with vendors, customers and other business partners, and the impact of the foregoing on the Company’s stockholders), the Company does not believe this incident will have a material impact on its financial condition and results of operations. In addition, as of the date this Form 10-Q other than the Company’s response and remediation activities, the incident has not had an impact on the Company’s business or operations.
Other than the foregoing, there have been no material changes to the risk factors disclosed in Item 1A, entitled “Risk Factors,” in the Company’s Form 10-K/A.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Plans
None of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934)
42
ITEM 6. EXHIBITS
Exhibit Number |
|
Document Description |
|
|
|
3.1 |
|
|
|
|
|
3.2 |
|
|
|
|
|
3.3 |
|
|
|
|
|
3.4 |
|
|
|
|
|
10.1† |
|
|
|
|
|
31.1 + |
|
|
|
|
|
31.2 + |
|
|
|
|
|
32.1 * |
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
|
|
|
104 |
|
Cover page formatted as Inline XBRL and contained in Exhibits 101. |
+ Filed herewith.
* Furnished herewith.
† Indicates a management contract or a compensatory plan, contract or arrangement.
43
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
REPLIGEN CORPORATION |
|
|
|
|
|
Date: November 18, 2024 |
|
By: |
/S/ OLIVIER LOEILLOT
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Olivier Loeillot |
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Chief Executive Officer |
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(Principal executive officer) |
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Repligen Corporation |
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Date: November 18, 2024 |
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By: |
/S/ JASON K. GARLAND
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Jason K. Garland |
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Chief Financial Officer |
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(Principal financial officer) |
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Repligen Corporation |
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