TIDMMXCT TIDMTTM
RNS Number : 8683W
MaxCyte, Inc.
24 April 2019
MaxCyte, Inc.
("MaxCyte" or the "Company")
MaxCyte Reports Final Results for Year Ended 31 December
2018
3/4 First CARMA(TM) cell therapeutic programme targeting
treatment of solid tumours has advanced into clinical
development
3/4 Partner of choice for non-viral cell therapy demonstrated by
recent commercial deals with CRISPR Therapeutics, Precision
BioSciences, and Kite, a Gilead Company
3/4 Gaining commercial momentum: more than 70 partnered programmes
Gaithersburg, Maryland - 24 April 2019: MaxCyte (LSE: MXCT,
MXCS), the global clinical-stage cell-based medicines and life
sciences company, today announces its full-year audited results for
the year ended 31 December 2018.
HIGHLIGHTS (including post-period-end highlights)
All financial amounts are in USD unless noted otherwise
-- First patient treated in Phase I dose-escalation clinical
trial with MCY-M11, a wholly-owned therapeutic candidate from
MaxCyte's CARMA platform:
-- MaxCyte is one of a small number of companies with a cell
therapy for solid tumours in the clinic
-- Successful dosing represents MaxCyte's unique approach to
chimeric antigen receptor ("CAR") therapy, including its rapid
manufacturing process
-- A poster on the Phase I trial in progress, highlighting key
aspects of the study design, presented at the American Association
for Cancer Research ("AACR") Annual Meeting in March 2019
-- An oral presentation on the CARMA manufacturing process to be
presented by MaxCyte at the American Society of Gene and Cell
Therapy 22(nd) Annual Meeting
-- Acceleration of CARMA programme: second trial planned to commence in 2019
-- Significant commercial momentum:
-- New commercial agreements signed with CRISPR Therapeutics and
Precision BioSciences - taking cell therapy partnered programme
licenses to more than 70 including more than 35 partnered
programmes licensed for clinical development
-- Multi-drug clinical and commercial agreement with Kite, a
Gilead Company, announced in March 2019 to enable non-viral cell
engineering for development of multiple CAR-T drug candidates for
up to ten targets, expanding upon the research agreement entered
into in November 2018
-- Leadership position established in clinical non-viral cell
engineering for off-the-shelf CAR-T oncology medicines and for
inherited genetic diseases:
-- Aggregate potential milestone payments from the Company's
commercial agreements signed to date could result in receipt of
more than $250m; significant additional potential milestones from
the recent Kite commercial agreement
-- MaxCyte operates in the fastest growing segment of
healthcare: funding for regenerative medicine increased 73% to
US$13.3bn in 2018
-- In April 2019, launched next generation of
commercially-oriented instruments and consumables, under the
ExPERT(TM) brand. Includes three instrument formats with enhanced
design and functionality, coupled with a wider range of consumables
that offer expanded utility from early research to clinical and
commercial use
Financial Highlights
Information presented below is as of 31 December 2018 and 31
December 2017, respectively.
Key metrics 2018 2017
Revenue $16.7m $14.0m
--------- ---------
Gross margin 89% 90%
--------- ---------
CARMA investment ($6.5m) ($7.5m)
--------- ---------
Total operating
expenses ($23.3m) ($21.8m)
--------- ---------
Adjusted EBITDA
before CARMA* ($0.8m) ($1.2m)
--------- ---------
Net profit (loss)
before CARMA investment ($2.3m) ($2.4m)
--------- ---------
Total assets (as
of 31 December) $24.3m $31.4m
--------- ---------
Cash and cash
equivalents (as
of 31 December) $14.4m $25.3m
--------- ---------
* Excluding associated non-cash stock-based compensation of
$0.4m and $0.8m in 2017 and 2018, respectively.
-- 2018 revenues increased approximately 19% year over year:
-- Revenues driven by high-margin recurring annual fees from
cell therapeutics business, complemented by recurring revenues from
sale of proprietary single-use disposable processing assemblies
-- Significant medium-term and long-term upside from potential
milestones from partnered therapeutic development programs:
currently four commercial deals in place
-- Revenue accelerated in the second half of 2018 increasing
approximately 25% over the second half of 2017 ($9.7m compared to
$7.8m)
-- Four-year revenue compounded annual growth rate ("CAGR") now 24%
-- Successful fundraise of GBP10.0m (before expenses) completed on 1 March 2019
Commenting on the 2018 Annual Results, Doug Doerfler, CEO of
MaxCyte, said: "Our core markets, cell therapy and immuno-oncology,
continue to expand rapidly as do applications for gene-editing
technologies in the development of various therapies for the
treatment of inherited genetic diseases and a number of cancers.
Our unique technology places MaxCyte at the forefront of a wide
variety of programmes with leading global partners across this
exciting and increasingly valuable area of healthcare. As a result
of our targeted investment strategy, we've made strong progress
with our CARMA programme during the last year. We advanced MCY-M11,
our lead CARMA candidate, through to the filing of our
investigational drug application ("IND") and the initiation of
dosing of patients in our US-based Phase I clinical trial.
"MaxCyte has established itself as a world leader in non-viral
cell engineering - offering a rapid and efficient means of
delivering the future generation of cell-based therapies, which is
underlined by the Company's recent commercial and research
partnerships with leading biotech companies including Kite, a
Gilead Company; CRISPR Therapeutics; and Precision BioSciences.
This is a very exciting time for the Company and our team, and we
expect 2019 to be a pivotal year for MaxCyte. We have launched our
next generation of instruments and consumables under the newly
branded ExPERT product line. We are also bringing a new generation
of chimeric antigen receptor-based cancer treatments into the
clinic for the first time. In addition, we continue to enable our
partners to make important medical advancements. We look forward to
the future with great confidence."
Conference call and Webcast for analysts
A briefing for analysts will be held at 11.00 am BST on
Wednesday 24 April 2019 at the offices of Panmure Gordon & Co.,
One New Change, London, EC4M 9AF. There will be a simultaneous live
webcast and conference call with Q&A, and the presentation will
be available on MaxCyte's website at https://www.maxcyte.com/
Dial-in details:
Participant dial-in: 08003767922
International dial-in: +44 (0) 2071 928000
Participant code: 7273585
To register for the webcast visit:
https://edge.media-server.com/m6/p/6dpova45
A replay file will be made available shortly afterwards via the
Company website.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No. 596/2014.
About MaxCyte
MaxCyte is a clinical-stage global cell-based medicines and life
sciences company applying its proprietary cell engineering platform
to deliver the advances of cell-based medicine to patients with
high unmet medical needs. MaxCyte is developing novel CARMA
therapies for its own pipeline, with its first drug candidate in a
Phase I clinical trial. CARMA is MaxCyte's mRNA-based proprietary
therapeutic platform for autologous cell therapy for the treatment
of solid cancers. In addition, through its life sciences business,
MaxCyte leverages its Flow Electroporation Technology to enable its
biopharmaceutical partners to advance the development of innovative
medicines, particularly in cell therapy. MaxCyte has placed its
flow electroporation instruments worldwide, with all of the top ten
global biopharmaceutical companies. The Company now has more than
70 partnered programme licenses in cell therapy with more than 35
licensed for clinical use, including four announced commercial
licenses covering potentially more than 30 products with aggregate
potential milestones of more than $250m plus significant additional
potential milestones from the multi-drug commercial agreement with
Kite announced 1 March 2019. With its robust delivery technology
platform, MaxCyte helps its partners to unlock the full potential
of their products. For more information, visit www.maxcyte.com.
For further information, please contact:
MaxCyte Inc.
Doug Doerfler, Chief Executive Officer
Ron Holtz, Chief Financial Officer +1 301 944 1660
Nominated adviser and broker
Panmure Gordon
Emma Earl
Freddy Crossley
Corporate broking
James Stearns +44 (0)20 7886 2500
Financial PR adviser
Consilium Strategic Communications +44 (0)203 709 5700
Mary-Jane Elliott maxcyte@consilium-comms.com
Chris Welsh
Sukaina Virji
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S REVIEW
MaxCyte is at the forefront of a revolution in therapeutics
offering a uniquely powerful, validated and differentiated approach
to cell engineering that is enabling pioneers in the industry to
develop a new class of groundbreaking treatments - from ultra-rare
diseases affecting a handful of patients to some of the most common
forms of cancer. Our team is using this same technology to power
MaxCyte's own therapeutic development programmes through CARMA -
our proprietary therapeutic platform for next-generation CAR-based
cancer treatments.
MaxCyte has continued to focus on the needs of our customers and
patients. We continually strive to understand how we can improve
our products and deliver enhanced solutions that support expanded
use and that allow us to anticipate our customer's needs, including
as they advance their therapeutics into commercialisation. As a
result, earlier this month, we proudly launched the ExPERT product
family, our next generation of instruments and consumables. These
industry leading offerings include the ExPERT ATx(TM), STx(TM) and
GTx(TM) instruments, with enhanced design and functionality,
coupled with a wider range of consumables that offer expanded
utility from early research to clinical and commercial use.
Effectively, we now offer a product range that enhances our
customers' ability to consolidate onto a single, unifying
technology. This provides a simplified and streamlined transition
from early research to the clinic and opens new opportunities to
accelerate the development of important medicines for patients.
We believe there is a significant opportunity for MaxCyte's
proprietary technology to help overcome some of the main challenges
presented by viral-based cell therapies, including CAR, and to
advance the development of successful novel treatments. Through new
partnerships and expanded collaborations with leading partners
across the fast-growing global cell therapy market, we will
continue to enable important new medical advancements with the
potential to make a significant impact on the lives of
patients.
We have great belief in the potential of MCY-M11, now in Phase I
clinical study, as a new, effective therapeutic in solid tumors,
especially for individuals with limited treatment options. The
clinical trial of MCY-M11 is designed to establish CARMA as a new
autologous cell therapy platform for next-generation targeted
cell-based immune therapies and demonstrates the feasibility of the
Company's clinical manufacturing process. We are excited by the
overall potential of the CARMA programme to address some of the
most significant issues with current CAR-T therapies, including
challenging side effects as well as the complex, expensive and
time-consuming manufacturing processes found in viral-based CAR
therapies.
Driving a new generation of cell therapies
MaxCyte's technology continues to help unlock the potential of
cutting-edge product development programmes, enabling many of the
leading gene editing tools in the field and demonstrating our
leadership as the go-to technology for cell engineering. MaxCyte's
cell therapy licenses now include more than 70 partnered programmes
including new agreements with Kite (a Gilead Company), CRISPR
Therapeutics and Precision BioSciences. MaxCyte also has more than
35 partnered programmes now licensed for clinical use. As our
partners' programmes progress through the clinical stage, MaxCyte's
technology becomes an intrinsic part of the drug, providing the
Company with a share in the value of the drug, including license
fees, milestones and sales-based payments. The aggregate potential
milestone payments from the commercial agreements signed to date
are currently in excess of $250m; the Company also anticipates
significant additional potential milestones from the recent Kite
commercial agreement.
Scientific leadership
Continuing to advance our technology and broaden our engagement
with the wider scientific community, MaxCyte presented at several
conferences worldwide, including a presentation of preclinical data
at the annual meeting of the 2018 American Society of Gene and Cell
Therapy, in which MaxCyte's non-viral cell engineering technology
was used to correct a gene from a sickle cell disease patient at
the National Institutes of Health showing potential therapeutic
application.
MaxCyte has established itself as a world leader in non-viral
cell engineering - offering a rapid, safe and clinically-focused
means of engineering cells to enable the next generation of
cell-based therapies. Our partners continue to use MaxCyte to gain
the most from their therapeutic approaches, enabling the most
effective use of their technology and ultimately enabling better
drugs.
Outlook
We remain focused on the potential of our CARMA programme as we
bring a new generation of CAR-based cancer treatments into the
clinic for the first time. We are well positioned to continue
growth and progress across all areas of our business with our
team's broad expertise and our new ExPERT family of instruments.
The addition of exciting new instrument and consumable product
offerings to our product portfolio will enhance the use of our
products by our existing customers, while helping to expand our
customer base in key global markets. Through new partnerships and
expanded collaborations with leading partners across the
fast-growing cell therapy market, as well as our own proprietary
CARMA therapies, we will continue to enable important new medical
advancements with the potential to make significant impact on the
lives of patients. MaxCyte's Board anticipates continued progress
and strong growth in the 2019 financial year in line with
expectations.
Doug Doerfler
President and Chief Executive Officer
J. Stark Thompson, PhD
Non-Executive Chairman
24 April 2019
OPERATIONAL REVIEW
CARMA
CARMA is MaxCyte's proprietary therapeutic platform for
autologous cell therapy for the treatment of solid cancers. CARMA
utilises messenger RNA ("mRNA") transfected into freshly isolated
peripheral blood mononuclear cells, allowing for rapid manufacture
and treatment to the patient, without the need for a viral
component or cell expansion. The CARMA platform provides a cell
therapy with transient expression product, enabling repeat dosing
and with the potential to decrease toxicities seen in viral-based
CAR therapies.
Progress with our CARMA programme remained strong in 2018. We
received IND clearance from the US Food & Drug Administration
("FDA") to begin a clinical study in the United States with the
first wholly-owned CARMA candidate, MCY-M11, and initiated a Phase
I multi-dose, dose-escalation clinical trial in solid tumors. The
multi-center, non-randomised, open label trial is evaluating the
safety and feasibility of intraperitoneal infusions of MCY-M11 in
individuals with advanced ovarian cancer and peritoneal
mesothelioma.
MaxCyte is also expanding its next-generation CARMA programme
for potential use in further treating solid and haematological
cancers, including an intravenous administration programme. This
significantly broadens the opportunity and potential value of this
advanced cancer therapy.
New product launch
Following extensive customer feedback from a global market
research initiative, MaxCyte has launched the new ExPERT family of
instruments. By introducing a sleek and modern design that
integrates important value-added features, the ExPERT product line
delivers improved usability that will further solidify the
Company's leading position in the cell therapy and gene editing
markets. The ExPERT family includes three separate instruments: the
ATx, STx and GTx. Each one addresses specific needs in cell therapy
and protein production market segments, including new functionality
of importance to both pre-clinical and clinical and commercial
users, while enhancing the MaxCyte's market-leading performance.
New updated software, a touch-screen user interface and other
features deliver a significant improvement to the user experience.
The combination of the new instruments, together with the launch of
a new range of processing assemblies, will enable customers to
standardise on a single, unifying technology from early research
through to clinical and commercial use. The transition from
preclinical research to clinical trials, when using different
technologies, often creates a significant financial burden for
customers and can lead to many months/years of delays due to
re-optimisation requirements. With the expansion of the instrument
and processing assembly product offerings, these bottlenecks can be
eliminated, which in turn can provide significant cost and time
savings for customers and accelerate delivery of new treatments to
patients.
Cell therapeutics
MaxCyte has established itself as a world leader in non-viral
cell engineering - offering a rapid, safe and clinically-focused
means of delivering the next generation of cell-based therapies.
The Company's leadership in this field has and continues to be
demonstrated throughout the year with the announcement of
collaborations, partnerships and research agreements with a number
of leading biotech companies and research institutions.
In November 2018, MaxCyte and CRISPR Therapeutics announced the
expansion of an existing relationship that allowed for the
development of commercial therapeutics for haemoglobin-related
diseases. The two companies entered into a non-exclusive commercial
licence agreement that will allow CRISPR Therapeutics to deploy
MaxCyte's Flow Electroporation Technology to develop
CRISPR/Cas9-based immunotherapies. MaxCyte will supply its
technology to CRISPR Therapeutics as part of the enabling
technology licence agreement and will receive milestone and
sales-based payments in addition to other licensing fees.
Also in November 2018, MaxCyte announced entry into a research
agreement with Kite, a Gilead Company, to utilise MaxCyte's Flow
Electroporation Technology platform to enable non-viral cell
engineering. This agreement was expanded into a clinical and
commercial agreement in March 2019 for the development of multiple
CAR-T drug candidates for up to ten targets. The agreement includes
development and approval milestones and sales-based payments in
addition to other licensing fees. The Company also announced a
clinical and commercial licence agreement with Precision
BioSciences that will allow Precision to use MaxCyte's Flow
Electroporation technologies to robustly deliver Precision's
proprietary ARCUS genome-editing technology for use in
next-generation gene edited allogeneic T-cell immunotherapies
designed to treat a broad range of cancers.
MaxCyte presently participates in more than 70 partnered
programme licenses in cell therapy (including now more than 35
programmes licensed for clinical use). MaxCyte's business model
provides not only a stable and growing recurring revenue stream
from its annual instrument license fees and disposable sales, but
also offers significant medium-term and long-term upside from
potential milestone- and sales-based payments from its partners'
therapeutic development programmes.
In June 2018, the Company also announced a Cooperative Research
and Development Agreement ("CRADA") with the US National Institutes
of Health's ("NIH's") Heart, Lung, and Blood Institute to develop
treatments for individuals with sickle cell disease ("SCD") using
next-generation CRISPR/Cas9-based single-nucleotide correction
enabled by MaxCyte's cell engineering platform. During a
presentation of preclinical data at the 2018 ASGCT Annual Meeting,
MaxCyte scientists showed how the Company's non-viral cell
engineering technology was used to correct a gene from a patient
with SCD at the NIH, thereby highlighting the potential for this
therapeutic application.
Drug discovery
MaxCyte's instruments and technology are sold in
biopharmaceutical markets for discovery, development and
manufacture of small molecule drugs, biologics and vaccines. The
unique enabling capabilities of our technology in these
applications are evidenced by our broad global customer base in
drug discovery and development, which includes all of the top ten
biopharmaceutical companies by revenue.
MaxCyte's success is based upon our ability to anticipate the
needs of customers as they move through the drug development
process, expanding our offerings to broaden the uses of our
technology by customers across the drug discovery landscape.
Board and team
In February 2018, MaxCyte announced that Dr Richard Douglas, a
30-year life sciences industry veteran, was appointed as
Independent Non-Executive Director. Dr Douglas formerly served as
the Senior Vice President of Corporate Development and Corporate
Officer at Genzyme Corporation from 1989 until Genzyme was acquired
by Sanofi in 2011.
In April 2018, MaxCyte announced the appointment of Claudio
Dansky Ullmann, MD, as its Chief Medical Officer ("CMO"). In this
role, Dr Dansky Ullmann is responsible for overseeing clinical
development of MaxCyte's CARMA drug development programme as the
Company's first candidate, MCY-M11, progresses through the
clinic.
FINANCIAL REVIEW
The Company reported revenues of $16.7m in 2018, representing a
19% increase over the previous year and including 25% growth in the
second half of 2018 compared to H2 2017. That growth extended our
run of double-digit revenue growth, yielding a compound average
revenue growth of 24% since 2014.
Gross margins remained stable at approximately 89% and, EBITDA
loss in 2018 remained in line with expectations at $6.8m ($0.8m
before CARMA expenses and non-cash stock-based compensation).
Operating expenses increased to $23.3m reflecting the maturation
of the CARMA programme, which accounted for $6.5m as the Company's
first CARMA candidate MCY-M11 entered the clinic.
At year end 2018, total assets of the Company were $24.3m,
compared to $31.4m in 2017, as well as cash and cash equivalents
totalling $14.4m.
The Company successfully raised GBP10.0m (before expenses)
through a placing of new shares which completed on 1 March
2019.
Ron Holtz
24 April 2019
Editor's Note: In the fall of 2018, MaxCyte transitioned to a
new audit firm, engaging the US national audit firm, CohnReznick
LLP to be the Company's auditor for 2018 and beyond, and concluding
the ten years of excellent work performed for the Company by its
prior auditors, Aronson LLC. Engaging CohnReznick LLP is an
important part of the Company's on-going efforts to advance its
internal operations and support the Company's future plans and
growth. You will note that as part of this transition, the
following pages include Independent Auditor's Reports from Aronson
LLC for 2017 and from CohnReznick LLP for 2018.
Reports of Independent Registered Accounting Firms
Report of Independent Registered Accounting Firm for the 2018
Financial Statements
To the Board of Directors and Stockholders of MaxCyte, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of MaxCyte, Inc.
(the "Company") as of 31 December 2018, and the related statement
of operations, changes in stockholders' equity, and cash flows for
the year then ended and the related notes (collectively referred to
as the "financial statements"). In our opinion, the financial
statements referred to above present fairly, in all material
respects, the financial position of the Company as of 31 December
2018, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally
accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion
on the Company's financial statements based on our audit. We are a
public accounting firm registered with the Public Company
Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in
accordance with the US federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audit in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial
statements are free of material misstatement whether due to error
or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting. As part of our audit, we are required to obtain an
understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of
the Company's internal control over financial reporting.
Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audit also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis
for our opinion.
/s/CohnReznick LLP
We have served as the Company's auditor since 2018.
Tysons, Virginia
23 April 2019
Report of Independent Registered Accounting Firm for the 2017
Financial Statements
To the Board of Directors and Stockholders of MaxCyte, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of MaxCyte, Inc.
(the "Company") as of 31 December 2017, and the related statements
of operations, stockholders' equity, and cash flows for the year
ended 31 December 2017, and the related notes (collectively
referred to as the financial statements). In our opinion, the
financial statements present fairly, in all material respects, the
financial position of the Company as of 31 December 2017, and the
results of its operations and its cash flows for the year ended 31
December 2017, in conformity with accounting principles generally
accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion
on the Company's financial statements based on our audit. We are a
public accounting firm registered with the PCAOB and are required
to be independent with respect to the Company in accordance with
the US federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting. As part of our audit, we are required to obtain an
understanding of internal control over financial reporting, but not
for the purpose of expressing an opinion on the effectiveness of
the Company's internal control over financial reporting.
Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of
material misstatements of the financial statements, whether due to
error of fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audit also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis
for our opinion.
/s/Aronson LLC
Rockville, Maryland
We have served as the Company's auditor since 2008. In 2018 we
became the predecessor auditor.
27 February 2019
MaxCyte, Inc.
Balance Sheets
(amounts in US dollars, except share amounts)
31 December 31 December
2018 2017
-------------------- ---------------------------
Assets
Current assets:
Cash and cash equivalents $ 11,248,000 $ 25,341,700
Short-term investments,
at amortised cost 3,191,000 -
Accounts receivable, net 4,904,500 3,195,600
Inventory 2,242,800 1,347,000
Other current assets 863,700 665,800
-------------------- ---------------------------
Total current assets 22,450,000 30,550,100
Property and equipment,
net 1,817,900 847,600
Total assets $ 24,267,900 $ 31,397,700
==================== ===========================
Liabilities and stockholders' equity
Current liabilities:
Current portion of capital lease obligations $ - $ 3,200
Accounts payable and accrued expenses 4,123,300 4,331,000
Deferred revenue 2,449,300 2,055,100
-------------------- ---------------------------
Total current liabilities 6,572,600 6,389,300
Note payable, net of discount, deferred fees 5,056,300 5,027,200
Other liabilities 357,300 384,500
-------------------- ---------------------------
Total liabilities 11,986,200 11,801,000
-------------------- ---------------------------
Commitments and contingencies (Note 9)
Stockholders' equity
Common stock, $0.01 par; 200,000,000 shares authorised,
51,332,764 and 50,896,376 shares issued and outstanding
at 31 December 2018 and 2017, respectively. 513,300 509,000
Additional paid-in capital 82,279,300 80,729,400
Accumulated deficit (70,510,900) (61,641,700)
-------------------- ---------------------------
Total stockholders' equity 12,281,700 19,596,700
-------------------- ---------------------------
Liabilities and stockholders' equity $ 24,267,900 $ 31,397,700
==================== ===========================
See accompanying notes to the financial statements.
MaxCyte, Inc.
Statements of Operations
For the Years Ended 31 December
(amounts in US dollars, except
share amounts)
2018 2017
------------------------------------ ----------------
Revenue $ 16,667,000 $ 13,985,000
Costs of goods sold 1,840,000 1,453,100
------------------------------------ ----------------
Gross profit 14,827,000 12,531,900
------------------------------------ ----------------
Operating expenses:
Research and development 11,244,000 11,284,800
Sales and marketing 6,723,700 6,016,700
General and administrative 5,284,200 4,522,100
------------------------------------ ----------------
Total operating expenses 23,251,900 21,823,600
Operating loss (8,424,900) (9,291,700)
------------------------------------ ----------------
Other income (expense):
Interest expense (614,600) (625,300)
Interest and other
income 170,300 -
------------------------------------ ----------------
Total other income (expense) (444,300) (625,300)
------------------------------------ ----------------
Net loss $ (8,869,200) $ (9,917,000)
==================================== ================
Basic and diluted net loss per common share $ (0.17) $ (0.20)
==================================== ================
Weighted average common shares outstanding, basic
and diluted 51,182,402 48,642,926
==================================== ================
See accompanying notes to the financial statements.
MaxCyte, Inc.
Statement of Changes in Stockholders' Equity
For the Years Ended 31 December
(amounts in US dollars)
Additional
Paid-in Accumulated Total Stockholders'
Common Stock Capital Deficit Equity
-------------------------------------------- --------------------- --------------------- --------------------
Shares Amount
Balance 1
January
2017 43,539,527 $ 435,400 $ 56,372,700 $ (51,724,700) $ 5,083,400
Issuance of
common
stock in
public
offering 7,275,000 72,800 23,826,800 - 23,899,600
Stock-based
compensation
expense - - 514,500 - 514,500
Exercise of
stock
options 81,849 800 15,400 - 16,200
Net loss - - - (9,917,000) (9,917,000)
--------------------- --------------------- --------------------- --------------------- --------------------
Balance 31
December
2017 50,896,376 509,000 80,729,400 (61,641,700) 19,596,700
Stock-based
compensation
expense - - 1,324,200 - 1,324,200
Exercise of
stock
options 436,388 4,300 225,700 - 230,000
Net loss - - - (8,869,200) (8,869,200)
--------------------- --------------------- --------------------- --------------------- --------------------
Balance 31
December
2018 51,332,764 $ 513,300 $ 82,279,300 $ (70,510,900) $ 12,281,700
===================== ===================== ===================== ===================== ====================
See accompanying notes to the financial statements.
MaxCyte, Inc.
Statements of Cash Flow
For the Years Ended 31 December
(amounts in US dollars)
2018 2017
----------------------- -----------------------
Cash flows from operating activities:
Net loss $ (8,869,200) $ (9,917,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortisation 344,000 142,900
Net book value of consigned equipment
sold 45,600 63,200
Stock-based compensation 1,324,200 514,500
Bad debt expense 164,000 -
Amortisation of discounts on short-term
investments (67,600) -
Non-cash interest expense 29,100 38,100
Changes in operating assets and liabilities:
Accounts receivable (1,947,900) (784,900)
Inventory (1,289,700) (174,900)
Other current assets (197,900) (347,400)
Accounts payable and accrued expenses (464,000) 1,156,500
Deferred revenue 469,200 (408,000)
Other liabilities (27,200) 39,900
----------------------- -----------------------
Net cash used in operating activities (10,487,400) (9,677,100)
----------------------- -----------------------
Cash flows from investing activities:
Purchases of short-term investments (12,673,400) -
Maturities of short-term investments 9,550,000 -
Purchases of property and equipment (709,700) (609,700)
----------------------- -----------------------
Net cash used in investing activities (3,833,100) (609,700)
----------------------- -----------------------
Cash flows from financing activities:
Borrowings under notes payable 283,700 -
Principal payments on notes payable (283,700) -
Proceeds from exercise of stock options 230,000 16,200
Principal payments on capital leases (3,200) (14,300)
Net proceeds from issuance of common stock - 23,899,600
Net cash provided by financing activities 226,800 23,901,500
----------------------- -----------------------
Net (decrease)increase in cash and cash
equivalents (14,093,700) 13,614,700
Cash and cash equivalents, beginning of
year 25,341,700 11,727,000
Cash and cash equivalents, end of year $ 11,248,000 $ 25,341,700
======================= =======================
Supplemental cash flow information:
Cash paid for interest $ 784,400 $ 530,000
Supplemental non-cash information:
Property and equipment purchases included
in accounts payable $ 256,300 $ -
See accompanying notes to the financial statements.
MaxCyte, Inc.
Notes to Financial Statements
1. Organization and Description of Business
MaxCyte, Inc. (the "Company" or "MaxCyte") was incorporated as a
majority owned subsidiary of EntreMed, Inc. ("EntreMed") on 31 July
1998, under the laws and provisions of the state of Delaware, and
commenced operations on 01 July 1999. In November 2002, MaxCyte was
recapitalised and EntreMed was no longer deemed to control the
Company.
MaxCyte is a global life sciences company utilizing its
proprietary cell engineering technology to enable development of
CARMA, MaxCyte's proprietary, mRNA-based immuno-oncology cell
therapy, as well as the programmes of its biotechnology and
pharmaceutical company customers who are engaged in cell therapy,
including gene editing and immuno-oncology, and in drug discovery
and development and biomanufacturing. The Company licenses and
sells its instruments and technology and sells its consumables to
developers of cell therapies and to pharmaceutical and
biotechnology companies for use in drug discovery and development
and biomanufacturing.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in
accordance with accounting principles generally accepted in the
United States of America ("US GAAP").
The Company operates in a single business segment.
Use of Estimates
The preparation of financial statements in conformity with US
GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amount of revenues and
expenses during the reporting period. In the accompanying financial
statements, estimates are used for, but not limited to, revenue
recognition, stock-based compensation, allowance for doubtful
accounts, allowance for inventory obsolescence, accruals for
contingent liabilities, deferred taxes and valuation allowance, and
the depreciable lives of fixed assets. Actual results could differ
from those estimates.
Concentration
During the years ended 31 December 2018 and 2017, one customer
represented 11% and 10% of revenue, respectively. As of 31 December
2018 and 2017, accounts receivable from this customer totalled 14%
and 5% of net accounts receivable, respectively.
During the years ended 31 December 2018 and 2017, the Company
purchased approximately 73% and 61%, respectively of its inventory
from two suppliers. As of 31 December 2018 and 2017, amounts
payable to these suppliers totalled 26% and 4% of total accounts
payable, respectively.
Foreign Currency
The Company's functional currency is the US dollar; transactions
denominated in foreign currencies are transacted at the exchange
rate in effect at the date of each transaction. Differences in
exchange rates during the period between the date a transaction
denominated in foreign currency is consummated and the date on
which it is either settled or at the reporting date are recognised
in the Statements of Operations as general and administrative
expense. The foreign currency transaction gains (losses) were
($8,000) and $50,100 for the years ended 31 December 2018 and 2017,
respectively.
Fair Value
Fair value is the price that would be received from the sale of
an asset or paid to transfer a liability assuming an orderly
transaction in the most advantageous market at the measurement
date. US GAAP establishes a hierarchical disclosure framework which
prioritises and ranks the level of observability of inputs used in
measuring fair value. These tiers include:
-- Level 1-Quoted prices (unadjusted) in active markets that are
accessible at the measurement date for identical assets or
liabilities. The fair value hierarchy gives the highest priority to
Level 1 inputs.
-- Level 2-Observable market-based inputs other than quoted
prices in active markets for identical assets or liabilities.
-- Level 3-Unobservable inputs are used when little or no market
data is available. The fair value hierarchy gives the lowest
priority to Level 3 inputs.
See Note 6 for additional information regarding fair value.
Cash, Cash Equivalents and Short-term Investments
Cash and cash equivalents consist of financial instruments
including money market funds and commercial paper with original
maturities of less than 90 days. Short-term investments consist of
commercial paper with original maturities greater than 90 days and
less than 1 year. All money market funds and commercial paper are
recorded at amortised cost unless they are deemed to be impaired on
an other-than-temporary basis, at which time they are recorded at
fair value using Level 2 inputs.
The following table summarizes the Company's investments at 31
December 2018:
Gross unrecognised Gross unrecognised
Amortised holding holding Aggregate
Description Classification cost gains losses fair value
Money market
funds Cash equivalents $ 5,945,200 $ - $ - $ 5,945,200
Commercial
Paper Cash equivalents 3,455,700 500 - 3,456,200
Commercial Short-term
Paper investments 3,191,000 500 - 3,191,500
-------------- ------------------- ------------------- --------------
Total Investments $ 12,591,900 $ 1,000 $ - $ 12,592,900
============== =================== =================== ==============
The Company had no investments at 31 December 2017.
At times the Company's cash balances may exceed federally
insured limits and cash may also be deposited in foreign bank
accounts that are not covered by federal deposit insurance. The
Company does not believe that this results in any significant
credit risk.
Inventory
The Company sells or licenses products to customers. The Company
uses the average cost method of accounting for its inventory, and
adjustments resulting from periodic physical inventory counts are
reflected in costs of goods sold in the period of the adjustment.
Inventory consisted of the following at 31 December:
2018 2017
-------------- ------------------
Raw materials inventory $ 884,200 $ 371,100
Finished goods inventory 1,358,600 975,900
Total Inventory $ 2,242,800 $ 1,347,000
============== ==================
The Company determined no allowance for obsolescence was
necessary at 31 December 2018 or 2017.
Accounts Receivable
Accounts receivable are reduced by an allowance for doubtful
accounts, if needed. The allowance for doubtful accounts reflects
the best estimate of probable losses determined principally on the
basis of historical experience and specific allowances for known
troubled accounts. All accounts or portions thereof that are deemed
to be uncollectible or to require an excessive collection cost are
written off to the allowance for doubtful accounts. The Company
recorded an allowance of $239,000 and $0 at 31 December 2018 or
2017, respectively.
Property and Equipment
Property and equipment is stated at cost. Depreciation is
computed using the straight-line method. Office equipment
(principally computers) is depreciated over an estimated useful
life of three years. Laboratory equipment is depreciated over an
estimated useful life of five years. Furniture is depreciated over
a useful life of seven years. Leasehold improvements are amortised
over the shorter of the estimated lease term or useful life.
Instruments represent equipment held at a customer's site that is
typically leased to customers on a short-term basis and is
depreciated over an estimated useful life of five years.
Property and equipment includes capitalised costs to develop
internal-use software. Applicable costs are capitalised during the
development stage of the project and include direct internal costs,
third-party costs and allocated interest expenses as
appropriate.
Property and equipment consist of the following at 31
December:
2018 2017
------------- -------------------
Furniture and equipment $1,743,200 $ 1,497,000
Instruments 735,600 419,700
Leasehold improvements 280,600 265,400
Internal-use software under
development 666,700 -
Purchased software 28,300 -
Accumulated depreciation
and amortisation (1,636,500) (1,334,500)
Property and equipment,
net $1,817,900 $ 847,600
============= ===================
For the years ended 31 December 2018 and 2017, the Company
transferred $393,900 and $162,500, respectively of instruments
previously classified as inventory to property and equipment leased
to customers.
For the years ended 31 December 2018 and 2017, the Company
incurred depreciation and amortisation expense of $344,000 and
$142,900, respectively. Maintenance and repairs are charged to
expense as incurred.
Management reviews property and equipment for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability
of the long-lived asset is measured by a comparison of the carrying
amount of the asset to future undiscounted net cash flows expected
to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognised is measured by the amount
by which the carrying amount of the assets exceeds the estimated
fair value of the assets. The Company recognised no impairment in
either of the years ended 31 December 2018 or 2017.
Revenue Recognition
On 1 January 2018, the Company adopted guidance for revenue
recognition for contracts as defined by the Financial Accounting
Standards Board ("FASB"), Accounting Standards Codification 606,
Revenue from Contracts with Customers ("ASC 606"), using the
modified retrospective method applied only to contracts that were
not completed at the date of adoption. The modified retrospective
method provides for recognition of the cumulative effect of
initially applying the new guidance as an adjustment to the opening
balance of retained earnings. The implementation of the guidance
had no material impact on the measurement or recognition of revenue
from customer contracts recognised in prior periods. For the
Company's revenue recognition policy prior to adopting the guidance
for revenue recognition for contracts, please refer to the
Company's financial statements for the year ended 31 December 2017
filed with the London Stock Exchange on 4 April 2018.
The Company analyzes contracts to determine the appropriate
revenue recognition using the following steps: (i) identification
of contracts with customers, (ii) identification of distinct
performance obligations in the contract, (iii) determination of
contract transaction price, (iv) allocation of contract transaction
price to the performance obligations and (v) determination of
revenue recognition based on timing of satisfaction of the
performance obligations.
In some arrangements, product and services have been sold
together representing distinct performance obligations. In such
arrangements the Company allocates the sale price to the various
performance obligations in the arrangement on a relative selling
price basis. Under this basis, the Company determines the estimated
selling price of each performance obligation in a manner that is
consistent with that used to determine the price to sell the
deliverable on a standalone basis.
The Company recognises revenue upon the satisfaction of its
performance obligation (generally upon transfer of control of
promised goods or services to its customers) in an amount that
reflects the consideration to which it expects to be entitled in
exchange for those goods or services.
The Company defers incremental costs of obtaining a customer
contract and amortises the deferred costs over the period that the
goods and services are transferred to the customer. The Company had
no material incremental costs to obtain customer contracts in any
period presented.
Deferred revenue results from amounts billed in advance to
customers or cash received from customers in advance of services
being provided.
Research and Development Costs
Research and development costs consist of independent
proprietary research and development costs and the costs associated
with work performed for fees from third parties. Research and
development costs are expensed as incurred. Research costs
performed for fees from customers are included in cost of goods
sold.
Stock-Based Compensation
The Company grants stock-based awards in exchange for employee,
consultant and non-employee director services. The value of the
award is recognised as expense on a straight-line basis over the
requisite service period.
The Company utilises the Black-Scholes option pricing model for
estimating fair value of its stock options granted. Option
valuation models, including the Black-Scholes model, require the
input of highly subjective assumptions, and changes in the
assumptions used can materially affect the grant-date fair value of
an award. These assumptions include the expected volatility,
expected dividend yield, risk-free rate of interest and the
expected life of the award. A discussion of management's
methodology for developing each of the assumptions used in the
Black-Scholes model is as follows:
Expected volatility
Volatility is a measure of the amount by which a financial
variable such as a share price has fluctuated (historical
volatility) or is expected to fluctuate (expected volatility)
during a period. The Company does not currently have sufficient
history with its common stock subsequent to its 2016 initial public
offering to determine its actual volatility. The Company has been
able to identify several public entities of similar size,
complexity and stage of development; accordingly, historical
volatility has been calculated at between 47% and 48% for 2018 and
47% and 49% for 2017 using the volatility of these companies.
Expected dividend yield
The Company has never declared or paid common stock dividends
and has no plans to do so in the foreseeable future. Additionally,
the Company's long-term debt agreement restricts the payment of
cash dividends.
Risk-free interest rate
This approximates the US Treasury rate for the day of each
option grant during the year, having a term that closely resembles
the expected term of the option. The risk-free interest rate was
between 2.7% and 3.0% for 2018 and 1.8% and 2.4% for 2017.
Expected term
This is the period of time that the options granted are expected
to remain unexercised. Options granted have a maximum term of ten
years. The Company estimates the expected term of the options to be
6.25 years for options with a standard four-year vesting period,
using the simplified method. Over time, management intends to track
estimates of the expected term of the option term so that estimates
will approximate actual behaviour for similar options.
Expected forfeiture rate
The Company records forfeitures as they occur.
Income Taxes
The Company uses the asset and liability method of accounting
for income taxes. Deferred tax assets and liabilities are
determined based on differences between the financial reporting and
tax basis of assets and liabilities and are measured using the
enacted tax rates and laws that are expected to be in effect when
the differences are expected to reverse. The effect on deferred tax
assets and liabilities of a change in tax rates is recognised in
the period that such tax rate changes are enacted. The measurement
of a deferred tax asset is reduced, if necessary, by a valuation
allowance if it is more-likely-than-not that all or a portion of
the deferred tax asset will not be realised.
Management uses a recognition threshold and a measurement
attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return, as
well as guidance on derecognition, classification, interest and
penalties and financial statement reporting disclosures. For those
benefits to be recognised, a tax position must be
more-likely-than-not to be sustained upon examination by taxing
authorities. The Company recognises interest and penalties accrued
on any unrecognised tax exposures as a component of income tax
expense. The Company has not identified any uncertain income tax
positions that could have a material impact to the financial
statements.
The Company is subject to taxation in various jurisdictions in
the United States and abroad and remains subject to examination by
taxing jurisdictions for 2014 and all subsequent periods. The
Company had a Federal Net Operating Loss ("NOL") carry forward of
$40.5m as of 31 December 2018, which was generally available as a
deduction against future income for US federal corporate income tax
purposes, subject to applicable carryforward limitations. As a
result of the March 2016 initial public offering, the Company's
NOLs are limited on an annual basis, subject to certain
carryforward provisions, pursuant to Section 382 of the Internal
Revenue Code of 1986, as amended, as a result of a greater than 50%
change in ownership that occurred in the three-year period ending
at the time of the March AIM IPO. The Company has calculated that
for the period ending 31 December 2022, the cumulative limitation
amount exceeds the NOLs subject to the limitation.
On 22 December 2017, the President of the United States signed
into law the Tax Cuts and Jobs Act of 2017 (the "Tax Act") which
included significant changes to the existing income tax laws for
domestic corporations. Key features of the Tax Act effective in
2018 include:
-- Reduction of the corporate tax rate from 35% to 21%;
-- Elimination of the alternative minimum tax;
-- Changes in the deductibility of certain aspects of executive compensation;
-- Changes in the deductibility of certain entertainment and recreation expenses; and
-- Changes in incentive tax breaks for US production activities.
Because of the Company's existing Federal net operating loss
carryforwards and current expectations as to the recovery of its
net deferred tax assets, the Company believes that the Tax Act will
not have a significant impact on its financial results and
financial position, including on its liquidity, for the foreseeable
future.
Loss Per Share
Basic loss per share is computed by dividing net loss available
to common shareholders by the weighted average number of shares of
common stock outstanding during the period.
For periods of net income, and when the effects are not
anti-dilutive, diluted earnings per share is computed by dividing
net income available to common shareholders by the weighted-average
number of shares outstanding plus the impact of all potential
dilutive common shares, consisting primarily of common stock
options and stock purchase warrants using the treasury stock
method.
For periods of net loss, diluted loss per share is calculated
similarly to basic loss per share because the impact of all
dilutive potential common shares is anti-dilutive. The number of
anti-dilutive shares, consisting of stock options and stock
purchase warrants, which has been excluded from the computation of
diluted loss per share, was 8.4m and 7.2m for the years ended 31
December 2018 and 31 December 2017, respectively.
Recent Accounting Pronouncements
Recently Adopted
In May 2017, the FASB issued guidance clarifying when changes in
the terms or conditions of share-based payment awards should be
accounted for as modifications. This guidance is effective for
fiscal years beginning after 15 December 2017 and early adoption is
permitted. This guidance must be applied prospectively to awards
modified after the adoption date. The Company adopted this new
guidance on 1 January 2018. The adoption of this new guidance did
not have a material impact on the Company's financial
statements.
Unadopted
In February 2016, the FASB issued guidance for the accounting
for leases. The guidance requires lessees to recognise assets and
liabilities related to long-term leases on the balance sheet and
expands disclosure requirements regarding leasing arrangements. The
guidance is effective for reporting periods beginning after 15
December 2018 and early adoption is permitted. The guidance must be
adopted on a modified retrospective basis and provides for certain
practical expedients. The Company is currently calculating the
total amount of lease assets and liabilities to be recorded on in
its financial statements as a result of the adoption.
In June 2016, the FASB issued guidance with respect to measuring
credit losses on financial instruments, including trade
receivables. The guidance eliminates the probable initial
recognition threshold that was previously required prior to
recognising a credit loss on financial instruments. The credit loss
estimate can now reflect an entity's current estimate of all future
expected credit losses. Under the previous guidance, an entity only
considered past events and current conditions. The guidance is
effective for fiscal years beginning after 15 December 2020,
including interim periods within those fiscal years. Early adoption
is permitted for fiscal years beginning after 15 December 2018,
including interim periods within those fiscal years. The adoption
of certain amendments of this guidance must be applied on a
modified retrospective basis and the adoption of the remaining
amendments must be applied on a prospective basis. The Company is
currently evaluating the impact, if any, that this new accounting
pronouncement will have on its financial statements.
In July 2017, the FASB issued guidance addressing several issues
involving financial instruments. Part I of the guidance simplifies
the accounting for certain equity-linked financial instruments and
embedded features with down round features that reduce the exercise
price when the pricing of a future round of financing is lower
("down round protection"). Current accounting guidance provides
that instruments with down round protection be classified as
derivative liabilities with changes in fair value recorded through
earnings. The updated guidance provides that instruments with down
round protection are no longer precluded from being classified as
equity. This guidance is effective for fiscal years beginning after
15 December 2018 for public business entities and early adoption is
permitted. This guidance must be applied retrospectively. The
Company is currently evaluating the impact, if any, that this new
accounting pronouncement will have on its financial statements.
In June 2018, the FASB issued guidance simplifying the
accounting for non-employee stock-based compensation awards. The
guidance aligns the measurement and classification for employee
stock-based compensation awards to non-employee stock-based
compensation awards. Under the guidance, non-employee awards will
be measured at their grant date fair value. Upon transition, the
existing non-employee awards will be measured at fair value as of
the adoption date. The guidance is effective for reporting periods
beginning after 15 December 2018, including interim periods within
that fiscal year. Early adoption is permitted, including adoption
in an interim period. The Company is currently evaluating the
impact, if any, that the adoption of this guidance will have on its
financial statements.
In August 2018, the FASB issued guidance addressing the
accounting for implementation, setup and other upfront costs paid
by a customer in a cloud computing or hosting arrangement. The
guidance aligns the accounting treatment of these costs incurred in
a hosting arrangement treated as a service contract with the
requirements for capitalization and amortisation costs to develop
or obtain internal-use software. The guidance is effective for
fiscal years beginning after 15 December 2019. The guidance can be
adopted either retrospectively or prospectively. Early adoption is
permitted. The Company is currently evaluating the impact, if any,
that this guidance will have on the financial statements.
In August 2018, the FASB issued guidance addressing the
disclosure requirements for fair value measurements. The guidance
intends to improve the effectiveness of the disclosures relating to
recurring and nonrecurring fair value measurements. The guidance is
effective for fiscal years beginning after 15 December 2019.
Portions of the guidance are to be adopted prospectively while
other portions are to be adopted retrospectively. Early adoption is
permitted. The Company is currently evaluating the impact, if any,
that this guidance will have on the financial statements.
The Company has evaluated all other issued and unadopted
Accounting Standards Updates and believes the adoption of these
standards will not have a material impact on its results of
operations, financial position, or cash flows.
3. Revenue
Revenue is principally from the sale or lease of instruments and
processing assemblies, as well as from extended warranties. In some
arrangements, products and services have been sold together
representing distinct performance obligations. In such arrangements
the Company allocates the sale price to the various performance
obligations in the arrangement on a relative selling price basis.
Under this basis, the Company determines the estimated selling
price of each performance obligation in a manner that is consistent
with that used to determine the price to sell the deliverable on a
standalone basis.
Revenue is recognised at the time control is transferred to the
customer and the performance obligation is satisfied. Revenue from
the sale of instruments and processing assemblies is generally
recognised at the time of shipment to the customer, provided no
significant vendor obligations remain and collectability is
reasonably assured. Revenue from equipment leases are recognised
ratably over the contractual term of the lease agreement. Licensing
fee revenue is recognised ratably over the licence period. Revenue
from fees for research services is recognised when services have
been provided.
Disaggregated revenue for the year ended 31 December 2018 is as
follows:
Revenue Revenue
(ASC 606 (Non- ASC
Revenue) 606 Revenue) Total Revenue
-------------------
Product Sales $ 10,459,200 $ - $10,459,200
Leased Equipment - 4,928,100 4,928,100
Other 264,500 1,015,200 1,279,700
Total $ 10,723,700 $ 5,943,300 $ 16,667,000
=================== ============== =============================
Disaggregated revenue for the year ended 31 December 2017 is as
follows:
Revenue Revenue
(ASC 606 (Non- ASC
Revenue) 606 Revenue) Total Revenue
-------------------
Product Sales $ 8,134,500 $ - $ 8,134,500
Leased Equipment - 4,275,900 4,275,900
Other 359,500 1,215,100 1,574,600
Total $ 8,494,000 $ 5,491,000 $ 13,985,000
=================== ============== ==============
Additional disclosures relating to Revenue from Contracts with
Customers (ASC 606)
Changes in deferred revenue for the year ended 31 December 2018
were as follows:
Balance at 1 January 2018 $2,222,900
Revenue recognised in the current period
from
amounts included in the beginning balance 2,051,100
Current period deferrals, net of amounts
recognised in the current period 2,598,200
Balance at 31 December
2018 $2,770,100
============
Remaining contract consideration for which revenue has not been
recognised due to unsatisfied performance obligations with a
duration greater than one year was approximately $428,100 at 31
December 2018, the majority of which the Company expects to
recognise over the next four years.
In the year ended 31 December 2018, the Company did not incur,
and therefore did not defer, any material incremental costs to
obtain contracts or costs to fulfill contracts.
4. Debt
The Company originally entered into a credit facility with
Midcap Financial SBIC, LP ("MidCap") in March 2014. The MidCap
facility carries a variable interest rate equal to the greater of
(i) 1.50% above the London Interbank Offered Rate ("LIBOR") then in
effect, or (ii) 10.00% and is collateralized by substantially all
tangible assets of the Company. The Company amended the MidCap
facility multiple times through August 2018 to, among other things,
(i) revise certain covenants, (ii) extend the maturity date to 1
June 2023, (iii) extend the interest only period to 1 July 2020 and
change the exit fee to 4.75% and (iv) increase the principal amount
to $5,105,400.
The Company accounted for all amendments as "modifications" to
the facility. Accordingly, the Company has deferred additional fees
incurred and paid to the lender in connection with the amendments
and expensed all fees paid to third parties. The deferred fees are
being amortised using the effective interest method over the
remaining term of the amended debt. Unamortised deferred financing
costs were approximately $45,600 and $72,500 at 31 December 2018
and 31 December 2017, respectively, and are included as reductions
to the note payable balance.
The total balance of the MidCap credit facility at both 31
December 2018 and 31 December 2017 was $5,105,400, with an interest
rate of 10%; the balance of the unamortised debt discount at 31
December 2018 and 31 December 2017 was $3,600 and $5,700,
respectively.
In February 2019, prior to its capital raise, the Company paid
off the MidCap credit facility in full in accordance with its terms
and conditions.
In the year ended December 31, 2018, the Company capitalised
approximately $17,300 of interest expense related to capitalised
software development projects.
5. Stockholders' Equity
Common Stock
On 21 April 2017, the Company completed an equity capital raise
issuing 7,275,000 shares of Common Stock at a price of LIR2.75 per
share (or approximately $3.51 per share). The transaction generated
gross proceeds of approximately LIR20m (or approximately $25.5m).
In conjunction with the transaction, the Company incurred costs of
approximately $1.6m which resulted in the Company receiving net
proceeds of approximately $23.9m.
During the year ended 31 December 2017, the Company issued
81,849 shares of common stock as a result of stock option
exercises, receiving gross proceeds of $16,200. During the year
ended 31 December 2018, the Company issued 436,388 shares of common
stock as a result of stock option exercises, receiving gross
proceeds of $230,000.
In March 2019, the Company completed an equity capital raise
issuing approximately 5.9m shares of common stock at a price of
LIR1.70 (or approximately $2.25). The transaction generated gross
proceeds of approximately LIR10m (or approximately $13.3m). In
conjunction with the transaction, the Company incurred costs of
approximately $0.9m which resulted in the Company receiving net
proceeds of approximately $12.4m.
Stock Options
The Company adopted the MaxCyte, Inc. Long-Term Incentive Plan
(the "Plan") in January of 2016 to amend and restate the MaxCyte
2000 Long-Term Incentive Plan to provide for the awarding of (i)
stock options, (ii) restricted stock, (iii) incentive shares, and
(iv) performance awards to employees, officers, and directors of
the Company and to other individuals as determined by the Board of
Directors. Under the Plan, the maximum number of shares of common
stock of the Company that the Company may issue is (a) 6,264,682
shares plus (b) ten percent (10%) of the shares that are issued and
outstanding at the time awards are made under the Plan.
On 21 February 2018, the Company's Board resolved to increase
the number of stock options under the Plan by 2,000,000 to provide
sufficient shares to allow competitive equity compensation in its
primary markets for staff and consistent with practices of
comparable companies.
The Company has not issued any restricted stock, incentive
shares, or performance awards under the Plan. Stock options granted
under the Plan may be either incentive stock options as defined by
the Internal Revenue Code or non-qualified stock options. The Board
of Directors determines who will receive options under the Plan and
determines the vesting period. The options can have a maximum term
of no more than ten years. The exercise price of options granted
under the Plan is determined by the Board of Directors and must be
at least equal to the fair market value of the common stock of the
Company on the date of grant.
A summary of stock option activity for the years ended 31
December 2018 and 2017 is as follows:
. Weighted-Average
Remaining
Weighted Contractual Aggregate
Number of Average Exercise Life (in Intrinsic
Options Price years) Value
--------------------- ------------------ ---------------------- -------------
Outstanding at 1 January
2017 5,774,366 $ 0.39 8.3 $ 7,520,400
Granted 1,630,100 $ 3.18
Exercised (81,849) $ 0.20 $ 256,400
Forfeited (81,398) $ 1.11
---------------------
Outstanding at 31 December
2017 7,241,219 $ 1.01 7.8 $ 16,266,800
Granted 1,983,200 $ 3.24
Exercised (436,388) $ 0.52 $ 1,266,300
Forfeited (399,531) $ 2.49
Outstanding at 31 December
2018 8,388,500 $ 1.49 7.4 $ 10,354,900
=====================
Exercisable at 31 December
2018 5,519,222 $ 0.76 6.6 $ 9,862,300
=====================
The weighted-average fair values of the options granted during
2018 and 2017 were estimated to be $1.60 and $1.53,
respectively.
As of 31 December 2018, total unrecognised compensation expense
was $5,060,200 which will be recognised over the following three
years.
Stock-based compensation expense for the years ended 31 December
was as follows:
2018 2017
------------
General and administrative $ 458,200 $210,100
Sales and marketing 194,100 124,400
Research and development 671,900 180,000
Total $1,324,200 $514,500
============ ==========
6. Fair Value
The Company's Balance Sheets include various financial
instruments (primarily cash and cash equivalents, short-term
investments, accounts receivable and accounts payable and accrued
expenses) that are carried at cost, which approximates fair value
due to the short-term nature of the instruments. Notes payable and
capital lease obligations are reflective of fair value based on
market comparable instruments with similar terms.
Financial Assets and Liabilities Measured at Fair Value on a
Recurring Basis
The Company has no financial assets or liabilities measured at
fair value on a recurring basis.
Financial Assets and Liabilities Measured at Fair Value on a
Non-Recurring Basis
Money market funds and commercial paper classified as
held-to-maturity are measured at fair value on a non-recurring
basis when they are deemed to be impaired on an
other-than-temporary basis. No such fair value impairment was
recognised during the years ended 31 December, 2018 or 2017.
Non-Financial Assets and Liabilities Measured at Fair Value on a
Recurring Basis
The Company has no non-financial assets and liabilities that are
measured at fair value on a recurring basis.
Non-Financial Assets and Liabilities Measured at Fair Value on a
Non-Recurring Basis
The Company measures its long-lived assets, including property
and equipment, at fair value on a non-recurring basis. These assets
are recognised at fair value when they are deemed to be impaired.
No such fair value impairment was recognised during the years ended
31 December, 2018 or 2017.
7. Retirement Plan
The Company sponsors a defined-contribution 401(k) retirement
plan covering eligible employees. Participating employees may
voluntarily contribute up to limits provided by the Internal
Revenue Code. The Company matches employee contributions equal to
50% of the salary deferral contributions, with a maximum Company
contribution of 3% of the employees' eligible compensation. In the
years ended 31 December, 2018 and 2017, Company matching
contributions amounted to $199,900 and $148,700, respectively.
8. Income Taxes
The Company did not recognise a provision (benefit) for income
taxes in 2018 or 2017. Based on the Company's historical operating
performance, the Company has provided a full valuation allowance
against its net deferred tax assets.
In December 2017, the President of the United States signed into
law the Tax Cuts and Jobs Act of 2017 (the "Tax Act") which
included significant changes to the existing
income tax laws for domestic corporations including a reduction
of the corporate tax rate from 35% to 21%. The effects of the Tax
Act are reflected in deferred tax assets and liabilities at both 31
December 2018 and 2017.
Net deferred tax assets as of 31 December are presented in the
table below:
2018 2017
Deferred tax
assets:
Net operating loss carryforwards $ 10,431,600 $ 8,349,400
Research and development
credits 875,400 620,000
Stock-based compensation 666,400 337,900
Deferred revenue 746,000 599,500
Accruals and
other 124,200 57,600
Deferred tax
liabilities:
Depreciation (45,700) (59,000))
--------------- ----------------
12,797,900 9,905,400
Valuation allowance (12,797,900) (9,905,400))
Net deferred $ - $ -
tax assets
=============== ================
The Federal NOL carryforwards of approximately $40.7m as of 31
December 2018 will begin to expire in various years beginning in
2025. The use of NOL carryforwards is limited on an annual basis
under Internal Revenue Code Section 382 when there is a change in
ownership (as defined by this code section). Based on changes in
Company ownership in the past, the Company believes that the use of
its NOL carryforwards generated prior to the date of the change is
limited on an annual basis; NOL carryforwards generated subsequent
to the date of change in ownership can be used without limitation.
The use of the Company's net operating loss carryforwards may be
restricted further if there are future changes in Company
ownership. Additionally, despite the net operating loss
carryforwards, the Company may have a future tax liability due to
alternative minimum tax or state tax requirements.
Income tax expense reconciled to the tax computed at statutory
rates for the years ended 31 December is as follows:
2018 2017
Federal income taxes (benefit) at statutory
rates $ (1,862,500) $ (3,359,000)
State income taxes (benefit), net of
Federal benefit (526,100) (492,700)
Effect of 2017 Tax Act - 4,468,600
Windfall tax benefits (314,900) (97,400)
Permanent differences, rate
changes and other (188,900) 439,700
Change in valuation allowance 2,892,400 (959,200)
$ - $ -
=================== =================
9. Commitments and Contingencies
The Company entered into a five-year non-cancellable operating
lease agreement for office and laboratory space in February 2009
with an initial expiration of 31 January 2014 which was
subsequently extended to January 2020. In April 2017, the Company
entered into leases for additional office and laboratory space. A
member of the Company's Board of Directors is the CEO and Board
member of the lessor in the April 2017 lease. Rent payments under
the April 2017 lease totalled $371,600 and $221,300 in 2018 and
2017, respectively.
All the Company's office and laboratory leases expire in January
2020 and provide for annual 3% increases to the base rent. The
current monthly base lease payment for all leases is approximately
$41,000. In addition to base rent, the Company pays a pro-rated
share of common area maintenance ("CAM") costs for the entire
building, which is adjusted annually based on actual expenses
incurred.
Estimated future minimum payments under the operating leases are
$520,700 and $43,700 in 2019 and 2020, respectively.
Total rent expense, including base rent and CAM for the years
ended 31 December 2018 and 2017, was $692,300 and $585,600,
respectively. Rent expense is recognised on a straight-line basis
in the accompanying financial statements.
10. Subsequent Events
In preparing these financial statements, the Company has
evaluated events and transactions for potential recognition or
disclosure through 23 April 2019 the date the financial statements
were available to be issued.
In February 2019, the Company paid off the MidCap credit
facility in full (see Note 4). In March 2019, the Company sold
approximately 5.9m shares of common stock for gross proceeds of
approximately $13.3m (see Note 5).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR PGUQWCUPBGBW
(END) Dow Jones Newswires
April 24, 2019 02:01 ET (06:01 GMT)
Maxcyte (LSE:MXCT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Maxcyte (LSE:MXCT)
Historical Stock Chart
From Jul 2023 to Jul 2024
