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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2021

or

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

For the transition period from                      to                     

Commission File Number: 001-40592

Rapid Micro Biosystems, Inc.

(Exact name of registrant as specified in its charter)

Graphic

Delaware

    

20-8121647

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

1001 Pawtucket Boulevard West, Suite 280

Lowell, MA 01854

(Address of Principal Executive Offices)

(978) 349-3200

(Registrant’s telephone number)

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

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

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

Large accelerated filer

    

Accelerated filer

    

Non-accelerated filer

  

Smaller reporting company

Emerging growth company

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

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

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

Title of Each Class

    

Trading symbol

    

Name of Exchange on which registered

Class A common stock, $0.01 par value per share

RPID

The Nasdaq Global Select Market

As of August 20, 2021, there were 34,178,636 of the registrant’s Class A common stock, par value $0.01, outstanding.

As of August 20, 2021, there were 6,903,379 of the registrant’s Class B common stock, par value $0.01, outstanding.

Table of Contents

TABLE OF CONTENTS

    

    

Page

Part I

Financial Information

Item 1.

Financial Statements

6

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

6

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (Unaudited)

7

Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2021 and 2020 (Unaudited)

8

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit for the three and six months ended June 30, 2021 and 2020 (Unaudited)

9

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (Unaudited)

11

Notes to Condensed Consolidated Financial Statements (Unaudited)

13

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

38

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

57

Item 4.

Controls and Procedures

57

Part II

Other Information

Item 1.

Legal Proceedings

59

Item 1A.

Risk Factors

59

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

97

Item 3.

Defaults Upon Senior Securities

98

Item 4.

Mine Safety Disclosures

98

Item 5.

Other Information

98

Item 6.

Exhibits

98

Exhibit Index

Signatures

2

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. These forward-looking statements are often, but not always, made through the use of words or phrases such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, future revenue, timing and likelihood of success, plans and objectives of management for future operations, future results of anticipated products and prospects, plans and objectives of management.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part II, Item 1A, “Risk Factors”, in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2021. The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

This Quarterly Report on Form 10-Q and the documents that we have filed as exhibits should be read with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

3

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SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part II Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. Investsors should carefully consider these risks and uncertainties when investing in our Class A common stock. The principal risks and uncertainties affecting our business include the following:

The COVID-19 pandemic has impacted, and may continue to impact, our operations and may materially and adversely affect our business and financial results;

We have incurred significant losses since inception, we expect to incur losses in the future and we may not be able to generate sufficient revenue to achieve and maintain profitability;

We may need to raise additional capital to fund our existing operations, improve our platform or develop and commercialize new products or expand our operations;

To date, our revenue has been primarily generated from sales of our Growth Direct system, laboratory information management system, or LIMS, connection software, and validation services. The generation of our recurring revenue, comprised of sales of our proprietary consumables and service contracts, is dependent upon the sale, delivery and installation of a system as well as the completion of validation services. As a result, we require a substantial period of time to generate recurring revenue;

We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy;

We have limited experience in marketing and sales, and if we are unable to expand our marketing and sales organization to adequately address our customers’ needs or to expand our customer base, our business may be adversely affected;

We must develop new products, adapt to rapid and significant technological change and respond to introductions of new products by competitors to remain competitive;

The continued success of our business relies heavily on establishing and maintaining our position in the market as a leading provider of automated microbial quality control, or MQC, testing;

If our sole manufacturing and development facility becomes damaged or inoperable or we are required to vacate our existing facility, our ability to conduct and pursue our manufacturing and development efforts will be jeopardized;

Our manufacturing operations are dependent upon third-party suppliers, including single-source suppliers, making us vulnerable to supply shortages and price fluctuations, which could harm our business;

If we lose key management, cannot recruit qualified employees, directors, officers or other significant personnel or experience increases in our compensation costs, our business may be materially harmed;

We may acquire businesses or form joint ventures or make investments in other companies or technologies that could negatively affect our operating results, dilute our stockholders’ ownership, increase our debt or cause us to incur significant expense;

Our customers use our Growth Direct platform as part of their quality-control workflow, which is subject to regulation by the U.S. Food and Drug Administration, or FDA, and other comparable regulatory authorities;

4

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If we fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures, we may not be able to accurately report our financial results in a timely manner or prevent fraud, which may adversely affect investor confidence in our company;

If we are unable to obtain and maintain sufficient intellectual property protection for our technology, including the Growth Direct platform, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be impaired;

Because we do not anticipate paying any cash dividends on our Class A common stock in the foreseeable future, capital appreciation, if any, would be a stockholders’ sole source of gain;

Provisions in our restated certificate of incorporation and amended and restated bylaws and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management;

The market price of our Class A common stock may be volatile and fluctuate substantially, which could result in substantial losses for our stockholders; and

Sales of a substantial number of shares of our Class A common stock in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A common stock.

5

Table of Contents

PART I —FINANCIAL INFORMATION

Item 1. Financial Statements

RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated balance sheets

(In thousands, except share and per share amounts)

(Unaudited)

June 30, 

December 31, 

    

2021

    

2020

Assets

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

100,047

$

30,079

Short-term investments

 

 

14,998

Accounts receivable

 

3,057

 

4,988

Inventory

 

11,910

 

8,965

Prepaid expenses and other current assets

 

3,034

 

3,120

Total current assets

 

118,048

 

62,150

Property and equipment, net

 

7,256

 

7,052

Other long-term assets

 

1,013

 

695

Deferred financing fees

2,641

Restricted cash

 

284

 

100

Total assets

$

129,242

$

69,997

Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit

 

  

 

  

Current liabilities:

Accounts payable

$

2,574

$

4,468

Accrued expenses and other current liabilities

 

9,065

 

6,654

Deferred revenue

 

4,366

 

4,423

Total current liabilities

 

16,005

 

15,545

Preferred stock warrant liability

 

15,600

 

4,117

Notes payable, net of unamortized discount

 

24,976

 

24,810

Deferred rent, long term

 

642

 

705

Other long-term liabilities

709

Total liabilities

 

57,932

 

45,177

Commitments and contingencies (Note 16)

 

  

 

  

Redeemable convertible preferred stock (Series A1, B1, C1, C2, D1, and D2), $0.01 par value; 196,257,710 shares and 161,455,689 shares authorized at June 30, 2021, and December 31, 2020, respectively; 155,521,633 shares and 133,021,640 shares issued and outstanding at June 30, 2021, and December 31, 2020, respectively; liquidation preference of $286,183 at June 30, 2021

 

235,836

 

151,826

Stockholders’ equity (deficit):

 

  

 

  

Class A common stock, $0.01 par value; 40,000,000 shares and 35,000,000 shares authorized at June 30, 2021 and December 31, 2020, respectively; 966,317 shares and 612,850 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

 

10

 

6

Class B common stock, $0.01 par value; 6,903,379 shares and zero shares authorized at June 30, 2021 and December 31, 2020, respectively; zero shares issued and outstanding at June 30, 2021 and December 31, 2020

Additional paid-in capital

 

110,984

 

114,575

Accumulated deficit

 

(275,520)

 

(241,588)

Accumulated other comprehensive income

 

 

1

Total stockholders’ deficit

 

(164,526)

 

(127,006)

Total liabilities, redeemable convertible preferred stock and stockholders’ deficit

$

129,242

$

69,997

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of operations

(Unaudited)

(In thousands, except share and per share amounts)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2021

    

2020

    

2021

    

2020

Revenue:

 

  

 

  

 

  

 

  

Product revenue

$

4,088

$

1,664

$

7,806

$

2,852

Service revenue

 

1,606

 

755

 

2,673

 

1,165

Non-commercial revenue

 

436

 

174

 

646

 

1,575

Total revenue

 

6,130

 

2,593

 

11,125

 

5,592

Costs and operating expenses:

 

  

 

  

 

  

 

  

Cost of product revenue

 

6,092

 

2,891

 

11,602

 

6,103

Cost of service revenue

 

1,344

 

755

 

2,481

 

1,706

Cost of non-commercial revenue

 

472

 

536

 

886

 

1,333

Research and development

 

2,337

 

1,244

 

4,485

 

2,682

Sales and marketing

 

3,122

 

1,236

 

5,397

 

2,702

General and administrative

 

3,625

 

1,943

 

6,827

 

4,314

Total costs and operating expenses

 

16,992

 

8,605

 

31,678

 

18,840

Loss from operations

 

(10,862)

 

(6,012)

 

(20,553)

 

(13,248)

Other income (expense):

 

  

 

  

 

  

 

  

Interest expense

 

(924)

 

(814)

 

(1,856)

 

(1,577)

Change in fair value of preferred stock warrant liability

 

(35)

 

544

 

(11,483)

 

549

Loss on extinguishment of debt

 

 

(2,910)

 

 

(2,910)

Other income (expense)

 

8

 

(1)

 

(3)

 

6

Total other income (expense), net

 

(951)

 

(3,181)

 

(13,342)

 

(3,932)

Loss before income taxes

 

(11,813)

 

(9,193)

 

(33,895)

 

(17,180)

Income tax expense

 

18

 

74

 

37

 

94

Net loss

 

(11,831)

 

(9,267)

 

(33,932)

 

(17,274)

Accretion of redeemable convertible preferred stock to redemption value

 

(1,184)

 

(1,232)

 

(1,971)

 

(2,050)

Cumulative redeemable convertible preferred stock dividends

 

(885)

 

(787)

 

(2,296)

 

(1,575)

Net loss attributable to common stockholders — basic and diluted

$

(13,900)

$

(11,286)

$

(38,199)

$

(20,899)

Net loss per share attributable to common stockholders — basic and diluted

$

(20.01)

$

(31.93)

$

(57.17)

$

(59.13)

Weighted average common shares outstanding — basic and diluted

 

694,698

 

353,465

 

668,180

 

353,465

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of comprehensive loss

(Unaudited)

(In thousands)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2021

    

2020

    

2021

    

2020

Net loss

$

(11,831)

$

(9,267)

$

(33,932)

$

(17,274)

Other comprehensive income:

 

  

 

  

 

  

 

  

Unrealized loss on short-term investments, net of tax

 

(1)

 

 

(1)

 

Comprehensive loss

$

(11,832)

$

(9,267)

$

(33,933)

$

(17,274)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of redeemable convertible preferred stock and stockholders’ deficit

(Unaudited)

(In thousands, except share amounts)

Accumulated

Redeemable convertible

Class A and Class B

Additional

other

preferred stock

Common stock

paid-in

Accumulated

comprehensive

  

Shares

Amount

 

 

Shares

  

Amount

  

capital

  

deficit

  

income

  

Total

Balances at December 31, 2020

133,021,640

$

151,826

612,850

$

6

  

$

114,575

$

(241,588)

$

1

$

(127,006)

Issuance of Series D1 redeemable convertible preferred stock, net of issuance costs of $2,627

 

22,086,725

 

 

78,338

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series D2 redeemable convertible preferred stock, net of issuance costs of $18

 

413,268

 

 

1,470

 

 

 

 

 

 

 

 

 

 

 

Accretion of redeemable convertible preferred stock to redemption value

 

 

 

787

 

 

 

 

 

(787)

 

 

 

 

 

 

(787)

Cumulative redeemable convertible preferred stock dividends

 

 

 

1,411

 

 

 

 

 

(1,411)

 

 

 

 

 

 

(1,411)

Issuance of common stock upon exercise of stock options

 

 

 

 

67,418

 

 

1

 

 

66

 

 

 

 

 

 

67

Issuance of restricted common stock awards

248,903

2

(2)

Stock-based compensation expense

 

 

 

 

 

 

 

 

191

 

 

 

 

 

 

191

Net loss

(22,101)

(22,101)

Balances at March 31, 2021

 

155,521,633

 

$

233,832

 

929,171

 

$

9

 

$

112,632

 

$

(263,689)

 

$

1

 

$

(151,047)

Series D1 issuance costs

 

 

 

(64)

 

 

 

 

 

 

 

 

 

 

 

Series D2 issuance costs

(1)

Accretion of redeemable convertible preferred stock to redemption value

 

 

 

1,184

 

 

 

 

 

(1,184)

 

 

 

 

 

 

(1,184)

Cumulative redeemable convertible preferred stock dividends

 

 

 

885

 

 

 

 

 

(885)

 

 

 

 

 

 

(885)

Issuance of common stock upon exercise of stock options

 

 

 

 

37,146

 

 

1

 

 

31

 

 

 

 

 

 

32

Stock-based compensation expense

 

 

 

 

 

 

 

 

390

 

 

 

 

 

 

390

Net loss

(11,831)

(11,831)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

(1)

 

 

(1)

Balances at June 30, 2021

 

155,521,633

 

$

235,836

 

966,317

 

$

10

 

$

110,984

 

$

(275,520)

 

$

 

$

(164,526)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of redeemable convertible preferred stock and stockholders’ deficit

(Unaudited), continued

(In thousands, except share amounts)

    

    

    

    

  

  

    

    

    

    

    

    

    

    

    

    

Accumulated

    

    

    

Redeemable convertible

Class A and Class B

Additional

other

preferred stock

Common stock

paid-in

Accumulated

comprehensive

Shares

Amount

Shares

Amount

capital

deficit

income

Total

Balances at December 31, 2019

 

78,757,540

 

$

81,850

 

353,465

 

$

4

 

$

121,931

 

$

(204,510)

 

$

 

$

(82,575)

Accretion of redeemable convertible preferred stock to redemption value

 

 

 

818

 

 

 

 

 

(818)

 

 

 

 

 

 

(818)

Cumulative redeemable convertible preferred stock dividends

 

 

 

788

 

 

 

 

 

(788)

 

 

 

 

 

 

(788)

Stock-based compensation expense

 

 

 

 

 

 

 

 

120

 

 

 

 

 

 

120

Net loss

(8,007)

(8,007)

Balances at March 31, 2020

 

78,757,540

 

 

83,456

 

353,465

$

4

 

$

120,445

 

$

(212,517)

 

$

 

$

(92,068)

Issuance of Series C1 redeemable convertible preferred stock, net of issuance costs of $261

 

23,611,208

 

 

26,891

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series C2 redeemable convertible preferred stock, net of issuance costs of $303

 

20,301,829

 

 

23,044

 

 

 

 

 

 

 

 

 

 

 

Conversion of bridge notes to C1 redeemable convertible preferred stock

 

10,351,063

 

 

11,898

 

 

 

 

 

 

 

 

 

 

 

Accretion of redeemable convertible preferred stock to redemption value

 

 

 

1,232

 

 

 

 

 

(1,232)

 

 

 

 

 

 

(1,232)

Cumulative redeemable convertible preferred stock dividends

 

 

 

787

 

 

 

 

 

(787)

 

 

 

 

 

 

(787)

Stock-based compensation expense

 

 

 

 

 

 

 

 

126

 

 

 

 

 

 

126

Net loss

(9,267)

(9,267)

Balances at June 30, 2020

 

133,021,640

 

 

147,308

 

353,465

$

4

 

$

118,552

 

$

(221,784)

 

$

 

$

(103,228)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of cash flows

(Unaudited)

(In thousands)

    

Six Months Ended June 30, 

2021

2020

Cash flows from operating activities:

 

  

 

  

Net loss

$

(33,932)

$

(17,274)

Adjustments to reconcile net loss to net cash used in operating activities:

 

  

 

  

Depreciation and amortization expense

 

696

 

857

Stock-based compensation expense

 

581

 

246

Change in fair value of preferred stock warrant liability

 

11,483

 

(549)

Provision recorded for inventory

 

38

 

Noncash interest expense

 

295

 

817

Gain on disposal of property and equipment

(18)

Accretion on investments

 

(4)

 

3

Loss on extinguishment of debt

 

 

2,910

Changes in operating assets and liabilities

 

 

Accounts receivable

 

1,931

 

1,104

Inventory

 

(2,984)

 

(2,582)

Prepaid expenses and other current assets

 

(43)

 

(260)

Other long-term assets

 

(172)

 

(989)

Accounts payable

 

(1,894)

 

(1,510)

Accrued expenses and other current liabilities

 

1,373

 

(581)

Deferred revenue

 

(56)

 

799

Deferred rent, long term

 

(62)

 

1

Net cash used in operating activities

 

(22,768)

 

(17,008)

Cash flows from investing activities:

 

  

 

  

Purchases of property and equipment

 

(792)

 

(392)

Proceeds from sale of property and equipment

20

Purchases of investments

(24,980)

Maturity of investments

 

15,000

 

Net cash provided by (used in) investing activities

 

14,228

 

(25,372)

Cash flows from financing activities:

 

  

 

  

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs

 

79,743

 

49,935

Proceeds from issuance of common stock upon option exercise

 

287

 

Proceeds from issuance of restricted stock award

 

523

 

Payments of deferred offering costs

 

(1,861)

 

Proceeds from issuance of convertible notes, net of issuance costs

9,500

Proceeds from issuance of notes payable, net of issuance costs

25,000

Payments of debt issuance costs

 

 

(857)

Repayment of term loans

 

 

(18,000)

Payment of debt extinguishment fees

 

 

(1,398)

Net cash provided by financing activities

 

78,692

 

64,180

Net increase in cash, cash equivalents and restricted cash

 

70,152

 

21,800

Cash, cash equivalents and restricted cash at beginning of period

 

30,179

 

12,611

Cash, cash equivalents and restricted cash at end of period

$

100,331

$

34,411

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RAPID MICRO BIOSYSTEMS, INC.

Condensed consolidated statements of cash flows, continued

(Unaudited)

(In thousands)

    

Six Months Ended June 30, 

2021

2020

Supplemental disclosure of cash flow information

 

  

 

  

Cash paid for interest

$

1,098

$

813

Supplemental disclosure of non-cash investing activities

 

  

 

  

Purchases of property and equipment in accounts payable

$

110

$

99

Supplemental disclosure of non-cash financing activities

 

  

 

  

Conversion of convertible notes to Series C1 preferred stock

$

$

9,523

Issuance of preferred stock warrants in connection with redeemable convertible preferred stock

$

$

652

Initial fair value of derivative liability

$

$

2,375

Deferred offering costs included in accounts payable and accrued expenses

$

780

$

Accretion of redeemable convertible preferred stock to redemption value

$

1,971

$

2,050

Cumulative redeemable convertible preferred stock dividends

$

2,296

$

1,575

The accompanying notes are an integral part of these condensed consolidated financial statements.

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RAPID MICRO BIOSYSTEMS, INC.

Notes to condensed consolidated financial statements

(Amounts in thousands, except share and per share amounts)

1. Nature of the business and basis of presentation

Rapid Micro Biosystems, Inc. (the “Company”) was incorporated under the laws of the State of Delaware on December 29, 2006. The Company develops, manufactures, markets and sells Growth Direct systems (“Systems”) proprietary consumables, laboratory information management system (“LIMS”) connection software, and services to address rapid microbial analysis used for quality control in the manufacture of pharmaceuticals, medical devices and personal care products. The Company’s technology uses a highly sensitive camera and the natural auto fluorescence of living cells to identify and quantify microbial growth faster and more accurately than the traditional method, which relies on the human eye. The Company currently sells to customers in North America, Europe and Asia. The Company is headquartered in Lowell, Massachusetts.

The Company is subject to risks and uncertainties common to companies in the pharmaceutical and biotech quality control laboratory testing and instrumentation industry including, but not limited to, the successful development, commercialization, marketing and sale of products, fluctuations in operating results and financial risks, protection of proprietary knowledge and patent risks, dependence on key personnel, competition, technological and medical risks, customer demand, compliance with governmental regulations and management of growth. Potential risks and uncertainties also include, without limitation, uncertainties regarding the duration and magnitude of the impact of the COVID-19 pandemic on the Company’s business and the economy in general. Products currently under development will require additional research and development efforts prior to commercialization and will require additional capital and adequate personnel and infrastructure. The Company’s research and development may not be successfully completed, adequate protection for the Company’s technology may not be obtained, the Company may not obtain necessary government regulatory approval, and approved products may not prove commercially viable. The Company operates in an environment of rapid change in technology and competition.

In March 2020, the World Health Organization declared the global novel coronavirus disease 2019 (“COVID-19”) outbreak a pandemic. The impact of this pandemic has been and may continue to be extensive in many aspects of society, which has resulted in and may continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world. The Company cannot at this time predict the ultimate extent, duration, or full impact that the COVID-19 pandemic will have on its future financial condition and operations. The impact of the COVID-19 coronavirus outbreak on the Company’s financial performance will depend on future developments, including the duration and spread of the pandemic and related governmental advisories and restrictions. These developments and the impact of COVID-19, and its variants, on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results may be materially adversely affected.

Future impacts to the Company’s business as a result of COVID-19, and its variants, could include disruptions to the Company’s manufacturing operations and supply chain caused by facility closures, reductions in operating hours, staggered shifts and other social distancing efforts; labor shortages; decreased productivity and unavailability of materials or components; limitations on its employees’ and customers’ ability to travel, and delays in shipments to and from affected countries and within the United States. While the Company maintains an inventory of finished products and raw materials used in its products, a prolonged pandemic could lead to shortages in the raw materials necessary to manufacture its products.

Basis of presentation

These condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries in Germany and Switzerland. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these condensed

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consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s audited consolidated financial statements for the year ended December 31, 2020, included in the Company’s prospectus, dated July 14, 2021, filed with the Securities and Exchange Commission (“SEC”) in accordance with Rule 424(b) of the Securities Act on July 16, 2021 (the “Prospectus”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2021 and the results of its operations for the three and six months ended June 30, 2021 and 2020, and its cash flows for the six months ended June 30, 2021 and 2020. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2021 and 2020 are also unaudited. The results for the three and six months ended June 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021, any other interim periods, or any future year or period.

Reverse split

On July 9, 2021, the Company effected a one-for-five reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s Preferred Stock (see Note 10). Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the Preferred Stock conversion ratios.

Initial public offering

On July 19, 2021, the Company closed an initial public offering (“IPO”) of its Class A common stock, which resulted in the sale of 7,920,000 shares of its Class A common stock at a public offering price of $20.00 per share, before underwriting discounts. The offering resulted in gross proceeds of $158.4 million and net proceeds to the Company of approximately $143.6 million from the initial public offering after deducting underwriting discounts, commissions and estimated offering expenses payable by the Company.

On August 4, 2021, the underwriters exercised their overallotment option in part and purchased 1,086,604 shares of Class A common stock at the initial public offering price of $20.00 per share less discounts and commissions. The overallotment option exercise resulted in net proceeds of approximately $20.2 million.

Going concern

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.

Through June 30, 2021, the Company has funded its operations primarily with proceeds from product, service and non-commercial revenue, proceeds from sales of its redeemable convertible preferred stock, including borrowings under convertible debt arrangements that subsequently converted into redeemable convertible preferred stock, and from the issuance of term loans. Subsequent to June 30, 2021, the Company obtained proceeds from the IPO that will be used to fund operations. The Company has incurred recurring losses since its inception, including net losses of $11.8 million and $9.3 million for the three months ended June 30, 2021 and 2020, respectively, and net losses of $33.9 million and $17.3 million for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, the Company had an accumulated deficit of $275.5 million. The Company expects to continue to generate significant operating losses for the foreseeable future. As of August 27, 2021, the date these interim condensed consolidated financial statements were issued, the Company expects that its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months following the date these condensed consolidated

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financial statements were issued. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

2. Summary of significant accounting policies

Use of estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, calculating the standalone selling price for revenue recognition, the valuation of inventory, the valuation of common stock and stock-based awards, and the valuation of the preferred stock warrant liability. The Company bases its estimates on historical experience, known trends and other market-specific and relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained.

Other than policies noted below, there have been no significant changes to the significant accounting policies disclosed in Note 2 of the audited consolidated financial statements as of December 31, 2020 and 2019 and for the years ended December 31, 2020 and 2019, included in the Prospectus.

Risk of concentrations of credit, significant customers and significant suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company maintains its cash and cash equivalents with financial institutions that management believes to be of high credit quality. The Company has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company has not experienced any other-than-temporary losses with respect to its cash equivalents and investments and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

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