# Twist Bioscience Corp: Form 10-Q for the period ended Mar 31, 2025

- Company: [Twist Bioscience Corp](/companies/twst.md) (CIK 1581280)
- Form: 10-Q
- Filed: 2025-05-05
- Accepted by EDGAR: May 5, 2025, 16:05 ET
- Period: 2025-03-31
- Accession: 0001628280-25-022154
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1581280/000162828025022154/twst-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1581280/000162828025022154/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $92.8m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Revenue | 6 months, 2024-10-01 to 2025-03-31 | $181.5m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $46.8m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2024-10-01 to 2025-03-31 | $92.6m | us-gaap:CostOfRevenue |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $23.9m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2024-10-01 to 2025-03-31 | $45.2m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $63.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2024-10-01 to 2025-03-31 | $119.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$41.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-10-01 to 2025-03-31 | −$76.2m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $143.0k | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2024-10-01 to 2025-03-31 | $166.0k | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $175.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-10-01 to 2025-03-31 | $271.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$39.3m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-10-01 to 2025-03-31 | −$70.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.66 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-10-01 to 2025-03-31 | −$1.19 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.66 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-10-01 to 2025-03-31 | −$1.19 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 59,649,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-10-01 to 2025-03-31 | 59,403,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-10-01 to 2025-03-31 | −$34.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2024-10-01 to 2025-03-31 | $6.4m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-03-31 | $210.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $338.4m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $595.6m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $75.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $155.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $440.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 24,439 characters.

*You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated financial statements and related notes that are included elsewhere in this Form 10-Q and our Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those discussed in the section entitled “Risk Factors” and elsewhere in this Form 10-Q. In preparing this MD&A, we presume that readers have access to and have read the MD&A in our Annual Report on Form 10-K, pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K.*

### Overview

We are a leading, rapidly growing synthetic biology company that has developed a disruptive DNA synthesis platform to industrialize the engineering of biology. The core of our platform is a proprietary technology that pioneers a new method of manufacturing synthetic DNA by “writing” DNA on a silicon chip. We have combined our silicon-based DNA writing technology with proprietary software, scalable commercial infrastructure and an e-commerce platform to create an integrated technology platform that enables us to achieve high levels of quality, precision, automation, and manufacturing throughput at a significantly lower cost than our competitors. We have applied our unique technology to manufacture a broad range of synthetic DNA-based products, including synthetic genes, tools for next generation sequencing, or NGS, sample preparation, and antibody libraries for drug discovery and development, all designed to enable our customers to conduct research more efficiently and effectively. Leveraging our same technology, we have expanded our footprint beyond DNA synthesis to manufacture synthetic RNA as well as antibody proteins to disrupt and innovate within larger market opportunities, in addition to discovery partnerships for biologic drugs.

We believe our products enable a broad range of applications that may ultimately improve health and the sustainability of the planet across multiple industries including healthcare, chemicals/materials, food/agriculture, and academic research. We sell our synthetic DNA and synthetic DNA-based products to a customer base of approximately 3,562 customers annually across a broad range of industries. In order to address this diverse customer base, we employ a multi-channel strategy comprised of a direct sales force targeting synthetic DNA customers, a direct sales force focusing on the NGS market and an e-commerce platform that serves both commercial channels. We employ business development and sales representatives for our biopharma solutions as well. Our easy-to-use e-commerce platform allows customers to design, validate and place on-demand orders of customized DNA online, and enables them to receive real-time customized quotes for their products and track their order status through the manufacturing and delivery process. This is a critical part of our strategy to address our large markets and diverse customer base, as well as drive commercial productivity, enhance the customer experience, and promote loyalty.

We currently generate revenue through our synthetic biology and NGS tools product lines as well as biopharma services for antibody discovery, optimization and development.

Since our inception, we have incurred net losses each year. Our net losses for the three months ended March 31, 2025 was $39.3 million compared to $45.5 million for the three months ended March 31, 2024. As of March 31, 2025, we have accumulated net deficit of $1,312.8 million and cash, cash equivalents and short-term investments of $257.1 million. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the success of our existing products and the development and commercialization of additional products in the synthetic biology and biologic drug industries as well as leveraging our investment in our manufacturing facility in Wilsonville, Oregon.

Financial highlights from three months ended March 31, 2025, compared to the three months ended March 31, 2024, include the following:

- Increase in revenues of 23% to $92.8 million from $75.3 million, primarily due to growth in NGS tools and synthetic genes revenues;
- Gross margin increased to 49.6% from 41.0% mainly due to increase in revenues and the fixed costs being spread over a larger revenue base;
- Loss from operations decreased to $41.6 million from $48.9 million primarily due to increases in revenues and gross profit;
- Net loss decreased to $39.3 million from $45.5 million and net loss per share, basic and diluted, decreased to $0.66, a significant improvement from the net loss per share of $0.79;
- Net cash used in operating activities decreased to $13.0 million from $19.4 million.

### Results of Operations

### Comparison of the Three Months Ended March 31, 2025 and 2024

### Revenues

*(in thousands, except percentages)*

|  | Three Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Revenues | $92,793 | $75,302 | $17,491 | 23% |

### Revenues by Geography

We have one reportable segment from the manufacturing of synthetic DNA products. The following table shows our revenues by geography, based on our customers’ shipping addresses. Americas consists of United States, Canada, Mexico and South America; EMEA consists of Europe, Middle East and Africa; and APAC consists of Japan, China, South Korea, India, Singapore, Malaysia, Australia, New Zealand, Thailand and Taiwan.

|  | Three Months Ended March 31, |  |
| --- | ---: | ---: |
| **(in thousands, except percentages)** | **2025%** | **2024%** |
| Americas | $55,189 59% | $45,873 61% |
| EMEA | 30,642 33% | 22,263 30% |
| APAC | 6,962 8% | 7,166 9% |
| Total revenues | $92,793 100% | $75,302 100% |

### Revenues by Product

The table below summarized revenues by product:

|  | Three Months Ended March 31, |  |
| --- | ---: | ---: |
| **(in thousands, except percentages)** | **2025%** | **2024%** |
| Synthetic genes | $28,222 31% | $22,356 29% |
| Oligo pools | 4,711 5% | 3,940 6% |
| DNA libraries | 3,017 3% | 3,531 5% |
| Antibody discovery | 5,697 6% | 4,701 6% |
| NGS tools | 51,146 55% | 40,774 54% |
| Total revenues | $92,793 100% | $75,302 100% |

### Revenues by Industry

The table below summarized revenues by industry:

|  | Three Months Ended March 31, |  |
| --- | ---: | ---: |
| **(in thousands, except percentages)** | **2025%** | **2024%** |
| Industrial chemicals/materials | $22,795 24% | $20,264 27% |
| Academic research | 16,527 18% | 13,722 18% |
| Healthcare | 52,766 57% | 40,934 54% |
| Food/agriculture | 705 1% | 382 1% |
| Total revenues | $92,793 100% | $75,302 100% |

23

### Product Shipments Including Synthetic Genes

The table below summarized product shipments including synthetic genes:

*(in thousands)*

|  | Three Months Ended March 31, March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Number of genes shipped | 227 | 205 | 196 | 212 | 193 | 171 | 177 | 171 |

The number of customers who purchased products from us were approximately 2,431 and 2,253 customers for the three months ended March 31, 2025 and 2024, respectively.

Revenues increased 23% to $92.8 million for the three months ended March 31, 2025, as compared to $75.3 million for the three months ended March 31, 2024. The increase in revenues primarily reflects growth in NGS tools revenue of $10.4 million and growth in synthetic genes revenue of $5.9 million, which is primarily attributable to increase in revenues from our customers in the healthcare, industrial chemicals/materials and academic research industries and an increase in the number of customers. The number of our genes shipped in the three months ended March 31, 2025 increased to approximately 227,000 genes compared to approximately 193,000 genes in the three months ended March 31, 2024, an increase of 18%.

### Cost of Revenues

*(in thousands, except percentages)*

|  | Three Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Cost of revenues | $46,765 | $44,420 | $2,345 | 5% |
| Gross profit | $46,028 | $30,882 | $15,146 | 49% |
| Gross margin | 49.6% | 41.0% | 8.6% |  |

Cost of revenues increased 5% to $46.8 million for the three months ended March 31, 2025, as compared to $44.4 million for the three months ended March 31, 2024. The increase is primarily attributable to an increase in material costs of $3.0 million due to higher sales volume, increase in production overheads including facilities, IT services, and lab supplies of $0.6 million, and an increase in stock-based compensation of $1.0 million. The increase was partially offset by a decrease in depreciation and amortization expense of $1.4 million due to impairment of long-lived assets in fiscal year 2024 and a decrease in outside services of $0.9 million. Gross margin increased 859 basis points to 49.6% for the three months ended March 31, 2025 as compared to 41.0% for the three months ended March 31, 2024 mainly due to increase in revenues and the fixed costs being spread over a larger revenue base as well as the impact of continuous process improvement.

### Research and Development Expenses

*(in thousands, except percentages)*

|  | Three Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $23,917 | $24,149 | $(232) | (1)% |

Research and development expenses decreased 1% to $23.9 million for the three months ended March 31, 2025, as compared to $24.1 million for the three months ended March 31, 2024. The decrease is primarily due to a decrease in personnel costs of $0.7 million offset by increases in IT services costs of $0.2 million, stock compensation expenses of $0.2 million and lab supplies of $0.1 million.

### Selling, General and Administrative Expenses

*(in thousands, except percentages)*

|  | Three Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Selling, general and administrative | $63,671 | $55,622 | $8,049 | 14% |

24

Total selling, general and administrative expenses increased 14% to $63.7 million for the three months ended March 31, 2025, as compared to $55.6 million for the three months ended March 31, 2024. The increase is primarily due to increases in stock-based compensation expense of $5.3 million, third party spending of $1.8 million, and personnel costs of $1.3 million. The increase was partially offset by decrease in marketing costs of $0.5 million.

### Interest and Other Income (Expense), net

*(in thousands, except percentages)*

|  | Three Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Interest income | $2,801 | $3,941 | $(1,140) | (29)% |
| Interest expense | (143) | — | (143) | N/A |
| Other expense | (251) | (199) | (52) | 26% |
| Total interest and other income (expense), net | $2,407 | $3,742 | $(1,335) | (36)% |

Interest income decreased 29% to $2.8 million for the three months ended March 31, 2025, as compared to $3.9 million for the three months ended March 31, 2024, due to lower cash equivalents and short-term investments balance.

### Income Tax Expense

*(in thousands, except percentages)*

|  | Three Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Income tax expense | $(175) | $(345) | $170 | (49)% |

We recorded an income tax provision of $0.2 million and $0.3 million for the three months ended March 31, 2025 and March 31, 2024, respectively.

### Comparison of the Six Months Ended March 31, 2025 and 2024

### Revenues

*(in thousands, except percentages)*

|  | Six Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Revenues | $181,506 | $146,800 | $34,706 | 24% |

### Revenues by Geography

We have one reportable segment from the manufacturing of synthetic DNA products. The following table shows our revenues by geography, based on our customers’ shipping addresses. Americas consists of United States, Canada, Mexico and South America; EMEA consists of Europe, Middle East and Africa; and APAC consists of Japan, China, South Korea, India, Singapore, Malaysia, Australia, New Zealand, Thailand and Taiwan.

|  | Six Months Ended March 31, |  |
| --- | ---: | ---: |
| **(in thousands, except percentages)** | **2025%** | **2024%** |
| Americas | $108,899 60% | $89,832 61% |
| EMEA | 58,945 32% | 43,483 30% |
| APAC | 13,662 8% | 13,485 9% |
| Total revenues | $181,506 100% | $146,800 100% |

### Revenues by Product

The table below summarized revenues by product:

|  | Six Months Ended March 31, |  |
| --- | ---: | ---: |
| **(in thousands, except percentages)** | **2025%** | **2024%** |
| Synthetic genes | $54,708 30% | $42,083 28% |
| Oligo pools | 9,804 6% | 8,129 6% |
| DNA libraries | 5,811 3% | 6,470 4% |
| Antibody discovery | 11,395 6% | 9,927 7% |
| NGS tools | 99,788 55% | 80,191 55% |
| Total revenues | $181,506 100% | $146,800 100% |

### Revenues by Industry

The table below summarized revenues by industry:

|  | Six Months Ended March 31, |  |
| --- | ---: | ---: |
| **(in thousands, except percentages)** | **2025%** | **2024%** |
| Industrial chemicals/materials | $43,998 24% | $36,542 25% |
| Academic research | 34,073 19% | 27,495 18% |
| Healthcare | 102,135 56% | 81,815 56% |
| Food/agriculture | 1,300 1% | 948 1% |
| Total revenues | $181,506 100% | $146,800 100% |

Revenues increased 24% to $181.5 million for the six months ended March 31, 2025, as compared to $146.8 million for the six months ended March 31, 2024. The increase in revenues primarily reflects growth in NGS tools revenue of $19.6 million and growth in synthetic genes revenue of $12.6 million, which is primarily attributable to increase in revenues from our customers in the healthcare, industrial chemicals/materials and academic research industries and an increase in the number of customers. The number of our genes shipped in the six months ended March 31, 2025 increased to approximately 432,000 genes compared to approximately 364,000 genes in the six months ended March 31, 2024, an increase of 19%.

### Cost of Revenues

*(in thousands, except percentages)*

|  | Six Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Cost of revenues | $92,638 | $86,955 | $5,683 | 7% |
| Gross profit | $88,868 | $59,845 | $29,023 | 48% |
| Gross margin | 49.0% | 40.8% | 8.2% |  |

Cost of revenues increased 7% to $92.6 million for the six months ended March 31, 2025, as compared to $87.0 million for the six months ended March 31, 2024. The increase is primarily attributable to an increase in material costs of $7.6 million due to higher sales volume, an increase in production overheads including facilities, IT services, and laboratory supplies of $1.3 million and an increase in personnel costs including stock-based compensation of $1.0 million. The increase was partially offset by a decrease in depreciation and amortization expense of $2.7 million due to impairment of long-lived assets in fiscal year 2024 and a decrease in outside services of $1.4 million. Gross margin increased 820 basis points to 49.0% for the six months ended March 31, 2025 as compared to 40.8% for the six months ended March 31, 2024 mainly due to increase in revenues and the fixed costs being spread over a larger revenue base as well as the impact of continuous process improvement.

### Research and Development Expenses

*(in thousands, except percentages)*

|  | Six Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $45,224 | $47,249 | $(2,025) | (4)% |

Research and development expenses decreased 4% to $45.2 million for the six months ended March 31, 2025, as compared to $47.2 million for the six months ended March 31, 2024. The decrease is primarily due to a decrease in personnel costs of $0.9 million, outside service costs of $0.9 million and facilities costs of $0.1 million.

### Selling, General and Administrative Expenses

*(in thousands, except percentages)*

|  | Six Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Selling, general and administrative | $119,849 | $108,462 | $11,387 | 10% |

Total selling, general and administrative expenses increased 10% to $119.8 million for the six months ended March 31, 2025, as compared to $108.5 million for the six months ended March 31, 2024. The increase is primarily due to an increase in stock-based compensation expense of $6.1 million, third party spending of $3.4 million, and personnel costs of $2.0 million.

### Interest and Other Income (Expense), net

*(in thousands, except percentages)*

|  | Six Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Interest income | $6,041 | $8,061 | $(2,020) | (25)% |
| Interest expense | (166) | — | (166) | N/A |
| Other expense | (321) | (230) | (91) | 40% |
| Total interest and other income (expense), net | $5,554 | $7,831 | $(2,277) | (29)% |

Interest income decreased 25% to $6.0 million for the six months ended March 31, 2025, as compared to $8.1 million for the six months ended March 31, 2024, due to lower cash equivalents and short-term investments balance.

### Income Tax Expense

*(in thousands, except percentages)*

|  | Six Months Ended March 31, 2025 | 2024 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Income tax expense | $(271) | $(465) | $194 | (42)% |

We recorded an income tax provision of $0.3 million and $0.5 million for the six months ended March 31, 2025 and March 31, 2024, respectively.

### Liquidity and Capital Resources

### Sources of Liquidity

To date, we have financed our operations principally through public equity raises, private placements of our convertible preferred stock, borrowings from credit facilities and revenue from our commercial operations. At March 31, 2025, we had a balance of $210.4 million of cash and cash equivalents and $46.7 million in short-term investments.

During the six months ended March 31, 2025, we received an upfront payment of $15.0 million from XOMA (US) LLC ("XOMA") in cash in exchange for XOMA's right to receive half of the future potential milestone and royalty payments resulting from existing antibody discovery and biopharma services collaborations with Company’s partners. We accounted for the transaction as liability for the sale of future revenue under the accounting guidance for sale of future revenues (see note 15 of the condensed consolidated financial statements included elsewhere in this Form 10-Q).

### Operating Capital Requirements

Our primary uses of capital are, and we expect will continue to be for the near future, compensation and related expenses, manufacturing costs, laboratory and related supplies, legal and other regulatory expenses and general overhead costs and capital expenditures. We had $4.9 million in commitments for capital expenditures as of March 31, 2025.

### Cash Flows

The following table summarizes our sources and uses of cash and cash equivalents:

*(in thousands)*

|  | Six Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash used in operating activities | $(34,414) | $(42,396) |
| Net cash provided by (used in) investing activities | (2,962) | (1,075) |
| Net cash provided by financing activities | 21,140 | 355 |

### Operating Activities

Net cash used in operating activities was $34.4 million during the six months ended March 31, 2025 primarily due to a net loss of $70.9 million adjusted for non-cash items including depreciation and amortization expense of $12.8 million, stock-based compensation expense of $32.3 million and a net cash outflow from operating assets and liabilities of $9.4 million. The net cash outflow from operating assets and liabilities was mainly due to an increase in accounts receivable of $15.3 million due to timing of collections, a decrease in accrued compensation of $8.7 million offset by decreases in inventories of $3.2 million, increases in accrued expenses of $3.3 million, accounts payable of $6.4 million and other liabilities of $1.3 million. The changes in accrued compensation, accrued expenses, and accounts payable are due to timing of payments to vendors and employees.

Net cash used in operating activities was $42.4 million in the six months ended March 31, 2024 and consisted primarily of a net loss of $88.5 million adjusted for non-cash items including depreciation and amortization expenses of $16.5 million, stock-based compensation expense of $24.8 million, non-cash lease expense of $0.5 million and a net change in operating assets and liabilities of $4.0 million. The change in operating assets and liabilities was mainly due to decreases in accounts receivable of $7.4 million, inventories of $1.7 million, other non-current assets of $0.3 million, accounts payable of $5.7 million, accrued compensation of $0.5 million and other liabilities of $2.6 million offset by an increase in prepaid expenses of $0.4 million and accrued expenses of $3.9 million.

### Investing Activities

Net cash used in investing activities was $3.0 million during the six months ended March 31, 2025, which consisted of the purchases of property and equipment of $6.4 million offset by the proceeds from the net impact of purchases and maturity of investments of $3.5 million.

In the six months ended March 31, 2024, our investing activities used net cash of $1.1 million, which was comprised of the purchases of property and equipment of $2.1 million offset by the proceeds from the net impact of purchases and maturity of investments of $1.0 million.

### Financing Activities

Net cash provided by financing activities was $21.1 million in the six months ended March 31, 2025, which consisted of $15.0 million from XOMA for the sale of future revenue, $3.7 million from the exercise of stock options and $2.4 million proceeds from issuance of shares under the ESPP.

Net cash provided by financing activities was $0.4 million in the six months ended March 31, 2024, which consisted of $2.3 million from the exercise of stock options and $2.0 million proceeds from issuance of shares under the ESPP offset by $4.0 million in repurchases of common stock for income tax withholdings.

### Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

### Contractual Obligations and Other Commitments

Our contractual obligations have not materially changed from those reported in our Annual Report on Form 10-K.

### Critical Accounting Policies and Significant Management Estimates

The preparation of our Condensed Consolidated Financial Statements in accordance with generally accepted accounting principles in the United States of America requires management to make estimates and judgments that affect the reported amounts in the financial statements and related disclosures. On an ongoing basis, we evaluate our significant accounting policies and estimates. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ significantly from these estimates. A summary of our critical accounting policies and estimates is presented in Part II, Item 7 of our Annual Report on Form 10-K. There were no changes to our critical accounting policies and estimates during the six months ended March 31, 2025.

### Recent Accounting Pronouncements

For a description of accounting changes and recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our condensed consolidated financial statements, see Note 2, “Summary of significant accounting policies” in Item 1 of Part I of this Form 10-Q.

## Market risk

As filed, 243 characters.

Information about our market risk is presented in Part II, Item 7A “Quantitative and Qualitative Disclosures about Market Risk” of our Annual Report on Form 10-K. Our exposure to market risk has not changed materially since September 30, 2024.

## Controls and procedures

As filed, 1,902 characters.

### Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025, which is the end of the period covered by this Form 10-Q. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures to ensure that information required to be disclosed by the Company in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, evaluated and reported, as applicable, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures were effective as of March 31, 2025.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Limitations on Effectiveness of Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, as specified above. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.

## Risk factors

As filed, 3,793 characters.

In addition to the other information set forth in this Form 10-Q, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our Annual Report on Form 10-K , and this Form 10-Q, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in our Annual Report on Form 10-K, other than the updates to the risk factors set forth below. We may disclose changes to risk factors or additional risk factors from time to time in our future filings with the SEC.

### Risks Related to Our Business

***Adverse global economic conditions and U.S. policy changes could have a negative effect on our business, financial condition and results of operations.***

The global economy has been impacted by geopolitical tensions. For example, new U.S. federal administration has recently imposed significant new tariffs on imports, which, along with other U.S. trade actions, have triggered retaliatory actions by certain affected countries. These geopolitical tensions could result in, among other things, macroeconomic uncertainty, cyberattacks, supply chain disruptions, higher costs and changes to foreign exchange rates and financial markets, and tariffs and trade restrictions may result in increased production costs and product pricing, further supply chain disruptions, limited access to markets and uncertainty related to planning long-term investments and strategies. Additionally, the administration's halt on certain federal research grants may negatively impact our industry. Any prolonged reductions in such funding could slow innovation, delay collaborations and limit the adoption of new technologies that contribute to our business growth. If these or similar policy changes continue or expand, we may face increased costs or impact on the demand for our products. We are monitoring and evaluating any potential impacts that global economic conditions and other policy changes may have on our business, and we are considering ways in which we may offset any impacts. However, there is no assurance that we will be successful in mitigating the effects in the current environment. Although we cannot predict the full extent of these impacts, any such policy changes could adversely affect our business, financial condition and results of operations.

***We may not achieve the anticipated benefits from the spin out of our DNA data storage application.***

In May 2025, we completed the spin out of our DNA data storage application to a new independent company, Atlas Data Storage (“Atlas”), which allows us to focus on our synthetic biology, NGS and biopharma products and services. While we will retain an equity interest in Atlas and receive potential milestone payments and royalties on any future sales of Atlas’ products and services, we may not achieve some or all of the anticipated benefits of the spin out if Atlas’ technology development and commercialization efforts are not successful. In addition, the divestiture reduces business diversification and may prove not to be a superior alternative to the continued development of the DNA data storage application by us. Further, we will be required to provide transition services to Atlas throughout a transition period, including use of some of our facilities and employee services which may require significant time, attention and resources of our management and other employees, potentially diverting their attention from other aspects of our business.

Filed May 5, 2025.
Source: SEC EDGAR, the filing index for accession 0001628280-25-022154. Last ingested by Listed: Nov 5, 2026, 16:39 ET. No prices; not investment advice.