UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,
2024
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 No. 333-254886
SEQLL INC.
(Exact name of registrant as specified in its
charter)
Delaware | | 46-5319744 |
(State or other jurisdiction of | | (I.R.S. Employer |
incorporation or organization) | | Identification No.) |
3 Federal Street | | |
Billerica, MA | | 01821 |
(Address of principal executive office) | | (Zip Code) |
(781) 460-6016
(Registrant’s telephone number, including
area code)
Securities registered pursuant to Section 12(b) of the Act: None
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, 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 ☒
As of May 13, 2024, there were 380,648 shares
of registrant’s common stock outstanding.
TABLE OF CONTENTS
EXPLANATORY NOTE
In this Quarterly Report on Form 10-Q, and unless
the context otherwise requires, the “Company,” “we,” “us,” and “our” refer to SeqLL Inc.
and its wholly owned Subsidiaries taken as a whole.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Quarterly Report on Form 10-Q contains “forward-looking statements.” Forward-looking statements include, but are not limited
to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future
activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our
business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially
from what is expressed or forecasted in the forward-looking statements due to numerous factors discussed from time to time in this report
and in other documents which we file with the Securities and Exchange Commission. In addition, such statements could be affected by risks
and uncertainties related to:
| ● | our
ability to consummate the transactions contemplated by the Merger Agreement or the Asset Purchase Agreement, each as defined in Note
1 to the condensed consolidated financial statements included in this report; |
|
● |
our ability to relist our securities on a national stock market; |
| ● | the
success, cost and timing of our product development activities, including statements regarding the timing of initiation and completion
of our research and development programs; |
| ● | developments
regarding next generation sequencing technologies; |
| ● | our
expectations regarding the market size and growth potential for our business; |
| ● | our
ability to generate sustained revenue or achieve profitability; |
| ● | the
potential for our identified research priorities to advance our technology; |
| ● | the
pricing and expected gross margin for our products; and |
| ● | the
other factors discussed in the “Risk Factors” section and elsewhere in this report. |
Any forward-looking statements speak only as of
the date on which they are made, and except as may be required under applicable securities laws, we do not undertake any obligation to
update any forward-looking statement to reflect events or circumstances after the filing date of this report.
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
SeqLL Inc.
Condensed Consolidated Balance Sheets
| |
March 31, | | |
December 31, | |
| |
2024 | | |
2023 | |
| |
(Unaudited) | | |
| |
Assets | |
| | |
| |
Current assets | |
| | |
| |
Cash and cash equivalents | |
$ | 1,688,926 | | |
$ | 2,693,991 | |
Accounts receivable, net of allowance for doubtful accounts of $24,507 as of March 31, 2024 and December 31, 2023 | |
| 2,723 | | |
| 2,723 | |
Prepaid expenses | |
| 33,600 | | |
| 32,933 | |
Total current assets | |
| 1,725,249 | | |
| 2,729,647 | |
Other assets | |
| | | |
| | |
Property and equipment, net | |
| 584,031 | | |
| 625,360 | |
Operating lease right-of-use asset | |
| 964,163 | | |
| 998,346 | |
Other assets | |
| 81,219 | | |
| 83,008 | |
Total assets | |
$ | 3,354,662 | | |
$ | 4,436,361 | |
| |
| | | |
| | |
Liabilities and Stockholders’ Equity (Deficit) | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable | |
$ | 497,441 | | |
$ | 522,940 | |
Accrued expenses | |
| 410,944 | | |
| 375,191 | |
Current portion of finance lease liability | |
| 62,106 | | |
| 59,659 | |
Current portion of operating lease liability | |
| 203,288 | | |
| 198,314 | |
Non-convertible promissory notes | |
| 1,375,000 | | |
| 1,375,000 | |
Total current liabilities | |
| 2,548,779 | | |
| 2,531,104 | |
| |
| | | |
| | |
Non-current liabilities | |
| | | |
| | |
Finance lease liability, less current portion | |
| 35,008 | | |
| 51,481 | |
Operating lease liability, less current portion | |
| 1,193,059 | | |
| 1,246,033 | |
Total non-current liabilities | |
| 1,228,067 | | |
| 1,297,514 | |
| |
| | | |
| | |
Total liabilities | |
| 3,776,846 | | |
| 3,828,618 | |
| |
| | | |
| | |
Commitments and contingencies (Note 8) | |
| | | |
| | |
| |
| | | |
| | |
Stockholders’ equity (deficit) | |
| | | |
| | |
Preferred stock, $0.00001 par value; 20,000,000 shares authorized; zero shares issued and outstanding | |
| - | | |
| - | |
Common stock, $0.00001 par value; 300,000,000 shares authorized; 384,790 and 380,648 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | |
| 4 | | |
| 4 | |
Additional paid-in capital | |
| 24,809,667 | | |
| 24,744,014 | |
Accumulated deficit | |
| (25,231,855 | ) | |
| (24,136,275 | ) |
Total stockholders’ equity (deficit) | |
| (422,184 | ) | |
| 607,743 | |
Total liabilities and stockholders’ equity (deficit) | |
$ | 3,354,662 | | |
$ | 4,436,361 | |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
SeqLL Inc.
Condensed Consolidated Statements of Comprehensive
Loss
(Unaudited)
| |
Three months ended
March 31, |
| |
2024 | | |
2023 | |
Operating expenses | |
| | |
| |
Research and development | |
| 316,263 | | |
| 776,720 | |
General and administrative | |
| 749,558 | | |
| 981,107 | |
Total operating expenses | |
| 1,065,821 | | |
| 1,757,827 | |
| |
| | | |
| | |
Operating loss | |
| (1,065,821 | ) | |
| (1,757,827 | ) |
| |
| | | |
| | |
Other (income) and expenses | |
| | | |
| | |
Investment
income | |
| (10,061 | ) | |
| (56,267 | ) |
Interest expense | |
| 39,820 | | |
| 16,806 | |
| |
| | | |
| | |
Net loss | |
| (1,095,580 | ) | |
| (1,718,366 | ) |
Other comprehensive income | |
| | | |
| | |
Unrealized
gain on marketable debt securities | |
| - | | |
| 17,569 | |
Reclassification
adjustment for net gains included in net loss | |
| - | | |
| (22,081 | ) |
Net
change | |
| - | | |
| (4,512 | ) |
| |
| | | |
| | |
Total
comprehensive loss | |
$ | (1,095,580 | ) | |
$ | (1,722,878 | ) |
| |
| | | |
| | |
Net loss per share - basic and diluted | |
$ | (2.87 | ) | |
$ | (4.83 | ) |
| |
| | | |
| | |
Weighted average common shares - basic and diluted | |
| 382,151 | | |
| 355,648 | |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
Reflects a 1-for-40 reverse stock split effective
August 30, 2023
SeqLL Inc.
Condensed Consolidated Statements of Changes
in Stockholders’ Equity
(Unaudited)
| |
Preferred Stock | | |
Common Stock | | |
Additional Paid-In | | |
Accumulated Other Comprehensive
Income | | |
Accumulated | | |
Total Equity | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
(Loss) | | |
Deficit | | |
(Deficit) | |
Balance as of December 31, 2023 | |
| - | | |
$ | - | | |
| 380,648 | | |
$ | 4 | | |
$ | 24,744,014 | | |
$ | - | | |
$ | (24,136,275 | ) | |
| 607,743 | |
Stock-based compensation expense | |
| - | | |
| - | | |
| - | | |
| - | | |
| 65,653 | | |
| - | | |
| - | | |
| 65,653 | |
Issuance of common stock for vested RSU’s | |
| - | | |
| - | | |
| 4,142 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,095,580 | ) | |
| (1,095,580 | ) |
Balance as of March 31, 2024 | |
| - | | |
$ | - | | |
| 384,790 | | |
$ | 4 | | |
$ | 24,809,667 | | |
$ | - | | |
$ | (25,231,855 | ) | |
| (422,184 | ) |
| |
Preferred
Stock | | |
Common
Stock | | |
Additional
Paid-In | | |
Accumulated
Other Comprehensive Income | | |
Accumulated | | |
Total
Stockholders’ | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
(Loss) | | |
Deficit | | |
Equity | |
Balance
as of December 31, 2022 | |
| - | | |
$ | - | | |
| 330,648 | | |
$ | 3 | | |
$ | 22,853,116 | | |
$ | 22,451 | | |
$ | (18,508,684 | ) | |
$ | 4,366,886 | |
Issuance of common stock, net of issuance costs of $300,750 | |
| - | | |
| - | | |
| 50,000 | | |
| 1 | | |
| 1,499,249 | | |
| - | | |
| - | | |
| 1,499,250 | |
Stock-based
compensation expense | |
| - | | |
| - | | |
| - | | |
| - | | |
| 82,594 | | |
| - | | |
| - | | |
| 82,594 | |
Other
comprehensive income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (4,512 | ) | |
| - | | |
| (4,512 | ) |
Net
loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,718,366 | ) | |
| (1,718,366 | ) |
Balance
as of March 31, 2023 | |
| - | | |
$ | - | | |
| 380,648 | | |
$ | 4 | | |
$ | 24,434,959 | | |
$ | 17,939 | | |
$ | (20,227,050 | ) | |
$ | 4,225,852 | |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
Reflects a 1-for-40 reverse stock split effective
August 30, 2023
SeqLL Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| |
Three months ended March 31, | |
| |
2024 | | |
2023 | |
Cash Flows from Operating Activities | |
| | |
| |
Net loss | |
$ | (1,095,580 | ) | |
$ | (1,718,366 | ) |
Adjustment to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Depreciation | |
| 41,329 | | |
| 30,246 | |
Write-off of obsolete inventory | |
| - | | |
| 165,852 | |
Realized gain on marketable debt and equity securities | |
| - | | |
| (48,072 | ) |
Provision for bad debts | |
| - | | |
| 78,491 | |
Stock-based compensation | |
| 65,653 | | |
| 82,594 | |
Non-cash lease expense | |
| (13,817 | ) | |
| 11,689 | |
Changes in operating assets and liabilities | |
| | | |
| | |
Prepaid expenses | |
| (667 | ) | |
| 50,959 | |
Other assets | |
| 1,789 | | |
| 7,856 | |
Accounts payable | |
| (25,499 | ) | |
| 263,686 | |
Accrued expenses | |
| 35,753 | | |
| (46,971 | ) |
Net
cash used in operating activities | |
| (991,039 | ) | |
| (1,122,036 | ) |
| |
| | | |
| | |
Cash Flows from Investing Activities | |
| | | |
| | |
Purchases of lab equipment | |
| - | | |
| (61,888 | ) |
Maturity of marketable debt securities | |
| - | | |
| 2,548,000 | |
Net
cash provided by investing activities | |
| - | | |
| 2,486,112 | |
| |
| | | |
| | |
Cash Flows from Financing Activities | |
| | | |
| | |
Proceeds from issuance of common stock, gross | |
| - | | |
| 1,800,000 | |
Payment for issuance costs of common stock | |
| - | | |
| (300,750 | ) |
Repayments of finance lease liability | |
| (14,026 | ) | |
| - | |
Net
cash (used in) provided by financing activities | |
| (14,026 | ) | |
| 1,499,250 | |
| |
| | | |
| | |
Net (decrease) increase in cash and cash equivalents | |
| (1,005,065 | ) | |
| 2,863,326 | |
| |
| | | |
| | |
Cash and cash equivalents, beginning of period | |
| 2,693,991 | | |
| 2,180,525 | |
| |
| | | |
| | |
Cash and cash equivalents, end of period | |
$ | 1,688,926 | | |
$ | 5,043,851 | |
The accompanying notes are an integral
part of these unaudited condensed consolidated financial statements.
SeqLL Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 – Nature of Operations and Basis of Presentation
SeqLL Inc. was incorporated as a Delaware corporation
on April 3, 2014. On April 8, 2014, SeqLL Inc. acquired a 100% ownership interest in SeqLL, LLC (“Subsidiary”), a domestic
limited liability company formed on March 11, 2013 in the State of Massachusetts. SeqLL Inc. is a holding company of the Subsidiary (together
the “Company”, SeqLL”, “we”, “us” or “our”) and is a life sciences company focused
on the development and application of innovative genetic analysis technologies and the monetization of that technology and related intellectual
property. The Subsidiary owns technology to enable the analysis of large volumes of genetic material by directly sequencing single molecules
of DNA or RNA. The Subsidiary’s principal office is located in Billerica, Massachusetts.
On April 26, 2023, SeqLL Merger LLC (“SeqLL
Merger Sub”) was formed in the State of Delaware as a wholly-owned subsidiary of the Company. SeqLL Merger Sub was formed solely
for the purpose of completing the Merger (defined below). SeqLL Merger Sub has not carried on any activities as of March 31, 2024,
except for activities incidental to its formation and activities undertaken in connection with the Merger Agreement (defined below) and
the Merger.
On August 30, 2023, the Company executed one-for-40
reverse stock split of its common stock as disclosed further below.
Proposed Merger
On May 29, 2023, the Company, SeqLL Merger LLC,
a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Purchaser Sub”), Atlantic Acquisition
Corp, a Delaware corporation (“Atlantic”), Atlantic Merger LLC, a Delaware limited liability company and a majority-owned
subsidiary of Atlantic (“Atlantic Merger Sub”), Lyneer Investments, LLC, a Delaware limited liability company (“Lyneer”),
IDC Technologies, Inc., a California corporation (“IDC”), and Lyneer Management Holdings LLC, a Delaware limited liability
company (“Lyneer Management”), entered into an Agreement and Plan of Reorganization (as amended, the “Merger Agreement”),
pursuant to which (i) Atlantic Merger Sub will be merged with and into Lyneer, with Lyneer continuing as the surviving entity (the “Lyneer
Merger”), and (ii) Purchaser Sub will subsequently be merged with and into Lyneer, with Lyneer continuing as the surviving entity
and as a wholly-owned subsidiary of the Company (the “SeqLL Merger” and, together with the Lyneer Merger, the “Mergers”).
The Merger Agreement contains customary representations
and warranties from the parties, and each party has agreed to customary covenants applicable to such party, including, among others, covenants
relating to (i) the conduct of their respective businesses in the ordinary course prior to the effective time of the Mergers and (ii)
the requirement of each party to maintain and preserve intact their respective business organizations, assets, properties and material
business relations.
The obligation of each of the Company, Atlantic and Lyneer, and their
respective subsidiaries to complete the Mergers is subject to the fulfillment (or waiver, to the extent permissible under applicable law)
of certain customary closing conditions, plus the conditions that (i) the stockholders of the Company shall have approved the issuance
of the shares of the Company’s common stock in the Mergers (which approval has been received), and (ii) the Company completes the
Capital Raise to certain amount of gross proceeds as defined in the Merger Agreement, part of which will be used to pay the Cash Consideration.
The Merger Agreement, as most recently amended
on April 15, 2024, contains certain termination rights, including (i) by mutual consent of the Company, Atlantic, IDC and Lyneer Management,
(ii) by any of the Company, Atlantic, IDC or Lyneer Management upon a material breach of the representations or of any covenants or agreements
of certain other parties, (iii) by any of the Company, Atlantic, IDC or Lyneer Management if the Mergers have not been consummated by
June 30, 2024 (the “Termination Date”), (iv) by any of the Company, Atlantic, IDC or Lyneer Management if any governmental
authority shall have issued an order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions
contemplated by the Merger Agreement, (v) by any of the Company, Atlantic, IDC or Lyneer Management if the special meeting of the Company’s
stockholders has been held and the approval of the issuance of the common stock of the Company in the Mergers and the change of control
of the Company that will be effected as a result of such issuance and certain other proposals contemplated by the related proxy statement
was not approved, or (vi) by Atlantic, IDC or Lyneer Management if the Company is in breach of the rules and regulations of the Nasdaq
Stock Market LLC (“Nasdaq”) or has received a notice from Nasdaq relating to the delisting or maintenance of listing of the
Company’s common stock on Nasdaq and the Company fails to cure and maintain its listing on Nasdaq prior to the closing of the Mergers.
The most recent amendment also amended the closing conditions to the Mergers to remove the requirement that the common stock of the Company
be listed on the Nasdaq Capital Market upon the closing of the Mergers and to, instead, require that the common stock of the Company be
listed or approved for listing on the Cboe BZX Exchange, Inc. (“CBOE”) upon the closing of the Mergers and to require that
the Company be in compliance with all CBOE rules and regulations.
Prior to its amendment, under the terms of the
Merger Agreement, in connection with the consummation of the Mergers, the Company was required to declare (i) a cash dividend payable
to its stockholders of record as of April 26, 2023 (the “Record Date”) in an amount equal to the Company’s cash and
cash equivalents as of the closing date of the SeqLL Merger (exclusive of any proceeds of the Capital Raise), less any amounts withheld
for taxes and certain other obligations as of such date and (ii) a stock dividend issuable to such stockholders of an aggregate of 819,352
shares of the Company’s common stock, assuming a public offering price of $10.00 per share in the Capital Raise.
Subsequent amendments removed the requirement
for the declaration of such dividends in consideration of the Company’s agreement to make a settlement offer within 90 days of the
closing of the Mergers to its stockholders of record as of the Record Date for such dividends to settle any claims for failing to pay
such dividends by issuing to such stockholders the amount of cash and the number of shares of the Company’s common stock that such
stockholders would have received had such dividends been declared and made.
The terms of the Merger Agreement as further disclosed
and described in the Company’s filings with the Securities and Exchange Commission (the “SEC”), which can be accessed
by the public over the Internet at the SEC’s website at http:/www.sec.gov or on the Company’s website at www.seqll.com/.
Reverse Stock Split
On August 29, 2023, the
Company filed a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Third Amended and Restated
Certificate of Incorporation to (i) effect a reverse stock split of its issued common stock, par value $0.00001 per share, in the ratio
of one-for-40 (the “Reverse Stock Split”) to be effective at 11:59 p.m., eastern time, on August 30, 2023, and (ii) to increase
the authorized capital stock of the Company to 320,000,000 shares, of which 300,000,000 shares shall be common stock, and 20,000,000 shares
shall be preferred stock (the “Capital Stock Increase”). The common stock began trading on a split-adjusted basis at the market
open on August 31, 2023.
All of the Company’s 2023 historical
share and per share information related to issued and outstanding common stock and outstanding options and warrants exercisable for
common stock in these financial statements have been adjusted, on a retroactive basis, to reflect this 1-for-40 reverse stock
split.
Asset Purchase Agreement
In connection with the execution and delivery
of the Merger Agreement, the Company entered into an asset purchase agreement (“Asset Purchase Agreement”) with SeqLL Omics,
Inc., a Delaware corporation (“SeqLL Omics”) on May 29, 2023. SeqLL Omics was formed by Daniel Jones, the Chairman of the
Board and Chief Executive Officer of the Company, and certain other Company employees, for the purpose of carrying on the Company’s
pre-Merger business after the Mergers. Subject to the terms and conditions of the Asset Purchase Agreement, SeqLL Omics has agreed to
purchase from the Company, and the Company has agreed to sell to SeqLL Omics, for a purchase price of $1,000, all of the Company’s
rights, title and interests in the assets and properties of the Company as it exists immediately prior to consummation of the Mergers,
excluding cash and cash equivalents, including without limitation:
| ● | all
leasehold interests in real estate; |
| ● | all
contracts with customers, vendors and suppliers and all technology license agreements; |
| ● | all
intellectual property and general intangibles; |
| ● | all
equipment and other tangible assets used in, or related to, its business operations; and |
| ● | all
accounts receivable. |
In addition to keeping its cash and cash equivalents
in order to make a cash dividend to the Company’s stockholders, the Company will not sell or transfer, and SeqLL Omics will not
acquire, certain contracts unrelated to the Company’s pre-Merger business operations, the Company’s corporate records or its
rights under the Merger Agreement.
Pursuant to the Asset Purchase Agreement, SeqLL
Omics will assume from the Company all obligations or liabilities of the Company related to its pre-Merger business operations, including
those under the contracts and leases that it will purchase, other than the following:
| ● | obligations
to pay any rent pursuant to the Company’s real estate lease prior to the first anniversary of the closing under the Asset Purchase
Agreement; |
| ● | all
obligations of the Company under the Merger Agreement; |
| ● | obligations
of the Company that are not related to the Company’s current business operations and arise following the closing; |
| ● | amounts
payable under the promissory note of the Company in the principal amount of $1,375,000 payable to St. Laurent Investments LLC, an entity
affiliated with William C. St. Laurent, one of the founders and (directly and through affiliates) a principal stockholder of the Company;
and |
| ● | any
obligations under the excluded contracts. |
The Company will be responsible for the payment of transfer taxes,
if any, related to the transfer of the transferred assets.
Delisting from the Nasdaq Stock Market
On September 8, 2023, and September 18, 2023,
the Company received letters from Nasdaq regarding its compliance with Nasdaq Listing Rule 5550(a) (4), which requires the Company to
have a minimum of 500,000 publicly-held shares of common stock, exclusive of shares held by officers, directors and 10% stockholders.
The letters from Nasdaq indicated that according to its calculations, as of September 7, 2023, the Company no longer met the requirements
of such Rule, and the Company was given until September 25, 2023 to submit a plan to Nasdaq to regain compliance. On September 22, 2023,
the Company advised Nasdaq that it expected to regain compliance with Rule 5550(a)(4) upon consummation of the Merger and Nasdaq granted
the Company an extension through October 15, 2023 to demonstrate compliance with the public float rule. On October 16, 2023, the Company
submitted a late request asking that the public float exception be extended through October 31, 2023. On October 17, 2023, Nasdaq issued
a final extension to October 31, 2023 and advised the Company that no further continuances would be granted and that the Company’s
failure to meet the terms of the extension would result in the immediate delisting of the Company’s securities from Nasdaq.
On November 9, 2023, the Company confirmed to
Nasdaq that its public float as of October 31, 2023 and November 10, 2023, was below the minimum requirement in Rule 5550(a)(4). On November
10, 2023, the Company received a letter from Nasdaq indicating that, in light of the Company’s inability to meet the terms of Nasdaq’s
amended decision of October 17, 2023, Nasdaq determined to delist the Company’s securities from Nasdaq. Nasdaq suspended trading
in the Company’s securities effective at the open of trading on November 13, 2023.
On February 21, 2024, the Company received notice
from Nasdaq of the removal of the listing of the Company’s common stock and warrants. On March 20, 2024, the Company received the
notification of termination of the registration of the Company’s common stock and warrants under Section 12(b) of the Securities
and Exchange Act of 1934.
Risks and Uncertainties
The Company is subject to a number of risks similar
to other companies in its industries, including rapid technological change, competition from larger pharmaceutical and biotechnology companies
and dependence on key personnel.
Results of operations may be adversely affected
by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond the Company’s
control. The Company’s business could be impacted by, among other things, downturns in the financial markets or in economic conditions,
inflation, increases in interest rates, and geopolitical instability, such as the military conflicts in Ukraine and the Israel-Hamas war.
The Company cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent
to which they may negatively impact the Company’s business.
Basis of Presentation
The unaudited condensed consolidated financial
statements include the accounts of the Company and its wholly-owned subsidiaries, SeqLL, LLC and SeqLL Merger Sub. All intercompany accounts
and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements of the
Company have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management,
reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s condensed
consolidated financial position as of March 31, 2024 and its results of operations for the three months ended March 31, 2024 and 2023,
and changes in stockholders’ equity and cash flows for the periods presented. The results disclosed in the condensed consolidated
statements of operations and comprehensive loss for the three months ended March 31, 2024 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2024. These unaudited condensed consolidated financial statements should be read
in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2023 filed with the
Securities and Exchange Commission.
Going Concern Uncertainty
The accompanying condensed consolidated financial
statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. We experienced negative cash flows from operations of $1 million for the three months ended March 31,
2024, which included our costs and expenses related to the transactions contemplated by the Merger Agreement. The Company had cash and
cash equivalents of $1.7 million at March 31, 2024 and an accumulated deficit of $25 million.
The Company will need additional capital to fund its planned operations for the
next 12 months if the Merger is not completed. These conditions raise substantial doubt about the Company’s ability to continue
as a going concern.
The condensed consolidated financial statements
for the three months ended March 31, 2024 and 2023 were prepared under the assumption that the Company will continue as a going concern,
which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business.
Note 2 – Significant Accounting Policies
During the three-month period ended March 31,
2024, there were no changes to the significant accounting policies in relation to what was described in the Annual Report on Form 10-K
for the year ended December 31, 2023.
Use of Estimates
The preparation of the financial statements in
conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities
at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include
but are not limited to stock-based compensation expense, and discount rates used to establish operating and finance lease liabilities.
Actual results could differ from those estimates and changes in estimates may occur.
Segments
The Company operates in a single business segment
that includes the design, development and manufacturing of genetic analysis technologies.
Net Loss per Share
Basic net loss per share is computed by dividing
the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for potentially
dilutive securities if their effect is antidilutive. Diluted net loss per share is computed by dividing the net loss by the weighted average
number of shares of common stock and dilutive common stock equivalents outstanding for the period determined using the treasury stock
and if-converted methods. Dilutive common stock equivalents are comprised of restricted stock units, options outstanding under the Company’s
stock option plan, and warrants. For all periods presented, there is no difference in the number of shares used to calculate basic and
diluted shares outstanding as inclusion of the potentially dilutive securities would be antidilutive.
The following potential shares of common stock
were not considered in the computation of diluted net loss per share as their effect would have been antidilutive:
| |
March 31, | |
| |
2024 | | |
2023 | |
Restricted stock units | |
| 8,283 | | |
| 13,825 | |
Stock options | |
| 47,639 | | |
| 63,648 | |
Warrants for common stock | |
| 95,563 | | |
| 109,705 | |
Recently Issued Accounting Standards
There were no recently issued but not yet effective
accounting pronouncements that will have a material effect on the accompanying condensed consolidated financial statements.
Note 3 – Fair Value Measurements
The accounting guidance defines fair value, establishes
a consistent framework for measuring fair value and requires disclosure for each major asset and liability category measured at fair
value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a
basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the
inputs used in measuring fair value as follows:
|
Level 1: |
Observable inputs such as quoted
prices in active markets. |
|
Level 2: |
Inputs, other than the
quoted prices in active markets that are observable either directly or indirectly. |
|
Level 3: |
Unobservable inputs in
which there is little or no market data, which require the reporting entity to develop its own assumptions. |
There were no assets measured at fair value on
a recurring basis as of March 31, 2024 and December 31, 2023.
There were no assets or liabilities measured
at fair value on a non-recurring basis during the three month periods ended March 31, 2024 or 2023.
The carrying values of financial instruments
such as accounts receivable, net, other assets, prepaid expenses, accounts payable, and accrued expenses approximated fair value as of
March 31, 2024 and December 31, 2023 due to their short-term maturities. The carrying value of the Company’s Non-Convertible Promissory
Note approximated its fair value as of March 31, 2024 and December 31, 2023.
Note 4 – Stock-based Compensation
The Company’s 2014 Equity Incentive Plan
(the “2014 Plan”) permits the grant of options and restricted stock units for its common stock and shares of common stock
to its employees, board members and consultants for up to 87,500 shares.
As of March 31, 2024, there were 26,036 shares available for future
issuance under the 2014 Plan. Generally, option awards are granted with an exercise price equal to the fair value of the Company’s
stock at the date of grant and vest over a period of three to four years. No option may have a term in excess of ten years from the option
grant date. Certain option and share awards provide for accelerated vesting if there is a change in control (as defined by the 2014 Plan).
The stock option activity for the period ended March 31, 2024 was as
follows:
| |
Number of Options | | |
Weighted- Average Exercise Price per Share | | |
Weighted Average Remaining Contractual Term (in Years) | |
Outstanding as of December 31, 2023 | |
| 54,020 | | |
$ | 72.55 | | |
| 6.81 | |
Cancelled/Forfeited | |
| (6,381 | ) | |
$ | 23.10 | | |
| - | |
Outstanding as of March 31, 2024 | |
| 47,639 | | |
$ | 79.17 | | |
| 6.27 | |
Exercisable at March 31, 2024 | |
| 33,027 | | |
$ | 91.76 | | |
| 5.41 | |
The restricted stock unit activity for the period ended March 31, 2024
was as follows:
| |
Number of Shares | | |
Weighted- Average Exercise Price per Share | | |
Weighted Average Remaining Contractual Term (in Years) | |
Outstanding as of December 31, 2023 | |
| 13,825 | | |
$ | 25.60 | | |
| 9.17 | |
Vested | |
| (4,142 | ) | |
| 25.60 | | |
| 8.92 | |
Cancelled/Forfeited | |
| (1,400 | ) | |
$ | 25.60 | | |
| - | |
Outstanding as of March 31, 2024 | |
| 8,283 | | |
$ | 25.60 | | |
| 8.92 | |
During the three-month periods ended March 31,
2024 and 2023, the Company recorded $65,653 and $82,594, respectively, of stock-based compensation associated with stock options and restricted
stock units, of which $32,315 and $51,520 were included in general and administrative expenses for the three-month periods ended March
31, 2024 and 2023, respectively, and $33,338 and $31,074 were included in research and development expenses for the three-month periods
ended March 31, 2024 and 2023, respectively.
As of March 31, 2024, there was approximately
$534,861 of unrecognized compensation expense related to unvested stock options and restricted stock units, which will be recognized over
approximately one year.
Note 5 – Related Party Transactions
At March 31, 2024 and December 31, 2023, the
Company had the following outstanding payables to its shareholders for past services, which are included within the Company’s accounts
payable above:
| |
March 31, | | |
December 31, | |
| |
2024 | | |
2023 | |
SeqLL Omics Inc. | |
$ | 22,692 | | |
$ | 73,764 | |
St. Laurent Realty, Inc. | |
| 7,558 | | |
| 7,558 | |
| |
$ | 30,250 | | |
$ | 81,322 | |
St. Laurent Realty, Inc. assisted the Company
by previously providing corporate accounting support, and is affiliated with William C. St. Laurent, a former member of the Company’s
board of directors. No expense was recorded associated with these entities for the three month periods ended March 31, 2024 or 2023.
SeqLL Omics was formed by Daniel Jones, the Chairman
of the Board and Chief Executive Officer of the Company, and certain other Company employees, for the purpose of carrying on the Company’s
pre-Merger business after the Mergers. SeqLL Omics currently performs research and development services for the Company, in order to facilitate
the Company’s pre-Merger research and development efforts. The Company recorded $34,382 of expenses associated with services provided
by SeqLL Omics for the three-month period ended March 31, 2024. The Company did not incur expenses associated with services provided by
SeqLL Omics for the three month period ended March 31, 2023.
Note 6 – Notes Payable
From April 29, 2019 to April 29, 2020, the Company
entered into a series of non-convertible promissory notes (the “Promissory Notes”) with St. Laurent Investments LLC amounting
to $1,375,000. The Promissory Notes had a one-year term, most recently extended through July 31, 2024. The Promissory Notes bear interest
accruing at the rate of 5% per annum, which is compounded on an annual basis.
For the three months ended March 31, 2024 and
2023, interest expense on the Promissory Notes was $35,754 and $16,806, respectively.
Note 7 – Common Stock Warrants
The following table summarizes information with
regard to outstanding warrants to purchase the Company’s common stock as of March 31, 2024. All warrants are accounted for as equity
based on the U.S. GAAP guidance applicable to the instruments indexed to an entity’s own stock.
| |
Number of | | |
| | |
|
| |
Shares | | |
| | |
|
| |
Issuable | | |
| | |
|
| |
Upon | | |
| | |
|
| |
Exercise of | | |
| | |
|
| |
Outstanding | | |
Exercise | | |
|
Issuance Date | |
Warrants | | |
Price | | |
Expiration Date |
4/8/2019 | |
| 48 | | |
$ | 124.00 | | |
4/6/2024 |
11/19/2020 | |
| 1,333 | | |
$ | 164.00 | | |
6/30/2024 |
11/19/2020 | |
| 213 | | |
$ | 164.00 | | |
6/30/2024 |
1/8/2021 | |
| 333 | | |
$ | 164.00 | | |
6/30/2024 |
1/11/2021 | |
| 667 | | |
$ | 164.00 | | |
6/30/2024 |
2/13/2021 | |
| 333 | | |
$ | 164.00 | | |
6/30/2024 |
3/16/2021 | |
| 267 | | |
$ | 164.00 | | |
6/30/2024 |
3/16/2021 | |
| 333 | | |
$ | 164.00 | | |
6/30/2024 |
8/31/2021 | |
| 87,975 | | |
$ | 170.00 | | |
8/31/2026 |
8/31/2021 | |
| 3,825 | | |
$ | 187.00 | | |
8/26/2026 |
9/29/2021 | |
| 236 | | |
$ | 187.00 | | |
8/26/2026 |
| |
| 95,563 | | |
| | | |
|
During the three-month period March 31, 2024, warrants to purchase
214 shares of common stock with exercise prices of $124.00, expired.
Note 8 – Commitments and Contingencies
Operating Leases
On February 2, 2022, the Company entered into
a lease agreement for approximately 15,638 square feet of its new corporate office space in Billerica, Massachusetts (the “Billerica
Lease”). The Billerica Lease has a term of 92 months from its effective date and included access to certain additional
office space until August 1, 2022. In addition, the Company is required to share in certain taxes and operating expenses of the Billerica
Lease. The Billerica Lease is classified as an operating lease. As of March 31, 2024, the remaining lease term was 5.5 years.
The Company recorded expense related to the Billerica
Lease in the amount of $54,643 for the three months ended March 31, 2024 and 2023.
The Company made cash payments of $68,456 and
$42,950 during the three-month period ended March 31, 2024 and 2023, respectively.
As of March 31, 2024, the Company has presented
$203,288 in current portion of operating lease liability and $1,193,059 in operating lease liability, less current portion.
Finance Lease
On May 1, 2023, the Company entered into a lease
agreement for laboratory equipment (the “Equipment Lease”). The Equipment Lease has a term of 36 months from its effective
date, and an end of lease purchase option of $1. The Equipment Lease was classified as a finance lease. As of March 31, 2024, the remaining
lease term was 1.5 years.
The Company made cash payments of $18,092 during
the three months ended March 31, 2024. These cash payments, less interest expense of $4,066 for the three months ended March 31, 2024,
reduced the Company’s finance lease liability in the amount of $14,026 as of March 31, 2024.
The equipment is included in property and equipment,
net and is depreciated on a straight-line basis over a five-year period. The Company amortizes the equipment over its useful life as the
Company is reasonably certain to exercise the $1 purchase option for the equipment at the end of the lease term.
Depreciation expense related to finance lease
assets totaled $9,375 for the three months ended March 31, 2024.
As of March 31, 2024, the Company has presented
$62,106 in current portion of finance lease liability and $35,008 in finance lease liability, less current portion.
The following table reconciles the undiscounted
lease liabilities to the total lease liabilities recognized on the condensed consolidated balance sheet as of March 31, 2024:
| |
Operating Lease | | |
Finance Lease | |
2024 (remaining) | |
$ | 207,420 | | |
$ | 54,281 | |
2025 | |
| 284,151 | | |
| 54,281 | |
2026 | |
| 292,676 | | |
| - | |
2027 | |
| 301,456 | | |
| - | |
2028 | |
| 310,500 | | |
| - | |
Thereafter | |
| 238,076 | | |
| - | |
Total undiscounted lease liabilities | |
$ | 1,634,279 | | |
$ | 108,562 | |
Less effects of discounting | |
| 237,932 | | |
| 11,448 | |
Total lease liabilities | |
$ | 1,396,347 | | |
$ | 97,114 | |
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
You should read the following discussion of
our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements for the
three months ended March 31, 2024 and related notes included elsewhere in this filing. This discussion and analysis and other parts of
this filing contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and
assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking
statements as a result of several factors, including those set forth under “Risk Factors” and elsewhere in this filing. You
should carefully read the “Risk Factors” section of this filing to gain an understanding of the important factors that could
cause actual results to differ materially from our forward-looking statements. Please also see the section entitled “Cautionary
Note Regarding Forward-Looking Statements” in this filing.
Overview
This overview and outlook provide a high-level
discussion of our operating results and significant known trends that affect our business. We believe that the understanding of these
trends is important to understanding our financial results for the periods being reported herein as well as our future financial performance.
This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided
elsewhere in this report.
About SeqLL
We are an early commercial-stage life sciences
instrumentation and research services company engaged in the development of scientific assets and novel intellectual property across
multiple “omics” fields. We leverage our expertise with True Single Molecule Sequencing (tSMS) technology enabling researchers
and clinicians to contribute major advancements to scientific research and development.
Our customers are primarily the early adopters
of genomics technology and tSMS in academic research, biomarker discovery, and molecular diagnostic product development.
Our financial results have been, and will continue
to be, impacted by several significant trends, which are described below. While these trends are important to understanding and evaluating
our financial results, this discussion should be read in conjunction with our condensed consolidated financial statements and the notes
thereto within the Condensed Consolidated Financial Statements section of this report, and trends discussed in “Risk Factors”
in Item 1A of Part II of this report.
Proposed Merger Agreement
Terms used and not defined in the following discussion
have the respective meanings set forth in Note 1 to our unaudited condensed consolidated financial statements included in Part I to this
report.
On May 29, 2023, we entered into the Merger Agreement
with Atlantic, Atlantic Merger Sub, SeqLL Merger Sub, Lyneer, and the Sellers subject to the approval of our stockholders at a special
meeting, which approval has been obtained. Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein,
Atlantic Merger Sub will initially be merged into Lyneer, and SeqLL Merger Sub will then be merged into Lyneer, with Lyneer continuing
as the surviving entity and as our wholly-owned subsidiary. In connection with the consummation of the Merger, we will be renamed “Atlantic
International Corp.”
Lyneer, through its subsidiaries, specializes
in the placement of temporary and temporary-to-permanent labor across various industries within the United States. Lyneer primarily places
individuals in accounting and finance, administrative and clerical, information technology, legal, light industrial, and medical roles.
It is also a leading provider of productivity consulting and workforce management solutions. Lyneer is headquartered in Lawrenceville,
New Jersey and has more than 100 locations in the U.S.
For further description of the terms of the Merger
Agreement, please refer to Note 1 to the condensed consolidated financial statements.
Results of operations
We incurred net losses of $1,095,580 and $1,718,366
for the three months ended March 31, 2024 and 2023, respectively. We had negative cash flow from operating activities of $991,039 and
$1,122,036 for the three months ended March 31, 2024 and 2023, respectively, and had an accumulated deficit of $25,231,855 as of March
31, 2024.
Results of operations may be adversely affected
by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control.
Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, inflation, increases
in interest rates, and geopolitical instability, such as the military conflict in Ukraine and the Israel-Hamas war. We cannot at this
time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively
impact our business.
Our financial results have been, and will continue to be, impacted
by several significant trends, which are described below. While these trends are important to understanding and evaluating our financial
results, this discussion should be read in conjunction with our consolidated financial statements and the notes thereto within the Consolidated
Financial Statements section of this report, and trends discussed in “Risk Factors” in Item 1A of Part II of this report.
Comparison of the Three Months Ended March 31, 2024 and 2023
The following table summarizes our results of
operations for the three months ended March 31, 2024 and 2023:
| |
Three months ended
March 31, |
| |
2024 | | |
2023 | |
Operating expenses | |
| | |
| |
Research and development | |
| 316,263 | | |
| 776,720 | |
General and administrative | |
| 749,558 | | |
| 981,107 | |
Total operating expenses | |
| 1,065,821 | | |
| 1,757,827 | |
| |
| | | |
| | |
Operating loss | |
| (1,065,821 | ) | |
| (1,757,827 | ) |
| |
| | | |
| | |
Other (income) and expenses | |
| | | |
| | |
Investment
income | |
| (10,061 | ) | |
| (56,267 | ) |
Interest expense | |
| 39,820 | | |
| 16,806 | |
| |
| | | |
| | |
Net loss | |
| (1,095,580 | ) | |
| (1,718,366 | ) |
Other comprehensive income | |
| | | |
| | |
Unrealized
gain on marketable debt securities | |
| - | | |
| 17,569 | |
Reclassification
adjustment for net gains included in net loss | |
| - | | |
| (22,081 | ) |
Net
change | |
| - | | |
| (4,512 | ) |
| |
| | | |
| | |
Total
comprehensive loss | |
$ | (1,095,580 | ) | |
$ | (1,722,878 | ) |
| |
| | | |
| | |
Net loss per share - basic and diluted | |
$ | (2.87 | ) | |
$ | (4.83 | ) |
| |
| | | |
| | |
Weighted average common shares - basic and diluted | |
| 382,151 | | |
| 355,648 | |
Research and Development Expenses
Research and development expenses decreased by $460,457, or 59%, from
$776,720 for the three-month period ended March 31, 2023 compared to $316,263 for the three-month period ended March 31, 2024. The decrease
in expenses was a result of the Company’s reduction in research and development activities.
General and Administrative Expenses
General and administrative expenses decreased
by $231,549 or 24%, from $981,107 for the three-month period ended March 31, 2023 compared to $749,558 for the three-month period ended
March 31, 2024. The decrease in expenses was primarily due to the inventory write-off of $165,852 and the write off of bad debts of $78,491
in the three-month period ended March 31, 2023.
Interest and other Income/Loss
We recognized $10,061 of investment income related
to cash invested in money market accounts during the three-month period ended March 31, 2024 as compared to $56,267 of income from money
market accounts and marketable debt securities during the three months ended March 31, 2023. The decrease in investment income is due
to the decrease in the cash equivalents and the sale of the Company’s holdings in marketable securities.
For the three months ended March 31, 2024 and
2023, the interest expense on the Promissory Notes was $35,754 and $16,806, respectively. The increase in the interest expense is due
to the annual compounding of the interest on the outstanding accrued interest balance.
Net Loss
Overall, the net loss decreased by $622,786,
or 36%, to $1,095,580 as compared to $1,718,366 for the three-month period ended March 31, 2023, primarily due to a reduction of general
and administrative and research and development expenses in the three-month period ended March 31, 2024 due to the decrease in research
and development activities and due to the inventory write-off of $165,852 and the write off of bad debts of $78,491 in the three month
period ended March 31, 2023.
Liquidity and Going Concern Uncertainty
The accompanying condensed consolidated financial
statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. We experienced negative cash flows from operations of $991,039 for the three months ended March 31,
2024, which included our costs and expenses related to the transactions contemplated by the Merger Agreement. We had cash and cash equivalents
of $1,688,926 at March 31, 2024 and an accumulated deficit of $25,231,855.
We will need additional capital to fund its planned operations for the next 12
months if the Merger is not completed. These conditions raise substantial doubt about our ability to continue as a going concern.
The condensed consolidated financial statements
for the three months ended March 31, 2024 and 2023 were prepared under the assumption that we will continue as a going concern, which
contemplates that we will be able to realize assets and discharge liabilities in the normal course of business.
Cash Flows
The following table sets forth the primary sources
and uses of cash and cash equivalents for each of the periods presented.
| |
Three Months Ended | |
| |
March 31, | |
| |
2024 | | |
2023 | |
Cash proceeds (used in) provided by: | |
| | |
| |
Operating activities | |
$ | (991,039 | ) | |
$ | (1,122,036 | ) |
Investing activities | |
| - | | |
| 2,486,112 | |
Financing activities | |
| (14,026 | ) | |
| 1,499,250 | |
Net (decrease) increase in cash and cash equivalents | |
$ | (1,005,065 | ) | |
$ | 2,863,326 | |
Net cash used in operating activities
Net cash used in operating activities was approximately
$1.0 million and $1.1 million for the three months ended March 31, 2024 and 2023, respectively. The decrease in operating spending was
due to a reduction in research and development activities in the three month period ended March 31, 2024.
Net cash provided by investing activities
Net cash provided by investing activities was
approximately $0 and $2.5 million for the three months ended March 31, 2024 and 2023, respectively. The decrease was primarily attributable
to the maturities of marketable securities of approximately $2.5 million during the three months ended March 31, 2023, while there were
no such investments for the three months ended March 31, 2024.
Net cash (used in) provided by financing activities
Net cash (used in) provided by financing activities
was less than ($.1) million, and $1.5 million, for the three-month periods ended March 31, 2024 and 2023, respectively. The decrease
in cash provided by financing activities is attributable to the issuance of 50,000 shares of common stock to investors at a price of
$36.00 per share during the three-month period ended March 31, 2023 (after the effect of the Reverse Stock Split). The gross proceeds
of the issuance were $1.8 million. Additionally, we incurred offering costs of approximately $0.3 million, which were paid with proceeds
from the common stock issuance. No such transaction occurred during the three-month period ended March 31, 2024.
Recent Accounting Pronouncements
There were no recently issued but not yet effective
accounting pronouncements will have a material effect on the accompanying consolidated financial statements.
Critical Accounting Policies and Estimates
We prepare our financial statements and accompanying
notes in conformity with accounting principles generally accepted in the United States of America, which require management to make estimates
and assumptions about future events that affect reported amounts. Estimations are considered critical accounting estimates based on,
among other things, its impact on the portrayal of our financial condition, results of operations, or liquidity, as well as the degree
of difficulty, subjectivity, and complexity in its deployment. Critical accounting estimates address accounting matters that are inherently
uncertain due to unknown future resolution of such matters. Management routinely discusses the development, selection, and disclosure
of each critical accounting estimates.
There have been no significant changes to our
critical accounting policies and estimates during the three month period ended March 31, 2024 as compared to the information contained
in our 2023 Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC. Reference should be made to the consolidated
financial statements and related notes included in the 2023 Form 10-K for a full description of other significant accounting policies.
JOBS Act
Section 107 of the JOBS Act provides that an
“emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of new
or revised accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail
ourselves of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised
accounting standards as other public companies that are not emerging growth companies.
For as long as we remain an emerging growth company
under the recently-enacted JOBS Act, we will, among other things:
| ● | be
permitted to have only two years of audited financial statements and only two years of related selected financial data and management’s
discussion and analysis of financial condition and results of operations disclosure; |
| ● | be
entitled to rely on an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over
financial reporting pursuant to the Sarbanes-Oxley Act; |
| ● | be
entitled to reduced disclosure obligations about executive compensation arrangements in our periodic reports, registration statements
and proxy statements; and |
| ● | be
exempt from the requirements to seek non-binding advisory votes on executive compensation or golden parachute arrangements. |
We currently intend to take advantage of some
or all of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an “emerging
growth company.” Among other things, this means that our independent registered public accounting firm will not be required to
provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an emerging
growth company, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected.
Likewise, so long as we qualify as an emerging
growth company, we may elect not to provide certain information, including certain financial information and certain information regarding
compensation of our executive officers, that we would otherwise have been required to provide in filings we make with the SEC, which
may make it more difficult for investors and securities analysts to evaluate our company. As a result, investor confidence in our company
and the market price of our common stock may be materially and adversely affected.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not required under Regulation S-K for smaller
reporting companies.
Item 4. Controls and Procedures.
Evaluation of disclosure controls and procedures
Our Chief Executive Officer (who is our principal
executive officer) and Chief Financial Officer (who is our principal financial officer), conducted an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (the “Exchange Act”) as of March 31, 2024. As of March 31, 2024, based upon the evaluation, our principal
executive officer and principal financial officer concluded that our disclosure controls and procedures were effective. Disclosure controls
and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such
as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over
financial reporting that occurred during the most recent fiscal quarter that materially affected, or was reasonably likely to materially
affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our disclosure controls and procedures and internal
control over financial reporting are designed to reasonably ensure that designed control objectives are achieved. 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. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements
due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 1A. Risk Factors
There have been no material changes to the risk
factors set forth in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the year ended December
31, 2023 filed with the SEC on April 10, 2024 (our “Annual Report”), except for the risk factors relating to the Merger,
the Merger Agreement and the Asset Sale Agreement set forth in our Information Statement dated August 10, 2023 filed with the SEC on August
10, 2023 (the “Information Statement”) and except as follows:
Our securities were recently delisted by
Nasdaq and our failure to relist our securities in the future, could limit investors’ ability to effect transactions in our securities
and subject us to additional trading restrictions.
As previously reported, on September 8, 2023,
we received a letter from the Listing Qualifications Staff ( the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”)
regarding compliance with Nasdaq Listing Rule 5550(a)(4) (the “Rule”), which required us to have a minimum of 500,000 publicly
held shares, exclusive of shares held by officers, directors and 10% stockholders. On November 10, 2023, we received a letter from Nasdaq
advising us that in light of our inability to meet the requirements of the Rule by October 31, 2023, Nasdaq had determined to delist
our securities from Nasdaq and suspend trading in those securities effective at the open of trading on November 13, 2023. The letter
further advised that Nasdaq will complete the delisting by filing a Form 25 Notice of Delisting with the Securities and Exchange Commission,
after applicable appeal periods have lapsed. We have appealed the decision of Nasdaq and paid the applicable filing fee for such appeal.
On November 17, 2023, Nasdaq advised us that the decision to delist our securities will be reviewed by the Nasdaq Listing and Hearing
Review Council, and that we may submit a memorandum in support of our appeal no later than December 1, 2023.
As previously disclosed, in connection with the
transactions contemplated by the Merger Agreement, we have filed a registration statement on Form S-1 for the sale of our securities in
connection with the closing of the transactions contemplated by the Merger Agreement. As previously reported, we had intended to cure
our Nasdaq listing deficiency by consummating the transactions contemplated by the Merger Agreement. Subsequent to the de-listing of our
common stock from Nasdaq, we filed a listing application to list our common stock on the Cboe BZX Exchange Inc. (the “CBOE”)
upon the closing of our public offering of equity securities in connection with the closing of the proposed Merger.
There can be no assurance that our listing
application to CBOE will be approved or that we will be able to list our securities on the CBOE. Even if our securities are listed
on the CBOE following the Merger, we may be unable to maintain the listing of our securities in the future.
If our listing application is not approved, there
could be significant material adverse consequences to us, including:
|
● |
the possibility that Atlantic
or Lyneer will terminate the Merger Agreement due to our failure to meet a material condition to the consummation of the Merger; |
|
● |
a limited availability
of market quotations for our securities; |
|
● |
a limited amount of news
and analyst coverage for our company; and |
|
● |
a decreased ability to
obtain capital or pursue acquisitions by issuing additional equity or convertible securities. |
Our
business involves significant risks. You should carefully consider the risks and uncertainties described in the Annual Report and the
Information Statement, together with all of the other information in this Quarterly Report on Form 10-Q, as well as our audited
consolidated financial statements and related notes as included in our Annual Report. The risks and uncertainties described in our Annual
Report, the Information Statement and this report are not the only ones we face. Additional risk and uncertainties that we are unaware
of or that we deem immaterial may also become important factors that adversely affect our business. The realization of any of these risks
and uncertainties could have a material adverse effect on our reputation, business, financial condition, results of operations, growth
and future prospects as well as our ability to accomplish our strategic objectives. In that event, the market price of our common stock
could decline and you could lose part or all of your investment.
Item 2. Unregistered Securities Sales of Equity Securities and
Use of Proceeds
Sales of Unregistered Securities
There have been no sales of unregistered securities
within the period covered by this report that would be required to be disclosed pursuant to Item 701 of Regulation S-K.
Repurchases of Shares or of Company Equity Securities
None.
Item 3. Default Upon Senior Securities
None
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
The
following documents are filed as a part of this report or incorporated herein by reference:
SIGNATURES
Pursuant to the requirements
of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
SEQLL INC. |
|
|
Date: May 17, 2024 |
/s/ Daniel
Jones |
|
Daniel Jones |
|
Chief Executive Officer |
|
(Principal Executive Officer) |
|
|
Date: May 17, 2024 |
/s/ Frances
Scally |
|
Frances Scally |
|
Chief Financial Officer |
|
(Principal Financial and Accounting Officer) |
22
2.87
4.83
355648
382151
false
--12-31
Q1
0001605888
true
0001605888
2024-01-01
2024-03-31
0001605888
2024-05-13
0001605888
2024-03-31
0001605888
2023-12-31
0001605888
2023-01-01
2023-03-31
0001605888
us-gaap:PreferredStockMember
2023-12-31
0001605888
us-gaap:CommonStockMember
2023-12-31
0001605888
us-gaap:AdditionalPaidInCapitalMember
2023-12-31
0001605888
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2023-12-31
0001605888
us-gaap:RetainedEarningsMember
2023-12-31
0001605888
us-gaap:PreferredStockMember
2024-01-01
2024-03-31
0001605888
us-gaap:CommonStockMember
2024-01-01
2024-03-31
0001605888
us-gaap:AdditionalPaidInCapitalMember
2024-01-01
2024-03-31
0001605888
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2024-01-01
2024-03-31
0001605888
us-gaap:RetainedEarningsMember
2024-01-01
2024-03-31
0001605888
us-gaap:PreferredStockMember
2024-03-31
0001605888
us-gaap:CommonStockMember
2024-03-31
0001605888
us-gaap:AdditionalPaidInCapitalMember
2024-03-31
0001605888
us-gaap:RetainedEarningsMember
2024-03-31
0001605888
us-gaap:PreferredStockMember
2022-12-31
0001605888
us-gaap:CommonStockMember
2022-12-31
0001605888
us-gaap:AdditionalPaidInCapitalMember
2022-12-31
0001605888
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2022-12-31
0001605888
us-gaap:RetainedEarningsMember
2022-12-31
0001605888
2022-12-31
0001605888
us-gaap:PreferredStockMember
2023-01-01
2023-03-31
0001605888
us-gaap:CommonStockMember
2023-01-01
2023-03-31
0001605888
us-gaap:AdditionalPaidInCapitalMember
2023-01-01
2023-03-31
0001605888
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2023-01-01
2023-03-31
0001605888
us-gaap:RetainedEarningsMember
2023-01-01
2023-03-31
0001605888
us-gaap:PreferredStockMember
2023-03-31
0001605888
us-gaap:CommonStockMember
2023-03-31
0001605888
us-gaap:AdditionalPaidInCapitalMember
2023-03-31
0001605888
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2023-03-31
0001605888
us-gaap:RetainedEarningsMember
2023-03-31
0001605888
2023-03-31
0001605888
sql:SeqLLLLCMember
2014-04-08
0001605888
2023-04-26
0001605888
2023-08-29
0001605888
us-gaap:PreferredStockMember
2023-08-29
0001605888
sql:PromissoryNotesMember
2024-03-31
0001605888
2023-09-08
2023-09-08
0001605888
us-gaap:RestrictedStockMember
2024-01-01
2024-03-31
0001605888
us-gaap:RestrictedStockMember
2023-01-01
2023-03-31
0001605888
sql:StockOptionsMember
2024-01-01
2024-03-31
0001605888
sql:StockOptionsMember
2023-01-01
2023-03-31
0001605888
sql:WarrantsForCommonStockMember
2024-01-01
2024-03-31
0001605888
sql:WarrantsForCommonStockMember
2023-01-01
2023-03-31
0001605888
sql:EquityIncentivePlanMember
2024-01-01
2024-03-31
0001605888
us-gaap:RestrictedStockUnitsRSUMember
us-gaap:StockOptionMember
2024-01-01
2024-03-31
0001605888
2023-12-31
2023-12-31
0001605888
sql:SeqLLOmicsIncMember
2024-01-01
2024-03-31
0001605888
sql:SeqLLOmicsIncMember
2024-03-31
0001605888
sql:SeqLLOmicsIncMember
2023-12-31
0001605888
sql:StLaurentRealtyIncMember
2024-03-31
0001605888
sql:StLaurentRealtyIncMember
2023-12-31
0001605888
sql:StLaurentInvestmentsLLCMember
sql:PromissoryNotesMember
2024-03-31
0001605888
sql:PromissoryNotesMember
2024-03-31
0001605888
sql:PromissoryNotesMember
2024-01-01
2024-03-31
0001605888
sql:PromissoryNotesMember
2023-01-01
2023-03-31
0001605888
us-gaap:WarrantMember
us-gaap:CommonStockMember
2024-01-01
2024-03-31
0001605888
sql:AprilEightTwoThousandNineteenMember
2024-01-01
2024-03-31
0001605888
sql:AprilEightTwoThousandNineteenMember
2024-03-31
0001605888
sql:NovemberNineteenTwoThousandTwentyMember
2024-01-01
2024-03-31
0001605888
sql:NovemberNineteenTwoThousandTwentyMember
2024-03-31
0001605888
sql:NovemberNineteenTwoThousandTwenty1Member
2024-01-01
2024-03-31
0001605888
sql:NovemberNineteenTwoThousandTwenty1Member
2024-03-31
0001605888
sql:JanuaryEightTwoThousandTwentyOneMember
2024-01-01
2024-03-31
0001605888
sql:JanuaryEightTwoThousandTwentyOneMember
2024-03-31
0001605888
sql:JanuaryElevenTwoThousandTwentyOneMember
2024-01-01
2024-03-31
0001605888
sql:JanuaryElevenTwoThousandTwentyOneMember
2024-03-31
0001605888
sql:FebruaryThirteenTwoThousandTwentyOneMember
2024-01-01
2024-03-31
0001605888
sql:FebruaryThirteenTwoThousandTwentyOneMember
2024-03-31
0001605888
sql:MarchSixteenTwoThousandTwentyOneMember
2024-01-01
2024-03-31
0001605888
sql:MarchSixteenTwoThousandTwentyOneMember
2024-03-31
0001605888
sql:MarchSixteenTwoThousandTwentyOne1Member
2024-01-01
2024-03-31
0001605888
sql:MarchSixteenTwoThousandTwentyOne1Member
2024-03-31
0001605888
sql:AugustThirtyOneTwoThousandTwentyOneMember
2024-01-01
2024-03-31
0001605888
sql:AugustThirtyOneTwoThousandTwentyOneMember
2024-03-31
0001605888
sql:AugustThirtyOneTwoThousandTwentyOne1Member
2024-01-01
2024-03-31
0001605888
sql:AugustThirtyOneTwoThousandTwentyOne1Member
2024-03-31
0001605888
sql:SeptemberTwentyNineTwoThousandTwentyOneMember
2024-01-01
2024-03-31
0001605888
sql:SeptemberTwentyNineTwoThousandTwentyOneMember
2024-03-31
0001605888
2022-02-02
0001605888
sql:OperatingLeaseMember
2024-03-31
0001605888
2023-05-01
0001605888
2023-05-01
2023-05-01
0001605888
sql:FinanceLeaseMember
2024-03-31
0001605888
sql:FinanceLeaseMember
2024-01-01
2024-03-31
xbrli:shares
iso4217:USD
iso4217:USD
xbrli:shares
xbrli:pure
utr:sqm
In connection with the Quarterly Report of SeqLL,
Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and Exchange Commission
on the date hereof (the “Report”), I, Daniel Jones, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
In connection with the Quarterly
Report of SeqLL, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and
Exchange Commission on the date hereof (the “Report”), I, Frances Scally, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: