Nautilus Biotechnology Inc

Previous wording

Given our stage of development, we have not yet established a commercial organization or distribution capabilities. We do intend to build a commercial infrastructure to support sales of our products. We expect to manage sales, marketing and distribution through both internal resources and third-party relationships. We plan to commercialize our proteomics platform using a three-phase plan that has been shown to be effective and optimal for introducing disruptive products in numerous life sciences technology markets. The first phase is expected to involve collaboration with biopharmaceutical companies and key opinion leaders to validate the performance and utility of Nautilus’ product, during which we do not expect to recognize significant revenue, if any. The second phase will include an early access limited release phase in which we expect to recognize limited revenue. Finally, the third phase is anticipated to include a broader commercial launch. We are currently in the collaboration phase during which we have entered into collaborations with a small number of research customers, including with biopharmaceutical companies and key opinion leaders in proteomics whose assessment and validation of our products can significantly influence other researchers in their respective markets and/or fields. During the early access limited release phase, we plan to leverage our publications to drive awareness and customer demand to pre-sell instruments and reagents to select customers performing large-scale proteomics research. We do not anticipate that these activities will result in any material revenue. During the second phase, we expect to work closely with early access customers to demonstrate a unique value proposition for our Nautilus platform. During this phase, we plan to provide early access program partners with broad-scale analysis and profiling of samples analyzed in our facility and shared via a cloud platform. We anticipate early access engagements and associated revenue in 2025. We expect this second phase to lead into the third phase of broad commercialization and launch of our proteome analysis platform in 2025. Voice of customer studies have suggested that there is market demand for a proteomics platform with specifications that are initially lower than what we have previously disclosed, for example, around characteristics such as sample input and proteome coverage. Consequently, as we balance our time to market goals with our evolving view of customer requirements, we are refining our initial launch specifications. We believe that subsequent consumable releases will enable our platform to meet or exceed our previously announced product specifications.

Current wording

Given our stage of development, we have not yet established a commercial organization or distribution capabilities. We do intend to build a commercial infrastructure to support sales of our products. We expect to manage sales, marketing and distribution through both internal resources and third-party relationships. We plan to commercialize our proteomics platform using a three-phase plan that has been shown to be effective and optimal for introducing disruptive products in numerous life sciences technology markets. The first phase is expected to involve collaboration with biopharmaceutical companies and key opinion leaders to validate the performance and utility of Nautilus’ product, during which we do not expect to recognize significant revenue, if any. The second phase will include an early access limited release phase in which we expect to recognize limited revenue. Finally, the third phase is anticipated to include a broader commercial launch. We are currently in the collaboration phase during which we have entered into collaborations with a small number of research customers, including with biopharmaceutical companies and key opinion leaders in proteomics whose assessment and validation of our products can significantly influence other researchers in their respective markets and/or fields. During the early access limited release phase, we plan to leverage our publications to drive awareness and customer demand to pre-sell instruments and reagents to select customers performing large-scale proteomics research. During the second phase, we expect to work closely with early access customers to demonstrate a unique value proposition for our Nautilus platform. During this phase, we plan to provide early access to our partners with broad-scale and targeted analyses and profiling of samples analyzed in our facility and shared via a cloud platform. We anticipate early access engagements in 2025. We do not anticipate that these activities will result in any material revenue. We expect this second phase to lead into the third phase of launch of our proteome analysis platform in 2025 and subsequent broad commercialization thereafter. Voice of customer studies have suggested that there is market demand for a proteomics platform with specifications that are initially lower than what we have previously disclosed, for example, around characteristics such as sample input and proteome coverage. Consequently, as we balance our time to market goals with our evolving view of customer requirements, we are refining our initial launch specifications. We believe that subsequent consumable releases will enable our platform to meet or exceed our previously announced product specifications.

Previous wording

Prior to the Business Combination, we financed our operations primarily through private placements of convertible preferred stock and had raised aggregate net proceeds of $108.4 million from these private placements. In connection with the consummation of the Business Combination and PIPE Financing, we received additional gross proceeds of approximately $345.5 million from PIPE Investors and the Business Combination, offset by approximately $18.2 million of transaction costs and underwriters’ fees relating to the closing of the Business Combination. As of March 31, 2024, we had cash, cash equivalents and short-term investments of $181.4 million. Based on this, we believe that our existing cash, cash equivalents, and short-term investments will enable us to fund our planned operating expenses and capital expenditures through at least the next 12 months.

Current wording

Prior to the Business Combination, we financed our operations primarily through private placements of convertible preferred stock and had raised aggregate net proceeds of $108.4 million from these private placements. In connection with the consummation of the Business Combination and PIPE Financing, we received additional gross proceeds of approximately $345.5 million from PIPE Investors and the Business Combination, offset by approximately $18.2 million of transaction costs and underwriters’ fees relating to the closing of the Business Combination. As of June 30, 2024, we had cash, cash equivalents and short-term investments of $167.4 million. Based on this, we believe that our existing cash, cash equivalents, and short-term investments will enable us to fund our planned operating expenses and capital expenditures through at least the next 12 months.

Previous wording

We have incurred significant losses since the commencement of our operations. Our net loss was $18.7 million during the three months ended March 31, 2024, and we expect to continue to incur significant losses for the foreseeable future as we continue our research and development activities and planned commercialization of our Nautilus platform. As of March 31, 2024, we had an accumulated deficit of $221.0 million. These losses have resulted primarily from costs incurred in connection with research and development activities and to a lesser extent from general and administrative costs associated with our operations. We expect to incur significant and increasing expenses and operating losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned commercialization and research and development activities.

Current wording

We have incurred significant losses since the commencement of our operations. Our net loss was $36.7 million during the six months ended June 30, 2024, and we expect to continue to incur significant losses for the foreseeable future as we continue our research and development activities and planned commercialization of our Nautilus platform. As of June 30, 2024, we had an accumulated deficit of $239.0 million. These losses have resulted primarily from costs incurred in connection with research and development activities and to a lesser extent from general and administrative costs associated with our operations. We expect to incur significant and increasing expenses and operating losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned commercialization and research and development activities.

Previous wording

•operate as a public company.

Current wording

•continue to operate as a public company.

Previous wording

Businesses have been and will continue to be impacted by a number of challenging global and national events and circumstances that continue to evolve, including extreme weather conditions, increased economic uncertainty, inflation, rising interest rates, recent and any potential future financial institution failures, and conflicts in Eastern Europe, the Middle East and in other countries. The extent of the impact of these events and circumstances on our business, operations and development timelines and plans remains uncertain, and will depend on certain developments, including the duration and scope of the events and their impact on our development activities, third-party manufacturers, and other third parties with whom we do business, as well as its impact on regulatory authorities and our key scientific and management personnel. We have been and continue to actively monitor the potential impacts that these various events and circumstances may have on our business and we take steps, where warranted, to minimize any potential negative impacts on our business resulting from these events and circumstances.

Current wording

Businesses have been and will continue to be impacted by a number of challenging global and national events and circumstances that continue to evolve, including extreme weather conditions, economic uncertainty, inflation, changing interest rates, recent and any potential future financial institution failures, and conflicts in Eastern Europe, the Middle East and in other countries. The extent of the impact of these events and circumstances on our business, operations and development timelines and plans remains uncertain, and will depend on certain developments, including the duration and scope of the events and their impact on our development activities, third-party manufacturers, and other third parties with whom we do business, as well as its impact on regulatory authorities and our key scientific and management personnel. We have been and continue to actively monitor the potential impacts that these various events and circumstances may have on our business and we take steps, where warranted, to minimize any potential negative impacts on our business resulting from these events and circumstances.

Previous wording

General and administrative expenses consist of salaries, related benefits, and stock-based compensation expense for personnel in executive, operations, legal, human resources, finance, marketing, commercial, IT personnel and administrative functions, professional fees for legal, patent, consulting, accounting and audit services, directors and officers insurance, allocated expenses for technology and facilities, and marketing expenses. We expense general and administrative expenses in the periods in which they are incurred.

Current wording

General and administrative expenses consist of salaries, related benefits, and stock-based compensation expense for personnel in executive, operations, legal, human resources, finance, marketing, commercial, IT personnel and administrative functions, professional fees for legal, patent, consulting, accounting and audit services, directors and officers insurance, allocated expenses for technology and facilities, loss contingency accruals, and marketing expenses. We expense general and administrative expenses in the periods in which they are incurred.

Previous wording

Other income (expense) consists primarily of interest income on our cash, cash equivalents and investments (including accretion and amortization of discounts and premiums on marketable debt securities), and other miscellaneous non-recurring expenses such as gains or losses on disposal of property and equipment.

Current wording

Other income (expense) consists primarily of interest income on our cash, cash equivalents and investments, including accretion and amortization of discounts and premiums on marketable debt securities. Other miscellaneous non-recurring expenses such as gains or losses on disposal of property and equipment are also included.

Previous wording

For the Three Months Ended March 31, 2024 and 2023

Current wording

Research and development expenses were $12.4 million for the three months ended June 30, 2024, compared to $11.9 million for the three months ended June 30, 2023, an increase of $0.5 million, or 4%. The increase was due to a $0.4 million increase in salaries, related benefits, and stock-based compensation, a $0.3 million increase in laboratory supplies and equipment expense. These increases are attributable to increased headcount during the period. These increases were partially offset by a $0.3 million decrease in facilities costs.

Previous wording

General and administrative expenses were $8.7 million for the three months ended March 31, 2024, compared to $7.2 million for the three months ended March 31, 2023, an increase of $1.5 million, or 21%. The increase was due to a $0.7 million increase in salaries, related benefits, and stock-based compensation, attributable to increased hiring during the period, a $0.5 million increase in professional services from fees related to the shelf registration statement filed during the period, and a $0.1 million increase in other legal and audit fees.

Current wording

General and administrative expenses were $8.4 million for the three months ended June 30, 2024, compared to $7.1 million for the three months ended June 30, 2023, an increase of $1.2 million, or 18%. The increase was due to a $0.7 million increase in professional services attributable to legal and audit fees, and a $0.4 million increase in salaries, related benefits, and stock-based compensation, attributable to increased hiring during the period.

Previous wording

Other income (expense) for the three months ended March 31, 2024 decreased compared to the three months ended March 31, 2023. The decrease was driven by the decrease in our cash, cash equivalents, and investments balance used to fund operations during the period.

Current wording

Other income (expense) for the three months ended June 30, 2024 decreased compared to the three months ended June 30, 2023. The decrease is attributable to the decrease in interest income as our cash, cash equivalents, and investments balance decreased during the period.

Previous wording

Research and development expenses were $12.9 million for the three months ended March 31, 2024, compared to $10.9 million for the three months ended March 31, 2023, an increase of $2.1 million, or 19%. The increase was due to a $1.3 million increase in salaries, related benefits, and stock-based compensation, a $0.7 million increase in laboratory supplies and equipment expense, and a $0.4 million increase in facilities costs. These increases were caused by increased headcount during the period and a new lease that commenced in March 2023. These increases were partially offset by a decrease of $0.5 million in professional services and external development services as more development efforts were performed by the Company.

Current wording

Research and development expenses were $25.4 million for the six months ended June 30, 2024, compared to $22.8 million for the six months ended June 30, 2023, an increase of $2.6 million, or 11%. The increase was due to a $1.7 million increase in salaries, related benefits, and stock-based compensation, and a $1.0 million increase in laboratory supplies and equipment expense attributable to increased headcount during the period. Also contributing to the increase was a $0.2 million increase in facilities costs attributable to a new lease that commenced in March 2023, and a $0.2 million increase in depreciation attributable to the growth in laboratory and prototype equipment balances. These increases were partially offset by a $0.5 million decrease in professional services as more development efforts were performed by the Company.

Previous wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. Our net loss was $18.7 million for the three months ended March 31, 2024. As of March 31, 2024, we had an accumulated deficit of $221.0 million. Prior to the Business Combination, we funded our operations primarily with proceeds from the sale of convertible preferred stock. Prior to the Business Combination, we had raised net proceeds of $108.4 million from these private placements of our convertible preferred stock. In June 2021, in conjunction with the consummation of the Business Combination with ARYA, we received additional gross proceeds of approximately $345.5 million from PIPE Investors and the Business Combination, offset by approximately $18.2 million of transaction costs and underwriters’ fees relating to the closing of the Business Combination. As of March 31, 2024, we had cash, cash equivalents and investments of $247.7 million.

Current wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. Our net loss was $36.7 million for the six months ended June 30, 2024. As of June 30, 2024, we had an accumulated deficit of $239.0 million. Prior to the Business Combination, we funded our operations primarily with proceeds from the sale of convertible preferred stock. Prior to the Business Combination, we had raised net proceeds of $108.4 million from these private placements of our convertible preferred stock. In June 2021, in conjunction with the consummation of the Business Combination with ARYA, we received additional gross proceeds of approximately $345.5 million from PIPE Investors and the Business Combination, offset by approximately $18.2 million of transaction costs and underwriters’ fees relating to the closing of the Business Combination. As of June 30, 2024, we had cash, cash equivalents and investments of $232.9 million.

Previous wording

In February 2024, we entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“TD Cowen”)under which we may offer and sell up to $125.0 million of shares of our common stock from time to time through an “at the market” offering program under which TD Cowen will act as sales agent. Under the Sales Agreement, we set the parameters for the sale of shares, including the number or dollar amount of shares to be issued, the time period during which sales are requested to be made, limitations on the number or dollar amount of shares that may be sold in any one trading day and any minimum price below which sales may not be made. The Sales Agreement provides that TD Cowen will be entitled to compensation for its services in an amount equal to up to 3.0% of the gross proceeds of all shares of common stock sold through TD Cowen under the Sales Agreement. We have no obligation to sell any shares under the Sales Agreement and may at any time suspend solicitation and offers under the Sales Agreement. During the three months ended March 31, 2024, we did not sell any shares of common stock pursuant to the sales agreement.

Current wording

In February 2024, we entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“TD Cowen”)under which we may offer and sell up to $125.0 million of shares of our common stock from time to time through an “at the market” offering program under which TD Cowen will act as sales agent. Under the Sales Agreement, we set the parameters for the sale of shares, including the number or dollar amount of shares to be issued, the time period during which sales are requested to be made, limitations on the number or dollar amount of shares that may be sold in any one trading day and any minimum price below which sales may not be made. The Sales Agreement provides that TD Cowen will be entitled to compensation for its services in an amount equal to up to 3.0% of the gross proceeds of all shares of common stock sold through TD Cowen under the Sales Agreement. We have no obligation to sell any shares under the Sales Agreement and may at any time suspend solicitation and offers under the Sales Agreement. During the six months ended June 30, 2024, we did not sell any shares of common stock pursuant to the sales agreement.

Previous wording

The following table summarizes our cash flows for the three months ended March 31, 2024 and 2023:

Current wording

The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:

Previous wording

During the three months ended March 31, 2024, net cash used in operating activities was $16.3 million, resulting from our net loss of $18.7 million and decrease in net changes in assets and liabilities aggregating $1.5 million. Net cash used in operating activities was partially offset by non-cash charges aggregating $4.0 million, which included $3.1 million of stock-based compensation, $1.1 million of amortization of operating lease right-of-use assets, and $0.5 million of depreciation. These non-cash charges were partially offset by $0.8 million of net accretion of discounts on securities.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities was $31.7 million, resulting from our net loss of $36.7 million and decrease in net changes in assets and liabilities aggregating $3.1 million. Net cash used in operating activities was partially offset by non-cash charges aggregating $8.1 million, which included $6.4 million of stock-based compensation, $2.2 million of amortization of operating lease right-of-use assets, and $1.0 million of depreciation. These non-cash charges were partially offset by $1.5 million of net accretion of discounts on securities.

Previous wording

During the three months ended March 31, 2023, net cash used in operating activities was $12.5 million, resulting from our net loss of $15.0 million and decrease in net changes in assets and liabilities aggregating $0.9 million. Net cash used in operating activities was partially offset by non-cash charges aggregating $3.4 million, which included $2.9 million of stock-based compensation, $0.8 million amortization of operating lease right-of-use assets, and$0.4 million of depreciation. These non-cash charges were partially offset by$0.7 million of net accretion of discounts on securities.

Current wording

During the six months ended June 30, 2023, net cash used in operating activities was $26.1 million, resulting from our net loss of $30.8 million and decrease in net changes in assets and liabilities aggregating $2.5 million. Net cash used in operating activities was partially offset by non-cash charges aggregating $7.2 million, which included $6.0 million of stock-based compensation, $1.8 million amortization of operating lease right-of-use assets, and$0.8 million of depreciation. These non-cash charges were partially offset by$1.4 million of net accretion of discounts on securities.

Previous wording

During the three months ended March 31, 2024, net cash provided by investing activities was $22.4 million, resulting from $23.0 million in proceeds from the maturity of securities, partially offset by $0.6 million in purchases of property and equipment.

Current wording

During the six months ended June 30, 2024, net cash provided by investing activities was $36.6 million, resulting from $53.5 million in proceeds from the maturity of securities, partially offset by $15.7 million in purchases of securities and $1.2 million in purchases of property and equipment.

Previous wording

During the three months ended March 31, 2023, net cash used in investing activities was $13.5 million, resulting from $27.1 million in purchases of securities and $0.7 million in purchases of property and equipment, partially offset by $14.2 million in proceeds from maturities of securities.

Current wording

During the six months ended June 30, 2023, net cash used in investing activities was $15.8 million, resulting from $46.8 million in purchases of securities and $1.2 million in purchases of property and equipment, partially offset by $32.2 million in proceeds from maturities of securities.

Previous wording

During the three months ended March 31, 2024, cash provided by financing activities was comprised of $0.2 million of proceeds from exercise of stock options.

Current wording

During the six months ended June 30, 2024, cash provided by financing activities was comprised of $0.6 million of proceeds from exercise of stock options and issuance of common stock under the employee stock purchase plan.

Previous wording

During the three months ended March 31, 2023, cash provided by financing activities was comprised of proceeds from exercise of stock options.

Current wording

During the six months ended June 30, 2023, cash provided by financing activities was comprised of$0.1 million of proceeds from exercise of stock options and issuance of common stock under the employee stock purchase plan.