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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For transition period from    to
Commission File Number 001-40090
SOMALOGIC, INC.
(Exact name of registrant as specified in its charter)
Delaware85-4298912
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
2945 Wilderness Place
Boulder, Colorado 80301
(303) 625-9000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.0001 par valueSLGC
Nasdaq Capital Market
Warrants to purchase Common StockSLGCW
Nasdaq Capital Market
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. YesNo
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging 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): YesNo
As of April 28, 2023, there were approximately 187,945,300 shares of the registrant's common stock outstanding.



TABLE OF CONTENTS
 
  Page
   
 
 
 
 
 
 
  
 



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information in this Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements, other than statements of historical fact included in or incorporated by reference into this Quarterly Report on Form 10-Q, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this report, the words ““will be,” “will,” “expect,” “anticipate,” “continue,” “project,” “believe,” “plan,” “could,” “estimate,” “forecast,” “guidance,” “intend,” “may,” “plan,” “possible,” “potential,” “predict,” “pursue,” “should,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
These statements include, but are not limited to the following:
the occurrence of any event, change or other circumstances, including the outcome of any legal proceedings that may be instituted against the Company;
the ability to comply with the listing requirements of the Nasdaq;
the risk of disruption, including in the Company’s information technology systems, to the Company’s current plans and operations;
the ability to recognize the anticipated benefits of the Company’s business, which may be affected by, among other things, competition and the ability to grow and manage growth profitably and retain its key employees;
costs related to the Company’s business;
changes in applicable laws or regulations;
the ability of the Company to raise financing in the future;
the success, cost and timing of the Company’s product development, sales and marketing, and research and development activities;
the ability to protect the Company’s intellectual property;
the Company’s plans to engage in acquisition activities and the anticipated impact of such activities on the Company’s financial results;
the impact of the procurement and budgetary cycles of customers;
the Company’s ability to obtain and maintain regulatory approval for its products, and any related restrictions and limitations of any approved product;
the Company’s ability to maintain existing license agreements and manufacturing arrangements;
the Company’s ability to attract or retain sales and distribution partners;
the Company’s ability to compete with other companies currently marketing or engaged in the development of products and services that serve customers engaged in proteomic analysis, many of which have greater financial and marketing resources than the Company;
the size and growth potential of the markets for the Company’s products, and the ability of each to serve those markets, either alone or in partnership with others;
the Company’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
the ability to use net operating losses and certain other tax attributes; and
the Company’s financial performance.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. The Company will not and does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

1

PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements
SomaLogic, Inc.
Condensed Consolidated Balance Sheets
Unaudited
(in thousands, except share data)
March 31, 2023December 31, 2022
ASSETS
Current assets
Cash and cash equivalents
$438,509 $421,830 
Investments
62,061 117,758 
Accounts receivable, net
25,585 17,006 
Inventory
15,051 13,897 
Deferred costs of services
1,181 1,337 
Prepaid expenses and other current assets
4,666 9,873 
Total current assets
547,053 581,701 
Non-current inventory
6,985 4,643 
Accounts receivable, net of current portion9,048 9,284 
Property and equipment, net of accumulated depreciation and amortization of $19,628 and $17,899 as of March 31, 2023 and December 31, 2022, respectively
19,706 19,564 
Other long-term assets
4,349 5,083 
Intangible assets16,700 16,700 
Goodwill10,399 10,399 
Total assets
$614,240 $647,374 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
$22,676 $16,794 
Accrued liabilities
10,071 20,678 
Deferred revenue
3,905 3,383 
Other current liabilities
2,221 2,477 
Total current liabilities
38,873 43,332 
Warrant liabilities3,160 4,213 
Earn-out liability— 15 
Deferred revenue, net of current portion
31,469 31,732 
Other long-term liabilities
5,428 5,524 
Total liabilities
78,930 84,816 
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding at March 31, 2023 and December 31, 2022
— — 
Common stock, $0.0001 par value; 600,000,000 shares authorized; 187,945,232 and 187,647,973 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively
19 19 
Additional paid-in capital
1,178,212 1,171,122 
Accumulated other comprehensive loss
(164)(513)
Accumulated deficit
(642,757)(608,070)
Total stockholders’ equity
535,310 562,558 
Total liabilities and stockholders’ equity
$614,240 $647,374 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2

SomaLogic, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
Unaudited
(in thousands, except share and per share amounts)

Three Months Ended March 31,
20232022
Revenue
Assay services revenue$18,419 $18,800 
Product revenue1,186 453 
Collaboration revenue763 763 
Other revenue11 2,964 
Total revenue20,379 22,980 
Operating expenses
Cost of assay services revenue11,682 11,380 
Cost of product revenue634 272 
Research and development14,067 13,800 
Selling, general and administrative34,189 30,815 
Total operating expenses60,572 56,267 
Loss from operations(40,193)(33,287)
Other income
Interest income and other, net4,925 209 
Change in fair value of warrant liabilities1,053 12,640 
Change in fair value of earn-out liability15 16,462 
Total other income5,993 29,311 
Net loss before income tax provision$(34,200)$(3,976)
Income tax provision(2)(3)
Net loss$(34,202)$(3,979)
Other comprehensive income (loss)
Net unrealized gain (loss) on available-for-sale securities$351 $(652)
Foreign currency translation loss(2)(3)
Total other comprehensive income (loss)349 (655)
Comprehensive loss$(33,853)$(4,634)
Net loss per share, basic and diluted$(0.18)$(0.02)
Weighted-average shares outstanding used to compute net loss per share, basic and diluted186,524,473182,050,468
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

SomaLogic, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
Unaudited
(in thousands, except share amounts)

Three Months Ended March 31, 2023
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’ Equity (Deficit)
SharesAmount
Balance at December 31, 2022187,647,973 $19 $1,171,122 $(513)$(608,070)$562,558 
Issuance of Common Stock upon vesting of RSUs185,863 — — — — — 
Issuance of Common Stock upon exercise of options111,396 — 172 — — 172 
Stock-based compensation— — 6,918 — — 6,918 
Impact of adoption of ASC 326— — — — (485)(485)
Net unrealized gain on available-for-sale securities— — — 351 — 351 
Foreign currency translation loss— — — (2)— (2)
Net loss— — — — (34,202)(34,202)
Balance at March 31, 2023187,945,232 $19 $1,178,212 $(164)$(642,757)$535,310 

Three Months Ended March 31, 2022
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated
Deficit
Total Stockholders’ Equity (Deficit)
SharesAmount
Balance at December 31, 2021181,552,241 $18 $1,110,991 $(72)$(498,913)$612,024 
Issuance of Common Stock upon exercise of options624,685 — 1,242 — — 1,242 
Issuance of Common Stock for services— — 50 — — 50 
Stock-based compensation— — 8,627 — — 8,627 
Net unrealized loss on available-for-sale securities— — — (652)— (652)
Foreign currency translation loss— — — (3)— (3)
Net loss— — — — (3,979)(3,979)
Balance at March 31, 2022182,176,926 $18 $1,120,910 $(727)$(502,892)$617,309 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



4

SomaLogic, Inc.
Condensed Consolidated Statements of Cash Flows
Unaudited
(in thousands)
Three Months Ended March 31,
 20232022
Operating activities    
Net loss $(34,202)$(3,979)
Adjustments to reconcile net loss to cash used in operating activities: 
Stock-based compensation expense 7,183 8,671 
Depreciation and amortization 1,754 755 
Noncash lease expense(47)369 
Change in fair value of warrant liabilities (1,053)(12,640)
Change in fair value of earn-out liability(15)(16,462)
Change in fair value contingent consideration— 
Amortization of premium (accretion of discount) on available-for-sale securities, net(493)77 
Provision for expected credit losses94 133 
Cloud computing arrangement expenditures(620)(1,795)
Other 10 15 
Changes in operating assets and liabilities: 
Accounts receivable(8,921)(4,965)
Inventory(3,496)(1,760)
Deferred costs of services 156 462 
Prepaid expenses and other current assets 1,096 (526)
Other long-term assets — (113)
Accounts payable5,881 2,165 
Deferred revenue 259 29,185 
Accrued and other liabilities (10,637)(5,507)
Net cash used in operating activities (43,045)(5,915)
Investing activities 
Purchases of property and equipment(1,262)(364)
Purchases of available-for-sale securities — (77,919)
Proceeds from maturities of available-for-sale securities 56,541 85,650 
Net cash provided by investing activities 55,279 7,367 
Financing activities 
Proceeds from exercise of stock options and employee stock purchase plan172 1,242 
Net cash provided by financing activities 172 1,242 
Effect of exchange rates on cash, cash equivalents and restricted cash (7)(10)
Net increase in cash, cash equivalents and restricted cash12,399 2,684 
Cash, cash equivalents and restricted cash at beginning of period427,282 440,268 
Cash, cash equivalents and restricted cash at end of period$439,681 $442,952 
Supplemental disclosure of non-cash investing and financing activities: 
Purchase of property and equipment included in accounts payable $634 $1,467 
Operating lease assets obtained in exchange for lease obligations— 4,134 
Issuance of Common Stock for services— 50 
Reconciliation of cash, cash equivalents and restricted cash 
Cash and cash equivalents 438,509 438,052 
Restricted cash included in prepaid expenses and other current assets547 — 
Restricted cash included in other long-term assets 625 4,900 
Total cash, cash equivalents and restricted cash at end of period $439,681 $442,952 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited

Note 1 — Description of Business
Organization and Operations
SomaLogic, Inc. (“SomaLogic” or the “Company”) operates as a protein biomarker discovery and clinical diagnostics company that develops slow off-rate modified aptamers (“SOMAmers®”), which are modified nucleic acid-based protein binding reagents that are specific for their cognate protein, and offer proprietary SomaScan® services, which provide multiplex protein detection and quantification of protein levels in complex biological samples. The SOMAmers®/SomaScan® technology enables researchers to analyze various types of biological samples for protein biomarker signatures, which can be utilized in drug discovery and development. Biomarker discoveries from SomaScan® can lead to diagnostic applications in various areas of diseases including cardiovascular and metabolic disease, nonalcoholic steatohepatitis, and wellness, among others.
SomaLogic, Inc. was incorporated in Delaware on December 15, 2020 as a special purpose acquisition company (“SPAC”) under the name CM Life Sciences II Inc. (“CMLS II”) for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses.
On September 1, 2021, we consummated a business combination (the “SPAC Merger”) wherein SomaLogic Operating Co. Inc. (“SomaLogic Operating”), a Delaware corporation formed on October 13, 1999, became a wholly-owned subsidiary of CMLS II. In connection with the closing of the SPAC Merger, we changed our name from CM Life Sciences II Inc. to SomaLogic, Inc.
Unless the context otherwise requires, the terms “we”, “us”, “our”, “SomaLogic" and “the Company" refer to SomaLogic, Inc. and its consolidated subsidiaries. See Note 4, Business Combinations, for more details of the SPAC Merger and, the presentation of historical amounts and balances after the SPAC Merger. Our Common Stock and warrants to purchase Common Stock are listed on the Nasdaq under the ticker symbols “SLGC” and “SLGCW”, respectively.
Other than information discussed herein, there have been no significant changes to our description of business disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”).
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements and accompanying notes include the accounts of SomaLogic and our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”).
Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2022 included in the 2022 Form 10-K.
These unaudited condensed consolidated financial statements have been prepared on the same basis as our annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments considered necessary for a fair presentation of interim financial information, to present fairly our condensed consolidated financial position and our results of operations and cash flows. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other future annual or interim period.
Certain reclassifications have been made to prior period amounts to conform to the current presentation.
Revisions of prior period consolidated financial statements
Capitalized costs incurred in relation to the development of software under hosting arrangements that are service contracts should be classified as operating activities in the statement of cash flows. We determined that the prior classification of these capitalized costs under purchases of property and equipment, net of proceeds from sales within investing activities in the condensed consolidated statement of cash flows was not material to the prior period condensed consolidated financial statements as a whole. The prior period’s condensed consolidated statement of cash flows has
6

SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
been revised to reflect the proper classification of capitalized costs in the accompanying condensed consolidated financial statements as follows:
Three Months Ended March 31, 2022
(in thousands)As Previously ReportedReclassificationRevised
Operating Activities
Cloud computing arrangement expenditures$— $(1,795)$(1,795)
Net cash used in operating activities$(4,120)$(1,795)$(5,915)
Investing Activities
Purchases of property and equipment, net of proceeds from sales(2,159)1,795 (364)
Net cash provided by investing activities$5,572 $1,795 $7,367 
Supplemental disclosure of non-cash investing and financing activities:
Purchase of property and equipment included in accounts payable$905 $562 $1,467 
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from those estimates. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition, net realizable value of inventory, intangible asset valuations, and contingent consideration valuations. We base our estimates on current facts, historical and anticipated results, trends, and other relevant assumptions that we believe are reasonable under the circumstances. Actual results could differ from these estimates, and such differences could be material to our consolidated financial position and results of operations.
Concentration of Credit Risk and Other Risks and Uncertainties
Financial instruments that potentially expose us to concentrations of credit risk consist principally of cash and cash equivalents, investments, and accounts receivable. We do not require collateral or other security related to our receivables. Our cash and cash equivalents are deposited with high-quality financial institutions. Deposits at these institutions may, at times, exceed federally insured limits.
Significant customers are those that represent more than 10% of our total revenues or gross accounts receivable balances for the periods in the condensed consolidated statements of operations and comprehensive loss and as of each balance sheet date presented. For each significant customer, revenue as a percentage of total revenues and gross accounts receivable as a percentage of total gross accounts receivable as of the periods presented were as follows:
Accounts Receivable Revenue
 March 31, 2023December 31, 2022 Three months ended March 31,
  20232022
Customer A
26%11%45%35%
Customer B
**10%*
Customer C
38%51%*13%
*    less than 10%
International sales entail a variety of risks, including currency exchange fluctuations, longer payment cycles, and greater difficulty in accounts receivable collection. Customers outside the United States collectively represent 66% and 44% of our revenues for the three months ended March 31, 2023 and 2022, respectively. Customers outside of the United States collectively represented 41% and 23% of our gross accounts receivable balance as of March 31, 2023 and December 31, 2022, respectively.
Certain components included in our products require customization and are obtained from a single source or a limited number of suppliers.

7

SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Business Combination
We account for business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations. A business combination is one that combines inputs and processes to create outputs, and where substantially all of the fair value of assets acquired is not concentrated in a single identifiable asset or group of similar identifiable assets. Identifiable assets acquired and liabilities assumed are recorded at their acquisition date fair values. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities assumed is recorded as goodwill. Acquisition related costs are expensed as incurred and included in selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss. See Note 4, Business Combinations, for additional details.
Contingent Consideration
Contingent consideration arrangements represent a promise to deliver Common Stock and/or cash to former owners of an acquired business after the acquisition if certain specified events occur or conditions are met in the future are classified as liabilities and recognized at fair value at the acquisition date and at each subsequent reporting period. The contingent consideration liabilities contractually due beyond 12 months are recorded in other long-term liabilities on the condensed consolidated balance sheets. Subsequent changes in fair value are recorded in selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss. See Note 4, Business Combinations, for additional details.
Accounts Receivable and Allowance for Expected Credit Losses
Effective January 1, 2023, we adopted the requirements of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), along with the subsequently issued guidance amending and clarifying various aspects of ASU 2016-13, using the modified retrospective method of adoption. In accordance with that method, the comparative periods’ information continues to be reported under the relevant accounting guidance in effect for that period. For the current period, the standard replaces the existing incurred credit loss model with the current expected credit losses model for financial instruments, including accounts receivable, through a cumulative-effect adjustment to accumulated deficit as of the beginning of the first reporting period in which the guidance is effective.
We are exposed to credit losses primarily through sales of products and services and recognize an allowance for expected credit losses on accounts receivable in an amount equal to the current expected credit losses. The estimation of the allowance for expected credit losses is based on an analysis of historical loss experience, a review of the current aging status of receivables, assessments of current and estimated future economic and market conditions, and assessments of specific customer accounts to be considered at risk or uncollectible. We write off accounts receivable against the allowance for expected credit losses when we determine a balance is uncollectible and cease collection efforts. We did not write off any material accounts receivable balances during the periods ended March 31, 2023 and 2022.
As of March 31, 2023, we also recorded a long-term receivable for guaranteed fixed minimum royalties net of a discount related to a significant financing component. The related interest income is recognized over the term of the agreement on an effective interest rate basis.
Accounts receivable, net consisted of the following:
(in thousands)March 31, 2023December 31, 2022
Accounts receivable$35,363 $26,441 
Less: allowance for expected credit losses(730)(151)
Accounts receivable, net$34,633 $26,290 
Accounts receivable, net (current)$25,585 $17,006 
Accounts receivable, net of current portion$9,048 $9,284 
A rollforward of the allowance for expected credit losses balance for the three months ended March 31, 2023 is as follows:
8

SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
(in thousands)
Allowance for doubtful accounts, December 31, 2022$(151)
Impact of adopting ASU 2016-13(485)
Allowance for expected credit losses, January 1, 2023(636)
Provision for credit losses(94)
Write offs, net— 
Allowance for expected credit losses, March 31, 2023$(730)
Inventory
Inventory is stated at the lower of cost (on a first-in, first-out basis) or net realizable value. Cost is determined using a standard cost system, whereby the standard costs are updated periodically to reflect current costs. We estimate the recoverability of inventory by referencing estimates of future demands and product life cycles, including expiration. We periodically analyze our inventory levels to identify inventory that may expire prior to expected usage, no longer meets quality specifications, or has a cost basis in excess of its estimated net realizable value and record a charge to cost of revenue for such inventory as appropriate. The value of inventory that is not expected to be used within 12 months of the balance sheet date is classified as non-current inventory in the accompanying condensed consolidated balance sheets.
In-process Research and Development
Acquired in-process research and development (“IPR&D”) relates to substantial research and development efforts that are incomplete at the acquisition date. IPR&D intangible assets are considered indefinite-lived until the completion or abandonment of the associated research and development efforts. During the development phase, these assets are not amortized but are tested for impairment annually during the fourth quarter of the year or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Once the IPR&D activities are completed, the intangible asset is amortized over its useful life on a straight-line basis.
Goodwill
Goodwill is the difference between the total consideration paid in a business combination and the fair value of the net of identifiable assets acquired and liabilities assumed. Goodwill is not amortized but is tested for impairment on an annual basis during the fourth quarter of the year and in interim periods if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying amount. All of our goodwill is assigned to our one reporting unit.
We first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary. For the quantitative goodwill impairment test, the fair value of the reporting unit is compared to its carrying value and an impairment is recorded for the excess carrying value over fair value, not to exceed the carrying amount of goodwill. There were no goodwill impairment losses recorded in any period presented.
Impairment of Long-Lived Assets
We evaluate a long-lived asset (or asset group) for impairment whenever events or changes in circumstances indicate that the carrying value of the asset (or asset group) may not be recoverable. If indicators of impairment exist and the undiscounted future cash flows that the asset is expected to generate are less than the carrying value of the asset, an impairment loss is recorded to write down the asset to its estimated fair value based on a discounted cash flow approach. There were no impairment losses recorded in any period presented.
Leases
We determine if an arrangement is a lease at inception of the contract. Operating lease right-of-use (“ROU”) assets are included in other long-term assets, and operating lease liabilities are included in other current liabilities and other long-term liabilities in the condensed consolidated balance sheets.
ROU assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. As the implicit rate in our leases is generally unknown, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. We give consideration to our credit risk, term of the lease, total lease payments and adjust for the impacts of collateral, as necessary, when calculating our incremental borrowing rates.
9

SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Operating lease ROU assets include lease incentives and initial direct costs incurred. When the lease incentives specify a maximum level of reimbursement and we are reasonably certain to incur reimbursable costs equal to or exceeding this level, we include the lease incentive in the measurement of the ROU assets and lease liabilities at commencement. The lease terms may include options to extend or terminate the lease when it is reasonably certain we will exercise any such options. Lease costs for our operating leases are recognized on a straight-line basis within operating expenses over the lease term in the condensed consolidated statements of operations and comprehensive loss.
We have lease agreements with lease and non-lease components. However, we have elected the practical expedient to not separate lease and non-lease components for all of our existing classes of assets. Therefore, the lease and non-lease components are accounted for as a single lease component. We have also elected to not apply the recognition requirement to any short-term leases with a term of 12 months or less.
We monitor for events or changes in circumstances that may require a reassessment or impairment of our leases, at which time our ROU assets for operating leases may be reduced by impairment losses.
Warrant Liabilities
During February 2021, in connection with CMLS II’s initial public offering, CMLS II issued 5,519,991 warrants (the “Public Warrants”) to purchase shares of Common Stock at $11.50 per share. Simultaneously, with the consummation of the CMLS II initial public offering, CMLS II issued 5,013,333 warrants through a private placement (the “Private Placement Warrants”, and together with the Public Warrants, the “Warrants”) to purchase shares of Common Stock at $11.50 per share. All of the Warrants were outstanding as of March 31, 2023.
We classify the Warrants as liabilities on our condensed consolidated balance sheets as these instruments are precluded from being indexed to our own stock given that the terms allow for a settlement adjustment that does not meet the scope for the fixed-for-fixed exception in ASC 815, Derivatives and Hedging (“ASC 815”). Since the Warrants meet the definition of a derivative under ASC 815-40, we recorded these warrants as long-term liabilities at fair value on the date of the SPAC Merger, with subsequent changes in their respective fair values recognized within change in fair value of warrant liabilities in the condensed consolidated statements of operations and comprehensive loss at each reporting date. See Note 10, Stockholders' Equity, for more information on the Warrants.
Earn-Out Liability
As a result of the SPAC Merger, additional shares of Common Stock were provided to SomaLogic Operating shareholders and to certain employees and directors of SomaLogic (“Earn-Out Service Providers”) of up to 3,500,125 and 1,499,875, respectively (the “Earn-Out Shares”). The Earn-Out Shares are payable if the price of our Common Stock is greater than or equal to $20.00 for a period of at least 20 out of 30 consecutive trading days at any time between the 13- and 24-month anniversary of the closing date of the SPAC Merger (the “Triggering Event”). Any Earn-Out Shares issuable to an Earn-Out Service Provider (the “Service Provider Earn-Outs”) shall be issued only if such individual continues to provide services (whether as an employee or director) through the date of occurrence of the corresponding Triggering Event (or a change in control acceleration event, if applicable) that causes such Earn-Out Shares to become issuable. Any Earn-Out Shares that are forfeited pursuant to the preceding sentence shall be reallocated to the SomaLogic Operating shareholders in accordance with their respective pro rata Earn-Out Shares.
The Earn-Out Shares granted to shareholders are recognized as a liability in accordance with ASC 815. The liability was included as part of the consideration transferred in the SPAC Merger and was recorded at fair value. The earn-out liability is remeasured at the end of each reporting period, with subsequent changes in fair value recognized within change in fair value of earn-out liability in the condensed consolidated statements of operations and comprehensive loss.
As the issuance of the Service Provider Earn-Outs is contingent on services being provided, they are accounted for in accordance with ASC 718, Compensation - Stock Compensation. See Note 11, Stock-based Compensation, for additional information regarding Earn-Out Shares granted to Earn-Out Service Providers.
Revenue Recognition
We recognize revenue from sales to customers under ASC 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 provides a five-step model for recognizing revenue that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.
We recognize revenue when or as control of promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Sales, value add, and other taxes collected concurrent with revenue-producing activities are excluded from revenue.
10

SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Payment terms may vary by customer, are based on customary commercial terms, and are generally less than one year. We do not adjust revenue for the effects of a significant financing component for contracts where the period between the transfer of the good or service and collection is one year or less. We expense incremental costs to obtain a contract when incurred since the amortization period of the asset that would otherwise be recognized is one year or less.
Assay Services Revenue
We generate assay services revenue primarily from the sale of SomaScan® services. SomaScan® service revenue is derived from performing the SomaScan® assay on customer samples to generate data on protein biomarkers. Revenue from SomaScan® services is recognized at the time the analysis data or report is delivered to the customer, which is when control has been transferred to the customer. SomaScan® services are sold at a fixed price per sample without any volume discounts, rebates, or refunds.
The delivery of each assay data report is a separate performance obligation. For arrangements with multiple performance obligations, the transaction price must be allocated to each performance obligation based on its relative standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance obligation as there are few directly comparable products in the market and factors such as customer size are factored into the determination of selling price. We determine standalone selling prices based on amounts invoiced to customers in observable transactions.
Product Revenue
Product revenue primarily consists of equipment and kit sales to customers that assay samples in their own laboratories. Equipment is generally accounted for as a bundle with installation, qualification and training services. Revenue is recognized based on the progress made toward achieving the performance obligation utilizing input methods, including costs incurred. Revenue from kit sales is recognized upon transfer of control to the customer. Shipping and handling costs billed to customers are included in product revenue in the condensed consolidated statements of operations and comprehensive loss.
Collaboration Revenue
In July 2011, NEC Corporation (“NEC”) and SomaLogic entered into a Strategic Alliance Agreement (the “SAA”) to develop a professional software tool to enable SomaScan® customers to easily access and interpret the highly multiplexed proteomic data generated by SomaLogic’s SomaScan® assay technology in the United States. To support this development, NEC made an upfront payment of $12.0 million. This agreement includes a clause whereby if there is a material breach of the contract or change in control of SomaLogic, we may be required to pay a fee to terminate the agreement.
We determined that the SAA met the criteria set forth in ASC 808, Collaborative Arrangements, (“ASC 808”) because both parties were active participants and were exposed to significant risks and rewards dependent on commercial failure or success. We recorded the upfront payment as deferred revenue to be recognized over the period of performance of 15 years. The revenue was recorded in collaboration revenue in the condensed consolidated statements of operations and comprehensive loss.
In March 2020, NEC and SomaLogic mutually terminated the SAA and concurrently SomaLogic and NEC Solution Innovators, Ltd. (“NES”), a wholly owned subsidiary of NEC, entered into a new arrangement, the Joint Development & Commercialization Agreement (the “JDCA”), to develop and commercialize SomaScan® services in Japan. NES agreed to make annual payments of $2.0 million for five years, for a total of $10.0 million, in exchange for research and development activities, as described below. We determined the JDCA should be accounted for as a modification of the SAA. Therefore, the remaining SAA deferred revenue balance as of the date of the modification was included as consideration under the JDCA resulting in total consideration of $15.3 million for research and development activities. We determined that this arrangement also meets the criteria set forth in ASC 808. The JDCA contains three separate performance obligations: (i) research and development activities, (ii) assay services, and (iii) a 10-year exclusive license of our intellectual property.
(i) Research and Development Activities
We determined that NES is not a customer with respect to the research and development activities associated with the collaboration arrangement under ASC 808. We recognize revenue from these activities based on the progress made toward achieving the performance obligation utilizing input methods, including costs incurred, in collaboration revenue in the condensed consolidated statements of operations and comprehensive loss.
(ii) Assay Services
We determined that NES is a customer for the assay services performance obligation, which should be accounted for using the criteria under ASC 606. We receive a fixed fee (standalone selling price) per sample in exchange for assaying
11

SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
samples, which is a service performed for other customers in the ordinary course of business. This performance obligation is recognized at a point in time when the assay data report is delivered to the customer and recorded in assay services revenue in the condensed consolidated statements of operations and comprehensive loss.
(iii) License of Intellectual Property
We determined that NES is a customer for the license performance obligation, which should be accounted for using the criteria under ASC 606. We receive royalties based on NES’ net sales and determined the allocation of royalties solely to this performance obligation is consistent with the objectives in ASC 606. This performance obligation was satisfied at the beginning of the license term. Subject to the sales and usage-based royalty exception, revenue is recognized in the period in which the subsequent sale or usage has occurred. Royalties are recorded in other revenue in the condensed consolidated statements of operations and comprehensive loss.
Other Revenue
Other revenue includes royalty revenue and revenue received from research grants. We recognize royalty revenue for fees paid by customers in return for a license to make, use or sell certain licensed products in certain geographic areas. These fees are equivalent to a percentage of the customer’s related revenues. We recognize revenue for sales-based or usage-based royalties promised in exchange for a functional license of intellectual property when the later of the following events occurs: (i) the subsequent sale or usage occurs, or (ii) the performance obligation to which some or all of the sales-based or usage-based royalty has been satisfied. As such, revenue is recognized in the period in which the subsequent sale or usage has occurred.
In June 2008, SomaLogic and New England Biolabs, Inc. (“NEB”) entered into an exclusive licensing agreement, whereby we provide a license to use certain proprietary information and know-how relating to its aptamer technology to make and use commercial products. In exchange, we receive royalties from NEB for this functional license of intellectual property. In September 2022, SomaLogic and NEB entered into a license and settlement agreement (“NEB Agreement”) that terminated the existing exclusive licensing arrangement and provided for a settlement of $8.0 million of previously constrained royalties recognized for the year ended December 31, 2022. The NEB Agreement also provided a non-exclusive license arrangement for the same proprietary information and know-how under which we are guaranteed fixed minimum royalties of $15.0 million to be received over the next 3 years. We recognized revenue for the guaranteed fixed minimum royalties of $13.2 million for the year ended December 31, 2022, net of a significant financing component of $1.8 million. Any revenue above the guaranteed fixed minimum royalties is recognized in the period in which the subsequent sale or usage has occurred. We have recorded a receivable of $12.8 million as of March 31, 2023, of which $8.7 million is recorded in accounts receivable, net of current portion and $4.1 million is recorded in accounts receivable, net on the condensed consolidated balance sheets. Interest income related to the significant financing component was $0.2 million for the period ended March 31, 2023, and is included in interest income and other, net in the condensed consolidated statements of operations and comprehensive loss.
Grant revenue represents funding under cost reimbursement programs or fixed rate arrangements from government agencies and non-profit foundations for qualified research and development activities performed by SomaLogic. We recognize grant revenue when it is reasonably assured that the grant funding will be received as evidenced through the existence of a grant arrangement, amounts eligible for reimbursement are determinable and have been incurred, the applicable conditions under the grant arrangements have been met, and collectability of amounts due is reasonably assured. The classification of costs incurred related to grants is based on the nature of the activities performed by SomaLogic. Grant revenue is recognized when the related costs are incurred and recorded in other revenue in the condensed consolidated statements of operations and comprehensive loss.
Illumina Cambridge, Ltd.
On December 31, 2021, we entered into a multi-year arrangement with Illumina Cambridge, Ltd. (“Illumina Agreement”) to jointly develop and commercialize co-branded kits that will combine Illumina’s Next Generation Sequencing (“NGS”) technology with SomaLogic’s SomaScan technology. Pursuant to the agreement, we received a non-refundable upfront payment of $30.0 million on January 4, 2022. This arrangement is accounted for in accordance with ASC 606. We concluded there are two performance obligations: (1) SOMAmer reagents necessary to develop and commercialize NGS based proteomic products, inclusive of the rights to licenses, patents and training to allow for the use of such reagents and (2) an option to purchase goods post-commercialization with a material right (“Material Right”). The total transaction price is subject to a constraint since it is uncertain that commercialization will be achieved; and therefore the transaction price was determined to be $30.0 million and was allocated to each of the performance obligations identified on a relative standalone selling price basis. Revenue from the performance obligations is recognized as follows in product revenue in the condensed consolidated statements of operations and comprehensive loss:
Reagents: Revenue is recognized when control transfers to the customer (i.e., when the SOMAmer reagents are shipped). We estimated the standalone selling price (“SSP”) based on observable pricing of similar performance obligations.
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SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Material Right: Revenue is recognized when Illumina exercises its option to purchase goods post-commercialization. We estimated the SSP based on an incremental discount to be provided to the customer adjusted for the likelihood that Illumina will exercise the option.
In June 2022, Illumina issued a purchase order that changed the promises under the Illumina Agreement. The purchase order represents a contract modification that is accounted for prospectively as if it were a termination of the existing contract and the creation of a new contract.
As a result, we determined that there were three new performance obligations (total of five performance obligations): (1) equipment bundle that includes customization services, integration services, system qualification services, site initiation services and training (“Equipment Bundle”), (2) qualification kits, and (3) support services. The contract modification resulted in an increase in the transaction price of $0.5 million. The updated transaction price was allocated between the performance obligations on a relative SSP basis. We estimated the SSP based on observable pricing of similar performance obligations. Revenue from the performance obligations is recognized as follows in product revenue in the condensed consolidated statements of operations and comprehensive loss:
Equipment Bundle: Revenue is recognized based on the progress made toward achieving the performance obligation utilizing input methods, including costs incurred.
Qualification Kits: Revenue is recognized when control transfers to the customer (i.e., when the qualification kits are shipped).
Support Services: Revenue is recognized for the support services as the services are provided.
We did not recognize any revenue during the three months ended March 31, 2023 or 2022 pursuant to the Illumina Agreement for performance obligations satisfied.
Restricted Cash
Restricted cash represents cash on deposit with a financial institution as security for letters of credit outstanding for the benefit of the landlords related to operating leases and a bank guarantee with an international customer. The portion of restricted cash expected to be released within twelve months is classified as prepaid expenses and other current assets on the condensed consolidated balance sheets was $0.5 million and $4.7 million as of March 31, 2023 and December 31, 2022, respectively. Cash expected to be restricted for greater than twelve months is classified as other long-term assets on the condensed consolidated balance sheets was $0.6 million and $0.8 million as of March 31, 2023 and December 31, 2022.
Income Taxes
We use the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are determined based on differences between the tax bases of assets and liabilities and their respective financial reporting amounts, based on enacted tax laws and statutory tax rates applicable to the periods in which these temporary differences are expected to reverse. We evaluate the need to establish or release a valuation allowance based upon expected levels of taxable income, future reversals of existing temporary differences, tax planning strategies, and recent financial operations. Valuation allowances are established to reduce deferred tax assets to the amount expected to be more likely than not realized in the future.
The effect of income tax positions is recognized only when it is more likely than not to be sustained. Interest and penalties associated with uncertain tax positions are recorded in income tax benefit (provision) in the condensed consolidated statements of operations and comprehensive loss.
Segment Information
We have one operating segment. Our chief operating decision maker (the “CODM”) role is performed by our Chief Executive Officer. The CODM manages our operations on a consolidated basis for purposes of allocating resources and assessing performance. Substantially all of our operations and decision-making functions are located in the United States.
Other Significant Accounting Policies
Our significant accounting policies are described in our 2022 Form 10-K. There have been no significant changes to those policies.
Recent Accounting Pronouncements
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition
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SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period and, as a result, we will not be required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies so long as we remain an emerging growth company.
Recently Adopted Accounting Standards
Financial Instruments Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which sets forth a “current expected credit loss” (“CECL”) model that requires us to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. We adopted ASU 2016-13, as amended, on January 1, 2023 using a modified retrospective approach and recorded a cumulative effect adjustment to accumulated deficit. The adoption of ASU 2016-13 did not have a material impact on our condensed consolidated financials.
Note 3 — Revenue
The following table provides information about disaggregated revenue by product line:
Three Months Ended March 31,
 (in thousands)
20232022
Assay services revenue
$18,419 $18,800 
Product revenue
1,186 453 
Collaboration revenue
763 763 
Other revenue:
Royalties
— 2,955 
Other
11 
Total other revenue
11 2,964 
Total revenue
$20,379 $22,980 
Contract Balances and Remaining Performance Obligations
Contract liabilities represent our obligation to transfer goods or services to customers from which we have received consideration. Deferred revenue is classified as current if we expects to be able to recognize the deferred amount as revenue within 12 months of the balance sheet date. Deferred revenue is recognized as or when we satisfy our performance obligations under the contract.
As of March 31, 2023 and December 31, 2022, deferred revenue of $35.4 million and $35.1 million, respectively, was comprised of balances related to our collaboration revenue, product, assay services, and other revenue. As of March 31, 2023 and December 31, 2022, the portion of deferred revenue related to collaboration revenue was $2.1 million and $2.9 million, respectively. As of March 31, 2023, the estimated remaining performance period is 2.0 years. As of March 31, 2023 and December 31, 2022, the portion of deferred revenue related to assay services and other revenue was $2.9 million and $1.8 million, respectively. As of March 31, 2023, the deferred revenue related to assay services and other revenue will be recognized within 12 months.

As of March 31, 2023 and December 31, 2022, the deferred product revenue related to the Illumina Agreement amounted to $30.4 million for each period. As of March 31, 2023, the estimated remaining performance obligation period is approximately 8.0 years.
A summary of the change in contract liabilities is as follows:
(in thousands)March 31, 2023December 31, 2022
Balance at beginning of period
$35,115 $5,385 
Recognition of revenue included in balance at beginning of period
(1,228)(2,772)
Revenue deferred during the period, net of revenue recognized
1,487 32,502 
Balance at end of period
$35,374 $35,115 
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SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Note 4 — Business Combinations
On July 25, 2022, we entered into an Agreement and Plan of Merger to acquire 100% of the equity interests in Palamedrix, Inc. ("Palamedrix") (the “Palamedrix Acquisition”). Palamedrix is a DNA nano tech firm that provides scientific and engineering expertise, miniaturization technology and enhanced ease-of-use capabilities that we intend to leverage as we develop the next generation of SomaScan® Assay. The Palamedrix Acquisition provides for up to $0.5 million to be paid to the founders contingent upon settlement of pre-acquisition legal matters. It also provides for three potential additional payments of up to $17.5 million to the owners, including non-founder and founder employees, to be settled in cash and/or Common Stock contingent on the achievement of certain net sales milestone targets by the fifth and sixth year anniversary of the closing date of the acquisition (the “Milestone Consideration”). The acquisition closed on August 31, 2022.
The following table summarizes the fair value of consideration transferred to acquire Palamedrix:
(in thousands)
Cash$15,778 
Common Stock11,832 
Contingent consideration1,448 
Fair value of replaced Palamedrix equity awards relating to pre-combination service625 
Total consideration transferred$29,683 
Consideration transferred includes 3,215,295 shares of Common Stock issued to Palamedrix securityholders. An additional 815,177 shares of Common Stock were issued to Palamedrix employees and founders that were accounted for as post-combination compensation expense. The fair value of Common Stock is based on a per share price of $3.68 on August 31, 2022, the acquisition date.
We are in the process of completing our purchase accounting, whereby the purchase price is allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. The purchase accounting is considered preliminary and is subject to revision based on final determinations of fair value and allocations of purchase price to the acquired identifiable assets acquired and liabilities assumed.
The following table represents the preliminary allocation of consideration transferred to the identifiable assets acquired and the liabilities assumed based on the fair values as of August 31, 2022:
(in thousands)
Cash and cash equivalents$2,521 
Prepaid expenses and other current assets251 
Property and equipment1,246 
Intangible assets16,700 
Other long-term assets1,289 
Accounts payable(68)
Accrued liabilities(81)
Other current liabilities(634)
Deferred income taxes, net(1,390)
Other long-term liabilities(550)
Net identifiable assets acquired$19,284 
Goodwill10,399 
Total consideration transferred$29,683 
The goodwill is generated from operational synergies and cost savings that we expect to achieve from the combined operations and Palamedrix’s knowledgeable and experienced assembled workforce. The goodwill is not deductible for tax purposes.
All unvested awards of non-founder employees were accelerated on a discretionary basis as part of the Palamedrix Acquisition. These awards were exchanged at the close date for cash, Common Stock, and Milestone Consideration. As a result, we allocated $1.3 million of the total consideration transferred to post-combination compensation expense. The amount is recorded in selling, general and administrative in the condensed consolidated statement of operations and comprehensive loss during the year ended December 31, 2022.
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SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
In addition, the unvested awards of the Palamedrix founders were exchanged for cash, Common Stock, and Milestone Consideration on a consistent basis with all other shareholders. However, the Common Stock and Milestone Consideration replacement awards granted to the Palamedrix founders require continuing employment for a period of three years. The Common Stock awards vest ratably over the service period and are equity classified. The Milestone Consideration awards vest after a three year service period or upon the achievement of the milestones.
The Milestone Consideration replacement awards of non-founder and founder employees are accounted for under ASC 718. As the milestone payments are a fixed monetary value settled in cash and/or Common Stock, they are liability classified. A liability of $1.5 million as of March 31, 2023 is recorded in other long-term liabilities on the condensed consolidated balance sheets.
Note 5 — Fair Value Measurements
Assets measured at fair value on a recurring basis
The following tables set forth our financial assets measured at fair value on a recurring basis and the level of inputs used in such measurements:
As of March 31, 2023
(in thousands)
 
Amortized
Cost
Gross
Unrealized
Gain
Gross
Unrealized
Loss
Aggregate
Fair Value
 
Fair Value
Level
Cash and cash equivalents:
         
Cash
 $22,317 $— $— $22,317 Level 1
Money market funds
 416,192 — — 416,192 Level 1
Total cash and cash equivalents
 438,509 — — 438,509 
Investments:
 
Commercial paper
 42,524 (74)42,452 Level 2
U.S. Treasuries
 7,749 — (23)7,726 Level 2
Corporate bonds
 4,475 — (12)4,463 Level 2
Agency bonds
 7,458 — (38)7,420 Level 2
Total investments
 62,206 (147)62,061 
Total assets measured at fair value on a recurring basis
 $500,715 $$(147)$500,570 
As of December 31, 2022
(in thousands)
Amortized Cost
Gross
Unrealized
Gain
Gross
Unrealized
Loss
Aggregate
Fair Value
Fair Value
Level
Cash and cash equivalents:
     
Cash
$44,045 $— $— $44,045 Level 1
Money market funds
377,785 — — 377,785 Level 1
Total cash and cash equivalents
421,830 — — 421,830 
Investments:
Commercial paper
58,794 — (195)58,599 Level 2
U.S. Treasuries
35,252 — (175)35,077 Level 2
Corporate bonds
11,782 — (39)11,743 Level 2
Agency bonds12,426 — (87)12,339 Level 2
Total investments
118,254 — (496)117,758 
Total assets measured at fair value on a recurring basis
$540,084 $— $(496)$539,588 
As of March 31, 2023 and December 31, 2022, we had $0.3 million and $0.5 million, respectively, of accrued interest on investments recorded in prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets.
Our investments consist of money market funds, commercial paper, U.S. Treasuries, corporate bonds, and agency bonds. All of the commercial paper, U.S. Treasuries, corporate bonds and agency bonds are designated as available-for-sale securities and have an effective maturity date that is less than one year from the respective balance sheet date, and accordingly, have been classified as current in the condensed consolidated balance sheets.
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SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
We classify our investments in money market funds within Level 1 of the fair value hierarchy because they are valued using quoted market prices. We classify our commercial paper, U.S Treasuries, asset-backed securities, corporate bonds and agency bonds as Level 2 and obtain the fair value from a third-party pricing service, which may use quoted market prices for identical or comparable instruments or model-driven valuations using observable market data or inputs corroborated by observable market data.
We adopted ASU 2016-13 on January 1, 2023. Under the new guidance, we evaluated our available-for-sale securities with unrealized losses for impairment, considering available evidence, including the extent to which fair value is less than cost, whether an allowance for expected credit loss is required, and adverse factors that could affect the value of the securities. Any unrealized losses from declines in fair value below the amortized cost basis as a result of non-credit factors are recognized in accumulated other comprehensive loss as a separate component of stockholders’ equity, along with unrealized gains. Realized gains and losses and declines in fair value, if any, on available-for-sale securities are included in interest and other income, net in the condensed consolidated statements of operations and comprehensive loss.
We evaluated the available-for-sale securities as of March 31, 2023 and determined that no available-for-sale securities in an unrealized loss position are arising from credit related reasons. Additionally, we do not intend to sell or believe that it is not more likely than not that we will be required to sell the securities before recovery of the amortized cost bases and have therefore not recorded any allowances for available-for-sale securities in our allowance for expected credit losses as of March 31, 2023. We did not recognize any realized gains or losses for the three months ended March 31, 2023. Subsequent to March 31, 2023, we sold $10.5 million of investments prior to maturity. The realized loss was immaterial.
We evaluated our securities for other-than-temporary impairment as of December 31, 2022, and considered the decline in fair value to be primarily attributable to current economic and market conditions and we would not be required to sell the securities before recovery of the amortized cost basis. Based on this analysis, these marketable securities were not considered to be other-than-temporarily impaired as of December 31, 2022.
Liabilities measured at fair value on a recurring basis
The following table presents information about our liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation inputs we utilized to determine such fair value:
(in thousands)March 31, 2023December 31, 2022Fair Value Level
Warrant liability - public warrants
$1,656 $2,208 Level 1
Warrant liability - private placement warrants
1,504 2,005 Level 2
Earn-out liability
— 15 Level 3
Milestone contingent consideration1,171 1,165 Level 3
Holdback contingent consideration450 450 Level 3
Total liabilities measured at fair value on a recurring basis
$4,781 $5,843 
Warrant liabilities
The public warrants were valued using Level 1 inputs as they are traded in an active market. The fair value of the private placement warrants is equivalent to that of the public warrants as they have substantially the same terms; however, as they are not actively traded, they are classified as Level 2 in the hierarchy table above.
Earn-out liability
The fair value of the Earn-Out Shares was estimated using a Monte Carlo simulation model. The fair value is based on the simulated price of the Company over the maturity date of the contingent consideration and increased by estimated forfeitures of Earn-Out Shares issued to Earn-Out Service Providers. During the three months ended March 31, 2023, the earn-out liability was determined to be immaterial and was fully written off.
The significant unobservable inputs used in the Monte Carlo simulation to measure the Earn-Out Shares that are categorized within Level 3 of the fair value hierarchy were as follows:
December 31, 2022
Stock price on valuation date$2.51 
Volatility78.10 %
Risk-free rate4.75 %
Dividend yield— %
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SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
The rollforward of the fair value of the earn-out liability is summarized as follows:
(in thousands)Fair Value
Balance as of December 31, 2022$15 
Change in fair value of earn-out liability(15)
Balance as of March 31, 2023$— 
Milestone Contingent Consideration
The fair value of milestone contingent consideration was estimated using a Monte Carlo simulation model. The fair value is based on an option pricing framework, whereby a range of possible scenarios were simulated around forecasted net sales.
The significant unobservable inputs used in the Monte Carlo simulation to measure the milestone contingent consideration that are categorized within Level 3 of the fair value hierarchy were as follows:
March 31, 2023December 31, 2022
Volatility35.0 %35.0 %
Risk-free rate3.6 %4.0 %
Weighted average cost of capital30.0 %30.0 %
Cost of debt10.8 %10.0 %
The change in the fair value of the milestone contingent consideration is summarized as follows:
(in thousands)Fair Value
Balance as of December 31, 2022$1,165 
Change in fair value of milestone contingent consideration
Balance as of March 31, 2023$1,171 

Holdback Contingent Consideration
The holdback contingent consideration related to the Palamedrix Acquisition was $0.5 million as of March 31, 2023 and is recorded in other long-term liabilities on the condensed consolidated balance sheets. There was no significant change in fair value between December 31, 2022 and March 31, 2023. The fair value of holdback contingent consideration was estimated using a scenario-based analysis. The fair value is based on the expected holdback release date and expected holdback payment. The future expected payments were discounted to the valuation date using the cost of debt.
The significant unobservable inputs used in the scenario-based analysis to measure the holdback contingent consideration that are categorized within Level 3 of the fair value hierarchy were as follows:
March 31, 2023December 31, 2022
Cost of debt11.5 %10.2 %

Note 6 — Leases
We have operating leases for certain office spaces with lease terms ranging from two to five years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at our election to renew or extend the leases for additional periods ranging from three to ten years. These optional periods have not been considered in the determination of the ROU assets or lease liabilities associated with these leases as we did not consider the exercise of these options to be reasonably certain. The ROU
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SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
asset is included in other long-term assets on the condensed consolidated balance sheets and was $3.4 million and $3.9 million as of March 31, 2023, and December 31, 2022, respectively.
Lease Costs
Lease costs for operating leases are recognized on a straight-line basis over the lease term. The total lease cost for the period was as follows:
Three Months EndedThree Months Ended
(in thousands)March 31, 2023March 31, 2022
Operating lease cost$591 $401 
Variable lease cost378 181 
Short-term lease cost12 11 
Total lease cost$981 $593 
Lease Maturities
The table below reconciles the undiscounted lease payment maturities to the lease liabilities for our operating leases:
(in thousands)March 31, 2023
Remainder of 2023$1,923 
20241,143 
2025834 
2026143 
Total4,043 
Less: amount of lease payments representing interest(115)
Present value of future minimum lease payments3,928 
Less: current operating lease liabilities (included in other current liabilities)(2,221)
Long-term operating lease liabilities (included in other long-term liabilities)$1,707 
Supplemental Lease Information
Supplemental information related to our operating leases was as follows:
March 31, 2023
Weighted average remaining lease term2.1 years
Weighted average discount rate2.5 %
Cash paid for amounts included in the measurement of our operating lease liabilities for the three months ended March 31, 2023 and 2022 was $0.6 million and $0.5 million, respectively.
In February 2022, we executed two separate lease agreements (the “Leases”) to lease buildings pending construction that had not yet commenced. Both leases were set to expire on November 30, 2033, unless extended or early terminated in accordance with the terms of the lease. In accordance with the lease agreements, we made a deposit of $4.1 million during the first quarter of 2022. The deposit was restricted from withdrawal and held by a bank in the form of collateral for an irrevocable standby letter of credit held as security.
On August 25, 2022, we entered into a lease termination agreement (the “Lease Termination”) for the Leases prior to lease commencement. As consideration for the termination of the Leases, we agreed to pay the landlord a termination fee of $6.0 million of which $2.5 million was paid on the termination date. During the fourth quarter of 2022 the remaining liability was reduced by $1.0 million after the landlord entered into a separate lease with a third party. The remaining $2.5 million liability was paid in January 2023 and the $4.1 million deposit was released in March 2023.
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SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Note 7 — Inventory

Inventory was comprised of the following:
(in thousands)March 31, 2023December 31, 2022
Raw materials
$19,753 $16,710 
Work in process1,535 1,191 
Finished goods
748 639 
Total inventory
$22,036 $18,540 
Inventory (current)
$15,051 $13,897 
Non-current inventory
$6,985 $4,643 
Note 8 — Accrued Liabilities and Other Long-Term Liabilities
Accrued liabilities consisted of the following:
(in thousands)March 31, 2023December 31, 2022
Accrued compensation
$6,623 $13,897 
Accrued restructuring costs2,139 2,223 
Accrued lease termination fee
— 2,500 
Accrued real estate agent commission
— 764 
Accrued medical claims
684 663 
Other
625 631 
Total accrued liabilities
$10,071 $20,678 
Other long-term liabilities consisted of the following:
(in thousands)March 31, 2023December 31, 2022
Long-term operating lease liabilities$1,707 $2,063 
Milestone Consideration replacement award liability1,515 1,261 
Milestone Contingent Consideration1,171 1,165 
Holdback Contingent Consideration450 450 
Long-term deferred tax liability585 585 
Total other long-term liabilities$5,428 $5,524 
Note 9 — Commitments and Contingencies
Legal Proceedings
We are subject to claims and assessments from time to time in the ordinary course of business. We will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. We are not currently party to any material legal proceedings in which a potential loss is probable or reasonably estimable.
Indemnification
In the normal course of business, we enter into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. Our exposure under these agreements is unknown because it involves claims that may be made against us in the future, but that have not yet been made. To date, we have not paid any claims or been required to defend any action related to our indemnification obligations. However, we may record charges in the future as a result of these indemnification obligations.
Note 10 — Stockholders' Equity
Under our amended and restated certificate of incorporation, we are authorized to issue 600,000,000 shares of Common Stock, par value of $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share.
As of March 31, 2023, there were an aggregate of 5,519,991 and 5,013,333 outstanding public warrants and private placement warrants, respectively. Each warrant entitles the holder to purchase one share of our Common Stock at a price
20

SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
of $11.50 per share at any time commencing on February 25, 2022. As of March 31, 2023, no warrants have been exercised. The warrants will expire on September 1, 2026 or earlier upon redemption or liquidation.
There have been no significant changes to the disclosures in our 2022 Form 10-K related to Common Stock, preferred stock, or our public and private placement warrants, including warrant redemption terms.
Note 11 — Stock-based Compensation
Stock-based compensation includes grants of equity incentive awards in the form of stock options and other stock-based awards as well as the issuance of Earn-Out Shares to service providers in connection with the SPAC Merger, issuance of common stock subject to vesting conditions issued to Palamedrix founder employees, and Milestone Consideration replacement awards of non-founder and founder employees. Stock-based compensation also includes the impact of common stock purchased through our employee stock purchase plan, which allows eligible employees to purchase shares of our Common Stock at a price equal to 85% of their fair market value on the last day of a defined offering period.
Effective January 2023, we increased the reserve of Common Stock for issuance under all incentive plans by approximately 9 million shares in accordance with our 2021 Omnibus Incentive Plan.
There have been no other significant changes to our equity incentive plans and types of stock-based incentive awards disclosed in our 2022 Form 10-K.
Stock-based compensation was recorded in the condensed consolidated statements of operations and comprehensive loss as shown in the following table:
Three months ended March 31,
(in thousands) 
20232022
Cost of assay services revenue
$190 $291 
Cost of product revenue
10 
Research and development
1,770 1,732 
Selling, general and administrative
5,213 6,641 
Total stock-based compensation
$7,183 $8,671 
Stock-based compensation will fluctuate based on the grant-date fair value of awards, the number of awards, the requisite service period of the awards, modification of awards, employee forfeitures and the timing of the awards. Expense related to each stock option and restricted stock unit (“RSU”) award is recognized on a straight-line basis over the requisite service period of the entire award.
The following table summarizes our award activity for stock options and RSUs for the three months ended March 31, 2023:
Stock Options(1)
RSUs(2)
Outstanding as of December 31, 202223,541,194 3,084,379 
Granted
3,566,250 535,438 
Exercised or Issued
(111,396)(185,863)
Forfeited
(2,000,267)(407,240)
Expired
(62,857)— 
Outstanding as of March 31, 202324,932,924 3,026,714 
(1)    The stock options generally vest over four years, with 25% vesting upon the first-year anniversary of the grant date and the remaining options vesting ratably each month thereafter.
(2)    The RSUs vest subject to the satisfaction of service requirements. The grant date fair values of these awards are determined based on the closing price of our Common Stock on the date of grant.
We also incurred incremental stock-based compensation expense related to option modifications of $1.0 million and $0.1 million for the three months ended March 31, 2023 and March 31, 2022, respectively.
Service Provider Earn-Out Shares
As of March 31, 2023, 927,924 Service Provider Earn-Outs were outstanding after forfeitures. Upon forfeiture, the forfeited shares will be redistributed to the Old SomaLogic stockholders. The weighted average grant date fair value of the Service Provider Earn-Outs was $7.04 per share, and was recognized as stock-based compensation expense on a straight-line basis over the derived service period of 1.2 years. The assumptions used in valuing the Service Provider
21

SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
Earn-Outs using the Monte Carlo simulation included volatility of 89.8%, risk-free interest rate of 0.10% to 0.11%, and a stock price of $10.63 to $10.67. We recorded nil and $1.8 million in stock-based compensation expense related to the Service Provider Earn-Outs during the three months ended March 31, 2023 and 2022, respectively. As the derived service period has passed, expenses related to the Service Provider Earn-Outs were fully recognized as of December 31, 2022.
Replacement Awards Subject to Vesting Conditions
In connection with the Palamedrix Acquisition, we issued 1,209,801 shares of Common Stock and Milestone Consideration to founder employees that require continuing employment for a period of three years. Related stock-based compensation expense of $0.5 million was recorded in research and development expense in the condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2023.
Note 12 — Income Taxes
There has historically been no federal or state provision for income taxes because we have incurred operating losses and maintain a valuation allowance against our net realizable deferred tax assets in the United States. For the three months ended March 31, 2023 and 2022, we recognized no provision for income taxes in the United States. The provision for foreign income taxes was immaterial for the three months ended March 31, 2023 and 2022.
Utilization of our net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration or elimination of the net operating loss and tax credit carryforwards before utilization. Management believes that the limitation will not limit utilization of the carryforwards prior to their expiration.
Note 13 — Net Loss Per Share
The following table sets forth the computation of basic and diluted net loss per share:
Three Months Ended March 31,
(in thousands, except share and per share data) 
20232022
Net loss
$(34,202)$(3,979)
Weighted-average shares outstanding, basic and diluted
186,524,473 182,050,468 
Net loss per share, basic and diluted
$(0.18)$(0.02)
During periods in which we incur a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effect of all awards is anti-dilutive. The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive:
Three Months Ended March 31,
20232022
Anti-dilutive shares:
Stock options to purchase common stock
24,932,924 23,139,522 
Public warrants and private placement warrants10,533,324 10,533,324 
Unvested RSUs 3,026,714 553,193 
Replacement awards subject to vesting conditions1,209,801 — 
Employee stock purchase plan79,103 11,304 
Total anti-dilutive shares39,781,866 34,237,343 
Note 14 — Related Parties
Casdin Partners Master Fund, L.P (“Casdin”), founded by Eli Casdin, a member of our Board of Directors and principal owner of the Company, was a shareholder of Palamedrix. Upon our acquisition of Palamedrix, Casdin received $0.8 million in cash, $0.8 million in equity, and the right to receive up to $0.3 million of Milestone Consideration related to the achievement of net sales milestones.
Note 15 — Restructuring
On December 16, 2022, following the completion of a strategic review of our business, we announced a workforce reduction plan (the "Strategic Reorganization") to reduce operating costs and focus on long-term growth opportunities in our life sciences business. Under this Strategic Reorganization, we reduced our workforce by approximately 16%, with a majority of these employees separating in December and the remaining affected employees separating over the next
22

SomaLogic, Inc.
Notes to Condensed Consolidated Financial Statements
Unaudited
three-month period. Employees who were impacted by the restructuring were eligible to receive severance benefits contingent upon an impacted employee's execution of a separation agreement, which included a general release of claims against us. Certain impacted employees were covered by employment agreements or an existing severance plan that provides termination benefits.
Employee severance and benefits are comprised of severance, other termination benefit costs, and non-cash stock-based compensation expense for the extension of the exercise period of vested options. One-time termination benefits were recorded pursuant to ASC 420, Exit or Disposal Cost Obligations, while termination benefits under ongoing benefit arrangements were recorded pursuant to ASC 712, Compensation - Nonretirement Postemployment Benefits. See Note 11, Stock-based Compensation, for additional information about benefits related to the extension of the exercise period of vested options.
We recognized restructuring charges of approximately $1.0 million primarily related to one-time termination benefits during the three months ended March 31, 2023. We do not expect to incur additional material employee severance and benefits expense. This reflects our best estimate, which may be revised in subsequent periods as the Strategic Reorganization progresses.
The following table outlines the components of the restructuring charges included in the condensed consolidated statement of operations and comprehensive loss:
(in thousands)Three Months Ended March 31, 2023
Cost of assay services revenue$19 
Research and development243 
Selling, general and administrative779 
Total employee severance and benefits$1,041 
The following table outlines the changes in liabilities associated with our Strategic Reorganization, including restructuring expenses incurred and cash payments for the three months ended March 31, 2023:
(in thousands)March 31, 2023
Balance at December 31, 2022$2,223 
Accruals1,016 
Payments(1,100)
Balance at March 31, 2023$2,139 
The restructuring liabilities are included in accrued liabilities in the condensed consolidated balance sheets. We expect that substantially all of the remaining accrued restructuring liabilities will be paid in cash over the next 12 months. The charges recognized in the rollforward of our accrued restructuring liabilities do not include items charged directly to expense for extension of the exercise period of vested options.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements, and the related notes thereto, presented in this Quarterly Report on Form 10-Q as well as our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). The following discussion and analysis contains forward-looking statements based upon our current expectations, estimates and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed under Cautionary Note Regarding Forward-Looking Statements included elsewhere in this Quarterly Report on Form 10-Q. Unless the context otherwise requires, all references in this section to the “Company,” “we,” “us” or “our” refer to the business of SomaLogic prior to the consummation of the SPAC Merger, and to the Company and its consolidated subsidiaries following the consummation of the SPAC Merger.
SomaLogic, Inc. and our Predecessor
SomaLogic was originally formed as a special purpose acquisition company under the name CM Life Sciences II Inc. for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. Prior to the SPAC Merger, it did not have historical financial operating results. SomaLogic Operating, our accounting predecessor, is a leading commercial-stage proteomics company. In connection with the SPAC Merger, SomaLogic Operating became a wholly owned subsidiary of SomaLogic.
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Business Overview
SomaLogic is a leading commercial-stage proteomics company. We have built an integrated proteomics platform capable of robust, high throughput proteomics analysis with broad proteome coverage, low limits of detection, high reproducibility and at low costs. We designed our platform with the goal of being a universal proteomics platform, with the breadth (number of proteins measured) and precision (accuracy of measurement) important for discovery and research applications, and both the reproducibility and robustness important for clinical applications. We currently run our platform within our own laboratory, receive samples from customers and provide them proteomics analysis services. We are also developing an integrated solution comprising kits and select equipment that would enable customers to perform our proteomics assay at their own sites and leverage our bioinformatics capabilities to analyze the data.
On August 31, 2022, we completed the acquisition of Palamedrix, Inc. Palamedrix is a DNA nano tech firm that provides deep scientific and engineering expertise, miniaturization technology and enhanced ease-of-use capabilities that we intend to leverage as it develops the next generation of SomaScan® Assay. The acquisition expands the development of our portfolio of services, while enhancing our research capabilities, and providing an immediate footprint in the San Diego area with already-established staff, lab, and strong local talent pool.
Effects of Inflation
Inflation has impacted our results of operations for the three-month period ended March 31, 2023, and our business could continue to be affected by inflation in the future.
Factors Affecting Our Performance
The following factors have been important to our business and we expect them to impact our results of operations and financial condition in future periods:
Continued adoption of our services and products:
We have a well-established base of marquee customer and Key Opinion Leader (“KOL”) relationships in place, and as we grow further, we expect to win contracts with new customers and expand the scope of existing contracts with existing customers.
We plan to develop and grow our offering of reagents and corresponding solutions, including both small and large plex capabilities, site-of-service deployed assay options, and bioinformatics offerings to attract additional customers and cross-sell to existing customers.
We continue to focus on growing our proteomics database and artificial intelligence and machine learning analytics to drive value and market opportunities.
We expect our total revenue may vary from period to period based on, among other things, the timing and size of new contracts, fluctuations in customer consumption of and adoption trends, ramp time and productivity of our salesforce, the impact of significant transactions, and seasonality. Failure to effectively develop and expand our sales and marketing capabilities or improve the productivity of our sales and marketing organization could harm our ability to expand our potential customer and sales pipeline, increase our customer base, and achieve broader market acceptance of our offering.
Continued investment in growth:
We continue to invest significantly in our laboratory process and commercial infrastructure.
Investments in research and development will include hiring of employees with the necessary scientific and technical backgrounds to enable enhancements to our existing services and products and bring new services and products to market.
Ability to lower the costs associated with performing the assay:
We intend to reduce the cost of manufacturing inventory by, in part, modifying our assays and laboratory processes to use materials and technologies that provide equal or greater quality at lower cost, improving how we manage our materials and negotiating favorable terms for our materials purchases.
We intend to reduce the cost of performing our SomaScan® assay as we move to either a less expensive array or Next Generation Sequencing system for our DNA readout of the protein concentrations present in a sample.
Seasonality:
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Our revenue can be seasonal dependent upon the procurement and budgeting cycles of many of our customers, especially government- or grant-funded customers, whose cycles often coincide with government fiscal year ends.
Expansion of our proteomic content:
To maintain our competitive advantage, we plan to increase the number of protein reagents for commercial availability based on allocated funding, resource availability, and the successful validation of new reagents.
Macroeconomic conditions:
A deterioration in macroeconomic economic conditions including risk of recession, decreased government funding, effects of inflation, labor shortages, supply chain issues and higher interest rates could impact both our and our customers’ operations. We could experience pricing pressure and decreased demand as a result.
Components of Results of Operations
Revenue
We derive our revenue from four primary sources: (1) assay services revenue, (2) product revenue, (3) collaboration revenue, and (4) other revenue. Customers include top biopharmaceutical companies and leading academic research universities.
Assay services revenue
We generate assay services revenue primarily from the sale of SomaScan® services. SomaScan® service revenue is derived from performing the SomaScan® assay on customer samples to generate data on protein biomarkers. We expect assay services revenue to increase over the long-term with new and recurring sales opportunities. With the enhancement of our proteomic services, we expect to capture more market opportunities outside of the United States region, as well as winning contracts with new customers and expanding the scope of sales with existing customers.
Product revenue
Product revenue primarily consists of equipment and kit sales, which enable our customers to bring the SomaScan® proteomic platform in-house and to build lines of business based on this technology. The establishment of SomaScan® Certified Sites will allow SomaLogic to quickly grow into new geographic regions and expand our customer base.
Collaboration revenue
Collaboration revenue consists of fees earned for research and development services, except for grant revenue research and development services that are classified in other revenue. Collaboration revenue currently relates to an arrangement with one customer, NEC Solution Innovators, Ltd. (“NES”), a wholly owned subsidiary of NEC Corporation (“NEC”). We believe expanding collaborative arrangements with KOLs will allow for further enhancements of our integrated platform, lower barriers to adoption and introduce or expand new market channels and customers within geographic regions and markets we do not currently operate in.
Other revenue
Other revenue includes royalty revenue and revenue received from research grants. We recognize royalty revenue for fees paid by customers in return for a license to make, use or sell certain licensed products in certain geographic areas in the period in which the subsequent sale or usage has occurred. A license arrangement entered into in September 2022 with New England BioLabs (“NEB”) includes guaranteed fixed minimum royalties for which revenue has been recognized, net of the effect of a significant financing component. Any revenue above the guaranteed fixed minimum royalties is recognized in the period in which the subsequent sale or usage has occurred. Grant revenue represents funding under cost reimbursement programs from government agencies, and non-profit foundations for qualified research and development activities we perform. We expect other revenue to continue to grow as we expand our commercial team and continue to pursue additional licensing relationships.
Cost of revenue
Cost of assay services revenue
Cost of assay services revenue consists of raw materials and production costs, salaries and other personnel costs, overhead and other direct costs related to assay services revenue. It also includes costs for production variances, such as
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yield losses, material usages, spending and capacity variances. Cost of assay services revenue is recognized in the period the related revenue is recognized.
We expect cost of assay services revenue to increase as we grow our sample volume. We expect the cost per sample to decrease over the long term due to the efficiencies we may gain as sample volume increases from improved utilization of our laboratory capacity and other value engineering initiatives. If our sample volume throughput is reduced cost of revenue as a percentage of total revenue may be adversely impacted due to fixed overhead cost.
Cost of product revenue
Cost of product revenue consists primarily of raw materials, equipment and production costs, salaries and other personnel costs, overhead and other direct costs related to product revenue. Cost of product revenue is recognized in the period the related revenue is recognized. Shipping and handling costs incurred for product shipments are included in cost of product revenue in the condensed consolidated statements of operations and comprehensive loss.
Research and development
Research and development expenses consist primarily of salaries and benefits, laboratory supplies, clinical study costs, consulting fees and related costs. We believe that our continued investment in research and development is essential to our long-term competitive position. We plan to continue to invest significantly in our research and development efforts, including hiring additional employees, with an expected focus on advancing our assay and our bioinformatics platform, new clinical studies, as well as lowering the cost of assays. As a result of these and other initiatives, we expect research and development expenses will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue.
Selling, general and administrative
Selling expenses consist primarily of personnel and marketing related costs. General and administrative expenses consist primarily of personnel costs for our finance, human resources, business development and general management, as well as professional services, such as legal and accounting services.
As we continue to introduce new services and products, broaden our customer base and grow our business, we expect selling, general and administrative expenses to increase in future periods as the number of sales and marketing and administrative personnel grows. We also anticipate incurring increased accounting, audit, legal, regulatory, compliance, director and officer insurance costs, as well as, investor and public relations expenses associated with operating as a public company.
Interest income and other, net
Interest income and other, net primarily consists of interest earned on our cash equivalents and investments, which are invested in money market funds, commercial paper, U.S Treasuries, asset-backed securities, corporate bonds, and agency bonds. Interest income and other, net also includes interest income recognized related to a significant financing component.
Change in fair value of warrant liabilities
Change in fair value of warrant liabilities consists of changes in fair value related to the Public Warrant and Private Warrant liabilities. The warrant liabilities are classified as marked-to-market liabilities pursuant to ASC 815, Derivatives and Hedging, and the corresponding increase or decrease in value impacts our net loss.
Change in fair value of earn-out liability
Change in fair value of earn-out liability consists of changes in the earn-out liability related to Earn-Out Shares issued as part of the SPAC Merger. The earn-out liability is classified as a marked-to-market liability pursuant to ASC 815 and the corresponding increase or decrease in value impacts our net loss.
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Results of Operations
Comparison of the three months ended March 31, 2023 versus the three months ended March 31, 2022
Revenue
Three Months Ended March 31,Change
(in thousands)20232022$%
Assay services revenue
$18,419 $18,800 $(381)(2)%
Product revenue
1,186 453 733 162 %
Collaboration revenue
763 763 — — %
Other revenue
11 2,964 (2,953)(100)%
Total revenue
$20,379 $22,980 $(2,601)(11)%

Total revenue decreased by $2.6 million, or 11%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022.
The $0.4 million decrease in assay services revenue for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was due to a decrease in average selling price driven by customer mix, offset by an increase in sample volumes resulting from fluctuations in customer consumption.
Product revenue increased by $0.7 million, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily due to an increase in the volume of kit sales.
Other revenue decreased by $3.0 million, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily due to a decrease in royalty revenue recognized as we entered into a new agreement with NEB in September 2022 which resulted in recognition of the guaranteed fixed minimum royalties to be received over the term of the agreement during the third quarter of 2022.
Cost of revenue
Three Months Ended March 31,Change
(in thousands)20232022$%
Cost of assay services revenue
$11,682 $11,380 $302 %
Cost of product revenue
634 272 362 133 %
Total cost of revenue
$12,316 $11,652 $664 %

Total cost of revenue increased by $0.7 million, or 6%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022.
Cost of assay services revenue increased by $0.3 million, or 3%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. The increase in cost of assay services revenue was primarily due to an increase in sample volumes resulting from fluctuations in customer consumption.
Cost of product revenue increased by $0.4 million, or 133%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily due to an increase in the volume of kit sales.
Research and development
Three Months Ended March 31,Change
(in thousands)20232022$%
Research and development
$14,067 $13,800 $267 %
Research and development increased by $0.3 million, or 2%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. The increase in research and development was primarily due to a $2.5 million increase in wages and benefits and a $0.3 million increase in stock-based compensation expense due to increased headcount, offset by of $2.1 million decrease in professional services and supplies related to projects for content expansion and cost reduction and a $0.4 million decrease in internal clinical studies.
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Selling, general, and administrative
Three Months Ended March 31,Change
(in thousands)20232022$%
Selling, general and administrative
$34,189 $30,815 $3,374 11 %
Selling, general, and administrative increased by $3.4 million, or 11%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. The increase in selling, general and administrative was primarily due to a $2.0 million increase in wages and benefits due to increased headcount in our commercial and administrative teams, a $1.0 million stock based compensation expense related to the accelerated vesting of options held by terminated executives, $1.0 million of severance related to the terminated executives, a $0.7 million increase in services incurred related to marketing initiatives and product development and a $0.4 million increase in advisory and management services incurred in relation to public-company compliance and other transactions. We have also incurred $0.8 million of restructuring charges during the period ended March 31, 2023. This is offset by a $2.5 million decrease in stock-based compensation expense primarily due to the full expense recognition of the Service Provider Earn-Outs as of December 31, 2022.
Other income
Three Months Ended March 31,Change
(in thousands)20232022$%
Other income:
Interest income and other, net$4,925 $209 $4,716 NM
Change in fair value of warrant liabilities1,053 12,640 (11,587)(92)%
Change in fair value of earn-out liability15 16,462 (16,447)(100)%
Total other income$5,993 $29,311 $(23,318)(80)%
NM    A percentage calculation is not meaningful due to change in signs, a zero-value denominator or a percentage change greater than 200.
Interest income and other, net increased by $4.7 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 due to higher interest rates during the three months ended March 31, 2023 compared to the three months ended March 31, 2022.
The change in fair value of warrant liabilities resulted in a gain of $1.1 million during the three months ended March 31, 2023, due to the quarterly remeasurement of the warrant liabilities.
The change in fair value of the earn-out liability resulted in an immaterial gain for the three months ended March 31, 2023, due to the quarterly remeasurement of the earn-out liability. The earn-out liability was fully written off as of March 31, 2023.
Income Taxes
Three Months Ended March 31,Change
(in thousands)20232022$%
Income tax provision$(2)$(3)$(33)%

The income tax provisions for the three months ended March 31, 2023 and 2022 were not material.
Non-GAAP Financial Measures
We present non-GAAP financial measures in order to assist readers of our condensed consolidated financial statements in understanding the core operating results used by management to evaluate and run the business, as well as, for financial planning purposes. Our non-GAAP financial measure, Adjusted EBITDA, provides an additional tool for investors to use in comparing our financial performance over multiple periods.
Adjusted EBITDA is a key performance measure that our management uses to assess its operating performance. Adjusted EBITDA facilitates internal comparisons of our operating performance on a more consistent basis, and we use this measure for business planning, forecasting, and decision-making. We believe that Adjusted EBITDA enhances an investor’s understanding of our financial performance as it is useful in assessing our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business.
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Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net loss as determined in accordance with GAAP or as an indicator of our operating performance. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance. Our presentation of Adjusted EBITDA should not be construed as an inference that our results will be unaffected by those adjusted items. Our Adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate this measure in the same manner.
Adjusted EBITDA
We calculate Adjusted EBITDA as net loss adjusted to exclude interest expense, net, depreciation and amortization, income tax benefit, and other non-recurring items. The other non-recurring items include the change in the fair value of warrant liabilities and the earn-out liability.
The following table is a reconciliation of net loss in accordance with GAAP to non-GAAP adjusted EBITDA for the three months ended March 31, 2023 and 2022:
Three Months Ended March 31,
(in thousands)20232022
Net loss$(34,202)$(3,979)
Adjustments to reconcile to EBITDA:
Interest income and other, net(4,925)(209)
Income tax provision
Depreciation and amortization1,754 755 
EBITDA(37,371)(3,430)
Adjustments to reconcile to Adjusted EBITDA:
Change in fair value of warrant liabilities (1)
(1,053)(12,640)
Change in fair value of earn-out liability (2)
(15)(16,462)
Stock compensation expense related to equity award modifications (3)
952 123 
Restructuring charges (4)
1,041 — 
Adjusted EBITDA$(36,446)$(32,409)
(1)    Represents change in fair value of warrant liabilities. See Note 5, Fair Value Measurements, for more details.
(2)    Represents change in fair value of earn-out liability. See Note 5, Fair Value Measurements, for more details.
(3)    Represents stock-based compensation expense related to equity modifications. See Note 11, Stock-based Compensation, for more details.
(4)    Represents restructuring charges related to the Strategic Reorganization consisting of severance, other termination benefit costs, and non-cash stock-based compensation expense. See Note 15, Restructuring, for more details.
Liquidity and Capital Resources
Liquidity Outlook
We believe that our existing cash and cash equivalents and investments will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our sample volume growth rate, the pace of expansion of sales and marketing activities, the timing and extent of spending to supporting research and development efforts, the introduction of new and enhanced products and services, and the level of costs to operate as a public company. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, products and technologies.
Cash Sources
Historically, our primary sources of liquidity have been proceeds from the SPAC Merger, cash collected from our customers, net proceeds from sale of our capital stock, and borrowings from debt facilities. During the first three months of 2023, our primary source of liquidity was cash collected from our customers in the amount of $11.7 million.
As of March 31, 2023, we did not have any outstanding debt.
Cash Uses
Historically, our primary use of cash has been to invest in research and development, our laboratory process, commercial infrastructure and scale our operations to support growth.
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We may be required to seek additional equity or debt financing. In the event we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations, and financial condition.
We also have entered into various non-cancelable operating lease agreements for administrative and laboratory facilities. As of March 31, 2023, our total future minimum lease commitments were $4.0 million.
Cash flows
The following table summarizes our cash flows for the periods presented:
Three Months Ended March 31,
(in thousands)20232022
Net cash used in operating activities$(43,045)$(5,915)
Net cash provided by investing activities55,279 7,367 
Net cash provided by financing activities172 1,242 
Effect of exchange rates on cash, cash equivalents and restricted cash(7)(10)
Net increase in cash, cash equivalents and restricted cash$12,399 $2,684 
Cash flows from operating activities
Cash used in operating activities for the three months ended March 31, 2023 was $43.0 million, and was primarily attributable to a net loss of $34.2 million, which included a non-cash gain on the change in fair value of warrant liabilities of $1.1 million and non-cash accretion of discount on available-for-sale securities, net, of $0.5 million. This was partially offset by non-cash stock-based compensation expense of $7.2 million and non-cash depreciation and amortization of $1.8 million. Additionally, we incurred $0.6 million in cloud computing arrangement expenditures and experienced a net decrease in our operating assets and liabilities of $15.7 million.
Cash used in operating activities for the three months ended March 31, 2022 was $5.9 million, which was primarily attributable to a net loss of $4.0 million, which included a non-cash gain on the change in fair value of the earn-out liability of $16.5 million and a non-cash gain on the change in fair value of warrant liabilities of $12.6 million. This was partially offset by non-cash stock-based compensation expense of $8.7 million, non-cash depreciation and amortization of $0.8 million, non-cash lease expense of $0.4 million, non-cash amortization of premium on available-for-sale securities, net, of $0.1 million, and non-cash provision of doubtful accounts of $0.1 million. Additionally, we incurred $1.8 million in cloud computing arrangement expenditures and experienced a net increase in our operating assets and liabilities of $18.9 million.
Cash flows from investing activities
Cash provided by investing activities for the three months ended March 31, 2023 was $55.3 million, consisting of $56.5 million for the proceeds from maturities of available-for-sale securities and $1.3 million for the purchase of property and equipment.
Cash used in investing activities for the three months ended March 31, 2022 was $7.4 million, consisting of $7.7 million for the purchase of available-for-sale securities, net of proceeds from maturities of available-for-sale securities, and $0.4 million for the purchase of property and equipment.
Cash flows from financing activities
Cash provided by financing activities for the three months ended March 31, 2023 was $0.2 million, which was attributable to the proceeds from the exercise of options to purchase our common stock.
Cash provided by financing activities for the three months ended March 31, 2022 was $1.2 million, which was attributable to the proceeds from the exercise of options to purchase our common stock
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements which have been prepared in accordance with United States generally accepted accounting principles, or GAAP. The preparation of the condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs, expenses and related disclosures. We evaluate our estimates and judgments on an on-going basis. We base our estimates on current facts, historical and anticipated results, trends, and other relevant assumptions that we believe are reasonable under the
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circumstances. Actual results could differ from these estimates, and such differences could be material to our condensed consolidated financial position and results of operations. Within the context of these critical accounting policies, we are not currently aware of any reasonably likely event that would result in materially different amounts being reported.
Our significant accounting policies are described in more detail in Note 2, Significant Accounting Policies, in our 2022 Form 10-K. Our most critical accounting policies and estimates are those that require difficult, subjective, and/or complex judgments and estimates and are used in the preparation of our consolidated financial statements. Our critical accounting policies and estimates are described in more detail in Critical Accounting Policies and Estimates in our 2022 Form 10-K. There have been no significant changes to our critical accounting policies and estimates disclosed in our 2022 Form 10-K for the year ended December 31, 2022.
Recently Issued Accounting Pronouncements
Please refer to Note 2, Significant Accounting Policies - Recent Accounting Pronouncements, in “Part I. Financial Information - Item 1. Financial Statements” for a discussion of recent accounting pronouncements and their anticipated effect on our business.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies. 
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2023. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2023, based on the material weaknesses described below. In light of these material weaknesses, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Based on such analysis and notwithstanding the identified material weaknesses, management, including our Chief Executive Officer and Chief Financial Officer, believe the consolidated financial statements included in this Annual Report on Form 10-K fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with GAAP.
Limitations on the Effectiveness of Disclosure Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within a company are detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term as defined in Rules 13a-15(f)and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.
Our internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that, in reasonable detail, accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements in accordance with generally accepted accounting principles and that the receipts and expenditures of company assets are made in accordance with our management and directors authorization; and (iii) provide reasonable assurance regarding the prevention of or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
As of March 31, 2023, our management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in "Internal Control – Integrated Framework (2013)", issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment and those criteria, management determined that our internal control over financial reporting was not effective as of March 31, 2023, due to the material weaknesses described below.
Previously Identified Material Weaknesses
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
The following material weaknesses were identified as a result of management’s assessment:
As discussed in our Annual Reports on Form 10-K filed for the years ended December 31, 2021 and 2020, we identified a material weakness in our internal control over financial reporting due to ineffective controls over the financial statement close process and lack of sufficient accounting and financial reporting personnel to ensure consistent application of GAAP and compliance with SEC rules and regulations.
As discussed in our Annual Report on Form 10-K filed for the year ended December 31, 2022, we continued to identify material weaknesses related to the design and operation of controls supporting key principles related to the control activities, information and communication, and monitoring components of the COSO framework over: (i) significant nonrecurring transactions and events, (ii) inventory costing and classification, and (iii) the classification and presentation of the consolidated statement of cash flows. Specifically, management failed to design and implement certain risk assessment controls related to identifying and analyzing risks to achieve control objectives, and failed to address the impact of changes in the business on the system of internal controls
As discussed in our Annual Report on Form 10-K filed for the year ended December 31, 2022, we identified a material weakness related to our information technology general controls. Specifically, effective controls were not maintained over user access to our Enterprise Resources (ERP) system that supports the accounting and reporting processes, causing a lack of segregation of duties in key processes.
These material weaknesses will not be considered remediated until management designs and implements effective controls that operate for a sufficient period of time and management has concluded through testing that these controls are effective. See “Remediation Plan” for details.
Remediation Plan
We are committed to the planning and implementation of remediation efforts to address control deficiencies and other identified areas of risk. In particular:
We will enhance the design of existing controls, and where necessary, implement additional controls, over our accounting for significant nonrecurring transactions and will maintain evidence of management review controls.
We will increase the deployment of both internal and external specialists to assist our management with the evaluation of the accounting for significant nonrecurring transactions.
We will design and implement controls over inventory costing and classification.
We will design and implement controls to ensure that all cash inflow and outflow activity is appropriately classified and presented within the statements of cash flow.
We will remove unnecessary user access to our financially relevant IT systems based on job responsibilities and are in the process of reconfiguring the mapping of “roles and assigned privileges” to “duties” to ensure adequate segregation of duties is maintained within our ERP system.
We will implement timely periodic reviews of existing user and administrator security roles and privileges.
We will enhance the design of our information technology general controls over user access provisioning and monitoring controls to enforce appropriate system access and segregation of duties.
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Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during the first quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are party to lawsuits arising in the ordinary course of our business. We cannot predict the outcome of any such lawsuits with certainty, but management believes it is remote that pending or threatened legal matters will have a material adverse impact on our financial condition.
Due to the nature of our business, we are, from time to time, involved in other routine litigation or subject to disputes or claims related to our business activities. In the opinion of our management, none of these other pending litigation, disputes or claims against us, if decided adversely, will have a material adverse effect on our financial condition, cash flows or results of operations.
Item 1A. Risk Factors
Not required for smaller reporting companies. 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Default Upon Senior Securities 
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information 
None.
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Item 6. Exhibits.
Incorporated by Reference
Exhibit NumberDescriptionFormExhibitFiling Date
10.1*+
10.2*+
10.3*+††
10.4+8-K10.13/28/2023
10.5+8-K10.14/3/2023
10.6††8-K10.11/10/2023
31.1*
31.2*
32.1**
32.2**
101.IN*Inline XBRL Instance Document
101.SCH*Inline XBRL Schema Document
101.CAL*Inline XBRL Calculation Linkbase Document
101.LAB*Inline XBRL Label Linkbase Document
101.PRE*Inline XBRL Presentation Linkbase Document
101.DEF*Inline XBRL Taxonomy Extension Definition LinkBase Document
104*Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
*Filed herewith.
**Furnished herewith
Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5).
††The Company has omitted portions of the exhibit as permitted under Regulation S-K Item 601(b)(10). The Registrant agrees to furnish on a supplemental basis an unredacted copy of this exhibit and its materiality and privacy or confidentiality analysis if requested by the SEC.
+Management contract or compensatory plan or arrangement.
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SomaLogic, Inc.
Date:
May 15, 2023
By:/s/ Adam Taich
Adam Taich
Interim Chief Executive Officer
(Principal Executive Officer)
Date:
May 15, 2023
By:/s/ Shaun Blakeman
Shaun Blakeman
Chief Financial Officer
(Principal Financial and Accounting Officer)
36
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