What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-23 compared with 2022-02-24 · 153 added, 197 removed, 568 unchanged (38% of the section changed)

46 unchanged sentences

Total assets $ 350,052 $ 398,450

Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Equity (Deficit)

Liabilities and Stockholders’ Equity

Current liabilities:

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Commitments and contingencies (Note 10)

Redeemable convertible preferred stock:

Series Seed redeemable convertible preferred stock - par value $ 0.0001 , 0 and 13,174,805 shares authorized, issued and outstanding as of December 31, 2021 and 2020, respectively (liquidation preference of $ 0 and $ 7,263 as of December 31, 2021 and 2020, respectively)

Series A redeemable convertible preferred stock - par value $ 0.0001 , 0 and 16,836,436 shares authorized, issued and outstanding as of December 31, 2021 and 2020, respectively (liquidation preference of $ 0 and $ 27,200 as of December 31, 2021 and 2020, respectively)

Series B redeemable convertible preferred stock - par value $ 0.0001 , 0 and 22,527,535 shares authorized as of December 31, 2021 and 2020, respectively, 0 and 22,164,724 shares issued and outstanding as of December 31, 2021 and 2020, respectively (liquidation preference of $ 0 and $ 76,060 as of December 31, 2021 and 2020, respectively)

Stockholders’ equity (deficit):

Preferred stock, $ 0.0001 par value, 200,000,000 and 0 shares authorized as of December 31, 2021 and 2020, respectively, and 0 shares issued and outstanding as of December 31, 2021 and 2020

Common stock, $ 0.0001 par value, 1,000,000,000 and 98,672,620 shares authorized as of December 31, 2021 and 2020, respectively;

Stockholders’ equity:

Preferred stock, $ 0.0001 par value, 200,000,000 authorized as of December 31, 2022 and December 31, 2021, respectively;

0 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively

Common stock, $ 0.0001 par value, 1,000,000,000 shares authorized as of December 31, 2022 and 2021, respectively;

124,865,485 and 124,303,083 shares issued and outstanding as of December 31, 2022 and 2021, respectively

Additional paid-in capital 455,330 444,388

Accumulated other comprehensive (loss) income ( 184 ) 3

Accumulated other comprehensive loss ( 1,854 ) ( 184 )

Accumulated deficit ( 138,564 ) ( 80,640 )

Total stockholders’ equity (deficit) 363,576 ( 29,721 )

Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) $ 398,450 $ 85,011

Total stockholders’ equity 314,924 363,576

Total liabilities and stockholders’ equity $ 350,052 $ 398,450

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

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Total operating expenses 63,618 50,498

Other income (expense), net 183 125

Other income (expense):

Interest income 5,816 329

Other expense ( 122 ) ( 146 )

Total other income $ 5,694 $ 183

Net loss $ ( 57,924 ) $ ( 50,315 )

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Years Ended December 31, 2022 and 2021

Redeemable Convertible Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity (Deficit)

Redeemable Convertible Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ (Deficit) Equity

Series Seed Series A Series B

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Balances at December 31, 2020 13,174,805 $ 5,494 16,836,436 $ 27,067 22,164,724 $ 75,857 33,069,513 $ 1 $ 600 $ 3 $ ( 30,325 ) $ ( 29,721 )

13,174,805 $ 5,494 16,836,436 $ 27,067 — $ — 32,932,218 $ 1 $ 189 $ 7 $ ( 14,706 ) $ ( 14,509 )

Issuance of common stock upon exercise of vested stock options — — — — — — 273,696 — 167 — — 167

Issuance of Series B redeemable convertible preferred stock — — — — 22,164,724 75,857 — — — — — —

Issuance of common stock upon exercise of warrants — — — — — — 62,772 — — — — —

Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization ( 13,174,805 ) ( 5,494 ) ( 16,836,436 ) ( 27,067 ) ( 22,164,724 ) ( 75,857 ) 52,175,965 7 108,411 — — 108,418

Issuance of common stock upon the reverse recapitalization, net of issuance costs — — — — — — 38,721,137 4 327,276 — — 327,280

Stock-based compensation expense — — — — — — — — 7,934 — — 7,934

2 unchanged sentences

Balances at December 31, 2021 — $ — — $ — — $ — 124,303,083 12 $ 444,388 $ ( 184 ) $ ( 80,640 ) $ 363,576

13,174,805 $ 5,494 16,836,436 $ 27,067 22,164,724 $ 75,857 33,069,513 $ 1 $ 600 $ 3 $ ( 30,325 ) $ ( 29,721 )

Issuance of common stock upon exercise of vested stock options — — — — — — 463,207 — 330 — — 330

Issuance of common stock upon exercise of warrants — — — — — — 62,772 — — — — —

Issuance of common stock upon the reverse recapitalization, net of issuance costs — — — — — — — 38,721,137 4 327,276 — — 327,280

Issuance of common stock under employee stock purchase plan — — — — — — 99,195 — 232 — — 232

Stock-based compensation expense — — — — — — — — 10,380 — — 10,380

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Balances at December 31, 2022 — $ — — $ — — $ — 124,865,485 12 $ 455,330 $ ( 1,854 ) $ ( 138,564 ) $ 314,924

— $ — — $ — — $ — 124,303,083 $ 12 $ 444,388 $ ( 184 ) $ ( 80,640 ) $ 363,576

(1) The shares of the Company’s common and redeemable convertible preferred stock, prior to the Business Combination (as defined in Note 1) have been retroactively restated to reflect the exchange ratio of approximately 3.6281 established in the Business Combination as described in Note 3.

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Depreciation 1,217 1,019

Amortization of premiums on securities, net 183 282

Amortization (accretion) of premiums (discount) on securities, net ( 890 ) 183

Loss on disposal of property and equipment — 137

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Accrued expenses and other liabilities 409 2,255

Operating lease liability ( 788 ) ( 1,581 )

Operating lease liabilities ( 1,392 ) ( 788 )

Net cash used in operating activities ( 45,806 ) ( 39,241 )

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Purchases of property and equipment ( 2,324 ) ( 2,269 )

Proceeds from sale and maturities of securities 85,100 44,001

Proceeds from maturities of securities 163,175 85,100

Net cash used in investing activities ( 25,740 ) ( 138,964 )

Cash flows from financing activities

Net proceeds from reverse recapitalization and PIPE financing 335,409 —

Proceeds from exercise of stock options 330 167

Proceeds from issuance of common stock under employee stock purchase plan 232 —

Net proceeds from reverse recapitalization and PIPE financing — 335,409

Payments of offering costs — ( 8,129 )

Proceeds from issuance of convertible preferred stock, net of issuance costs — 75,857

Net cash provided by financing activities 562 327,447

Net increase in cash, cash equivalents and restricted cash 149,242 36,624

Net (decrease) increase in cash, cash equivalents and restricted cash ( 70,984 ) 149,242

Cash, cash equivalents and restricted cash at beginning of period 186,461 37,219

1 unchanged sentence

Supplementary cash flow information on non-cash activities:

Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization $ 108,418 $ —

Right-of-use assets obtained in exchange for operating lease liability $ 1,688 $ 29,893

Acquisitions of property and equipment included in accounts payable $ 174 $ 64

Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization $ — $ 108,418

Deferred offering costs reclassified to equity $ — $ 8,129

Modification to reduce right-of-use assets and lease liability $ — $ 3,535

Acquisitions of property and equipment included in accounts payable $ 64 $ 67

Deferred offering costs in accounts payable and accrued expenses and other liabilities $ — $ 212

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

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Securities and Exchange Commission.

The accompanying financial statements are consolidated for the year ended December 31, 2021 and include the accounts of Nautilus Biotechnology, Inc.

former ARYA) and its wholly-owned subsidiary, Legacy Nautilus, following the Reverse Recapitalization as further discussed in Note 3 “Reverse Recapitalization.” All other accompanying financial statements as of December 31, 2020 and for the year ended December 31, 2020 include only the accounts of Legacy Nautilus.

All intercompany transactions and balances have been eliminated upon consolidation.

The accompanying financial statements are consolidated for the years ended December 31, 2022 and 2021 and include the accounts of Nautilus Biotechnology, Inc.

former ARYA) and its wholly-owned subsidiary, Legacy Nautilus, following the Reverse Recapitalization as further discussed in Note 3 “Reverse Recapitalization.” All intercompany transactions and balances have been eliminated upon consolidation.

The Company’s reporting currency is the U.S.

Certain prior period amounts were reclassified to conform to the current year presentation of other income (expense).

Going Concern

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The Company has funded its operations primarily with proceeds from the issuance of redeemable convertible preferred stock and common stock.

The Company had cash, cash equivalents, and short-term investments of $ 345.7 million as of December 31, 2021.

In June 2021, the Company received gross proceeds of approximately $ 345.5 million from PIPE Investors and the Business Combination offset by approximately $ 18.2 million of transaction

In June 2021, the Company received gross proceeds of approximately $ 345.5 million from PIPE Investors and the Business Combination offset by approximately $ 18.2 million of transaction costs and underwriters’ fees relating to the closing of the Business Combination.

The Company had cash, cash

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

costs and underwriters’ fees relating to the closing of the Business Combination.

As of the date on which these consolidated financial statements were available to be issued, the Company believes that its cash, cash equivalents, and short-term investments will be sufficient to fund its operations for the next twelve months following the issuance of the consolidated financial statements.

The Company’s assessment of the period of time through which its financial resources will be adequate to support its operations is a forward-looking statement and involves risks and uncertainties.

equivalents, and short-term investments of $ 184.5 million as of December 31, 2022.

As of the date on which these consolidated financial statements were available to be issued, the Company believes that its cash, cash equivalents, and short-term investments will be sufficient to fund its operations for at least the next twelve months following the issuance of the consolidated financial statements.

The Company’s actual results could vary as a result of, and its near and long-term future capital requirements will depend on many factors, including its growth rate and the timing and extent of spending to support its research and development efforts.

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Future liquidity and cash requirements will depend on numerous factors.

In the event that additional financing is required from outside sources, the Company may not be able to raise it on acceptable terms or at all.

In the event that additional financing is required, the Company may not be able to raise it on acceptable terms or at all.

If the Company is unable to raise additional capital when desired, or if it cannot expand its operations or otherwise capitalize on its business opportunities because it lacks sufficient capital, its business, operating results, and financial condition would be adversely affected.

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Accordingly, it is not possible for the Company to predict the duration and ultimate extent to which this will affect its business, future results of operations, and financial condition at this time.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

Significant Accounting Policies

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Concentrations of Credit Risk and Other Risks and Uncertainties

Credit risk represents the accounting loss that would be recognized as of the reporting date if counterparties failed completely to perform as contracted.

Financial instruments, which potentially subject the Company to concentration of credit risk, consist of cash balances maintained in excess of federal depository insurance limits and investments in U.S.

Treasury securities that are not federally insured.

The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk on cash or investments.

Credit risk represents the accounting loss that would be recognized as of the reporting date if counterparties failed to perform as contracted.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

The Company has not experienced any realized losses in such accounts and believes it is not exposed to significant credit risk on cash or investments.

The Company relies, and expects to continue to rely, on a number of vendors to provide services, supplies and materials related to its research and development programs.

The Company relies on single source suppliers for certain components and materials used in the Nautilus platform.

The loss of any of these single source suppliers would require us to expend significant time and effort to locate and qualify an alternative source of supply for these components.

The loss of any of these single source suppliers would require the Company to expend significant time and effort to locate and qualify an alternative source of supply for these components.

The Company also relies, and expects to continue to rely, on third-party manufacturers and, in many cases, single third-party manufacturers for the production of certain reagents and antibodies.

These programs could be adversely affected by a significant interruption in these services or the availability of materials.

The Company is subject to risks similar to those of other pre-clinical stage companies in the biopharmaceutical industry, including dependence on key individuals, the need to develop commercially viable products, competition from other companies, many of whom are larger and better capitalized, the impact of the COVID-19 pandemic and the need to obtain adequate additional financing to fund the development of its products.

The Company is subject to risks similar to those of pre-clinical stage companies in the biopharmaceutical industry, including dependence on key individuals, the need to develop commercially viable products, competition from other companies, many of whom are larger and better capitalized, the impact of the COVID-19 pandemic and the need to obtain adequate additional financing to fund the development of its products.

There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be maintained, that any products developed will obtain required regulatory approval or that any approved products will be commercially viable.

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The Company’s long-lived assets are entirely based in the United States.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

Cash and Cash Equivalents

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The Company classifies those investments that are not required for use in current operations and that mature in more than 12 months as long-term investments.

The Company classifies its investments as available for sale and reports them at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss).

The Company classifies its marketable debt securities as available for sale and reports them at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss).

For investments sold prior to maturity, the cost of investments sold is based on the specific identification method.

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When assessing investments for other-than-temporary declines in value, the Company considers factors such as, among other things, the extent and length of time the investment’s fair value has been lower than its cost basis, the financial condition and near-term prospects of the investment, the Company’s ability and intent to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value, and the expected cash flows from the security.

If any adjustments to fair value reflects a decline in the value of the investment that the Company considers to be “other than temporary,” the Company reduces the investment to fair value through a charge to the consolidated statement of operations and consolidated statement of comprehensive loss.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

statement of operations and consolidated statement of comprehensive loss.

No such adjustments were necessary during the periods presented.

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The carrying amounts of cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses and other liabilities approximate their respective fair values due to their short-term nature.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

Offering Costs

Specific incremental costs (i.e.

consisting of legal, accounting and other fees and costs) directly attributable to a proposed or actual offering of securities are deferred and charged against the gross proceeds of the offering.

In the event of a significant delay or cancellation of a planned offering of securities, all of the costs are expensed.

Offering costs capitalized as of December 31, 2020 were $ 0.2 million and are included within Other long term assets on the Company's consolidated balance sheets.

There were no deferred offering costs capitalized as of December 31, 2021.

Property and Equipment, net

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Laboratory equipment 3 years to 5 years

Prototype equipment 3 years

Computer hardware 3 years

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The Company periodically reviews its long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

With respect to property and equipment subject to depreciation, the Company compares the carrying value of the long-lived assets with the estimated future net undiscounted cash flows expected to result from the use and eventual disposition of the asset (or asset group).

With respect to property and equipment, the Company compares the carrying value of the long-lived assets with the estimated future net undiscounted cash flows expected to result from the use and eventual disposition of the asset

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

(or asset group).

Should the sum of the estimated future net undiscounted cash flows be less than the carrying value, the Company would recognize an impairment loss as of that date.

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Certain of the Company's leases include renewal options which allow the Company to, at its election, renew or extend the lease for a fixed or indefinite period of time.

These renewal periods are included in the lease terms when the Company is

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

reasonably certain the options will be exercised.

These renewal periods are included in the lease terms when the Company is reasonably certain the options will be exercised.

Lease expense is recognized on a straight-line basis over the lease term when leases are operating leases.

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Research and development expenses consist of costs incurred in performing research and development activities, including salaries and bonuses, stock-based compensation, employee benefits, facilities costs, laboratory supplies, depreciation and amortization, external costs of vendors engaged to conduct research and development activities.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

As part of the process of preparing its financial statements, the Company estimates its accrued expenses .

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Fair Value of Common Stock

The fair value of the Company’s common stock is determined by its Board of Directors with input from management and third-party valuation specialists.

Prior to becoming a public company, the fair value of the Company’s common stock is determined by its Board of Directors with input from management and third-party valuation specialists.

The Company’s approach to estimate the fair value of the Company’s common stock is consistent with the methods outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

Determining the best estimated fair value of the Company’s common stock requires significant judgement and management considers several factors, including the Company’s stage of development, equity market conditions affecting comparable public companies, significant milestones and progress of research and development efforts.

Subsequent to the completion of the Business Combination (as defined in Note 1 and further described in Note 3)

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

the fair value of the Company’s common stock is determined by using the closing price per share of common stock as reported on the Nasdaq.

Subsequent to the completion of the Business Combination (as defined in Note 1 and further described in Note 3) the fair value of the Company’s common stock is determined by using the closing price per share of common stock as reported on the Nasdaq.

Stock-based Compensation

The Company accounts for stock-based compensation expense by calculating the estimated fair value of each employee and nonemployee award at the grant date or modification date by applying the Black-Scholes option pricing model (the “model”).

The Company accounts for stock-based compensation expense by calculating the estimated fair value of each employee and non-employee award at the grant date or modification date by applying the Black-Scholes option pricing model (the “model”).

The model utilizes the estimated value of the Company’s underlying common stock at the measurement date, the expected or contractual term of the option, the expected stock price volatility, risk-free interest rates, and expected dividend yield of the common stock.

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The Company calculates the expected term as the mid-point between the requisite service period and the contractual term of the award.

The Company bases its estimate of expected volatility on the historical volatility of comparable companies from a representative peer group selected based on industry, financial, and market capitalization data.

The Company bases its estimate of expected volatility on the historical volatility of comparable public companies from a representative peer group selected based on industry, financial, and market capitalization data.

The Company has never declared or paid any dividends and does not currently expect to do so in the future.

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Comprehensive Loss

Comprehensive loss consists of net loss and other gains or losses affecting stockholders’ equity (deficit) that, under U.S.

Comprehensive loss consists of net loss and other gains or losses affecting stockholders’ equity that, under U.S.

GAAP are excluded from net loss.

For the years ended December 31, 2021 and 2020, unrealized losses on debt securities were included as components of comprehensive loss.

For the years ended December 31, 2022 and 2021, unrealized losses on marketable debt securities were included as components of comprehensive loss.

Net Loss per Share Attributable to Common Stockholders

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common stock outstanding during the period, without consideration of potentially dilutive securities.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

dilutive securities.

Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period.

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Accounting Pronouncements

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

periods as those otherwise applicable to public business entities, or (2) within the same time periods as non-public business entities, including early adoption when permissible.

The Company is provided the option to adopt new or revised accounting guidance as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) either (1) within the same periods as those otherwise applicable to public business entities, or (2) within the same time periods as non-public business entities, including early adoption when permissible.

With the exception of standards the Company elected to early adopt, when permissible, the Company has elected to adopt new or revised accounting guidance within the same time period as non-public business entities, as indicated below.

Recently Adopted Accounting Standards

In August 2018, the FASB issued ASU No.

2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license.

The ASU will become effective for annual periods beginning after December 15, 2020.

In March 2020, the FASB issued ASU No.

2020-04, “Reference Rate Reform (Topic 848).” The amendments in ASU 2020-04 provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2024.

An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from the date that the financial statements are available to be issued.

Once elected for a Topic or an Industry Subtopic, the amendments must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic.

The Company adopted this guidance effective January 1, 2022 using the prospective method, which did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No.

2016-13, “ Financial Instruments- Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments” , which amends existing guidance on the impairment of financial assets and adds an impairment model that is based on expected losses rather than incurred losses and requires an entity to recognize as an allowance its estimate of expected credit losses for its financial assets.

An entity will apply this guidance through a cumulative-effect adjustment to retained earnings upon adoption (a modified-retrospective approach) while a prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date.

This ASU is effective for the Company for its fiscal year ending December 31, 2023.

Early adoption is permitted.

The Company is in the process of evaluating the impact of the adoption of this ASU on its consolidated financial statements and related disclosures.

The Company does not anticipate adoption to have a material impact on its consolidated financial statements.

In December 2019, the FASB issued ASU No.

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Early adoption is permitted.

The Company is in the process of evaluating the impact of the adoption of this ASU on its consolidated financial statements and related disclosures.

The Company does not anticipate adoption to have a material impact on its consolidated financial statements.

In March 2020, the FASB issued ASU No.

The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022.

Once elected for a Topic or an Industry Subtopic, the amendments must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic.

The Company is in the process of evaluating the impact of the adoption of this ASU on its consolidated financial statements and related disclosures.

The Company does not anticipate adoption to have a material impact on its consolidated financial statements.

The Company adopted the ASU effective January 1, 2022, with no material impact on the consolidated financial statements.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No.

2016-13, “ Financial Instruments- Credit Losses (Topic 326):

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

than-temporary impairment had been recognized before the effective date.

This ASU is effective for the Company for its fiscal year ending December 31, 2023.

Early adoption is permitted.

The Company adopted this ASU on January 1, 2023 and the adoption did not have a material impact on its consolidated financial statements.

Reverse Recapitalization

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The Company incurred $ 8.1 million of transaction costs, consisting of banking, legal, and other professional fees which were recorded as a reduction to additional paid-in capital.

The number of shares of Common Stock issued immediately following the consummation of the Business Combination was:

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

The number of shares of Common Stock issued immediately following the consummation of the Business Combination was:

Number of shares

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Mutual funds 1,121 — — 1,121 1,121 — —

treasury bills 15,156 — ( 20 ) 15,136 — 15,136 —

treasury securities 52,686 4 ( 774 ) 51,916 — 2,873 49,043

Total Level 1 53,807 4 ( 774 ) 53,037 1,121 2,873 49,043

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Total Level 1 37,081 — ( 20 ) 37,061 21,925 15,136 —

Contractual maturities of short-term investments as of December 31, 2021 and 2020 are due in one year or less.

Contractual maturities of long-term investments as of December 31, 2021 are due after 1 year through 2 years.

Commercial paper 301,906 2 ( 90 ) 301,818 163,694 138,124 —

Corporate debt securities 14,299 — ( 36 ) 14,263 — 6,850 7,413

Agency bonds 8,998 — ( 40 ) 8,958 — — 8,958

Total Level 2 325,203 2 ( 166 ) 325,039 163,694 144,974 16,371

Total Level 1 and Level 2 $ 362,284 $ 2 $ ( 186 ) $ 362,100 $ 185,619 $ 160,110 $ 16,371

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

Contractual maturities of short-term investments as of December 31, 2022 and 2021 are due in one year or less.

Contractual maturities of long-term investments as of December 31, 2022 are due after 1 year through 2 years.

(in thousands) Securities in Unrealized Loss Position Less than 12 months Securities in Unrealized Loss Position Greater than 12 months Total

December 31, 2022 Gross Unrealized Losses Fair Market Value Gross Unrealized Losses Fair Market Value Gross Unrealized Losses Fair Market Value

treasury securities $ 774 $ 49,114 $ — $ — $ 774 $ 49,114

Commercial paper 266 151,354 — — 266 151,354

Corporate debt securities 14 6,859 57 7,224 71 14,083

Agency bonds 670 50,531 113 8,887 783 59,418

Total $ 1,724 $ 257,858 $ 170 $ 16,111 $ 1,894 $ 273,969

There were no continuous unrealized loss positions in excess of twelve months as of December 31, 2021.

Composition of Certain Consolidated Financial Statement Line Items

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Furniture, fixtures and office equipment 25 1

Prototype equipment 332 —

Construction in progress 1,235 279

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Deposits 154 155

Deferred offering costs — 212

Total 1,108 997

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

Accrued Expenses and Other Liabilities

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Employee compensation $ 1,669 $ 1,465

Accrued research and development 970 518

Accrued professional and consulting fees 451 411

Accrued facilities — 337

Accrued research and development 518 —

Other 438 388

Total 3,528 3,119

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

Cash, Cash Equivalents and Restricted Cash

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There were 124,865,485 shares issued and outstanding as of December 31, 2022.

Common Stock Warrants

In connection with a term loan that the Company entered into during fiscal year 2017, 63,491 common stock warrants were issued to the lender, and recorded at fair value within additional paid-in capital in stockholders’ equity (deficit).

Fair value was determined using the Black-Scholes Option Pricing Model.

There were no common stock warrants issued in fiscal years 2021 and 2020.

During the fiscal year 2021, all common stock warrants were net exercised and the Company issued 62,722 Common Stock shares to the lender.

Common stock warrants as of December 31, 2020 were as follows:

December 31, 2020

Outstanding Warrants

Number of Warrants Exercise Price Expiration Date

Common stock 63,491 $ 0.12 9/7/2027

Total outstanding common stock warrants 63,491

Nautilus Biotechnology, Inc.

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Shares of common stock reserved for future issuance on an as-if converted basis, were as follows:

December 31, 2021 December 31, 2020

2022 December 31,

Shares available for grant under 2021 Equity Incentive Plan 17,298,043 14,481,463

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Shares available for grant under 2021 Employee Stock Purchase Plan 2,388,735 1,244,900

Convertible preferred stock — 52,175,965

Shares available for grant under 2017 Equity Incentive Plan — 2,349,673

Common stock warrants outstanding — 63,491

Total shares of common stock reserved 31,172,221 24,276,439

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Total $ — $ —

As of December 31, 2021, the Company had federal net operating loss carryforwards of $ 0.5 million that begin to expire in 2037 and federal net operating loss carryforwards of $ 31.6 million that arose after the 2017 tax year that will carryforward indefinitely.

As of December 31, 2022, the Company had federal net operating loss carryforwards of $ 0.5 million that begin to expire in 2037 and federal net operating loss carryforwards of $ 51.5 million that arose after the 2017 tax year that will carryforward indefinitely and will be subject to the 80% of taxable income limitation.

The Company has state net operating loss carryforwards of $ 21.1 million that will begin to expire in 2037.

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Depreciation and amortization $ 11,142 $ 11,928

Capitalized research and development 7,607 —

Loss carryforwards 12,402 7,319

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All tax years are open to examination.

As of December 31, 2021, the Company had an unrecognized tax benefit balance of $ 0.8 million related to research and development credits and California net operating loss carryforward.

The Tax Cuts and Jobs Act contained a provision which requires the capitalization of Section 174 costs incurred in years beginning on or after January 1, 2022.

Section 174 costs are expenditures which represent research and development costs that are incident to the development or improvement of a product, process, formula, invention, computer software, or technique.

This provision changes the treatment of Section 174 costs such that the expenditures are no longer allowed as an immediate deduction but rather must be capitalized and amortized.

We have included the impact of this provision, which results in a deferred tax asset of approximately $ 7.6 million as of December 31, 2022.

A valuation allowance of $ 41.2 million and $ 24.1 million at December 31, 2022 and 2021, respectively, has been recognized to offset net deferred tax assets where realization of such net deferred tax assets is determined to be more likely than not to not be realized.

The valuation allowance increased by $ 17.1 million in 2022, and increased by $ 15.1 millions in 2021, which was primarily due to changes in our deferred tax asset balances.

The 2022 increase in the valuation allowance was primarily due to the net operating loss and tax credit generation, capitalized research and development expense and share-based compensation.

The 2021 increase in the valuation allowance was primarily due to the net operating loss and tax credit generation, capitalized startup costs and share-based compensation.

The Company had an unrecognized tax benefit balance of $ 1.5 million and $ 0.8 million related to research and development credits and California net operating loss carryforward as of December 31, 2022 and 2021, respectively.

No amount of unrecognized tax benefits as of December 31, 2022, if recognized, would reduce the Company’s effective tax rate because the benefits would be in the form of tax credit carryforwards, which would be reduced to $ 0 by a full valuation allowance.

There are no provisions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date.

Because the statute of limitations does not expire until after the net operating loss and credit carryforwards are actually used, the statutes are still open on calendars years ending 2017 forward for federal and state purposes.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

statute of limitations does not expire until after the net operating loss and credit carryforwards are actually used, the statutes are still open on calendars years ending 2017 forward for federal and state purposes.

A reconciliation of the beginning and ending amount of the liability for uncertain tax positions, excluding potential interest and penalties, is as follows:

(in thousands) December 31, 2021

Balance as of December 31, 2020

(in thousands) December 31, 2022 December 31, 2021

Beginning balance $ 837 $ 391

Increase based on current year tax positions 616 446

Balance as of December 31, 2021

Increase for prior year tax positions 91 —

Ending balance $ 1,544 $ 837

Net operating loss and tax credit carry-forwards are subject to review and possible adjustment by the Internal Revenue Service (the “IRS”) and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Code, which could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities.

The amount of the annual limitation is determined based on the Company’s value immediately prior to the ownership change.

Subsequent ownership changes may further affect the

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

limitation in future years.

Subsequent ownership changes may further affect the limitation in future years.

The Company has not, as yet, conducted a study to determine if any such changes have occurred that could limit its ability to use the net operating loss and tax credit carryforwards.

Stock Option Plan and Stock-based Compensation

Equity Incentive Plans and Stock-based Compensation

On June 8, 2021, the stockholders of the Company approved the 2021 Equity Incentive Plan (“2021 Plan”) and the 2021 Employee Stock Purchase Plan ( “2021 ESPP”).

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The number of shares of common stock available for issuance under the 2021 ESPP will be increased on the first day of each fiscal year beginning on January 1, 2022, in an amount equal to the least of (i) 3,734,500 shares of common stock, (ii) a number of s hares of common stock equal to one percent ( 1 %) of the total number of shares of all classes of common stock of the Company on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Administrator no later than the last day of the immediately preceding fiscal year.

The first offering period is from October 1, 2021 through May 31, 2022.

The first offering period was from October 1, 2021 through May 31, 2022.

For subsequent offering periods, the Company will be offering a six month purchase period.

As of December 31, 2021, no shares of common stock were purchased under the 2021 ESPP.

As of December 31, 2022, 99,195 shares of common stock were purchased under the 2021 ESPP.

2021 Equity Incentive Plan

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Options generally expire ten years after the date of grant.

The number of shares available for issuance under the 2021 Plan will be increased on the first day of each fiscal year, beginning on January 1, 2022, in an amount equal to the least of (i) 18,672,200 shares, (ii) a number of shares equal to five percent ( 5 %) of the total number of shares of all classes of common stock of the Company outstanding on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Administrator no later than the last day of the immediately preceding fiscal year.

2017 Equity Incentive Plan

At the time of adoption of the 2021 Plan and the 2021 ESPP, no further awards will be granted under the 2017 Equity Incentive Plan (“2017 Plan”) and 7,106,767 shares of common stock were initially reserved for outstanding awards issued under the 2017 Plan

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

preceding fiscal year, or (iii) such number of shares determined by the Administrator no later than the last day of the immediately preceding fiscal year.

2017 Equity Incentive Plan

Grant Date Fair Value of Stock Options

In determining the compensation cost of the option awards, the fair value for each option award has been estimated using the Black Scholes model.

The significant assumptions used in these calculations are summarized as follows:

December 31, 2021 Year Ended

December 31, 2020

Year Ended December 31, 2022 Year Ended December 31, 2021

Expected term (in years) 5.3 - 6.1

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Fair value of common stock:

The fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s Board of Directors.

Prior to the Business Combination, the fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s Board of Directors.

Because there has been no public market for the common stock, the Board of Directors has determined the fair value of the common stock at the time of grant of the option by contemporaneous valuations performed by an unrelated third-party valuation firm as well as a number of objective and subjective factors including valuation of comparable companies, sales of convertible preferred stock to unrelated third parties, operating and financial performance, the implied equity value of the Company as contemplated by the Business Combination, the lack of liquidity of capital stock and general and industry specific economic outlook, among other factors.

The fair value of common stock was determined in accordance with applicable elements of the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

Subsequent to the completion of the Business Combination (as defined in Note 1 and further described in Note 3) the fair value of the Company’s common stock is determined based on its closing market price.

The awards granted in late January 2021 had an exercise price equal to the grant date fair value of the Company’s common stock.

The Company’s board of directors made a determination of the fair market value of the Company’s common stock which contemplated the implied equity value of the Company per the Business Combination Agreement that was executed on February 7, 2021.

For the period following execution of the Business Combination Agreement through December 31, 2021, options for 2,190,232 common stock shares were granted.

The Company’s board of directors made a determination of the fair market value of the

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

The following table summarizes option award activity during the years ended December 31, 2021 and 2020:

Company’s common stock which contemplated the implied equity value of the Company per the Business Combination Agreement that was executed on February 7, 2021.

The following table summarizes option award activity during the year ended December 31, 2022:

Number of Stock Option Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value

(in thousands)

Outstanding at December 31, 2019

1,658,564 $ 0.34

Granted 3,696,804 $ 1.04

Exercised ( 137,295 ) $ 0.31

Forfeited ( 72,526 ) $ 0.44

Outstanding as of December 31, 2021 8,550,076 $ 4.66

5,145,547 $ 0.85

Granted 4,677,363 $ 3.59

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Outstanding as of December 31, 2022 11,485,443 $ 4.12 8.3 $ 3,681

8,550,076 $ 4.66 8.8 $ 19,978

Options vested and expected to vest as of December 31, 2022 11,485,443 $ 4.12

8,550,076 $ 4.66

Vested and exercisable at December 31, 2022 4,167,416 $ 3.85 7.6 $ 2,545

1,615,483 $ 0.88 7.5 $ 7,214

The total intrinsic value of options exercised during the years ended December 31, 2022 and 2021 was $ 1.2 million and $ 1.7 million, respectively.

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As of December 31, 2022, there was $ 25.1 million of total unrecognized compensation expense expected to be recognized over a weighted average-period of 2.5 years.

Restricted Stock

In January 2017, the Company granted 32,652,640 shares of restricted common stock to founders for future services that vest over 4 years from the date of grant.

Activity with respect to restricted stock for the years ended December 31, 2021 and 2020 was as follows:

Number of Shares Underlying Outstanding Restricted Stock Weighted- Average Grant Date Fair Value

Unvested, December 31, 2019

7,406,367 $ 0.00003

Vested ( 6,836,646 ) $ 0.00003

Unvested, December 31, 2020

569,721 $ 0.00003

Vested ( 569,721 ) $ 0.00003

Unvested, December 31, 2021

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

Stock-based Compensation Expense

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As of December 31, 2022, the Company had open purchase commitments for goods and services of $ 1.7 million, all of which are expected to be received through the next 12 months.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

Legal Proceedings

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The Company is obligated under certain non-cancellable operating leases for office space and laboratory space.

This space includes operating leases in Seattle, Washington, Menlo Park, California and San Carlos, California.

The operating lease in Menlo Park, California expired in February 2020.

This space includes operating leases in Seattle, Washington, San Carlos, California, and San Diego, California.

Seattle Leases

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The impact of this modification reduced the operating lease right-of-use asset and lease liability balance as a $ 3.3 million non-cash adjustment.

Additionally, as a result of the remaining lease term being less than a year, the total remaining operating lease liability balance was classified as current.

In September 2021, the Company further amended the facility lease contract in San Carlos, California to shorten the remaining term of the lease to expire in October 2021 and was also accounted for as a modification.

In December 2020, the Company entered into a new lease in San Carlos, California for ten years which commenced in October 2021 and expiring in October 2031 with total minimum lease payments of $ 40.7 million.

In December 2020, the Company also entered into a temporary office space lease agreement in San Carlos, California which commenced in February 2021 and expired in October 2021 with total minimum lease payments of

The temporary office space lease agreement was recognized as a short-term lease due to the election of the short-term lease measurement and recognition exemption.

In December 2021, the Company entered into another lease in San Carlos, California for nine years that is expected to commence in the first quarter of 2023 and expiring in October 2031.

The Company can terminate this lease after five years from the commencement date without bearing any significant termination penalties and therefore the Company concluded that the lease term is five years with total minimum lease payments of $ 7.2 million.

The Company may utilize funds from the landlord of up to $ 2.0 million with an interest rate of 7 % to finance its tenant improvements.

As of December 31, 2022, $ 0.8 million has been utilized.

San Diego Lease

In November 2022, the Company entered into a lease in San Diego, California for 39 months commencing in December 2022.

Total non-cancellable payments under this lease aggregate $ 2.1 million through March 2026.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

$ 1.2 million.

The temporary office space lease agreement was recognized as a short-term lease due to the election of the short-term lease measurement and recognition exemption.

In December 2021, the Company entered into another lease in San Carlos, California for nine years commencing in October 2022 and expiring in October 2031.

The Company can terminate this lease after five years from October 1, 2022 without bearing any significant termination penalties and therefore the Company concluded that the lease term is five years with total minimum lease payments of $ 7.2 million.

The components of lease costs which were included in operating expenses in the consolidated statements of operations were as follows:

(in thousands) Year Ended

December 31, 2021 Year Ended

December 31, 2020

(in thousands) Year Ended December 31, 2022 Year Ended December 31, 2021

Fixed operating lease costs $ 4,751 $ 2,539

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Variable operating lease costs 1,655 362

Sublease income — ( 77 )

Total lease costs $ 6,431 $ 4,126

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The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by them in any action or proceeding to which any of them are, or are threatened to be, made a party by reason of their service as a director or officer.

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The Company may be subject to indemnification obligation by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

Letter of Credit

Letters of Credit

In conjunction with the San Carlos lease agreement entered in December 2020, the Company issued a cash-collateralized letter of credit in lieu of security deposit of $ 0.6 million.

In conjunction with the San Carlos lease agreement entered in December 2021, the Company amended the existing cash-collateralized letter of credit and increased the amount to $ 0.8 million.

In conjunction with the San Carlos lease

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

agreement entered in December 2021, the Company amended the existing cash-collateralized letter of credit and increased the amount to $ 0.8 million.

In conjunction with the San Diego lease agreement entered in November 2022, the Company issued a cash-collateralized letter of credit in lieu of a security deposit of $ 0.1 million.

The cash amount is recorded as restricted cash under Other long-term assets on the Company’s consolidated balance sheets.

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Employee stock purchase plan 63,246 59,085

Convertible preferred stock (on an as-converted basis) — 52,175,965

Unvested restricted common stock — 569,721

Common stock warrants — 63,491

Total potentially dilutive common share equivalents 11,548,689 8,609,161

Nautilus Biotechnology, Inc.

Notes to Consolidated Financial Statements—(Continued)

Subsequent Events

The Company has evaluated subsequent events through February 24, 2022, the date on which the financial statements were available to be issued.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

As previously reported on our Current Report on Form 8-K, dated June 9, 2021, on June 9, 2021, the audit committee of our board of directors approved a resolution appointing PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for the fiscal year ending December 31, 2021.

PwC served as the independent registered public accounting firm of Legacy Nautilus prior to the Business Combination.

Accordingly, WithumSmith+Brown, PC (“Withum”), ARYA’s independent registered public accounting firm prior to the Business Combination, was informed on June 9, 2021 that it was dismissed as our independent registered public accounting firm.

The reports of Withum on ARYA’s financial statements as of and for the most recent fiscal year ending December 31, 2020 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles.

During ARYA’s fiscal year ending December 31, 2020 and the subsequent interim period through June 9, 2021, there were no disagreements between ARYA and Withum on any matter of accounting principles or practices, financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Withum, would have caused it to make reference to the subject matter of the disagreements in its reports on ARYA’s financial statements for such year.

During ARYA’s fiscal year ending December 31, 2020 and the subsequent interim period through June 9, 2021, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934, as amended.

During the fiscal year ending December 31, 2020 and the subsequent interim period through June 9, 2021, neither the Company, nor any party on the Company’s behalf, consulted with PwC with respect to either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of the audit opinion that might be rendered with respect to the Company’s consolidated financial statements, and no written report or oral advice was provided to the Company by PwC that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was subject to any disagreement (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data