{ "docId": "019dd923-622c-750b-8b9a-4b91788fc785", "docSlug": "5fadb686cc03", "documentTitle": "Twist Bioscience (TWST)", "authorId": "58_Scorpion_Capital", "authorName": "Scorpion Capital", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2022-11-15 00:00:00", "orientation": "landscape", "aspectRatio": 1.2941177, "pageNumber": 119, "pageCount": 236, "prevPage": 118, "nextPage": 120, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 0, "notes": "The slide uses excerpts from an S-1/A filing to support the claim of misclassification.", "elementsJson": [ "paragraph", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-4b91788fc785/119", "deckHref": "/decks/019dd923-622c-750b-8b9a-4b91788fc785", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-4b91788fc785.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-4b91788fc785#slide-119", "components": [ { "bbox": null, "kind": "callout", "text": "Revealing language buried in Twist’s SEC filings confirms our belief that Twist is misclassifying manufacturing expenses as R&D - the kind of language that lawyers add in an attempt to cover-your-ass, which nonetheless conflicts with the CEO and CFO’s strong, unambiguous statements using the phrase “gross margin.”", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0932-77cf-bfed-d1a4cab9e982", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.3, "x": 0.05, "y": 0.45 }, "kind": "paragraph", "text": "S-1/A filed Oct 29, 2018 - excerpts", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5f5be9ea-da56-4727-8f03-22d0cc115fc9", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.9, "x": 0.05, "y": 0.65 }, "kind": "quote", "text": "“As of June 30, 2018, we had 56 full-time employees dedicated to research and development. Of these employees, 26 hold advanced degrees in engineering and biology or other sciences, including either a Ph.D. or master’s degree...As of June 30, 2018, we had 221 full-time employees and a team of 14 dedicated commercial consultants across the European Union and United Kingdom and five dedicated commercial consultants across Asia. Of these full-time employees, 56 full-time employees are engaged in research and development activities.”", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3e5258a3-a53a-4093-a5e7-27f5eabb9c26", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.48 }, "kind": "quote", "text": "“Research and development expenses consist primarily of costs incurred for the development of our products, which include personnel costs, laboratory supplies, consulting costs and allocated overhead, including IT and facility costs. We expense our research and development expenses in the period in which they are incurred. We expect to increase our research and development expenses as we continue to develop new products.”", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c8841e4f-3590-4c62-a21e-de4454e9a5ce", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“Research and development expenses consist primarily of costs incurred for the development of our products, which include personnel costs, laboratory supplies, consulting costs and allocated overhead, including IT and facility costs. We expense our research and development expenses in the period in which they are incurred. We expect to increase our research and development expenses as we continue to develop new products.” — S-1/A filed Oct 29, 2018", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0932-77cf-bfed-d6d9e0a8ad65", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.15, "x": 0.05, "y": 0.95 }, "kind": "source-note", "text": "Source: Twist SEC filings", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1feee27e-0787-431e-8abe-dccfcbebaacd", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.35, "w": 0.9, "x": 0.05, "y": 0.08 }, "kind": "title", "text": "Revealing language buried in Twist’s SEC filings confirms our belief that Twist is misclassifying manufacturing expenses as R&D - the kind of language that lawyers add in an attempt to cover-your-ass, which nonetheless conflicts with the CEO and CFO’s strong, unambiguous statements using the phrase “gross margin.” We compare wording changes in the prospectus filed in Oct 2018 right before the IPO, with the 10K filed a few months later. In the prospectus, the language in the R&D expenses section is clear and unambiguous, using only the phrase “research and development” without muddying it with any qualifiers. The employees section of the filing also refers to employees who are “dedicated to research and development” - full stop.", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0f2e7d08-f7e8-433e-8672-fb54204767af", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "572829a1-e0bb-437d-8ba8-371dc88afecf", "evidence": "The slide explicitly aims to expose a contradiction in financial reporting to suggest misclassification.", "confidence": 0.9 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }