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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

or

Commission file number 001-38161

Calyxt, Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (651) (651) 683-2807

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 (check one):

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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over

financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

Aggregate market value of the common stock held by non-affiliates of the registrant: As of June 28, 2019,30, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of shares of common stock held by non-affiliates of the registrant was $125,417,099$52,658,096 based upon the closing sale price of the registrant’s common stock of $12.48$4.02 on such date.

The number of outstanding shares of the registrant’s common stock on March 4, 20203, 2022 was 32,990,64742,718,930 shares.

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Terms

When we use the terms “we,” “us,” the “Company,”“Company” or “our”“its” are used in this report, unless the context otherwise requires, wethose terms are referringbeing used to refer to Calyxt, Inc. When we use the term “Cellectis,” we are referringis used, it is being used to refer to Cellectis S.A., ourthe Company's majority stockholder. Cellectis is a leading gene-editingclinical-stage biotechnology company focused onemploying its core proprietary technologies to develop best-in-class products in the developmentfield of immuno-oncology therapeutics.immuno-oncology.

We own

The Company owns the names PlantSpring and BioFactory. The Company also owns the trademarks Calyxt® and Calyno®; we also own and owns or licenselicenses other trademarks, trade names, and service marks of Calyxt appearing in this Annual Report on Form 10-K. The names and trademarks “Cellectis®”Cellectis® and “TALEN®”TALEN®, andalong with any other trademarks, trade names, and service marks of Cellectis appearing in this Annual Report on Form 10-Kreport are the property of Cellectis. This Annual Report on Form 10-Kreport also contains additional trade names, trademarks, and service marks belonging to other companies. We doThe Company does not intend ourits use or display of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply a relationship with, or endorsement or sponsorship of us by, these other parties.

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). WeThe Company may also make forward-looking statements in other reports filed with the Securities and Exchange Commission (SEC), in materials delivered to stockholders, and in press releases. In addition, ourthe Company's representatives may from time to timetime-to-time make oral forward-looking statements.

We have

The Company has made these forward-looking statements in reliance on the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “anticipates,” “believes,” “continue,” “estimates,” “expects,” “intends,” “may,” “might,” “will,“plans,” “predicts,” “projects,” “should,” “expects,“targets,” “plans,“will,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparablesimilar terminology. These forward-looking statements, which are based on our current assumptions and expectations, are subject to risks and uncertainties. Forward-looking statements in this report may include statements about ourthe Company's future financial performance, including its cash runway; its product pipeline and development; its business model and strategies for the development, commercialization efforts, regulatory progression,and sales of commercial products; commercial demand for its synthetic biology solutions; the development and deployment of its PlantSpring technology platform; its ability to deploy and leverage its artificial intelligence and machine learning (AIML) capabilities; the ability to scale production capability for its BioFactory production system; potential collaborationsdevelopment agreements, partnerships, customer relationships, and partnerships,licensing arrangements and their contribution to its financial results, cash usage, and growth strategies,strategies; the potential impact of the COVID-19 pandemic on its business and operating results; and anticipated trends in ourits business. These and other forward-looking statements are predictions based on our current expectations and projections about future events and trends.  Ourtrends based on the Company's current expectations, objectives, and intentions and are premised on current assumptions. The Company's actual results, level of activity, performance, or achievements could be materially different than those expressed, implied, or anticipated by forward-looking statements.

Therestatements due to a variety of factors, including, but not limited to: the impact of increased competition, including competition from a broader array of synthetic biology companies; competition for customers, partners, and licensees and the successful execution of development and licensing agreements; disruptions at its key facilities, including disruptions impacting its BioFactory production system; flaws in AIML algorithms, insufficiency of data inputs required by such algorithms, and human error in interacting with AIML; changes in customer preferences and market acceptance of its products; changes in market consensus as to what attributes are required for a product to be considered “sustainable”; the impact of adverse events during development, including unsuccessful pilot production of plant-based chemistries or field trials; the impact of improper handling of its product candidates during development; failures by third-party contractors; inaccurate demand forecasting or milestone and royalty payment projections; the effectiveness of commercialization efforts by commercial partners or licensees; disruptions to supply chains, including raw material inputs for its BioFactory; the impact of changes or increases in oversight and regulation; disputes or challenges regarding intellectual property; proliferation and continuous evolution of new technologies; management changes; dislocations in the capital markets; the severity and duration of the evolving COVID-19 pandemic and the resulting impact on macro-economic conditions; and other important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including, without limitation, the factors discussed in Part I, Item 1A, “Risk Factors,” Factors” of this Annual Report on Form 10-K, which should be considered an integral part of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Any forward-looking statementstatements made by usthe Company in this Annual Report on Form 10-K isare based only on information currently available to usinformation and speaksspeak only as of the date of this report. We doExcept as otherwise required by securities and other applicable laws, the Company does not assume any obligation to publicly provide revisions or updates to any forward-looking statements, after the date of this Annual Report on Form 10-K, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by law.change.

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Market Data

Unless otherwise indicated, information contained in this Annual Report on Form 10-K concerning ourthe Company's industry and the markets in which we operateit operates is based on information from various sources, including independent industry publications. In presenting this information, we havethe Company has also made assumptions based on such data and other similar sources, and on ourits knowledge of, and ourits experience to date in, the potential markets for ourits product. The industry in which we operatethe Company operates is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Part I, Item 1A,the section entitled “Risk Factors” in this Annual Report on Form 10-K. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.the Company.

Website Disclosure

We use our

The Company uses its website (www.calyxt.com)(www.calyxt.com), ourits corporate Twitter account (@Calyxt_Inc) and ourits corporate LinkedIn account (https://www.linkedin.com/company/calyxt-inc) as routine channels of distribution of company information, including press releases, analyst presentations, and supplemental financial information, as a means of disclosing material non-public information and for complying with ourits disclosure obligations under Regulation FD. Accordingly, investors should monitor ourthe Company's website and ourits corporate Twitter and LinkedIn accounts in addition to following press releases, filings with the SEC, and public conference calls and webcasts.

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Additionally, we providethe Company provides notifications of announcements as part of ourits website. Additionally, we provideInvestors and others can receive notifications of announcements as part of our website.new press releases posted on the Company's website by signing up for email alerts.

None of the information provided on ourthe Company's website, in ourits press releases or public conference calls and webcasts, or through social media is incorporated into, or deemed to be a part of, this Annual Report on Form 10-K or in any other report or document we fileit files with the SEC, and any references to ourits website or ourto its corporate Twitter and LinkedIn accounts are intended to be inactive textual references only.

JOBS Act

We qualify

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups (JOBS) Act of 2012 (the JOBS Act). As an emerging growth company, wethe Company may take advantage of certain reduced disclosure and other requirements that are otherwise applicable generally to public companies. Pursuant to these provisions:

We

The Company may take advantage of these provisions for up to five years or until such earlier time that we areit is no longer an emerging growth company.

We

The Company would cease to be an emerging growth company upon the earliest to occur of (1) the last day of the fiscal year in which we haveit has more than $1.07 billion in annual revenue; (2) the date we qualifyit qualifies as a “large accelerated filer,” with at least $700 million of public float (3) the issuance, in any three-year period, by usthe Company of more than $1.0 billion in non-convertible debt securities held by non-affiliates; and (4) the last day of the fiscal year ending after the fifth anniversary of ourits initial public offering, or December 31, 2022.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intendThe Company intends to take advantage of the exemptions discussed above. Accordingly, the information contained herein may be different than the information you receivereceived from other public companies.

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PARTPART I

Item 1. Business.

Company Overview

Calyxt, Inc. was incorporated in the State of Delawarefounded in 2010 and isincorporated in Delaware. Calyxt is a majority-owned subsidiary of Cellectis.

We are aplant-based synthetic biology company that leverages its proprietary PlantSpringTM technology companyplatform to engineer plant metabolism to produce innovative, high-value plant-based chemistries for use in customers’ materials and products. As plant-based solutions, the Company’s synthetic biology products can be used in helping customers meet their sustainability targets and financial goals. The Company is focused on deliveringdeveloping these synthetic biology solutions for customers in large and differentiated end markets, including the cosmeceutical, nutraceutical, and pharmaceutical industries, which are the Company’s initial target markets.

The Company will produce its plant-based solutionschemistries in its proprietary BioFactoryTM production system. This strategic initiative was announced in October 2021. In the context of the Company’s PlantSpring technology platform and BioFactory production system, the term “sustainable”, as used in this Annual Report, refers to the plant-based chemistry production methods that use plant biomass as a raw material and are healthytherefore renewable and sustainable. We intend to bring thesedo not completely use up or destroy natural resources.

The Company also out-licenses elements of the PlantSpring technology platform, has historically developed seed-trait product candidates for the traditional agriculture market, and may selectively develop products to market one of two ways. First, through an integrated business model where we leverage third party assetsfor customers in traditional agriculture. For example, in the agricultural supply chain to process grains and sellthird quarter of 2021, the resulting products. Second, throughCompany announced it had entered into a research collaboration arrangements or license agreements with third partiesa global food ingredient manufacturer based in Asia to develop an improved soybean capable of producing oil that would serve as a commercial alternative to palm oil.

The Company was previously focused on the development of traits for traditional agriculture that it planned to commercialize using either a vertically integrated or license products. In a collaboration arrangement we expect to receive payments for the use of our innovations, upon the achievement of development milestones, and from royalties uponlicensing business model. The Company’s first commercial sale of products. We also have an option to monetize our technology platform by strategically licensing our innovations to others. We evaluate the go-to-market strategy and business model for product, candidates on a case-by-case basis. We are currently exploring product opportunities in alfalfa, canola, hemp, oats, peanuts, peas, potato, soybeans, wheat, and other crops.  

Using our proprietary technologies and expertise, including TALEN^® gene-editing technology exclusively licensed to us in the field of agriculture, we develop crops with targeted traits quickly and more cost effectively than through traditional methods. Our technologies enable precise cuts to DNA in a single plant cell, and then the plant’s natural repair mechanism occurs resulting in the edited plant. We then regenerate the edited single cell into a full plant. We believe that we can assess the viability of a trait in less than two years by utilizing these proprietary technologies.

Our first product is a high oleic soybean, designed to produce a “heart healthy¹” oil that has increased heat stability with zero grams trans fat per serving. We derive high oleic oil and meal from our soybean and completed our first saleswas launched in this manner in the first quarter of 2019. Among our otherIn August 2020, the Company announced it was winding down the vertically integrated soybean product candidates areline. The wind-down of this product line was completed in late 2021 with the final sales of soybean grain to a large soybean processor. The Company’s second product, an improved digestibility alfalfa, was developed with and licensed to S&W Seed Company (S&W). S&W is pursuing regulatory clearance for their product candidate and is targeting commercialization in 2022 at which time the Company expects to begin to receive royalty payments. The Company intends to use this licensing strategy for other historically developed, traditional agriculture seed-trait product candidates.

The Company has historically operated in a high fiber wheat and a cold storable potato. We also intend to explore the ability to add value to our existing product candidates by combining traits in the same crop, which may allow us to deliver products with additional benefits without adding significant supply chain costs.

Our current commercial focus is North America. This may expand over time to other geographies, subject to customer demand and regulatory requirements, among other factors.

Market and Industry Overview

We are poised to take advantage of trends that include increasing demand for products that support healthier eating, improved traceability and global sustainability.

Consumers have developed an increasingly heightened awareness of the role that dietary habits play in long-term wellness. This trend is especially prevalent in wealthier, developed nations where consumers have greater access to information that is helping to shift their consumption habits. Insingle segment primarily within the United States and its assets are located within the United States.

Prior to its initial public offering (IPO) on July 25, 2017, the Company was a wholly owned subsidiary of Cellectis S.A. (Cellectis). As of December 31, 2021, Cellectis owned 61.8 percent of the Company's issued and outstanding common stock. Cellectis has certain contractual rights as well as rights pursuant to the Company's certificate of incorporation and bylaws, in each case, for so long as it maintains threshold beneficial ownership levels in the Company's shares.

The PlantSpring Technology Platform, AIML Capabilities, and Calyxt’s Development Process

The PlantSpring technology platform is founded on the Company’s more than a decade of experience engineering plant metabolism and incorporates its scientific knowledge, its proprietary systems, tools and technologies, and an expanding set of artificial intelligence and machine learning (AIML) capabilities. Through the PlantSpring platform, the Company seeks to unleash the natural capabilities of plants—the original biological systems—and make available commercial innovations that produce unique plant-based chemistries from plant species, including rare or undomesticated species, in a manner that the Company believes is more robust and sustainable than other developed nations,methods of production.

Plants naturally produce many chemistries that may be valuable inputs for end products. Of the approximately 170,000 known and classified compounds derived from plants, bacteria, and fungi, approximately 78 percent are derived from plants. Moreover, some estimates suggest that there may be up to one million additional chemical compounds yet to be discovered.

However, the yield of plant-based chemistries that occurs naturally may be insufficient for commercialization using traditional production methods, the plant that produces the chemistry may be scarce in nature or difficult to harvest, or there may be a socioeconomic concern with the harvest of the plant producing the chemistry. Additionally, the quality or quantity of a natural plant chemistry may be

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inconsistent, varying considerably over each variety, harvest, or field, and can be impacted by different contaminants in the soil where grown.

In PlantSpring, the Company identifies metabolic pathways to produce plant-based chemistries, designs strategies to reprogram host cells, engineers plant cell metabolism to optimally produce targeted compounds, and produces those targeted compounds at laboratory scale.

The Company has implemented AIML capabilities for the identification of targets for editing specific genetic pathways and continues to develop AIML capabilities across the PlantSpring platform, which will enable learning and adaptation of knowledge gained from past activity and are expected to be combined with predictive analytics to rapidly prototype and provide feedback, accelerate the time to complete the development cycle and help mitigate the risk associated with commercial scale-up. The Company expects to leverage its deep scientific experience and vast amounts of data that it has accumulated over its history, including a large proprietary database of genomic information across numerous plant species, in its future AIML development efforts.

The Company uses an efficient development process to deliver innovation through PlantSpring platform, leveraging its extensive knowledge of plants and their metabolism when developing a plant-based chemistry. The Company’s synthetic biology product development process is comprised of three primary stages: Design, Engineer, and Verify, and activities within each stage are as follows:

The Company has used this development process to successfully produce proof-of-concept compounds at laboratory scale—ovalbumin, a plant-based protein, and betanin, a red colorant typically derived from beets.

The development process also uses an iterative learning mechanism through which accumulated knowledge is leveraged. As the Company expands and develops its AIML capabilities, it intends to utilize them throughout the PlantSpring development cycle. The typical timeline to complete the Design-Engineer-Verify process is currently estimated at twelve months, at which point the verified chemistry would advance to pilot production. The Company is in the grocery aisleprocess of implementing AIML more broadly to assist in the identification of pathways and targets, and in scaling production beyond the laboratory. The Company has a near term focus of expanding current AIML capabilities in the Design and Engineer phases of development and expanding AIML capabilities toward optimizing pilot production, reducing production variables, and designing critical steps in the scale-up process. With the expansion and further deployment of its AIML capabilities and systematic learning as additional compounds move through the development process, the Company expects this development cycle time may be accelerated. Additional development time is required to achieve commercial scale for out-of-home eating. Consumers view foodcompounds to be produced in the BioFactory production system, as discussed below.

As the Company incorporates AIML techniques further into its development process it has the aim of accelerating development cycles and reducing development costs, improving and influencing its rapid prototyping capabilities, and discovering new pathways or new plant-derived compounds for future commercialization efforts. As a result, the Company believes it will be able to develop compounds in plants for customers at faster speeds than its competitors in the synthetic biology industry.

Commercialization Strategies

The Company intends to commercialize its PlantSpring technology platform using three strategies: (i) the development and sale of high-value synthetic biology products from the Company’s proprietary BioFactory production system, (ii) the licensing of elements of the PlantSpring technology platform and historically developed, traditional agriculture seed-trait product candidates, and (iii) selective product development for customers in traditional agriculture. The Company’s current focus is on development of synthetic biology products for its customers using its BioFactory production system.

The BioFactory Production System

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The BioFactory is a bioreactor-based production system that is designed to be capable of continuous production of plant-based chemistries. The bioreactor can be of any size depending upon factors including yield and titer necessary to reach the required commercial scale. For production, multicellular Plant Cell MatrixTM(PCMTM) structures are placed inside the bioreactor, and growth media bathes the PCM structures to provide them with nutrition, which differentiates the Company’s process from other methods that require complete submersion of cells in growth media. A PCM structure is a living system of various cell types, which is designed to emulate the intercellular metabolism of an entire plant, that grows over time and produces and stores, or excretes, the target chemistries. The growth mediais the feedstock of the BioFactory production system and contains the essential inputs to support growth of the PCM structures and necessary chemistry production. The growth media is expected to be reused throughout the production cycle, which may run for an extended time period. To scale production in the BioFactory productions system, the Company expects to move the PCM structures from its current bioreactor into larger capacity bioreactors or groups of bioreactors.

The Company began running lab-scale bioreactors in early 2021. The Company’s first pilot-scale bioreactor became operational in December 2021 and is scalable up to 200 liters. The pilot stage of development takes a compound developed with the PlantSpring platform through to commercial production. Depending on the compound to be produced, there may be a range of vessel sizes between the initial pilot facility and the commercial production facility. The Company’s current plan is to engage third parties, referred to as infrastructure partners, for at-scale commercial production. Infrastructure partners are likely to be companies with processing assets that can be converted from current production to the Company’s bioreactor-based approach. If an infrastructure partner is used for production, the Company expects to pay a fee for that production. Because of the expected modular nature of the BioFactory production system and the types of high value compounds the Company expects to develop for customers, it is also possible that commercial production could also occur in a customer’s in-house facility. The Company expects to expand the scope of its pilot facilities based on customer demand, and the scope of production could extend, subject to regulatory and other considerations, outside the United States.

The Company believes the typical development time from initiation of the pilot stage of development through to commercialization is 24 months with the customer addressing formulation and regulatory matters. Some industries, such as pharmaceuticals, are expected to have a longer path to regulatory clearance. In combination with the Design-Engineer-Verify stages of the development process, the timeline to achieve commercial availability is currently estimated at approximately 36 months, subject to potential regulatory extensions for certain industries. As the Company broadens, develops and deploys its AIML capabilities across the development process, the Company anticipates that this timeline can be accelerated for future development efforts.

In parallel with developing additional AIML capabilities across the PlantSpring platform, the Company is developing its AIML capabilities to increase the efficiency and productivity of the BioFactory system. Synthesizing plant-based chemistry in the BioFactory system at scale involves optimizing a large number of parameters. AIML approaches to planning, designing, executing, and analyzing BioFactory production runs are expected to enable the Company to tune the operation of the BioFactory system through prediction and refinement of the optimal operating points for each targeted compound. The enormous amount of data produced by the BioFactory system will be augmented with synthetic experiments generated from the Company’s process models that are expected to enable it to explore and model many more combinations of control settings than can be achieved in the absence of AIML.

Based on the customer demand-driven approach to product development that the Company is expecting to employ, it anticipates that the compounds it produces in the BioFactory system will be primarily replacements or enhancements of plant-based chemistries that are hard to source, either because they are scarce in nature or difficult to harvest, or where there may be a socioeconomic concern with the harvest of the plant producing the chemistry. The Company may also selectively explore the development of high-value and novel plant-based chemistries without a partner and may opt to bring these to market using its own resources.

The Company also believes the BioFactory system has the potential to be a highly sustainable synthetic biology production system because of its production methodology, which relies upon a limited quantity of media and nutrients in a continuous flow system that operates for long periods of time, potentially more than one year, in an operating cycle. The BioFactory system involves fewer of the sustainability challenges associated with other traditional plant-based indoor and outdoor production systems, including excess heating, cooling, fertilizer and pesticide uses, and because the BioFactory does not use fermentation, there is no off-gassing, the media can be recycled, and only depleted components are replaced resulting in lower waste levels. This production method is expected to align well with customers’ goals of replacing existing compounds that may be scarce in nature, have an unstable supply chain, cannot be produced through fermentation or other similar methods, or are currently produced in a non-sustainable process, with high-value, sustainable, plant-based synthetic biology compounds.

As a result, the Company believes that in combination its PlantSpring technology platform and its BioFactory production system are capable of unlocking the power of plants to produce high value and complex plant-based chemistries that are finite, that are difficult to source sustainably, and that may not be able to be produced through other production systems, or that cannot be produced as efficiently in single cell plant culture systems.

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The Company’s go-to-market strategy for BioFactory-produced compounds is expected to be customer demand-driven. The strategy encompasses customer needs, the Company’s development and production capabilities, and seeks to drive financial returns throughout the product’s lifecycle. The Company has developed a set of criteria it employs to evaluate customer-driven opportunities and ensure focus for its development efforts. Those criteria include the nature of the customers’ need, the capabilities of the BioFactory system, the estimated size of the customers’ demand for targeted compound, the customers’ anticipated speed of adoption, and potential financial returns.

The Company currently targets having two to four plant-based chemistries in its development process by the end of 2022.

From a financial standpoint, the Company anticipates that its customers may fund the development of their compounds, and once at-scale production is achieved, the customers are expected to purchase their compounds from the Company pursuant to supply agreements. The Company also anticipates that customers will be responsible for any regulatory activities associated with development of their commissioned compounds.

Technology Licensing & Product Development for Agriculture

In addition to the core demand-driven synthetic biology solutions to be executed through the PlantSpring platform and the BioFactory system, the Company maintains the capability to implement broad technology licensing arrangements and to selectively develop agricultural products. The Company may pursue commercial opportunities for the licensing of elements of the PlantSpring technology platform as well as historically developed, traditional agriculture seed-trait product candidates.

With respect to licensing opportunities for select elements of the PlantSpring technology platform, the opportunities span the Company’s intellectual property portfolio built for more than a decade as a keyleading plant-based biotechnology company, including multiple gene editing platforms, plant breeding, and other capabilities. The Company’s PlantSpring technology platform has been utilized to good health. More food, functional fooddrive industry-leading modernization of the hemp species, including improved characteristics for protein and supplement products are being launched that go beyond basic nutritionoil production and use in advanced materials. Hemp can also contribute to support wellness, digestive health,enhancing a wide variety of materials, including strengthening plastics, reducing petroleum-based content, and providing greater strength and longevity compared to other plant-based fabrics like linen or cotton. The Company has successfully transformed the hemp genome and also has produced “pollen-proof” (seedless) hemp with its triploid breeding technology. Combined, the Company’s hemp advancements offer significant potential advantages in innovation, crop management, and harvest yield.

Additional technology-licensing activity may also continue in connection with the licensing of historically developed, traditional agriculture seed-trait product candidates, including soybeans with improved fatty-acid profiles; an improved digestibility alfalfa, which has been licensed for commercialization to S&W; wheat with a higher energy levels. Locally sourced foods are becoming more attractivefiber content than traditionally bred varieties, and its second generation soybean product, which has an improved fatty acid profile compared to consumerscommodity soybeans and the demandCompany’s initial soybean product launched in 2019. Among the Company’s other development successes are a soybean with improved flavor to help enable wider adoption for transparencyplant-based protein applications and controlling the production of storage sugars in food origin, growing method, sourcing, productionpotatoes to improve fry quality and labeling is gaining traction. We believe that as consumers continuereduce acrylamide. While the shift from production-driven food culture to a modern demand-driven food culture, theyCompany will pursue licensing opportunities for these product candidates, it expects there will be limited investment in further development until licensee customers are identified.

The Company may also continue to demand more information and accountability about how ingredients are sourced and processed, how “real” their food products are, and how responsive food companies are to consumers’ desireopportunistically develop seed-trait product candidates for choice and customization. Regulatory changes including with respect to labeling, are also expected to help drive change in consumer consumption and expectation.

As these consumer demands for sourcing, transparency, traceability, environmental impact, and climate impact data increase for food products, they are also increasing for non-food products. We see plant-based products having a significant role in addressing these consumer demands for non-food products as well.

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Furthermore, consumers and investors alike are concerned about the impact agricultural practices may havecustomers focused on climate change, and climate change itself will pressure the world’s food supply, food chain and adjacent non-food value chains. Whether the concern is methane gas output from livestock and dairy production, the fossil fuel impact of importing vegetable oils into the United States, the direct use of oilseed crops for energy, or the ability to raise wheat in Kansas in 2040, we believe our technologies will allow us to collaborate with others to bring sustainability solutions totraditional outdoor agriculture market. For example, our first collaboration project in alfalfa has been designed to improve alfalfa digestibility and thereby reduce methane gas output per gallon of milk production.

For our first product, high oleic soybean oil, we anticipate taking share within the premium vegetable oil market. The premium vegetable oil market in the United States was estimatedthird quarter of 2021, the Company announced that it had entered into a research collaboration with a global food ingredient manufacturer based in Asia to develop an improved soybean capable of producing an oil that would serve as a commercial alternative to palm oil.

To manage prioritization of resources and to drive returns on its investment, the Company has developed a set of criteria by which all agricultural seed trait licensing and seed trait development opportunities are evaluated, which include the size of the overall opportunity, the nature of the product to be nearly 15 billion pounds, valued at $7.5 billion, in 2018. We expect our oildeveloped, and the amount of cash it expects to compete against other premium oils in the foodservice, food ingredient, animal nutrition,receive both up front and industrial market segments. All these market segments represent a multi-billion-pound addressable market for our oil,over time.

Research and we believe the potential premiums will offer us better economics than other segments of the market. We sell our high oleic soybean meal to dairy, poultry and pork producers.Development

From a sustainability perspective, most other premium oils are imported and therefore have a higher carbon footprint than ours. We are also focused on environmental stewardship, biodiversity and sustainable practices in agriculture through our agreements with contracted growers. We are also able to trace our product to the field level to meet customer and consumer demands for sustainable sourcing, environmental impact and transparency of production.

Our Technology

OurThe Company's proprietary technologies and intellectual property portfolio enable usare focused on the PlantSpring technology platform, the BioFactory production system, TALEN, and other adjacent technologies, data analytics, plant breeding, systems, and work processes.

The Company's Research and Development (R&D) team has technical expertise in AIML, biochemistry, bioinformatics, chemistry, genetics and genetic engineering, molecular biology, plant physiology, tissue culture techniques, and other related fields. The Company's R&D activities are conducted principally at its Minnesota facility. The Company's current R&D cash usage consists of the following:

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The Company has made, and will continue to make, substantial investments in R&D. For more information on R&D expenses, see the Company's consolidated financial statements and related financial statement schedules on page F-1.

Market and Industry Overview

Calyxt believes that it has a unique opportunity to revolutionize how the world uses plants. The Company's focus is on innovating in the space where customers’ needs to consume finite resources and their enhanced focus on the sustainability of the planet intersect. The global economy today faces numerous sustainability challenges, as evidenced by knocking out genes or making precise gene edits. We take advantage of our knowledge about plant gene functionmetrics such as carbon pollution, water scarcity, and soil erosion. To address their sustainability goals, many companies must produce products differently, and plant–based chemistries represent a differentiated and a more sustainable alternative to identify and select beneficial genetic variation that results in traits of value. A key difference between our gene-editedmany products and genetically modifiedmaterials in use today. More than 20 percent of the world’s 2,000 largest public companies have committed to carbon-neutrality, supporting a shift to plant-based solutions.

The synthetic biology industry has expanded significantly over the past several years. New companies are being formed, investment capital is being deployed, and the number of public exits for once-private synthetic biology companies have accelerated. Companies within this group are pursuing novel methods of production to replace current approaches to the production of various compounds or products. Examples of such compounds include plant-based proteins, colorants, advanced materials, pharma-grade products (such as vaccine adjuvants and antibiotics), and many others. The Company believes it is the only company in the synthetic biology industry exclusively using plants as its core innovation species, with most competitors focused on single-cell organisms commonly referredincluding yeast, bacteria (such as e coli), and algae.

Target addressable markets for the BioFactory are expected to be valuable and diverse because plant-based synthetic biology can be used to produce compounds and products relatively quickly and cost-effectively, and with many desirable sustainability features. The Company believes that potential end markets for plant-based sustainable solutions are vast. In the near term, the Company intends to focus its customer activation and development efforts in a narrower market segmentation where it believes its current BioFactory capability gives it the best opportunity to capture a share of the addressable market. These end markets include the cosmeceutical, nutraceutical, and pharmaceutical industries. These end markets contain attractive potential customers, as GMOs, is a GMO product contains foreign DNA whereas our products contain no foreign DNA.many significant market participants are taking action to achieve corporate sustainability targets and to reduce their carbon footprints.

Our gene-editing platform relies on our capacity to custom design DNA-sequence specific cutting enzymes (nucleases) for a chosen gene and ourThe Company also maintains the capability to enable such custom-made nucleasesimplement broad technology licensing arrangements and to make a desired edit intodevelop agricultural product candidates. Under the livingtechnology licensing and product candidate development for agriculture strategies, the Company expects that its potential customers will primarily be seed companies, biotechnology companies, germplasm providers, large agricultural processors, and others in the relevant plant cells we wantspecies’ supply chain. The Company will also continue to edit. Our platform also relies on precisely chosen binding elements that can specifically recognize unique DNA sequences and can be tailored to target such sequences in a chosen gene or genetic region.

We use transcription activator-like effector nucleases, or TALEN, as the foundation of our gene editing platform. TALEN enable gene editing by first recognizing a specific DNA sequence and then precisely inducing a controlled DNA double-strand break. A DNA double-strand break is the key to unlocking gene editing. The removal of nucleotides (through non-homologous end-joining) can result in gene inactivation or a gene knock-out. If a DNA fragment from a different region of the genome with a similar sequence to the TALEN binding site is provided at the time of the DNA break, then the DNA fragment can be moved or copied into the targeted region of the plant genome to repair a broken gene (through homologous recombination). We are currentlyopportunistically develop seed traits for customers focused on using gene knockouts and gene repair to develop new traits, which result in products containing no foreign DNA.traditional agriculture.

Key Advantages of TALEN Technology

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The following chart depicts our development process:

Intellectual Property

Intellectual property protection is key to our business.the Company. As of December 31, 2019, our2021, the Company's patent estate is composed of patents and patent applications owned by usthe Company and in-licensed from other parties. Most of the in-licensed patents and patent applications are licensed from Cellectis or the University of Minnesota. The license from Cellectis includes technologies invented at Cellectis, technologies invented at Calyxtby the Company when we wereit was a wholly owned subsidiary of Cellectis, and technologies licensed to Cellectis from third parties. WeThe Company also havehas access to additional patents and patent applications through in-licensing agreements with other research institutions and universities.

Our

TheCompany's patent portfolio is directed to: (1)categorized into three major platforms: PlantSpring, BioFactory and other products, and Licensing. Some patents and patent applications are applicable to multiple platforms, and as such are included in multiple categories.

The PlantSpring platform elements of the Company’s patent portfolio is intellectual property used with its PlantSpring platform and includes gene-editing technologies and hemp breeding technologies. This portion of the Company’s patent portfolio includes nearly 150 patents and patent applications worldwide.

The BioFactory and products platform elements of the Company’s patent portfolio includes outputs from its BioFactory, gene editing tools, (2) enabling technologies, (3) product concepts,edited crops, and (4) germplasm.its Plant Cell Matrix, or PCM technology. This portion of the Company’s patent portfolio includes approximately 40 patents and patent applications worldwide.

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The technologies available for licensing within the Company’s patent portfolio includes in-licensed technology and Calyxt-originated IP, and includes gene-editing technologies (e.g., TALEN®), gene-edited traits for agriculture, and hemp breeding technologies. This portion of the Company’s patent portfolio includes approximately 550 patents and patent applications worldwide.

We areThe Company is actively involved in the prosecution and protection of our key technology, which globallyits technology. The Company’s global patent portfolio includes approximately 7068 patent families comprised of approximately 300413 patents and over 100125 patent applications. Of those patents, 3039 have been issued in the U.S.,United States, with the remaining issued in key geographies outside the U.S.,United States, primarily Europe, Japan, and China. This number also includes European patents validated in individual European countries. Of those patent applications, 34approximately 30 are pending in the United States, with the remaining pending as international applications or country-specific applications in key geographies outside the U.S.United States.

Individual patent terms extend for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance, and the legal term of patents in the countries in which they are obtained. The issued patents that we have in-licensedthe Company has licensed in will expire on dates ranging from 20202022 to 2037. If patents are issued on the pending patent applications owned by usthe Company or that we haveit has in-licensed, the resulting patents are projected to expire on dates ranging from 2022 to 2040.2042. The Company does not believe that the expiration of any patents expected to occur during 2022 would have a material effect on the Company’s business, including any impact on its future operations and financial position. For more information regarding the risks related to ourthe Company's intellectual property, please see “Risk Factors—Risks Related to Intellectual Property.”

License Agreement with Cellectis

Through ourits license agreement with Cellectis, we havethe Company has access to intellectual property that broadly covers the use of engineered nucleases for plant gene editing. This intellectual property covers methods to edit plant genes using “chimeric restriction endonucleases,” which include TALEN,^®, CRISPR/Cas9, zinc finger nucleases, and some types of meganucleases. We believeThe Company believes this umbrella intellectual property applies broadly across gene editing in plants and makes usit a key player in the gene editing intellectual property space.

Under ourits license agreement with Cellectis, we havethe Company has exclusive sublicense rights (subject to existing non-exclusive sublicenses to third parties) to intellectual property exclusively licensed to Cellectis from the University of Minnesota in the field of researching, developing, and commercializing agricultural and food products, including traits, seeds, and feed and food ingredients (excluding any application in connection with animals or animal cells). These patent applications cover the use of DNA replicons for gene editing.

We have

The Company has also been granted a non-exclusive license to use the TALEN®TALEN trademark in connection with ourits use of licensed products under the agreement. Any improvements we makeit makes to the in-licensed intellectual property are owned by usthe Company and licensed back to Cellectis on an exclusive basis for any use outside of ourits exclusive agricultural field of use. The exclusivity of ourthe Company's license agreement with Cellectis is subject to certain non-exclusive licenses Cellectis granted to third parties in the field of research.

In consideration for the license from Cellectis, we arethe Company is required to pay to Cellectis, on a product-by-product and country-by-country basis, a royalty of 3three percent of net sales less certain items as defined, including costs for grain and seed of any products that are covered by the patents licensed from Cellectis. In addition, we arethe Company is required to pay Cellectis 30 percent of revenue we receiveit receives for sublicensing ourits rights under the agreement to third parties. OurThe Company's payment obligations to Cellectis will expire upon the expiration of the last-to-expire valid claim of the patents licensed to usthe Company by Cellectis.

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Under ourthe Company's license agreement with Cellectis, and as between the parties, Cellectis has the first right to control the prosecution, maintenance, defense and enforcement of the licensed intellectual property and wethe Company will have the right to step in and assume such control with respect to the patents owned by Cellectis and exclusively licensed to usit under the agreement if Cellectis elects to not prosecute, maintain, defend, or enforce such patents. In certain circumstances, if Cellectis elects to abandon any patents owned by Cellectis and exclusively licensed to usthe Company under the agreement, we haveit has the right to assume ownership of such patents. In addition, some of the intellectual property that is licensed to usthe Company by Cellectis consists of a sublicense of intellectual property originally licensed to Cellectis by the University of Minnesota. OurThe Company's license from Cellectis is subject to the license agreement between the University of Minnesota and Cellectis and should ourits activities under such sublicense violate the license agreement between Cellectis and the University of Minnesota, we arethe Company is responsible for any related damages that Cellectis may incur. In addition, we arethe Company is required to reimburse Cellectis for any payments made by Cellectis to the University of Minnesota pursuant to the license agreement between the University of Minnesota and Cellectis to the extent that such payments are required to be made as a result of ourits applicable activities. Under the license agreement between Cellectis and the University of Minnesota, the University of Minnesota has the first right to control the prosecution and maintenance of the licensed intellectual property.

Our

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The Company's license agreement with Cellectis is perpetual. However, itthe agreement may be terminated at any time upon the mutual written agreement of both parties, either party’s uncured material breach of the agreement, or upon certain bankruptcy and insolvency related events.

License Agreement between Cellectis and Regents of the University of Minnesota—TALEN^®

In January 2011, Cellectis entered into an exclusive license agreement with the University of Minnesota, which was amended in 2012, 2014 and 2015. Pursuant to the agreement, as amended, Cellectis and its affiliates were granted an exclusive, worldwide, royalty-bearing, sublicensable license, under certain patents and patent applications owned by the University of Minnesota, to make, use, sell, import, and otherwise dispose of products covered by the licensed patents, in all fields of use. These licensed patents relate to TALEN molecules and their use in gene editing.

Pursuant to the agreement, with respect to the agricultural field, Cellectis is required to pay to the University of Minnesota a yearly fee, as well as a commercialization fee for every seed variety containing new traits developed using the licensed technology. Cellectis is also required to pay the University of Minnesota milestone payments based on the net sales of licensed products in the agricultural field. Cellectis must also pay the University of Minnesota certain patent-related expenses for prosecuting and maintaining the licensed patents; and under ourthe Company's license agreement with Cellectis, we areit is obligated to reimburse Cellectis for these prosecution costs.

The agreement will expire upon the expiration of the last to expire valid claim of the licensed patents. The University of Minnesota may terminate the agreement upon advance written notice in the event of the insolvency or bankruptcy of Cellectis, and immediately upon written notice if Cellectis challenges the validity or enforceability of any licensed patent in a court or other applicable authority. Cellectis and the University of Minnesota may terminate the agreement by written notice in the event of the other party’s breach that has not been cured within a specified number of days after receiving notice of such breach.

License Agreement between Calyxt and Regents of the University of Minnesota—CRISPRTrademarks

In December 2014, we entered into an exclusive license with the University of Minnesota, pursuant to which we were granted an exclusive, worldwide, sublicensable license under a specified patent application and any patents that issue therefrom owned by the University of Minnesota relating to the use of the CRISPR-Cas9 technology to make use, and commercialize products covered by the licensed patents in any field of use. Pursuant to the terms of the agreement, we must use commercially reasonable efforts to commercialize the licensed technology and to manufacture, offer to sell, and sell licensed products as soon as practicable and to maximize sales. We must also achieve certain sales- and patent-related milestones.

Per the terms of the agreement, we paid the University of Minnesota an upfront license fee. We are also required to pay an annual fee, patent-related expenses for prosecution and maintenance of the licensed patents, and a percentage of any revenues received by us under sublicenses. If we undergo a change of control and wish to assign all our rights and duties under the agreement, we must pay the University of Minnesota a specified transfer fee.

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Unless earlier terminated under the terms of the agreement, the agreement will continue in effect until no licensed patent is active and until no licensed patent application is pending. The University of Minnesota may terminate the agreement for our uncured breach of the agreement upon 90 days’ prior written notice, or 60 days’ prior written notice if the breach relates to our payment obligations under the agreement. The University of Minnesota may also terminate the agreement, upon 10 days’ prior written notice, if we file for bankruptcy or become insolvent. The University of Minnesota may also immediately terminate the agreement if we or our agents or representatives commences or maintains an action in any court or before any governmental agency asserting or alleging the invalidity or unenforceability of the licensed patent rights. We may terminate the agreement for The University of Minnesota’s uncured breach of the agreement upon 90 days’ prior written notice. We may also terminate the agreement at any time upon 60 days’ prior written notice.

Trademarks

As of December 31, 2019, we have four issued2021, the Company had 24 registered trademarks in the United States.

Our Products

In late February 2019, we commercialized our first products, high oleic soybean oil and meal, and began generating revenue from their sale.

High Oleic Soybean

Soybean oil has historically been partially hydrogenated to enhance its oxidative stability in order to increase shelf life and improve frying characteristics. This process creates trans-unsaturated fatty acids, or trans fats, which have been demonstrated to raise low-density lipoprotein (LDL) cholesterol levels and lower high-density lipoprotein (HDL) cholesterol levels. High LDL and low HDL have been tied to increased risk for cardiovascular disease. The discovery that dietary trans fats increase the risk of several adverse health issues led the FDA to rule in 2003 that manufacturers must include trans-fat content information on the “Nutrition Facts” label of foods. In 2015, the FDA banned the addition of partially hydrogenated oils to food products in a phased approach, with full effectiveness commencing January 2020.

Monounsaturated fats, such as oleic acid, have been linked to reducing LDL cholesterol and triglycerides and raising HDL cholesterols. Diets rich in monounsaturated acids are associated with lower fat mass and decreased blood pressure. High levels of oleic acids can be found in olive, canola, sunflower and safflower oils.

We developed a soybean trait that has produced oils with a fatty acid profile that contains 80% oleic acid, 20% less saturated fatty acids compared to commodity soybean oil and zero grams of trans fat per serving.

Oil produced from our high oleic soybean also has multiple desirable characteristics as an ingredient for the food industry. The high level of oleic acid in our soybean oil enhances oxidative stability compared to other premium and commodity oils. This eliminates the need for partial hydrogenation, and thus little to no trans fats are produced during oil production. Furthermore, our high oleic soybean oil offers additional potential benefits, including a threefold increase in fry-life and reduced polymerization upon frying at high temperatures. Our high oleic soybean oil is also neutral in flavor, odorless and colorless and is therefore desired as a food ingredient because it has limited impact on the sensory characteristics of the final food product. Because we require segregation of our soybeans from others in the supply chain, which we refer to as identity preservation, our customers can make traceability statements if they elect to do so. In addition, our high oleic soybean oil requires less fossil fuel to process and transport to customer manufacturing sites than imported premium oils. We are currently targeting sales of our high oleic soybean oil to foodservice, food manufacturing, animal nutrition, and industrial market segments. We are targeting sales of our high oleic soybean meal to dairy, poultry, and pork producers.

Our high oleic soybean seed is sold either directly by us or through distributors to farmers. We introduced a single variety of our high oleic soybean in the northern United States in 2017. This single variety was designed to grow well in parts of South Dakota and Minnesota. In 2019 and 2018 we operated with that single variety as our only seed product. In 2019 we contracted more than 36,000 acres in South Dakota and Minnesota to grow our high oleic soybean. Also in 2019 we completed the processing and sale of all grain harvested from crops grown in 2018 and prior. We also took delivery of the bushels from approximately 30 percent of the acres grown in 2019 In 2018 we contracted more than 17,000 acres in South Dakota and Minnesota to grow our high oleic soybean.

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Our 2020 acreage goal was initially 100,000 acres contracted. As of March 1, 2020, we had exceeded this goal. To drive this acreage expansion, we are planning to launch five new soybean seed varieties for the 2020 planting season. These launches will expand our maturity groups and enable north to south expansion of growers, as well as a move east to Iowa. It will also diversify our weather risk. In 2019 we added three distributors for our seed: Agtegra Cooperative, focused on South Dakota and North Dakota; Landus Cooperative, focused on Iowa; and Central Valley Agriculture, focused on Nebraska and Kansas. These cooperatives will also all assist us with agronomy support, grain storage and transportation. Landus Cooperative is also a key soybean crusher in our supply chain. As a result of this expansion we will have access to distribution in states where over 45% of the total U.S. soybean acres are grown. Going forward, we expect to continue to double our acres annually for each of the next several years. We intend to support continued acreage growth with the launch of three to five new soybean varieties in 2021 and 2022 and adding additional seed distributors and other processors to our portfolio as needed.

We operate an identity-preserved supply chain to segregate our soybeans from field to processor. In 2019 we built a supply chain network by contracting on a toll basis with elevators, processors, refiners and transportation companies. As we move forward, we will work to optimize our supply chain, including where we contract acres, whether and how we transport grain, and what level of toll charges we pay as we scale. We expect these activities will help us improve our product margins on a go-forward basis.

We intend to continue growing, processing, and storing our high oleic soybeans using existing third-party infrastructure and standard industry practices currently used for non-transgenic products. We believe a supply chain of this nature enables us to maintain flexibility and allows us to apply our resources toward maximizing innovation and product development while minimizing our capital expenditures and overhead.

Our Product Pipeline

We identify product concepts from our own research and inbound interest from potential collaborators. We continue to refine our portfolio and seek to take advantage of the largest market opportunities. We categorize our stages of pre-commercial development as follows:

We disclose projects by name that are in Phase II or later in our development process and provide more general information about our earlier projects.

We are currently exploring product opportunities in alfalfa, canola, hemp, oats, peanuts, peas, potato, soybeans, wheat, and other crops. In the future, we expect to expand our product pipeline to include other crops.

As of December 31, 2019, we had a total of 15 products or product candidates, comprised of one commercial product, three product candidates in Phase 2, and eleven product candidates in Phase I or Discovery. We continue to evaluate additional product concepts as part of our development process and innovation efforts. We expect to launch at least six product candidates from now through 2024, including our hemp product candidate in 2020, our alfalfa product in 2021 through our collaboration with S&W, our high fiber wheat product candidate as early as 2022, and three additional product candidates either via our integrated business model or in collaboration with third parties.

As of December 31, 2018, we had six product candidates in our development funnel.

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A summary of our pipeline at December 31, 2019 is as follows:

Improved Digestibility Alfalfa

Alfalfa is a key feedstock in the production of milk from dairy cattle. The dairy industry is a significant producer of greenhouse gas and user of water. Dairy herds also produce substantial amounts of solid waste. Our alfalfa is designed to enable those producers to reduce their footprint in all three areas. We developed an alfalfa that has reduced lignin content in the stem of the plant, enabling it to be more digestible by livestock. Because the alfalfa is more digestible, fewer cows are needed to produce the same quantity of milk, potentially reducing the aggregate amount of water consumed and waste produced. We developed this product in collaboration with S&W Seed (S&W) (NASDAQ: SNSW) and expect it to launch in 2021 following the completion of field trials, testing and any voluntary regulatory consultations. Pursuant to our collaboration agreement, we are negotiating the commercial terms with S&W and expect to receive ongoing royalties from S&W’s sales of alfalfa seed.

High Fiber Wheat

Fiber is the indigestible portion of food that is essential for healthy digestion. Research has shown that fiber plays an important role in maintaining bowel health, lowering cholesterol, stabilizing blood glucose levels and controlling weight gain. In recent years, the awareness of the health benefits of high fiber diets has increased. This has translated to a strong growth in demand for high fiber food products, with approximately 35% of grocery shoppers now seeking high fiber foods.

We are developing our high fiber wheat product candidate that could be used to produce white flour with up to three times more dietary fiber than standard white flour while maintaining the same flavor and convenience of use. This product candidate is currently in Phase II of our development process. In March 2018 we received confirmation from USDA that our high fiber wheat is deemed non-regulated pursuant to APHIS’s regulatory procedures. We began planting high fiber wheat in field trials in 2018 and continued testing in 2019. During the first quarter of 2020, we were notified that a significant portion of our high fiber wheat plants were damaged in field trials due to improper aerial chemical applications by unaffiliated third parties. While we are continuing to assess the impact of this damage on the overall development process and timeline for this product candidate, we expect to harvest the remaining field trial crop in spring 2020 and continue Phase II development in 2020.  Our Phase II development activities in 2020 will include testing the product concept in field conditions, completing food application studies and voluntarily consulting with FDA. Depending on the results of the spring 2020 field trial crop harvest and the success of our other activities in Phase II and Phase III, our high fiber wheat product may launch as early as 2022.

Cold Storable Potato

A portion of potatoes harvested each fall are cold stored to reduce sprouting and extend postharvest shelf life. During cold storage, reducing sugars can accumulate in the potatoes and when cooked at temperatures above 250°F, the reducing sugars interact with free amino acids resulting in brown, bitter‐tasting products and elevated levels of acrylamide. The National Toxicology Program and the International Agency for Research on Cancer considers acrylamide a ‘probable’ human carcinogen. 

We have inactivated the enzyme responsible for the degradation of sugars in the tuber, thus reducing both the sweetening of cold-stored potatoes and the creation of acrylamide during frying.

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This product candidate is currently in Phase II of our development process. In August 2014 we received confirmation from USDA that our cold storable potato was deemed non-regulated pursuant to APHIS’s regulatory procedures. We have previously validated the effectiveness of our cold-storable potatoes in the greenhouse and across multi-location field trials. We are currently seeking a partner to further the commercialization process for this product candidate.

Government Regulation and Product Compliance

Gene editing is a relatively newThe Company’s PlantSpring technology platform and its BioFactory production system operate in contained environments without the regulatory schemes around the worldneed for outdoor cropping systems. Any regulated materials used under this process, such as specific bacteria, are continuingtherefore subject to evolve in how countries regulate gene edited crops and food products. We currently sell our high oleic soybean productswell-defined regulations in the United States.

The Company’s development and production processes involve the use, generation, handling, storage, transportation and disposal of hazardous chemicals and regulated biological materials. The Company is subject to a variety of federal, state, and local laws, regulations and permit requirements governing the use, generation, manufacture, transportation, storage, handling and disposal of these materials in the United States. In the future, to the extent the Company may operate or sell its products outside the United States, the Company would be subject to corresponding international laws and regulations. These laws, regulations and permits can require expensive fees, exposure or pollution control equipment or operational changes to limit actual or potential impact of the Company’s technology on the environment and violation of these laws could result in significant fines, civil sanctions, permit revocation or costs from environmental remediation. Future developments, including the commencement of or changes in the processes relating to commercial manufacturing of one or more of the Company’s products, more stringent environmental regulation, policies and enforcement, the implementation of new laws and regulations or the discovery of unknown environmental conditions, may require expenditures that could have a material adverse effect on the Company’s business, results of operations or financial condition.

Hemp, as defined in the 2018 Farm Bill as Cannabis sativa containing a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis, has been removed from the United States Federal Controlled Substances Act and is legally distinct from marijuana/cannabis, which is Cannabis sativa containing a THC concentration of more than 0.3 percent on a dry weight basis. Hemp is recognized as an identity-preservedagricultural crop by the United States federal government. Federal and state laws and regulations on hemp address production, monitoring, manufacturing, distribution, and laboratory testing to ensure that that the hemp has a THC concentration of not more than 0.3 percent on a dry weight basis. Federal laws and regulations also address the transportation or shipment of hemp or hemp products.

Consistent with the 2018 Farm Bill, the Minnesota Department of Agriculture (MDA) operates a Hemp Program under its United States Department of Agriculture (USDA) approved Minnesota state plan. This plan establishes that a commercial hemp production license is required for growing and processing of hemp in the State of Minnesota. The Company holds an MDA Hemp Program License and has implemented an internal hemp compliance system including procedures, quality control and internal audits. USDA and/or MDA may audit the Company at any time for compliance with license requirements.

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Additionally, Calyxt has obtained USDA permits for specific regulated materials (e.g., bacteria) that are used as part of its PlantSpring technology platform and BioFactory production system. We do notThe Company has implemented the required compliance system in order to meet USDA permit conditions and ensure adequate documentation is in place. The USDA may audit the Company at any time for compliance with permit requirements.

The BioFactory production system has the capability of producing a diverse range of plant-derived compounds that may be used for applications in cosmeceuticals, nutraceuticals, pharmaceuticals, and more. As the Company delivers these valuable compounds to its customers, each customer will be responsible for determining for which applications the compounds are utilized and such customer-determined specific uses will determine applicable regulatory requirements. It is anticipated that because the Company's customers would incorporate the purchased compounds into their existing product development processes and areas of applications, the customers will be best positioned to apply their specific expertise in the field to establish regulatory compliance and determine any additional requirements.

The Company also expects to continue to license its technology and develop seed traits for agricultural customers based on their needs. This would include the use of gene editing in crops for outdoor use. Neither the Company, nor its commercial partners, currently sell our high oleic soybean productsdeploy the Company's technology for use outside of the United States.States with the exception of the Company’s High Oleic Soybean product, which in addition to having clearance from the USDA and FDA, also has clearance from the Canadian Food Inspection Agency and Health Canada for use in Canada. In today’s global market, overall business development strategy for plant biology companies depends, in part, on the availability of regulatory clearance in strategic export markets, which enables broader flexibility for product expansion and is a key consideration in evaluating global trade opportunities. Regulatory predictability is critical in order to establish accurate product launch strategies. The costs of achieving clearance in foreign countries is often high, due to stricter regulatory environments than the United States, and the European Union are the two leading jurisdictions, with distinct regulatory regimes applying different rules and requirements.

United States

In the United States, the Environmental Protection Agency (EPA), the U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA) are primarily responsible for overseeing agriculture and food regulation and safety. Biotechnology is regulated in the United States under the “Coordinated Framework for Biotechnology”.

Biotechnology products are subject to EPA regulatory review if they contain plant-incorporated protectants, which refer to pesticides (such as insecticides) produced in plants. As our product candidates do not contain any plant-incorporated protectors, our product candidates are not subject to regulatory review by the EPA.

Under the Plant Protection Act (PPA), the USDA requires anyone who wishes to import, transport interstate, or plant a regulated article to apply for a permit or notify the Animal and Plant Health Inspection Service (APHIS) that the introduction will be made. Regulated articles are defined in the Code of Federal Regulations (CFR) 7 CFR Part 340.1 as “any organism which has been altered or produced through genetic engineering which USDA determines is a plant pest or has reason to believe is a plant pest.” If APHIS determines the product to be regulated, the product may be subject to extensive regulation, including permitting requirements for import, handling, interstate movement, release into the environment, and inspections.

In the last six years, we submitted petitions to APHIS for seven of our product candidates and received confirmation from APHIS that it does not consider any of the seven to be regulated articles under the Plant Protection Act. The seven product candidates include our high oleic soybean, high fiber wheat, improved digestibility alfalfa, and cold storable potato. The remaining three submissions were for product candidates for which we are either pursuing derivatives or no longer pursuing at this time. Therethere can be no guaranteeassurance the Company will be granted clearance on favorable terms, if at all.

Under the Company’s partner-driven model, agricultural customers would likely be contractually responsible for obtaining the needed global regulatory clearance for agricultural products developed by the Company or using its licensed technology. Accordingly, outside of the timing or success in obtaining nonregulated status from APHIS for our other crops or that the governing regulations will not change.

The FDA has oversight of food safety and security pursuant the Food, Drug, and Cosmetic Act, or FDCA and is primarily carried out by its Center for Food Safety and Applied Nutrition. The FDA regulates ingredients, packaging, and labeling of foods, including nutrition and health claims and the nutrition facts panel. Foods are typically not subject to premarket review and approval requirements, with limited exceptions.

The FDA offers a voluntary consultation process to determine whether foods derived from new plant varieties including genetically modified plant varieties require premarket review and approval. Developers routinely consult with the FDA prior to marketing and, in most cases, foods derived from plant varieties developed with biotechnology are not subjected to premarket review and approval processes.

We have completed voluntary consultation with the FDA for our high oleic soybean. After review, the FDA had no further questions concerning human food ingredients or animal food derived from our high oleic soybean.

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European Union

If we want to market and sell our productspermitting expenses incurred in the European Union (the EU), we would only do so once theyordinary course of business, the Company does not expect compliance with government regulations, including environmental regulations, to have gained appropriate regulatory clearance. The procedures for evaluation and authorization of GMOs are established by Regulation (EC) 1829/2003 on genetically modified food and feed and Directive 2001/18/ECa material effect on the release of GMOs into the environment. An application for authorization must be submitted under Directive 2001/18/EC if a company seeks to release GMOs for experimental purposes (e.g., field tests) and/Company’s capital expenditures, earnings, or to sell GMOs, as such or in products, in the market (e.g., cultivation, importation or processing). In turn, an application for authorization must be submitted under Regulation (EC) 1829/2003 if a company seeks to sell GMOs in the market for food and feed use and/or food and feed products containing or produced from GMOs. At the national level, EU member states can restrict or prohibit GMO cultivation in their territories by invoking grounds such as environmental or agricultural policy objectives, town and country-planning, land use, coexistence, socio-economic impacts or public policy.competitive position.

In addition, Directive 2001/18/EC, Regulation (EC) 1829/2003 and Regulation (EC) 1830/2003 establish specific labeling and traceability requirements for GMOs and products that contain or are produced from GMOs. Finally, Directives 2002/53/EC and 2002/55/EC require genetically modified varieties to be authorized before they can be included in a Common Catalogue of Varieties, which would permit the seeds of such genetically modified varieties to be marketed in the EU.Competition

A ruling of the European Court of Justice (ECJ) in July 2018 clarified that only mutagenesis techniques which (a) have been used in several applications and (b) have a long safety record, can be exempted from these requirements. EU member states remain free to subject even such exempted organisms to the obligations under Directive 2001/18/EC, or to other obligations. The impact of this ruling on, and the ultimate treatment by the EU of, products produced using other advanced plant breeding techniques is not yet known and the final determination could have a negative impact on our business.

Competition

The market for plant-based technologymore sustainably produced products is highly competitive, and we facethe Company faces significant direct and indirect competition in several aspects of ourits business. Competition for improving plant genetics comesin synthetic biology is largely from conventional and advanced plant breeding techniques, as well as fromfermentation-based companies who generally pursue the development of genetically modified traits. Other potentially competitive sources of improvement in crop yields include improvements in crop protection chemicals, fertilizer formulations, farm mechanization, other biotechnology,compounds by combining a single cell organism like a microbe, bacteria, or yeast with another organism’s DNA to achieve a desired result. These compounds are then marketed by third parties or directly by the fermentation company. These organizations may have substantially larger budgets for R&D, product commercialization, and informationregulatory process management. Programs to improve genetics and chemistry are generally concentrated within a relatively small number of large companies, while non-genetic approaches are underway with a broader set of companies. Additionally, competition for providing more nutritious ingredients for food companies come from chemical-based ingredients, additives and substitutes, which are developed by various companies.

In general, we believeThrough its technology licensing, the Company believes that we faceit faces competition from both large agricultural biotechnology, seed, and chemical companies, certain of which have been actively involved in new trait discovery, development, and commercialization, and from specialty food ingredient companies, which are generally focused on providing solutions to the food industry through chemical, synthetic or other methods.commercialization. Many of ourthe Company's competitors—particularly large chemical companies—have substantially larger budgets for research and development (R&D),R&D, product commercialization, and regulatory process management than we do.

We also face competition from traitmanagement. Trait research and development companies as well as agricultural research universities and institutions. Given the global importance of agriculture, there are several companies, research universities and institutions are competitors that specialize in R&D of agricultural yield and product quality traits. Because these competitors typically focus on a limited number of traits and do not generally have the product development, gene-editinggene editing technologies, and regulatory infrastructure necessary to bring traits to market, theymarket. They generally out-license trait technologies to large industry players with in-house development and regulatory capabilities at a relatively early stage of development.

We believeThe Company believes that the primary competitive factors in the food industry are product development, product quality, performance, scale, price, and compliance with food safety standards. We believe that weit can compete favorably based on ourits expertise and the precision, specificity, cost effectiveness and development speed of ourits proprietary technologies. Nevertheless, certain of the Company’s competitors are more established in the synthetic biology industry and many of ourthe Company's current or potential competitors, either alone or with their R&D or collaboration partners, have significantly greater financial resources and expertise in R&D, manufacturing, testing, and marketing approved products than we do.the Company.

OurThe Company's commercial opportunity could be reduced or eliminated if ourits competitors develop and commercialize products faster, with lower research costs or with more desirable traits than we can.the Company.

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Research and DevelopmentHuman Capital

Our

As of December 31, 2021, the Company had 55 employees, 36 of whom were in R&D. The Company's multidisciplinary R&D team has technical expertiseincludes experts in molecular biology,AIML, biochemistry, bioinformatics, chemistry, genetics and genetic engineering, molecular biology, plant physiology, and plant breeding. Our R&D activities are conducted principally at our Minnesota facility and we also conduct breeding activities through third parties in the United States and its territories and South America. We have made, and will continue to make, substantial investments in R&D. We incurred R&D expenses of $12.2 million in the year ended December 31, 2019, $10.4 million in the year ended December 31, 2018, and $11.5 million in the year ended December 31, 2017.

Employees

As of December 31, 2019, we employed 75 employees, 37 of whom are in R&D. Our multidisciplinary team includes experts in biology, chemistry, plant genetics, agronomy, data science,tissue culture techniques, and other related fields. As pioneers in the field of gene editing for plants, members of our management team have invented TALEN^®, oneNone of the premier gene-editing tools. None of ourCompany's employees are represented by a labor union or covered by a collective bargaining agreement. We consider ourThe Company considers its relationship with our employees to be good.

Information

The Company's employees are a critical asset. The Company believes that a critical component to its success depends on its ability to attract, develop, and retain key personnel. Recognizing the core importance of its personnel, the Company attracts and retains human capital by providing competitive wages and benefits, providing support to employees by promoting health and safety, providing training and development that builds technical and professional skills, and adhering to its code of conduct and business ethics and labor policy at all levels.

In accordance with the Company's COVID-19 Preparedness Plan, Minnesota executive order requirements, and guidelines promoted by the Centers for Disease Control and Prevention, the Company implemented health and safety measures for the protection of its onsite workers, maintained remote work arrangements for its non-laboratory personnel, and implemented, as necessary, appropriate self-quarantine precautions for potentially affected laboratory personnel. In addition, the Company supported employees impacted by COVID-19 related school and childcare restrictions by offering flexible work arrangements and generous paid leave for those sick with COVID-19. On May 28, 2021, nearly all Minnesota COVID-19 restrictions came to an end, including all capacity limits and distancing requirements - both indoors and outdoors. The Company's non-laboratory personnel returned to working onsite in July 2021. For additional information on the impact of the COVID-19 pandemic to the Company, please see “Risk Factors—Risks Related to the Business and Operations.”

The Company values and celebrates the diversity of its employee base and provides regular opportunities to learn about Segmentcontributions of various ethnic and Geographic Revenueminority groups on the culture and achievements of the United States, including scientific advancements.

We operate

Human capital management strategies are developed collectively by senior management and are overseen by the Board of Directors. The Company is committed to efforts that ensure that the workplace is respectful, equitable, ethical, and fosters an inclusive work environment across its workforce. This commitment has been reinforced through required diversity and inclusion trainings for all employees.

Seasonality

The BioFactory production system is expected to be able to produce compounds year-round in a single segmentcontrolled environment bioreactor, limiting the impact of seasonality that exists with traditional agriculture.

The Company maintains the capability to implement broad arrangements for technology licensing and geography. Accordingly, no additional segment or geographic information is being presented.product development for agriculture. Technology licensing opportunities span the Company’s intellectual property portfolio built over more than a decade as a leading plant-based biology company, including multiple gene editing platforms, plant breeding, and other capabilities. The Company may be exposed to the impact of seasonality that exits with traditional agriculture depending on the arrangement.

Corporate Information

We wereThe Company incorporated in Delaware on January 8, 2010, and ourits majority stockholder is Cellectis S.A. (société anonyme). OurThe Company's principal executive offices are located at 2800 Mount Ridge Road, Roseville, MN 55113, United States of America, and ourits telephone number is +1 (651) 683-2807. WeThe Company also maintainmaintains a website at www.calyxt.com.www.calyxt.com. The information contained in, or that can be accessed through, ourits website is not part of this report.

Available Information

We fileThe Company files or furnishfurnishes periodic reports and amendments thereto, including ourits Annual Reports on Form 10-K, ourits Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, proxy statements, and other information with the Securities and Exchange Commission (SEC). On ourthe Company's website located at www.calyxt.com, youinvestors can obtain, free of charge, this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all our other filings with the SEC as soon as reasonably practicable after weit electronically filefiles or furnish such information with the SEC. Information contained on ourthe Company's website is not incorporated into this Annual Report on Form 10-K. In addition, the SEC maintains a website that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC. The website can be accessed at www.sec.gov.www.sec.gov.

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Item 1A. Risk Factors.

This section includes a discussion of what we believethe Company believes to be the most significant importantmaterial factors that make an investment in the Company speculative or risky and that could affect ourits business, operating results, financial condition, and the trading price of ourthe Company’s common stock. The risks described below are not the only risks we face.the Company faces. Additional risks and uncertainties not currently known to us,the Company, or that wethe Company currently deemdeems to be immaterial, may occur or become material in the future. You should carefully consider these risk factors in connection with Part 2, Item 7, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations,” the consolidated financials and the other information in this Annual Report.

Risks Related to Ourthe Business and its Operations

We

The Company’s operational and financial success depends on its ability to successfully deliver synthetic biology solutions for an expanded group of end markets, which is subject to a variety of risks and uncertainties.

Since the Company’s inception, it has deployed its technology platform toward delivering plant-based innovations and solutions, primarily to the agriculture end market. In October 2021, the Company announced a strategic initiative to focus it on engineering plant-based synthetic biology solutions across an expanded group of end markets, including its initial target end-markets—the cosmeceutical, nutraceutical, and pharmaceutical markets—as well as other potential end markets, including advanced materials and chemical industries, in addition to the agriculture end market. This expanded and diversified focus places significant demands on the Company’s management, requires adaptations to its operational infrastructure, and necessitates incremental capital expenditures. If the Company fails to effectively and efficiently manage and implement the strategic initiative, its business, financial condition, and results of operations would be adversely impacted. The Company would face similar adverse impacts if it is unable to differentiate its offerings and capabilities from competitors in the synthetic biology industry, who may have a more established position in the synthetic biology industry, greater financial and operational resources, and other competitive advantages, or if the Company is otherwise not successful in marketing its offerings and capabilities to new target customers.

In addition, to the extent the Company faces technological and other challenges, including unanticipated costs or delays in the development of compounds intended to be produced using the BioFactory production system, challenges adapting its technology platform for specific customer-driven plant-based chemistry needs, or the inability to effectively or efficiently scale production, its business, financial condition and results of operations would be adversely impacted.

The AIML capabilities that the Company is developing for its PlantSpring platform remain in the early stages of development, and their implementation and effectiveness could be adversely affected by flawed algorithms, insufficient datasets, or errors resulting from human intervention. Further, the BioFactory production system and the Company’s ability to produce plant-based chemistries remain relatively unproven and may not be successful at scale or at all.

The market, including customers and potential investors, may be skeptical of the viability and benefits of the Company’s PlantSpring technology platform, its AIML capabilities, and its BioFactory production system because they are based on a novel approach and the adoption of complex and emerging technologies. There can be no assurance that the Company’s technology will be understood, approved, or accepted by customers, regulators, and potential investors or that the Company will be able to sell its services and products profitably at competitive prices and with features sufficient to establish demand. If potential investors are skeptical of the Company’s technology, its ability to raise capital and the value of its common stock may be adversely affected.

Moreover, because of the novelty and complexity of the PlantSpring platform and BioFactory production system, achieving broad commercial success may require that the Company overcomes potential customer skepticism regarding its capabilities, particularly in light of the historical challenges of scaling production in the field of synthetic biology. If the Company does not achieve the technical specifications required by its customers or successfully manage new product development processes, or if development work is not performed according to schedule, then its revenue growth from new pipeline products may be prevented or delayed, and its business and operating results may be harmed.

In order for novel products from the PlantSpring technology platform and its BioFactory production system to be successfully commercialized, it will be important for the Company to establish relationships not only with customers, but also with their suppliers in order to gain visibility into market trends, feature and specification demands, and manufacturing, regulatory, and distribution challenges. If the Company is unable to convince potential customers or their suppliers of the value of its synthetic biology products, it will not be successful in entering these markets and its business and results of operations will be adversely affected.

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The Company has a limited operating history, which makes it difficult to evaluate ourits current business and prospects and may increase the risk of investment.an investment in the Company.

We are

The Company is an early-stage biotechnologysynthetic biology company with a limited operating history that to date has been focused primarily on R&D conducting field trials, pursuing initial commercialization efforts and building our management team. its previous go-to-market strategies. The Company's limited operating history may make it difficult to evaluate its current business and prospects. The Company’s operating results for periods prior to October 2021 reflect results under its prior go-to-market strategies, which involved different areas of focus, different cost structures, and different sources of revenues, which, in combination with its limited operating history, may make it difficult to evaluate its current business and prospects.

In implementing the Company’s current strategic focus on the development of plant-based synthetic biology products, it will encounter risks and difficulties frequently experienced by companies in rapidly developing and changing emergent industries, including challenges in developing products, determining appropriate investments of its limited resources, capital raising, and gaining customers for its novel products and innovations.

Investment in plant-based technologysynthetic biology product development is a highly speculative endeavor. It entails substantialsignificant upfront R&D investment to scale the BioFactory production system to sufficient levels to support commercialization, and there is significant risk that wethe Company will not be able to editscale the genesBioFactory to these levels, or at all.

To commercialize its products, the Company must be successful in using its PCMs to produce target molecules at commercial scale and at a particular plantcommercially viable cost. If the Company cannot achieve commercial scale production levels or commercially viable production economics for enough products to expresssupport its business plan, including through establishing and maintaining sufficient commercial scale and volume, it will be unable to achieve a desired trait, or, once edited, wesustainable business. The Company’s commercial scale production costs depend on many factors that could have a negative effect on its ability to sell products developed for customers at competitive prices, including its ability to establish and maintain sufficient commercial scale and volume to attract third party contract manufacturing, referred to as infrastructure partners. There can be no assurance that the Company will not be able to replicate that trait across entire crops in orderengage infrastructure partners on acceptable terms, including reasonable costs per unit of production, or at all.

If the Company is unable to commercialize the product candidate. Moreover, the regulatory pathway for our product candidates canachieve these economies of scale and targeted unit commercial production, its revenues, profitability, and financial condition will be uncertain and could add significantadversely affected.

The Company’s ability to continue as a going concern will depend on its ability to obtain additional cost and time to development. Although we achieved commercialization in the first quarter of 2019, we have not yet generated significant revenue from sales of these products.

Our limited operating history may make it difficult to evaluate our current business and our prospects. We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly developing and changing industries, such as the plant-based technology industry, including challenges in forecasting accuracy, determining appropriate investments of our limited resources, gaining market acceptance of the products made using our gene-editing platform, managing a complex regulatory landscape and developing new product candidates. We may also face challenges in scaling our supply chain in a cost-effective manner, as we will rely on contracting with seed production companies, seed distributors, farmers, crushers, millers, refiners, and logistics and transportation providers, in order to get our products to market. Our current operating model may require changes for us to scale our operations efficiently. Wefinancing which may not be ableavailable on acceptable terms or at all. Failure to fully implementobtain this necessary capital when needed may force it to delay, limit or execute on our business strategyterminate its product development efforts or realize, in whole or in part within our expected time frames, the anticipated benefits of our growth strategies. You should consider our business and prospects considering the risks and difficulties we face as an early-stage company focused on developing products in the field of plant-based technology industry.other operations.

We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the next several years.

Our net losses for the years ended December 31 were $39.6 million for 2019, $27.9 million for 2018 and $26.0 million for 2017. As of December 31, 2019, we2021, the Company had an accumulated deficit$14.4 million of $122.1 million. Although we began generating revenuecash, cash equivalents, and restricted cash. The Company’s restricted cash is associated with its equipment financing leases and was $0.6 million as of December 31, 2021, with $0.5 million scheduled to be returned in December 2022. Current liabilities were $4.9 million as of December 31, 2021, and the first quarterCompany used $18.8 million of 2019 from salescash for operating activities for the year then ended.

On February 23, 2022 (the February 2022 Offering), the Company issued 3,880,000 shares of our high oleic soybean products, we expectits common stock, pre-funded warrants to purchase up to 3,880,000 shares of its common stock, and common warrants to purchase up to 7,760,000 shares of its common stock. In the aggregate, the Company received net proceeds of $10.0 million, after deducting approximately $0.9 million of underwriting discounts and estimated other offering expenses.

The Company has incurred losses since its inception and anticipates that it will continue to incur significant expenses and operatinggenerate losses for the next several years. The amountOver the longer term and until the Company can generate cash flows sufficient to support its operating capital requirements, it expects to finance a portion of our future losses will depend,cash needs through (i) cash on hand, (ii) commercialization activities, which may result in part, on ourvarious types of revenue associated withstreams from (a) future product development agreements and technology licenses, including upfront and milestone payments, annual license fees, and royalties; and (b) product sales from its proprietary BioFactory production system; (iii) government or other third-party funding, which the Company expects to be more readily available if Cellectis were to own less than 50 percent of our high oleic soybean products and expenses associated with our commercial operations, the expense associated with and timingCompany’s common stock, (iv) public or private equity or debt financings, or (v) a combination of introduction ofthe foregoing. However, additional products from our pipeline of product candidates, expenses associated with acquisition or in-licensing of technologies, and the revenue associated with future products or licensed technologies. We do not expect commercial launches of our improved digestibility alfalfa product candidate before 2021 or our high fiber wheat product candidate before 2022.

The net losses we incur may fluctuate significantly from year-to-year and quarter-to-quarter, such that a period-to-period comparison of our results of operationscapital may not be available on reasonable terms, if at all.

For example, based on the Company’s public float, as of the date of the filing of this Annual Report, the Company is only permitted to utilize a good indication“shelf” registration statement, including the registration statement under which the Company’s Open Market Sale AgreementSM with Jefferies LLC (the ATM Facility), is operated, subject to Instruction I.B.6 to Form S-3, which is referred to as the “baby shelf” rules. For so long as the Company's public float is less than $75,000,000, it may not sell more than the equivalent of our future performance.one-third of its public float during any 12 consecutive months pursuant to the baby shelf rules. Although alternative public and private transaction

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structures are expected to be available, these may require additional time and cost, may impose operational restrictions on the Company, and may not be available on attractive terms.

The Company’s ability to continue as a going concern will depend on its ability to obtain additional public or private equity or debt financing, obtain government or private grants and other similar types of funding, attain further operating efficiencies, reduce or contain expenditures, and, ultimately, to generate increasesrevenue. The Company’s cash, cash equivalents, and restricted cash as of December 31, 2021, considering its plan to continue to invest in our revenues, successfully commercialize other product candidates or generate revenuethe growth and scaling of its BioFactory production system and AIML capabilities and the $10.0 million of net proceeds from licensing or attain a level of profitable operations. Based on our history of losses, we do not expect that we will be ablethe February 2022 Offering, is sufficient to fund our longer-term capital and liquidity needs through our cash balances and operating cash flow alone. To fund our longer-term capital and liquidity needs, we expect weits operations into late 2022. The Company’s management has concluded there is substantial doubt regarding its ability to continue as a going concern because it anticipates that it will need to secureraise additional capital. Ourcapital to support this business plan for a period of 12 months or more from the date of this filing.

If the Company is unable to raise additional capital in a sufficient amount or on acceptable terms, management may be required to implement various cost reduction and financing needs are subjectother cash-focused measures to change depending on, among other things,manage liquidity and the successCompany may have to significantly delay, scale back, or cease operations, in part or in full. If the Company raises additional funds through the issuance of our effortsadditional debt or equity securities, it could result in dilution to grow revenueits existing stockholders and our effortsincreased fixed payment obligations, and these securities may have rights senior to continue to effectively manage expenses.those of the Company's shares of common stock. Any of these events could significantly harm the Company's business, financial condition, and prospects.

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We faceThe Company faces significant competition and many of ourits competitors have substantially greater financial, technical, and other resources than we do.Calyxt.

The market for plant-based technology products developed with synthetic biology is highly competitive, and we facethe Company faces significant direct and indirect competition in several aspects of ourits business. See “Item 1. Business – Competition.”Competition”. Mergers and acquisitions in the plant science, specialty food ingredient and agricultural biotechnology, seed and chemical industries may result in even more resources being concentrated among a smaller number of our competitors. MostMany of these competitors have substantially greater financial, technical, marketing, sales, distribution, and other resources than we do, such as largerthe Company.Many competitors engage in ongoing R&D, staff, more experienced marketing and manufacturing organizations and more well-established sales forces.technological developments by its competitors could render the Company's technology less competitive or obsolete, resulting in reduced revenues compared to expectations. As a result, wethe Company may be unable to compete successfully against ourits current or future competitors, which may result in price reductions in revenue, reduced margins, and the inability to achieve market acceptance for ourits products. We expectThe Company expects to continue to face significant competition.

The synthetic biology industry is still emerging and is characterized by rapid and significant technological changes, frequent new product introductions and enhancements, and evolving industry demands and standards. The Company’s future success will depend on its ability to sign and initiate commercial programs using its customer demand-driven approach to selecting compounds for development and scaling the production of those compounds in its BioFactory production system. Once commercial scale production occurs those customers will need to purchase the compound and integrate it into their business. The Company’s development activity needs to occur on a timely and cost-effective basis, and it will need to continue to advance its technology. Additionally, the Company’s customers may face significant competition in the markets in which we intend to commercialize our products.or other risks that may adversely impacttheirbusiness and results of operations.

Many of our competitors engage in ongoing R&D, and technological developments by our competitors could render our products less competitive or obsolete, resulting in reduced sales compared to our expectations. Our

The Company's ability to compete effectively and to achieve commercial success also depends, in part, on ourits ability to: control manufacturingto identify and marketing costs; effectively priceattract customers who contract with it to develop products for use in their production and market our products; successfully develop an effective marketing program and an efficient supply chain; develop new productscontracting with properties attractive to customers; and commercialize our products quickly without incurring major regulatory costs. Wethose same third parties for the commercialization of those products. The Company may not be successful in achieving these factors and any such failure may adversely affect ourits business, results of operations and financial condition. Due to the lead time involved in developing a product for a customer using the Company’s platform, its potential customers will be required to make a number of assumptions and estimates regarding the commercial feasibility of the plant-based chemistry, including assumptions and estimates regarding the demand for those end-products and processes that will utilize the plant-based chemistry developed with the Company’s technology, the existence or non-existence of products being simultaneously developed by competitors, potential market penetration and obsolescence, whether planned or unplanned. As a result, it is possible that the Company may reach an agreement with a customer who wishes to develop a product that has been displaced by the time of launch, addresses a market that no longer exists or is smaller than previously thought, that end-consumers do not like or otherwise is not competitive at the time of launch, in each case, after the incurrence of significant opportunity costs by the Company to develop such a product.

From time to time, certain seed and chemical companies that are potential competitors of oursthird parties who may seek new traits or trait development technologies andhave competed in the agriculture end market once pursued by the Company may seek to license ourits technology. We have,The Company has, in the past, entered such licensing arrangements and may continue to enter such arrangements in the future. Some of these companies may have significantly greater financial resources and may even compete with our business. In suchcertain circumstances, competitors who license the Company’s technology could use ourthose technologies to develop their own products that would compete with our products.products commercialized by the Company's agriculturally focused collaboration partners, which may impact its future royalties.

We

The Company also anticipateanticipates increased competition in the future as new companies enter the market and new technologies become available, particularly in the area of gene editing. Ouravailable. The Company's technology may be rendered obsolete or uneconomical by technological advances or entirely different

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approaches developed by one or more of ourits competitors that are more effective or that enable them to develop and commercialize products more quickly or with lower expense than we arethe Company is able to. At the same time, the expiration of patents covering existing productstechnologies reduces the barriers to entry for competitors. If for any reason ourthe Company's technology becomes obsolete or uneconomical relative to our competitors’ technologies, this would prevent or limit ourits ability to generate revenues from the commercialization of ourits products.

Our

If the Company cannot enter into new customer partnerships and successfully execute on the underlying product development projects to bring a customer’s plant-based chemistry to commercial scale production and ultimately sell them the product, its business activities are currently conducted atwill be adversely affected.

The Company's approach to product development is customer demand-driven and as a limitedresult, its success depends on the number, size, and scope of locations, which makes us susceptiblecustomer collaborations. The Company's ability to damage orwin new business disruptions caused by natural disasters or acts of vandalism.

Our current headquarters and R&D facilities, which include an office, labs, greenhouses, field testing acreage, and a demonstration test kitchen, are in Roseville, Minnesota. Our seed production takes place primarilydepends on many factors, including its reputation in the United Statesmarket, the differentiation of its PlantSpring technology platform and BioFactory production system relative to alternatives, the pricing and efficiency of its offerings relative to alternatives, its financial stability, and its territoriestechnical capabilities. If the Company fails to establish a position of strength in any of these factors, its ability to either sign new customer agreements may suffer and this could adversely affect its prospects.

The Company engages in conversations about collaborations with contra season production also occurringpotential customers regularly. The Company may spend considerable time and money engaging in Argentina. Third party warehousing for seed storage,these conversations and our limited numberfeasibility assessments, including understanding the technical specifications of processing partners (e.g. storage, transportation, crushersa particular plant-based chemistry, customer concerns and refiners) are all located inlimitations, and the Upper Midwest regionlegal or regulatory landscape of the United States. We take precautions to safeguard our facilities, including insurance, health and safety protocols, and off-site storage of critical research results and computer data. Particularly in the case of insurance, our insurancea potential program or offering, which may not cover certain losses, or our lossesresult in a commercial agreement. Even if an agreement is reached, the resulting relationship may exceed our coverage limits. A natural disaster, such as a hurricane, drought, fire, flood, tornado, earthquake, or other intentional or negligent acts,not be successful for many reasons, including acts of vandalism, could damage or destroy our equipment, inventory, development projects, field trials or data, and cause usthe Company's inability to incur significant additional expenses to repair or replace the damaged physical facilities, which in the case of seed production may be the result of years of development work that is not easily or quickly reproduced, and increasecomplete the development schedule for our pipeline of product candidates.a plant-based chemistry to the customers’ specifications or within the customers’ time frames, or unsuccessful development or commercialization of products or processes by its customers. In such circumstances, the Company's revenues from such an agreement might be meaningfully reduced.

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To compete effectively, we must introduce new products that achieve market acceptance.

In order to remain competitive and increase revenue, we must introduce new products from our pipeline of product candidates. If we fail to anticipate or respond to technological developments, market requirements, or consumer preferences, or if we are significantly delayed in developing and introducing products, our revenues will not increase.

Development of successful agricultural products using gene-editing technologies requires significant levels of investment in R&D, including laboratory, greenhouse and field testing, to demonstrate product effectiveness and can take several years or more. We incurred R&D expenses, including non-cash stock compensation expenses, of $12.2 million in the year ended December 31, 2019, $10.4 million in the year ended December 31, 2018, and $11.5 million in the year ended December 31, 2017. We must commit significant resources and may incur obligations (such as royalty obligations or milestone fees) to develop new products before knowing whether our investments will result in products the market will accept and without knowing the levels of revenue, if any, that may be derived from these products.

Development of new or improved agriculturalplant-based synthetic biology products that meet customer demand-driven specifications involves risks of failure inherent in the developmentdeployment of products based on innovative and complex emerging technologies. These risks include the possibility that:

Accordingly, if wethe Company or its infrastructure partners experience any significant delays in the development or introduction of new products or if our new products do not achieve market acceptance, ourmeet customer specifications, its business, operating results, and financial condition would be adversely affected.

Any collaboration arrangements that we may enter in the future may not be successful, which could adversely affect our ability

The Company intends to develop and commercialize our product candidates.

We may seek collaboration arrangements with third parties for the development or commercialization of our product candidates depending on the merits of retaining commercialization rights for ourselves as compared to entering collaboration arrangements. We will face, to the extent that we decide to enter collaboration arrangements, significant competition in seeking appropriate partners. Moreover, collaboration arrangements are complex and time-consuming to negotiate, document, implement and maintain. We may not be successful in our efforts to establish and implement collaboration or other alternative arrangements should we so chose to enter such arrangements. The terms of any collaborations or other arrangements that we may establish may not be favorable to us.

The success of our collaboration arrangements will depend heavily on the efforts and activities of our partners. Collaborations are subject to numerous risks, which may include that:

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If ongoing or future field trials are unsuccessful, we may be unable to complete the development of product candidates on a timely basis or at all.

We rely on field trials to demonstrate the efficacy of product candidates that we develop and evaluate in greenhouse conditions. Field trials allow us to test product candidates in the field as well as to increase seed production, and to measure performance across multiple geographies and conditions. Successful completion of field trials is critical to the success of our product development efforts. If our ongoing or future field trials are unsuccessful or produce inconsistent results or unanticipated adverse effects on the agronomic performance of our crops, or if the field trials do not produce reliable data, our product development efforts could be delayed, subject to additional regulatory review or abandoned entirely. In addition, in order to support our commercialization efforts, it is necessary to collect data across multiple growing seasons and from different geographies. Even in cases where initial field trials are successful, we cannot be certain that additional field trials conducted on a greater number of acres or in different geographies will also be successful. Many factors that are beyond our control may adversely affect the success of these field trials, including unique geographic conditions, weather and climatic variations, disease or pests, or acts of protest or vandalism. Field trials, which may take up to two to three years, are costly, and any field trial failures that we may experience may not be covered by insurance and, therefore, could result in increased costs, which may negatively impact our business and results of operations. During the first quarter of 2020, we were notified that a significant portion of our high fiber wheat plants were lost in field trials due to improper aerial chemical applications by unaffiliated third parties. While we are continuing to assess the impact of this loss on the overall development process and timeline, we expect to harvest the remaining field trial crop in spring 2020 and continue Phase II development in 2020. Our Phase II development activities in 2020 will include testing the product concept in field conditions, completing food application studies and voluntarily consulting with FDA. Depending on the results of the spring 2020 field trial crop harvest and the success of our other activities in Phase II and Phase III, our high fiber wheat product may launch as early as 2022.

We rely on third parties to conduct, monitor, support, and oversee field trialsfor at-scale BioFactory production and other research services, for product candidates in development, and any performance issues by such third parties, or ourthe Company's inability to engage third parties on acceptable terms, may impact ourthe Company's ability to successfully commercialize such product candidates.meet its commercial obligations.

We currently rely on third parties, such as growers, consultants, contractors

The Company’s current plan is to contract with third-party infrastructure partners for at-scale BioFactory production and universities,for other R&D services. Although the Company intends to conduct, monitor, supportprovide for audit and/or inspection rights and oversee these field trials. In some cases, these field trials are conducted outside ofwill provide the United States, making it difficult for us to monitor the work being conducted by the third parties that we engage. Although we provide our third-party contractorsinfrastructure partners with protocols regarding the production and handing of our product candidates, weits plant-based chemistries, it will have limited control over the execution of field trials.their activities. Poor field trial execution, or data collection, failure to follow required agronomic practices, protocols or regulatory requirements, or mishandling of product candidatesthe plant-based chemistry by these third partiesinfrastructure partners could impair success, delay production, cause the success of our field trials. Any such failures may result in delays inCompany to incur incremental costs, or damage the development of our product candidates or the incurrence of additional costs. customer relationship.

Even if our third-party contractorsthe Company’s infrastructure partners adhere to our suggested protocols, field trialsproduction runs and other R&D activities may fail to succeed for a variety of other reasons, including weather, disease or pests, improper timing of planting our seeds, or incorrect fertilizer use.reasons. Ultimately, we remainthe Company remains responsible for ensuring that each of our field trialswork performed is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance on third partiesinfrastructure partners does not relieve usthe Company of ourits responsibilities. Should such third partiesthese infrastructure partners fail to comply with these standards, ourthe Company’s ability to develop our product candidatesplant-based chemistries in accordance with customer specifications or in a timely manner could be adversely impacted.

Additionally, if we arethe Company is unable to maintain or enter into agreements with third-party contractorsinfrastructure partners on acceptable terms, or if engagement is terminated prematurely, weit may be unable to conduct or complete our field trialsresearch, development, and production in the manner we anticipate. anticipated manner. For example, establishing and operating infrastructure partner facilities may require the Company to make significant capital expenditures, which reduces its cash and places such capital at risk. Also, infrastructure partner agreements may contain terms that commit the Company to pay for other costs and amounts incurred or expected to be earned by the plant operators and owners, which can result in contractual liability and losses for it even if it terminates a particular infrastructure partner arrangement or decides to reduce or stop production under such an arrangement. Further, the Company cannot be sure that contract manufacturers will be available when it needs their services, that they will be willing to dedicate a portion of their capacity to its projects, or that it will be able to reach acceptable price, delivery, and other terms with the infrastructure partners for the provision of their production services.

If ourthe Company’s relationship with any of these third-party contractorsinfrastructure partners is terminated, weit may be unable to enter arrangements with alternative contractorsinfrastructure partners on commercially reasonable terms, or at all. Switching or adding third-party contractorsinfrastructure partners can involve

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substantial cost and require extensive management time and focus. In addition, there is a natural transition period when any new third partyinfrastructure partner commences field trial work. As a result, delays may occur, which could materially impact ourthe Company’s ability to meet our desired development timelines.timelines, its achievement of product-related revenues, and profitability.

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TableIf the Company’s technology licensees are delayed or unsuccessful in their development activities associated with their license of Contentsthe technology, its financial results could be affected.

The successfulCompany expects to license its technology and its historically developed seed-trait product candidates for traditional agriculture to third parties. If the Company’s licensees are delayed, are unsuccessful in their development and commercialization efforts, or if they fail to devote sufficient time and resources to support the marketing and selling efforts of our products depends on our abilitydeveloped using the licenses of the Company’s technology, it may not receive milestone and/or royalty payments as expected, and its financial results could be harmed. Further, if these licensee customers fail to produce high-quality plantsmarket the licensed seed-trait products or products developed with the Company’s licensed technology at prices that will achieve or sustain market acceptance for those products, its future royalty revenues could be further harmed. If a product is commercialized by a licensee, its performance may also be impact by numerous risks, including competition from alternative products, product defects, changes in end-consumer demand, changes in law or regulation, or changes in economic conditions. Moreover, licensees have significant discretion in determining the efforts and seeds cost-effectively onresources applied to commercializing products utilizing the plant-based chemistries developed by the Company, and they may not commit sufficient resources to successfully advance a large scaleproduct candidate or achieve commercial success. Disputes may arise with licensees that cause the delay or termination of commercial contracts for current or future products or that results in costly litigation or arbitration that diverts management attention and to accurately forecast demand for our products, and weresources.

Any outdoor agriculture product development agreements that the Company may enter in the future may be unable to do so.

The production of commercial-scale quantities of seeds requires the multiplication of the plantsdelayed or seeds through a succession of plantings and seed harvests. The cost-effective production of high-quality, high-volume quantities of any product candidates we successfully develop depends on our ability to scale our production processes to produce plants and seeds in enough quantity to meet demand. For example, food ingredients such as soybean oil and wheat flour will require optimized production and commercialization of the underlying plant and seed harvests. We cannot assure that our existing or future seed production techniques will enable us to meet our large-scale production goals cost-effectively for the products in our pipeline. Even if we are successful in developing ways to increase yields and enhance quality, we may not be able to do so cost-effectively or on a timely basis,unsuccessful, which could adversely affect ourits financial results.

The Company may opportunistically enter into product development arrangements with third parties for the development and commercialization of certain outdoor agriculture seed traits. For example, in the third quarter of 2021, the Company announced that it had entered into a research collaboration with a global food ingredient manufacturer based in Asia to develop an improved soybean capable of producing an oil as a commercial alternative to palm oil.

To the extent the Company enters into such product development agreements, their success will depend heavily on the efforts and activities of its customer’s commercialization efforts and as a result its ability to achieve profitability.milestone payments or generate royalties will not be within its direct control. If we are unable to maintain or enhance the quality of our plantsan outdoor agriculture product is commercialized by a licensee, its performance may also be impacted by numerous risks, including:

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For example, there are third-party verification organizations that withhold non-GMO certification from products developed using gene editing technology, including a product that does not contain any foreign DNA, such as our high oleic soybean. Such a position means that some non-GMO seals or labels are not available for gene edited products, including our high oleic soybean products. This has limited our ability to demand non-GMO premiums for our high oleic soybean meal.

If we are sued for defective products and if such lawsuits were determined adversely, we could beThe Company is subject to substantial damages, for which insurance coverage is not available.

We may be held liable if any product we develop, or any product that uses or incorporates any of our technologies, is found unsuitable during marketing, sale or consumption. For example, the detection of an unintended trait in a commercial seed variety or the crops and products produced may result in governmental actions such as mandated crop destruction, product recalls or environmental cleanup or monitoring. Concerns about seed quality could also lead to additional regulations being imposed on our business, such as regulationsvarious risks related to testing procedures, mandatory governmental reviewspublic health crises, including the COVID-19 pandemic, that could have material and adverse impacts on its business, financial condition, liquidity, and results of biotechnology advances, or additional regulations relating to the integrityoperations.

Any outbreaks of the food supply chain from the farm to the finished product.

We may need to raise additional funding, which may not be available on acceptable terms or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts orcontagious diseases and other operations.

As of December 31, 2019, we had cash and cash equivalents of $58.6 million. We believe our cash and cash equivalents will be enough to fund our operations into mid-2021.

Our business plan is to complete the development and regulatory processes for our product candidates and commercialize additional product candidates. Based on our history of losses, we do not expect that we will be able to fund our longer-term capital and liquidity needs to execute our business plan and pursue our strategic goals through our cash balances and operating cash flow alone. To fund our longer-term capital and liquidity needs, we expect we will need to secure additional capital. Our business plan and financing needs are subject to change depending on, among other things, success of our product development efforts, our revenue and our efforts to continue to effectively manage expenses. If we are ultimately unable to generate sufficient revenue to meet our financial targets, become profitable and have sustainable positive cash flows, we may be required to further reduce expenses, whichadverse public health developments could have a further negative effectmaterial and adverse impact on our ability to generate revenue, or we may be required to raise additional capital more quickly than we expect or we may need more capital than we expect.

We may obtain future additional financing by incurring indebtedness or from an offeringthe Company’s business, financial condition, liquidity, and results of our equity or convertible securities or both. Tooperations. As has occurred with the extent that we raise additional capital through the sale of additional equity or convertible securities, current ownership interests will be diluted, and new investors may demand rights, preferences or privileges senior to those of existing holders of common stock. Debt financing, if available, would result in increased fixed payment obligations andCOVID-19 pandemic, a portion of our operating cash flows, if any, being dedicatedglobal pandemic could cause significant disruption to the payment of principal and interest on such indebtedness. In addition, debt financing may involve agreements that include restrictive covenants that impose operating restrictions, such as restrictions on the incurrence of additional debt, the making of certain capital expenditures or the declaration of dividends. If we raise capitalglobal economy, including in the future, we cannot assure you that additional capital will be available in the amount or at the time we need it, or that it will be available on acceptable terms or at all. If we are unable to obtain sufficient funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or product candidate development programs or the commercialization of any product candidate or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, operating results and prospects and cause the price of the common stock to decline.

Risks Related to Our Industry

The overall agricultural industry is susceptible to commodity price changes and we are exposed to market risks from changes in commodity prices.

Changes in the prices of commodities products could result in higher overall cost along the agricultural supply chain, which may negatively affect our ability to commercialize our products. We will be susceptible to changes in costs in the agricultural industry as a result of factors beyond our control, such as general economic conditions, seasonal fluctuations, weather conditions, demand, food safety concerns, product recalls and government regulations. As a result, we may not be able to anticipate or react to changing costs by adjusting our practices, which could cause our operating results to deteriorate. While we manage our exposure to changing commodity prices underlying sales contracts and supply agreements for grain and seed production by entering into commodity derivative transactions, those activities may not provide full mitigation of our exposure to changes in commodity prices, and as a result our results of operations and financial condition may be affected. See Item 7A “Quantitative and Qualitative Disclosures About Market Risk”.

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Adverse weather conditions, natural disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business.

A farmer’s ability to grow our products is vulnerable to adverse weather conditions, including windstorms, floods, drought and temperature extremes, which are quite common but difficult to predict, the effects of which may be influenced and intensified by ongoing global climate change. Unfavorable growing conditions can reduce both crop size and crop quality. This risk is particularly acute with respect to the Upper Midwest region of the United Statesregions in which we, currently source our high oleic soybean grain. In extreme cases, entire harvests may be lost in some geographic areas. Such adverse conditions can result in harvesting delaysthe Company’s suppliers, infrastructure partners, and customers do business. A regional epidemic or loss of crops for farmersglobal pandemic and cause usefforts to be delayed, or to fail entirely in delivering product to customers, resulting in loss of revenue. Furthermore,manage it, including those by governmental authorities, could have significant fluctuations in market prices for agricultural inputsimpacts on national and cropsglobal financial markets, and could also have an adverse effecta significant, negative impact on the pricesCompany’s and the Company’s customers’ operating results. Disruptions could include partial shutdowns of our products.

the Company’s facilities as mandated by government decree, significant travel restrictions, “work-from-home” orders, limited availability of the Company’s workforce, supplier constraints, supply chain interruptions, logistics challenges and limitations, and reduced demand from customers. The abilityCOVID-19 pandemic has had, and could continue to grow our products is also vulnerable to crop disease and to pests, which may vary in severity and effect, dependinghave, these effects on the stage of production at the time of infection or infestation, the type of treatment applied, climatic conditionseconomy and the risks associated with ongoing global climate change. Company’s business.

The costsextent to control diseasewhich the COVID-19 pandemic will continue to impact the Company’s business going forward will be dependent on future developments such as the length and other infestations vary depending on the severity of the damagecrisis, the potential resurgence of the crisis, variant strains of the virus, vaccine

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availability and effectiveness, future government actions in response to the crisis and the extentoverall impact of the plantings affected. Moreover, there can be no assurance that available technologies to control such infestations will continue to be effective. These infestations can also increase costs, decrease revenuesCOVID-19 pandemic on the global economy and lead to additional charges to earnings,capital markets, among many other factors, all of which may have a material adverse effect on our business, financial position and results of operations.

Risks Related to Regulatory and Legal Matters

The regulatory environment in the United States for our current and future products isremain highly uncertain and evolving.

Changes in applicable regulatory requirementsunpredictable. This unpredictability could result in a substantial increase inlimit the time and costs associated with developing our products and negatively impact our operating results. While the USDA and FDA currently have petition processes that we have successfully completed in the past, these processes and the manner in which the USDA and FDA interpret their own regulations may change in the future, negatively impacting our speed to market and cost to launch product candidates. We cannot predict whether advocacy groups will challenge existing regulations and USDA or FDA determinations or whether the USDA or FDA will alter the manner in which it interprets its own regulations or institutes new regulations, or otherwise modifies regulations in a way that will subject our products to more burdensome standards, thereby substantially increasing the time and costs associated with developing our product candidates.

Additionally, we are currently exploring product opportunities in hemp, among other crops. Hemp is legally distinct from marijuana and recognized as an agricultural crop by the United States government. Federal and state laws and regulations on hemp address production, monitoring, manufacturing, distribution, and laboratory testing to ensure that that the hemp has a THC concentration of not more than 0.3% on a dry weight basis. Federal laws and regulations may also address the transportation or shipment of hemp or hemp products. As we continue to explore hemp as a product candidate, we may become subject to increasing regulation particular to hemp, which could require us to incur additional costs associated with compliance requirements.

The regulatory environment outside the United States varies greatly from jurisdiction to jurisdiction and there is less certainty how our products will be regulated.

The regulatory environment around gene editing in plants for food ingredients is greatly uncertain outside of the United States and varies greatly from jurisdiction to jurisdiction. Each jurisdiction may have its own regulatory framework regarding genetically modified foods, which may include restrictions and regulations on planting and growing genetically modified plants and in the consumption and labeling of genetically modified foods, and which may encapsulate our products. To the extent regulatory frameworks outside of the United States are not receptive to our gene-editing technologies, this may limit ourCompany’s ability to expand intorespond to future developments quickly. Additionally, the impacts described above and other impacts of a global markets.pandemic, including the COVID-19 pandemic and responses to it, could substantially increase the risk to the Company from the other risks described in this Item 1A, "Risk Factors".

Complying with the regulatory requirements outside the United States will be costly and time-consuming, and there is no guarantee we will be able to commercialize our products outside the United States.

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We cannot predict whether or when any jurisdiction will change its regulations with respect to our products. Advocacy groups have engaged in publicity campaigns and filed lawsuits in various countries against companies and regulatory authorities, seeking to halt regulatory approval or clearance activities or influence public opinion against genetically engineered and/or gene-edited products. In addition, governmental reaction to negative publicity concerning our products could result in greater regulation of genetic research and derivative products or regulatory costs that render our products cost prohibitive,

The scale of the commodity food industry may make it difficult to monitor and control the distribution of our products. As a result, our products may be sold inadvertently within jurisdictions where they are not approved for distribution. Such sales may lead to regulatory challenges or lawsuits against us, which could result in significant expenses and management attention.

Government policies and regulations, particularly those affecting the agricultural sector and related industries, could adversely affect our operations and profitability.

Agricultural production and trade flows are subject to government policies and regulations. Governmental policies and approvals of technologies affecting the agricultural industry, such as taxes, tariffs, duties, subsidies, incentives and import and export restrictions on agricultural commodities and commodity products can influence the planting of certain crops, the location and size of crop production, and the volume and types of imports and exports. Future government policies in the United States or in other countries may discourage our customers from using our products or encourage the use of products more advantageous to our competitors, which would put us at a commercial disadvantage and could negatively impact our future revenues and results of operations.

We may use biological materials in our business and are subject to numerous environmental, health and safety laws and regulations. Compliance with such laws and regulations and any claims relating to improper handling, storage or disposal of these materials could be time consuming and costly.

We are subject to numerous federal, state, local and foreign environmental, health and safety laws and regulations, including those governing laboratory procedures, the handling, use, storage, treatment, manufacture and disposal of hazardous materials and wastes, discharge of pollutants into the environment and human health and safety matters. Our R&D processes involve the controlled use of hazardous materials, including biological materials. We may be sued for any injury or contamination that results from our use or the use by third parties of these materials, or may otherwise be required to remediate such contamination, and our liability may exceed any insurance coverage and our total assets. Compliance with environmental, health and safety laws and regulations may be expensive and may impair our R&D efforts. If we fail to comply with these requirements, we could incur substantial costs and liabilities, including civil or criminal fines and penalties, clean-up costs or capital expenditures for control equipment or operational changes necessary to achieve and maintain compliance. In addition, we cannot predict the impact on our business of new or amended environmental, health and safety laws or regulations or any changes in the way existing and future laws and regulations are interpreted and enforced. These current or future laws and regulations may impair our research, development or production efforts or result in increased expense of compliance. 

Risks Related to Intellectual Property

We license a significant portion of our intellectual property from Cellectis, our majority stockholder, and the University of Minnesota, and principally rely upon Cellectis to prosecute and defend such intellectual property.

Our business relies heavily on the intellectual property we license from Cellectis and the University of Minnesota. If we do not comply with our obligations under the license agreements, we may be subject to damages, which may be significant, and in some cases Cellectis and/or the University of Minnesota may have the right to terminate the license agreement. Any termination of our license agreement with Cellectis or the University of Minnesota would have a material adverse effect on our business and results of operations.

Moreover, any enforcement of the licensed intellectual property could subject it to challenge by third parties and if any such challenge is successful, such intellectual property could be narrowed in scope or held to be invalid or unenforceable, which would materially impair any competitive advantage afforded to us by such intellectual property. There can be no assurance that Cellectis or the University of Minnesota will prosecute and maintain such intellectual property in the best interests of our business or at all, and, if Cellectis or the University of Minnesota fails to properly prosecute and maintain such intellectual property, we could lose our rights to such intellectual property, which would materially impair any competitive advantage afforded to us by such intellectual property. For more information regarding our license agreement with Cellectis or the license agreement between Cellectis and the University of Minnesota, please see “Business—Intellectual Property.”

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Patents and patent applications involve highly complex legal and factual questions, which, if determined adversely to us,the Company, could negatively impact ourits competitive position.

The patent positions of biotechnology companies and other actors in ourthe Company’s fields of business can be highly uncertain and involve complex scientific, legal, and factual analyses. The interpretation and breadth of claims allowed in some patents covering biological compositions may be uncertain and difficult to determine and are often affected materially by the facts and circumstances that pertain to the patented compositions and the related patent claims. The standards of the United States Patent and Trademark Office, or USPTO, and foreign patent offices are sometimes uncertain and could change in the future. Consequently, the issuance and scope of patents cannot be predicted with certainty. Patents, if issued, may be challenged, invalidated, narrowed, or circumvented. United States patents and patent applications may also be subject to interference proceedings, and United States patents may be subject to reexamination proceedings, post-grant review, inter partes review, or other administrative proceedings in the USPTO. Foreign patents as well may be subject to opposition or comparable proceedings in corresponding foreign patent offices. Challenges to ourthe Company or ourits licensors’ patents and patent applications, if successful, may result in the denial of ourit or ourits licensors’ patent applications or the loss or reduction in their scope. In addition, defending against such interference, reexamination, post-grant review, inter partes review, opposition proceedings and other administrative proceedingschallenges may be costly and involve the diversion of significant management time. Accordingly, rights under any of ourthe Company or ourits licensors’ patents may not provide usit with enough protection against competitive products or processes and any loss, denial, or reduction in scope of any of such patents and patent applications may have a material adverse effect on ourits business.

Even if not challenged, ourthe Company or ourits licensors’ patents and patent applications may not adequately protect ourits product candidates or technology or prevent others from designing their products or technology to avoid being covered by ourthe Company or ourits licensors’ patent claims. If the breadth or strength of protection provided by the patents we ownthe Company owns or license with respect to our product candidateslicenses is threatened, it could dissuade companies from partnering with usit to develop, and could threaten ourthe ability to successfully commercialize, ourthe Company’s product candidates. Furthermore, for United States patent applications in which claims are entitled to a priority date before March 16, 2013, an interference proceeding can be provoked by a third party

If the Company or instituted by the USPTO in order to determine who was the first to invent any of the subject matter covered by such patent claims.

In addition, changes in, or different interpretations of, patent laws in the United States and other countries may permit others to use our discoveries or to develop and commercialize our technology and products without providing any notice or compensation to us, or may limit the scope of patent protection that we or our licensors are able to obtain. The laws of some countries do not protect intellectual property rights to the same extent as United States laws and those countries may lack adequate rules and procedures for defending our intellectual property rights.

If we or ourits licensors fail to obtain and maintain patent protection and trade secret protection of ourits product candidates and technology, weit could lose our competitive advantage and competition we facethe Company faces would increase, reducing any potential revenues and have a material adverse effect on ourits business.

We

The Company will not seek to protect ourits intellectual property rights in all jurisdictions throughout the world and weit may not be able to adequately enforce ourits intellectual property rights even in the jurisdictions where we seekit seeks protection.

Filing, prosecuting, and defending patents on our product candidates in all countries and jurisdictions throughout the world would be prohibitively expensive. Patent protection must be sought on a country-by-country basis, which is an expensive and ourtime-consuming process with uncertain outcomes. The Company’s intellectual property rights in some countries outside the United States could be less extensive than those in the United States, assuming that rights are obtained in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, wethe Company may not be able to prevent third parties from practicing ourits inventions in all countries outside the United States, or from selling or importing products made using ourits inventions in and into the United States or other jurisdictions.

Competitors may use ourthe Company’s technologies in jurisdictions where weit or ourits licensors do not pursue and obtain patent protection to develop their own products and further,protection. Further, competitors may export otherwise infringing products to territories where wethe Company or ourits licensors have patent protection, but where the ability to enforce our or our licensors’those patent rights is not as strong as in the United States. These products may compete with ourthe Company’s products and ourits intellectual property rights and such rights may not be effective or enough to prevent such competition.

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TableIn addition, changes in, or different interpretations of, Contents

patent laws in the United States and other countries may permit others to use the Company’s discoveries or to develop and commercialize its technology and products without providing any notice or compensation or may limit the scope of patent protection that the Company or its licensors are able to obtain. The laws of some foreign countries do not protect intellectual property rights to the same extent as United States laws and those countries may lack adequate rules and procedures for defending the laws ofCompany’s intellectual property rights.

Furthermore, proceedings to enforce the United States. Patent protection must be sought on a country-by-country basis, which is an expensiveCompany’s licensors’ and time-consuming process with uncertain outcomes. Accordingly, we and our licensors may choose not to seekits patent protection in certain countries, and we will not have the benefit of patent protection in such countries. In addition, the legal systems of some countries, particularly developing countries, do not favor the enforcement of patentsrights and other intellectual property protection, especially those relatingrights in foreign jurisdictions could result in substantial costs and divert its efforts and attention from other aspects of its business, could put the Company or its licensors’ patents at risk of being invalidated or interpreted narrowly, could put it or its licensors’ patent applications at risk of not issuing and could provoke third parties to biotechnologies.assert claims against it or its licensors. The requirements for patentability differ from country to country,Company may not prevail in any lawsuits that

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initiates, and the laws of some foreign countries do not protect intellectual property rights, including trade secrets, to the same extent as federal and state laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. These realities may make it difficult for us to stop the infringement, misappropriationdamages or other violation of our intellectual property rights. Many foreign countries, includingremedies awarded to it, if any, may not be commercially meaningful, while the EU countries, have compulsory licensing laws under which a patent owner must grant licensesdamages and other remedies the Company may be ordered to third parties. In addition, many countries limit the enforceability of patents againstpay such third parties including government agencies or government contractors. In these countries, patents may provide limited or no benefit. In those countries, webe significant. Accordingly, the Company’s licensors and our licensors may have limited remedies if patents are infringed or if we or our licensors are compelled to grant a license to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our and our licensors’its efforts to enforce its intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we ownit develops or license. Similarly, if our trade secrets are disclosed in a foreign jurisdiction, competitors worldwide could have access to our proprietary information, and we may be without satisfactory recourse. Such disclosure could have a material adverse effect on our business. Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.licenses.

Furthermore, proceedings to enforce our licensors’ and our patent rights and other intellectual property rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our or our licensors’ patents at risk of being invalidated or interpreted narrowly, could put our or our licensors’ patent applications at risk of not issuing and could provoke third parties to assert claims against us or our licensors. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded to us, if any, may not be commercially meaningful, while the damages and other remedies we may be ordered to pay such third parties may be significant. Accordingly, our licensors’ and our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Third parties may assert rights to inventions we developthe Company develops or otherwise regardregards as ourits own.

Third parties may in the future make claims challenging the inventorship or ownership of ourthe Company or ourits licensors’ intellectual property. We haveThe Company has written agreements with R&D partners that provide for the ownership of intellectual property arising from our strategic alliances. Thesethe relationship. Some agreements provide that wethe Company must negotiate certain commercial rights with such partners with respect to joint inventions or inventions made by our partners that arise from the results of the strategic alliance. In some instances, thereat a later date and others may not be adequate written provisions toinclude or clearly address clearly the allocation of intellectual property rights that may arise fromrights. If the respective alliance. If weCompany cannot successfully negotiate sufficient ownership and commercial rights to the inventions that result from ourthe Company’s use of a third-party partner’s materials, when required, or if disputes otherwise arise with respect to the intellectual property developed through the use of a partner’s samples, wethe Company may be limited in ourits ability to capitalize on the full market potential of these inventions. In addition, wethe Company may face claims by third parties that ourits agreements with employees, contractors, or consultants obligating them to assign intellectual property to usit are ineffective or are in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual property we have developed or will develop and could interfere with our ability to capture the full commercial value of such inventions.assignment. Litigation may be necessary to resolve an ownership dispute, and if we arethe Company is not successful, weit may be precluded from using certain intellectual property and associated products and technology, or may lose our rights in that intellectual property. Either outcomewhich could have a material adverse effect on ourits business.

In addition, the research resulting in certain of ourthe Company’s in-licensed patent rights and technology was funded in part by the United States government. As a result, the United States government has certain rights to such patent rights and technology, which include march-in rights. When new technologies are developed with government funding, the government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the government to use the invention or to have others use the invention on its behalf. The government can exercise its march-in rights if it determines that action is necessary because we failthe Company fails to achieve practical application of the government-funded technology, or because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations, or to give preference to the United States industry. Any exercise by the government of any of the foregoing rights could have a material adverse effect on ourthe Company’s business.

Any infringement, misappropriation, or other violation by usthe Company of intellectual property rights of others may prevent or delay ourits product development efforts and may prevent or increase the costs of our successfully commercializing our product candidates, if approved.successful commercialization by the Company, its customers or its licensees.

Our

The Company’s success will depend in part on ourits ability to operate without infringing, misappropriating, or otherwise violating the intellectual property and proprietary rights of third parties. WeThe Company cannot assure that ourits business operations, products developed, historically developed agriculture-focused product candidates, and methods and the business operations, products, product candidates and methods of our partnersits customers or licensees do not or will not infringe, misappropriate, or otherwise violate the patents or other intellectual property rights of third parties.

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The biotechnology industry is characterized by extensive litigation regarding patents and other intellectual property rights. Other parties may allege that ourthe Company’s product development activities, products, product candidates or the use of ourits technologies infringe, misappropriate, or otherwise violate patent claims or other intellectual property rights held by them or that we areit is employing their proprietary technology without authorization. Patent and other types of intellectual property litigation can involve complex factual and legal questions, and their outcome is uncertain. Any claim relating to intellectual property infringement that is successfully asserted against usthe Company may require usit to pay substantial damages, including treble damages and attorneys’ fees if weit or ourits partners are found to be willfully infringing another party’s patents, for past use of the asserted intellectual property and royalties and other consideration going forward if we arethe Company is forced to take a license. Such a license may not be available on commercially reasonable terms, or at all. Even if we werethe Company was able to obtain a license, it could be non-exclusive, thereby giving ourits competitors access to the same intellectual property rights or technologies licensed to us.the Company. In addition, if any such claim were successfully asserted against usthe Company and weit could not obtain a license, wethe Company or ourits partners may be forced to stop or delay developing, manufacturing, selling or otherwise commercializing ourits products, product candidates or other infringing technology, or those we developit develops with ourits R&D partners.

Even if we arethe Company is successful in these proceedings, weit may incur substantial costs and divert management time and attention pursuing these proceedings, which could have a material adverse effect on us.the organization. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of ourthe Company’s confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of ourthe Company’s common stock. Such litigation or proceedings could

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substantially increase ourthe Company’s operating losses and reduce the resources available for development activities or any future sales, marketing, or distribution activities. If we arethe Company is unable to avoid infringing the patent rights of others, weit may be required to seek a license, defend an infringement action, or challenge the validity of the patents in court, or redesign ourits products. Patent litigation is costly and time consuming. WeThe Company may not have enough resources to bring these actions to a successful conclusion. In addition, intellectual property litigation or claims could force us to do one or more of the following:

Any of these risks coming to fruition could have a material adverse effect on ourthe Company’s business, results of operations, financial condition, and prospects.

We

The Company may be unsuccessful in developing, licensing, or acquiring intellectual property that may be required to develop and commercialize ourits product candidates.

Our

The Company’s programs may involve additional product candidates that may require the use of intellectual property or proprietary rights held by third parties; the growth of ourits business may depend in part on ourits ability to acquire, in-license or use these intellectual property and proprietary rights. However, wethe Company may be unable to acquire or in-license any third-party intellectual property or proprietary rights that may be key to development. Even if wethe Company can acquire or in-license such rights, weit may be unable to do so on commercially reasonable terms. The licensing and acquisition of third-party intellectual property and proprietary rights is a competitive area, and several more established companies are also pursuing strategies to license or acquire third-party intellectual property and proprietary rights that wethe Company may consider attractive or necessary. These established companies may have a competitive advantage over usthe Company due to their size, capital resources and agricultural development and commercialization capabilities.

We sometimes partner

In connection with academic institutions to accelerate our research or development under written agreements with these institutions. Typically, these institutions provide us with an option to negotiate a license to anyhis appointment as chair of the institution’s rights in technology resultingScientific Advisory Board, Dr. Dan Voytas is no longer the Company’s Chief Science Officer, a position he held from the strategic alliance. Regardless of such option, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to us, and the institution may license such intellectual property rights to third parties, potentially blocking our ability to pursue our development and commercialization plans.

Further, ourCompany’s founding in January 2010 through February 2021. The consulting agreement with Dr. Voytas, while he served as Chief Science Officer, and the current engagement letter with Dr. Voytas, as chair of the Scientific Advisory Board, each generally obligates Dr. Voytas to assign to usthe Company any intellectual property solely or jointly conceived, developed or reduced to practice by him in the course of the performance of his services to us.the Company. However, we dothe Company does not have any rights, including any assignment or right of first refusal rights, to intellectual property conceived, developed, or reduced to practice by Dr. Voytas outside the course of the performance of his services to us,the Company, including in connection with his employment at the University of Minnesota.

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In addition, companies that perceive usthe Company to be a competitor may be unwilling to assign or license intellectual property and proprietary rights to us. Wethe Company. The Company also may be unable to license or acquire third-party intellectual property and proprietary rights on terms that would allow usit to make an appropriate return on ourits investment or at all. If we arethe Company is unable to successfully acquire or in-license rights to required third-party intellectual property and proprietary rights or maintain the existing intellectual property and proprietary rights we have, wethe Company has, it may have to cease development of the relevant program, product, or product candidate, which could have a material adverse effect on ourits business.

Risks Related

The Company licenses a portion of its intellectual property from Cellectis, its majority stockholder, and the University of Minnesota.

The Company relies on the intellectual property it licenses from Cellectis and the University of Minnesota. If it does not comply with obligations under the license agreements, it may be subject to Our Organizationdamages, which may be significant, and Operation

We will needin some cases Cellectis and/or the University of Minnesota may have the right to develop and expand our company, and we may encounter difficulties in managing this development and expansion, which could disrupt our operations.

As of December 31, 2019, we had 75 employees. Effective withterminate the endlicense agreement. Any termination of the third quarter of 2019, we have internalized nearly all the management services Cellectis previously provided pursuant to our management servicesCompany’s license agreement with Cellectis. We expect to increase our numberCellectis or the University of employees and the scope and location of our operations as we continue to internally develop the managerial, operational and financial systems necessary to operate as a standalone company and to recruit and train additional qualified personnel to conduct our commercial operations that began in late February 2019 with the first sales of our high oleic soybean products and to further develop our pipeline of product candidates. Members of our management team may need to divert a disproportionate amount of their attention away from their day-to-day activities and devote a substantial amount of time to managing these development activities. If our management is unable to effectively manage our expected development and expansion, our expenses may increase more than expected, our ability to generate or increase our revenue could be reduced and we may not be able to execute our business strategy. Our future financial performance and our ability to commercialize our product candidates, if approved, and compete effectively will depend, in part, on our ability to effectively manage the future development and expansion of our company.

We depend on key management personnel and attracting and retaining other qualified personnel, and our business could be harmed if we lose key management personnel or cannot attract and retain other qualified personnel.

Our success depends to a significant degree upon the technical skills and continued service of certain members of our management and other key employees. Additionally, Dr. Dan Voytas, our Chief Science Officer, works for us as a consultant pursuant to a consulting agreement under which he is required to work 10 days per month with us. Accordingly, we may, from time to time, compete with Dr. Voytas’ other professional activities for his time and attention. The loss of the services of our management or key employees or Dr. Voytas may delay or prevent the timely and successful execution of our business strategies and objectives. Additionally, the majority of our personnel is involved in research, development, and regulatory activities and competition for these highly skilled employees is intense. Our business is therefore dependent on our ability to recruit and maintain a highly skilled and educated workforce with expertise in a range of disciplines, including biology, biochemistry, plant genetics, agronomics, mathematics, agribusiness, and other subjects relevant to our operations. All our current employees are at-will employees, and the failure to retain or hire skilled and highly educated personnel could limit our growth and hinder our research and development efforts. There can be no assurance that we will be successful in attracting or retaining such personnel and the failure to do soMinnesota could have a material adverse effect on ourits business financial condition, and results of operations.

Our business

Moreover, any enforcement of the licensed intellectual property could be subject it to challenge by third parties and operations would sufferif any such challenge is successful, such intellectual property could be narrowed in scope or held to be invalid or unenforceable, which could materially impair any competitive advantage afforded to the Company by such intellectual property. There can be no assurance that Cellectis or the University of Minnesota will prosecute and maintain such intellectual property in the eventbest interests of computer system failures, cyber-attacksthe Company’s business or a deficiency in our cyber-security.

Despiteat all, and, if Cellectis or the implementationUniversity of security measures, our internal computer systems,Minnesota fails to properly prosecute and those of third parties onmaintain such intellectual property, the Company could lose rights to such intellectual property, which we rely,would materially impair any competitive advantage afforded to it by such intellectual property. For more information regarding the Company’s license agreement with Cellectis or the license agreement between Cellectis and the data transmitted acrossUniversity of Minnesota, please see “Business—Intellectual Property.”

Risks Related to Regulatory and Legal Matters

Ethical, legal, and social concerns about products using genetically modified or edited plant cells could limit or prevent the use of the Company’s products and technologies and could harm its business.

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The Company’s technologies and products involve the use of genetically modified or edited plant cells. Public perception about the safety of, and ethical, legal, or social concerns over, genetically engineered products, including genetically modified or edited plant genetic materials, could affect public acceptance of the Company’s products. If the Company is not able to overcome any such concerns relating to its products, these systems,technologies may not be accepted by its customers or end-users of the customers’ products that incorporate the Company’s products. In addition, the use of genetically modified or edited plant cells has in the past received negative publicity, which could lead to greater regulation or restrictions on imports of the Company’s products. If the Company’s technologies and products are vulnerablenot accepted by its customers or their end-users due to damagenegative publicity or lack of public acceptance, the Company’s business could be materially harmed.

The Company may become subject to increasing regulation as a result of its hemp development activities, which could require it to incur additional costs associated with compliance requirements.

The Company has developed hemp product candidates and is currently exploring licensing opportunities in the crop. Hemp is legally distinct from computer viruses, malware, natural disasters, terrorism, war, telecommunicationmarijuana and electrical failures, cyber-attacksrecognized as an agricultural crop by the United States government. Federal and state laws and regulations on hemp address production, monitoring, manufacturing, distribution, and laboratory testing to ensure that that the hemp has a THC concentration of not more than 0.3 percent on a dry weight basis. Federal laws and regulations may also address the transportation or cyber-intrusions over the Internet, attachmentsshipment of hemp or hemp products. It is difficult to emails, persons inside our organization, or persons with access to systems inside our organization. The risk of data loss or a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increasedpredict whether regulators, such as the number, intensityUSDA or the MDA, will alter the manner in which they interpret existing federal and sophisticationstate laws and regulations on hemp or institute new regulations, or otherwise modify regulations in a way that will render compliance more burdensome. As the Company continues to pursue hemp as a product candidate, it may become subject to increasing regulation particular to hemp, which could require it to incur additional costs associated with compliance requirements.

The regulatory environment outside the United States varies greatly from jurisdiction to jurisdiction and there is less certainty how the Company’s products will be regulated.

The regulatory environment around gene editing and genetic modification in plants is greatly uncertain outside of attempted attacksthe United States and intrusionsvaries greatly from aroundjurisdiction to jurisdiction. Each jurisdiction may have its own regulatory framework regarding genetically modified and gene edited products and materials, which continue to evolve, and which may encapsulate the worldCompany’s products. To the extent regulatory frameworks outside of the United States are not receptive to the Company’s genetic modification and gene editing technologies, this may limit its ability to expand into other global markets.

Complying with the regulatory requirements outside the United States will be costly and time-consuming, and there is no guarantee the Company will be able to commercialize its products outside the United States. Such regulatory requirements may also inhibit the Company’s ability to market and sell its products to customers located outside of the United States.

The Company cannot predict whether or when any jurisdiction will change its regulations with respect to its products. Advocacy groups have increased. If such an event wereengaged in publicity campaigns and filed lawsuits in various countries against companies and regulatory authorities, seeking to occur and cause interruptions in our operationshalt regulatory approval or loss of our data, itclearance activities or influence public opinion against genetically engineered and/or gene edited products. In addition, governmental reaction to negative publicity concerning the Company’s products could result in greater regulation of genetic research and derivative products or regulatory costs that render its products cost prohibitive.

The scale of the industries in which the Company intends as the end markets for its products may make it difficult to monitor and control the distribution of the Company’s products. As a material disruption of our product development programs. For example,result, the loss of field trial data from completedCompany’s products may be sold inadvertently within jurisdictions where they are not approved for distribution. Such sales may lead to regulatory challenges or ongoing or planned field trialslawsuits against the Company, which could result in delayssignificant expenses and management attention.

The Company may use biological materials in our regulatory clearanceits business and significantly increase our costsis subject to recovernumerous environmental, health and safety laws and regulations. Compliance with such laws and regulations and any claims relating to improper handling, storage or reproducedisposal of these materials could be time consuming and costly.

The Company is subject to numerous federal, state, local and foreign environmental, health and safety laws and regulations, including those governing laboratory procedures, the datahandling, use, storage, treatment, manufacture and add additional timedisposal of hazardous materials and wastes, discharge of pollutants into the environment and human health and safety matters. The Company’s R&D processes involve the controlled use of hazardous materials, including biological materials. The Company may be sued for any injury or contamination that results from its use or the use by third parties of these materials, or may otherwise be required to our product development timelines. Toremediate such contamination, and its liability may exceed any insurance coverage and its total assets. Compliance with environmental, health and safety laws and regulations may be expensive and may impair the extent that any disruption or security breach wasCompany’s R&D efforts. If the Company fails to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, wecomply with these requirements, it could incur liability, damage to our reputation,substantial costs and the development of our product candidates could be delayed.liabilities, including civil or criminal fines and penalties, clean-up costs or capital expenditures for control

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equipment or operational changes necessary to achieve and maintain compliance. In addition, the Company cannot predict the impact on its business of new or amended environmental, health and safety laws or regulations or any changes in the way existing and future laws and regulations are interpreted and enforced. These current or future laws and regulations may impair the Company’s research, development or production efforts or result in increased expense of compliance.

The regulatory environment in the United States is uncertain and evolving and may impact our customers’ willingness to utilize the Company’s products.

The Company anticipates that its customers will be responsible for any regulatory activities associated with development of compounds commissioned from the Company. Such regulatory activities may involve significant expense and changes in applicable regulatory requirements could result in substantial increases in the time and costs associated with such activities. It is difficult for the Company and its customers to predict whether regulators, such as the USDA or FDA, will alter the manner in which they interpret existing laws and regulations or institute new regulations, or otherwise modify regulations in a way that will subject products utilizing the Company’s synthetic biology products to more burdensome standards, thereby substantially increasing the time and costs associated with the regulatory activities of its customers. If the regulatory burden and expense required for the utilization of the Company’s products becomes too significant, its customers may seek alternatives that involve lesser regulatory costs.

If the Company is sued for defective products and if such lawsuits were determined adversely, it could be subject to substantial damages, for which insurance coverage is not available.

The Company expects that some applications of its products will be used as components of customers’ end products and therefore its success will be tied, in part, to the success of such end products. The Company cannot be certain that material performance problems, defects, errors or delays will not arise in its products or the end products in which they are used as components.

The Company expects to provide warranties that its products will meet customer specifications. The costs incurred in correcting any failures to meet such specifications may be substantial and could adversely affect the Company’s business. If the Company’s products or the end products of which they are components, contain defects or are delayed, it may experience:

Risks Related to OurOwnership of the Company’s Common Stock and its Relationship with Cellectis

Cellectis controls

The market price of the direction of our business, and the concentrated ownership of ourCompany’s common stock has been and certain contractualcould remain volatile, which could adversely affect the market price of its common stock.

The market price of the Company’s common stock has experienced, and may continue to experience, volatility in response to various factors, such as:

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Furthermore, stock markets have experienced price and volume fluctuations that have affected, and continue to affect, the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rate changes and international currency fluctuations, may negatively affect the market price of the Company’s common stock.

Certain rights that Cellectis haspossesses will prevent you and other stockholders from influencing significant decisions.decisions, even after Cellectis’ ownership of Calyxt common stock falls substantially below a majority.

As of December 31, 2019,2021, Cellectis owned 68.9%61.8 percent of ourthe Company’s outstanding shares of common stock. Pursuant to ourthe stockholders’ agreement between the Company and Cellectis, Cellectis will have certain contractualcontinue to retain substantial rights with respect to the Company for so long as it beneficially owns at least 50%15 percent of the then outstanding shares of ourthe Company’s common stock including:(Continuing Cellectis Rights).

In addition, Cellectis will have the following rights for so long as it beneficially owns at least 15% of the then outstanding shares of our common stock, including: