| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2022;
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
| ||
Delaware | 27-1967997 | ||
(State or other jurisdiction of |
| ||
incorporation or organization) | (I.R.S. Employer Identification No.) | ||
2800 Mount Ridge Road Roseville, MN | 55113-1127 | ||
|
| ||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock (0.0001 par value) | CLXT | The NASDAQ Global Market |
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||
Non-accelerated filer |
| Smaller reporting company | ☐ | ||||||
Emerging growth company |
|
| 3 | ||||
| 3 | ||||
| 18 | ||||
| 26 | ||||
| 26 | ||||
| 27 | ||||
| 27 | ||||
| 27 | ||||
| 27 | ||||
27 | |||||
| 28 | ||||
29 |
|
We own
parties
We have
change.
the Company.
We use our
| March 31, 2021 (unaudited) |
|
| December 31, 2020 |
| ||
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents | $ | 16,386 |
|
| $ | 17,299 |
|
Short-term investments |
| 3,045 |
|
|
| 11,698 |
|
Restricted cash |
| 393 |
|
|
| 393 |
|
Accounts receivable |
| 1,354 |
|
|
| 4,887 |
|
Inventory |
| 4,532 |
|
|
| 1,383 |
|
Prepaid expenses and other current assets |
| 3,347 |
|
|
| 3,930 |
|
Total current assets |
| 29,057 |
|
|
| 39,590 |
|
Non-current restricted cash |
| 597 |
|
|
| 597 |
|
Land, buildings, and equipment |
| 22,549 |
|
|
| 22,860 |
|
Other non-current assets |
| 225 |
|
|
| 280 |
|
Total assets | $ | 52,428 |
|
| $ | 63,327 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable | $ | 959 |
|
| $ | 929 |
|
Accrued expenses |
| 3,058 |
|
|
| 2,891 |
|
Accrued compensation |
| 1,764 |
|
|
| 1,950 |
|
Due to related parties |
| 114 |
|
|
| 766 |
|
Current portion of financing lease obligations |
| 372 |
|
|
| 364 |
|
Other current liabilities |
| 45 |
|
|
| 45 |
|
Total current liabilities |
| 6,312 |
|
|
| 6,945 |
|
Financing lease obligations |
| 17,780 |
|
|
| 17,876 |
|
Long-term debt |
| 1,518 |
|
|
| 1,518 |
|
Other non-current liabilities |
| 1,213 |
|
|
| 113 |
|
Total liabilities |
| 26,823 |
|
|
| 26,452 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Common stock, $0.0001 par value; 275,000,000 shares authorized; 37,263,339 shares issued and 37,163,187 shares outstanding as of March 31, 2021, and 37,165,196 shares issued and 37,065,044 shares outstanding as of December 31, 2020 |
| 4 |
|
|
| 4 |
|
Additional paid-in capital |
| 203,565 |
|
|
| 204,807 |
|
Common stock in treasury, at cost; 100,152 shares as of March 31, 2021, and December 31, 2020 |
| (1,043 | ) |
|
| (1,043 | ) |
Accumulated deficit |
| (176,921 | ) |
|
| (166,893 | ) |
Total stockholders’ equity |
| 25,605 |
|
|
| 36,875 |
|
Total liabilities and stockholders’ equity | $ | 52,428 |
|
| $ | 63,327 |
|
March 31, 2022 (unaudited) | December 31, 2021 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 17,285 | $ | 13,823 | ||||
Restricted cash | 499 | 499 | ||||||
Prepaid expenses and other current assets | 1,189 | 859 | ||||||
Total current assets | 18,973 | 15,181 | ||||||
Non-current restricted cash | 99 | 99 | ||||||
Land, buildings, and equipment | 5,125 | 21,731 | ||||||
Operating lease right-of-use s | 13,973 | 0 | ||||||
Other non-current assets | 175 | 183 | ||||||
Total assets | $ | 38,345 | $ | 37,194 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,167 | $ | 1,260 | ||||
Accrued expenses | 379 | 339 | ||||||
Accrued compensation | 2,209 | 2,522 | ||||||
Due to related parties | 64 | 172 | ||||||
Current portion of financing lease obligations | 290 | 370 | ||||||
Common stock warrants | 4,976 | 0 | ||||||
Other current liabilities | 435 | 191 | ||||||
Total current liabilities | 9,520 | 4,854 | ||||||
Financing lease obligations | 89 | 17,506 | ||||||
Operating lease obligations | 13,742 | 0 | ||||||
Other non-current liabilities | 73 | 702 | ||||||
Total liabilities | 23,424 | 23,062 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $0.0001 par value; 275,000,000 shares authorized; 42,841,915 shares issued and 42,741,763 shares outstanding as of March 31, 2022, and 38,874,146 shares issued and 38,773,994 shares outstanding as of December 31, 2021 | 5 | 4 | ||||||
Additional paid-in capital | 216,838 | 211,263 | ||||||
Common stock in treasury, at cost; 100,152 shares as of March 31, 2022, and December 31, 2021 | (1,043 | ) | (1,043 | ) | ||||
Accumulated deficit | (200,879 | ) | (196,092 | ) | ||||
Total stockholders’ equity | 14,921 | 14,132 | ||||||
Total liabilities and stockholders’ equity | $ | 38,345 | $ | 37,194 | ||||
| Three Months Ended March 31, |
| |||||
| 2021 |
|
| 2020 |
| ||
Revenue | $ | 4,402 |
|
| $ | 2,377 |
|
Cost of goods sold |
| 6,745 |
|
|
| 3,884 |
|
Gross margin |
| (2,343 | ) |
|
| (1,507 | ) |
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
| 3,050 |
|
|
| 2,787 |
|
Selling, general, and administrative |
| 4,258 |
|
|
| 6,298 |
|
Management fees and royalties |
| 30 |
|
|
| 62 |
|
Total operating expenses |
| 7,338 |
|
|
| 9,147 |
|
Loss from operations |
| (9,681 | ) |
|
| (10,654 | ) |
Interest, net |
| (346 | ) |
|
| (398 | ) |
Non-operating expenses |
| (1 | ) |
|
| (11 | ) |
Loss before income taxes |
| (10,028 | ) |
|
| (11,063 | ) |
Income taxes |
| 0 |
|
|
| 0 |
|
Net loss | $ | (10,028 | ) |
| $ | (11,063 | ) |
Basic and diluted net loss per share | $ | (0.27 | ) |
| $ | (0.34 | ) |
Weighted average shares outstanding - basic and diluted |
| 37,136,338 |
|
|
| 32,988,141 |
|
Anti-dilutive stock options, restricted stock units, and performance stock units |
| 5,013,780 |
|
|
| 5,328,268 |
|
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Revenue | $ | 32 | $ | 4,402 | ||||
Cost of goods sold | 0 | 6,745 | ||||||
Gross profit | 32 | (2,343 | ) | |||||
Operating expenses: | ||||||||
Research and development | 2,941 | 3,050 | ||||||
Selling, general, and administrative | 3,180 | 4,258 | ||||||
Management fees | 0 | 30 | ||||||
Total operating expenses | 6,121 | 7,338 | ||||||
Loss from operations | (6,089 | ) | (9,681 | ) | ||||
Interest, net | (17 | ) | (346 | ) | ||||
Non-operating expenses | 487 | (1 | ) | |||||
Loss before income taxes | (5,619 | ) | (10,028 | ) | ||||
Income taxes | 0 | 0 | ||||||
Net loss | $ | (5,619 | ) | $ | (10,028 | ) | ||
Basic and diluted net loss per share | $ | (0.13 | ) | $ | (0.27 | ) | ||
Weighted average shares outstanding – basic and diluted | 42,020,090 | 37,136,338 | ||||||
Anti-dilutive stock options, restricted stock units, performance stock units, and common stock warrants | 16,276,362 | 5,013,780 | ||||||
Three months ended March 31, 2021 |
| Shares Outstanding |
|
| Common Stock |
|
| Additional Paid-In Capital |
|
| Shares in Treasury |
|
| Accumulated Deficit |
|
| Accumulated Other Comprehensive Income |
|
| Total Stockholders’ Equity |
| |||||||
Balance at December 31, 2020 |
|
| 37,065,044 |
|
| $ | 4 |
|
| $ | 204,807 |
|
| $ | (1,043 | ) |
| $ | (166,893 | ) |
| $ | — |
|
| $ | 36,875 |
|
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (10,028 | ) |
|
| — |
|
|
| (10,028 | ) |
Stock-based compensation |
|
| — |
|
|
| — |
|
|
| (1,450 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,450 | ) |
Issuance of common stock |
|
| 98,143 |
|
|
| — |
|
|
| 208 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 208 |
|
Shares withheld for net share settlement |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Balance at March 31, 2021 |
|
| 37,163,187 |
|
| $ | 4 |
|
| $ | 203,565 |
|
| $ | (1,043 | ) |
| $ | (176,921 | ) |
| $ | - |
|
| $ | 25,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2020 |
| Shares Outstanding |
|
| Common Stock |
|
| Additional Paid-In Capital |
|
| Shares in Treasury |
|
| Accumulated Deficit |
|
| Accumulated Other Comprehensive Income (Loss) |
|
| Total Stockholders’ Equity |
| |||||||
Balance at December 31, 2019 |
|
| 32,951,329 |
|
| $ | 3 |
|
| $ | 185,588 |
|
| $ | (1,043 | ) |
| $ | (122,057 | ) |
| $ | 17 |
|
| $ | 62,508 |
|
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (11,063 | ) |
|
| — |
|
|
| (11,063 | ) |
Stock-based compensation |
|
| — |
|
|
| — |
|
|
| 1,271 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,271 |
|
Issuance of common stock |
|
| 57,110 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Shares withheld for net share settlement |
|
| (17,792 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (180 | ) |
|
| (180 | ) |
Balance at March 31, 2020 |
|
| 32,990,647 |
|
| $ | 3 |
|
| $ | 186,859 |
|
| $ | (1,043 | ) |
| $ | (133,120 | ) |
| $ | (163 | ) |
| $ | 52,536 |
|
Three Months Ended March 31, 2022 | Shares Outstanding | Common Stock | Additional Paid-In Capital | Shares in Treasury | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||
Balance at December 31, 2021 | 38,773,994 | $ | 4 | $ | 211,263 | $ | (1,043 | ) | $ | (196,092 | ) | $ | 14,132 | |||||||||||
Net loss | — | — | — | — | (5,619 | ) | (5,619 | ) | ||||||||||||||||
Stock-based compensation | — | — | 531 | — | — | 531 | ||||||||||||||||||
Issuance of common stock from stock-based compensation awards | 87,769 | — | — | — | — | — | ||||||||||||||||||
Issuance of common stock from ATM facility, net of offering expenses | — | — | (7 | ) | — | — | (7 | ) | ||||||||||||||||
Issuance of common stock and pre-funded warrants in registered offering, net of $0.5 million of offering costs | 3,880,000 | 1 | 5,051 | — | — | 5,052 | ||||||||||||||||||
Cumulative effect of adoption of lease accounting standard | — | — | — | — | 832 | 832 | ||||||||||||||||||
Balance at March 31, 2022 | 42,741,763 | $ | 5 | $ | 216,838 | $ | (1,043 | ) | $ | (200,879 | ) | $ | 14,921 | |||||||||||
Three Months Ended March 31, 2021 | Shares Outstanding | Common Stock | Additional Paid-In Capital | Shares in Treasury | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||
Balance at December 31, 2020 | 37,065,044 | $ | 4 | $ | 204,807 | $ | (1,043 | ) | $ | (166,893 | ) | $ | 36,875 | |||||||||||
Net loss | — | — | — | — | (10,028 | ) | (10,028 | ) | ||||||||||||||||
Stock-based compensation | — | — | (1,450 | ) | — | — | (1,450 | ) | ||||||||||||||||
Issuance of common stock from stock-based compensation awards | 98,143 | — | 208 | — | — | 208 | ||||||||||||||||||
Balance at March 31, 2021 | 37,163,187 | $ | 4 | $ | 203,565 | $ | (1,043 | ) | $ | (176,921 | ) | $ | 25,605 | |||||||||||
| Three Months Ended March 31, |
| |||||
| 2021 |
|
| 2020 |
| ||
Operating activities |
|
|
|
|
|
|
|
Net loss | $ | (10,028 | ) |
| $ | (11,063 | ) |
Adjustments to reconcile net loss to net cash used by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
| 585 |
|
|
| 452 |
|
Stock-based compensation |
| (1,450 | ) |
|
| 1,271 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
| 3,533 |
|
|
| 281 |
|
Due to/from related parties |
| (652 | ) |
|
| (430 | ) |
Inventory |
| (3,149 | ) |
|
| (604 | ) |
Prepaid expenses and other current assets |
| 583 |
|
|
| (786 | ) |
Accounts payable |
| 30 |
|
|
| 8 |
|
Accrued expenses |
| 167 |
|
|
| (451 | ) |
Accrued compensation |
| (186 | ) |
|
| (818 | ) |
Other non-current liabilities |
| 1,100 |
|
|
| (9 | ) |
Other |
| 50 |
|
|
| (89 | ) |
Net cash used by operating activities |
| (9,417 | ) |
|
| (12,238 | ) |
Investing activities |
|
|
|
|
|
|
|
Sales and (purchases) of short-term investments, net |
| 8,653 |
|
|
| (38,620 | ) |
Purchases of land, buildings, and equipment |
| (269 | ) |
|
| (317 | ) |
Net cash provided by (used by) investing activities |
| 8,384 |
|
|
| (38,937 | ) |
Financing activities |
|
|
|
|
|
|
|
Repayments of financing lease obligations |
| (88 | ) |
|
| (45 | ) |
Proceeds from the exercise of stock options |
| 208 |
|
|
| — |
|
Net cash provided by (used by) financing activities |
| 120 |
|
|
| (45 | ) |
Net decrease in cash, cash equivalents, and restricted cash |
| (913 | ) |
|
| (51,220 | ) |
Cash, cash equivalents, and restricted cash - beginning of period |
| 18,289 |
|
|
| 60,038 |
|
Cash, cash equivalents, and restricted cash – end of period | $ | 17,376 |
|
| $ | 8,818 |
|
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Operating activities | ||||||||
Net loss | $ | (5,619 | ) | $ | (10,028 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
Depreciation and amortization | 370 | 585 | ||||||
Stock-based compensation | 531 | (1,450 | ) | |||||
Unrealized (gain) loss on mark-to-market of common stock warrants | (435 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | — | 3,533 | ||||||
Due to/from related parties | (108 | ) | (652 | ) | ||||
Inventory | — | (3,149 | ) | |||||
Prepaid expenses and other current assets | (110 | ) | 583 | |||||
Accounts payable | (145 | ) | 30 | |||||
Accrued expenses | 37 | 167 | ||||||
Accrued compensation | (313 | ) | (186 | ) | ||||
Other | (612 | ) | 1,150 | |||||
Net cash used by operating activities | (6,404 | ) | (9,417 | ) | ||||
Investing activities | ||||||||
Sales and (purchases) of short-term investments, net | — | 8,653 | ||||||
Purchases of land, buildings, and equipment | (545 | ) | (269 | ) | ||||
Net cash (used by) provided by investing activities | (545 | ) | 8,384 | |||||
Financing activities | ||||||||
Proceeds from the issuance of common stock and pre-funded warrants | 11,209 | — | ||||||
Costs incurred related to the issuance of common stock and pre-funded warrants | (704 | ) | — | |||||
Repayments of financing lease obligations | (94 | ) | (88 | ) | ||||
Proceeds from the exercise of stock options | — | 208 | ||||||
Net cash provided by financing activities | 10,411 | 120 | ||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 3,462 | (913 | ) | |||||
Cash, cash equivalents, and restricted cash – beginning of period | 14,421 | 18,289 | ||||||
Cash, cash equivalents, and restricted cash – end of period | $ | 17,883 | $ | 17,376 | ||||
Our
2021.
All anti-dilutive stock options, restricted stock units, and performance stock units are excluded from the calculation of net loss per share.
2. and Common Warrants to purchase up to 7,760,000 shares of its common stock in the
- 8 -
| March 31, 2021 |
| March 31, 2021 |
| ||||||||||||||||||||||||||
| Fair Values of Assets |
| Fair Values of Liabilities |
| ||||||||||||||||||||||||||
In Thousands | Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||||||
Other items reported at fair value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments | $ | 3,045 |
|
| $ | — |
|
| $ | — |
|
| $ | 3,045 |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Commodity derivative contracts |
| 266 |
|
|
| — |
|
|
| — |
|
|
| 266 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total | $ | 3,311 |
|
| $ | — |
|
| $ | — |
|
| $ | 3,311 |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
March 31, 2022 | March 31, 2022 | |||||||||||||||||||||||||||||||
Fair Values of Assets | Fair Values of Liabilities | |||||||||||||||||||||||||||||||
In Thousands | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Other items reported at fair value: | ||||||||||||||||||||||||||||||||
Common stock warrants | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 4,976 | $ | 4,976 | ||||||||||||||||
Total | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 4,976 | $ | 4,976 | ||||||||||||||||
| December 31, 2020 |
| December 31, 2020 |
| ||||||||||||||||||||||||||
| Fair Values of Assets |
| Fair Values of Liabilities |
| ||||||||||||||||||||||||||
In Thousands | Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||||||
Other items reported at fair value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments | $ | 11,698 |
|
| $ | — |
|
| $ | — |
|
| $ | 11,698 |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Commodity derivative contracts |
| 467 |
|
|
| — |
|
|
| — |
|
|
| 467 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total | $ | 12,165 |
|
| $ | — |
|
| $ | — |
|
| $ | 12,165 |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
The Company estimates the fair value of each Common Warrant as of the date of issuance and at the end of every fiscal period using a Black-Scholes option pricing model, which requires it to make predictive assumptions regarding future stock price volatility and dividend yield. The Company estimates the risk-free interest rate based on the United States Treasury
As of March 31, | ||||
2022 | ||||
Estimated fair value of Common Warrants | $ | 0.64 | ||
Assumptions: | ||||
Risk-free interest rate | 2.5 | % | ||
Expected volatility | 80.0 | % | ||
Expected term to liquidation (in years) | 5.4 | |||
The composition of our short-term investments as of March 31, 2021, and December 31, 2020 were as follows:
| As of March 31, |
|
| As of December 31, |
| ||
In Thousands | 2021 |
|
| 2020 |
| ||
Corporate debt securities | $ | 3,045 |
|
| $ | 11,698 |
|
Commodity Price Risk
We enter into seed and grain production agreements with settlement values based on commodity futures market prices (Forward Purchase Contracts). These Forward Purchase Contracts allow the counterparty to fix their sales prices at various times as defined in the contract. Because we intend to take physical delivery under the Forward Purchase Contracts, we have grain inventory we will need to sell. We intend to sell these inventories at then-current market prices. As a result, when the Forward Purchase Contract counterparty fixes their grain prices, we enter hedging arrangements by selling futures contracts which converts our exposure to these fixed prices to floating prices. We expect to maintain these hedging relationships until such grain inventory is sold to help stabilize our margins. We do not account for these economic hedges as accounting hedges. We expect any gains or losses from these hedging arrangements to be offset by gains or losses on the grain inventories when such grain inventories are sold.As of March 31, 2021, we have $3.0 million of unrealized commodity derivative losses from hedging contracts sold to convert our fixed price grain inventories and fixed price Forward Purchase Contracts to floating prices. As of March 31, 2021, we held commodity contracts with a notional amount of $10.4 million.
We previously designated all our commodity derivative contracts as cash flow hedges based on the nature of our business activities under the prior go-to-market strategy. As a result, all gains or losses associated with recording those commodity derivative contracts at fair value were recorded as a component of accumulated other comprehensive income (loss) (AOCI). We reclassify amounts from AOCI to cost of goods sold when we sell the underlying products to which those hedges relate. For the three months ended March 31, 2020, we reclassified an immaterial amount from AOCI to cost of goods sold, and there were no such reclassifications in the same period in 2021.
- 9 -
We invest our
3. As of March 31, 2022, the Company did not hold any short-term investments.
We have
2021.
At a point when Cellectis owns 50 percent or less of the Company’s outstanding common stock, the Company has agreed to indemnify Cellectis for any obligations incurred by Cellectis under its guaranty of the obligations under the lease.
We2021.
Number of Pre-Funded Warrants | Weighted Average Exercise Price | Number of Common Warrants | Weighted Average Exercise Price | |||||||||||||
Outstanding as of December 31, 2021: | ||||||||||||||||
Issued | 3,880,000 | $ | 0.0001 | 7,760,000 | $ | 1.41 | ||||||||||
Forfeited/canceled | — | — | ||||||||||||||
Exercised | — | — | ||||||||||||||
Outstanding as of March 31, 2022: | 3,880,000 | $ | 0.0001 | 7,760,000 | $ | 1.41 | ||||||||||
Exercisable as of March 31, 2022: | 3,880,000 | $ | 0.0001 | — | — | |||||||||||
4.2022, the Company did not issue any shares of common stock under the ATM Facility.
We use
In July 2021, the Company also adopted the Calyxt, Inc. Employee Inducement Incentive Plan (the Inducement Plan), from which PSUs were granted to Michael A. Carr.
PSUs.
granted under either the 2014 Plan or the Inducement Plan.
| Three Months Ended March 31, |
| |||||
| 2021 |
|
| 2020 |
| ||
Estimated fair values of stock options granted | $ | 5.85 |
|
| $ | 5.19 |
|
Assumptions: |
|
|
|
|
|
|
|
Risk-free interest rate |
| 0.6 | % |
|
| 1.7 | % |
Expected volatility |
| 85.0 | % |
|
| 77.4 | % |
Expected term (in years) | 5.7 - 6.2 |
|
|
| 6.9 |
|
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Estimated fair values of stock options granted | $ | 0.97 | $ | 5.85 | ||||
Assumptions: | ||||||||
Risk-free interest rate | 1.9% - 2.4 | % | 0.6% - 1.1 | % | ||||
Expected volatility | 89.7% - 91.8 | % | 85.0% - 87.6 | % | ||||
Expected term (in years) | 5.75 - 6.89 | 5.7 - 6.2 | ||||||
dividends in the foreseeable future.
| Options Exercisable |
|
| Weighted- Average Exercise Price Per Share |
|
| Options Outstanding |
|
| Weighted- Average Exercise Price Per Share |
| ||||
Balance as of December 31, 2020 |
| 2,347,663 |
|
| $ | 10.15 |
|
|
| 4,621,173 |
|
| $ | 10.30 |
|
Granted |
|
|
|
|
|
|
|
|
| 270,800 |
|
|
| 8.07 |
|
Exercised |
|
|
|
|
|
|
|
|
| (56,372 | ) |
|
| 3.71 |
|
Forfeited or expired |
|
|
|
|
|
|
|
|
| (456,450 | ) |
|
| 10.03 |
|
Balance as of March 31, 2021 |
| 2,369,997 |
|
| $ | 10.38 |
|
|
| 4,379,151 |
|
| $ | 10.27 |
|
Options Exercisable | Weighted- Average Exercise Price Per Share | Options Outstanding | Weighted- Average Exercise Price Per Share | |||||||||||||
Balance as of December 31, 2021 | 2,789,110 | $ | 10.23 | 4,658,405 | $ | 9.47 | ||||||||||
Granted | 1,346,000 | 1.27 | ||||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited or expired | (234,061 | ) | 7.30 | |||||||||||||
Balance as of March 31, 2022 | 2,948,076 | $ | 10.26 | 5,770,344 | $ | 7.65 | ||||||||||
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Stock-based compensation expense | $ | (396 | ) |
| $ | 1,006 |
|
Three Months Ended March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Stock-based compensation expense | $ | 180 | $ | (396 | ) | |||
5.5 years as of that date.
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Net cash proceeds | $ | 208 |
|
| $ | — |
|
Intrinsic value of options exercised | $ | 331 |
|
| $ | — |
|
Three Months Ended March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Net cash proceeds | $ | 0 | $ | 208 | ||||
Intrinsic value of options exercised | $ | 0 | $ | 331 | ||||
Units settled in stock subject to a
- 11 -
Information on restricted stock unit activity is as follows:
| Number of Restricted Stock Units Outstanding |
|
| Weighted- Average Grant Date Fair Value |
| ||
Unvested balance at December 31, 2020 |
| 547,807 |
|
| $ | 9.49 |
|
Granted |
| 68,000 |
|
|
| 8.05 |
|
Vested |
| (27,386 | ) |
|
| 9.18 |
|
Forfeited |
| (126,178 | ) |
|
| 12.89 |
|
Unvested balance at March 31, 2021 |
| 462,243 |
|
| $ | 8.37 |
|
Number of Restricted Stock Units Outstanding | Weighted- Average Grant Date Fair Value | |||||||
Unvested balance as of December 31, 2021 | 571,303 | $ | 6.15 | |||||
Granted | 1,048,800 | 1.27 | ||||||
Vested | (87,472 | ) | 7.06 | |||||
Forfeited | (61,613 | ) | 5.55 | |||||
Unvested balance as of March 31, 2022 | 1,471,018 | $ | 2.64 | |||||
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Grant-date fair value | $ | 251 |
|
| $ | 510 |
|
Three Months Ended March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Grant-date fair value | $ | 617 | $ | 251 | ||||
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Stock-based compensation expense | $ | (749 | ) |
| $ | 155 |
|
Three Months Ended March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Stock-based compensation expense | $ | 205 | $ | (749 | ) | |||
We treat
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Deemed dividends from grants to Cellectis employees | $ | 79 |
|
| $ | 224 |
|
Three Months Ended March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Deemed dividends from grants to Cellectis employees | $ | 37 | $ | 79 | ||||
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Stock-based compensation expense | $ | (305 | ) |
| $ | 110 |
|
Three Months Ended March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Stock-based compensation expense | $ | 146 | $ | (305 | ) | |||
5.
We provide
- 12 -
6.2021.
Litigation
Wein July 2018, ASU
Leases
Wesummarized as follows:
We also have an
As Reported December 31, 2021 | Adoption of Lease Standard | As Adjusted December 31, 2021 | ||||||||||
Assets | ||||||||||||
Land, buildings, and equipment | $ | 21,731 | $ | (16,543 | ) | $ | 5,188 | |||||
Operating lease right-of-use assets | 0 | 14,090 | 14,090 | |||||||||
$ | 21,731 | $ | (2,453 | ) | $ | 19,278 | ||||||
Liabilities and stockholders’ equity | ||||||||||||
Current portion of financing lease obligations | $ | 370 | $ | (4 | ) | $ | 366 | |||||
Other current liabilities | 191 | 276 | 467 | |||||||||
Financing lease obligations | 17,506 | (17,371 | ) | 135 | ||||||||
Operating lease obligations | 0 | 13,814 | 13,814 | |||||||||
Accumulated deficit | (196,092 | ) | 832 | (195,260 | ) | |||||||
$ | (178,025 | ) | $ | (2,453 | ) | $ | (180,478 | ) | ||||
March 31, 2022 | ||||||||
Remaining | Right-of-Use | |||||||
In Thousands | Term (years) | Asset | ||||||
Roseville, MN lease | 16.1 | $ | 13,969 | |||||
Total | $ | 13,969 |
In Thousands | Three Months Ended March 31, 2022 | |||
Finance lease costs | $ | 9 | ||
Operating lease costs | 399 | |||
Variable lease costs | 231 | |||
Total | $ | 639 | ||
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Rent expense from operating leases | $ | 13 |
|
| $ | 24 |
|
Other Commitments
In Thousands except for lease term and discount rate | As of and for Three Months Ended March 31, | |||||||
Operating | Financing | |||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows | $ | 67 | $ | 0 | ||||
Financing cash flows | $ | 0 | $ | 94 | ||||
Weighted average remaining lease term (years) | 16.1 | 0.9 | ||||||
Weighted average discount rate | 7.9 | % | 8.1 | % | ||||
In Thousands | Operating | Financing | Total | |||||||||
Remainder of 2022 | $ | 1,034 | $ | 231 | $ | 1,265 | ||||||
2023 | 1,446 | 99 | 1,545 | |||||||||
2024 | 1,480 | 0 | 1,480 | |||||||||
2025 | 1,479 | 0 | 1,479 | |||||||||
2026 | 1,479 | 0 | 1,479 | |||||||||
2027 | 1,479 | 0 | 1,479 | |||||||||
Thereafter | 16,991 | 0 | 16,991 | |||||||||
25,388 | 330 | 25,718 | ||||||||||
Less: imputed interest | (11,365 | ) | (15 | ) | (11,380 | ) | ||||||
Total | $ | 14,023 | $ | 315 | $ | 14,338 | ||||||
Three Months Ended March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Stock-based compensation expense: | ||||||||
Research and development | $ | 30 | $ | 392 | ||||
Selling, general, and administrative | 501 | (1,842 | ) | |||||
Total | $ | 531 | $ | (1,450 | ) | |||
Three Months Ended March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Interest, net: | ||||||||
Interest expense | $ | (10 | ) | $ | (360 | ) | ||
Interest income | 1 | 14 | ||||||
Common stock warrants - financing costs amortization | (8 | ) | 0 | |||||
Total | $ | (17 | ) | $ | (346 | ) | ||
| As of March 31, |
|
| As of December 31, |
| ||
In Thousands | 2021 |
|
| 2020 |
| ||
Accounts Receivable: |
|
|
|
|
|
|
|
Accounts receivable | $ | 1,107 |
|
| $ | 4,317 |
|
Receivables from growers |
| 247 |
|
|
| 570 |
|
Allowance for doubtful accounts |
| — |
|
|
| — |
|
Total | $ | 1,354 |
|
| $ | 4,887 |
|
We carry receivables related to amounts we are owed by growers from their purchases of seed. These amounts reduce the cost of the grain we ultimately purchase from the grower and are repaid either on current terms or on an extended payment basis. If a grower has elected extended payment terms, they will pay a higher price per unit and grant us the right to deduct the amount we are owed from the payment we make upon the purchase of their grain. As of March 31, 2021 and December 31, 2020 all of the receivables from growers were on extended payment terms.
Certain statements of operations amounts are as follows:
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Stock compensation expense: |
|
|
|
|
|
|
|
Research and development | $ | 392 |
|
| $ | 319 |
|
Selling, general, and administrative |
| (1,842 | ) |
|
| 952 |
|
Total | $ | (1,450 | ) |
| $ | 1,271 |
|
In Thousands | As of March 31, 2022 | As of December 31, 2021 | ||||||
Cash, cash equivalents, and restricted cash: | ||||||||
Cash and cash equivalents | $ | 17,285 | $ | 13,823 | ||||
Restricted cash | 499 | 499 | ||||||
Non-current restricted cash | 99 | 99 | ||||||
Total | $ | 17,883 | $ | 14,421 | ||||
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Interest, net: |
|
|
|
|
|
|
|
Interest expense | $ | (360 | ) |
| $ | (372 | ) |
Interest income |
| 14 |
|
|
| (26 | ) |
Total | $ | (346 | ) |
| $ | (398 | ) |
Certain statements
| As of March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Cash, cash equivalents, restricted cash, and short-term investments: |
|
|
|
|
|
|
|
Cash and cash equivalents | $ | 16,386 |
|
| $ | 7,385 |
|
Restricted cash |
| 393 |
|
|
| 388 |
|
Non-current restricted cash |
| 597 |
|
|
| 1,045 |
|
Total cash, cash equivalents, and restricted cash |
| 17,376 |
|
|
| 8,818 |
|
Short-term investments |
| 3,045 |
|
|
| 38,620 |
|
Total | $ | 20,421 |
|
| $ | 47,438 |
|
8. SEGMENT INFORMATION
We operate in a single reportable segment, agricultural products. Our current commercial focus is North America. Our major product categories are high oleic soybean seed, grain, oil, and meal. In the three months ended March 31, 2021 we only sold grain. In the three months ended March 31, 2020, we only sold oil and meal.
9. LONG-TERM DEBT
Our long-term debt is comprised of a $1.5 million promissory note pursuant to the Paycheck Protection Program (the Paycheck Protection Program loan) established by the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) implemented by the U.S. Small Business Administration (SBA). We received the funds under the Paycheck Protection Program loan on April 19, 2020. The Paycheck Protection Program loan matures in April 2022 and bears interest at a per annum rate of 1 percent. The Paycheck Protection Program loan may be prepaid at any time prior to maturity with 0 prepayment penalties. The Paycheck Protection Program loan contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. Subject to certain conditions, the Paycheck Protection Program loan and accrued interest may be forgiven in whole or in part by applying for forgiveness pursuant to the CARES Act and the Paycheck Protection Program. In order to be eligible for forgiveness, the proceeds of the Paycheck Protection Program loan must be applied to certain eligible expenses, including payroll costs, interest on certain mortgage obligations, rent payments on certain leases, and certain qualified utility payments, with
As of March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Interest paid | $ | 8 | $ | 359 | ||||
We have applied the proceeds from the Paycheck Protection Program loan toward qualifying expenses. On October 21, 2020, as modified December 29, 2020, we applied for forgiveness of the full principal amount and all accrued interest, and on April 8, 2021, we were notified by the SBA that the full amount of our Paycheck Protection Program loan had been forgiven. We expect to record incomereported in the second quarterconsolidated statement of 2021 for the full amount of the loan and the associated accrued interest.
cash flows is as follows:
As of March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Receivable from Jefferies for shares issued under ATM facility | $ | (260 | ) | $ | 0 | |||
Non-cash additions to land, buildings, and equipment | $ | (202 | ) | $ | 0 | |||
Unpaid stock offering costs included in stockholders’ equity | $ | 257 | $ | 0 | ||||
Cumulative effect of adoption of lease accounting standard on stockholders’ equity | $ | 832 | $ | 0 | ||||
Establishment of operating lease right-of-use | $ | 14,090 | $ | — | ||||
We are
Our capital-efficient business model comprises three differentiated go-to-market strategies, as follows:
|
|
|
|
|
|
While we will opportunistically engage in arrangements under each of these strategies, we have determined to pursue trait development andits PlantSpring technology platform by licensing arrangements with respect to allelements of the products currently under development.
For technologyplatform and trait licensing arrangements, we expect that our customers will primarily be seed companies, biotechnology companies, germplasm providers, large agricultural processors, others in the relevant crop’s supply chain, and growers, who would, in each case, utilize our technology for their own trait development in specified crops. We will seek to develop relationships with strategic customers where ourhistorically developed traditional agriculture seed-trait product candidates, are most likely to benefit from the counterparty’s deep agronomy, product management, and commercialization expertise. Placing our products and traits with such strategic customers will reduce our expenses and downstream risk exposure, while allowing us to pursue diversified growth across multiple revenue streams.
We believe that our primary focus on trait development and licensing provides a capital-efficient, lower-cost, and highly scalable approach. Our strategy is based on focusing on our core strengths in research and development, including gene editing, plant breeding, and trait development. We will continue to focus on advancing our technologies towardas well as selectively developing high value innovations and plant-based solutions with substantial disruption potential, while leveraging our partners and licensees to manage commercialization and the associated costs and risks. We believe that focusing our efforts on our technology and trait development expertise, while contracting with commercialization partners or licensees for downstream execution strikes a balance where we are best positioned for cost-efficient paths to market.
We are currently exploring product and partnership opportunities in various crops for potential applications across a variety of industries, including food, nutraceuticals, energy, and agriculture. Focusing primarily on our trait development and licensing go-to-market strategies, we are well positioned to nimbly develop plant-based input solutions for specific downstream issues, including consumer preferences, sustainability, cost, quality, and regulatory compliance. As of the date of this report, we have eight projects in later stage development, including two in Phase 3.
- 15 -
A summary of our product development as of March 31, 2021 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 The agronomic and functional quality of our product candidates and the timing of development are subject to a variety of factors and risks, which are describedfor customers in Part I, Item 1A, “Risk Factors” of our 2020 Form 10-K.
During the quarter we stopped development of our improved oil HOLL product, which was being developed with a target of higher HOLL oil content that was intended to reduce costs per pound of oil under our prior go-to-market strategy. During the quarter, we also determined to pursue trait development and licensing arrangements as our baseline go-to-market strategy. While we will opportunistically engage in seed sale arrangements, our intentiontraditional agriculture.
Select Recent Achievements and Developments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 16 -
We are an early-stage company and havehas incurred net losses since ourits inception. As of March 31, 2021, we2022, the Company had an accumulated deficit of $176.9$200.9 million. OurThe Company’s net losses were $10.0$5.6 million for the three months ended March 31, 2021. We expect2022. The Company expects to continue to incur significant expenses and operating losses for the next several years. Those expenses and losses may fluctuate significantly from
|
| MarketsandMarkets, Personal Care Ingredients Market – Global Forecast to |
|
2. | MarketsandMarkets, Global Color Cosmetics Market – Forecast Till 2020, |
|
| MarketsandMarkets, Fragrance Ingredients Market – Global Trends & Forecast to 2019 |
|
| MarketsandMarkets, Flavors and Fragrance Market – Global Forecast to 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
OUR
We are
We hold
Cellectis has also guaranteed the lease of our headquarters facility.
For the three months ended March 31, 2021, we
products, from licenses of technology, and from product development activities for customers.
Certain grain costs, net
Company’s technology licensing activities.
Research and development (R&D) expenses consist of the costs of performing activities to discover and develop products and advance our intellectual property. We recognizeExpense
Our R&D expensesprimarily consist primarily of employee-related costs for personnel who research and develop ourits product candidates, fees for contractors who support product development and breeding activities, expenses for trait validation, purchasing material and supplies for ourits laboratories, licensing, an allocation of facility and information technology expenses, and other costs associated with owning and operating ourits own laboratories.laboratories and pilot BioFactory capabilities. This includes the costs of performing activities to discover and develop products and advance the Company’s PlantSpring technology platform, including its intellectual property portfolio. BioFactory expenses from lab through pilot, unless incurred related to a specific product sold to a customer, are also classified as R&D expense. R&D expenses also include costs to write and support the research for filing patents.
The Company recognizes R&D expenses as they are incurred.
Selling, general, and administrative (SG&A) Expense
- 17 -
information technology expenses not otherwise allocated to R&D expenses, professional fees for auditing, tax and legal services, expenses associated with maintaining patents, consulting costs and other costs of ourthe Company’s information systems, and costs to market ourits products.
Because our strategy is based on focusing on our core strengths in research and development, gene editing, and trait development, we expect R&D expenses to be the primary area of increase in our expenses. At the same time, because our streamlined business model relies on third parties assuming responsibility for agronomy infrastructure, product management, and commercialization, we expect that SG&A expense will decline as the new models are fully implemented.
have strong positive gross profit margins over time.
As previously reported, our operations in Minnesota are classified as critical sector work under the State of Minnesota’s COVID-19 executive orders. Accordingly, most of our laboratory workers have continued to work onsite at our headquarters throughout the pandemic, and our R&D programs and seed distribution activities have not experienced material delays.
On May 28, 2021, nearly all Minnesota
| Three Months Ended March 31, |
| |||||||||||||
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||
Revenue | $ | 4,402 |
|
| $ | 2,377 |
|
| $ | 2,025 |
|
|
| 85 | % |
Cost of goods sold |
| 6,745 |
|
|
| 3,884 |
|
|
| 2,861 |
|
|
| 74 | % |
Gross margin |
| (2,343 | ) |
|
| (1,507 | ) |
|
| (836 | ) |
|
| (55 | )% |
Research and development expense |
| 3,050 |
|
|
| 2,787 |
|
|
| 263 |
|
|
| 9 | % |
Selling, general, and administrative expense |
| 4,258 |
|
|
| 6,298 |
|
|
| (2,040 | ) |
|
| (32 | )% |
Management fees and royalties |
| 30 |
|
|
| 62 |
|
|
| (32 | ) |
|
| (52 | )% |
Interest, net |
| (346 | ) |
|
| (398 | ) |
|
| 52 |
|
|
| 13 | % |
Non-operating expenses |
| (1 | ) |
|
| (11 | ) |
|
| 10 |
|
|
| 91 | % |
Net loss | $ | (10,028 | ) |
| $ | (11,063 | ) |
| $ | 1,035 |
|
|
| 9 | % |
Basic and diluted net loss per share | $ | (0.27 | ) |
| $ | (0.34 | ) |
| $ | 0.07 |
|
|
| 21 | % |
Adjusted EBITDA 1 | $ | (6,827 | ) |
| $ | (8,237 | ) |
| $ | 1,410 |
|
|
| 17 | % |
Three Months Ended March 31, | ||||||||||||||||
2022 | 2021 | $ Change | % Change | |||||||||||||
(In thousands, except percentage values) | ||||||||||||||||
Revenue | $ | 32 | $ | 4,402 | $ | (4,370 | ) | (99 | )% | |||||||
Cost of goods sold | — | 6,745 | (6,745 | ) | (100 | )% | ||||||||||
Gross profit | 32 | (2,343 | ) | 2,375 | 101 | % | ||||||||||
Research and development | 2,941 | 3,050 | (109 | ) | (4 | )% | ||||||||||
Selling, general, and administrative | 3,180 | 4,258 | (1,078 | ) | (25 | )% | ||||||||||
Management fees | — | 30 | (30 | ) | NM | |||||||||||
Loss from operations | (6,089 | ) | (9,681 | ) | 3,592 | 37 | % | |||||||||
Interest, net | (17 | ) | (346 | ) | 329 | 95 | % | |||||||||
Non-operating expenses | 487 | (1 | ) | 488 | 48,800 | % | ||||||||||
Net loss | $ | (5,619 | ) | $ | (10,028 | ) | $ | 4,409 | 44 | % | ||||||
Basic and diluted net loss per share | $ | (0.13 | ) | $ | (0.27 | ) | $ | 0.14 | 52 | % | ||||||
Adjusted EBITDA 1 | $ | (4,955 | ) | $ | (6,827 | ) | $ | 1,872 | 27 | % | ||||||
Revenue
Cost of Goods Sold
Cost of goods sold were $6.7 million in the first quarter of 2021, an increase of $2.9 million, or 74 percent, from the first quarter of 2020. The increase was driven by higher volumes of product sold, higher average prices paid for grain as a result of increases in commodity market prices for soybeans, and $0.2 million of unrealized commodity derivative losses from hedging contracts sold to convert our fixed price grain inventory and fixed price Forward Purchase Contracts to floating prices to link them to market, consistent with how we expect to sell the grain. These increases were partially offset by the benefits resulting from the advancement of our soybean product line go-to-market strategy.
Gross Margin and Adjusted Gross Margin
Gross margin was a negative $2.3 million, or negative 53 percent, in the first quarter of 2021, a decrease of $0.8 million or 55 percent from the first quarter of 2020, driven by higher volumes of product sold, higher cost of product sold as a result of increases in commodity prices for soybeans, and $0.2 million of unrealized commodity derivative losses from futures contracts sold to hedge our fixed price grain inventory and fixed price Forward Purchase Contracts. These increases were partially offset by higher selling prices and benefits from the advancement of our soybean product line go-to-market strategy.
Adjusted gross margin, a non-GAAP measure, was negative $1.3 million, or negative 31 percent, in the first quarter of 2021, compared to negative $1.2 million, or negative 49 percent, in the first quarter of 2020. The improvement on a percentage basis was driven by benefits resulting from the advancement of our soybean product line go-to-market strategy.
See below under the heading “Use of Non-GAAP Financial Information” for a discussion of adjusted gross margin and a reconciliation of gross margin, the most comparable GAAP measure, to adjusted gross margin.
Research and Development Expense
R&D expenses were $3.1 million in the first quarter of 2021, an increase of $0.3 million, or nine percent, from the first quarter of 2020. The increase was driven by an increase in non-cash stock compensation and third-party R&D expenses.
Selling, General, and Administrative Expense
SG&A expenses were $4.3 million in the first quarter of 2021, a decrease of $2.0 million, or 32 percent, from the first quarter of 2020.
- 19 -
2021. The decrease was primarily driven by lower non-cash stock compensation expense of $2.8 million from the recapture of stock compensation from forfeitures of unvested stock awards, lower personnel costs as a result of the reduction in cost following the advancement of the go-to-market strategy for our soybean product line, and other cash expenses also decreased from the first quarter of 2020. These decreases were partially offset by an increase of $2.4 million in Section 16 officer transition expenses and increase in certain insurance costs.Management Fees and RoyaltiesManagement fees and royalties were $30,000 in the first quarter of 2021, a decrease of $32,000, or 52 percent.Interest, netInterest, net for the first quarter of 2021 was essentially flat compared to the first quarter of 2020.Net Loss and Adjusted Net LossNet loss was $10.0 million in first quarter of 2021, an improvement of $1.0 million, or nine percent, from the first quarter of 2020. The improvement in net loss was driven by $2.7 million of lower non-cash stock compensation expenses as a result of a recapture of non-cash fewer stock awards granted,in the first quarter of 2022 and lower stock award values,operating expenses, partially offset by a $2.4 millionan increase in Section 16 officer transition expensesallocated SG&A costs of $0.5 million.
Adjusted net lossAdministrative Expense
loss and a year-over-year increase in weighted average shares outstanding.
loss and a year-over-year increase in weighted average shares outstanding.
Our
Three Months Ended March 31, | ||||||||||||||||
In Thousands | 2022 | 2021 | $ Change | % Change | ||||||||||||
Net loss | $ | (5,619 | ) | $ | (10,028 | ) | $ | 4,409 | 44 | % | ||||||
Depreciation and amortization expenses | 370 | 585 | (215 | ) | (37 | )% | ||||||||||
Stock-based compensation | 531 | (1,450 | ) | 1,981 | 137 | % | ||||||||||
Unrealized (gain) loss on mark-to-market of common stock warrants | (435 | ) | — | (435 | ) | NM | ||||||||||
Changes in operating assets and liabilities | (1,251 | ) | 1,476 | (2,727 | ) | (185 | )% | |||||||||
Net cash used by operating activities | $ | (6,404 | ) | $ | (9,417 | ) | $ | 3,013 | 32 | % | ||||||
Three Months Ended March 31, | ||||||||||||||||
In Thousands | 2022 | 2021 | $ Change | % Change | ||||||||||||
Sales and (purchases) of short-term investments, net | $ | — | $ | 8,653 | $ | (8,653 | ) | (100 | )% | |||||||
Purchases of land, buildings, and equipment | (545 | ) | (269 | ) | (276 | ) | (103 | )% | ||||||||
Net cash (used by) provided by investing activities | $ | (545 | ) | $ | 8,384 | $ | (8,929 | ) | (107 | )% | ||||||
Three Months Ended March 31, | ||||||||||||||||
In Thousands | 2022 | 2021 | $ Change | % Change | ||||||||||||
Proceeds from common stock issuance | $ | 11,209 | $ | — | $ | 11,209 | NM | |||||||||
Costs incurred related to the issuance of stock | (704 | ) | — | (704 | ) | NM | ||||||||||
Repayments of financing lease obligations | (94 | ) | (88 | ) | (6 | ) | (7 | )% | ||||||||
Proceeds from the exercise of stock options | — | 208 | (208 | ) | (100 | )% | ||||||||||
Net cash provided by financing activities | $ | 10,411 | $ | 120 | 10,291 | 8,576 | % | |||||||||
- 20 -
Our liquidity funds our non-discretionary cash requirements and our discretionary spending. Working capital is our principal non-discretionary funding requirement. In addition, we have contractual obligations related to our recurring business operations, primarily related to lease obligations. Our principal discretionary cash spending includes capital expenditures.
Gene editing is a highly regulated activity, and we incur significant expense related to our monitoring of, and compliance with, applicable regulatory requirementsbe returned in the United States. To the extent that we opportunistically pursue business arrangements that bring innovations developed for North America to new territories, we would be required to incur significant additional regulatory costs in order to comply with applicable regulatory requirements outside the United States.
We incurred losses from operations of $9.7December 2022. Current liabilities were $9.5 million for the three months ended March 31, 2021, and $10.7 million for the three months ended March 31, 2020. As of March 31, 2021, we had an accumulated deficit of $176.9 million and expect to continue to incur losses in the future.
We have $1.5 million outstanding under our Paycheck Protection Program loan as of March 31, 2021. We have applied2022.
Cash Flows from Operating Activities
| Three Months Ended March 31, |
| |||||||||||||
In Thousands | 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||
Net loss | $ | (10,028 | ) |
| $ | (11,063 | ) |
| $ | 1,035 |
|
|
| 9 | % |
Depreciation and amortization expense |
| 585 |
|
|
| 452 |
|
|
| 133 |
|
|
| 29 | % |
Stock-based compensation |
| (1,450 | ) |
|
| 1,271 |
|
|
| (2,721 | ) |
|
| (214 | )% |
Changes in operating assets and liabilities |
| 1,476 |
|
|
| (2,898 | ) |
|
| 4,374 |
|
|
| 151 | % |
Net cash used by operating activities | $ | (9,417 | ) |
| $ | (12,238 | ) |
| $ | 2,821 |
|
|
| 23 | % |
Net cash used by operating activities decreased by $2.8 million, primarily driven by a $4.4 million improvement in cash used by operating assets and liabilities primarily due to the severance recorded following the departure of Mr. Blome and $1.0 million decrease in net loss. These were partially offset by a $2.7 million change in the impact from non-cash stock compensation expense, primarily the result of the forfeiture of unvested stock awards.
We expect net cash used by operating activities over the remainder of 2021 to be lower than 2020 as a result of expense reductions following the advancement of the business model for our soybean product line.
Cash Flows from Investing Activities
| Three Months Ended March 31, |
| |||||||||||||
In Thousands | 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||
Sales and (purchases) of short-term investments, net | $ | 8,653 |
|
| $ | (38,620 | ) |
| $ | 47,273 |
|
|
| 122 | % |
Purchases of land, buildings, and equipment |
| (269 | ) |
|
| (317 | ) |
|
| 48 |
|
|
| 15 | % |
Net cash provided by (used by) investing activities | $ | 8,384 |
|
| $ | (38,937 | ) |
|
| 47,321 |
|
|
| 122 | % |
Net cash provided by investing activities increased by $47.3 million. This was driven by changes in purchases and sales of short-term investments.7,760,000 Common Warrants. In the first quarteraggregate, the Company received net proceeds of 2020, we invested cash$10.0 million, after deducting approximately $0.9 million of underwriting discounts and cash equivalents in short-term investments to diversify counterparty credit risk.
We expect net cash used for purchases of land, buildings,estimated other offering expenses.
- 21 -
Cash Flows from Financing Activities
| Three Months Ended March 31, |
| |||||||||||||
In Thousands | 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||
Repayments of financing lease obligations | $ | (88 | ) |
| $ | (45 | ) |
| $ | (43 | ) |
|
| (96 | )% |
Proceeds from the exercise of stock options |
| 208 |
|
|
| — |
|
|
| 208 |
|
| NM |
| |
Net cash provided by (used by) financing activities | $ | 120 |
|
| $ | (45 | ) |
| $ | 165 |
|
|
| 367 | % |
NM – not meaningful
Net cash provided by financing activities increased by $0.2 million, primarily driven by proceeds from stock option exercises.
We expect net cash from financing activities in 2021 to be less than 2020 due to the cash inflows from the $1.5 million Paycheck Protection Program loan received in 2020. On April 8, 2021, we were notified by the SBAanticipates that the full amount of our Paycheck Protection Program loan had been forgiven.
CAPITAL RESOURCES
Operating Capital Requirements
Considering factors such as cash raised in October 2020, our anticipated cash burn rate, our anticipated expense reduction efforts, our expectations regarding an effective advancement of our go-to-market soybean strategy, and anticipated cash receipts from our product development and technology licensing efforts with partners, we believe our cash, cash equivalents, short-term investments, and restricted cash as of March 31, 2021, will be enough to fund our operations for at least the next twelve months and into the second half of 2022.
We anticipate that weit will continue to generate losses for the next several years before revenue is enoughyears. Over the longer term and until the Company can generate cash flows sufficient to support ourits operating capital requirements. Until we can generate substantial cash flow, we expectrequirements, it expects to finance a portion of future cash needs through (i) cash on hand, public or private equity or debt financings, government or other third-party funding, and(ii) commercialization activities, which may result in various types of revenue streams from seed sales and(a) future product development agreements trait licenses, and technology licenses, including upfront and milestone payments, annual license fees, and royalties. 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 the Company’s common stock, (iv) public or private equity or debt financings, or (v) a combination of the foregoing. However, additional capital may not be available on reasonable terms, if at all.
Our
In response to current economic conditions, we have postponed non-essential capital expenditures and undertaken other efficiency efforts. In addition, the headcount reductions undertaken in connection with our business model advancement will contribute to our cost-saving initiatives. We will continue to review our operating expenses and to take actions that support efficient operations, financial flexibility, and optimized liquidity.
Company.
Report.
ESTIMATES
- 22 -
assumptions or conditions. We believeThe Company believes the policies discussed in Note 1, Basis of Presentation and Summary of Significant Accounting Policies, are the most critical to an understanding of ourits financial condition and results of operations because they require usit to make estimates, assumptions, and judgments about matters that are inherently uncertain.
As of March 31, 2022 | ||||
Estimated fair value of Common Warrants | $ | 0.64 | ||
Assumptions: | ||||
Risk-free interest rate | 2.5 | % | ||
Expected volatility | 80.0 | % | ||
Expected term to liquidation (in years) | 5.4 | |||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-02, “Leases (Topic 842)” (ASU 2016-02). Under ASU 2016-02, an entity will be required to recognize assets and liabilities for the rights and obligations created by leases on the entity’s balance sheet for both finance and operating leases. For leases with a term of 12 months or less, an entity can elect to not recognize lease assets and lease liabilities and expense the lease over a straight-line basis for the term of the lease.Because we are an emerging growth company, the requirements of the new standard are effective for annual reporting periods beginning after December 15, 2021, and interim periods within those annual periods. We are in the process of analyzing the impact of this standard on our results of operations and financial position.
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326)” (ASU 2016-13). ASU 2016-13 creates accounting requirements on how to account for credit losses on most financial assets and certain other instruments. This will require the estimation of lifetime expected credit losses and corresponding recognition of allowance for losses on trade and other receivables, loans, and other instruments held at amortized cost. The ASU requires certain recurring disclosures and is effective for annual periods, and interim periods within those annual periods, beginning on or after December 15, 2023. We are in the process of analyzing the impact of this standard on our results of operations.
We
We providerecognized in the table below a reconciliation of gross margin, which is the most directly comparable GAAP financial measure, to adjusted gross margin. We provide adjusted gross margin because we believe that this non-GAAP financial metric provides investors with useful supplemental information at this stage of commercialization as the amounts being adjusted affect the period-to-period comparability of our gross margins and financial performance.
The table below presents a reconciliation of gross margin to adjusted gross margin:
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Gross margin (GAAP measure) | $ | (2,343 | ) |
| $ | (1,507 | ) |
Gross margin percentage |
| (53 | )% |
|
| (63 | )% |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Unrealized mark-to-market loss |
| 211 |
|
|
| — |
|
Net realizable value adjustment to inventories |
| 787 |
|
|
| 334 |
|
Adjusted gross margin | $ | (1,345 | ) |
| $ | (1,173 | ) |
Adjusted gross margin percentage |
| (31 | )% |
|
| (49 | )% |
We present adjusted net loss, a non-GAAP measure, and define it as net loss excluding the effects of commodity derivatives entered into to hedge the change in value of fixed price grain inventories and fixed price Forward Purchase Contracts as the expected impact from these contracts will be fully offsetfuture when the underlying graininventory is sold, anyand (iv) net realizable value adjustments to inventories occurringrecognized in prior periods but associated with inventory sold in the current period, which would otherwise have been recorded as an adjustment to value in a prior period or would have been recorded in a
- 23 -
future period as the underlying products are sold,and excluding cash-based Section 16 officer transition expenses, the recapture ofexpense primarily associated with the departure of Section 16 officers, and expenses, which are primarily gains and losses on foreign exchange transactions and losses on the disposals of land, buildings, and equipment.We provide
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Net loss (GAAP measure) | $ | (10,028 | ) |
| $ | (11,063 | ) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Unrealized mark-to-market loss |
| 211 |
|
|
| — |
|
Net realizable value adjustment to inventories |
| 787 |
|
|
| 334 |
|
Section 16 officer transition expenses |
| 2,721 |
|
|
| 360 |
|
Recapture of non-cash stock compensation |
| (2,540 | ) |
|
| (471 | ) |
Non-operating expenses |
| 1 |
|
|
| 11 |
|
Adjusted net loss | $ | (8,848 | ) |
| $ | (10,829 | ) |
|
|
|
|
|
|
|
|
We present Three Months Ended March 31, In Thousands 2022 2021 Net loss (GAAP measure) $ (5,619 ) $ (10,028 ) Commodity derivative impact, net — 211 Net realizable value adjustment to inventories — 787 Section 16 officer transition expenses 116 2,721 — (2,540 ) (487 ) 1 Adjusted net loss $ (5,990 ) $ (8,848 )
We provide
| Three Months Ended March 31, |
| |||||
| 2021 |
|
| 2020 |
| ||
Net loss per share (GAAP measure) | $ | (0.27 | ) |
| $ | (0.34 | ) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Unrealized mark-to-market loss |
| 0.01 |
|
|
| — |
|
Net realizable value adjustment to inventories |
| 0.02 |
|
|
| 0.01 |
|
Section 16 officer transition expenses |
| 0.07 |
|
|
| 0.01 |
|
Recapture of non-cash stock compensation |
| (0.07 | ) |
|
| (0.01 | ) |
Non-operating expenses |
| — |
|
|
| — |
|
Adjusted net loss per share | $ | (0.24 | ) |
| $ | (0.33 | ) |
We present Three Months Ended March 31, 2022 2021 Net loss per share (GAAP measure) $ (0.13 ) $ (0.27 ) Commodity derivative impact, net — 0.01 Net realizable value adjustment to inventories — 0.02 Section 16 officer transition expenses — 0.07 — (0.07 ) (0.01 ) — Adjusted net loss per share $ (0.14 ) $ (0.24 )
We provide
- 24 -
EBITDA provides investors with useful supplemental information about the operational performance of ourits business and facilitates the our financial results where certain items may vary significantly independent of our business performance.
| Three Months Ended March 31, |
| |||||
In Thousands | 2021 |
|
| 2020 |
| ||
Net loss (GAAP measure) | $ | (10,028 | ) |
| $ | (11,063 | ) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Interest, net |
| 346 |
|
|
| 398 |
|
Depreciation and amortization expenses |
| 585 |
|
|
| 452 |
|
Stock-based compensation expenses |
| (1,450 | ) |
|
| 1,271 |
|
Unrealized mark-to-market loss |
| 211 |
|
|
| — |
|
Net realizable value adjustment to inventories |
| 787 |
|
|
| 334 |
|
Section 16 officer transition expenses |
| 2,721 |
|
|
| 360 |
|
Non-operating expenses |
| 1 |
|
|
| 11 |
|
Adjusted EBITDA | $ | (6,827 | ) |
| $ | (8,237 | ) |
Three Months Ended March 31, | ||||||||
In Thousands | 2022 | 2021 | ||||||
Net loss (GAAP measure) | $ | (5,619 | ) | $ | (10,028 | ) | ||
Non-GAAP adjustments: | ||||||||
Interest, net | 17 | 346 | ||||||
Depreciation and amortization expenses | 370 | 585 | ||||||
Operating lease right-of-use asset amortization expenses | 177 | — | ||||||
Stock-based compensation expenses | 531 | (1,450 | ) | |||||
Commodity derivative impact, net | — | 211 | ||||||
Net realizable value adjustment to inventories | — | 787 | ||||||
Section 16 officer transition expenses | 116 | 2,721 | ||||||
Non-operating expenses | (487 | ) | 1 | |||||
Adjusted EBITDA | $ | (4,955 | ) | $ | (6,827 | ) | ||
2022.
We are
In the three months ended March 31, 2021, the
during the three months ended March 31, 2022.
(a) | Index of Exhibits |
*Filed herewith
† Indicates management contract or compensatory plan.
* | Filed herewith |
† | Indicates management contract or compensatory plan. |
CALYXT, INC. | |||||
By: |
| /s/ | |||
Name: |
|
| |||
Title: |
| President & Chief Executive Officer (Principal Executive Officer) | |||
By: |
| /s/ William F. Koschak | |||
Name: |
| William F. Koschak | |||
Title: |
| Chief Financial Officer (Principal Financial and Accounting Officer) |