Execution of Commercial Agreement with S&W
Seed Company on IQ™ Alfalfa Product, Marking Calyxt’s First Trait
License Agreement
Significant Progress Achieved on Soybean
Product Transition Plan
Third Quarter 2020 Revenue Increases 77% to
$5.2 Million Year-On-Year
Cash Runway Extended into the Second Half of
2022
Management to Host Conference Call Today at
4:30 p.m. ET
Calyxt, Inc. (NASDAQ: CLXT), a plant-based technology company,
has reported its financial results for the third quarter ended
September 30, 2020.
Execution of commercial agreement with S&W Seed Company
on IQ™ Alfalfa product, marking Calyxt’s first trait license
agreement:
- Based on long-term U.S. sales projections, the agreement could
potentially generate more than $10M of license revenue over the
life of the pending patent for the trait.
- The enhanced trait gives farmers the opportunity to produce
alfalfa forage for livestock with improved digestibility, which may
lead to greater animal performance. The trait is designed to result
in a higher value alfalfa produced on the same acre with the same
inputs, putting greater profitability in the hands of the
farmer.
- IQ Alfalfa adds value to the market as a high-quality alfalfa
with a strong yield that delivers benefits to growers as well as
the dairy and cattle industries.
“As our first trait license agreement, this alfalfa launch
represents a milestone in the execution of Calyxt’s three
go-to-market strategies,” said Jim Blome, CEO of Calyxt. “It is a
great demonstration of Calyxt’s ability to work collaboratively,
choose traits to enhance value, do the research to make it happen,
and support S&W Seed Company in bringing advanced plant science
to market.”
Significant progress achieved on soybean product transition
plan:
- Executing on the advancement of our soybean products to a
streamlined go-to-market strategy that was announced in
August.
- Staffing adjustments related to soybean processing and product
sales, as well as the gradual exit of supply chain contractual
commitments that are not associated with the ongoing seed
go-to-market strategy, are progressing on schedule.
- Contracted grain purchases, subsequent sales of grain, and the
wind down of other contractual obligations are on-track to be
completed in late 2021.
- As of today, all current inventory of soybean oil and meal has
been sold, and we are negotiating with large processors for the
sale of all remaining grain inventories as well as the grain from
our 2020 grower production contracts. The grain sales are projected
to occur at then-current market prices.
- Our revenue for the quarter increased 77% compared to the prior
year third quarter to $5.2 million because of these selling
activities, including the sale nearly all our 2019 grain crop
during the quarter.
- We intend to target seed sales to large grain processors,
representing at least $3 million in projected 2021 revenue.
Additional Third Quarter 2020 and Subsequent Operational
Highlights:
- Appointed current board member Yves Ribeill, Ph.D., as
Chairman, and Laurent Arthaud (Cellectis-nominated Board member) as
Director.
- Commenced execution on differentiated go-to-market strategies
that are expected to optimize our TALEN® technology platform and
accelerate our trajectory toward positive free cash flow. Our
go-to-market strategies are as follows:
- Seed Sale Arrangements: Through purchase agreements for
the direct sale of seed, with such sales expected to generate
revenue for Calyxt.
- Trait and Product Licensing Arrangements: Through
licensing agreements with downstream partners with respect to
Calyxt-developed traits or products for negotiated upfront and
milestone payments and potential royalties upon commercial sale of
products.
- TALEN® Licensing Arrangements: Through licensing
agreements with third parties with respect to our technology for
negotiated upfront and annual fees and potential royalties upon
commercial sale of products.
- Patent portfolio continues to grow with allowances across
multiple families and geographies, including TALEN and CRISPR gene
editing tools. Filed patent applications focus on gene editing
enhancements as well as new technologies in hemp, pulses and
oats.
- Appointed Dan Voytas, Ph.D., to chair new scientific advisory
board. The scientific advisory board is expected to address
near-term pipeline opportunities, longer-term large-scale
opportunities, and the development of Calyxt’s approach to ESG
issues.
- Appointed Sarah Reiter as Vice President of Business
Development. Sarah is a plant-based technology and agribusiness
leader who has focused on establishing world-class partnerships and
value chains that lead to the successful commercialization of
emerging technologies for companies of all sizes. Sarah will make a
strong contribution to the overall commercial strategy for Calyxt's
future products, including the prioritization of markets,
customers, and product types.
- On October 20, 2020, completed a registered direct offering of
3.75 million shares of the company’s common stock at a purchase
price of $4.00 per share, resulting in gross proceeds of $15
million; Cellectis S.A., Calyxt’s majority shareholder, purchased
1.25 million shares in the offering.
Third Quarter 2020 Development Pipeline:
During the third quarter we advanced four of the projects in the
table below from Discovery to Phase I of our development process,
and today we have eight projects at Phase 1 stage or later in
development across alfalfa, hemp, oats, soybeans, and wheat. We are
also exploring improved protein and flavor profile in pulse crops,
with several options under consideration.
CROP
TRAIT
TARGET COMMERCIAL PLANTING
YEAR
TARGET GO-TO-MARKET
STRATEGY
Alfalfa
Improved Digestibility
2021
Trait
Wheat
High Fiber
2022
Seed
Soybean
High Oleic, Low Linolenic
(HOLL)
2023
Seed
Hemp
Marketable Yield2
2023
Seed and Trait
Hemp
Low THC for Food, Fiber, &
Therapeutics2
2024
Seed and Trait
Oat
Cold Tolerant2
2026
Seed and Trait
Soybean
Improved HOLL
2026
Seed
Soybean
High Saturated Fat2
2026
Seed and Trait
Pulse
Improved Protein Profile and
Flavor
2027
Trait
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 described in our filings
with the Securities and Exchange Commission.
2 These projects were advanced from
Discovery to Phase I of our development process during the third
quarter of 2020.
Calyxt is also actively negotiating agreements with potential
partners with respect to specific opportunities for which
development activity would only commence upon reaching a commercial
agreement. These projects are not included in the preceding
table.
CEO Summary
“The third quarter of 2020 was marked by two key milestones: an
initial validation of our licensing business model with the
execution of our agreement for Calyxt’s alfalfa product candidate
and the continued transition of our soybean products to a seed
go-to-market strategy,” said Jim Blome, Calyxt CEO. “We expect to
continue selling grain in the fourth quarter, and the overall
transition timeline remains on track.”
“We proved a gene edited food product could be developed and
launched with commercial success, and now we have found a more
optimal way for it to be monetized, in a business model that fits
our company well. In terms of our go-to-market strategies to
optimize the TALEN technology platform, we are focusing our R&D
and business development efforts to provide our shareholders with
the benefits of a less complex and highly accretive business model
characterized by lower non-R&D funding needs and, over time, a
higher margin recurring revenue stream that does not require
significant capital investment to operate. We anticipate the
structure of future agreements and the amount and timing of cash
flows will vary depending upon several factors, including cost to
develop, size of the opportunity, and the stage at which a partner
or licensee enters the development process. Success here would
propagate future projects and will further sharpen our gene-editing
excellence and build on our successful track record and growing
intellectual property portfolio.”
“We believe there is a significant market opportunity for
products developed with our TALEN technology, including these major
areas: first, developing crops that grow in a changing world – this
is a large and close-in area of opportunity where we seek to
address changes in consumer trends and preferences as well as
sustainability challenges our potential partners are facing; and
second, transforming farm economics – where we seek to deliver
products that result in increased financial benefit, like providing
cover crops that could be monetized as a second source of income
off the same acre,” added Blome.
“Calyxt’s focus on disruptive innovation utilizing plant-based
inputs has opened new doors during the third quarter and our
continuing conversations with potential partners are progressing
nicely. Through our streamlined business model with differentiated
go-to-market strategies, we are targeting diverse revenue streams
across multiple industries, a high double-digit margin profile, and
an accelerated path to positive free cash flow. We believe the
advancement of our soybean products, anticipated cash receipts from
our product development efforts with partners, and new cash
infusion extends our anticipated cash runway into the second half
of 2022.”
“We look forward to sharing more on our developing story with
respect to the key projects and business model during Calyxt’s
Virtual Analyst Day on November 17, 2020,” concluded Blome.
Financial Results for the Three Months Ended September 30,
2020
- Revenue increased by $2.3 million, or 77 percent, from the
third quarter of 2019 to $5.2 million in the third quarter of 2020.
The revenue growth was driven by 15 basis points of volume and 64
basis points of pricing, both partially offset by 2 basis points of
unfavorable product mix as we sold more meal in 2020 as a percent
of total revenue than the prior period. Most oil revenue in 2020
was from a single customer purchasing our oil to be used as a
plant-based alternative to synthetic fluids, and we expect to
fulfill their remaining orders in the fourth quarter of 2020.
- Cost of goods sold increased by $3.5 million from the third
quarter of 2019 to $7.1 million in the third quarter of 2020. The
increase in cost of goods sold reflects the higher volume of
product sold, the impact of lower costs associated with products
sold in 2019 because $2.8 million of grain costs were previously
expensed as R&D, $1.1 million of commodity derivative losses
from hedging contracts sold to convert our fixed price grain
inventories and fixed price Forward Purchase Contracts from fixed
to floating prices, consistent with how we expect to sell the
grain, and a $0.2 million increase in the net realizable value
adjustment to period-end inventories. These increases were
partially offset by lower product costs and the benefits resulting
from the advancement of our soybean product line go-to-market
strategy.
- Gross margin was a negative $1.8 million, or a negative 35
percent, in the third quarter of 2020, a decrease of $1.2 million,
or a negative 16 percent, from the third quarter of 2019. The
decline in gross margin in the third quarter of 2020 reflects the
impact of lower costs associated with products sold in 2019 because
$2.8 million of grain costs were previously expensed as R&D,
$1.1 million of commodity derivative losses from hedging contracts
sold to convert our fixed price grain inventories and fixed price
Forward Purchase Contracts from fixed to floating prices,
consistent with how we expect to sell the grain, and a $0.2 million
increase in the net realizable value adjustment to period-end
inventories. These increases were partially offset by lower product
costs and the benefits resulting from the advancement of our
soybean product line go-to-market strategy.
Gross margin, as adjusted, was negative $1.3 million, or
negative 24 percent, in the third quarter of 2020, as compared to
negative $2.5 million, or negative 86 percent, in the third quarter
of 2019. The improvement was driven by higher selling prices, lower
product costs, and the 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 gross margin, as adjusted, and a
reconciliation of gross margin, the most comparable GAAP measure,
to gross margin, as adjusted.
- Research and Development (R&D) expenses decreased by $1.4
million to $2.2 million, driven by a decrease in stock compensation
expense of $0.5 million from the recapture of non-cash stock
compensation expense from the forfeiture and modification of
unvested stock awards. The same period in 2019 also included $0.5
million of expense to write off R&D tax credits that were no
longer realizable.
- Selling & Supply Chain expenses decreased by $0.9 million
to $0.4 million, driven by a decrease in stock compensation expense
of $0.6 million from the recapture of non-cash stock compensation
expense from the forfeiture of unvested stock awards, partially
offset by higher year-over-year compensation expenses.
- General & Administrative expenses decreased by $0.7 million
to $4.2 million, driven by a decrease in stock compensation expense
of $1.0 million and lower personnel costs of $0.5 million,
partially offset by an increase in insurance costs.
- Restructuring costs include the impact of severance and other
expenses resulting from the action we initiated in August 2020 to
advance our soybean product line go-to-market strategy.
- Net loss was $9.5 million in the third quarter of 2020, an
improvement of $1.2 million from the third quarter of 2019. The
improvement was driven by a reduction in non-cash stock
compensation expenses of $2.1 million, partially offset by a
decline in gross margins of $1.2 million, and $0.4 million of
restructuring costs. The same period in 2019 also included $0.5
million of expense to write off R&D tax credits that were no
longer realizable.
Adjusted net loss was $9.3 million in the third quarter of 2020,
an improvement of $2.6 million from the third quarter of 2019,
driven by the 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 net loss and a
reconciliation of net loss, the most comparable GAAP measure, to
adjusted net loss.
- Net loss per share was $0.29 in the third quarter of 2020, an
improvement of $0.03 per share from the third quarter of 2019,
driven by the change in net loss.
Adjusted net loss per share was $0.28 in the third quarter of
2020, an improvement of $0.08 per share from the third quarter of
2019, driven by the change in adjusted net loss.
See below under the heading “Use of Non-GAAP Financial
Information” for a discussion of adjusted net loss per share and a
reconciliation of net loss per share, the most comparable GAAP
measure, to adjusted net loss per share.
- Adjusted EBITDA loss was $7.1 million in the third quarter of
2020, an improvement of $1.8 million from the third quarter of
2019.
See below under the heading “Use of Non-GAAP Financial
Information” for a discussion of adjusted EBITDA and a
reconciliation of net loss, the most comparable GAAP measure, to
adjusted EBITDA.
- Net cash used in the third quarter of 2020 improved by $4.2
million to $5.8 million, driven by a $4.6 million net decrease in
cash flows used by operating assets and liabilities, primarily the
result of the timing of cash payments to growers and changes in
inventory balances year-over-year, and a $0.6 million reduction in
purchases of land, buildings, and equipment, as the improvement in
net loss of $1.2 million was driven by a $2.1 million decline in
non-cash stock compensation expense.
- Cash, cash equivalents, short-term investments, and restricted
cash totaled $29.4 million as of September 30, 2020.
CFO Summary
“The third quarter of 2020 was highlighted by the significant
progress we made on transitioning our soybean products to a
streamlined go-to-market strategy. The sales of grain to a large
processor resulted in 77% growth in our revenues to $5.2 million.
We shed most of our freight leases and other soybean-related costs
in the period,” said Bill Koschak, CFO of Calyxt. “We expect to
sell the remaining grain we own or will purchase at market prices,
and, to help protect the cash margins of those sales, we have
utilized commodity derivatives to convert our fixed price exposures
to market.”
“Our adjusted gross margin performance in the quarter was as
expected based on the mix of product sold and following the
announcement we made earlier in the quarter to advance our soybean
products to a streamlined go-to-market strategy. We sold all our
soybean oil and meal inventory in the quarter and have sold nearly
all our 2019 grain inventory. These results demonstrate the
on-track progress we are making toward completing the transition of
the products on schedule.”
“We also signed a commercial license agreement early in the
fourth quarter for our improved quality alfalfa trait. Following
completion of remaining regulatory work, the agreement provides for
royalty payments on seed sales, which we estimate could reach
approximately $10 million over the life of the pending patent for
the trait. This is one small but illustrative example of the
earnings potential Calyxt has, which we expect to unlock with our
future project launches executed with a similar go-to-market
strategy,” said Koschak.
“After the closing of the third quarter Calyxt completed a
capital raise with gross proceeds of $15.0 million, which together
with the advancement of our soybean product and anticipated cash
receipts from our product development efforts with partners extends
our projected cash runway into the second half of 2022. Investors
in the SEC-registered, direct capital raise included Cellectis, our
largest shareholder, and new institutional investors. We believe
the support of Cellectis and our new shareholders is a testament to
our go-to-market strategies,” concluded Koschak.
Third Quarter 2020 Results Conference Call
Calyxt Chief Executive Officer Jim Blome and Chief Financial
Officer Bill Koschak will host the conference call, followed by a
question and answer session. The conference call will be
accompanied by a presentation, which can be viewed during the
webcast or accessed via the investor relations section of Calyxt’s
website here.
To access the call, please use the following information:
Date:
Thursday, November 5, 2020
Time:
4:30 p.m. EST, 1:30 p.m. PST
Toll Free dial-in number:
1-877-407-0789
Toll/International dial-in number:
1-201-689-8562
Conference ID:
13711539
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have difficulty connecting with the conference
call, please contact MZ Group at +1 (949) 491-8235.
The conference call will be broadcast live and available for
replay at http://public.viavid.com/index.php?id=141783 and via the
investor relations section of Calyxt’s website here.
A replay of the call will be available for one month following
the conference.
Toll Free Replay Number:
1-844-512-2921
International Replay Number:
1-412-317-6671
Replay ID:
13711539
About Calyxt:
Calyxt (NASDAQ: CLXT), based in Roseville, Minnesota, is a
technology company with a mission to deliver plant-based
innovations for a better world. Founded in 2010, Calyxt uses its
proprietary TALEN® gene editing technology to work with world-class
partners via technology licensing, product development, and seed
sale arrangements to revolutionize the way the world uses plants to
solve problems. For further information, please visit our website
at www.calyxt.com.
USE OF NON-GAAP FINANCIAL INFORMATION
To supplement our audited financial results prepared in
accordance with GAAP, we have prepared certain non-GAAP measures
that include or exclude special items. These non-GAAP measures are
not meant to be considered in isolation or as a substitute for
financial information presented in accordance with GAAP and should
be viewed as supplemental and in addition to our financial
information presented in accordance with GAAP. Investors are
cautioned that there are material limitations associated with the
use of non-GAAP financial measures. In addition, other companies
may report similarly titled measures, but calculate them
differently, which reduces their usefulness as a comparative
measure. Management utilizes these non-GAAP metrics as performance
measures in evaluating and making operational decisions regarding
our business.
We present gross margin, as adjusted, a non-GAAP measure that
includes the effects of grain costs expensed as R&D in a prior
period, excludes 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 offset when the underlying grain is
sold, and excludes the impact of any net realizable value
adjustments to inventories occurring in the period, which would
otherwise have been recorded as an adjustment to value in a prior
period or would have been recorded in a future period as the
underlying products are sold.
We provide in the table below a reconciliation of gross margin,
as adjusted, to gross margin, which is the most directly comparable
GAAP financial measure. We provide gross margin, as adjusted
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
gross margin, as adjusted:
Three Months Ended September
30,
Nine Months Ended September
30,
In Thousands
2020
2019
2020
2019
Gross margin (GAAP measure)
$
(1,819
)
$
(561
)
$
(6,340
)
$
(332
)
Gross margin percentage
(35
)%
(19
)%
(64
)%
(9
)%
Adjustments:
Grain costs expensed as R&D
—
(2,814
)
—
(3,349
)
Mark to market loss
1,107
—
1,107
—
Net realizable value adjustment to
inventories
(555
)
832
2,000
832
Gross margin, as adjusted
$
(1,267
)
$
(2,543
)
$
(3,233
)
$
(2,849
)
Gross margin percentage, as
adjusted
(24
)%
(86
)%
(33
)%
(81
)%
We present adjusted net loss, a non-GAAP measure, and define it
as net loss including the effects of grain costs expensed as
R&D in a prior period, and 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 offset
when the underlying grain is sold, any net realizable value
adjustments to inventories occurring in the period, which would
otherwise have been recorded as an adjustment to value in a prior
period or would have been recorded in a future period as the
underlying products are sold, Section 16 officer transition
expenses, R&D payroll tax credits that are no longer
realizable, restructuring costs, and the recapture of non-cash
stock compensation expense from the forfeiture and modification of
unvested stock awards associated with staffing adjustments made as
part of the advancement of our soybean business model.
We provide in the table below a reconciliation of adjusted net
loss to net loss, which is the most directly comparable GAAP
financial measure. We provide adjusted net loss 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 net losses and financial performance.
The table below presents a reconciliation of net loss to
adjusted net loss:
Three Months Ended September
30,
Nine Months Ended September
30,
In Thousands
2020
2019
2020
2019
Net loss (GAAP measure)
$
(9,476
)
$
(10,669
)
$
(31,441
)
$
(27,447
)
Non-GAAP adjustments:
Grain Costs expensed as R&D
—
(2,814
)
—
(3,349
)
Mark to market loss
1,107
—
1,107
—
Net realizable value adjustment to
inventories
(555
)
832
2,000
832
Section 16 officer transition expenses
56
193
493
1,052
Research and development payroll tax
credit
—
536
—
410
Restructuring costs
436
—
436
—
Recapture of non-cash stock
compensation
(906
)
—
(906
)
—
Adjusted net loss
$
(9,338
)
$
(11,922
)
$
(28,311
)
(28,502
)
We present adjusted net loss per share, a non-GAAP measure, and
define it as net loss per share including the effects of grain
costs expensed as R&D in a prior period, and 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 offset when the underlying grain is sold, any net
realizable value adjustments to inventories occurring in the
period, which would otherwise have been recorded as an adjustment
to value in a prior period or would have been recorded in a future
period as the underlying products are sold, Section 16 officer
transition expenses, R&D payroll tax credits that are no longer
realizable, restructuring costs, and the recapture of non-cash
stock compensation expense from the forfeiture and modification of
unvested stock awards associated with staffing adjustments made as
part of the advancement of our soybean business model.
We provide in the table below a reconciliation of adjusted net
loss per share to net loss per share, which is the most directly
comparable GAAP financial measure. We provide adjusted net loss per
share 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 net losses per share and
financial performance.
The table below presents a reconciliation of net loss per share
to adjusted net loss per share:
Three Months Ended September
30,
Nine Months Ended September
30,
In Thousands
2020
2019
2020
2019
Net loss per share (GAAP measure)
$
(0.29
)
$
(0.32
)
$
(0.95
)
$
(0.84
)
Non-GAAP adjustments:
Grain Costs expensed as R&D
—
(0.09
)
—
(0.10
)
Mark to market loss
0.03
—
0.03
—
Net realizable value adjustment to
inventories
(0.01
)
0.03
0.06
0.03
Section 16 officer transition expenses
0.01
0.01
0.02
0.03
Research and development payroll tax
credit
—
0.01
—
0.01
Restructuring costs
0.01
—
0.01
—
Recapture of non-cash stock
compensation
(0.03
)
—
(0.03
)
—
Adjusted net loss per share
$
(0.28
)
$
(0.36
)
$
(0.86
)
$
(0.87
)
We present adjusted EBITDA, a non-GAAP measure, and define it as
net loss excluding interest, net, income tax expense, depreciation
and amortization expenses, stock-based compensation expenses, the
effects of commodity derivatives entered into to hedge the change
in value of fixed price grain inventories and fixed Forward
Purchase Contracts as the expected impact from these contracts will
be fully offset when the underlying grain is sold, any net
realizable value adjustments to inventories occurring in the
period, which would otherwise have been recorded as an adjustment
to value in a prior period or would have been recorded in a future
period as the underlying products are sold, Section 16 officer
transition expenses, R&D payroll tax credits that are no longer
realizable, restructuring costs; and including the effects of grain
costs expensed as R&D in a prior period.
We provide in the table below a reconciliation of adjusted
EBITDA to net loss, which is the most directly comparable GAAP
financial measure. Because adjusted EBITDA excludes non-cash items
and discrete or infrequently occurring items, we believe that
adjusted EBITDA provides investors with useful supplemental
information about the operational performance of our business and
facilitates comparison of our financial results between periods
where certain items may vary significantly independent of our
business performance.
The table below presents a reconciliation of net loss to
adjusted EBITDA:
Three Months Ended September
30,
Nine Months Ended September
30,
In Thousands
2020
2019
2020
2019
Net loss (GAAP measure)
$
(9,476
)
$
(10,669
)
$
(31,441
)
$
(27,447
)
Non-GAAP adjustments:
Interest, net
324
(32
)
568
(296
)
Income tax expense
—
—
—
—
Depreciation and amortization
468
362
1,372
1,051
Stock-based compensation expenses
570
2,705
3,638
6,565
Grain Costs expensed as R&D
—
(2,814
)
—
(3,349
)
Mark to market loss
1,107
—
1,107
—
Net realizable value adjustment to
inventories
(555
)
832
2,000
832
Section 16 officer transition expenses
56
193
493
1,052
Research and development payroll tax
credit
—
536
—
410
Restructuring costs
436
—
436
—
Adjusted EBITDA
$
(7,070
)
$
(8,887
)
$
(21,827
)
$
(21,182
)
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of 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,”
“targets,” “intends,” “may,” “might,” “plans,” “potential,”
“predicts,” “projects,” “should,” or “will,” the negative of these
terms and other similar terminology. Forward-looking statements in
this press release include statements about the potential impact of
the COVID-19 pandemic on our business and operating results; our
future financial performance; product pipeline and development; our
business model and strategies for commercialization and sales of
commercial products; regulatory progression; potential
collaborations, partnerships and licensing arrangements and their
contribution to our financial results, cash usage, and growth
strategies, including with respect to potential revenue from
royalties relating to our improved quality alfalfa; and anticipated
trends in our business. These and other forward-looking statements
are predictions and projections about future events and trends
based on our current expectations, objectives and intentions and
premised on current assumptions. Our actual results, level of
activity, performance, or achievements could be materially
different than those expressed, implied, or anticipated by
forward-looking statements due to a variety of factors, including,
but not limited to: the severity and duration of the evolving
COVID-19 pandemic and the resulting impact on macro-economic
conditions; the impact of increased competition, including with
respect to enhanced quality alfalfa; disruptions at our or our
collaborators’ key facilities; changes in customer preferences and
market acceptance of our or our partners’ products, including our
improved quality alfalfa; competition for collaboration partners
and licensees and the successful execution of collaborations and
licensing agreements; the impact of adverse events during
development, including unsuccessful field trials or development
trials or disruptions in seed production; the impact of improper
handling of our product candidates by unaffiliated third parties
during development, such as the improper aerial spraying of our
high fiber wheat product candidate; failures by third-party
contractors; inaccurate demand forecasting, including with respect
to sales projections used by Calyxt management in determining
potential license revenues; the effectiveness of commercialization
efforts by commercial partners or licensees; our ability to make
grain sales on terms acceptable to us; the timing of our grain
sales; our ability to collect accounts receivable; disruptions to
supply chains, including transportation and storage functions;
commodity price conditions; 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; and other important factors discussed under the caption
entitled “Risk Factors” in our Annual Report on Form 10-K and
subsequent filings on Form 10-Q or 8-K with the U.S. Securities and
Exchange Commission. Any forward-looking statements made by us are
based only on information currently available to us when, and
speaks only as of the date, such statement is made. Except as
otherwise required by securities and other applicable laws we do
not assume any obligation to publicly provide revisions or updates
to any forward-looking statements, whether as a result of new
information, future developments or otherwise, should circumstances
change.
CALYXT, INC.
CONSOLIDATED BALANCE
SHEETS
(In Thousands, Except Par
Value and Share Amounts)
September 30, 2020
(unaudited)
December 31, 2019
Assets
Current assets:
Cash and cash equivalents
$
7,170
$
58,610
Short-term investments
20,802
—
Restricted cash
393
388
Accounts receivable
2,432
1,122
Due from related parties
2
—
Inventory
5,953
2,594
Prepaid expenses and other current
assets
1,515
808
Total current assets
38,267
63,522
Non-current restricted cash
1,041
1,040
Land, buildings, and equipment
22,823
23,212
Other non-current assets
347
324
Total assets
$
62,478
$
88,098
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
1,163
$
1,077
Accrued expenses
4,261
2,544
Accrued compensation
1,609
2,181
Due to related parties
481
977
Current portion of financing lease
obligations
361
356
Other current liabilities
44
61
Total current liabilities
7,919
7,196
Financing lease obligations
18,022
18,244
Long-term debt
1,518
—
Other non-current liabilities
123
150
Total liabilities
27,582
25,590
Stockholders’ equity:
Common stock, $0.0001 par value;
275,000,000 shares authorized; 33,343,313 shares issued and
33,243,161 shares outstanding as of September 30, 2020, and
33,033,689 shares issued and 32,951,329 shares outstanding as of
December 31, 2019
3
3
Additional paid-in capital
189,437
185,588
Common stock in treasury, at cost; 100,152
shares as of September 30, 2020, and 82,360 shares as of December
31, 2019
(1,043
)
(1,043
)
Accumulated deficit
(153,498
)
(122,057
)
Accumulated other comprehensive income
(loss)
(3
)
17
Total stockholders’ equity
34,896
62,508
Total liabilities and stockholders’
equity
$
62,478
$
88,098
CALYXT, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited and in Thousands
Except Shares and Per Share Amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Revenue
$
5,241
$
2,967
$
9,925
$
3,533
Cost of goods sold
7,060
3,528
16,265
3,865
Gross margin
(1,819
)
(561
)
(6,340
)
(332
)
Operating expenses:
Research and development
2,204
3,579
7,816
8,536
Selling and supply chain
439
1,314
3,368
3,421
General and administrative
4,185
4,934
12,713
14,302
Management fees
68
305
172
1,117
Restructuring costs
436
—
436
—
Total operating expenses
7,332
10,132
24,505
27,376
Loss from operations
(9,151
)
(10,693
)
(30,845
)
(27,708
)
Interest, net
(324
)
32
(568
)
296
Foreign currency transaction loss
(1
)
(8
)
(28
)
(35
)
Loss before income taxes
(9,476
)
(10,669
)
(31,441
)
(27,447
)
Income taxes
—
—
—
—
Net loss
$
(9,476
)
$
(10,669
)
$
(31,441
)
$
(27,447
)
Basic and diluted loss per
share
$
(0.29
)
$
(0.32
)
$
(0.95
)
$
(0.84
)
Weighted average shares outstanding -
basic and diluted
33,200,289
32,866,467
33,076,376
32,759,194
CALYXT, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited and in
Thousands)
Nine Months Ended September
30,
2020
2019
Operating activities
Net loss
$
(31,441
)
$
(27,447
)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization
1,372
1,051
Stock-based compensation
3,638
6,565
Changes in operating assets and
liabilities:
Accounts receivable
(1,310
)
(1,304
)
Due to/from related parties
(498
)
(1,223
)
Inventory
(3,359
)
(2,371
)
Prepaid expenses and other current
assets
(707
)
192
Accounts payable
86
127
Accrued expenses
1,717
(49
)
Accrued compensation
(572
)
478
Other current liabilities
(64
)
(743
)
Other non-current assets
140
36
Net cash used by operating
activities
(30,998
)
(24,688
)
Investing activities
Purchases of land, buildings, and
equipment
(1,146
)
(2,538
)
Short-term investments
(20,802
)
—
Net cash used by investing
activities
(21,948
)
(2,538
)
Financing activities
Proceeds from Payroll Protection Program
loan
1,518
—
Repayments of financing lease
obligations
(217
)
(195
)
Proceeds from the exercise of stock
options
211
314
Costs incurred related to shares withheld
for net share settlement
—
(645
)
Proceeds from the sale and leaseback of
land, buildings, and equipment
—
414
Net cash provided (used) by financing
activities
1,512
(112
)
Net decrease in cash, cash equivalents and
restricted cash
(51,434
)
(27,338
)
Cash, cash equivalents and restricted cash
- beginning of period
60,038
95,288
Cash, cash equivalents and restricted
cash – end of period
$
8,604
$
67,950
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105005945/en/
Calyxt Media Contact: Trina Lundblad, Director of
Corporate Communications (612) 790-0514 media@calyxt.com
Calyxt Investor Relations Contact: Chris Tyson, Managing
Director MZ Group – MZ North America (949) 491-8235 CLXT@mzgroup.us
www.mzgroup.us
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