Basis of Presentation & Summary of Significant Accounting Policies
|9 Months Ended|
Sep. 30, 2021
|Accounting Policies [Abstract]|
|Basis of Presentation & Summary of Significant Accounting Policies||
1. BASIS OF PRESENTATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited consolidated financial statements of Calyxt, Inc. (Calyxt or the Company) have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP or GAAP) for interim financial information and with the rules and regulations of the Securities and Exchange Commission (SEC) applicable to interim financial statements. In the Company's opinion, the accompanying consolidated financial statements reflect all adjustments necessary for a fair presentation of its statements of financial position, results of operations, and cash flows for the periods presented but they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. Except as otherwise disclosed herein, these adjustments consist of normal recurring items. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole or any other interim period.
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the consolidated financial statements and during the reporting period. Actual results could materially differ from these estimates.
Certain prior year amounts have been reclassified to conform to the current year presentation.
For further information, refer to the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 4, 2021. The accompanying Balance Sheet as of December 31, 2020, was derived from the audited consolidated financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with the Company's consolidated financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2020.
Risks and Uncertainties
Calyxt is an early-stage company and has incurred net losses since its inception. As of September 30, 2021, the Company had an accumulated deficit of $189.0 million. The Company's net losses were $22.1 million for the nine months ended September 30, 2021, and the Company used $14.7 million of cash for operating activities for the nine months ended September 30, 2021. The Company's primary sources of liquidity are its cash and cash equivalents.
As of September 30, 2021, the Company had $14.9 million of cash, cash equivalents, and restricted cash. The Company’s restricted cash is associated with its equipment financing leases and was $1.0 million as of September 30, 2021, with $0.4 million scheduled to be returned in December 2021. Current liabilities were $5.1 million as of September 30, 2021.
On September 21, 2021, the Company entered into an Open Market Sale AgreementSM (the ATM Facility) with Jefferies LLC (Jefferies), acting as sole selling agent. Under the terms of the ATM Facility, the Company may, from time-to-time, issue common stock having an aggregate offering value of up to $50.0 million. At its discretion the Company determines the timing and number of shares to be issued under the ATM Facility. As of the date of this report, the Company has issued approximately 1.2 million shares of common stock under the ATM Facility for proceeds of $3.7 million net of commissions and payments for other share issuance costs.
The Company’s current operating plans reflect a modest level of payments from customers from commercial activities in 2022, which when combined with planned spending and the current balance of cash and cash equivalents make it likely that it will require additional liquidity to continue operations under this business plan over the next 12 months. Absent payments from customers in excess of Calyxt’s operating plans or the ability to raise capital, the Company’s management believes it can implement various cost reduction and other cash-focused measures in order to manage liquidity for the next 12 months.
The Company anticipates that it will continue to generate losses for the next several years before revenue is enough to support its operating capital requirements. Until the Company can generate substantial cash flow, it expects to finance a portion of future cash needs through cash on hand, commercialization activities, which may result in various types of revenue streams from (i) product sales from its proprietary BioFactory production system, and (ii) future product development agreements and technology licenses, including upfront and milestone payments, annual license fees, and royalties; government or other third-party funding, public or private equity or debt financings, or the issuance of shares under the Company's ATM Facility. However, additional capital may not be available on reasonable terms, if at all. If the Company is unable to raise additional capital in a sufficient amount or on acceptable terms, it may have to
significantly delay, scale back, or discontinue the development or commercialization of its activities. Failure to receive additional funding could cause the Company to cease operations, in part or in full. If the Company raises additional funds through the issuance of additional debt or equity securities, it could result in dilution to its existing stockholders and increased fixed payment obligations, and these securities may have rights senior to those of the Company's shares of common stock. Any of these events could significantly harm the Company's business, financial condition, and prospects.
Net Loss Per Share
Due to the Company's net loss position for the three and nine months ended September 30, 2021, and September 30, 2020, all its outstanding stock options, restricted stock units, and performance stock units are considered anti-dilutive and excluded from the calculation of net loss per share. Accordingly, the treasury method was not used in determining the number of anti-dilutive stock options and restricted stock units.
The entire disclosure for the basis of presentation and significant accounting policies concepts. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). Accounting policies describe all significant accounting policies of the reporting entity.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef