NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation and Summary of Significant Accounting Policies
As a leading synthetic biotechnology company active in the Clean Health and Beauty markets through our consumer brands and a top supplier of sustainable and natural ingredients, Amyris, Inc. and our subsidiaries (collectively, Amyris or the Company) apply the Company's proprietary Lab-to-Market biotechnology platform to engineer, manufacture and market high performance, natural and sustainably sourced products. The Company does so with the use of computational tools, strain construction tools, screening and analytics tools, and advanced lab automation and data integration. The Company's biotechnology platform enables the Company to rapidly engineer microbes and use them as catalysts to metabolize renewable, plant-sourced sugars into high-value ingredients that the Company manufactures at industrial scale. Through the combination of our biotechnology platform and our industrial fermentation process, the Company has successfully developed, produced and commercialized many distinct molecules.
The accompanying unaudited condensed consolidated financial statements of Amyris, Inc. should be read in conjunction with 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 (the 2020 Form 10-K), from which the condensed consolidated balance sheet as of December 31, 2020 is derived. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the accompanying interim condensed consolidated financial statements do not include all the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.
Significant Accounting Policies
Note 1, "Basis of Presentation and Summary of Significant Accounting Policies", to the audited consolidated financial statements in the 2020 Form 10-K includes a discussion of the significant accounting policies and estimates used in the preparation of the Company’s condensed consolidated financial statements. There have been no material changes to the Company's significant accounting policies and estimates during the three months ended March 31, 2021.
Use of Estimates and Judgements
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgements and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences may be material to the condensed consolidated financial statements. Significant estimates and judgements used in these consolidated financial statements are discussed in the relevant
accounting policies below or specifically discussed in the Notes to Consolidated Financial Statements where such transactions are disclosed.
Accounting Standards or Updates Recently Adopted
In the three months ended March 31, 2021, the Company adopted these accounting standards or updates:
Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for the Company in the first quarter of fiscal year 2021. The adoption of this standard did not have any impact on the Company’s condensed consolidated financial statements.
Equity Securities, Equity-method Investments and Certain Derivatives In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. ASU 2020-01 became effective for the Company in the first quarter of 2021. The adoption of this standard did not have any impact on the Company’s condensed consolidated financial statements.
Accounting Standards or Updates Not Yet Adopted
Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity's portfolio. ASU 2016-13 will be effective for the Company in the first quarter of 2023. The Company is currently evaluating the impact this standard will have on its consolidated financial statements and related disclosures.
Convertible Debt, and Derivatives and Hedging In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures.
2. Balance Sheet Details
Allowance for Doubtful Accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
Balance at Beginning of Year
|
Provisions
|
Write-offs, Net
|
Balance at End of Period
|
Three months ended March 31, 2021
|
$
|
137
|
|
$
|
17
|
|
$
|
—
|
|
$
|
154
|
|
Three months ended March 31, 2020
|
$
|
45
|
|
$
|
—
|
|
$
|
—
|
|
$
|
45
|
|
Inventories
|
|
|
|
|
|
|
|
|
(In thousands)
|
March 31, 2021
|
December 31, 2020
|
Raw materials
|
$
|
12,185
|
|
$
|
11,800
|
|
Work-in-process
|
8,702
|
|
10,760
|
|
Finished goods
|
26,752
|
|
20,302
|
|
Inventories
|
$
|
47,639
|
|
$
|
42,862
|
|
Deferred cost of products sold - related party
|
|
|
|
|
|
|
|
|
(In thousands)
|
March 31, 2021
|
December 31, 2020
|
Deferred cost of products sold - related party
|
$
|
5,220
|
|
$
|
9,801
|
|
Deferred cost of products sold, noncurrent - related party
|
9,391
|
|
9,939
|
|
Total
|
$
|
14,611
|
|
$
|
19,740
|
|
Amounts reported as "Deferred cost of products sold - related party" are in connection with an agreement with Koninklijke DSM N.V. (DSM) under which DSM will provide capacity for sweetener production at DSM's Brotas, Brazil manufacturing facility through December 2022. Deferred cost of products sold asset is being expensed to cost of products sold on a units of production basis as the Company's sweetener product is sold over the five-year term of the supply agreement. During the three months ended March 31, 2021 and 2020, the Company expensed $1.6 million and $0.1 million, respectively, of the deferred cost of products sold asset to cost of products sold. Inception-to-date amortization through March 31, 2021 totaled $4.9 million.
Prepaid expenses and other current assets
|
|
|
|
|
|
|
|
|
(In thousands)
|
March 31, 2021
|
December 31, 2020
|
Prepayments, advances and deposits
|
$
|
13,453
|
|
$
|
6,637
|
|
Non-inventory production supplies
|
3,364
|
|
3,989
|
|
Recoverable taxes from Brazilian government entities
|
1,020
|
|
1,063
|
|
Other
|
1,409
|
|
1,414
|
|
Total prepaid expenses and other current assets
|
$
|
19,246
|
|
$
|
13,103
|
|
Property, Plant and Equipment, Net
|
|
|
|
|
|
|
|
|
(In thousands)
|
March 31, 2021
|
December 31, 2020
|
Machinery and equipment
|
$
|
49,880
|
|
$
|
50,415
|
|
Leasehold improvements
|
44,800
|
|
45,197
|
|
Computers and software
|
7,362
|
|
6,741
|
|
Furniture and office equipment, vehicles and land
|
3,450
|
|
3,507
|
|
Construction in progress
|
7,238
|
|
7,250
|
|
|
112,730
|
|
113,110
|
|
Less: accumulated depreciation and amortization
|
(80,797)
|
|
(80,235)
|
|
Property, plant and equipment, net
|
$
|
31,933
|
|
$
|
32,875
|
|
During the three months ended March 31, 2021 and 2020, depreciation and amortization expense, including amortization of right-of-use assets under financing leases, was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
(In thousands)
|
2021
|
2020
|
|
|
|
Depreciation and amortization expense
|
$
|
2,114
|
|
$
|
1,719
|
|
|
|
|
Leases
Operating Leases
The Company has operating leases primarily for administrative offices, laboratory equipment and other facilities. The operating leases have remaining terms that range from 1 to 5 years, and often include one or more options to renew. These renewal terms can extend the lease term from 1 to 5 years and are included in the lease term when it is reasonably certain that the Company will exercise the option. The operating leases are classified as ROU assets under operating leases on the Company's condensed consolidated balance sheets and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make operating lease payments is included in "Lease liabilities" and "Lease liabilities, net of current portion" on the Company's condensed consolidated balance sheets. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company had $9.3 million and $10.1 million of right-of-use assets as of March 31, 2021 and December 31, 2020, respectively. Operating lease liabilities were $13.7 million and $15.0 million as of March 31, 2021 and December 31, 2020, respectively. During the three
ended March 31, 2021 and 2020, respectively, the Company recorded $1.8 million and $1.5 million of operating lease amortization that was charged to expense, of which $0.2 million and $0.3 million was recorded to cost of products sold.
Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company has certain contracts for real estate and marketing which may contain lease and non-lease components which it has elected to treat as a single lease component.
Information related to the Company's right-of-use assets and related lease liabilities were as follows:
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
2021
|
2020
|
Cash paid for operating lease liabilities, in thousands
|
$1,185
|
$1,893
|
Right-of-use assets obtained in exchange for new operating lease obligations, in thousands
|
$—
|
$—
|
Weighted-average remaining lease term
|
2.7
|
3.2
|
Weighted-average discount rate
|
18.0%
|
18.0%
|
Financing Leases
The Company has financing leases primarily for laboratory and computer equipment. Assets purchased under financing leases are included in "Right-of-use assets under financing leases, net" on the condensed consolidated balance sheets. For financing leases, the associated assets are depreciated or amortized over the shorter of the relevant useful life of each asset or the lease term. Accumulated amortization of assets under financing leases totaled $5.3 million and $4.6 million as of March 31, 2021 and December 31, 2020, respectively.
Maturities of Financing and Operating Leases
Maturities of lease liabilities as of March 31, 2021 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Years ending December 31:
(In thousands)
|
Financing
Leases
|
Operating
Leases
|
Total Leases
|
2021 (Remaining Nine Months)
|
$
|
3,491
|
|
$
|
5,644
|
|
$
|
9,135
|
|
2022
|
—
|
|
7,655
|
|
7,655
|
|
2023
|
—
|
|
3,320
|
|
3,320
|
|
2024
|
—
|
|
150
|
|
150
|
|
2025
|
—
|
|
—
|
|
—
|
|
Total lease payments
|
3,491
|
|
16,769
|
|
20,260
|
|
Less: amount representing interest
|
(233)
|
|
(3,050)
|
|
(3,283)
|
|
Total lease liability
|
$
|
3,258
|
|
$
|
13,719
|
|
$
|
16,977
|
|
|
|
|
|
Current lease liability
|
$
|
3,258
|
|
$
|
5,510
|
|
$
|
8,768
|
|
Noncurrent lease liability
|
—
|
|
8,209
|
|
8,209
|
|
Total lease liability
|
$
|
3,258
|
|
$
|
13,719
|
|
$
|
16,977
|
|
Other Assets
|
|
|
|
|
|
|
|
|
(In thousands)
|
March 31, 2021
|
December 31, 2020
|
Equity-method investment
|
$
|
3,431
|
|
$
|
2,380
|
|
Deposits
|
126
|
|
128
|
|
Other
|
1,213
|
|
1,196
|
|
Total other assets
|
$
|
4,770
|
|
$
|
3,704
|
|
Accrued and Other Current Liabilities
|
|
|
|
|
|
|
|
|
(In thousands)
|
March 31, 2021
|
December 31, 2020
|
Payroll and related expenses
|
$
|
10,540
|
|
$
|
8,230
|
|
Accrued interest
|
7,721
|
|
9,327
|
|
Contract termination fees
|
5,311
|
|
5,344
|
|
Asset retirement obligation(1)
|
3,003
|
|
3,041
|
|
Professional services
|
1,604
|
|
994
|
|
Ginkgo partnership payments obligation
|
878
|
|
878
|
|
Tax-related liabilities
|
639
|
|
656
|
|
Other
|
2,425
|
|
2,237
|
|
Total accrued and other current liabilities
|
$
|
32,121
|
|
$
|
30,707
|
|
______________
(1) The asset retirement obligation represents liabilities incurred but not yet discharged in connection with our 2013 abandonment of a partially constructed facility in Pradópolis, Brazil.
Other noncurrent liabilities
|
|
|
|
|
|
|
|
|
(In thousands)
|
March 31, 2021
|
December 31, 2020
|
Liability for unrecognized tax benefit
|
$
|
7,551
|
|
$
|
7,496
|
|
Ginkgo partnership payments obligation, net of current portion
|
7,461
|
|
7,277
|
|
Liability in connection with acquisition of equity-method investment
|
7,216
|
|
6,771
|
|
Contract liabilities, net of current portion
|
111
|
|
111
|
|
Other
|
128
|
|
1,099
|
|
Total other noncurrent liabilities
|
$
|
22,467
|
|
$
|
22,754
|
|
3. Fair Value Measurement
Liabilities Measured and Recorded at Fair Value on a Recurring Basis
The following tables summarize liabilities measured at fair value, and the respective fair value by input classification level within the fair value hierarchy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
March 31, 2021
|
|
December 31, 2020
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Foris Convertible Note (LSA Amendment)
|
$
|
—
|
|
$
|
—
|
|
$
|
379,439
|
|
$
|
379,439
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
123,164
|
|
$
|
123,164
|
|
Senior Convertible Notes
|
—
|
|
—
|
|
54,757
|
|
54,757
|
|
|
—
|
|
—
|
|
53,387
|
|
53,387
|
|
Embedded derivatives bifurcated from debt instruments
|
—
|
|
—
|
|
188
|
|
188
|
|
|
—
|
|
—
|
|
247
|
|
247
|
|
Freestanding derivative instruments issued in connection with other debt and equity instruments
|
—
|
|
—
|
|
31,196
|
|
31,196
|
|
|
—
|
|
—
|
|
8,451
|
|
8,451
|
|
Total liabilities measured and recorded at fair value
|
$
|
—
|
|
$
|
—
|
|
$
|
465,580
|
|
$
|
465,580
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
185,249
|
|
$
|
185,249
|
|
The Company did not hold any financial assets to be measured and recorded at fair value on a recurring basis as of March 31, 2021 and December 31, 2020. Also, there were no transfers between the levels during the three months ended March 31, 2021 or the year ended December 31, 2020.
The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgements and consider factors specific to the asset or liability. The method of determining the fair value of embedded derivative liabilities is described subsequently in this note. Market risk associated with embedded derivative liabilities relates to the potential reduction in fair value and negative impact to future earnings from a decrease in interest rates.
Changes in fair value of derivative liabilities are presented as gains or losses in the condensed consolidated statements of operations in the line captioned "Gain (loss) from change in fair value of derivative instruments".
Changes in the fair value of debt that is accounted for at fair value are presented as gains or losses in the condensed consolidated statements of operations in the line captioned "Gain (loss) from change in fair value of debt".
Fair Value of Debt — Foris Convertible Note
At March 31, 2021, the contractual outstanding principal of the Foris Convertible Note was $50.0 million, and fair value was $379.4 million. The Company remeasured the fair value of the Foris Convertible Note under a binomial lattice model (which is discussed in further detail below) using the following inputs: (i) $19.10 stock price, (ii) 10% discount yield, (iii) 0.09% risk free interest rate (iv) 45% equity volatility and (v) 5% probability of change in control. The Company assumed that if a change of control event were to occur, it would occur at the end of the calendar year. The Company recorded a loss of $256.3 million related to change in fair value of the Foris Convertible Note for the three months ended March 31, 2021. The most sensitive input to the valuation model is the Company’s stock price in relation to the $3.00 conversion price.
Fair Value of Debt — Senior Convertible Notes
At March 31, 2021, the contractual outstanding principal of the Senior Convertible Notes was $10.0 million, and fair value was $54.8 million. The Company measured the fair value at March 31, 2021 under a binomial lattice model (which is discussed in further detail below) using the following inputs: (i) $19.10 stock price, (ii) 210% discount yield, (iii) 0.02% risk free interest rate (iv) 45% equity volatility, and (v) 0% probability of change in control. The most sensitive input to the valuation model is the Company’s stock price in relation to the $3.50 conversion price.
For the three months ended March 31, 2021, the Company recorded a $70.5 million loss from change in fair value of debt in connection with fair value remeasurement of the Senior Convertible Notes, as follows:
|
|
|
|
|
|
In thousands
|
|
Fair value at December 31, 2020
|
$
|
53,387
|
|
Loss from change in fair value
|
70,510
|
|
Less: principal converted into common stock
|
(20,000)
|
|
Less: fair value adjustment extinguished upon conversion of debt principal
|
(49,140)
|
|
Fair value at March 31, 2021
|
$
|
54,757
|
|
Binomial Lattice Model
A binomial lattice model was used to determine whether the Foris Convertible Note and the Senior Convertible Notes (Debt Instruments) would be converted, called or held at each decision point. Within the lattice model, the following assumptions are made: (i) the convertible note will be converted early if the conversion value is greater than the holding value and (ii) the convertible note will be called if the holding value is greater than both (a) redemption price and (b) the conversion value at the time. If the convertible note is called, the holder will maximize their value by finding the optimal decision between (1) redeeming at the redemption price and (2) converting the convertible note. Using this lattice method, the Company valued the Debt Instruments using the "with-and-without method", where the fair value of the Debt Instruments including the embedded and freestanding features is defined as the "with," and the fair value of the Debt Instruments excluding the embedded and freestanding features is defined as the "without." This method estimates the fair value of the Debt Instruments by looking at the difference in the values of the Debt Instruments with the embedded and freestanding derivatives and the fair value of the Debt Instruments without the embedded and freestanding features. The lattice model uses the stock price, conversion price, maturity date, risk-free interest rate, estimated stock volatility, estimated credit spread and other instrument-specific assumptions. The Company remeasures the fair value of the Debt Instruments and records the change as a gain or loss from change in fair value of debt in the statement of operations for each reporting period.
Derivative Liabilities Recognized in Connection with the Issuance of Debt Instruments
The following table provides a reconciliation of the beginning and ending balances for the Company's derivative liabilities recognized in connection with the issuance of debt instruments, either freestanding or embedded, measured at fair value using significant unobservable inputs (Level 3):
|
|
|
|
|
|
(In thousands)
|
Derivative Liability
|
Balance at December 31, 2020
|
$
|
8,698
|
|
Change in fair value of derivative instruments
|
22,745
|
|
Derecognition on settlement or extinguishment
|
(59)
|
|
Balance at March 31, 2021
|
$
|
31,384
|
|
Freestanding Derivative Instruments
On February 28, 2020, the Company entered into forbearance agreements with certain affiliates of the Schottenfeld Group LLC (the Lenders) related to certain defaults under the Schottenfeld Notes. In connection with entering into the forbearance agreements, the Company committed to issuing warrants (Warrants) to the Lenders under certain contingent events for 1.9 million shares of common stock at a $2.87 purchase price and a two-year term. The contingent obligation to issue the Warrants did not meet the derivative scope exception or equity classification criteria and was accounted for as a derivative liability and remeasured each reporting period until settled or extinguished with subsequent changes in fair value recorded through the statement of operations. The fair value of the Warrants derivative liability was determined using a Black-Scholes-Merton option pricing model based on the input assumptions for liability classified warrants table in the valuation methodology section below. At March 31, 2021, the fair value of the contingently issuable Warrants derivative liability was $31.2 million, and for the three months ended March 31, 2021, the Company recorded a $22.7 million loss on change in fair value of derivative instruments.
Valuation Methodology and Approach to Measuring the Derivative Liabilities
Substantially all the outstanding liabilities associated with the Company’s derivatives at March 31, 2021 and December 31, 2020 represent the fair value of freestanding equity instruments. See Note 4, "Debt", and Note 6, "Stockholders' Deficit" for further information regarding these host instruments. There is no current observable market for these types of
derivatives and, as such, the Company determined the fair value of the freestanding instruments using the Black-Scholes-Merton option pricing model, which is discussed in more detail below.
The Company used the Black-Scholes-Merton option pricing model to determine the fair value of its liability classified warrants as of March 31, 2021 and December 31, 2020. Input assumptions for these freestanding instruments are as follows:
|
|
|
|
|
|
|
|
|
|
Range for the Period
|
Input assumptions for liability classified warrants:
|
March 31, 2021
|
December 31, 2020
|
Fair value of common stock on issue date
|
$19.10 – $19.10
|
$2.56 – $6.18
|
Exercise price of warrants
|
$2.87 – $2.87
|
$2.87 – $3.25
|
Expected volatility
|
114% – 114%
|
94% – 117%
|
Risk-free interest rate
|
0.16% – 0.16%
|
0.13% – 1.58%
|
Expected term in years
|
2 – 2
|
1 – 2
|
Dividend yield
|
0.0
|
%
|
0.0 %
|
Changes in valuation assumptions can have a significant impact on the valuation of the freestanding derivative liabilities and debt that the Company elects to account for at fair value. For example, all other things being equal, generally, an increase in the Company’s stock price, change of control probability, risk-adjusted yields term to maturity/conversion or stock price volatility increases the value of the derivative liability.
Assets and Liabilities Recorded at Carrying Value
Financial Assets and Liabilities
The carrying amounts of certain financial instruments, such as cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and other current accrued liabilities, approximate fair value due to their relatively short maturities and low market interest rates, if applicable. Loans payable and credit facilities are recorded at carrying value, which is representative of fair value at the date of acquisition. The Company estimates the fair value of these instruments using observable market-based inputs (Level 2). The carrying amount (the total amount of net debt presented on the balance sheet) of the Company's debt at March 31, 2021 and at December 31, 2020, excluding the debt instruments recorded at fair value, was $49.3 million and $86.5 million, respectively. The fair value of such debt at March 31, 2021 and at December 31, 2020 was $51.1 million and $83.3 million, respectively, and was determined by (i) discounting expected cash flows using current market discount rates estimated for certain of the debt instruments and (ii) using third-party fair value estimates for the remaining debt instruments.
4. Debt
Net carrying amounts of debt are as follows:
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|
|
|
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|
|
March 31, 2021
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|
December 31, 2020
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(In thousands)
|
Principal
|
Unaccreted Debt Discount
|
Change in Fair Value
|
Net
|
|
Principal
|
Unaccreted Debt Discount
|
Change in Fair Value
|
Net
|
Convertible notes payable
|
|
|
|
|
|
|
|
|
|
Senior convertible notes
|
$
|
10,020
|
|
$
|
—
|
|
$
|
44,737
|
|
$
|
54,757
|
|
|
$
|
30,020
|
|
$
|
—
|
|
$
|
23,367
|
|
$
|
53,387
|
|
|
|
|
|
|
|
|
|
|
|
Related party convertible notes payable
|
|
|
|
|
|
|
|
|
|
Foris convertible note
|
50,041
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|
—
|
|
329,398
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|
379,439
|
|
|
50,041
|
|
—
|
|
73,123
|
|
123,164
|
|
|
|
|
|
|
|
|
|
|
|
Loans payable and credit facilities
|
|
|
|
|
|
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|
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Schottenfeld notes
|
—
|
|
—
|
|
—
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|
—
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|
|
12,500
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|
(240)
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|
—
|
|
12,260
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Nikko notes
|
2,737
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|
(725)
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|
—
|
|
2,012
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|
|
2,802
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|
(759)
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|
—
|
|
2,043
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|
Ginkgo note
|
12,000
|
|
—
|
|
—
|
|
12,000
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|
|
12,000
|
|
—
|
|
—
|
|
12,000
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|
Other loans payable
|
1,009
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|
—
|
|
—
|
|
1,009
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|
|
1,227
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|
—
|
|
—
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|
1,227
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|
|
15,746
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|
(725)
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|
—
|
|
15,021
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|
|
28,529
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|
(999)
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|
—
|
|
27,530
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Related party loans payable
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|
|
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|
|
|
|
|
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Foris note
|
5,000
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|
—
|
|
—
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|
5,000
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|
|
5,000
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|
—
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|
—
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|
5,000
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DSM notes
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10,000
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|
(4,254)
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|
—
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|
5,746
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|
|
33,000
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|
(2,443)
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—
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|
30,557
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Naxyris note
|
23,914
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|
(412)
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|
—
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|
23,502
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|
|
23,914
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|
(493)
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|
—
|
|
23,421
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|
|
38,914
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|
(4,666)
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|
—
|
|
34,248
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|
|
61,914
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|
(2,936)
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|
—
|
|
58,978
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|
Total debt
|
$
|
114,721
|
|
$
|
(5,391)
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|
$
|
374,135
|
|
483,465
|
|
|
$
|
170,504
|
|
$
|
(3,935)
|
|
$
|
96,490
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|
263,059
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Less: current portion
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|
|
|
(55,904)
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|
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(77,437)
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Long-term debt, net of current portion
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|
|
|
$
|
427,561
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|
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$
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185,622
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Senior Convertible Notes Conversion
On February 4, 2021, the Company received a notice of conversion from HT Investments MA, LLC (HT) with respect to $20.0 million of its outstanding Senior Convertible Notes, pursuant to which the Company was required to issue 5.7 million shares of common stock per the conversion price stated in the agreement and cancelled the outstanding Note. Also, under the terms of the Senior Convertible Note, HT was required to return 2.6 million shares of common stock outstanding under the Pre-Delivery Shares provision once the Company had fully repaid the principal balance. HT fulfilled its obligation to return these shares in accordance with the contractual requirement, and as a result the Company net settled the $20 million principal conversion by issuing 3.1 million of incremental shares to HT.
Upon conversion of the HT Senior Convertible Note, the Company recorded a $31.9 million loss upon extinguishment of debt, which was primarily comprised of a fair value adjustment upon repayment of the note's principal.
See the Company's 2020 Form 10-K, Note 4, “Debt” for additional information regarding the Senior Convertible Notes.
Schottenfeld Note Exchange
On March 1, 2021, the Company entered into an Exchange and Settlement Agreement (Exchange Agreement) with Schottenfeld Opportunities Fund II, L.P. and certain other holders of notes under the Credit and Security Agreement dated November 14, 2019 (Schottenfeld Notes). Pursuant to the terms of the Exchange Agreement, the Company paid all accrued and unpaid interest on the $12.5 million principal balance outstanding under the Schottenfeld Notes, and issued 4.1 million net shares of common stock in a cashless exchange and cancellation of all amounts due and outstanding under the Notes and related loan documents and all warrants held by each of the holders of Schottenfeld Notes.
Upon conversion of the Schottenfeld note balance, the Company recorded a $28.9 million loss upon extinguishment of debt, which primarily represented the fair value of common shares issued in excess of debt principal extinguished.
See the Company's 2020 Form 10-K, Note 4, “Debt” for additional information regarding the Schottenfeld Notes.
DSM Notes Amendments and Repayment
On December 28, 2017, the Company and DSM Finance, a wholly owned subsidiary of Koninklijke DSM N.V. (DSM), entered into a credit agreement (the DSM Credit Agreement) to make available to the Company an unsecured credit facility of $25.0 million. On December 28, 2017, the Company borrowed $25.0 million under the DSM Credit Agreement and issued a promissory note to DSM Finance. The $25 million Note matures on December 31, 2021 and accrues interest at 10% per annum, payable quarterly.
On September 17, 2019, the Company and DSM entered into a credit agreement (the 2019 DSM Credit Agreement) to make available to the Company a secured credit facility in an aggregate principal amount of $8.0 million. In September 2019, the Company borrowed the $8.0 million in three installments. The promissory notes issued under the 2019 DSM Credit Agreement (i) mature on August 7, 2022, (ii) accrue interest at a rate of 12.5% per annum, payable quarterly and (iii) are secured by a first-priority lien on certain Company intellectual property licensed to DSM.
In March 2021, the Company entered into amendments (the March 2021 Amendments) to the $25 million Note and the $8 million Note that provided for (i) the prepayment of the $8 million Note, (ii) a $15 million partial prepayment of the $25 million Note and (iii) extension of the maturity date from December 31, 2021 to April 15, 2022 for the remaining $10 million principal balance under the $25 million Note, in exchange for a $2.5 million prepayment fee The Company repaid $23 million on March 31, 2021 to extinguish the $8 million Note and to partially repay the $25 million Note.
The Company evaluated the March 2021 Amendments, and concluded the before and after cash flows resulting from the amendments were not significantly different and accounted for the amendments to the Notes as a debt modification. Consequently, the $2.5 million Prepayment Fee was recorded as an incremental debt discount to the remaining $10 million principal balance under the $25 million Note. The Company will accrete the adjusted discount over the Note’s amended remaining term using the effective interest method.
See the Company's 2020 Form 10-K, Note 4, “Debt” for additional information regarding the DSM notes.
Future Minimum Payments
Future minimum payments under the Company's debt agreements as of March 31, 2021 are as follows:
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(In thousands)
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Convertible Notes
|
Loans
Payable and Credit Facilities
|
Related Party Convertible Notes
|
Related Party Loans Payable and Credit Facilities
|
Total
|
2021 (Remaining Nine Months)
|
$
|
11,189
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|
$
|
2,260
|
|
$
|
—
|
|
$
|
2,782
|
|
$
|
16,231
|
|
2022
|
—
|
|
13,268
|
|
59,578
|
|
42,379
|
|
115,225
|
|
2023
|
—
|
|
399
|
|
—
|
|
—
|
|
399
|
|
2024
|
—
|
|
398
|
|
—
|
|
—
|
|
398
|
|
2025
|
—
|
|
397
|
|
—
|
|
—
|
|
397
|
|
Thereafter
|
—
|
|
1,473
|
|
—
|
|
—
|
|
1,473
|
|
Total future minimum payments
|
11,189
|
|
18,195
|
|
59,578
|
|
45,161
|
|
134,123
|
|
Less: amount representing interest
|
(1,169)
|
|
(2,449)
|
|
(9,537)
|
|
(6,247)
|
|
(19,402)
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|
Present value of minimum debt payments
|
10,020
|
|
15,746
|
|
50,041
|
|
38,914
|
|
114,721
|
|
Less: current portion of debt principal
|
(10,020)
|
|
(1,280)
|
|
—
|
|
—
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|
(11,300)
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|
Noncurrent portion of debt principal
|
$
|
—
|
|
$
|
14,466
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|
$
|
50,041
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|
$
|
38,914
|
|
$
|
103,421
|
|
5. Mezzanine Equity
Mezzanine equity at March 31, 2021 and December 31, 2020 is comprised of proceeds from shares of common stock sold on May 10, 2016 to the Bill & Melinda Gates Foundation (the Gates Foundation). In connection with the stock sale, the Company and the Gates Foundation entered into an agreement under which the Company agreed to expend an aggregate amount not less than the proceeds from the stock sale to develop a yeast strain that produces artemisinic acid and/or amorphadiene at a low cost and to supply such artemisinic acid and amorphadiene to companies qualified to convert artemisinic acid and amorphadiene to artemisinin for inclusion in artemisinin combination therapies used to treat malaria. If the Company defaults in its obligation to use the proceeds from the stock sale as set forth above or defaults under certain other commitments in the agreement, the Gates Foundation will have the right to request that the Company redeem, or facilitate the purchase by a
third party, the shares then held by the Gates Foundation at a price per share equal to the greater of (i) the closing price of the Company’s common stock on the trading day prior to the redemption or purchase, as applicable, or (ii) an amount equal to $17.10 plus a compounded annual return of 10%.
As of March 31, 2021, the Company's remaining research and development obligation under this arrangement was $0.3 million.
6. Stockholders' Deficit
Warrants and Rights Activity Summary
In connection with various debt and equity transactions (see Note 4, “Debt” above and Note 4, "Debt" and Note 6, “Stockholders’ Deficit” in Part II, Item 8 of the 2020 Form 10-K), the Company has issued warrants exercisable for shares of common stock. The following table summarizes warrants outstanding at March 31, 2021:
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|
|
Transaction
|
|
Number Outstanding as of March 31, 2021
|
Exercise Price per Share as of March 31, 2021
|
Blackwell and Silverback warrants
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|
1,000,000
|
|
$
|
3.25
|
|
January 2020 warrant exercise right shares
|
|
4,209,608
|
|
$
|
2.87
|
|
April 2019 PIPE warrants
|
|
1,381,940
|
|
$4.76/$5.02
|
Naxyris LSA warrants
|
|
2,000,000
|
|
$
|
2.87
|
|
October 2019 Naxyris warrant
|
|
2,000,000
|
|
$
|
3.87
|
|
May 2019 6.50% Note Exchange warrants
|
|
960,225
|
|
$
|
2.87
|
|
May 2017 cash warrants
|
|
1,863,056
|
|
$
|
2.87
|
|
May 2017 dilution warrants
|
|
3,085,893
|
|
$
|
0.00
|
|
August 2017 dilution warrants
|
|
3,028,983
|
|
$
|
0.00
|
|
July 2015 related party debt exchange
|
|
58,690
|
|
$
|
0.15
|
|
Other
|
|
1,406
|
|
$
|
160.05
|
|
|
|
19,589,801
|
|
|
Warrant Exercises
During the three months ended March 31, 2021, warrant-holders exercised warrants to purchase approximately 24.8 million shares of the Company’s common stock at a weighted-average exercise price of $3.06 per share, for net proceeds to the Company of $32.2 million. Some of the exercises were cashless or in connection with the Schottenfeld Note Exchange, which resulted in fewer shares being issued than the number of warrant-shares exercised. As a result, 21.6 million shares were issued.
7. Net Loss per Share Attributable to Common Stockholders
For the three months ended March 31, 2021 and 2020, basic loss per share was the same as diluted loss per share, because the inclusion of all potentially dilutive securities outstanding was antidilutive.
The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The two-class method also requires losses for the period to be allocated between common stock and participating securities based on their respective rights if the participating security contractually participates in losses. The Company’s convertible preferred stock are participating securities as they contractually entitle the holders of such shares to participate in dividends and contractually require the holders of such shares to participate in the Company’s losses.
The following table presents the calculation of basic and diluted loss per share:
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|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
(In thousands, except shares and per share amounts)
|
2021
|
2020
|
|
|
|
Numerator:
|
|
|
|
|
|
Net loss attributable to Amyris, Inc.
|
$
|
(291,251)
|
|
$
|
(87,844)
|
|
|
|
|
|
|
|
|
|
|
Less: losses allocated to participating securities
|
2,099
|
|
1,087
|
|
|
|
|
Net loss attributable to Amyris, Inc. common stockholders, basic and diluted
|
$
|
(289,152)
|
|
$
|
(86,757)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic and diluted
|
267,733,555
|
|
155,065,635
|
|
|
|
|
Loss per share, basic and diluted
|
$
|
(1.08)
|
|
$
|
(0.56)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted loss per share of common stock because including them would have been antidilutive:
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|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2021
|
2020
|
|
|
|
Period-end common stock warrants
|
13,416,235
|
|
50,518,519
|
|
|
|
|
Convertible promissory notes(1)
|
19,540,447
|
|
9,217,185
|
|
|
|
|
Period-end stock options to purchase common stock
|
6,205,576
|
|
5,578,264
|
|
|
|
|
Period-end restricted stock units
|
6,653,640
|
|
5,298,639
|
|
|
|
|
Period-end preferred stock
|
1,943,661
|
|
1,943,661
|
|
|
|
|
Total potentially dilutive securities excluded from computation of diluted loss per share
|
47,759,559
|
|
72,556,268
|
|
|
|
|
______________
(1) The potentially dilutive effect of convertible promissory notes was computed based on conversion ratios in effect as of the respective period end dates. A portion of the convertible promissory notes issued carries a provision for a reduction in conversion price under certain circumstances, which could potentially increase the dilutive shares outstanding. Another portion of the convertible promissory notes issued carries a provision for an increase in the conversion rate under certain circumstances, which could also potentially increase the dilutive shares outstanding.
8. Commitments and Contingencies
Guarantor Arrangements
The Company has agreements whereby it indemnifies its executive officers and directors for certain events or occurrences while the executive officer or director is serving in his or her official capacity. The indemnification period remains enforceable for the executive officer's or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits its exposure and enables the Company to recover a portion of any future payments. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. Accordingly, the Company had no liabilities recorded for these agreements as of March 31, 2021 and December 31, 2020.
The Foris Convertible Note (see Note 4, "Debt") is collateralized by first-priority liens on substantially all of the Company's assets, including Company intellectual property, other than certain Company intellectual property licensed to DSM and the Company's shares of Aprinnova. Certain of the Company’s subsidiaries have guaranteed the Company’s obligations under the Foris Convertible Note.
The obligations of the Company under the Naxyris Note (see Note 4, "Debt") are (i) guaranteed by the Subsidiary Guarantors and (ii) secured by a perfected security interest in substantially all of the assets of the Company and the Subsidiary Guarantors (the Collateral), junior in payment priority to Foris subject to certain limitations and exceptions, as well as the terms of the Intercreditor Agreement.
The Nikko $3.9 million note is collateralized by a first-priority lien on 10.0% of the Aprinnova JV interests owned by the Company.
Other Matters
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but will only be recorded when one or more future events occur or fail to occur. The Company's management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgement. In assessing loss contingencies related to legal proceedings that are pending against and by the Company or unasserted claims that may result in such proceedings, the Company's management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be reasonably estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.
On April 3, 2019, a securities class action complaint was filed against Amyris and our CEO, John G. Melo, and former CFO, Kathleen Valiasek, in the U.S. District Court for the Northern District of California. The complaint seeks unspecified damages on behalf of a purported class that would comprise all persons and entities that purchased or otherwise acquired our securities between March 15, 2018 and March 19, 2019. The complaint, which was amended by the lead plaintiff on September 13, 2019, alleges securities law violations based on statements and omissions made by the Company during such period. On October 25, 2019, the defendants filed a motion to dismiss the securities class action complaint, which was denied by the court on October 5, 2020. The Company filed its answer to the securities class action complaint on October 26, 2020. Subsequent to the filing of the securities class action complaint described above, on June 21, 2019 and October 1, 2019, respectively, two separate purported shareholder derivative complaints were filed in the U.S. District Court for the Northern District of California (Bonner v. Doerr, et al., and Carlson v. Doerr, et al.) based on similar allegations to those made in the securities class action complaint and naming the Company, and certain of the Company’s current and former officers and directors, as defendants. The derivative lawsuits sought to recover, on the Company’s behalf, unspecified damages purportedly sustained by the Company in connection with allegedly misleading statements and omissions made in connection with the Company’s securities filings. The derivative lawsuits were dismissed on October 18, 2019 (Bonner) and December 10, 2019 (Carlson), without prejudice. On November 3, 2020, Bonner re-filed its derivative complaint against the Company in San Mateo County Superior Court. The Company filed its demurrer to the complaint on January 13, 2021 and attended a preliminary hearing on April 22, 2021. An additional shareholder derivative complaint (Kimbrough v. Melo, et al.), substantially identical to the Bonner complaint, was filed on December 18, 2020 in the United States District Court for the Northern District of California. On February 19, 2021, the Company filed its motion to dismiss the Kimbrough complaint. In response, the Kimbrough complaint was dismissed in federal court on March 4, 2021 and refiled in state court on March 12, 2021. By agreement, the Kimbrough and Bonner complaints were consolidated for all purposes on April 9, 2021. By May 10, 2021, the derivative shareholder plaintiffs will either file a new complaint or designate one of the existing complaints as operative. A briefing schedule on a demurrer to that complaint will be negotiated no later than May 24, 2021. The Company believes the securities class action and derivative complaints lack merit, and intends to continue to defend itself vigorously. Given the early stage of these proceedings, it is not yet possible to reliably determine any potential liability that could result from these matters.
On September 10, 2020, LAVVAN, Inc. (Lavvan) filed a suit against the Company in the United States District Court for the Southern District of New York alleging breach of contract, patent infringement, and trade secret misappropriation in connection with that certain Research, Collaboration and License Agreement between Lavvan and Amyris, dated March 18, 2019, as amended (Cannabinoid Agreement). Amyris filed motions to compel arbitration or to dismiss on October 2, 2020. On October 30, Lavvan filed its opposition to the motions and the Company filed its reply to such opposition on November 13, 2020. The matter is fully briefed and the parties are awaiting an order from the Court. The Company believes the suit lacks merit and intends to continue to defend itself vigorously. Given the early stage of these proceedings, it is not yet possible to reliably determine any potential liability that could result therefrom.
The Company is subject to disputes and claims that arise or have arisen in the ordinary course of business and that have not resulted in legal proceedings or have not been fully adjudicated. Such matters that may arise in the ordinary course of business are subject to many uncertainties and outcomes, and are not predictable with reasonable assurance; therefore, an estimate of all the reasonably possible losses cannot be determined at this time. If one or more of these legal disputes or claims resulted in settlements or legal proceedings that were resolved against the Company for amounts in excess of management’s
expectations, the Company’s condensed consolidated financial statements for the relevant reporting period could be materially adversely affected.
9. Revenue Recognition and Contract Assets and Liabilities
Disaggregation of Revenue
The following table presents revenue by major product and service, as well as by primary geographical market, based on the location of the customer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
(In thousands)
|
2021
|
|
2020
|
|
Renewable Products
|
Licenses and Royalties
|
Grants and Collaborations
|
Total
|
|
Renewable Products
|
Licenses and Royalties
|
Grants and Collaborations
|
Total
|
United States
|
$
|
20,090
|
|
$
|
—
|
|
$
|
250
|
|
$
|
20,340
|
|
|
$
|
11,944
|
|
$
|
—
|
|
$
|
—
|
|
$
|
11,944
|
|
Europe
|
2,972
|
|
143,800
|
|
2,346
|
|
149,118
|
|
|
3,242
|
|
5,161
|
|
3,356
|
|
11,759
|
|
Asia
|
4,405
|
|
|
2,284
|
|
6,689
|
|
|
2,018
|
|
—
|
|
2,759
|
|
4,777
|
|
Brazil
|
313
|
|
|
|
313
|
|
|
577
|
|
—
|
|
—
|
|
577
|
|
Other
|
399
|
|
|
|
399
|
|
|
73
|
|
—
|
|
—
|
|
73
|
|
|
$
|
28,179
|
|
$
|
143,800
|
|
$
|
4,880
|
|
$
|
176,859
|
|
|
$
|
17,854
|
|
$
|
5,161
|
|
$
|
6,115
|
|
$
|
29,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents revenue by major product and service, as well as by customer type:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
(In thousands)
|
2021
|
|
2020
|
|
Renewable Products
|
Licenses and Royalties
|
Grants and Collaborations
|
Total
|
|
Renewable Products
|
Licenses and Royalties
|
Grants and Collaborations
|
Total
|
Consumer
|
$
|
15,653
|
|
$
|
—
|
|
$
|
—
|
|
$
|
15,653
|
|
|
$
|
9,065
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9,065
|
|
Ingredients
|
12,526
|
|
143,800
|
|
—
|
|
156,326
|
|
|
8,789
|
|
5,161
|
|
—
|
|
13,950
|
|
Research and development
|
—
|
|
—
|
|
4,880
|
|
4,880
|
|
|
—
|
|
—
|
|
6,115
|
|
6,115
|
|
|
$
|
28,179
|
|
$
|
143,800
|
|
$
|
4,880
|
|
$
|
176,859
|
|
|
$
|
17,854
|
|
$
|
5,161
|
|
$
|
6,115
|
|
$
|
29,130
|
|
Revenue from Significant Revenue Agreements
In connection with the significant revenue agreements discussed below and others previously disclosed (see Note 10, “Revenue Recognition” in Part II, Item 8 of the 2020 Form 10-K), the Company recognized the following revenue for the three months ended March 31, 2021 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
(In thousands)
|
2021
|
|
2020
|
|
Renewable Products
|
Licenses and Royalties
|
Grants and Collaborations
|
Total
|
|
Renewable Products
|
Licenses and Royalties
|
Grants and Collaborations
|
Total
|
DSM - related party
|
$
|
1,662
|
|
$
|
143,612
|
|
$
|
2,000
|
|
$
|
147,274
|
|
|
$
|
49
|
|
$
|
3,750
|
|
$
|
3,018
|
|
$
|
6,817
|
|
Sephora
|
4,441
|
|
—
|
|
—
|
|
4,441
|
|
|
4,446
|
|
—
|
|
—
|
|
4,446
|
|
Yifan
|
—
|
|
—
|
|
2,284
|
|
2,284
|
|
|
—
|
|
—
|
|
2,709
|
|
2,709
|
|
Firmenich
|
379
|
|
188
|
|
205
|
|
772
|
|
|
1,229
|
|
1,411
|
|
161
|
|
2,801
|
|
Givaudan
|
210
|
|
—
|
|
—
|
|
210
|
|
|
2,109
|
|
—
|
|
—
|
|
2,109
|
|
Subtotal revenue from significant revenue agreements
|
6,692
|
|
143,800
|
|
4,489
|
|
154,981
|
|
|
7,833
|
|
5,161
|
|
5,888
|
|
18,882
|
|
Revenue from all other customers
|
21,487
|
|
—
|
|
391
|
|
21,878
|
|
|
10,021
|
|
—
|
|
227
|
|
10,248
|
|
Total revenue from all customers
|
$
|
28,179
|
|
$
|
143,800
|
|
$
|
4,880
|
|
$
|
176,859
|
|
|
$
|
17,854
|
|
$
|
5,161
|
|
$
|
6,115
|
|
$
|
29,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DSM License Agreement and Contract Assignment
On March 31, 2021, the Company and DSM entered into a license agreement and asset purchase agreement pursuant to which DSM acquired exclusive rights to the Company’s Flavor and Fragrance (F&F) product portfolio. The Company granted DSM exclusive licenses covering specific intellectual property (F&F Intellectual Property License) of the Company and assigned the Company’s rights and obligations under certain F&F ingredients supply agreements to DSM, in exchange for non-refundable upfront consideration totaling $150 million, and up to $235 million of contingent consideration if and when certain
commercial milestones are achieved in each of the calendar years 2022 through 2024. DSM also acquired the Company’s F&F finished goods inventory on-hand, unbilled accounts receivables and billed accounts receivable that were uncollected at closing. The Company and DSM also entered into a 15-year manufacturing agreement whereby the Company will manufacture certain F&F ingredients for DSM to supply to third parties.
The Company determined the licenses to be functional intellectual property licenses allowing DSM the immediate use of and benefit from the technology, and concluded the licenses and related assigned F&F ingredients supply agreements, the asset purchase agreement and the manufacturing agreement were revenue contracts within the scope of ASC 606. The Company identified three distinct performance obligations: (i) F&F license, (ii) finished goods inventory and (iii) receivables, that once delivered are satisfied at a point in time. The Company also concluded the additional contingent consideration and manufacturing supply agreement represent variable consideration that will be fully constrained until the commercial targets are probable of achievement and the products are manufactured and sold.
The Company allocated the $150 million transaction price to the three revenue performance obligations using the residual approach. The transaction price was first allocated to the transferred inventory and receivables at the stand-alone selling price for these performance obligations, and the residual consideration was allocated to the F&F intellectual property licenses:
•Finished goods inventory - $1.5 million
•Receivables - $4.9 million
•F&F intellectual property licenses - $143.6 million
The Company also concluded the F&F intellectual property licenses and the assigned F&F supply agreements had been fully delivered with no further performance obligation upon closing the transaction, and recognized license revenue of $143.6 million in the period ended March 31, 2021.
Due to the related party nature of the transaction with DSM, who is a significant shareholder with two members on the Company’s board of directors, the Company performed a fair value assessment of the F&F intellectual property licenses under an income approach using a discounted cash flow model, in part with the assistance of a third-party valuation firm, and concluded the $143.6 million residual consideration received in exchange for the F&F intellectual property licenses approximated the fair value and stand-alone selling price of the F&F intellectual property licenses.
DSM Performance Agreement
In December 2017, the Company and DSM entered into a research and development services agreement (Performance Agreement), pursuant to which the Company would provide services to DSM relating to the further development of the technology underlying farnesene-related products in exchange for certain bonus payments in the event that specific performance metrics were achieved. If the Company did not meet the established metrics under the Performance Agreement, the Company would be required to pay $1.9 million to DSM. The Company accounted for the Performance Agreement under ASC 606 as a combined transaction with the Farnesene license granted to DSM in connection with the sale of the Brotas facility in December 2017. The Performance Agreement was allocated $1.2 million of the transaction price under a relative fair value allocation approach, and was recorded as a contract asset reflecting the Company’s right to receive additional consideration and deferred revenue reflecting the probability of returning to DSM a portion of the cash received under the combined transaction. In the first quarter of 2021, the Company and DSM determined the performance metrics would not be reasonably achieved without the Company providing further research and development services and concluded the Performance Agreement and related activities should be terminated. As a result, the Company paid DSM $1.9 million and reduced the deferred revenue liability, and expensed the contract asset balance and recorded $1.9 million of additional research and development expense during the three months ended March 31, 2021.
DSM Ingredients Collaboration
Pursuant to the September 2017 research and development collaboration agreement, as amended, the Company provides DSM with research and development services for specific field of use ingredients. The Company concluded the amended agreement contained a single performance obligation to provide research and development services delivered over time and that revenue recognition is based on an input measure of progress as labor hours are expended each quarter. DSM funds the development work with payments of $2.0 million quarterly from October 1, 2020 to September 30, 2021 for services singularly focused on achieving a certain fermentation yield and cost target over the twelve-month period. During the three months ended March 31, 2021 and 2020, the Company recognized $2.0 million and $3.0 million of collaboration revenue in connection with the amended agreement.
Yifan Collaborations
The Company has a collaboration agreement with Yifan Pharmaceutical Co., Ltd. (Yifan), a leading Chinese pharmaceutical company. During the three months ended March 31, 2021 and 2020, the Company recognized $2.3 million and $2.7 million of collaboration revenue, and $16.6 million of cumulative-to-date collaboration revenue in connection with the agreement. At March 31, 2021, the Company also recorded a $5.9 million contract asset in connection with the Collaboration Agreement.
For more information about the DSM ingredients collaboration and Yifan collaboration, see the Company's 2020 Form 10-K, Part II, Item 8, Note 10, "Revenue Recognition".
Contract Assets and Liabilities
When a contract results in revenue being recognized in excess of the amount the Company has invoiced or has the right to invoice to the customer, a contract asset is recognized. Contract assets are transferred to accounts receivable, net when the rights to the consideration become unconditional.
Contract liabilities consist of payments received from customers, or such consideration that is contractually due, in advance of providing the product or performing services such that control has not passed to the customer.
Trade receivables related to revenue from contracts with customers are included in accounts receivable on the condensed consolidated balance sheets, net of the allowance for doubtful accounts. Trade receivables are recorded for the sale of goods or the performance of services at the point of renewable product sale or in accordance with the contractual payment terms for licenses and royalties, and grants and collaborative research and development services for the amount payable by the customer to the Company.
Contract Balances
The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers:
|
|
|
|
|
|
|
|
|
(In thousands)
|
March 31, 2021
|
December 31, 2020
|
Accounts receivable, net
|
$
|
27,036
|
|
$
|
32,846
|
|
Accounts receivable - related party, net
|
$
|
391
|
|
$
|
12,110
|
|
Contract assets
|
$
|
6,589
|
|
$
|
4,178
|
|
Contract assets - related party
|
$
|
2,000
|
|
$
|
1,203
|
|
Contract liabilities
|
$
|
6,163
|
|
$
|
4,468
|
|
Contract liabilities, noncurrent(1)
|
$
|
111
|
|
$
|
111
|
|
(1)As of March 31, 2021 and December 31, 2020, contract liabilities, noncurrent is presented in Other noncurrent liabilities in the condensed consolidated balance sheets.
Remaining Performance Obligations
The following table provides information regarding the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) based on the Company's existing agreements with customers as of March 31, 2021.
|
|
|
|
|
|
(In thousands)
|
As of March 31, 2021
|
Remaining 2021
|
$
|
143
|
|
2022
|
3,103
|
|
2023
|
1,430
|
|
2024 and thereafter
|
429
|
|
Total from all customers
|
$
|
5,105
|
|
In accordance with the disclosure provisions of ASC 606, the table above excludes estimated future revenues for performance obligations that are part of a contract that has an original expected duration of one year or less or a performance obligation with variable consideration that is recognized using the sales-based royalty exception for licenses of intellectual
property. Additionally, approximately $297.8 million of estimated future revenue is excluded from the table above, as that amount represents constrained variable consideration.
10. Related Party Transactions
Related Party Debt
See Note 4, "Debt," for details of the DSM Notes Amendments and Repayments that occurred during the three months ended March 31, 2021.
Related party debt was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
December 31, 2020
|
In thousands
|
Principal
|
Unaccreted Debt Discount
|
Change in Fair Value
|
Net
|
|
Principal
|
Unaccreted Debt Discount
|
Change in Fair Value
|
Net
|
Foris notes
|
$
|
55,041
|
|
$
|
—
|
|
$
|
329,398
|
|
$
|
384,439
|
|
|
$
|
55,041
|
|
$
|
—
|
|
$
|
73,123
|
|
$
|
128,164
|
|
DSM notes
|
10,000
|
|
(4,254)
|
|
—
|
|
5,746
|
|
|
33,000
|
|
(2,443)
|
|
—
|
|
30,557
|
|
Naxyris note
|
23,914
|
|
(412)
|
|
—
|
|
23,502
|
|
|
23,914
|
|
(493)
|
|
—
|
|
23,421
|
|
|
$
|
88,955
|
|
$
|
(4,666)
|
|
$
|
329,398
|
|
$
|
413,687
|
|
|
$
|
111,955
|
|
$
|
(2,936)
|
|
$
|
73,123
|
|
$
|
182,142
|
|
Related Party Revenue
See Note 9, "Revenue Recognition", for information about the March 31, 2021 DSM License Agreement and Contract Assignment.
Related Party Accounts Receivable, Unbilled Receivables and Accounts Payable
Related party accounts receivable, contract assets and accounts payable were as follows:
|
|
|
|
|
|
|
|
|
(In thousands)
|
March 31, 2021
|
December 31, 2020
|
Accounts receivable - related party
|
$
|
391
|
|
$
|
12,110
|
|
Contract assets - related party
|
$
|
2,000
|
|
$
|
1,203
|
|
Accounts payable
|
$
|
10,302
|
|
$
|
5,011
|
|
11. Stock-based Compensation
The Company’s stock option activity and related information for the three months ended March 31, 2021 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quantity of Stock Options
|
Weighted-
average
Exercise
Price
|
Weighted-average
Remaining
Contractual
Life, in Years
|
Aggregate
Intrinsic
Value, in Thousands
|
Outstanding - December 31, 2020
|
6,502,096
|
|
$
|
7.64
|
|
7.6
|
$
|
8,875
|
|
Granted
|
131,408
|
|
$
|
14.52
|
|
|
|
Exercised
|
(375,390)
|
|
$
|
5.12
|
|
|
|
Forfeited or expired
|
(52,538)
|
|
$
|
38.21
|
|
|
|
Outstanding - March 31, 2021
|
6,205,576
|
|
$
|
7.68
|
|
7.4
|
$
|
82,615
|
|
Vested or expected to vest after March 31, 2021
|
5,697,447
|
|
$
|
7.91
|
|
7.3
|
$
|
75,493
|
|
Exercisable at March 31, 2021
|
1,259,029
|
|
$
|
18.19
|
|
5.8
|
$
|
12,884
|
|
The Company’s restricted stock units (RSUs) activity and related information for the three months ended March 31, 2021 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Quantity of Restricted Stock Units
|
Weighted-average Grant-date Fair Value
|
Weighted-average Remaining Contractual Life, in Years
|
Outstanding - December 31, 2020
|
7,043,909
|
|
$
|
4.18
|
|
1.5
|
Awarded
|
345,903
|
|
$
|
13.53
|
|
|
Released
|
(496,492)
|
|
$
|
4.34
|
|
|
Forfeited
|
(239,680)
|
|
$
|
4.22
|
|
|
Outstanding - March 31, 2021
|
6,653,640
|
|
$
|
4.65
|
|
1.4
|
Vested or expected to vest after March 31, 2021
|
6,082,165
|
|
$
|
4.65
|
|
1.3
|
Stock-based compensation expense related to employee and non-employee options, RSUs and ESPP during the three months ended March 31, 2021 and 2020 is reflected in the condensed consolidated statements of operations as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
(In thousands)
|
2021
|
2020
|
|
|
|
Cost of products sold
|
$
|
63
|
|
$
|
—
|
|
|
|
|
Research and development
|
1,062
|
|
1,065
|
|
|
|
|
Sales, general and administrative
|
3,156
|
|
2,439
|
|
|
|
|
Total stock-based compensation expense
|
$
|
4,281
|
|
$
|
3,504
|
|
|
|
|
As of March 31, 2021, there was unrecognized compensation expense of $30.0 million related to stock options and RSUs. The Company expects to recognize this expense over a weighted-average period of 2.4 years.
Evergreen Shares for 2020 Equity Incentive Plan and 2010 Employee Stock Purchase Plan
In March 2021, the Board approved increases to the number of shares available for issuance under the Company's 2020 Equity Incentive Plan (the 2020 Equity Plan) and 2010 Employee Stock Purchase Plan (the 2010 ESPP).
The increase in shares in connection with the 2020 Equity Plan represented an automatic annual increase in the number of shares available for grant and issuance under the 2020 Equity Plan of 12,247,572 shares (Evergreen Shares). This increase is equal to approximately 5.0% of the 244,951,446 total outstanding shares of the Company’s common stock as of December 31, 2020. This automatic increase was effective as of January 1, 2021.
The increase in shares in connection with the 2010 ESPP represented an automatic annual increase in the number of shares reserved for issuance of 42,077 shares, which represents the remaining allowable under the existing 1,666,666 maximum limit for share issuance under the 2010 ESPP. This automatic increase was effective as of January 1, 2021.
12. Subsequent Events
Primary and Secondary Offering
On April 8, 2021, the Company entered into an underwriting agreement (the Underwriting Agreement) with J.P. Morgan Securities LLC and Cowen and Company, LLC (the Underwriters) and with certain stockholders of the Company (the Selling Stockholders), pursuant to which the Selling Stockholders agreed to sell 11,390,797 shares of common stock of the Company, par value $0.0001 per share and Amyris agreed to issue and sell 7,656,822, at a public offering price of $15.75 per share. DSM International B.V. and affiliates of Vivo Capital LLC were the Secondary Offering Selling Stockholders. Under the terms of the Underwriting Agreement, the Selling Stockholders and Amyris granted the Underwriters a 30-day option to purchase up to an additional 1,708,619 shares of Common Stock from the Selling Stockholders and 1,148,523 shares of Common Stock from Amyris. The Underwriters exercised this option in full.
Net proceeds to the Company from the 8,805,345 new shares issued by the Company were approximately $130.7 million (inclusive of the underwriters’ option to purchase additional shares), after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
The Company did not receive any proceeds from the sale of common stock in the secondary offering by the Selling Stockholders.
Ingredion Agreement
On May 3, 2021, the Company and Ingredion Incorporated entered into a Membership Interest Purchase Agreement (MIPA) under which (i) the Company will assign and transfer certain contracts for the sale and distribution of RebM to Ingredion’s subsidiary, PureCircle, which will become the exclusive global business-to-business commercialization partner for the Company’s sugar reduction technology that includes fermented RebM; (ii) the Company and Ingredion will enter into certain intellectual property license agreements to make, have made, commercialize and advance the development of sustainably sourced, zero-calorie, nature-based sweeteners and potentially other types of fermentation-based ingredients; (iii) Ingredion will purchase 31% of all of the membership interests in Amyris RealSweet LLC, a wholly owned subsidiary of the Company incorporated on April 15, 2021 (RealSweet), which entity will own the new manufacturing facility under construction in Brazil, and; (iv) The parties will enter into an R&D collaboration agreement to create and advance the development of sustainably sourced, zero-calorie, nature-based sweeteners, and potentially other types of fermentation-based food ingredients. The Company will continue to own and market its Purecane™ consumer brand offering of tabletop and culinary sweetener products to consumers. Under the terms of the license agreement, the Company will receive an upfront $10 million license fee at closing and additional milestone payments in the aggregate of $35 million upon achievement of certain manufacturing cost targets and RebM sales revenue. The Company will also receive $30 million of cash and non-cash consideration from Ingredion in exchange for their 31% interest in RealSweet. Additionally, the Company will earn a profit share from future Reb M sales by PureCircle. The closing of the MIPA is subject to customary closing conditions.