x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
|
71-0872999
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
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|
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200 Penobscot Drive, Redwood City, California
|
|
94063
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(Address of principal executive offices)
|
|
(Zip Code)
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Large accelerated filer
|
¨
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Accelerated filer
|
x
|
|
|
|
|
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Non-accelerated filer
|
¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
|
¨
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PAGE
NUMBER
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PART I. FINANCIAL INFORMATION
|
||
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ITEM 1:
|
|
|
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|
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ITEM 2:
|
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ITEM 3:
|
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ITEM 4:
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ITEM 1:
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ITEM 1A:
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ITEM 2:
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ITEM 3:
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ITEM 4:
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ITEM 5:
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ITEM 6:
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September 30,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
14,918
|
|
|
$
|
23,273
|
|
Restricted cash, current
|
883
|
|
|
—
|
|
||
Accounts receivable, net of allowances of $421 at September 30, 2016 and December 31, 2015
|
11,965
|
|
|
7,329
|
|
||
Inventories
|
1,076
|
|
|
992
|
|
||
Prepaid expenses and other current assets
|
1,264
|
|
|
1,245
|
|
||
Total current assets
|
30,106
|
|
|
32,839
|
|
||
Restricted cash
|
783
|
|
|
787
|
|
||
Marketable securities
|
1,527
|
|
|
1,549
|
|
||
Property and equipment, net
|
2,301
|
|
|
3,109
|
|
||
Intangible assets, net
|
281
|
|
|
2,812
|
|
||
Goodwill
|
3,241
|
|
|
3,241
|
|
||
Other non-current assets
|
272
|
|
|
310
|
|
||
Total assets
|
$
|
38,511
|
|
|
$
|
44,647
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,123
|
|
|
$
|
3,399
|
|
Accrued compensation
|
3,024
|
|
|
3,331
|
|
||
Other accrued liabilities
|
2,339
|
|
|
2,013
|
|
||
Deferred revenue
|
4,221
|
|
|
6,098
|
|
||
Total current liabilities
|
11,707
|
|
|
14,841
|
|
||
Deferred revenue, net of current portion
|
745
|
|
|
3,120
|
|
||
Lease incentive obligation, net of current portion
|
992
|
|
|
1,310
|
|
||
Other long-term liabilities
|
2,230
|
|
|
2,497
|
|
||
Total liabilities
|
15,674
|
|
|
21,768
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
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Stockholders' equity:
|
|
|
|
||||
Preferred stock, $0.0001 par value per share; 5,000 shares authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.0001 par value per share; 100,000 shares authorized; 41,218 shares and 40,343 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively
|
4
|
|
|
4
|
|
||
Additional paid-in capital
|
309,258
|
|
|
305,981
|
|
||
Accumulated other comprehensive income
|
384
|
|
|
405
|
|
||
Accumulated deficit
|
(286,809
|
)
|
|
(283,511
|
)
|
||
Total stockholders' equity
|
22,837
|
|
|
22,879
|
|
||
Total liabilities and stockholders' equity
|
$
|
38,511
|
|
|
$
|
44,647
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Biocatalyst product sales
|
$
|
4,052
|
|
|
$
|
1,818
|
|
|
$
|
11,072
|
|
|
$
|
6,915
|
|
Biocatalyst research and development
|
10,373
|
|
|
14,517
|
|
|
25,971
|
|
|
19,247
|
|
||||
Revenue sharing arrangement
|
445
|
|
|
1,066
|
|
|
1,825
|
|
|
4,056
|
|
||||
Total revenues
|
14,870
|
|
|
17,401
|
|
|
38,868
|
|
|
30,218
|
|
||||
Costs and operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of biocatalyst product sales
|
2,756
|
|
|
1,302
|
|
|
7,466
|
|
|
4,009
|
|
||||
Research and development
|
5,467
|
|
|
4,994
|
|
|
16,265
|
|
|
15,457
|
|
||||
Selling, general and administrative
|
5,229
|
|
|
5,415
|
|
|
18,451
|
|
|
16,289
|
|
||||
Total costs and operating expenses
|
13,452
|
|
|
11,711
|
|
|
42,182
|
|
|
35,755
|
|
||||
Income (loss) from operations
|
1,418
|
|
|
5,690
|
|
|
(3,314
|
)
|
|
(5,537
|
)
|
||||
Interest income
|
12
|
|
|
4
|
|
|
40
|
|
|
12
|
|
||||
Other income (expenses)
|
7
|
|
|
(26
|
)
|
|
(39
|
)
|
|
(147
|
)
|
||||
Income (loss) before income taxes
|
1,437
|
|
|
5,668
|
|
|
(3,313
|
)
|
|
(5,672
|
)
|
||||
Provision for (benefit from) income taxes
|
—
|
|
|
274
|
|
|
(15
|
)
|
|
(144
|
)
|
||||
Net income (loss)
|
$
|
1,437
|
|
|
$
|
5,394
|
|
|
$
|
(3,298
|
)
|
|
$
|
(5,528
|
)
|
Net income (loss) per share, basic
|
$
|
0.04
|
|
|
$
|
0.14
|
|
|
$
|
(0.08
|
)
|
|
$
|
(0.14
|
)
|
Net income (loss) per share, diluted
|
$
|
0.03
|
|
|
$
|
0.13
|
|
|
$
|
(0.08
|
)
|
|
$
|
(0.14
|
)
|
Weighted average common stock shares used in computing net income (loss) per share, basic
|
40,940
|
|
|
39,767
|
|
|
40,504
|
|
|
39,340
|
|
||||
Weighted average common stock shares used in computing net income (loss) per share, diluted
|
42,134
|
|
|
40,970
|
|
|
40,504
|
|
|
39,340
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
1,437
|
|
|
$
|
5,394
|
|
|
$
|
(3,298
|
)
|
|
$
|
(5,528
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on marketable securities, net of tax expense of $0 and $263 for the three months ended September 30, 2016 and 2015, respectively, and tax benefit of $0 and $200 for the nine months ended September 30, 2016 and 2015, respectively.
|
413
|
|
|
(449
|
)
|
|
(21
|
)
|
|
343
|
|
||||
Other comprehensive income (loss)
|
413
|
|
|
(449
|
)
|
|
(21
|
)
|
|
343
|
|
||||
Total comprehensive income (loss)
|
$
|
1,850
|
|
|
$
|
4,945
|
|
|
$
|
(3,319
|
)
|
|
$
|
(5,185
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(3,298
|
)
|
|
$
|
(5,528
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Amortization of intangible assets
|
2,531
|
|
|
2,531
|
|
||
Depreciation and amortization of property and equipment
|
1,365
|
|
|
1,569
|
|
||
Gain on disposal of property and equipment
|
(35
|
)
|
|
(5
|
)
|
||
Income tax benefit related to marketable securities
|
—
|
|
|
(200
|
)
|
||
Stock-based compensation
|
3,861
|
|
|
3,759
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Restricted cash, current
|
(883
|
)
|
|
—
|
|
||
Accounts receivable, net
|
(4,636
|
)
|
|
(9,738
|
)
|
||
Inventories
|
(84
|
)
|
|
717
|
|
||
Prepaid expenses and other assets, current
|
(18
|
)
|
|
163
|
|
||
Other assets
|
38
|
|
|
29
|
|
||
Accounts payable
|
(1,046
|
)
|
|
(3,606
|
)
|
||
Accrued compensation
|
(307
|
)
|
|
(393
|
)
|
||
Other accrued liabilities
|
60
|
|
|
(523
|
)
|
||
Long term lease incentive
|
(319
|
)
|
|
(319
|
)
|
||
Deferred revenues
|
(4,252
|
)
|
|
3,955
|
|
||
Net cash used in operating activities
|
(7,023
|
)
|
|
(7,589
|
)
|
||
Investing activities:
|
|
|
|
||||
Purchase of property and equipment
|
(787
|
)
|
|
(288
|
)
|
||
Proceeds from disposal of property and equipment
|
35
|
|
|
5
|
|
||
Decrease (increase) in restricted cash
|
4
|
|
|
(75
|
)
|
||
Net cash used in investing activities
|
(748
|
)
|
|
(358
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from exercises of options
|
939
|
|
|
235
|
|
||
Taxes paid related to net share settlement of equity awards
|
(1,523
|
)
|
|
(1,812
|
)
|
||
Net cash used in financing activities
|
(584
|
)
|
|
(1,577
|
)
|
||
Net decrease in cash and cash equivalents
|
(8,355
|
)
|
|
(9,524
|
)
|
||
Cash and cash equivalents at the beginning of the period
|
23,273
|
|
|
26,487
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
14,918
|
|
|
$
|
16,963
|
|
•
|
Level 1: Inputs that are unadjusted, quoted prices in active markets that are accessible at the measurement date for assets or liabilities.
|
•
|
Level 2: Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
|
•
|
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
1,437
|
|
|
$
|
5,394
|
|
|
$
|
(3,298
|
)
|
|
$
|
(5,528
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common stock shares used in computing net income (loss) per share, basic
|
40,940
|
|
|
39,767
|
|
|
40,504
|
|
|
39,340
|
|
||||
Effect of dilutive shares
|
1,194
|
|
|
1,203
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common stock shares used in computing net income (loss) per share, diluted
|
42,134
|
|
|
40,970
|
|
|
40,504
|
|
|
39,340
|
|
||||
Net income (loss) per share, basic
|
$
|
0.04
|
|
|
$
|
0.14
|
|
|
$
|
(0.08
|
)
|
|
$
|
(0.14
|
)
|
Net income (loss) per share, diluted
|
$
|
0.03
|
|
|
$
|
0.13
|
|
|
$
|
(0.08
|
)
|
|
$
|
(0.14
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Shares of common stock issuable pursuant to equity awards outstanding under the Equity Incentive Plan
|
2,149
|
|
|
2,320
|
|
|
5,371
|
|
|
6,121
|
|
Shares of common stock issuable upon exercise of outstanding warrants
|
73
|
|
|
75
|
|
|
73
|
|
|
75
|
|
Total shares excluded as anti-dilutive
|
2,222
|
|
|
2,395
|
|
|
5,444
|
|
|
6,196
|
|
|
September 30, 2016
|
||||||||||||||
|
Adjusted Cost
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
||||||||
|
|
||||||||||||||
Money market funds
(1)
|
$
|
11,153
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,153
|
|
Common shares of CO
2
Solutions
(2)
|
563
|
|
|
964
|
|
|
—
|
|
|
1,527
|
|
||||
Total
|
$
|
11,716
|
|
|
$
|
964
|
|
|
$
|
—
|
|
|
$
|
12,680
|
|
|
December 31, 2015
|
||||||||||||||
|
Adjusted Cost
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
||||||||
|
|
||||||||||||||
Money market funds
(1)
|
$
|
11,120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,120
|
|
Common shares of CO
2
Solutions
(2)
|
563
|
|
|
986
|
|
|
—
|
|
|
1,549
|
|
||||
Total
|
$
|
11,683
|
|
|
$
|
986
|
|
|
$
|
—
|
|
|
$
|
12,669
|
|
|
September 30, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Money market funds
|
$
|
11,153
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,153
|
|
Common shares of CO
2
Solutions
|
—
|
|
|
1,527
|
|
|
—
|
|
|
1,527
|
|
||||
Total
|
$
|
11,153
|
|
|
$
|
1,527
|
|
|
$
|
—
|
|
|
$
|
12,680
|
|
|
December 31, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Money market funds
|
$
|
11,120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,120
|
|
Common shares of CO
2
Solutions
|
—
|
|
|
1,549
|
|
|
—
|
|
|
1,549
|
|
||||
Total
|
$
|
11,120
|
|
|
$
|
1,549
|
|
|
$
|
—
|
|
|
$
|
12,669
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Raw materials
|
$
|
520
|
|
|
$
|
262
|
|
Work-in-process
|
128
|
|
|
—
|
|
||
Finished goods
|
428
|
|
|
730
|
|
||
Inventories
|
$
|
1,076
|
|
|
$
|
992
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Laboratory equipment
|
$
|
20,624
|
|
|
$
|
20,503
|
|
Leasehold improvements
|
10,395
|
|
|
10,369
|
|
||
Computer equipment and software
|
3,284
|
|
|
3,271
|
|
||
Office equipment and furniture
|
1,178
|
|
|
1,178
|
|
||
Construction in progress
(1)
|
1
|
|
|
3
|
|
||
Property and equipment
|
35,482
|
|
|
35,324
|
|
||
Less: accumulated depreciation and amortization
|
(33,181
|
)
|
|
(32,215
|
)
|
||
Property and equipment, net
|
$
|
2,301
|
|
|
$
|
3,109
|
|
|
September 30, 2016
|
|
December 31, 2015
|
|
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Amortization
Period
(years)
|
||||||||||||
Developed and core technology
|
$
|
1,534
|
|
|
$
|
(1,534
|
)
|
|
$
|
—
|
|
|
$
|
1,534
|
|
|
$
|
(1,534
|
)
|
|
$
|
—
|
|
|
5
|
Maxygen intellectual property
|
20,244
|
|
|
(19,963
|
)
|
|
281
|
|
|
20,244
|
|
|
(17,432
|
)
|
|
2,812
|
|
|
6
|
||||||
Intangible assets, net
|
$
|
21,778
|
|
|
$
|
(21,497
|
)
|
|
$
|
281
|
|
|
$
|
21,778
|
|
|
$
|
(18,966
|
)
|
|
$
|
2,812
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Research and development
|
$
|
246
|
|
|
$
|
181
|
|
|
$
|
688
|
|
|
$
|
710
|
|
Selling, general and administrative
|
984
|
|
|
1,042
|
|
|
3,173
|
|
|
3,049
|
|
||||
Total
|
$
|
1,230
|
|
|
$
|
1,223
|
|
|
$
|
3,861
|
|
|
$
|
3,759
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Stock options
|
$
|
249
|
|
|
$
|
281
|
|
|
$
|
820
|
|
|
$
|
798
|
|
RSUs and RSAs
|
445
|
|
|
566
|
|
|
1,580
|
|
|
2,020
|
|
||||
PSUs
|
536
|
|
|
376
|
|
|
1,461
|
|
|
941
|
|
||||
Total
|
$
|
1,230
|
|
|
$
|
1,223
|
|
|
$
|
3,861
|
|
|
$
|
3,759
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Expected term (in years)
(1)
|
5.2
|
|
|
5.2
|
|
|
5.4
|
|
|
6.0
|
|
||||
Volatility
|
63
|
%
|
|
67
|
%
|
|
65
|
%
|
|
66
|
%
|
||||
Risk-free interest rate
|
1.18
|
%
|
|
1.64
|
%
|
|
1.29
|
%
|
|
1.70
|
%
|
||||
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
||||
Weighted-average estimated fair value of stock options granted
|
$
|
2.25
|
|
|
$
|
2.31
|
|
|
$
|
2.30
|
|
|
$
|
2.09
|
|
|
September 30, 2016
|
||||||
Issue Date
|
Shares Subject
to Warrants
|
|
Exercise Price
per Share
|
|
Expiration
|
||
September 28, 2007
|
72,727
|
|
$
|
8.25
|
|
|
September 28, 2017
|
Years ending December 31,
|
Lease payments
|
||
2016 (3 months remaining)
|
$
|
710
|
|
2017
|
2,677
|
|
|
2018
|
2,736
|
|
|
2019
|
2,818
|
|
|
2020
|
236
|
|
|
Total
|
$
|
9,177
|
|
Years ending December 31,
|
Lease payments
|
||
2016 (3 months remaining)
|
$
|
—
|
|
2017
|
400
|
|
|
2018
|
448
|
|
|
2019
|
462
|
|
|
2020
|
476
|
|
|
Thereafter
|
531
|
|
|
Total
|
$
|
2,317
|
|
|
Percentage of Total Revenues for the
|
||||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Customer A
(2)
|
76
|
%
|
|
39
|
%
|
|
43
|
%
|
|
34
|
%
|
Customer B
|
*
|
|
|
40
|
%
|
|
27
|
%
|
|
26
|
%
|
Customer C (related party)
|
*
|
|
|
*
|
|
|
*
|
|
|
13
|
%
|
Customer F
|
11
|
%
|
|
*
|
|
|
*
|
|
|
*
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
10,373
|
|
|
$
|
8,755
|
|
|
$
|
17,226
|
|
|
$
|
16,516
|
|
Asia
|
|
|
|
|
|
|
|
||||||||
India
|
714
|
|
|
369
|
|
|
2,760
|
|
|
519
|
|
||||
Singapore
|
792
|
|
|
497
|
|
|
2,912
|
|
|
497
|
|
||||
Others
|
245
|
|
|
122
|
|
|
740
|
|
|
808
|
|
||||
Europe
|
|
|
|
|
|
|
|
|
|
|
|
||||
United Kingdom
|
145
|
|
|
7,001
|
|
|
10,726
|
|
|
8,204
|
|
||||
Others
|
2,601
|
|
|
657
|
|
|
4,504
|
|
|
3,674
|
|
||||
Total revenues
|
$
|
14,870
|
|
|
$
|
17,401
|
|
|
$
|
38,868
|
|
|
$
|
30,218
|
|
Long-lived assets:
|
September 30, 2016
|
|
December 31, 2015
|
||||
United States
|
$
|
2,854
|
|
|
$
|
6,231
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three months ended September 30,
|
|
Change
|
|
Nine months ended September 30,
|
|
Change
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Biocatalyst product sales
|
$
|
4,052
|
|
|
$
|
1,818
|
|
|
$
|
2,234
|
|
|
123
|
%
|
|
$
|
11,072
|
|
|
$
|
6,915
|
|
|
$
|
4,157
|
|
|
60
|
%
|
Biocatalyst research and development
|
10,373
|
|
|
14,517
|
|
|
(4,144
|
)
|
|
(29
|
)%
|
|
25,971
|
|
|
19,247
|
|
|
6,724
|
|
|
35
|
%
|
||||||
Revenue sharing arrangement
|
445
|
|
|
1,066
|
|
|
(621
|
)
|
|
(58
|
)%
|
|
1,825
|
|
|
4,056
|
|
|
(2,231
|
)
|
|
(55
|
)%
|
||||||
Total revenues
|
14,870
|
|
|
17,401
|
|
|
(2,531
|
)
|
|
(15
|
)%
|
|
38,868
|
|
|
30,218
|
|
|
8,650
|
|
|
29
|
%
|
||||||
Costs and operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of biocatalyst product sales
|
2,756
|
|
|
1,302
|
|
|
1,454
|
|
|
112
|
%
|
|
7,466
|
|
|
4,009
|
|
|
3,457
|
|
|
86
|
%
|
||||||
Research and development
|
5,467
|
|
|
4,994
|
|
|
473
|
|
|
9
|
%
|
|
16,265
|
|
|
15,457
|
|
|
808
|
|
|
5
|
%
|
||||||
Selling, general and administrative
|
5,229
|
|
|
5,415
|
|
|
(186
|
)
|
|
(3
|
)%
|
|
18,451
|
|
|
16,289
|
|
|
2,162
|
|
|
13
|
%
|
||||||
Total costs and operating expenses
|
13,452
|
|
|
11,711
|
|
|
1,741
|
|
|
15
|
%
|
|
42,182
|
|
|
35,755
|
|
|
6,427
|
|
|
18
|
%
|
||||||
Income (loss) from operations
|
1,418
|
|
|
5,690
|
|
|
(4,272
|
)
|
|
(75
|
)%
|
|
(3,314
|
)
|
|
(5,537
|
)
|
|
2,223
|
|
|
40
|
%
|
||||||
Interest income
|
12
|
|
|
4
|
|
|
8
|
|
|
200
|
%
|
|
40
|
|
|
12
|
|
|
28
|
|
|
233
|
%
|
||||||
Other income (expenses)
|
7
|
|
|
(26
|
)
|
|
33
|
|
|
127
|
%
|
|
(39
|
)
|
|
(147
|
)
|
|
108
|
|
|
73
|
%
|
||||||
Income (loss) before income taxes
|
1,437
|
|
|
5,668
|
|
|
(4,231
|
)
|
|
(75
|
)%
|
|
(3,313
|
)
|
|
(5,672
|
)
|
|
2,359
|
|
|
42
|
%
|
||||||
Provision for (benefit from) income taxes
|
—
|
|
|
274
|
|
|
(274
|
)
|
|
(100
|
)%
|
|
(15
|
)
|
|
(144
|
)
|
|
129
|
|
|
90
|
%
|
||||||
Net income (loss)
|
$
|
1,437
|
|
|
$
|
5,394
|
|
|
$
|
(3,957
|
)
|
|
(73
|
)%
|
|
$
|
(3,298
|
)
|
|
$
|
(5,528
|
)
|
|
$
|
2,230
|
|
|
40
|
%
|
•
|
Biocatalyst product sales revenues consist of sales of biocatalyst enzymes, chemical intermediates, and Codex
®
Biocatalyst Panels and Kits.
|
•
|
Biocatalyst research and development revenues include license, technology access and exclusivity fees, research services, milestone payments, royalties, and optimization and screening fees.
|
•
|
Revenue sharing arrangement revenues are recognized based upon sales of licensed products by Exela.
|
|
Three months ended September 30,
|
|
Change
|
|
Nine months ended September 30,
|
|
Change
|
||||||||||||||||||||||
(In Thousands)
|
2016
|
|
2015
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||||||||
Cost of biocatalyst product sales
|
$
|
2,756
|
|
|
$
|
1,302
|
|
|
$
|
1,454
|
|
|
112
|
%
|
|
$
|
7,466
|
|
|
$
|
4,009
|
|
|
$
|
3,457
|
|
|
86
|
%
|
Research and development expense
|
5,467
|
|
|
4,994
|
|
|
473
|
|
|
9
|
%
|
|
16,265
|
|
|
15,457
|
|
|
808
|
|
|
5
|
%
|
||||||
Selling, general and administrative expense
|
5,229
|
|
|
5,415
|
|
|
(186
|
)
|
|
(3
|
)%
|
|
18,451
|
|
|
16,289
|
|
|
2,162
|
|
|
13
|
%
|
||||||
Total costs and operating expenses
|
$
|
13,452
|
|
|
$
|
11,711
|
|
|
$
|
1,741
|
|
|
15
|
%
|
|
$
|
42,182
|
|
|
$
|
35,755
|
|
|
$
|
6,427
|
|
|
18
|
%
|
|
Three months ended September 30,
|
|
Change
|
|
Nine months ended September 30,
|
|
Change
|
||||||||||||||||||||||
(In Thousands)
|
2016
|
|
2015
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||||||||
Revenues from biocatalyst product sales
|
$
|
4,052
|
|
|
$
|
1,818
|
|
|
$
|
2,234
|
|
|
123
|
%
|
|
$
|
11,072
|
|
|
$
|
6,915
|
|
|
$
|
4,157
|
|
|
60
|
%
|
Cost of biocatalyst product sales
|
2,756
|
|
|
1,302
|
|
|
1,454
|
|
|
112
|
%
|
|
7,466
|
|
|
4,009
|
|
|
3,457
|
|
|
86
|
%
|
||||||
Biocatalyst product gross profit
|
$
|
1,296
|
|
|
$
|
516
|
|
|
$
|
780
|
|
|
151
|
%
|
|
$
|
3,606
|
|
|
$
|
2,906
|
|
|
$
|
700
|
|
|
24
|
%
|
Product gross margin (%)
|
32%
|
|
28%
|
|
|
|
|
|
33%
|
|
42%
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Change
|
|
Nine months ended September 30,
|
|
Change
|
||||||||||||||||||||||
(In Thousands)
|
2016
|
|
2015
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
||||||||||||||
Interest income
|
$
|
12
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
200
|
%
|
|
$
|
40
|
|
|
$
|
12
|
|
|
$
|
28
|
|
|
233
|
%
|
Other income (expense)
|
7
|
|
|
(26
|
)
|
|
33
|
|
|
127
|
%
|
|
(39
|
)
|
|
(147
|
)
|
|
108
|
|
|
73
|
%
|
||||||
Total other income (expense)
|
$
|
19
|
|
|
$
|
(22
|
)
|
|
$
|
41
|
|
|
186
|
%
|
|
$
|
1
|
|
|
$
|
(135
|
)
|
|
$
|
136
|
|
|
101
|
%
|
(In Thousands)
|
September 30, 2016
|
|
December 31, 2015
|
||||
Cash and cash equivalents
|
$
|
14,918
|
|
|
$
|
23,273
|
|
Working capital
|
$
|
18,399
|
|
|
$
|
17,998
|
|
|
Nine months ended September 30,
|
||||||
(In Thousands)
|
2016
|
|
2015
|
||||
Net cash used in operating activities
|
$
|
(7,023
|
)
|
|
$
|
(7,589
|
)
|
Net cash used in investing activities
|
(748
|
)
|
|
(358
|
)
|
||
Net cash used in financing activities
|
(584
|
)
|
|
(1,577
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(8,355
|
)
|
|
$
|
(9,524
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
|
|
Codexis, Inc.
|
|
|
|
|
|
Date:
|
November 8, 2016
|
By:
|
/s/ John J. Nicols
|
|
|
|
John J. Nicols
President and Chief Executive Officer
(principal executive officer)
|
|
|
|
|
Date:
|
November 8, 2016
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By:
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/s/ Gordon Sangster
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Gordon Sangster
Chief Financial Officer
(principal financial and accounting officer)
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ITEM 6.
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Exhibits
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3.1
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Amended and Restated Certificate of Incorporation of Codexis, Inc. filed with the Secretary of the State of the State of Delaware on April 27, 2010 and effective as of April 27, 2010 (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, filed on May 28, 2010).
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3.2
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Certificate of Designations of Series A Junior Participating Preferred Stock of Codexis, Inc., filed with the Secretary of State of the State of Delaware on September 4, 2012 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on September 4, 2012).
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3.3
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Amended and Restated Bylaws of Codexis, Inc. effective as of April 27, 2010 (incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, filed on May 28, 2010).
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4.1
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Reference is made to Exhibits 3.1 through 3.3.
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4.2
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Form of the Company's Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed on August 9, 2012).
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4.3*
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Form of Warrant to purchase shares of Series D preferred stock issued in connection with the Bridge Loan Agreement dated as of May 25, 2006.
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4.4*
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Form of Warrant to purchase shares of Series D preferred stock issued in connection with the Loan and Security Agreement dated as of September 28, 2007.
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4.5*
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Warrant to purchase shares of Common Stock issued to Alexandria Equities, LLC.
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4.6*
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Registration Rights Agreement among the Company, Jülich Fine Chemicals GmbH and the other parties named therein, dated February 11, 2005.
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10.1‡
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Amendment No. 4 to Sitagliptin Supply Agreement, effective as of January 1, 2016, by and between the Company and Merck Sharp and Dohme Corp.
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10.2+
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Offer Letter, dated as of October 12, 2016, by and between the Company and Michael Aldridge.
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10.3
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Seventh Amendment to Lease, effective as of October 11, 2016, with Metropolitan Life Insurance Company.
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31.1
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Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
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31.2
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Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
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32.1
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Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
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101
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The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, formatted in Extensible Business Reporting Language (XBRL) includes: (i) Condensed Consolidated Balance Sheets at September 30, 2016 and December 31, 2015, (ii) Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2016 and 2015, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2016 and 2015, (iv) Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015, and (v) Notes to Condensed Consolidated Financial Statements.
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1.
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As of the AMENDMENT EFFECTIVE DATE, the Agreement is amended as follows:
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1.01
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Section 1.10.1 is added as follows:
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1.02
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Section 1.10.2 is added as follows:
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1.03
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Section 2.1.3 shall be amended to read in its entirety as follows:
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1.04
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Section 2.1.5 shall be amended to read in its entirety as follows:
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1.05
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Section 2.2.1.1 shall be amended to read in its entirety as follows:
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1.06
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Section 2.2.1.2 shall be amended to read in its entirety as follows:
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1.07
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Section 4.1.2.2 shall be amended to read in its entirety as follows:
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1.08
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Section 12.1 shall be amended to read in its entirety as follows:
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1.09
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As of the AMENDMENT EFFECTIVE DATE, Article 12.2 of the AGREEMENT is deleted in its entirety.
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1.10
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Section 13.1.1 shall be amended to read in its entirety as follows:
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1.
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Miscellaneous
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2.01
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Effect of Amendment; Joinder
. Except as expressly changed by this Amendment, the Agreement shall remain in full force and effect in accordance with its stated terms.
The Agreement and the Schedules and Exhibits thereto, as amended by this Amendment and all preceding amendments, set forth the entire understanding of the parties with respect to the subject matter thereof. There are no agreements, restrictions, promises, warranties, covenants or undertakings other than those expressly set forth or referred to therein. The Agreement and the Schedules and Exhibits thereto, as amended by this Amendment and all preceding amendments, supersede all prior agreements and undertakings between the parties with respect to such subject matter.
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2.02
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Counterparts
. This Amendment may be executed by the parties in separate counterparts, each of which when so executed and delivered is deemed an original. All such counterparts together constitute but one and the same instrument.
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2.03
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Definitions
. All capitalized terms used but not defined in this Amendment shall have the respective definitions assigned to such terms in the Agreement.
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Codexis Inc.
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Merck Sharp & Dohme Corp.
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By: /s/ Gordon Sangster
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By: /s/ Aatush Chauhan
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Name: Gordon Sangster
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Name: Aatush Chauhan
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Title: Senior Vice President and CFO
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Title: Director, API/Intermediates Procurement
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Date: 29 June 2016
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Date: 03 August 2016
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CALENDAR YEAR 20[
***
] DELIVERIES OF SUBSTANCE
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SUBSTANCE PRICE AT
[
***
]% SUBSTANCE LOADING FACTOR
($/kg)
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All deliveries from [
***
], 20[
***
] through [
***
], 20[
***
]
All deliveries from and after [
***
], 20[
***
] through [
***
], 20[
***
]
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$[
***
]
$[
***
]
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CUMULATIVE SUBSTANCE PURCHASE VOLUME TIER
[CUMULATIVE SUBSTANCE PURCHASE VOLUME delivered commencing [
***
], 20[
***
] and thereafter]
(kg) |
SUBSTANCE PRICE AT
[
***
]% SUBSTANCE LOADING FACTOR
($/kg)
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[
***]
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[
***
]
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$[
***
]
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[
***
]
|
[
***
]
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$[
***
]
|
[
***
]
|
[
***
]
|
$[
***
]
|
[
***
]
|
[
***
]
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$[
***
]
|
[
***
]
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[
***
]
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$[
***
]
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[
***
]
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$[
***
]
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Codexis, Inc.
200 Penobscot Drive Redwood City, CA 94063 Tel: 650.421.8100 Fax: 650.421.8135 www.codexis.com |
Date:
10-18-2016
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/s/ Michael Aldridge
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Michael Aldridge
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Signature
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Printed
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CODEXIS, INC.
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By:
/s/ John Nicols
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Title:
President & CEO
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Date:
Oct 17/2016
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Title
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Date
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Identifying Number
Or Brief Description |
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Period from/to
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Monthly Base Rent
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February 1, 2017 ‒ January 31, 2018
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$36,366.00
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February 1, 2018 ‒ January 31, 2019
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$37,456.98
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February 1, 2019 ‒ January 31, 2020
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$38,580.69
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February 1, 2020 ‒ January 31, 2021
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$39,738.11
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February 1, 2021 ‒ January 31, 2022
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$40,930.25
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TENANT:
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CODEXIS, INC.,
a Delaware corporation
By:
/s/ John J. Nicols
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Print Name: John J. Nicols
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Title: President and CEO
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LANDLORD:
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METROPOLITAN LIFE INSURANCE COMPANY,
a
New York corporation
By:
/s/ Leland Low
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Print Name: Leland Low
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Title: Director
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Codexis, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ John J. Nicols
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John J. Nicols
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President and Chief Executive Officer
(principal executive officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Codexis, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Gordon Sangster
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Gordon Sangster
Senior Vice President and Chief Financial Officer
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(principal financial and accounting officer)
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•
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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•
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The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ John J. Nicols
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John J. Nicols
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President and Chief Executive Officer
(principal executive officer)
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/s/ Gordon Sangster
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Gordon Sangster
Senior Vice President and Chief Financial Officer |
(principal financial and accounting officer)
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