x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
71-0872999
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
200 Penobscot Drive, Redwood City, California
|
|
94063
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
¨
|
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
|
|
|
Emerging growth company
|
¨
|
|
PAGE
NUMBER
|
|
|
||
PART I. FINANCIAL INFORMATION
|
||
|
|
|
ITEM 1:
|
|
|
|
||
|
||
|
Condensed Consolidated Statements of Comprehensive
Income (Loss)
|
|
|
||
|
||
ITEM 2:
|
||
ITEM 3:
|
||
ITEM 4:
|
||
|
|
|
|
|
|
ITEM 1:
|
||
ITEM 1A:
|
||
ITEM 2:
|
||
ITEM 3:
|
||
ITEM 4:
|
||
ITEM 5:
|
||
ITEM 6:
|
||
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
23,826
|
|
|
$
|
19,240
|
|
Accounts receivable, net of allowances of $34 at September 30, 2017 and $421 at December 31, 2016
|
7,906
|
|
|
5,924
|
|
||
Inventories
|
849
|
|
|
825
|
|
||
Prepaid expenses and other current assets
|
2,443
|
|
|
1,238
|
|
||
Total current assets
|
35,024
|
|
|
27,227
|
|
||
Restricted cash
|
1,536
|
|
|
1,624
|
|
||
Marketable securities
|
1,163
|
|
|
1,142
|
|
||
Property and equipment, net
|
2,810
|
|
|
2,155
|
|
||
Goodwill
|
3,241
|
|
|
3,241
|
|
||
Other non-current assets
|
327
|
|
|
259
|
|
||
Total assets
|
$
|
44,101
|
|
|
$
|
35,648
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
4,474
|
|
|
$
|
4,232
|
|
Accrued compensation
|
3,795
|
|
|
4,314
|
|
||
Other accrued liabilities
|
4,664
|
|
|
2,111
|
|
||
Deferred revenue
|
4,141
|
|
|
1,710
|
|
||
Total current liabilities
|
17,074
|
|
|
12,367
|
|
||
Deferred revenue, net of current portion
|
1,839
|
|
|
1,066
|
|
||
Financing obligation, net of current portion
|
360
|
|
|
—
|
|
||
Other long-term liabilities
|
2,736
|
|
|
3,116
|
|
||
Total liabilities
|
22,009
|
|
|
16,549
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
||
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; 48,343 shares and 41,255 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively
|
5
|
|
|
4
|
|
||
Additional paid-in capital
|
338,110
|
|
|
311,164
|
|
||
Accumulated other comprehensive income
|
13
|
|
|
—
|
|
||
Accumulated deficit
|
(316,036
|
)
|
|
(292,069
|
)
|
||
Total stockholders' equity
|
22,092
|
|
|
19,099
|
|
||
Total liabilities and stockholders' equity
|
$
|
44,101
|
|
|
$
|
35,648
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product sales
|
$
|
6,948
|
|
|
$
|
4,052
|
|
|
$
|
19,134
|
|
|
$
|
11,072
|
|
Research and development revenues
|
2,929
|
|
|
10,373
|
|
|
8,320
|
|
|
25,971
|
|
||||
Revenue sharing arrangement
|
107
|
|
|
445
|
|
|
847
|
|
|
1,825
|
|
||||
Total revenues
|
9,984
|
|
|
14,870
|
|
|
28,301
|
|
|
38,868
|
|
||||
Costs and operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of product sales
|
3,976
|
|
|
2,756
|
|
|
10,768
|
|
|
7,466
|
|
||||
Research and development
|
8,055
|
|
|
5,467
|
|
|
20,242
|
|
|
16,265
|
|
||||
Selling, general and administrative
|
7,989
|
|
|
5,229
|
|
|
21,141
|
|
|
18,451
|
|
||||
Total costs and operating expenses
|
20,020
|
|
|
13,452
|
|
|
52,151
|
|
|
42,182
|
|
||||
Income (loss) from operations
|
(10,036
|
)
|
|
1,418
|
|
|
(23,850
|
)
|
|
(3,314
|
)
|
||||
Interest income
|
28
|
|
|
12
|
|
|
96
|
|
|
40
|
|
||||
Other income (expenses)
|
(68
|
)
|
|
7
|
|
|
(80
|
)
|
|
(39
|
)
|
||||
Income (loss) before income taxes
|
(10,076
|
)
|
|
1,437
|
|
|
(23,834
|
)
|
|
(3,313
|
)
|
||||
Provision for (benefit from) income taxes
|
150
|
|
|
—
|
|
|
132
|
|
|
(15
|
)
|
||||
Net income (loss)
|
$
|
(10,226
|
)
|
|
$
|
1,437
|
|
|
$
|
(23,966
|
)
|
|
$
|
(3,298
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share, basic
|
$
|
(0.21
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.53
|
)
|
|
$
|
(0.08
|
)
|
Net income (loss) per share, diluted
|
$
|
(0.21
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.53
|
)
|
|
$
|
(0.08
|
)
|
Weighted average common stock shares used in computing net income (loss) per share, basic
|
48,147
|
|
|
40,940
|
|
|
45,568
|
|
|
40,504
|
|
||||
Weighted average common stock shares used in computing net income (loss) per share, diluted
|
48,147
|
|
|
42,134
|
|
|
45,568
|
|
|
40,504
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss)
|
$
|
(10,226
|
)
|
|
$
|
1,437
|
|
|
$
|
(23,966
|
)
|
|
$
|
(3,298
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on marketable securities, net of tax expense of $52 and $0 for the three months ended September 30, 2017 and 2016, respectively, and tax benefit of $8 and $0 for the nine months ended September 30, 2017 and 2016, respectively
|
(90
|
)
|
|
413
|
|
|
13
|
|
|
(21
|
)
|
||||
Other comprehensive income (loss)
|
(90
|
)
|
|
413
|
|
|
13
|
|
|
(21
|
)
|
||||
Total comprehensive income (loss)
|
$
|
(10,316
|
)
|
|
$
|
1,850
|
|
|
$
|
(23,953
|
)
|
|
$
|
(3,319
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(23,966
|
)
|
|
$
|
(3,298
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Amortization of intangible assets
|
—
|
|
|
2,531
|
|
||
Depreciation and amortization
|
795
|
|
|
1,365
|
|
||
Gain on disposal of property and equipment
|
(5
|
)
|
|
(35
|
)
|
||
Income tax expense related to marketable securities
|
(8
|
)
|
|
—
|
|
||
Stock-based compensation
|
5,212
|
|
|
3,861
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(1,757
|
)
|
|
(4,636
|
)
|
||
Inventories
|
(24
|
)
|
|
(84
|
)
|
||
Prepaid expenses and other current assets
|
(1,303
|
)
|
|
(18
|
)
|
||
Restricted cash
|
13
|
|
|
(883
|
)
|
||
Other assets
|
(68
|
)
|
|
38
|
|
||
Accounts payable
|
150
|
|
|
(1,046
|
)
|
||
Accrued compensation
|
(519
|
)
|
|
(307
|
)
|
||
Other accrued liabilities
|
2,287
|
|
|
60
|
|
||
Long term lease incentive
|
(319
|
)
|
|
(319
|
)
|
||
Other long term liabilities
|
(60
|
)
|
|
—
|
|
||
Deferred revenue
|
3,204
|
|
|
(4,252
|
)
|
||
Net cash used in operating activities
|
(16,368
|
)
|
|
(7,023
|
)
|
||
Investing activities:
|
|
|
|
||||
Purchase of property and equipment
|
(743
|
)
|
|
(787
|
)
|
||
Proceeds from disposal of property and equipment
|
5
|
|
|
35
|
|
||
Changes in restricted cash
|
75
|
|
|
4
|
|
||
Net cash used in investing activities
|
(663
|
)
|
|
(748
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from exercises of stock options
|
175
|
|
|
939
|
|
||
Proceeds from issuance of common stock, net of issuance costs
|
23,229
|
|
|
—
|
|
||
Principal payments on capital lease obligations
|
(117
|
)
|
|
—
|
|
||
Taxes paid related to net share settlement of equity awards
|
(1,670
|
)
|
|
(1,523
|
)
|
||
Net cash provided by (used in) financing activities
|
21,617
|
|
|
(584
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
4,586
|
|
|
(8,355
|
)
|
||
Cash and cash equivalents at the beginning of the period
|
19,240
|
|
|
23,273
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
23,826
|
|
|
$
|
14,918
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
131
|
|
|
$
|
12
|
|
Income taxes
|
$
|
32
|
|
|
$
|
5
|
|
Supplemental non-cash financing activities:
|
|
|
|
||||
Equipment acquired under capital leases
|
$
|
840
|
|
|
$
|
—
|
|
•
|
Level 1: Inputs that are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
|
•
|
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,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(10,226
|
)
|
|
$
|
1,437
|
|
|
$
|
(23,966
|
)
|
|
$
|
(3,298
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common stock shares used in computing net income (loss) per share, basic
|
48,147
|
|
|
40,940
|
|
|
45,568
|
|
|
40,504
|
|
||||
Effect of dilutive shares
|
—
|
|
|
1,194
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common stock shares used in computing net income (loss) per share, diluted
|
48,147
|
|
|
42,134
|
|
|
45,568
|
|
|
40,504
|
|
||||
Net income (loss) per share, basic
|
(0.21
|
)
|
|
$
|
0.04
|
|
|
(0.53
|
)
|
|
$
|
(0.08
|
)
|
||
Net income (loss) per share, diluted
|
(0.21
|
)
|
|
$
|
0.03
|
|
|
(0.53
|
)
|
|
$
|
(0.08
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Shares of common stock issuable pursuant to equity awards outstanding under the Equity Incentive Plan
|
7,494
|
|
|
2,149
|
|
|
7,494
|
|
|
5,371
|
|
Shares of common stock issuable upon exercise of outstanding warrants
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
Total shares excluded as anti-dilutive
|
7,494
|
|
|
2,222
|
|
|
7,494
|
|
|
5,444
|
|
|
September 30, 2017
|
||||||||||||||
|
Adjusted Cost
|
|
Gross Unrealized
Gains |
|
Gross Unrealized
Losses |
|
Estimated
Fair Value |
||||||||
Money market funds
(1)
|
$
|
6,262
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,262
|
|
Common shares of CO
2
Solutions
(2)
|
563
|
|
|
600
|
|
|
—
|
|
|
1,163
|
|
||||
Total
|
$
|
6,825
|
|
|
$
|
600
|
|
|
$
|
—
|
|
|
$
|
7,425
|
|
|
December 31, 2016
|
||||||||||||||
|
Adjusted Cost
|
|
Gross Unrealized
Gains |
|
Gross Unrealized
Losses |
|
Estimated
Fair Value |
||||||||
Money market funds
(1)
|
$
|
11,172
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,172
|
|
Common shares of CO
2
Solutions
(2)
|
563
|
|
|
579
|
|
|
—
|
|
|
1,142
|
|
||||
Total
|
$
|
11,735
|
|
|
$
|
579
|
|
|
$
|
—
|
|
|
$
|
12,314
|
|
|
September 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Money market funds
|
$
|
6,262
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,262
|
|
Common shares of CO
2
Solutions
|
|
|
|
1,163
|
|
|
—
|
|
|
1,163
|
|
||||
Total
|
$
|
6,262
|
|
|
$
|
1,163
|
|
|
$
|
—
|
|
|
$
|
7,425
|
|
|
December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Money market funds
|
$
|
11,172
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,172
|
|
Common shares of CO
2
Solutions
|
—
|
|
|
1,142
|
|
|
—
|
|
|
1,142
|
|
||||
Total
|
$
|
11,172
|
|
|
$
|
1,142
|
|
|
$
|
—
|
|
|
$
|
12,314
|
|
Allowance as of December 31, 2016
|
|
$
|
(421
|
)
|
Write-offs and other
(1)
|
|
387
|
|
|
Allowance as of September 30, 2017
|
|
$
|
(34
|
)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Raw materials
|
$
|
159
|
|
|
$
|
118
|
|
Work-in-process
|
110
|
|
|
59
|
|
||
Finished goods
|
580
|
|
|
648
|
|
||
Inventories
|
$
|
849
|
|
|
$
|
825
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Laboratory equipment
|
$
|
19,682
|
|
|
$
|
18,849
|
|
Leasehold improvements
|
10,503
|
|
|
10,395
|
|
||
Computer equipment and software
|
3,678
|
|
|
3,267
|
|
||
Office equipment and furniture
|
1,185
|
|
|
1,171
|
|
||
Construction in progress
(2)
|
50
|
|
|
124
|
|
||
Property and equipment
|
35,098
|
|
|
33,806
|
|
||
Less: accumulated depreciation and amortization
|
(32,288
|
)
|
|
(31,651
|
)
|
||
Property and equipment, net
|
$
|
2,810
|
|
|
$
|
2,155
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Research and development
|
$
|
386
|
|
|
$
|
246
|
|
|
$
|
1,050
|
|
|
$
|
688
|
|
Selling, general and administrative
|
1,447
|
|
|
984
|
|
|
4,162
|
|
|
3,173
|
|
||||
Total
|
$
|
1,833
|
|
|
$
|
1,230
|
|
|
$
|
5,212
|
|
|
$
|
3,861
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Stock options
|
$
|
393
|
|
|
$
|
249
|
|
|
$
|
1,107
|
|
|
$
|
820
|
|
RSUs and RSAs
|
456
|
|
|
445
|
|
|
1,399
|
|
|
1,580
|
|
||||
PSUs
|
385
|
|
|
536
|
|
|
1,373
|
|
|
1,461
|
|
||||
PBOs
|
599
|
|
|
—
|
|
|
1,333
|
|
|
—
|
|
||||
Total
|
$
|
1,833
|
|
|
$
|
1,230
|
|
|
$
|
5,212
|
|
|
$
|
3,861
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||
|
(1)
|
|
|
|
|
|
|
|||||||
Expected term (in years)
|
—
|
|
|
5.2
|
|
|
5.3
|
|
|
5.3
|
|
|||
Volatility
|
—
|
|
|
63
|
%
|
|
62
|
%
|
|
65
|
%
|
|||
Risk-free interest rate
|
—
|
|
|
1.18
|
%
|
|
2.02
|
%
|
|
1.29
|
%
|
|||
Dividend yield
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Weighted-average estimated fair value of stock options granted
|
—
|
|
|
$
|
2.25
|
|
|
$
|
2.52
|
|
|
$
|
2.51
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
Additional
|
|
Other
|
|
|
|
Total
|
|||||||||||
|
|
Common Stock
|
|
Paid-in
|
|
Comprehensive
|
|
Accumulated
|
|
Stockholders’
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Income
|
|
Deficit
|
|
Equity
|
|||||||||||
December 31, 2015
|
|
40,343
|
|
|
$
|
4
|
|
|
$
|
305,981
|
|
|
$
|
405
|
|
|
$
|
(283,511
|
)
|
|
$
|
22,879
|
|
Exercise of stock options
|
|
361
|
|
|
—
|
|
|
939
|
|
|
—
|
|
|
—
|
|
|
939
|
|
|||||
Release of stock awards
|
|
911
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Employee stock-based compensation
|
|
—
|
|
|
—
|
|
|
3,861
|
|
|
—
|
|
|
—
|
|
|
3,861
|
|
|||||
Cancelled shares
|
|
(397
|
)
|
|
—
|
|
|
(1,523
|
)
|
|
—
|
|
|
—
|
|
|
(1,523
|
)
|
|||||
Total comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
(3,298
|
)
|
|
(3,320
|
)
|
|||||
September 30, 2016
|
|
41,218
|
|
|
$
|
4
|
|
|
$
|
309,258
|
|
|
$
|
383
|
|
|
$
|
(286,809
|
)
|
|
$
|
22,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
December 31, 2016
|
|
41,255
|
|
|
$
|
4
|
|
|
$
|
311,164
|
|
|
$
|
—
|
|
|
$
|
(292,069
|
)
|
|
$
|
19,099
|
|
Exercise of stock options
|
|
64
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
—
|
|
|
175
|
|
|||||
Release of stock awards
|
|
1,096
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Employee stock-based compensation
|
|
—
|
|
|
—
|
|
|
5,212
|
|
|
—
|
|
|
—
|
|
|
5,212
|
|
|||||
Cancelled shares
|
|
(397
|
)
|
|
—
|
|
|
(1,670
|
)
|
|
—
|
|
|
—
|
|
|
(1,670
|
)
|
|||||
Issuance of common stock, net of issuance costs
|
|
6,325
|
|
|
1
|
|
|
23,229
|
|
|
—
|
|
|
—
|
|
|
23,230
|
|
|||||
Total comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
(23,966
|
)
|
|
(23,953
|
)
|
|||||
September 30, 2017
|
|
48,343
|
|
|
$
|
5
|
|
|
$
|
338,110
|
|
|
$
|
13
|
|
|
$
|
(316,036
|
)
|
|
$
|
22,092
|
|
Years ending December 31,
|
Capital Leases
|
|
Operating Leases
|
||||
2017 (3 months remaining)
|
$
|
63
|
|
|
$
|
776
|
|
2018
|
252
|
|
|
3,185
|
|
||
2019
|
252
|
|
|
3,280
|
|
||
2020
|
60
|
|
|
712
|
|
||
2021 and beyond
|
—
|
|
|
531
|
|
||
Total minimum lease payments
|
627
|
|
|
$
|
8,484
|
|
|
Less: amount representing interest
|
(39
|
)
|
|
|
|||
Present value of capital lease obligations
|
588
|
|
|
|
|||
Less: current portion
|
(228
|
)
|
|
|
|||
Long-term portion of capital leases
|
$
|
360
|
|
|
|
Other Commitment Agreement Type
|
Agreement Date
|
|
Future Minimum Payment
|
||
Manufacture and supply agreement with expected future payment date of December 2022
|
April 2016
|
|
$
|
1,693
|
|
Service agreement for the development of manufacturing process
|
April 2017
|
|
2,180
|
|
|
Service agreement for stability study
|
July 2017
|
|
369
|
|
|
Total other commitments
|
|
|
$
|
4,242
|
|
|
Term Debt
|
|
Revolving Line of Credit
|
Through and including the first anniversary of the funding date of the first Term Debt drawn
|
2.0%
|
|
|
After the first anniversary of the funding date of the first Term Debt drawn and before the maturity date
|
1.0%
|
|
|
On the earliest to occur of the maturity date, the acceleration of Term Debt drawn or prepayment of Term Debt drawn
|
5.5%
|
|
|
Through and including the first anniversary of the closing date
|
|
|
3.0%
|
After the first anniversary of the closing date through and including the second anniversary of the closing date
|
|
|
2.0%
|
After the second anniversary of the closing date through and including the third anniversary of the closing date
|
|
|
1.0%
|
|
Percentage of Total Revenues for the
|
||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Customer A
|
27%
|
|
76%
|
|
37%
|
|
43%
|
Customer B
|
*
|
|
*
|
|
*
|
|
27%
|
Customer C
|
29%
|
|
*
|
|
18%
|
|
*
|
Customer D
|
11%
|
|
*
|
|
11%
|
|
*
|
Customer E
|
10%
|
|
*
|
|
*
|
|
*
|
Customer F
|
*
|
|
11%
|
|
*
|
|
*
|
Long-lived assets:
|
September 30, 2017
|
|
December 31, 2016
|
||||
United States
|
$
|
3,137
|
|
|
$
|
2,414
|
|
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
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product sales
|
$
|
6,948
|
|
|
$
|
4,052
|
|
|
$
|
2,896
|
|
|
71%
|
|
$
|
19,134
|
|
|
$
|
11,072
|
|
|
$
|
8,062
|
|
|
73%
|
Research and development revenues
|
2,929
|
|
|
10,373
|
|
|
(7,444
|
)
|
|
(72)%
|
|
8,320
|
|
|
25,971
|
|
|
(17,651
|
)
|
|
(68)%
|
||||||
Revenue sharing arrangement
|
107
|
|
|
445
|
|
|
(338
|
)
|
|
(76)%
|
|
847
|
|
|
1,825
|
|
|
(978
|
)
|
|
(54)%
|
||||||
Total revenues
|
9,984
|
|
|
14,870
|
|
|
(4,886
|
)
|
|
(33)%
|
|
28,301
|
|
|
38,868
|
|
|
(10,567
|
)
|
|
(27)%
|
||||||
Costs and operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of product sales
|
3,976
|
|
|
2,756
|
|
|
1,220
|
|
|
44%
|
|
10,768
|
|
|
7,466
|
|
|
3,302
|
|
|
44%
|
||||||
Research and development
|
8,055
|
|
|
5,467
|
|
|
2,588
|
|
|
47%
|
|
20,242
|
|
|
16,265
|
|
|
3,977
|
|
|
24%
|
||||||
Selling, general and administrative
|
7,989
|
|
|
5,229
|
|
|
2,760
|
|
|
53%
|
|
21,141
|
|
|
18,451
|
|
|
2,690
|
|
|
15%
|
||||||
Total costs and operating expenses
|
20,020
|
|
|
13,452
|
|
|
6,568
|
|
|
49%
|
|
52,151
|
|
|
42,182
|
|
|
9,969
|
|
|
24%
|
||||||
Income (loss) from operations
|
(10,036
|
)
|
|
1,418
|
|
|
(11,454
|
)
|
|
(808)%
|
|
(23,850
|
)
|
|
(3,314
|
)
|
|
(20,536
|
)
|
|
(620)%
|
||||||
Interest income
|
28
|
|
|
12
|
|
|
16
|
|
|
133%
|
|
96
|
|
|
40
|
|
|
56
|
|
|
140%
|
||||||
Other income (expenses)
|
(68
|
)
|
|
7
|
|
|
(75
|
)
|
|
(1,071)%
|
|
(80
|
)
|
|
(39
|
)
|
|
(41
|
)
|
|
(105)%
|
||||||
Income (loss) before income taxes
|
(10,076
|
)
|
|
1,437
|
|
|
(11,513
|
)
|
|
(801)%
|
|
(23,834
|
)
|
|
(3,313
|
)
|
|
(20,521
|
)
|
|
(619)%
|
||||||
Provision for (benefit from) income taxes
|
150
|
|
|
—
|
|
|
150
|
|
|
—%
|
|
132
|
|
|
(15
|
)
|
|
147
|
|
|
980%
|
||||||
Net income (loss)
|
$
|
(10,226
|
)
|
|
$
|
1,437
|
|
|
$
|
(11,663
|
)
|
|
(812)%
|
|
$
|
(23,966
|
)
|
|
$
|
(3,298
|
)
|
|
$
|
(20,668
|
)
|
|
(627)%
|
•
|
Product sales consist of sales of enzymes, chemical intermediates, and Codex
®
Biocatalyst Panels and Kits.
|
•
|
Research and development revenues include license, technology access and exclusivity fees, research services fees for FTE, milestone payments, royalties, and optimization and screening fees.
|
•
|
Revenue sharing arrangement is recognized based upon sales of licensed products by Exela.
|
|
Three months ended September 30,
|
|
Change
|
|
Nine months ended September 30,
|
|
Change
|
||||||||||||||||||||
(In Thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||
Product sales
|
$
|
6,948
|
|
|
$
|
4,052
|
|
|
$
|
2,896
|
|
|
71%
|
|
$
|
19,134
|
|
|
$
|
11,072
|
|
|
$
|
8,062
|
|
|
73%
|
Research and development revenues
|
2,929
|
|
|
10,373
|
|
|
(7,444
|
)
|
|
(72)%
|
|
8,320
|
|
|
25,971
|
|
|
(17,651
|
)
|
|
(68)%
|
||||||
Revenue sharing arrangement
|
107
|
|
|
445
|
|
|
(338
|
)
|
|
(76)%
|
|
847
|
|
|
1,825
|
|
|
(978
|
)
|
|
(54)%
|
||||||
Total revenues
|
$
|
9,984
|
|
|
$
|
14,870
|
|
|
$
|
(4,886
|
)
|
|
(33)%
|
|
$
|
28,301
|
|
|
$
|
38,868
|
|
|
$
|
(10,567
|
)
|
|
(27)%
|
|
Three months ended September 30,
|
|
Change
|
|
Nine months ended September 30,
|
|
Change
|
||||||||||||||||||||
(In Thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||
Cost of product sales
|
$
|
3,976
|
|
|
$
|
2,756
|
|
|
$
|
1,220
|
|
|
44%
|
|
$
|
10,768
|
|
|
$
|
7,466
|
|
|
$
|
3,302
|
|
|
44%
|
Research and development expense
|
8,055
|
|
|
5,467
|
|
|
2,588
|
|
|
47%
|
|
20,242
|
|
|
16,265
|
|
|
3,977
|
|
|
24%
|
||||||
Selling, general and administrative expense
|
7,989
|
|
|
5,229
|
|
|
2,760
|
|
|
53%
|
|
21,141
|
|
|
18,451
|
|
|
2,690
|
|
|
15%
|
||||||
Total costs and operating expenses
|
$
|
20,020
|
|
|
$
|
13,452
|
|
|
$
|
6,568
|
|
|
49%
|
|
$
|
52,151
|
|
|
$
|
42,182
|
|
|
$
|
9,969
|
|
|
24%
|
|
Three months ended September 30,
|
|
Change
|
|
Nine months ended September 30,
|
|
Change
|
||||||||||||||||||||
(In Thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||
Revenues from product sales
|
$
|
6,948
|
|
|
$
|
4,052
|
|
|
$
|
2,896
|
|
|
71%
|
|
$
|
19,134
|
|
|
$
|
11,072
|
|
|
$
|
8,062
|
|
|
73%
|
Cost of product sales
|
3,976
|
|
|
2,756
|
|
|
1,220
|
|
|
44%
|
|
10,768
|
|
|
7,466
|
|
|
3,302
|
|
|
44%
|
||||||
Product gross profit
|
$
|
2,972
|
|
|
$
|
1,296
|
|
|
$
|
1,676
|
|
|
129%
|
|
$
|
8,366
|
|
|
$
|
3,606
|
|
|
$
|
4,760
|
|
|
132%
|
Product gross margin (%)
|
43%
|
|
32%
|
|
|
|
|
|
44%
|
|
33%
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Change
|
|
Nine months ended September 30,
|
|
Change
|
||||||||||||||||||||
(In Thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||
Interest income
|
$
|
28
|
|
|
$
|
12
|
|
|
$
|
16
|
|
|
133%
|
|
$
|
96
|
|
|
$
|
40
|
|
|
$
|
56
|
|
|
140%
|
Other income (expense)
|
(68
|
)
|
|
7
|
|
|
(75
|
)
|
|
(1,071)%
|
|
(80
|
)
|
|
(39
|
)
|
|
(41
|
)
|
|
(105)%
|
||||||
Total other income (expense)
|
$
|
(40
|
)
|
|
$
|
19
|
|
|
$
|
(59
|
)
|
|
(311)%
|
|
$
|
16
|
|
|
$
|
1
|
|
|
$
|
15
|
|
|
1,500%
|
(In Thousands)
|
September 30, 2017
|
|
December 31, 2016
|
||||
Cash and cash equivalents
|
$
|
23,826
|
|
|
$
|
19,240
|
|
Working capital
|
$
|
17,950
|
|
|
$
|
14,860
|
|
|
Nine months ended September 30,
|
||||||
(In Thousands)
|
2017
|
|
2016
|
||||
Net cash used in operating activities
|
$
|
(16,368
|
)
|
|
$
|
(7,023
|
)
|
Net cash used in investing activities
|
(663
|
)
|
|
(748
|
)
|
||
Net cash provided by (used in) financing activities
|
21,617
|
|
|
(584
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
4,586
|
|
|
$
|
(8,355
|
)
|
|
|
|
Payments due by period
|
||||||||||||||
(In Thousands)
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|||||||||
Capital lease obligations
|
|
$
|
627
|
|
|
$
|
252
|
|
|
$
|
375
|
|
|
$
|
—
|
|
|
Operating leases
|
|
8,484
|
|
|
3,161
|
|
|
4,672
|
|
|
651
|
|
|||||
|
Total
|
|
$
|
9,111
|
|
|
$
|
3,413
|
|
|
$
|
5,047
|
|
|
$
|
651
|
|
Other Commitment Agreement Type
|
|
Agreement Date
|
|
Future Minimum Payment
|
||
Manufacture and supply agreement with expected future payment date of December 2022
|
|
April 2016
|
|
$
|
1,693
|
|
Service agreement for the development of manufacturing process
|
|
April 2017
|
|
2,180
|
|
|
Service agreement for stability study
|
|
July 2017
|
|
369
|
|
|
Total other commitments
|
|
|
|
$
|
4,242
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable. If we or Nestlé Health Science, as applicable, are ultimately unable to obtain regulatory approval for CDX-6114 or any other product candidates that we may develop in the future, our business will be harmed. To obtain regulatory approval to market any product candidate, preclinical studies and costly and lengthy clinical trials are required, and the results of the studies and trials are highly uncertain. A failure of one or more pre-clinical or clinical trials can occur at any stage, and many companies that have believed their drug candidates performed satisfactorily in pre-clinical and clinical testing have nonetheless failed to obtain marketing approval of their product candidates.
|
•
|
We may find it difficult to enroll patients in our clinical trials given the limited number of patients that have PKU. Any enrollment difficulties could delay clinical trials and any potential product approval.
|
•
|
Delays in the commencement or completion of clinical testing could significantly affect our product development costs or the product development costs of our present and any future collaborators. We do not know whether planned clinical trials will begin on time or be completed on schedule, if at all. The commencement and completion of clinical trials can be delayed for a number of reasons.
|
•
|
If Nestlé Health Science does not exercise its option with respect to CDX-6114 or any other product candidates that we develop under our agreement, or if it terminates any development program under its collaboration with us, whether as a result of our inability to meet milestones or otherwise, any potential revenue from those collaborations will be significantly reduced or non-existent, and our results of operations and financial condition will be materially and adversely affected. In addition, without a partner to assist us with the funding and development of our PKU program, we may not have sufficient funds or expertise to advance development of the program on our own.
|
•
|
We do not have experience in drug development or regulatory matters related to drug development. As a result, we rely or will rely on third parties to conduct our pre-clinical and clinical studies, assist us with drug manufacturing and formulation and perform other tasks for us. If these third parties do not successfully carry out their responsibilities or comply with regulatory requirements, we may receive lower quality products or services, suffer reputational harm and not be able to obtain regulatory approval for CDX-6114 or any other product candidates that we may develop in the future.
|
•
|
Our efforts to use CodeEvolver® protein engineering technology platform to generate new lead biotherapeutic candidates, whether under our collaboration with Nestlé Health Science or otherwise, may not be successful in creating candidates of value.
|
•
|
We will be exposed to potential product liability risks through the testing of experimental therapeutics in humans, which may expose us to substantial uninsured liabilities.
|
•
|
Third parties may develop intellectual property that could limit our ability to develop, market and commercialize CDX-6114, if approved, or any other product candidates that we may develop in the future.
|
•
|
Changes in methods of treatment of disease, such as gene therapy, could cause us to stop development of our product candidate or reduce or eliminate potential demand for CDX-6114, if approved, or any other product candidates that we may develop in the future.
|
|
•
|
|
we may be required to use a portion of our cash flow from operations to make debt service payments, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, product development efforts, research and development, and other general corporate requirements;
|
|
|
|
|
|
•
|
|
our interest expense could increase if prevailing interest rates increase, because a portion of draws which could be made under the Credit Facility bear interest at floating rates;
|
|
|
|
|
|
•
|
|
the Credit Facility could reduce our flexibility to adjust to changing business conditions or obtain additional financing to fund working capital, capital expenditures, product development efforts, research and development, and other general corporate requirements; and
|
|
|
|
|
|
•
|
|
restrictive covenants in our Credit Facility, which apply regardless of whether we draw down under the facility, limit our ability to, among other things, transfer collateral, incur additional indebtedness, engage in mergers or acquisitions, pay dividends or make other distributions, make investments, create liens and sell assets.
|
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
|
3.1
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
|
|
|
3.3
|
|
|
|
|
|
|
|
4.1
|
|
|
Reference is made to Exhibits 3.1 through 3.3.
|
|
|
|
|
4.2
|
|
|
|
|
|
|
|
10.1
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
101
|
|
|
The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in Extensible Business Reporting Language (XBRL) includes: (i) Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, (ii) Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2017 and 2016, (iv) Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016, and (v) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
*
|
|
Filed as exhibits to the registrant’s Registration Statement on Form S-1 (File No. 333-164044), effective April 21, 2010, and incorporated herein by reference.
|
|
|
|
|
|
|
|
|
|
Codexis, Inc.
|
|
|
|
|
|
Date:
|
November 9, 2017
|
By:
|
/s/ John J. Nicols
|
|
|
|
John J. Nicols
President and Chief Executive Officer
(principal executive officer)
|
|
|
|
|
Date:
|
November 9, 2017
|
By:
|
/s/ Gordon Sangster
|
|
|
|
Gordon Sangster
Chief Financial Officer
(principal financial and accounting officer)
|
1.
|
Capitalized terms used herein but not otherwise defined shall have the respective meanings given to them in the Loan Agreement.
|
2.
|
Section 1.1 of the Loan Agreement is hereby amended by amending and restating the following definitions therein as follows:
|
3.
|
The following subsection (e) is hereby added to Section 6.3 of the Loan Agreement:
|
4.
|
The following Section 6.15 is hereby added to the Loan Agreement:
|
5.
|
Limitation of Amendment.
|
a.
|
The amendments set forth above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right, remedy or obligation which the Bank or Borrower may now have or may have in the future under or in connection with any Loan Document, as amended hereby.
|
b.
|
This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.
|
6.
|
To induce the Bank to enter into this Amendment, Borrower hereby represents and warrants to the Bank as follows:
|
a.
|
Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct in all material respects as of such date), and (b) no Event of Default has occurred and is continuing;
|
b.
|
Borrower has the power and due authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;
|
c.
|
The organizational documents of Borrower delivered to the Bank on the Effective Date, and updated pursuant to subsequent deliveries by the Borrower to the Bank, if any, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;
|
d.
|
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (i) any law or regulation binding on or affecting Borrower, (ii) any contractual restriction with a Person binding on Borrower, (iii) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (iv) the organizational documents of Borrower;
|
e.
|
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration by Borrower with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and
|
f.
|
This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and by general equitable principles.
|
7.
|
Except as expressly set forth herein, the Loan Agreement shall continue in full force and effect without alteration or amendment. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.
|
8.
|
This Amendment shall be deemed effective as of the Amendment Date upon the due execution and delivery to the Bank of this Amendment by each party hereto.
|
9.
|
This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.
|
10.
|
This Amendment and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of California.
|
BORROWER:
|
|
|
|
|
|
CODEXIS, INC., A DELAWARE CORPORATION
|
|
|
|
|
|
|
|
|
By
/s/ Gordon Sangster
|
|
|
Name: Gordon Sangster
|
|
|
Title: CFO
|
|
|
|
|
|
|
|
|
BANK:
|
|
|
|
|
|
WESTERN ALLIANCE BANK, AN ARIZONA CORPORATIO
N
|
|
|
|
|
|
|
|
|
By
/s/ Bill Wickline
|
|
|
Name: Bill Wickline
|
|
|
Title: VP, Director of Portfolio Management
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Codexis, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
/s/ John J. Nicols
|
John J. Nicols
|
President and Chief Executive Officer
(principal executive officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Codexis, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
/s/ Gordon Sangster
|
Gordon Sangster
Senior Vice President and Chief Financial Officer
|
(principal financial and accounting officer)
|
•
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ John J. Nicols
|
John J. Nicols
|
President and Chief Executive Officer
(principal executive officer)
|
|
/s/ Gordon Sangster
|
Gordon Sangster
Senior Vice President and Chief Financial Officer |
(principal financial and accounting officer)
|