What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2023-03-02 compared with 2022-03-03 · 25 added, 1287 removed, 23 unchanged (98% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

The Company's common stock has traded on the NASDAQ Global Market under the ticker symbol of CLXT since its initial public offering on July 25, 2017.

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

The Company’s common stock has traded on the NASDAQ Global Market under the ticker symbol of CLXT since its IPO on July 25, 2017.

Prior to that time, there was no established public trading market for the Company’s common stock.

Holders of Common Stock

As of March 3, 2022, there were 84 holders of record of 42,718,930 outstanding shares of the Company's common stock.

As of February 28, 2023, there were 89 holders of record of 49,376,160 outstanding shares of the Company’s common stock.

The number of holders of record of the Company’s common stock does not reflect the number of beneficial holders whose shares are held by banks, depositaries, brokers, or other nominees.

1 unchanged sentence

Stock Performance Graph

The following graph shows a comparison from July 25, 2017 (the date the Company's common stock commenced trading on The NASDAQ Global Market) through December 31, 2021, of the cumulative total return for its common stock, the Russell 2000 Index, the Standard & Poor’s 500 Stock Index (S&P 500 Index) and the NASDAQ Composite Index (NASDAQ Composite).

The following graph shows a comparison from July 25, 2017 (the date the Company’s common stock commenced trading on The NASDAQ Global Market) through December 31, 2022, of the cumulative total return for its common stock, the Russell 2000 Index, the Standard & Poor’s 500 Stock Index (S&P 500 Index) and the NASDAQ Composite Index (NASDAQ Composite).

The graph assumes that $100 was invested at the close of the market on July 20, 2017, in the Company’s common stock, the S&P 500 Index and the NASDAQ Composite, and data for the S&P 500 Index and the NASDAQ Composite assumes reinvestments of dividends.

4 unchanged sentences

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A)

Number of securities

to be issued upon

outstanding options,

warrants and rights

Weighted-average

exercise price of

outstanding options,

warrants and rights

Number of securities

remaining available for

future issuance under

equity compensation

plans (excluding

securities reflected in

Equity compensation plans approved by security holders 1

2 unchanged sentences

Equity Incentive Plan (2014 Plan) and the 2017 Omnibus Plan (2017 Plan).

Includes stock options, RSUs, and the 2022 grant of PSUs.

The number of shares underlying the 2022 PSUs included in these amounts is the maximum amount that holders are eligible to earn if the applicable performance metrics are fully achieved under terms of the PSU awards.

Represents the weighted average exercise price of options outstanding under the 2014 Plan and the 2017 Plan.

Does not take into account outstanding RSUs and PSUs which, when settled, will be settled in shares of the Company’ common stock on a one-for-one basis at no additional cost.

Of these shares, none are available for future issuance from the 2014 Plan and 3,112,568 remain available for future issuance from the 2017 Plan.

The total number of Shares available for issuance under the 2017 Plan will be increased on the first day of each Company fiscal year following the effective date of the Company’s initial public offering in an amount equal to the least of (i) 2,000,000 Shares, (ii) 5% of outstanding Shares on the last day of the immediately preceding fiscal year or (iii) such number of Shares as determined by the Board in its discretion All these shares are available for issuance other than upon exercise of options, warrants, or rights.

The total number of Shares available for issuance under the 2017 Plan will be increased on the first day of each Company fiscal year following the effective date of the Company’s IPO in an amount equal to the least of (i) 2,000,000 Shares, (ii) 5% of outstanding Shares on the last day of the immediately preceding fiscal year or (iii) such number of Shares as determined by the Board in its discretion All these shares are available for issuance other than upon exercise of options, warrants, or rights.

Includes the Calyxt, Inc.

2021 Employee Inducement Plan (Inducement Plan).

In July 2021, the Company adopted the Inducement Plan, pursuant to which shares of common stock are issuable upon the settlement of performance stock units granted to Mr.

In July 2021, the Company adopted the Inducement Plan, pursuant to which shares of common stock are issuable upon the settlement of performance stock units (PSUs) granted to Mr.

Carr in July 2021 as a material inducement to accept employment as the Company’s President and Chief Executive Officer.

The performance stock units will vest if the Company’s stock remains above three specified price levels for 30 calendar days over the three-year performance period.

The performance stock units will be settled in unrestricted shares of the Company's common stock on the vesting date.

The PSUs will vest if the Company’s stock remains above three specified price levels for 30 calendar days over the three-year performance period.

The PSUs will be settled in unrestricted shares of the Company’s common stock on the vesting date.

Repurchases of Equity Securities by the Issuer or Affiliate Purchasers

1 unchanged sentence

Unregistered Sales of Equity Securities

Management’s Discussion and Analysis o f Financial Condition and Results of Operations

EXECUTIVE OVERVIEW

Calyxt i s a plant-based synthetic biology company.

In October 2021, the Company announced the launch of a strategic initiative which focused it on engineering synthetic biology solutions using its proprietary and differentiated BioFactory production system for a diverse base of target customers across an expanded group of end markets including the cosmeceutical, nutraceutical, and pharmaceutical industries.

The Company currently leverages its proprietary PlantSpring technology platform to engineer plant metabolism to produce innovative, high-value, and sustainable materials and products for use in helping customers meet their sustainability targets and financial goals.

The Company intends to commercialize its PlantSpring technology platform using three customer demand-driven commercialization strategies that include (i) the development and sale of high-value synthetic biology products from its proprietary BioFactory production system, which is the Company’s primary focus, (ii) the licensing of elements of the PlantSpring technology platform and historically developed traditional agriculture seed-trait product candidates, and (iii) selective product development for customers in traditional agriculture .

The business is described in greater detail in “Item 1.

Business—Company Overview.”

The Company is an early-stage company and has incurred net losses since its inception.

As of December 31, 2021, the Company had an accumulated deficit of $196.1 million.

The Company's net losses were $29.2 million for the year ended December 31, 2021.

The Company expects to continue to incur significant expenses and operating losses for the next several years.

Those expenses and losses may fluctuate significantly from quarter-to-quarter and year-to-year.

The Company expects that its expenses will be primarily driven by:

R&D expenses to continue to enhance the capabilities of its PlantSpring technology platform, including continued investments in artificial intelligence and machine learning capabilities;

R&D expenses and capital expenditures to expand its BioFactory production system from laboratory scale through various pilot vessel sizes;

other R&D expenses to further develop traditional agriculture seed-trait product candidates for its licensee customers;

to the extent not reimbursed by its customers, conducting regulatory studies and other associated activities for its current and future products under development;

acquiring or in-licensing other products, technologies, germplasm, or other biological material;

maintaining, protecting, expanding, and defending its intellectual property portfolio, including intellectual property related to the PlantSpring technology platform and BioFactory production system;

seeking to attract and retain skilled personnel;

identifying and negotiating agreements with customers, licensees, and infrastructure partners;

experiencing any delays or encountering issues with any of the above, including due to the COVID-19 pandemic and its impacts.

RELATIONSHIP WITH CELLECTIS AND COMPARABILITY OF RESULTS

The Company is a majority-owned subsidiary of Cellectis.

As of December 31, 2021, Cellectis owned 61.8 percent of the Company's issued and outstanding common stock.

Cellectis has certain contractual rights as well as rights pursuant to the Company's certificate of incorporation and bylaws, in each case, for so long as it maintains threshold beneficial ownership levels in the Company's shares.

See “Risk Factors—Risks Related to the Company’s Relationship with Cellectis.”

The Company's financial information for the year ended December 31, 2019, reflects expense allocations for certain support functions that were provided on a centralized basis pursuant to a management services agreement.

These services were internalized during 2019.

As a result, such historical financial information may not reflect the financial condition, results of operations, or cash flows the Company would have achieved as a stand-alone company and not a subsidiary of Cellectis during that period.

Cellectis has also guaranteed the lease of the Company's headquarters facility.

The Company holds an exclusive license from Cellectis that broadly covers the use of engineered nucleases for plant gene editing.

This intellectual property covers methods to edit plant genes using “chimeric restriction endonucleases,”

which include TALEN ® , CRISPR/Cas9, zinc finger nucleases, and some types of meganucleases.

FINANCIAL OPERATIONS OVERVIEW

Revenue is recognized from sales of products, from licenses of technology, and from product development activities for customers.

Cost of Goods Sold

Cost of goods sold are recognized as products are sold.

Generally, there are minimal cost of goods sold associated with the Company’s technology licensing activities.

Research and Development Expense

The Company's R&D expenses primarily consist of employee-related costs for personnel who research and develop its product candidates, fees for contractors who support product development activities, purchasing material and supplies for its laboratories, licensing, an allocation of facility and information technology expenses, and other costs associated with owning and operating its own laboratories and pilot BioFactory capabilities.

This includes the costs of performing activities to discover and develop products and advance the Company's PlantSpring technology platform, including its intellectual property portfolio.

BioFactory expenses from lab through pilot, unless incurred related to a specific product sold to a customer, are also classified as R&D expense.

R&D expenses also include costs to write and support the research for filing patents.

The Company recognizes R&D expenses as they are incurred.

Selling, General, and Administrative Expense

Selling, general, and administrative (SG&A) expenses consist primarily of employee-related expenses for selling and licensing the Company's products and employee-related expenses for its executive, legal, intellectual property, information technology, finance, and human resources functions.

In periods prior to 2021, these expenses also included employee-related and other expenses for selling soybean oil and meal, soybean acreage acquisition, and managing the soybean product supply chain.

Other SG&A expenses include facility and information technology expenses not otherwise allocated to R&D, professional fees for auditing, tax and legal services, expenses associated with maintaining patents, consulting costs and other costs of the Company's information systems, and costs to market its products.

Interest, net

Interest, net is comprised of interest income resulting from investments of cash and cash equivalents, short-term investments, unrealized gains and losses on short-term investments, and interest expense incurred related to financing lease obligations.

It is also driven by balances, yields, and timing of financing and other capital raising activities.

Non-operating expenses

Non-operating expenses are expenses that are not directly related to ongoing operations and are primarily comprised of gains and losses from foreign exchange-related transactions and disposals of land, buildings, and equipment.

Anticipated Changes Between Revenues and Costs

As the Company executes upon its business model, it expects the composition of revenues and costs to evolve.

In the near-term, soybean-related revenues will decline to zero, the negative gross profit margins experienced from sales of those products will no longer occur, and the significant working capital investment to support those activities will also decline.

As a result, the Company anticipates most of its revenues in the near-term to be from product development activities for customers for both the BioFactory and agricultural production and technology licensing arrangements.

Future cash and revenue-generating opportunities associated with these activities are expected to primarily arise from up-front and milestone payments, annual license fees, and royalties.

Over the next several years as the BioFactory begins to produce products for customers, it is anticipated those revenues will grow and surpass revenues from other sources.

These revenues are anticipated to have strong positive gross profit margins over time.

Recent Developments –

COVID-19 Update

In accordance with the Company's COVID-19 Preparedness Plan, Minnesota executive order requirements, and guidelines promoted by the Centers for Disease Control and Prevention, the Company implemented health and safety measures for the protection of its onsite workers, maintained remote work arrangements for its non-laboratory personnel, and implemented, as necessary, appropriate self-quarantine precautions for potentially affected laboratory personnel.

On May 28, 2021, nearly all Minnesota COVID-19 restrictions

came to an end, including all capacity limits and distancing requirements - both indoors and outdoors.

The Company's non-laboratory personnel returned to working onsite in mid-July 2021.

During the year ended December 31, 2021, the COVID-19 pandemic did not have a material impact on the Company's operations.

However, a resurgence or prolonging of the COVID-19 pandemic, governmental response measures (including vaccination requirements or other mandatory health and safety requirements), and resulting disruptions could rapidly offset such improvements.

Moreover, the long-term effects of the COVID-19 pandemic on the financial markets and broader economy remain uncertain, which may make obtaining capital challenging and may exacerbate the risk that capital, if available, may not be available on terms acceptable to the Company.

There continues to be uncertainty relating to the COVID-19 pandemic and its long-term impact, and many factors could affect the Company's results and operations, including, but not limited to, those described in Part I, Item 1A, “Risk Factors”

of this report.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2021, COMPARED TO THE YEAR ENDED DECEMBER 31, 2020

A summary of results of operations for the years ended December 31, 2021, and 2020 follows:

Year Ended December 31,

(In thousands, except percentage values)

Cost of goods sold

Research and development

Selling, general, and administrative

Management fees

Restructuring costs

Loss from operations

Gain upon extinguishment of Payroll Protection Program loan

Interest, net

Non-operating expenses

Basic and diluted net loss per share

Adjusted EBITDA 1

1 See “Use of Non-GAAP Financial Information”

for a discussion of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to Net loss, the most comparable GAAP measure.

NM- not meaningful

Revenue was $26.0 million in 2021, an increase of $2.1 million, or 9 percent, from 2020.

The increase was driven by sales of the 2020 grain crop, which included higher volumes and reflected higher commodity prices, in each case, as compared to 2020.

As of December 31, 2021, the Company had sold all of the 2020 grain crop.

Cost of Goods Sold

Cost of goods sold was $28.6 million in 2021, a decrease of $6.6 million, or 19 percent, from 2020.

The decrease was driven by the benefits resulting from the move to sell grain compared to selling soybean oil and meal, as well as a $2.8 million year-over-year benefit from net commodity derivative impacts from hedging contracts entered into to convert fixed price grain inventories and fixed price grain production agreements to floating prices, consistent with how the grain was sold, and a $2.2 million year-over-year decrease in net realizable value adjustments to inventory as the year ago period included costs to write down inventory balances to expected margins.

Gross Profit and Adjusted Gross Profit

Gross profit was negative $2.6 million, or negative 10 percent of revenue, in 2021, compared to negative $11.3 million, or negative 47 percent of revenue, in 2020.

This is an improvement of $8.7 million, or 77 percent, from 2020 and was driven by the move to sell grain compared to selling oil and meal, as well as a $2.8 million year-over-year benefit from net commodity derivative impacts from hedging contracts entered into to convert fixed price grain inventories and fixed price grain production agreements to floating prices, consistent

with how the grain was sold, and a $2.2 million year-over-year decrease in net realizable value adjustments to inventory as the year ago period included costs to write down inventory balances to expected margins.

Adjusted gross profit, a non-GAAP measure, was negative $5.7 million, or negative 22 percent of revenue, in 2021, compared to negative $7.2 million, or negative 30 percent of revenue, in 2020.

The improvement on a percentage basis was driven by benefits resulting from the move to sell grain compared to selling oil and meal.

See below under the heading “Use of Non-GAAP Financial Information”

for a discussion of adjusted gross profit and adjusted gross profit percentage and a reconciliation of gross profit and gross profit percentage, the most comparable GAAP measure, to adjusted gross profit and adjusted gross profit percentage, respectively.

Research and Development Expense

R&D expense was $11.3 million in 2021, an increase of $0.3 million, or 2 percent, from 2020.

The increase was driven by an increase in non-cash stock compensation expense, personnel costs, and other expenses.

These increases were partially offset by lower professional fees.

Selling, General, and Administrative Expense

SG&A expense was $15.4 million in 2021, a decrease of $5.2 million, or 25 percent, from 2020.

The decrease was driven by lower personnel costs and lower professional fees.

Management Fees

Management fees were nominal for 2021 and 2020.

Restructuring Costs

In 2020, the Company approved a move to a streamlined go-to-market strategy for its soybean product line.

The impact of the action included staffing adjustments related to soybean processing and product sales, as well as the gradual exit of all supply chain contractual commitments that were not associated with the ongoing soybean go-to-market strategy.

As a result, the Company recorded $0.7 million of expenses for severance and other related payments.

Gain Upon Extinguishment of Payroll Protection Program Loan

O n April 8, 2021, the Company was notified by the Small Business Administration (SBA) that the full principal amount and all accrued interest of the Paycheck Protection Program (PPP) loan had been forgiven.

Accordingly, the Company recognized a gain upon the extinguishment of the PPP loan of $1.5 million.

Interest, net

Interest, net was an expense of $1.4 million in 2021, a $0.5 million decrease, or 61 percent, compared to 2020.

The decline was driven by lower balances and rates on invested cash balances.

Net Loss and Adjusted Net Loss

Net loss was $29.2 million in 2021, an improvement of $15.6 million, or 35 percent, from 2020.

The improvement in net loss was driven by improved gross profits, reduced operating expenses, and the gain upon the extinguishment of the PPP loan.

Adjusted net loss was $33.2 million in 2021, an improvement of $7.6 million, or 19 percent, from 2020.

The improvement in adjusted net loss was driven by the benefits resulting from the move to sell grain compared to selling oil and meal and reductions in operating expenses.

See below under the heading “Use of Non-GAAP Financial Information”

for a discussion of adjusted net loss and a reconciliation of net loss, the most comparable GAAP measure, to adjusted net loss.

Net Loss Per Share and Adjusted Net Loss Per Share

Net loss per share was $0.78 in 2021, an improvement of $0.54 per share, or 41 percent, from 2020.

The improvement in net loss per share was driven by the change in net loss and a year-over-year increase in the weighted average share count.

Adjusted net loss per share was $0.89 in 2021, an improvement of $0.31 per share, or 26 percent, from 2020.

The improvement in adjusted net loss per share was driven by the change in adjusted net loss and a year-over-year increase in the weighted average share count.

See below under the heading “Use of Non-GAAP Financial Information”

for a discussion of adjusted net loss per share and a reconciliation of net loss per share, the most comparable GAAP measure, to adjusted net loss per share.

Adjusted EBITDA

Adjusted EBITDA loss was $24.9 million in 2021, an improvement of $6.8 million, or 21 percent, from 2020.

The improvement was driven by the benefits resulting from the move to sell grain compared to selling oil and meal and reductions in operating expenses.

See below under the heading “Use of Non-GAAP Financial Information”

for a discussion of adjusted EBITDA and a reconciliation of net loss, the most comparable GAAP measure, to adjusted EBITDA.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity are its cash and cash equivalents, with additional liquidity accessible from the capital markets, including under its ATM Facility.

That additional liquidity is subject to market conditions and other factors, including limitations that may apply to the Company under applicable SEC regulations.

As of December 31, 2021, the Company had $14.4 million of cash, cash equivalents, and restricted cash.

The Company's restricted cash balances are cash and cash equivalents deposited in an amount equal to future equipment rent payments, as required under its equipment lease facility.

The Company may request the return of excess restricted cash collateral annually in December.

The Company’s restricted cash was $0.6 million as of December 31, 2021.

Current liabilities were $4.9 million as of December 31, 2021.

The Company's current cash, cash equivalents, and restricted cash is sufficient to cover all of its current liabilities as of December 31, 2021.

Prior to December 31, 2021, the Company completed the following capital raising transactions:

On July 25, 2017, the Company completed its IPO of common stock.

In the aggregate, the Company received net proceeds from the IPO of $58.0 million, all of which have been used to fund R&D costs, build out commercial capabilities, and for general corporate purposes.

On May 22, 2018, the Company completed a follow-on offering of its common stock.

In the aggregate, the Company received net proceeds from the follow-on offering of $57.0 million.

On October 20, 2020, the Company completed a follow-on offering of its common stock.

In the aggregate, the Company received net proceeds from the follow-on offering of $14.0 million.

On September 21, 2021, the Company entered into an ATM Facility.

Under the terms of the ATM Facility, the Company may, from time-to-time, issue common stock having an aggregate offering value of up to $50.0 million.

At its discretion, the Company determines the timing and number of shares to be issued under the ATM Facility.

As of December 31, 2021, the Company had issued approximately 1.4 million shares of common stock under the ATM Facility.

The Company's balance of cash and cash equivalents includes $3.9 million of net proceeds from those sales, and another $0.2 million of cash was received in early January 2022 following the settlement of those sales with the broker.

As of the date of this filing, the Company has not issued any additional shares under the ATM Facility.

On February 23, 2022 (the February 2022 Offering) , the Company issued 3,880,000 shares of its common stock, pre-funded warrants to purchase up to 3,880,000 shares of its common stock, and common warrants to purchase up to 7,760,000 shares of its common stock.

In the aggregate, the Company received net proceeds of $10.0 million, after deducting approximately $0.9 million of underwriting discounts and estimated other offering expenses.

The Company's liquidity funds its non-discretionary cash requirements and its discretionary spending.

Prior to the wind-down of the Company’s soybean go-to-market strategy, working capital was its principal non-discretionary funding requirement.

In addition, the Company has contractual obligations related to recurring business operations, primarily related to its headquarters and laboratory facilities.

The Company's principal discretionary cash spending is for capital expenditures.

The Company's capital expenditures include its pilot-scale BioFactory production system which became operational in December 2021 and that may require additional capital expenditures in 2022 to support additional pilot-scale or commercial-level production based on customer demand.

The Company incurred net losses of $29.2 million for the year ended December 31, 2021.

As of December 31, 2021, the Company had an accumulated deficit of $196.1 million and expects to continue to incur losses in the future.

Cash Flows from Operating Activities

Year Ended December 31,

Gain upon extinguishment of Payroll Protection Program loan

Depreciation and amortization expenses

Stock-based compensation

Changes in operating assets and liabilities

Net cash used by operating activities

NM- not meaningful

Net cash used by operating activities was $18.8 million in 2021, an improvement of $24.9 million, or 57 percent, from 2020.

The improvement was driven by a $15.6 million decrease in net loss and a $13.2 million improvement in cash used by operating assets and liabilities due to the completed wind-down of the soybean product line.

These improvements were partially offset by a $2.9 million decrease in non-cash stock compensation, primarily the result of the forfeiture of unvested stock awards, and the $1.5 million non-cash gain upon the extinguishment of the PPP loan.

The Company expects cash used by operating activities in 2022 to be higher than 2021 driven by the elimination of the working capital benefit received in 2021, and a slightly higher net loss driven by AIML and BioFactory-related investments.

Cash Flows from Investing Activities

Year Ended December 31,

Sales and (purchases) of short-term investments, net

Purchases of land, buildings, and equipment

Net cash provided (used) by investing activities

Net cash provided by investing activities was $11.2 million in 2021, an increase of $24.7 million, or 183 percent, from 2020.

This increase was driven by changes in purchases and sales of short-term investments, as 2020 saw the Company invest its cash in short-term investments while 2021 reflects the draw-down of those short-term investments to fund operations.

The Company expects cash used for purchases of land, buildings, and equipment in 2022 to be higher than 2021, driven by investments to scale its BioFactory production system and its AIML capabilities.

Cash Flows from Financing Activities

Year Ended December 31,

Proceeds from common stock issuance

Costs incurred related to the issuance of stock

Proceeds from Payroll Protection Program loan

Repayments of financing lease obligations

Proceeds from the exercise of stock options

Net cash provided by financing activities

not meaningful

Net cash provided by financing activities was $3.7 million in 2021, a decrease of $11.7 million, or 76 percent, from 2020.

The decrease was primarily driven by the $14.0 million of net proceeds from the follow-on offering of the Company's common stock completed in the fourth quarter of 2020.

The Company expects net cash provided by financing activities in 2022 to increase compared to 2021, primarily due to the $10.0 million of net proceeds received from the February 2022 Offering.

Capital Resources

Operating Capital Requirements

The Company has incurred losses since its inception and its net loss was $29.2 million for the year ended December 31, 2021, and it used $18.8 million of cash for operating activities for the year ended December 31, 2021.

The Company's primary sources of liquidity are its cash and cash equivalents, with additional liquidity accessible, subject to market conditions and other factors, including limitations that may apply to the Company under applicable SEC regulations, from the capital markets, including under its ATM Facility.

As of December 31, 2021, the Company had $14.4 million of cash, cash equivalents, and restricted cash.

The Company’s restricted cash is associated with its equipment financing leases and was $0.6 million as of December 31, 2021, with $0.5 million scheduled to be returned in December 2022.

Current liabilities were $4.9 million as of December 31, 2021.

During the February 2022 Offering, t he Company issued 3,880,000 shares of its common stock, pre-funded warrants to purchase up to 3,880,000 shares of its common stock, and common warrants to purchase up to 7,760,000 shares of its common stock.

In the aggregate, the Company received net proceeds of $10.0 million, after deducting approximately $0.9 million of underwriting discounts and estimated other offering expenses.

The Company has incurred losses since its inception and anticipates that it will continue to generate losses for the next several years.

Over the longer term and until the Company can generate cash flows sufficient to support its operating capital requirements, it expects to finance a portion of future cash needs through (i) cash on hand, (ii) commercialization activities, which may result in various types of revenue streams from (a) future product development agreements and technology licenses, including upfront and milestone payments, annual license fees, and royalties;

and (b) product sales from its proprietary BioFactory production system;

(iii) government or other third-party funding, which the Company expects to be more readily available if Cellectis were to own less than 50 percent of the Company’s common stock, (iv) public or private equity or debt financings, or (v) a combination of the foregoing.

However, additional capital may not be available on reasonable terms, if at all.

For example, based on the Company’s public float, as of the date of the filing of this Annual Report, the Company is only permitted to utilize a “shelf”

registration statement, including the registration statement under which the Company’s the ATM Facility, is operated, subject to Instruction I.B.6 to Form S-3, which is referred to as the “baby shelf”

For so long as the Company's public float is less than $75,000,000, it may not sell more than the equivalent of one-third of its public float during any 12 consecutive months pursuant to the baby shelf rules.

Although alternative public and private transaction structures are expected to be available, these may require additional time and cost, may impose operational restrictions on the Company, and may not be available on attractive terms.

The Company’s ability to continue as a going concern will depend on its ability to obtain additional public or private equity or debt financing, obtain government or private grants and other similar types of funding, attain further operating efficiencies, reduce or contain expenditures, and, ultimately, to generate revenue.

The Company’s cash, cash equivalents, and restricted cash as of December 31, 2021, considering its plan to continue to invest in the growth and scaling of its BioFactory production system and AIML capabilities and the $10.0 million of net proceeds from the February 2022 Offering, is sufficient to fund its operations into late 2022.

The Company’s management has concluded there is substantial doubt regarding its ability to continue as a going concern because it anticipates that it will need to raise additional capital to support this business plan for a period of 12 months or more from the date of this filing.

If the Company is unable to raise additional capital in a sufficient amount or on acceptable terms, management may be required to implement various cost reduction and other cash-focused measures to manage liquidity and the Company may have to significantly delay, scale back, or cease operations, in part or in full.

If the Company raises additional funds through the issuance of additional debt or equity securities, it could result in dilution to its existing stockholders and increased fixed payment obligations, and these securities may have rights senior to those of the Company's shares of common stock.

Any of these events could significantly harm the Company's business, financial condition, and prospects.

The Company's financing needs are subject to change depending on, among other things, the success of its product development efforts, the effective execution of its business model, its revenue, and its efforts to effectively manage expenses.

The effects of the COVID-19 pandemic, other macroeconomic events, and potential geopolitical developments on the financial markets and broader economic uncertainties may make obtaining capital through equity or debt financings more challenging and may exacerbate the risk that such capital, if available, may not be available on terms acceptable to the Company.

CONTRACTUAL OBLIGATIONS, COMMITMENTS, AND CONTINGENCIES

As of December 31, 2021, the Company had the following contractual obligations:

Liability for minimum lease payments for its corporate headquarters and lab facilities, and equipment leases due within the next five years in an aggregate amount of $7.7 million, of which $1.7 million is payable in 2022;

Remaining severance obligation to Mr.

Blome, its former Chief Executive Officer , due within the next two years in an aggregate amount of $1.8 million, of which $1.1 million is payable in 2022.

Sale-Leaseback of Headquarters and Lab Facility

In September 2017, the Company consummated a sale-leaseback transaction with a third party for its corporate headquarters and lab facilities.

The Company's headquarters facility is comprised of a 44,000 square-foot office and lab building, the first pilot BioFactory production system, greenhouses, and outdoor research plots.

The Company is deemed the owner for accounting purposes.

The lease has a term of twenty years with four options to extend its term for five years each subject to there being no default under the lease terms beyond any cure period and the Company occupying the property at the time of extension.

In 2017, the Company received $7.0 million in connection with the sale of the land and uncompleted facility.

The lease commenced in May 2018.

Under the lease, the Company pays an annual base rent of eight percent of the total project cost with scheduled increases in rent of 7.5 percent on the sixth, eleventh, and sixteenth anniversaries of the start of the lease commencement as well as on the first day of each renewal term.

Currently, the Company pays an annual base rent of $1.4 million.

The Company is also responsible for all operating costs and expenses associated with the property.

If the landlord decides to sell the property, the Company has a right of first refusal to purchase the property on the same terms offered to any third party.

Concurrent with entering the lease, Cellectis guaranteed all of the Company's obligations under the lease agreement.

Cellectis’

guarantee of the Company's obligations will terminate at the end of the second consecutive calendar year in which its tangible net worth exceeds $300 million, as determined in accordance with generally accepted accounting principles.

At a point when Cellectis owns 50 percent or less of the Company's outstanding common stock, the Company has agreed to indemnify Cellectis for any obligations incurred by Cellectis under its guaranty of the obligations under the lease.

Sale-Leaseback of Equipment

The Company also has an equipment financing arrangement that is considered a financing lease.

As of December 31, 2021, this arrangement requires aggregate payments of $0.6 million over the next 21 months.

The Company was required to deposit cash and cash equivalent amounts equal to the future rent payments as required under the Company's equipment lease facility.

As of December 31, 2021, this restricted cash totaled $0.6 million, and a portion may be requested to be returned in each of December 2022 and December 2023.

CRITICAL ACCOUNTING ESTIMATES

The accompanying discussion and analysis of the Company's financial condition and results of operations are based upon its consolidated financial statements and the related disclosures, which have been prepared in accordance with accounting principles generally accepted in the United States.

The preparation of these consolidated financial statements requires the Company to make estimates, assumptions, and judgments that affect the reported amounts in the Company's consolidated financial statements and accompanying notes.

The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following policies to be the most critical to understanding its financial condition and results of operations because they require the use of estimates, assumptions, and judgments about matters that are inherently uncertain.

Stock-Based Compensation

The valuation of stock options is a critical accounting estimate that requires the use of judgments and assumptions that are likely to have a material impact on the Company's consolidated financial statements.

The Company generally measures the fair value of employee and nonemployee stock-based awards on their grant date and records compensation expense on a straight-line basis over the related service

period of the award, which is generally the vesting period.

The Company uses the Black-Scholes option pricing model to value its stock option awards, which requires the Company to make predictive assumptions regarding employee exercise behavior, future stock price volatility, and dividend yield.

The Company generally measures compensation expense for grants of restricted stock units using the Company's share price on the date of grant.

The Company uses a Monte Carlo simulation pricing model when estimating the fair values of performance stock units, which requires the Company to make predictive assumptions.

The Company estimates fair values and accounts for employee and nonemployee awards in a similar manner.

Due to the limited historical experience of the Company's stock awards program, it has elected to account for forfeitures of awards as they occur.

If an award is forfeited prior to vesting, the associated reduction in expense is reflected net in stock-based compensation expense in that period.

Stock Options

The estimated fair values of stock options granted, and the assumptions used for the Black-Scholes option-pricing model were as follows:

Expected term (in years)

Expected volatility

80.1% - 91.0%

77.4% - 81.2%

Risk-free interest rate

Due to the Company's limited history, it does not always have sufficient historical stock option activity to make predictive assumptions based solely on its stock or stock option activity for the Black-Scholes option pricing model.

As a result, the Company may need to use data from other comparable public companies or alternative calculation methods as allowed by generally accepted accounting principles to make predictive assumptions.

The Company estimates its future stock price volatility using the weighted-average historical volatility calculated from a group of comparable public companies over the expected term of the option.

The group of comparable public companies is determined by management on an annual basis.

When selecting a comparable company, management considers relevant factors including industry and strategy, size, maturity, and financial leverage.

The comparable companies used by management to calculate expected volatility may change from year-to-year because of changes in those factors and because a new comparable company may become publicly traded.

A one percentage point increase in the Company's volatility assumption, leaving all other assumptions constant, would increase the grant date fair value by one percent.

The expected term of stock options is estimated using the average of the vesting tranches and the contractual life of each grant for employee options, or the simplified method, as the Company has limited historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock option grants.

The use of the simplified method is dependent upon the type of equity award granted and the term of the award.

Management reviews the expected term of stock options before issuance to ensure that the use of the simplified method is appropriate and that the Company does not have sufficient historical exercise data to estimate the expected term using a different method.

An increase in the expected term by one year, leaving all other assumptions constant, would increase the grant date fair value by five percent.

The Company estimates the risk-free interest rate based on the United States Treasury zero-coupon yield curve at the date of grant for the expected term of the option.

A one percentage point increase in the risk-free interest rate, leaving all other assumptions constant, would not change the grant date fair value.

The Company does not, nor does it expect to pay dividends in the foreseeable future.

Performance Stock Units

From time-to-time the Company issues performance stock units to certain individuals in management to align their objectives with stockholders of the Company.

In July 2021, the Company granted 600,000 performance stock units under the Inducement Plan to Mr.

Carr, its President and Chief Executive Officer.

The estimated fair values of performance stock units granted in 2021, and the assumptions used were as follows:

Estimated fair values of performance stock units granted:

At least $12 per share

At least $15 per share

At least $20 per share

Expected term (in years)

Expected volatility

Risk-free interest rate

The Company estimated the fair value of each tranche of the performance stock units on the grant date using the Monte Carlo simulation pricing model, which required it to make predictive assumptions as to the expected term of the grant, future stock price volatility, and dividend yield.

The expected term represents the expected service period of the performance stock units granted.

It does not represent a significant accounting estimate.

Due to the expected term of the award being three years and the Company having been publicly traded for more than three years, the volatility assumption was based on the historical volatility of the Company’s common stock over the expected term.

The Company estimates the risk-free interest rate based on the United States Treasury zero-coupon yield curve at the date of grant for the expected term of the performance stock unit.

Net Realizable Value of Inventories

Due to the wind-down of its soybean product line, the Company did not have any inventory balances, nor does it anticipate having any such balances in 2022 based on the nature of its business activities.

Under the Company's prior go-to-market soybean strategy, the determination of the net realizable value of inventories was a critical accounting estimate that required the use of judgments and assumptions that may have had a material impact on the Company's consolidated financial statements.

At each period-end, the Company made assumptions regarding projected selling prices of its products considering futures market prices for the underlying agricultural markets and its associated risk management strategies, anticipated costs, and other factors that take into consideration the Company's limited operating history and compare those prices to the current weighted average costs of its inventories.

If the Company's costs were higher than the projected selling prices, then a valuation adjustment was recorded.

Income Tax Valuation Allowances

The determination of the income tax valuation allowances requires the use of judgments and assumptions that may have a material impact on the Company's consolidated financial statements, especially at the early stage of commercialization.

The Company provides deferred taxes for deductible and taxable temporary differences.

Deferred tax assets are reduced by a valuation allowance when the Company believes it is more likely than not that some portion or all the deferred tax assets will not be realized.

Because the Company has generated losses cumulatively, management believes it is more likely than not that some portion or all the deferred tax assets will not be realized and have reflected a full valuation allowance against its net deferred tax assets.

If the Company were to generate profits, the valuation allowance may change.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

For more information on recently issued accounting pronouncements, see the Company's consolidated financial statements and related financial statement schedules on page F-1.

USE OF NON-GAAP FINANCIAL INFORMATION

To supplement the Company's financial results prepared in accordance with GAAP, it has prepared certain non-GAAP measures that include or exclude special items.

These non-GAAP measures are not meant to be considered in isolation or as a substitute for financial information presented in accordance with GAAP and should be viewed as supplemental and in addition to financial information presented in accordance with GAAP.

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures.

In addition, other companies may report similarly titled measures, but calculate them differently, which reduces their usefulness as a comparative measure.

Management utilizes these non-GAAP metrics as performance measures in evaluating and making operational decisions regarding the Company’s business.

The Company’s non-GAAP financial measures reflect adjustments for certain commodity derivatives entered into in connection with its soybean product line.

As a result of the continued wind-down of this product line, the Company held no commodity derivative contracts as of December 31, 2021.

The Company presents adjusted gross profit and adjusted gross profit percentage, which are non-GAAP measures.

Adjusted gross profit reflects adjustments necessary to present the underlying gross profit of its soybean product line, including (i) unrealized gains and losses associated with commodity derivatives entered into to hedge the change in value of fixed price grain inventories and fixed price grain production agreements that should be recognized in the future when the underlying inventory is sold, (ii) gains and losses from commodity derivatives realized in prior periods but associated with inventory sold in the current period, (iii) net realizable value adjustments to inventories occurring in the period which otherwise would have been recognized in the future when the underlying inventory is sold, and (iv) net realizable value adjustments recognized in prior periods but associated with inventory sold in the current period.

Adjusted gross profit percentage is derived from adjusted gross profit, a non-GAAP measure, and total revenue.

The Company provides in the table below a reconciliation of gross profit and gross profit percentage, which are the most directly comparable GAAP financial measures, to adjusted gross profit and adjusted gross profit percentage.

The Company provides adjusted gross profit and adjusted gross profit percentage because it believes that these non-GAAP financial metrics provide investors with useful supplemental information as the amounts being adjusted affect the period-to-period comparability of gross profit and financial performance.

The table below presents a reconciliation of gross profit and gross profit percentage to adjusted gross profit and adjusted gross profit percentage:

Year Ended December 31,

Gross profit (GAAP measure)

Gross profit percentage

Non-GAAP adjustments:

Commodity derivative impact, net

Net realizable value adjustment to inventories

Adjusted gross profit

Adjusted gross profit percentage

The Company presents adjusted net loss, a non-GAAP measure, and defines it as net loss including adjustments necessary to present the underlying gross profit of its soybean product line, including (i) unrealized gains and losses associated with commodity derivatives entered into to hedge the change in value of fixed price grain inventories and fixed price grain production agreements that should be recognized in the future when the underlying inventory is sold, (ii) gains and losses from commodity derivatives realized in prior periods but associated with inventory sold in the current period, (iii) net realizable value adjustments to inventories occurring in the period which otherwise would have been recognized in the future when the underlying inventory is sold, and (iv) net realizable value adjustments recognized in prior periods but associated with inventory sold in the current period, and excluding cash-based Section 16 officer transition expenses, restructuring costs, the recapture of non-cash stock compensation associated with the departure of Section 16 officers and restructuring-related staffing adjustments made in the third quarter of 2020 , the gain upon the extinguishment of the PPP loan, and non-operating expenses, which are primarily gains and losses on foreign exchange transactions and losses on the disposals of land, buildings, and equipment.

The Company provides in the table below a reconciliation of net loss, which is the most directly comparable GAAP financial measure, to adjusted net loss.

The Company provides adjusted net loss because it believes that this non-GAAP financial metric provides investors with useful supplemental information at this stage of commercialization as the amounts being adjusted affect the period-to-period comparability of net losses and financial performance.

The table below presents a reconciliation of net loss to adjusted net loss:

Year Ended December 31,

Net loss (GAAP measure)

Non-GAAP adjustments:

Commodity derivative impact, net

Net realizable value adjustment to inventories

Section 16 officer transition expenses

Restructuring costs

Recapture of non-cash stock compensation

Gain upon extinguishment of Payroll Protection Program loan

Non-operating expenses

Adjusted net loss

The Company presents adjusted net loss per share, a non-GAAP measure, and defines it as net loss per share including adjustments necessary to present the underlying gross profit of its soybean product line, including (i) unrealized gains and losses associated with commodity derivatives entered into to hedge the change in value of fixed price grain inventories and fixed price grain production agreements that should be recognized in the future when the underlying inventory is sold, (ii) gains and losses from commodity derivatives realized in prior periods but associated with inventory sold in the current period, (iii) net realizable value adjustments to inventories occurring in the period which otherwise would have been recognized in the future when the underlying inventory is sold, and (iv) net realizable value adjustments recognized in prior periods but associated with inventory sold in the current period, and excluding cash-based Section 16 officer transition expenses, restructuring costs, the recapture of non-cash stock compensation associated with the departure of Section 16 officers and restructuring-related staffing adjustments made in the third quarter of 2020 , the gain upon the extinguishment of the PPP loan, and non-operating expenses, which are primarily gains and losses on foreign exchange transactions and losses on the disposals of land, buildings, and equipment.

The Company provides in the table below a reconciliation of net loss per share, which is the most directly comparable GAAP financial measure, to adjusted net loss per share.

The Company provides adjusted net loss per share because it believes that this non-GAAP financial metric provides investors with useful supplemental information at this stage of commercialization as the amounts being adjusted affect the period-to-period comparability of net losses per share and financial performance.

The table below presents a reconciliation of net loss per share to adjusted net loss per share:

Year Ended December 31,

Net loss per share (GAAP measure)

Non-GAAP adjustments:

Commodity derivative impact, net

Net realizable value adjustment to inventories

Section 16 officer transition expenses

Restructuring costs

Recapture of non-cash stock compensation

Gain upon extinguishment of Payroll Protection Program loan

Non-operating expenses

Adjusted net loss per share

The Company presents adjusted EBITDA, a non-GAAP measure, and defines it as net loss including adjustments necessary to present the underlying gross profit of its soybean product line, including (i) unrealized gains and losses associated with commodity derivatives entered into to hedge the change in value of fixed price grain inventories and fixed price grain production agreements that should be recognized in the future when the underlying inventory is sold, (ii) gains and losses from commodity derivatives realized in prior periods but associated with inventory sold in the current period, (iii) net realizable value adjustments to inventories occurring in the period which otherwise would have been recognized in the future when the underlying inventory is sold, and (iv) net realizable value adjustments recognized in prior periods but associated with inventory sold in the current period, and excluding interest, net, depreciation and amortization expenses, non-cash stock compensation expenses including the recapture of non-cash stock compensation associated with the departure of Section 16 officers and restructuring-related staffing adjustments made in the third quarter of 2020 , cash-based Section

16 officer transition expenses, restructuring costs, the gain upon the extinguishment of the PPP loan, and non-operating expenses, which are primarily gains and losses on foreign exchange transactions and losses on the disposals of land, buildings, and equipment.

The Company provides in the table below a reconciliation of net loss, which is the most directly comparable GAAP financial measure, to adjusted EBITDA.

Because adjusted EBITDA excludes non-cash items and discrete or infrequently occurring items, the Company believes that adjusted EBITDA provides investors with useful supplemental information about the operational performance of its business and facilitates the period-to-period comparability of financial results where certain items may vary significantly independent of business performance.

The table below presents a reconciliation of net loss to adjusted EBITDA:

Year Ended December 31,

Net loss (GAAP measure)

Non-GAAP adjustments:

Commodity derivative impact, net

Net realizable value adjustment to inventories

Interest, net

Depreciation and amortization expenses

Stock-based compensation expenses

Section 16 officer transition expenses

Restructuring costs

Gain upon extinguishment of Payroll Protection Program loan

Non-operating expenses

Adjusted EBITDA

QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK

Prior to the Company's shift in business strategy, the Company's primary exposure to market risk was commodity price sensitivity under its former soybean go-to-market strategy.

The Company was susceptible to changes in commodity market prices that could impact the selling price for grain inventories, which were carried at historical cost.

Prior to the purchase, the Company also had market exposure associated with fixed price grain production agreements .

Under this former strategy, the Company managed its exposure to changes in market prices by entering commodity hedges to convert fixed price grain inventories and fixed price grain production agreements to floating market prices.

By executing these hedging strategies, the Company could closely match the expected economic terms of the grain sale with the market.

In a rising market these positions resulted in losses, and in a falling market these positions resulted in gains once any losses, if any, are recaptured.

At time of sale, the gains or losses on the commodity derivatives were realized and fully offset by gains or losses on the grain inventories.

As a result of the wind-down of the soybean product line, the Company’s market risk related to commodity price sensitivity has been eliminated.

As a result, the Company held no commodity derivative contracts as of December 31, 2021.

The Company is also exposed to interest rate sensitivity on its cash equivalents and investments, which are affected by changes in the general level of United States interest rates.

However, because of the short-term nature of the duration of its portfolio and the low-risk profile of its investments, the Company believes an immediate ten percent change in market interest rates would not have a material impact on the fair market value of its investment portfolio or on its financial condition or results of operations.

As of December 31, 2021, the Company had $14.4 million of cash, cash equivalents, and restricted cash.

As of December 31, 2021, the Company did not hold any short-term investments.

The Company also has foreign exchange exposure from fluctuations in foreign currency exchange rates, primarily as a result of certain receivable and payable balances with Cellectis.

The primary currency exposure is to the Euro.

The Company believes an immediate ten percent change in foreign exchange rates would not have a material impact on its financial condition or results of operations.

Consolidated Financial Statements and Supplementary Data

The consolidated financial statements and related financial statement schedules required to be filed are listed in the Index to Consolidated Financial Statements on page F-1 hereto and are incorporated herein.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to Management, including the Company's principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision of the Company's principal executive officer and principal financial officer, it evaluated the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2021.

Based on that evaluation, as of December 31, 2021, the Company's principal executive officer and principal financial officer have concluded that its disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control Over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

The Company's management, including its principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of its internal controls over financial reporting based on the framework set forth in the “Internal Control—Integrated Framework”

issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on an evaluation under that framework, Management concluded that the Company's internal control over financial reporting was effective as of December 31, 2021.

Inherent Limitations on Controls and Procedures

The Company's management, including the principal executive officer and principal financial officer, does not expect that its disclosure controls and procedures and its internal control over financial reporting will prevent all error and all fraud.

A control system, no matter how well designed and operated, can only provide reasonable assurances that the objectives of the control system are met.

The design of a control system reflects resource constraints;

the benefits of controls must be considered relative to their costs.

Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, for the Company have been or will be detected.

As these inherent limitations are known features of the disclosure and financial reporting processes, it is possible to design into the processes safeguards to reduce, though not eliminate, these risks.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns occur because of simple error or mistake.

Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls is based in part upon certain assumptions about the likelihood of future events.

While the Company's disclosure controls and procedures and its internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives, there can be no assurance that any design will succeed in achieving its stated goals under all future conditions.

Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with the policies or procedures.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company's internal control over financial reporting identified in connection with the evaluation required by Rules 13a-13(d) and 15d-15(d) of the Exchange Act that occurred during the fourth quarter ended December 31, 2021, that has materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Of ficers and Corporate Governance

The information required by this item concerning the Company's directors, executive officers, and corporate governance matters is incorporated by reference to its 2022 Proxy Statement.

The Company's Board of Directors has adopted a Code of Business Conduct and Ethics applicable to all officers, directors, and employees.

The Company's Code of Business Conduct and Ethics, Corporate Governance Guidelines, and the charters of its Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee are available on the Company's website (www.calyxt.com) under “Corporate Governance”

in the “Investors”

The Company will provide a copy of these documents to any person, without charge, upon request.

The Company intends to make all required disclosures concerning any amendments to, or waivers from, the Code of Business Conduct and Ethics on its website.

Executi ve Compensation

The information required by this item regarding executive compensation is incorporated by reference to the Company's 2022 Proxy Statement.

Security Ownership of Certain Beneficial Ow ners and Management and Related Stockholder Matters

The information required by this item regarding security ownership of certain beneficial owners and management is incorporated by reference in the Company's 2022 Proxy Statement.

Certain Relationships and Relate d Transactions, and Director Independence

The information required by this item regarding certain relationships and related transactions is incorporated by reference to the Company's 2022 Proxy Statement.

Principal Accou nting Fees and Services

The information required by this item regarding principal accounting fees and services is incorporated by reference to the Company's 2022 Proxy Statement.

Exhibits and Finan cial Statement Schedules

(1) Consolidated Financial Statements

(2) See “Index to Consolidated Financial Statements”

in Item 8, which is incorporated into this Item by reference.

(3) Financial Statement Schedules—Not applicable.

(4) Schedules not filed with this Annual Report on Form 10-K are omitted because of the absence of conditions under which they are required or because the information called for is shown in the consolidated financial statements or related notes.

(a)(3) Exhibits

Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2018)

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 7, 2018)

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 5, 2020)

Management Services Agreement between Cellectis S.A., Cellectis, Inc.

and Calyxt, Inc., dated as of January 1, 2016 (incorporated by reference to Exhibit 10.1 of the Company’s Registration Statement on Form S-1 filed with the SEC on June 23, 2017)

First Amendment to the Management Services Agreement Amendment dated July 25, 2017 between Cellectis S.A.

and Calyxt, Inc.

(incorporated by reference to Exhibit 10.2 of the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2018)

Second Amendment to the Management Services Agreement Amendment dated January 29, 2020 between Cellectis S.A., Cellectis, Inc., Cellectis Biologics, Inc.

and Calyxt, Inc.

(incorporated by reference to Exhibit 10.3 of the Company’s Annual Report on Form 10-K filed with the SEC on March 5, 2020)

Separation Agreement dated July 25, 2017 between Cellectis S.A.

and Calyxt, Inc.

(incorporated by reference to Exhibit 10.3 of the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2018)

Stockholders Agreement dated July 25, 2017 between Cellectis S.A.

and Calyxt, Inc.

(incorporated by reference to Exhibit 10.4 of the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2018)

License Agreement dated July 25, 2017 between Cellectis S.A.

and Calyxt, Inc.

(incorporated by reference to Exhibit 10.5 of the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2018)

Exclusive Patent License Agreement between Regents of the University of Minnesota and Calyxt Inc.

Cellectis Plant Sciences, Inc.), dated December 15, 2014 (incorporated by reference to Exhibit 10.6 of the Company’s Registration Statement on Form S-1/A filed with the SEC on July 3, 2017)

Equity Incentive Plan (incorporated by reference to Exhibit 10.11 of the Company’s Registration Statement on Form S-1 filed with the SEC on June 23, 2017)

Form of Stock Option Agreement pursuant to the Calyxt, Inc.

Equity Incentive Plan (incorporated by reference to Exhibit 10.12 of the Company’s Registration Statement on Form S-1 filed with the SEC on June 23, 2017)

2017 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.20 of the Company’s Registration Statement on Form S-1/A filed with the SEC on July 3, 2017)

2017 Stock Option Sub-Plan for French Employees and Directors (incorporated by reference to Exhibit 10.21 of the Company’s Registration Statement on Form S-1/A filed with the SEC on July 3, 2017)

Form of Stock Option Agreement pursuant to the Calyxt, Inc.

2017 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.22 of the Company’s Form 10-Q for the quarter ended June 30, 2020)

Form of Restrictive Stock Unit Agreement pursuant to the Calyxt, Inc.

2017 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.23 of the Company’s Form 10-Q for the quarter ended June 30, 2020)

Form of Performance Stock Unit Award Agreement(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019)

2017 Restricted Stock Unit Sub-Plan for French Employees and Directors (incorporated by reference to Exhibit 10.25 of the Company’s Registration Statement on Form S-1/A filed with the SEC on July 3, 2017)

Lease Agreement between Calyxt, Inc., as Tenant, and NLD Mount Ridge LLC, as Landlord, dated September 6, 2017 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2017)

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.24 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017)

Amendment No.

1 to Stockholders Agreement dated May 7, 2018 between Cellectis S.A.

and Calyxt, Inc.

(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018)

Offer Letter between Calyxt, Inc.

Carr, dated July 13, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 15, 2021)

Employment Agreement between Calyxt, Inc.

Bill Koschak, dated December 21, 2018 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on January 3, 2019)

Employment Agreement between Calyxt, Inc.

Debra Frimerman, dated January 21, 2019 (incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018)

Employment Agreement between Calyxt, Inc.

and Dr Travis J.

Frey, dated May 13, 2019 (incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019)

2021 Short Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 18, 2021)

2021 Executive Severance Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 18, 2021)

Separation Agreement between Calyxt, Inc.

and James Blome, dated March 18, 2021

Employment Agreement between Calyxt, Inc.

Sarah Reiter, dated October 13, 2020

2021 Employee Inducement Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 15, 2021)

Form of Performance Stock Unit Agreement under the Calyxt, Inc.

2021 Employee Inducement Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on July 15, 2021)

Participation Agreement of Mr.

Carr under the 2021 Executive Severance Plan (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on July 15, 2021)

Form of Non-Competition, Non-Solicitation, Confidentiality and Inventions Agreement (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on July 15, 2021)

Open Market Sale Agreement SM dated September 21, 2021, by and between Calyxt, Inc.

and Jefferies LLC (incorporated by reference to Exhibit 1.1.

to the Company’s Current Report on Form 8-K filed on September 21, 2021)

Annual Incentive Payment Criteria for Executive Officers - In Respect of Fiscal Year 2021 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2021)

Separation Agreement between Calyxt, Inc.

and Sarah Reiter, dated January 20, 2022

Subsidiaries of Registrant (incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 5, 2020)

Consent of Independent Registered Public Accounting Firm

Power of Attorney (included on signature page to this Form 10-K)

Certification of the Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act

Certification of the Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act

Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C.

Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

The cover page for the Company’s Annual Report on 10-K for the year ended December 31, 2021 has been formatted in Inline IXBRL

# Confidential treatment has been granted for certain information contained in this exhibit.

These portions have been omitted and filed separately with the United States Securities and Exchange Commission.

Indicates management contract or compensatory plan.

* Filed herewith

Form 10-K Summary

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

March 3, 2022

/s/ Michael A.

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Each of the undersigned hereby constitute and appoint Michael A.

Carr, William F.

Koschak, and Debra Frimerman, and each of them, his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, for him or her and in his or her name, place, and stead in any and all capacities, to sign one or more amendments to this Annual Report on Form 10-K, each in such form as they or any one of them may approve, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done so that this Annual Report and any amendments shall comply with the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations adopted or issued pursuant thereto, as fully and to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their substitute or resubstitute, may lawfully do or cause to be done by virtue hereof.

/s/ Michael A.

President, Chief Executive Officer, and Director

(principal executive officer)

March 3, 2022

/s/ William F.

Chief Financial Officer

(principal financial and accounting officer)

March 3, 2022

/s/ Yves Ribeill

Board Chair and Director

March 3, 2022

/s/ Philippe Dumont

Philippe Dumont

March 3, 2022

/s/ Anna Ewa Kozicz-Stankiewicz

Anna Ewa Kozicz-Stankiewicz

March 3, 2022

/s/ Christopher Neugent

Christopher Neugent

March 3, 2022

/s/ Jonathan Fassberg

Jonathan Fassberg

March 3, 2022

/s/ Kimberly Nelson

Kimberly Nelson

March 3, 2022

/s/ Laurent Arthaud

Laurent Arthaud

March 3, 2022

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets at December 31, 2021, and 2020

Consolidated Statements of Operations for the years ended December 31, 2021, 2020, and 2019

Consolidated Statements of Stockholders’

Equity for the years ended December 31, 2021, 2020, and 2019

Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020, and 2019

Notes to Consolidated Financial Statements

F- 7 through F-23

Report of Independent Regist ered Public Accounting Firm

To the Shareholders and the Board of Directors of Calyxt, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Calyxt, Inc.

(the Company) as of December 31, 2021, and 2020, the related consolidated statements of operations, stockholders’

equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021, and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.

generally accepted accounting principles.

The Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2, Going Concern, to the financial statements, the Company has incurred recurring losses from operations, utilized cash from operations, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.

Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2015.

Minneapolis, Minnesota

March 3, 2022

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Par Value and Share Amounts)

Current assets:

Cash and cash equivalents

Short-term investments

Restricted cash

Accounts receivable

Prepaid expenses and other current assets

Total current assets

Non-current restricted cash

Land, buildings, and equipment

Other non-current assets

Liabilities and stockholders’

Current liabilities:

Accounts payable

Accrued expenses

Accrued compensation

Due to related parties

Current portion of financing lease obligations

Other current liabilities

Total current liabilities

Financing lease obligations

Long-term debt

Other non-current liabilities

Total liabilities

Stockholders’

Common stock, $ 0.0001 par value;

275,000,000 shares authorized;

38,874,146 shares issued and 38,773,994 shares outstanding as of December 31, 2021, and 37,165,196 shares issued and 37,065,044 shares outstanding as of December 31, 2020

Additional paid-in capital

Common stock in treasury, at cost;

100,152 shares as of December 31, 2021, and December 31, 2020

Accumulated deficit

Total stockholders’

Total liabilities and stockholders’

See accompanying notes to the Consolidated Financial Statements.

CONSOLIDATED STATEMENTS O F OPERATIONS

(In Thousands Except Shares and Per Share Amounts)

Year Ended December 31,

Cost of goods sold

Operating expenses:

Research and development

Selling, general, and administrative

Management fees

Restructuring costs

Total operating expenses

Loss from operations

Gain upon extinguishment of Payroll Protection Program loan

Interest, net

Non-operating expenses

Loss before income taxes

Basic and diluted net loss per share

Weighted average shares outstanding - basic and diluted

Anti-dilutive stock options, restricted stock units, and performance stock units

See accompanying notes to the Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF STO CKHOLDERS’

(In Thousands Except Shares Outstanding)

Comprehensive

Income (Loss)

Stockholders’

Balances at December 31, 2018

Stock-based compensation

Issuance of common stock from stock-based compensation awards

Shares withheld for net share settlement

Other comprehensive income

Balances at December 31, 2019

Stock-based compensation

Issuance of common stock from stock-based compensation awards

Issuance of common stock from the follow-on offering, net of $ 1.0 million of issuance costs

Shares withheld for net share settlement

Other comprehensive income

Balances at December 31, 2020

Stock-based compensation

Issuance of common stock from stock-based compensation awards

Issuance of common stock from ATM Facility, net of $ 0.5 million of issuance costs

Shares withheld for net share settlement

Balances at December 31, 2021

See accompanying notes to the Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

Year Ended December 31,

Operating activities

Adjustments to reconcile net loss to net cash used by

operating activities:

Gain upon extinguishment of Payroll Protection Program loan

Depreciation and amortization

Stock-based compensation

Changes in operating assets and liabilities:

Accounts receivable

Due to/from related parties

Prepaid expenses and other current assets

Accounts payable

Accrued expenses

Accrued compensation

Net cash used by operating activities

Investing activities

Sales and (purchases) of short-term investments, net

Purchases of land, buildings, and equipment

Net cash provided (used) by investing activities

Financing activities

Proceeds from common stock issuance

Costs incurred related to the issuance of stock

Proceeds from Payroll Protection Program loan

Repayments of financing lease obligations

Proceeds from the exercise of stock options

Costs incurred related to shares withheld for net settlement

Proceeds from sale and leaseback of land, buildings, and equipment

Net cash provided (used) by financing activities

Net decrease in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash - beginning of period

Cash, cash equivalents, and restricted cash –

end of period

See accompanying notes to the Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

was founded in 2010 and incorporated in Delaware.

Calyxt i s a plant-based synthetic biology company that leverages its proprietary PlantSpring technology platform to engineer plant metabolism to produce innovative, high-value materials and products for use in helping customers meet their sustainability targets and financial goals.

The Company is focused on developing these materials and products for customers in large and differentiated end markets including the cosmeceutical, nutraceutical, and pharmaceutical industries.

The Company uses its PlantSpring technology platform for development of those plant-based chemistries and will produce them in its proprietary BioFactory TM production system.

Prior to its initial public offering (IPO) on July 25, 2017, the Company was a wholly owned subsidiary of Cellectis S.A.

As of December 31, 2021, Cellectis owned 61.8 percent of the Company's issued and outstanding common stock.

Basis of Presentation and Use of Estimates

The Company has prepared its Consolidated Financial Statements according to a ccounting principles generally accepted in the United States and has included the accounts of Calyxt and its subsidiary.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, including those related to revenue recognition, the net realizable value of inventories , stock-based compensation, and valuation allowances on deferred tax assets.

Actual results could differ from those estimates.

Cash, Cash Equivalents, Restricted Cash, and Investments

All investments purchased with an original maturity of three months or less are accounted for as cash equivalents.

The Company's restricted cash balances are cash and cash equivalents deposited in an amount equal to the future rent payments as required under the Company's equipment lease facility.

The Company may request the return of excess restricted cash collateral annually in December.

The amount of the restricted cash balance the Company expects to have returned in December 2022 is reflected as a current asset.

The Company periodically invests its cash in high grade, highly liquid securities, and investment funds.

The Company considers securities purchased with more than ninety days to their original maturity at issuance to be short-term investments.

These short-term investments are classified as available-for-sale securities based on the Company's intent to generally match maturities with Calyxt's projected monthly cash usage.

The Company held these securities to their planned maturity or liquidated them earlier in response to variations in the Company's monthly cash usage.

The Company ensures the credit risk in this portfolio is in accordance with its internal policies and if necessary, makes changes to investments to ensure credit risk is minimized.

The Company has not experienced any counterparty credit losses.

Accounts Receivable

Accounts receivable are unsecured and are recorded at net realizable value.

The Company makes judgments as to its ability to collect outstanding receivables based upon patterns of collectability, historical experience, and its evaluation of specific accounts and will provide an allowance for credit losses when collection becomes doubtful.

The Company performs credit evaluations of its customers’

financial condition on an as-needed basis.

Payment is generally due fifteen or thirty days from the invoice date depending upon the product, and accounts past 30 days are individually analyzed for collectability.

When all collection efforts have been exhausted, the account is written off.

Inventories are recorded at the lower of cost or net realizable value and include all costs of seed production and grain the Company purchased as well as costs to store and transport the grain.

As of December 31, 2020, inventory included the costs to process the grain into finished products.

Consideration received from growers when they purchase seed is recorded as a reduction of inventory.

The Company evaluates inventory balances for obsolescence or estimated net realizable value on a regular basis based on the age of the inventory and its sales forecasts.

At each period-end, the Company made assumptions regarding projected selling prices for its products considering futures market prices for the underlying agricultural markets and its associated risk management strategies, anticipated costs, and other factors that take into consideration its limited operating history and compare those prices to the current weighted average inventory costs.

If the Company's costs were higher than the projected selling prices, then a valuation adjustment was recorded.

Prior to the commercialization of its high oleic soybean products, the Company expensed all grain costs as R&D.

Forward Purchase Contracts

Under the Company's former go-to-market soybean strategy, it would enter into hedging contracts to convert fixed price grain inventories and fixed price grain production agreements to floating prices, consistent with how the grain was sold.

The seed contracts often required the Company to pay prices for the seed produced at commodity futures market prices plus a premium.

The seed growers had the option to fix their price with the Company throughout the term of the agreement.

The Company paid a portion of the seed cost in December each year and the remainder upon delivery in either the first or second quarter of the following year.

The grain grower contracts required the Company to pay prices for all grain produced at commodity futures market prices plus a premium.

The grain growers had the option to fix their price with the Company throughout the term of the agreement.

The grain grower contracts allowed for delivery of grain to the Company at harvest, if so specified when the agreement was executed, otherwise delivery occurred on a date that was elected by the Company through August 31, 2021.

The Company paid for grain within a contractually determined number of days following delivery and final pricing.

Upon delivery, the inventory was carried at historical cost but sold at prevailing market prices.

As a result, the Company entered into hedging arrangements by selling futures contracts which converted its market exposure to these fixed prices to floating prices.

By executing these hedging strategies, the Company could closely match the expected economic terms of the grain sale with the market, which helped stabilize margins until such inventory was sold.

The Company did not account for these economic hedges as accounting hedges.

All unrealized gains or losses on outstanding hedging contracts were recognized in Cost of Goods sold.

The Company expected that any gains or losses from these hedging arrangements would be offset by gains or losses on the grain inventories when such grain inventories were sold.

Prior to August 1, 2020, the Company designated all of its commodity derivative contracts as cash flow hedges based on the nature of its business activities.

As a result, all gains or losses associated with recording those commodity derivative contracts at fair value were recorded as a component of accumulated other comprehensive income (loss) (AOCI).

The Company reclassified amounts from AOCI to cost of goods sold when the underlying products were sold to which those hedges related.

For the year ended December 31, 2020, the Company reclassified a nominal amount from AOCI to cost of goods sold, and there were no such reclassifications in 2021.

Land, Buildings, and Equipment

Land, buildings, and equipment are stated at cost less accumulated depreciation.

Assets under capital lease are stated at the lesser of their net present value of future lease payments or fair market value.

Repairs and maintenance costs are expensed as incurred.

The cost and accumulated depreciation of property and equipment retired, or otherwise disposed of, are removed from the related accounts, and any residual values are charged to expense.

Depreciation is recorded using the straight-line method over estimated useful lives as follows :

Buildings and improvements

10 - 20 years

Leasehold improvements

Shorter of lease term or 15 years

Office furniture and equipment

Assets under capital lease

Computer equipment and software

Impairment of Long-Lived Assets

The Company has a single asset group and reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of that asset group may not be recoverable.

If the impairment tests indicate that the carrying value of the asset group is greater than the expected undiscounted cash flows to be generated by the asset group, further analysis is performed to determine the fair value of the asset group.

To the extent the fair value of the asset group is less than its carrying value, an impairment loss is recognized equal to the amount the carrying value exceeds the fair value of the asset group.

If the Company’s plans or intentions change with regard to a specific asset within the asset group, that asset’s remaining useful life is assessed and depreciation is accelerated if necessary.

Assets to be disposed of are carried at the lower of their carrying value or fair value less costs to sell.

Fair value is measured using a discounted cash flow model or independent appraisals, as appropriate.

The Company has no t recognized any impairment losses in these consolidated financial statements.

Revenue Recognition

The Company accounts for a contract as revenue when it has approval and commitment to perform from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance, and collectability of the consideration is probable.

Changes to contracts are assessed for whether they represent a modification or should be accounted for as a new contract.

The Company considers the following indicators, among others, when determining if it is acting as a principal in the transaction and recording revenue on a gross basis:

(i) the Company is primarily responsible for fulfilling the promise to provide the specified good or service, (ii) the Company has inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer and (iii) the Company has discretion in establishing the price for the specified good or service.

If a transaction does not meet the Company's indicators of being a principal in the transaction, then the Company is acting as an agent in the transaction and the associated revenues are recognized on a net basis.

The Company recognizes revenue when control of the good or service has passed to the customer.

The following indicators are evaluated in determining when control has passed to the customer:

(i) the customer has legal title to the product, (ii) the Company has transferred physical possession of the product or service to the customer, (iii) the Company has a right to receive payment for the good or service, (iv) the customer absorbs the significant risks and rewards of ownership of the good and (v) the customer has accepted the good.

The Company generally does not incur costs to obtain new contracts.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

The Company's contracts may contain multiple performance obligations if a promise to transfer the individual good or service is separately identifiable from other promises in the contracts and, therefore, is considered distinct.

Performance obligations that are not considered distinct are combined with other goods or services in the contract until that combination meets the distinct criteria above.

For contracts with multiple performance obligations, the Company determines the standalone selling price of each performance obligation and allocates the total transaction price using the relative selling price basis.

The following is a description of the principal goods and services from which the Company generates revenue:

Product Sales

Historically, the Company sold soybean grain, oil, and meal.

The Company recognized sales revenue at the point in time that title transferred to the customer, which was based on shipping terms.

Sales included shipping and handling charges if billed to the customer and were reported net of trade promotion and other costs, including estimated allowances for returns, unsalable product, and prompt pay discounts.

Sales, use, value-added, and other excise taxes were not recognized in revenue.

Trade promotions were recorded based on estimated participation and performance levels for offered programs at the time of sale.

The Company generally did not allow a right of return.

During 2021 and 2020, the Company sold soybean grain to a processor and subsequent to the sale they utilized the Company’s rented third-party storage facility to hold the grain until such time they requested it be delivered.

The Company was responsible for all handling charges and delivery activities.

In those instances, the Company recognized revenue from the sale of grain to the processor upon the transfer of the control of the grain, which was determined to be at the time of the issuance of the purchase order and assignment of warehouse receipts to the customer.

The Company determined that the reason for the arrangement was substantive, in that the customer had requested the arrangement, the product was separately identified as belonging to the customer, the product was ready for physical

transfer, and the Company did not have the ability to use the product or direct it to another customer.

The Company concluded that any remaining performance obligations (e.g., for custodial services) were immaterial in relation to the contract.

The Company concurrently accrued all estimated future storage, handling, and delivery costs associated with that sale.

All arrangements of this nature were completed prior to December 31, 2021.

In certain transactions occurring in the third quarter of 2020, the Company sold grain to a processor with a commitment to provide consideration to the processor in exchange for the soybean meal resulting from the grain crushing activity.

The Company determined the consideration payable to the processor was not in exchange for a distinct good or service, as the soybean meal was considered highly interrelated to the grain because they both possess Calyxt specific genetic traits, and the transactions were entered into in contemplation of one another, and therefore, were not considered to be distinct within the context of the contract.

For these transactions, the Company recognized revenue from the sale of grain in the amount of the final net cash settlement with the processor, as the consideration payable to the processor was treated as a reduction of revenue.

Technology Licensing

The Company recognizes revenue from license agreements, which may consist of nonrefundable up-front payments, milestone payments, annual licensing fee payments, royalty payments, and payments for services.

Nonrefundable up-front payments are deferred and recognized as revenue over the term of the license agreement.

If a license agreement is terminated before the original term of the agreement is fulfilled, all remaining deferred revenue is recognized at termination.

Annual licensing fee payments are generally associated with services in the contract and are recognized over time as the customer receives the benefits of the services.

If necessary, the Company establishes and increases a contract asset as the revenue is recognized.

For these types of payments, the Company recognizes revenue using an input method, such as the completed contract or time elapsed methods, or an output method, such as the work performed or units produced methods.

The Company will apply each method of revenue recognition consistently for like contracts and assess any revenue estimates periodically for cumulative adjustments.

In certain instances, the receipt of payments in these arrangements are dependent upon the achievement of certain scientific, regulatory, commercial, or other milestones.

The Company recognizes milestone payments when the triggering event has occurred, there are no further contingencies or services to be provided with respect to that event, and the counterparty has no right to refund of the payment.

Royalty revenues are expected to arise following the commercialization of products developed using the licensed technology by the counterparty to the license agreement.

The royalties may be a percentage of sales or another measurement achieved by the licensee.

Royalty revenues will be recognized at the later of (i) when the licensee is generating sales subject to royalty payments or (ii) the performance obligation to which the sales-based or usage-based royalties relates has been satisfied.

Product Development Agreements

The Company recognizes revenue from product development agreements, which may consist of nonrefundable up-front payments, milestone payments, annual payments, and payments for services.

Nonrefundable up-front payments are recognized as revenue over the term of the development agreement.

If a development agreement is terminated before the original term of the agreement is fulfilled, all remaining deferred revenue is recognized at termination.

In certain instances, the receipt of payments in these arrangements are dependent upon the achievement of certain scientific, regulatory, commercial, or other milestones.

Milestone payments are considered variable consideration which are evaluated against the Company’s performance obligations for determination of when it is appropriate to recognize revenue.

For purposes of revenue recognition, the Company considers whether the performance obligation is achieved, which may be (i) when a triggering event has occurred, (ii) there are no further contingencies or services to be provided with respect to that event, and (iii) the customer has no right to require refund of their payment.

The Company recognizes milestone payments as revenue when it is highly probable that any revenue recognized will not be subsequently reversed.

Annual payments are generally associated with services in the contract and are recognized over time as the customer receives the benefits of the services.

If necessary, the Company establishes and increases a contract asset as the revenue is recognized.

The Company will apply each method of revenue recognition consistently for like contracts and assess any revenue estimates periodically for cumulative adjustments.

Agreements for the performance of research and development services and cost reimbursements are recognized as revenue over time based on work performed.

Collaborative Arrangements

For arrangements that do not represent contracts with a customer, the Company analyzes the transaction to assess whether the arrangement involves joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities.

The Company had no such arrangements as of December 31, 2021.

Advertising Costs

The Company expenses advertising costs as incurred.

Research and Development Expenses

The Company recognizes R&D expenses as incurred.

These expenses consist of direct costs for R&D and R&D-related allocations of overhead costs such as facilities and information technology costs.

Costs incurred in connection with customer-funded activities are expensed as incurred.

Costs to acquire technologies that are utilized in R&D that have no alternative future use are expensed as incurred.

Prior to the commercialization of the Company's soybean product, the Company expensed all grain costs as R&D .

The Company expenses patent costs, including related legal costs, as incurred.

Costs to write and support the research for filing patents are recorded as R&D expenses in the statements of operations.

Costs to maintain, in-license, and defend patents are recorded as SG&A expenses in the statements of operations.

Stock-Based Compensation

The Company generally measures the fair value of employee and nonemployee stock-based awards on their grant date and records compensation expense on a straight-line basis over the related service period of the award, which is generally the vesting period.

The Company uses the Black-Scholes option pricing model to value its stock option awards.

The Company generally measures compensation expense for grants of restricted stock units using the Company's share price on the date of grant.

The Company uses a Monte Carlo simulation pricing model when estimating the fair values of performance stock units.

The Company estimates fair values and accounts for employee and nonemployee awards in a similar manner.

As a result, the Company may need to use data from other comparable public companies or alternative calculation methods to make predictive assumptions.

The Company estimates its future stock price volatility using the weighted-average historical volatility calculated from a group of comparable public companies over the expected term of the option.

The group of comparable public companies is determined by management on an annual basis.

When selecting a comparable company, management considers relevant factors including industry and strategy, size, maturity, and financial leverage.

Due to the limited historical experience of the Company's stock awards program, it has elected to account for forfeitures of awards as they occur.

If an award is forfeited prior to vesting, the associated reduction in expense is reflected net in stock-based compensation expense in that period.

Stock-based compensation expense is recorded in R&D and SG&A expenses in the Company's consolidated statements of operations.

Current income taxes are recorded based on statutory obligations for the current operating period for the jurisdictions in which the Company has operations.

Deferred taxes are provided on an asset and liability method, whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis.

Deferred tax assets are reduced by a valuation allowance when the Company believes it is more likely than not that some portion or all the deferred tax assets will not be realized.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Foreign Currency Transactions

Transactions in foreign currencies are translated at the exchange rates effective on the transaction dates.

Assets and liabilities denominated in foreign currencies are translated at the period-end exchange rate.

Foreign currency gains and losses are recognized in non-operating expenses in the consolidated statements of operations.

Foreign currency fluctuations affect the Company's foreign currency cash flows related primarily to payments to Cellectis.

The Company's principal foreign currency exposure is to the euro.

The Company does not hedge these exposures, and it does not believe that the current level of foreign currency risk is significant to its operations.

Net Loss Per Share

Due to the Company's net loss position for the years ended December 31, 2021, 2020, and 2019, all its outstanding stock options, restricted stock units, and performance stock units are considered anti-dilutive and excluded from the calculation of net loss per share.

Accordingly, the treasury method was not used in determining the number of anti-dilutive stock options and restricted stock units.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No.

2016-02, “Leases (Topic 842)”

(ASU 2016-02).

Under ASU 2016-02, an entity will be required to recognize assets and liabilities for the rights and obligations created by leases on the entity’s balance sheet for both finance and operating leases.

For leases with a term of 12 months or less, an entity can elect to not recognize lease assets and lease liabilities and expense the lease over a straight-line basis for the term of the lease.

Because the Company is an emerging growth company, the Company adopted the new standard on January 1, 2022, using the cumulative effect upon adoption approach.

In June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments –

Credit Losses (Topic 326)”

(ASU 2016-13).

ASU 2016-13 creates accounting requirements on how to account for credit losses on most financial assets and certain other instruments.

This will require the estimation of lifetime expected credit losses and corresponding recognition of allowance for losses on trade and other receivables, loans, and other instruments held at amortized cost.

The ASU requires certain recurring disclosures and is effective for annual periods, and interim periods within those annual periods, beginning on or after December 15, 2023.

The Company is analyzing the impact of this standard on its results of operations and financial position.

GOING CONCERN

The Company has incurred losses since its inception and its net loss was $ 29.2 million for the year ended December 31, 2021, and it used $ 18.8 million of cash for operating activities for the year ended December 31, 2021.

As of December 31, 2021, the Company had $ 14.4 million of cash, cash equivalents, and restricted cash.

The Company’s restricted cash is associated with its equipment financing leases and was $ 0.6 million as of December 31, 2021, with $ 0.5 million scheduled to be returned in December 2022.

Current liabilities were $ 4.9 million as of December 31, 2021.

In the aggregate, the Company received net proceeds of $ 10.0 million, after deducting approximately $ 0.9 million of underwriting discounts and estimated other offering expenses.

The Company has incurred losses since its inception and anticipates that it will continue to generate losses for the next several years.

and (b) product sales from its proprietary BioFactory production system;

However, additional capital may not be available on reasonable terms, if at all.

For example, based on the Company’s public float, as of the date of the filing of this Annual Report, the Company is only permitted to utilize a “shelf”

For so long as the Company's public float is less than $ 75,000,000 , it may not sell more than the equivalent of one-third of its public float during any 12 consecutive months pursuant to the baby shelf rules.

The Company’s cash, cash equivalents, and restricted cash as of December 31, 2021, considering its plan to continue to invest in the growth and scaling of its BioFactory production system and AIML capabilities and the $ 10.0 million of net proceeds from the February 2022 Offering, is sufficient to fund its operations into late 2022.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

Any of these events could significantly harm the Company's business, financial condition, and prospects.

FINANCIAL INSTRUMENTS AND FAIR VALUE

Financial Instruments Measured at Fair Value and Financial Statement Presentation

Financial instruments including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and all other current liabilities have carrying values that approximate fair value.

The Company measures short-term investments and commodity derivative contracts at fair value on a recurring basis.

The accounting guidance establishes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as of the measurement date as follows:

Fair values are based on unadjusted quoted prices in active trading markets for identical assets and liabilities.

Fair values are based on observable quoted prices other than those in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Fair values are based on at least one significant unobservable input for the asset or liability.

Fair Value Measurements and Financial Statement Presentation

As of December 31, 2021, the Company had no financial instruments measured at fair value.

The fair values of the Company's financial instruments measured at fair value and their respective levels in the fair value hierarchy as of December 31, 2020, were as follows:

December 31, 2020

Fair Values of Assets

Fair Values of Liabilities

Other items reported at fair value:

Short-term investments

Commodity derivative contracts

The non-current portion of the Company's financing lease obligations are also considered a financial instrument, which it measures at fair value for disclosure purposes on a non-recurring basis.

It is a Level 2 liability and had a fair value of $ 14.5 million as of December 31, 2021, and a fair value of $ 15.2 million as of December 31, 2020.

As of December 31, 2021, the Company held no short-term investments.

All of the Company's short-term investments as of December 31, 2020, were in corporate debt securities.

Commodity Price Risk

Under the Company's former go-to-market strategy for its soybean product line, it entered into hedging contracts to convert fixed price grain inventories and fixed price grain production agreements to floating prices, consistent with how the grain was sold.

These hedging contracts allowed the counterparty to fix their sales prices at various times as defined in the contract.

As a result of the continued wind-down of the soybean product line, the Company held no commodity derivative contracts as of December 31, 2021.

As of December 31, 2020, the Company held commodity contracts with a notional amount of $ 12.8 million.

The Company had no unrealized losses as of December 31, 2021, and $ 2.0 million of unrealized losses as of December 31, 2020.

RELATED-PARTY TRANSACTIONS

During the year ended December 31, 2020, Cellectis purchased 1,250,000 shares of common stock in the Company’s follow-on offering at the public offering price of $ 4.00 per share

The Company is party to several agreements that govern its relationship with Cellectis, some of which require the Company to make payments to Cellectis.

The Company incurred nominal management fees in 2021 and 2020 as services previously provided by Cellectis were internalized in 2019.

For the year ended December 31, 2019, management fees were $ 1.3 million.

Cellectis has also guaranteed the lease agreement for the Company's headquarters.

Cellectis’

guarantee of the Company's obligations under the lease will terminate at the end of the second consecutive calendar year in which the Company's tangible net worth exceeds $ 300 million.

TALEN ® is the Company's primary gene editing technology.

TALEN ® technology was invented by researchers at the University of Minnesota and Iowa State University and exclusively licensed to Cellectis.

The Company obtained an exclusive license for the TALEN ® technology for commercial use in plants from Cellectis.

The Company also licenses other technology from Cellectis.

Cellectis is entitled to royalties on any revenue the Company generates from sales of products less certain amounts as defined in the license agreement, royalties on certain cumulative revenue thresholds, and a percentage of any sublicense revenues.

The Company has incurred nominal license and royalty fees for the years ended December 31, 2021, 2020, and 2019.

STOCKHOLDERS’

Preferred Stock

Preferred stock of 50.0 million shares, with a $ 0.0001 par value, is authorized but unissued.

Follow-on Public Offerings

On February 23, 2022, the Company completed a follow-on offering of its common stock and warrants.

It issued 3,880,000 shares of its common stock, pre-funded warrants to purchase up to 3,880,000 shares of its common stock, and common warrants to purchase up to 7,760,000 shares of its common stock, all at a price of $ 1.41 per share.

In the aggregate, the Company received net proceeds of $ 10.0 million, after deducting approximately $ 0.9 million of underwriting discounts and estimated other offering expenses.

On October 20, 2020, the Company completed a follow-on offering of its common stock.

It sold an aggregate of 3,750,000 shares of common stock at a price of $ 4.00 per share.

In the aggregate, the Company received net proceeds from the follow-on offering of $ 14.0 million, after deducting $ 1.0 million of placement and agent fees and other offering expenses.

As part of the follow-on offering, Cellectis purchased 1,250,000 shares of common stock for a value of $ 5.0 million, the proceeds of which are included in the net proceeds of $ 14.0 million.

On September 21, 2021, the Company entered into an ATM Facility with Jefferies, who is acting as sole selling agent for the ATM Facility.

Under the terms of the ATM Facility, the Company may, from time-to-time, issue common stock having an aggregate offering value of up to $ 50.0 million.

At its discretion, the Company determines the timing and number of shares to be issued under the ATM Facility.

As of December 31, 2021, the Company had issued approximately 1.4 million shares of common stock under the ATM Facility.

The Company's balance of cash and cash equivalents includes $ 3.9 million of net proceeds from those sales, and another $ 0.2 million of cash was received in early January 2022 following the settlement of those sales with the broker.

As of the date of this filing, the Company has not issued any additional shares under the ATM Facility.

Share Repurchases

The Company repurchased $ 0.8 million of common stock in 2019.

STOCK-BASED COMPENSATION

The Company uses broad-based stock plans to attract and retain highly qualified officers and employees and to help ensure that management’s interests are aligned with those of its shareholders.

The Company has also granted equity-based awards to directors, nonemployees, and certain employees of Cellectis.

In December 2014, the Company adopted the Calyxt, Inc.

Equity Incentive Plan (2014 Plan), which allowed for the grant of stock options, and in June 2017, it adopted the 2017 Omnibus Plan (2017 Plan), which allowed for the grant of stock options, restricted stock units, performance stock units, and other types of equity awards.

On February 19, 2021, James Blome ceased serving as the Company's Chief Executive Officer.

The Company recorded a benefit to earnings from a $ 2.5 million recapture of non-cash stock compensation expense from the forfeiture of Mr.

Blome’s unvested stock options, restricted stock units, and performance stock units.

On July 16, 2021, the Company filed a Registration Statement on Form S-8 with the SEC which registered an additional 4,299,904 shares of common stock that may be issued or delivered and sold pursuant to the 2017 Plan and 600,000 shares of common stock that may be issued or delivered and sold pursuant to the Calyxt, Inc.

Employee Inducement Incentive Plan (the Inducement Plan).

Shares of common stock are issuable under the Inducement Plan upon the settlement of performance stock units which were granted to Mr.

Carr in July 2021 as a material inducement to accept employment as the Company's President and Chief Executive Officer.

As of December 31, 2021, 5,508,797 shares were registered and available for grant under effective registration statements, while 5,642,247 shares were available for grant in the form of stock options, restricted stock, restricted stock units, and performance stock units under the 2017 Plan.

Stock-based awards currently outstanding also include awards granted under the 2014 Plan and the Inducement Plan.

No further awards will be granted under either the 2014 Plan or the Inducement Plan.

Stock Options

The estimated fair values of stock options granted, and the assumptions used for the Black-Scholes option pricing model were as follows:

Year ended December 31,

Estimated fair values of stock options granted

Risk-free interest rate

0.6 % - 1.2 %

0.3 % - 1.7 %

1.7 % - 2.5 %

Expected volatility

80.1 % - 91.0 %

77.4 % - 81.2 %

52.6 % - 78.9 %

Expected term (in years)

The Company estimates the fair value of each option on the grant date, or other measurement dates if applicable, using a Black-Scholes option-pricing model, which requires it to make predictive assumptions regarding employee exercise behavior, future stock price volatility, and dividend yield.

The Company estimates the risk-free interest rate based on the United States Treasury zero-coupon yield curve at the date of grant for the expected term of the option.

The Company estimates its future stock price volatility using the historical volatility of comparable public companies over the expected term of the option.

The Company's expected term represents the period that options granted are expected to be outstanding determined using the simplified method.

The Company does not, nor does it expect to, pay dividends.

Option strike prices are set at 100 percent or more of the closing share price on the date of grant and generally vest over three to six years following the grant date.

Options generally expire 10 years after the date of grant.

Information on stock option activity is as follows:

Balance as of December 31, 2020

Forfeited or expired

Balance as of December 31, 2021

Stock-based compensation expense related to stock option awards was as follows:

Year ended December 31,

Stock-based compensation expenses

As of December 31, 2021, options outstanding and exercisable had no aggregate intrinsic value and the weighted average remaining contractual term was 5.6 years as of that date.

Net cash proceeds from the exercise of stock options less shares used for minimum withholding taxes and the intrinsic value of options exercised were as follows:

Year ended December 31,

Net cash proceeds

Intrinsic value of options exercised

As of December 31, 2021, unrecognized compensation expense related to non-vested stock options was $ 5.2 million.

This expense will be recognized over 24 months on average.

Restricted Stock Units

The Company grants restricted stock units which generally vest over three to five years after the date of grant.

Information on restricted stock unit activity is as follows:

Restricted Stock

Units Outstanding

Grant Date Fair

Unvested balance at December 31, 2020

Unvested balance at December 31, 2021

The total grant-date fair value of restricted stock unit awards that vested was as follows:

Year ended December 31,

Grant-date fair value

Information on the weighted average grant date fair value of restricted stock units issued was as follows:

Year ended December 31,

Weighted average grant date fair value

Stock-based compensation expense related to restricted stock units was as follows:

Year ended December 31,

Stock-based compensation expenses

As of December 31, 2021, unrecognized compensation expense related to restricted stock units was $ 1.7 million.

This expense will be recognized over 22 months on average.

The Company accounts for stock-based compensation awards granted to employees of Cellectis as deemed dividends.

The Company recorded deemed dividends as follows:

Year ended December 31,

Deemed dividends from grants to Cellectis employees

Performance Stock Units

From time-to-time, the Company issues performance stock units to certain individuals in management in order to align their objectives with stockholders of the Company.

The Company uses a Monte Carlo simulation pricing model when estimating the fair values of these awards.

In July 2021, the Company granted 600,000 performance stock units under the Inducement Plan to Mr.

The performance stock units will vest if the Company’s stock remains above three specified price levels for 30 calendar days over the three-year performance period.

The performance stock units will be settled in unrestricted shares of the Company's common stock on the vesting date.

The estimated fair values of performance stock units granted in 2021, and the assumptions used were as follows:

Estimated fair values of performance stock units granted:

At least $12 per share

At least $15 per share

At least $20 per share

Expected term (in years)

Expected volatility

Risk-free interest rate

The expected term represents the expected service period of the performance stock units granted.

Expected volatility was based on the historical volatility of the Company’s common stock over the expected term.

The Company estimates the risk-free interest rate based on the United States Treasury zero-coupon yield curve at the date of grant for the expected term of the option.

In June 2019, the Company granted 311,667 performance stock units under the 2017 Plan to three executive officers.

The performance stock units will vest at 50 percent, 100 percent, or 120 percent of the shares under the award at the end of a three-year performance period based upon increases in the value of the Company's common stock from the grant price of $ 12.48 .

The performance stock units will be settled in restricted stock upon vesting, with restrictions on transfer lapsing on the second anniversary of the restricted stock issuance date.

During 2021, the Company recognized a benefit from the forfeiture of 166,667 performance stock units held by Mr.

Blome, its former Chief Executive Officer.

The estimated fair values of performance stock units granted, and the assumptions used were as follows:

Estimated fair values of performance stock units granted

Expected term (in years)

Expected volatility

Risk-free interest rate

Stock-based compensation expense related to performance stock units is as follows:

Year ended December 31,

Stock-based compensation expenses

As of December 31, 2021, unrecognized compensation expense related to performance stock units was $ 1.5 million and will be recognized over 30 months .

Cellectis Equity Incentive Plan

Prior to 2018, Cellectis granted stock options to the Company's employees.

Compensation costs related to these grants have been recognized in the statements of operations with a corresponding credit to stockholders’

equity, representing the Cellectis’

capital contribution to the Company.

The fair value of each stock option was estimated at the grant date using the Black-Scholes option pricing model.

The Company recognized stock-based compensation expense related to its Cellectis’

Expenses in 2019 were immaterial and as of December 31, 2019, all expenses related to these awards had been recognized.

The following table reconciles the United States statutory income tax rate to the Company's effective income tax rate:

Year ended December 31,

United States statutory rate

State tax, net of federal benefit

Stock-based compensation

Officer compensation

Deferred rate change

Change in valuation allowance

Effective income tax rate

Deferred assets and liabilities consist of the following:

Net operating losses

Stock-based compensation

Financing lease obligations

Tax credit carry forwards

Derivative liability

Gross deferred tax assets

Less valuation allowance

Net deferred tax assets

Gross deferred tax liabilities

Net deferred tax asset or liability

The Company provides for a valuation allowance when it is more likely than not that it will not realize a portion of the deferred tax assets.

The Company has established a full valuation allowance for deferred tax assets described above due to the uncertainty that enough taxable income will be generated in the taxing jurisdiction to utilize the assets.

Therefore, the Company has not reflected any benefit of such deferred tax assets in the accompanying consolidated financial statements.

The Company has $ 228.5 million of tax loss carryforwards.

Of this amount, $ 55.2 million are state operating loss carryforwards and $ 173.3 million are federal operating loss carryforwards.

The federal carryforward periods are as follows:

$ 131.3 million do not expire and $ 41.9 million expire between 2032 and 2037 .

The state net operating losses will expire between 2027 and 2041 , with some amounts having indefinite carryover.

The Company also has federal and state R&D credit carryovers of $ 2.3 million and $ 1.1 million, which will expire between 2028 and 2041 .

The Company is subject to federal income taxes in the United States as well as various state and local jurisdictions.

The Company has reviewed its tax positions and concluded that no liability for uncertain tax positions is required as of December 31, 2021.

The Company will classify any future interest and penalties as a component of income tax expense if incurred.

The Company does not expect the amount of uncertain tax positions to change significantly in the next twelve months.

The Company's major taxing jurisdictions are in the United States, at both the federal and state levels.

The number of years open for examination varies depending on the tax jurisdiction but are generally from 3 to 5 years.

LEASES, OTHER COMMITMENTS, AND CONTINGENCIES

Litigation and Claims

The Company is not currently a party to any material pending legal proceeding.

The Company leases comprise of its headquarters facility, office equipment, and other items.

The Company's headquarters lease involved the sale of land and improvements to a third party who then constructed the facility.

This lease is considered a financing lease.

Sale-Leaseback of Headquarters and Lab Facility

In September 2017, the Company consummated a sale-leaseback transaction with a third party for its corporate headquarters and lab facility.

The Company's headquarters facility is comprised of a 44,000 square-foot office and lab building, the first pilot BioFactory production system, greenhouses, and outdoor research plots.

The Company was deemed the owner for accounting purposes.

In 2017, the Company received $ 7.0 million in connection with the sale of the land and uncompleted facility.

The lease commenced in May 2018.

Currently, the Company pays an annual base rent of $ 1.4 million.

The Company is also responsible for all operating costs and expenses associated with the property.

If the landlord decides to sell the property, the Company has a right of first refusal to purchase the property on the same terms offered to any third party.

Concurrent with entering the lease, Cellectis guaranteed all of the Company's obligations under the lease agreement.

Cellectis’

guarantee of the Company's obligations will terminate at the end of the second consecutive calendar year in which its tangible net worth exceeds $ 300 million, as determined in accordance with generally accepted accounting principles.

Sale-Leaseback of Equipment

The Company also has an equipment financing arrangement that is considered a financing lease.

As of December 31, 2021, this arrangement requires aggregate payments of $ 0.6 million over the next 21 months .

The Company was required to deposit cash and cash equivalent amounts equal to the future rent payments as required under the Company's equipment lease facility.

As of December 31, 2021, this restricted cash totaled $ 0.6 million, and a portion may be requested to be returned in each of December 2022 and December 2023.

Operating Leases

As a lessee, the Company leases a vehicle and office equipment under various operating leases.

Rent expense from all operating leases was as follows:

Year ended December 31,

Rent expense from operating leases

Noncancelable future lease commitments are as follows:

After fiscal 2027

Total noncancelable future lease commitments

EMPLOYEE BENEFIT PLAN

The Company provides a 401(k) defined contribution plan for all regular full-time employees who have completed two months of service.

The Company matches employee contributions up to certain amounts and those matching contributions vest immediately.

Year ended December 31,

Employee benefit plan expenses

SUPPLEMENTAL INFORMATION

Certain balance sheet amounts are as follows:

Accounts Receivable:

Accounts receivable

Receivables from growers

Allowance for doubtful accounts

Raw materials

Land, buildings, and equipment:

Land under capital lease

Buildings under capital lease

Leasehold improvements

Leasehold improvements under capital lease

Office furniture and equipment

Office furniture and equipment under capital lease

Computer equipment and software

Construction in progress

Total land, buildings, and equipment

Less accumulated depreciation and amortization

Certain statements of operations amounts are as follows:

Year Ended December 31,

Soybean grain

Year Ended December 31,

Stock-based compensation expense:

Research and development

Selling, general, and administrative

Year Ended December 31,

Interest, net:

Interest expense

Interest income

Certain statements of cash flows amounts are as follows:

Year Ended December 31,

Cash, cash equivalents, restricted cash, and short-term investments:

Cash and cash equivalents

Restricted cash

Non-current restricted cash

Cash, cash equivalents, and restricted cash

Short-term investments

Year Ended December 31,

Supplemental investing and financing transactions:

Receivable from Jefferies for shares issued under ATM Facility

Interest paid

Non-cash additions to land, buildings, and equipment

SEGMENT INFORMATION

The Company operates in a single reportable segment, the development and commercialization of products derived from plant cells.

The chief operating decision maker is the Company's Chief Executive Officer, who makes resource allocation decisions and assesses business performance based on financial information presented on a consolidated basis.

There are no segment managers who are held accountable by the chief operating decision maker, or anyone else, for operations, operating results, and planning for levels or components below the consolidated unit level.

Accordingly, the Company has determined that it operates in a single reportable segment, the development and commercialization of products derived from plant cells.

The Company's current commercial focus is North America, and all revenue in 2021 was recognized in the United States.

LONG-TERM DEBT

The Company's long-term debt was comprised of a $ 1.5 million promissory note pursuant to the Paycheck Protection Program (the PPP loan) established by the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) implemented by the U.S.

Small Business Administration (SBA).

The Company received the funds under the PPP loan on April 19, 2020.

Subject to certain conditions, the PPP loan and accrued interest were eligible to be forgiven in whole or in part by applying for forgiveness pursuant to the CARES Act and the Paycheck Protection Program.

In order to be eligible for forgiveness, the proceeds of the PPP loan were required to be applied to certain eligible expenses, including payroll costs, interest on certain mortgage obligations, rent payments on certain leases, and certain qualified utility payments, with not more than 40 percent of the amount applied to non-payroll costs.

The Company applied the proceeds from the PPP loan toward qualifying expenses.

On October 21, 2020, as modified December 29, 2020, the Company applied for forgiveness of the full principal amount and all accrued interest.

O n April 8, 2021, the Company was notified by the SBA that the full principal amount and all accrued interest of the PPP loan had been forgiven.

Accordingly, the Company recognized a gain upon the extinguishment of the PPP loan for $ 1.5 million during the second quarter of 2021.

RESTRUCTURING COSTS

On August 4, 2020, the Company approved a move to a streamlined go-to-market strategy for its soybean product line.

In the twelve months ended December 31, 2020, the Company recorded $ 0.7 million of restructuring costs for severance and other related payments, and also recorded a $ 0.9 million recapture benefit of non-cash stock compensation expense from the forfeiture or modification of unvested stock awards.

The Company did not incur any other material costs from the disposal of any assets or contractual terminations in the years ended December 31, 2021, and 2020.

As of December 31, 2020, all severance and transitional expenses were recorded, with $ 0.4 million to be paid during 2021.

As of December 31, 2021, all amounts related to the restructuring had been paid.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity