What changed in this filing

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Item 1. Financial Statements

2022-08-05 compared with 2022-05-09 · 196 added, 89 removed, 492 unchanged (37% of the section changed)

3 unchanged sentences

(In Thousands, Except Per Share Amounts)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Current assets:

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100,000 shares authorized;

65,304 shares and 65,109 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

65,494 shares and 65,109 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 558,147 552,083

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(In Thousands, Except Per Share Amounts)

Three Months Ended March 31,

Product revenue $ 30,690 $ 10,226

Research and development revenue ($ 245 and $ 132 from a related party)

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Product revenue ($ 143 , $ 0 , $ 143 and $ 0 from a

related party)

$ 34,645 $ 14,717 $ 65,335 $ 24,943

Research and development revenue ($ 0 , $ 344 ,

$ 245 and $ 476 from a related party)

3,761 10,736 8,411 18,542

Total revenues 38,406 25,453 73,746 43,485

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Interest income 140 206 182 382

Other expense, net ( 3 ) ( 88 )

Other income (expense), net ( 63 ) 23 ( 66 ) ( 63 )

Loss before income taxes ( 2,532 ) ( 4,257 ) ( 10,879 ) ( 13,322 )

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Capital Accumulated Deficit Total Stockholders' Equity

Three Months Ended March 31, 2022 Shares Amount

Three Months Ended June 30, 2022 Shares Amount

Balance as of April 1, 2022

65,304 $ 6 $ 554,683 $ ( 396,054 ) $ 158,635

Exercise of stock options 97 — 251 — 251

Release of stock awards 95 — — — —

Employee stock-based compensation — — 3,174 — 3,174

Non-employee stock-based compensation — — 57 — 57

Taxes paid related to net share settlement of equity awards ( 2 ) — ( 18 ) — ( 18 )

Net loss — — — ( 2,640 ) ( 2,640 )

Balance as of June 30, 2022

65,494 $ 6 $ 558,147 $ ( 398,694 ) $ 159,459

Common Stock Additional

Capital Accumulated Deficit Total Stockholders' Equity

Three Months Ended June 30, 2021 Shares Amount

Balance as of April 1, 2021

64,488 $ 6 $ 539,220 $ ( 375,487 ) $ 163,739

Exercise of stock options 95 — 455 — 455

Release of stock awards 42 — — — —

Employee stock-based compensation — — 2,779 — 2,779

Non-employee stock-based compensation — — 65 — 65

Taxes paid related to net share settlement of equity awards ( 2 ) — — — —

Net loss — — — ( 4,265 ) ( 4,265 )

Balance as of June 30, 2021

64,623 $ 6 $ 542,519 $ ( 379,752 ) $ 162,773

See accompanying notes to the unaudited condensed consolidated financial statements.

Codexis, Inc.

Condensed Consolidated Statements of Stockholders' Equity

(In Thousands)

Common Stock Additional

Capital Accumulated Deficit Total Stockholders' Equity

Six Months Ended June 30, 2022 Shares Amount

Balance as of January 1, 2022

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Net loss — — — ( 10,996 ) ( 10,996 )

Balance as of March 31, 2022

Balance as of June 30, 2022

65,494 $ 6 $ 558,147 $ ( 398,694 ) $ 159,459

1 unchanged sentence

Capital Accumulated Deficit Total Stockholders' Equity

Three Months Ended March 31, 2021 Shares Amount

Six Months Ended June 30, 2021 Shares Amount

Balance as of January 1, 2021

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Net loss — — — ( 13,333 ) ( 13,333 )

Balance as of March 31, 2021

Balance as of June 30, 2021

64,623 $ 6 $ 542,519 $ ( 379,752 ) $ 162,773

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(In Thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

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Stock-based compensation 7,069 5,531

Provision (recovery) for credit losses ( 307 ) —

Equity securities earned from research and development activities from a related party ( 245 ) ( 477 )

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Changes in operating assets and liabilities:

Financial assets, net ( 6,463 ) 1,103

Financial assets ( 10,962 ) ( 7,521 )

Inventories ( 558 ) ( 113 )

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Capital expenditures incurred but not yet paid $ 409 $ 338

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets as of March 31, 2022 and 2021 to the total of the same such amounts shown above in the unaudited condensed consolidated statements of cash flows:

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets as of June 30, 2022 and 2021 to the total of the same such amounts shown above in the unaudited condensed consolidated statements of cash flows:

Cash and cash equivalents $ 90,113 $ 129,506

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economy and other economies worldwide.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and may not be accurately predicted, including the duration and severity of the pandemic, the prevalence of more contagious and or virulent variants such as the Delta and Omicron variants, and the extent and severity of the impact on our customers, new information that may emerge concerning COVID-19, the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and may not be accurately predicted, including the duration and severity of the pandemic, the prevalence of more contagious and or virulent variants, and the extent and severity of the impact on our customers, new information that may emerge concerning COVID-19, the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets.

To date, we and our collaboration partners have been able to continue to supply our enzymes to our customers worldwide.

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Furthermore, our ability to provide future R&D services may continue to be impacted as a result of governmental orders ("Orders") and any disruptions in operations of our customers with whom we collaborate.

We believe that these disruptions have had a minimal impact on revenue for the three months ended March 31, 2022.

We believe that these disruptions have had a minimal impact on revenue for the three and six months ended June 30, 2022.

The extent to which the pandemic may impact our business operations and operating results will continue to remain highly dependent on future developments, which are uncertain and cannot be predicted with confidence.

Should these disruptions escalate in the future, they may negatively and materially impact our business.

results of operations and financial condition.

Basis of Presentation and Summary of Significant Accounting Policies

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The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements.

The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements for the three months ended March 31, 2022 and 2021, are consistent with those discussed in Note 2 to the audited consolidated financial statements in the Company’s 2021 Annual Report on Form 10-K and are updated below as necessary.

The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2022 and 2021, are consistent with those discussed in Note 2 to the audited consolidated financial statements in the Company’s 2021 Annual Report on Form 10-K and are updated below as necessary.

There have been no significant changes in our significant accounting policies or critical accounting estimates since December 31, 2021.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly our financial position as of March 31, 2022, results of our operations for the three months ended March 31, 2022 and 2021, changes in stockholders' equity for the three months ended March 31, 2022 and 2021, and cash flows for the three months ended March 31, 2022 and 2021.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly our financial position as of June 30, 2022, results of our operations for the three and six months ended June 30, 2022 and 2021, changes in stockholders' equity for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021.

The interim results are not necessarily indicative of the results for any future interim period or for the entire year.

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Recently issued accounting pronouncements not yet adopted

There have been no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2022 that are of significance or potential significance to us.

There have been no other recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 30, 2022, that are of significance or potential significance to us.

Revenue Recognition

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Segment information is as follows (in thousands):

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021

Performance Enzymes Novel Biotherapeutics Total Performance Enzymes Novel Biotherapeutics Total

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Primary geographical markets:

$ 2,553 $ 1,179 $ 3,732 $ 2,871 $ 2,058 $ 4,929

3,065 1,062 4,127 4,537 1,745 6,282

27,481 — 27,481 6,821 — 6,821

Americas $ 2,307 $ 1,307 $ 3,614 $ 3,703 $ 2,141 $ 5,844

EMEA 4,121 569 4,690 4,442 1,727 6,169

APAC 30,102 — 30,102 13,440 — 13,440

Total revenues $ 36,530 $ 1,876 $ 38,406 $ 21,585 $ 3,868 $ 25,453

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

Performance Enzymes Novel Biotherapeutics Total Performance Enzymes Novel Biotherapeutics Total

Major products and service:

Product revenue $ 65,335 $ — $ 65,335 $ 24,943 $ — $ 24,943

Research and development revenue 4,294 4,117 8,411 10,872 7,670 18,542

Total revenues $ 69,629 $ 4,117 $ 73,746 $ 35,815 $ 7,670 $ 43,485

Primary geographical markets:

Americas $ 4,861 $ 2,486 $ 7,347 $ 6,574 $ 4,199 $ 10,773

EMEA 7,186 1,631 8,817 8,979 3,471 12,450

APAC 57,582 — 57,582 20,262 — 20,262

Total revenues $ 69,629 $ 4,117 $ 73,746 $ 35,815 $ 7,670 $ 43,485

Contract Balances

The following table presents balances of contract assets, unbilled receivables, contract costs, and contract liabilities (in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Contract assets $ 11,287 $ 4,557

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deferred revenue $ 5,381 $ 6,335

We ha d no a sset impairment charges related to financial assets in the three months ended March 31, 2022 and 2021.

We had no asset impairment charges related to financial assets in the three and six months ended June 30, 2022 and 2021.

The increase in contract assets was primarily due to increases in product revenue from contracts subject to over time revenue recognition.

The increase in unbilled receivables was primarily due to the timing of billings.

The decrease in deferred revenue was primarily due to timing of recognition of revenue.

We recognized t he following revenues ( in thousands):

Three Months Ended March 31,

The nominal decrease in unbilled receivables was primari ly due to the timing of billings.

T he decrease in deferred revenue was primarily due to timing of recognition of revenue.

We recognized the following revenues (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Revenue recognized in the period for:

2022 2021 2022 2021

Amounts included in contract liabilities at the beginning of the period:

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The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting periods.

The estimated revenue does not include contracts with original durations of one year or less, amounts of variable consideration attributable to royalties, or contract renewals that are unexercised as of March 31, 2022.

Th e balances in the table below are partially based on judgments involved in estimating future orders from customers subject to the exercise of material rights pursuant to respective contracts as of March 31, 2022 (in thousands):

The balances in the table below are partially based on judgments involved in estimating future orders from customers subject to the exercise of material rights pursuant to respective contracts as of June 30, 2022 (in thousands):

Remainder of 2022

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The following shares were not considered in the computation of diluted net loss per share because their effect was anti-dilutive (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Shares issuable under the Equity Incentive Plan 5,792 5,366 5,792 5,366

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In July 2021, we converted the non-marketable debt security with a carrying value of $ 1.3 million into 207,070 shares of Series B-2 preferred stock of Arzeda Corp.

During the three months ended March 31, 2021, we recognized $ 0.1 million in interest income from interest earned on our investment in this debt security.

There were no investments in non-marketable debt securities as of March 31, 2022 and December 31, 2021.

During the three and six months ended June 30, 2021, we recognized $ 0.2 million and $ 0.3 million, respectively, in interest income from interest earned on our investment in this debt security.

There were no investments in non-marketable debt securities as of June 30, 2022 and December 31, 2021.

Non-Marketable Equity Securities

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(“seqWell”), a privately held biotechnology company, pursuant to which we purchased 1,000,000 shares of seqWell's Series C preferred stock for $ 5.0 million.

Our non-marketable equity securities are investments in privately held companies without readily determinable market value and primarily relate to our investments in Molecular Assemblies, Inc.

(“MAI“), Arzeda and seqWell.

Our non-marketable equity securities are investments in privately held companies without readily determinable market value.

These investments are accounted for under the measurement alternative and are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes for identical or similar securities of the same issuer.

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We adjust the carrying value of non-marketable equity securities which have been remeasured during the period and recognize resulting gains or losses as a component of other income (expense), net in the unaudited condensed consolidated statements of operations.

There was no remeasurement event for our investments in MAI, Arzeda and seqWell that occurred during the three months ended March 31, 2022 and 2021.

We recognized no realized gains or losses during the three months ended March 31, 2022 and 2021.

There was no remeasurement event for our investments in non-marketable equity securities that occurred during the three and six months ended June 30, 2022 and 2021.

We recognized no realized gains or losses during the three and six months ended June 30, 2022 and 2021.

The following table presents the carrying value of our non-marketable equity securities (in thousands):

March 31, 2022 December 31, 2021

MAI $ 12,713 $ 12,713

June 30, 2022 December 31, 2021

Molecular Assemblies, Inc.

$ 12,713 $ 12,713

seqWell 5,000 —

Arzeda 1,289 1,289

Other investments in non-marketable equity securities 300 —

Total non-marketable equity securities $ 19,302 $ 14,002

Fair Value Measurements

The following tables present the financial instruments that were measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021 by level within the fair value hierarchy (in thousands):

March 31, 2022

The following tables present the financial instruments that were measured at fair value on a recurring basis within the fair value hierarchy (in thousands):

June 30, 2022

Level 1 Level 2 Level 3 Total

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Money market funds $ 86,095 $ — $ — $ 86,095

During the three months ended March 31, 2022 and 2021, we did no t recognize any significant credit losses no r other-than-temporary impairment losses on non-marketable securities.

During the three and six months ended June 30, 2022 and 2021, we did no t recognize any significant credit losses no r other-than-temporary impairment losses on non-marketable securities.

Balance Sheets Details

Cash Equivalents

Cash equivalents as of March 31, 2022 and December 31, 2021, consisted of the following (in thousands):

March 31, 2022 December 31, 2021

Cash equivalents as of June 30, 2022 and December 31, 2021, consisted of the following (in thousands):

June 30, 2022 December 31, 2021

Adjusted Cost Estimated Fair Value Adjusted Cost Estimated Fair Value

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$ 67,218 $ 67,218 $ 86,095 $ 86,095

(1) Money market funds are classified in cash and cash equivalents on our unaudited condensed consolidated balance sheets.

(1) Money market funds are classified in cash and cash equivalents on our unaudited consolidated balance sheets.

Average contractual maturities (in days) is not applicable.

As of March 31, 2022, the total cash and cash equivalents balance of $ 94.3 million consisted of money market funds of $ 72.1 million and cash of $ 22.2 million held with major financial institutions.

As of June 30, 2022, the total cash and cash equivalents balance of $ 90.1 million consisted of money market funds of $ 67.2 million and cash of $ 22.9 million held with major financial institutions.

As of December 31, 2021, the total cash and cash equivalents balance of $ 116.8 million consisted of money market funds of $ 86.1 million and cash of $ 30.7 million held with major financial institutions.

Inventories consisted of the following (in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Raw materials $ 49 $ 49

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Inventories $ 1,718 $ 1,160

Inventories are recorded net of reserves o f $ 1.4 million a s of March 31, 2022 and December 31, 2021.

Inventories are recorded net of reserves of $ 1.4 million as of June 30, 2022 and December 31, 2021.

Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Laboratory equipment $ 38,378 $ 33,101

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Depreciation expense included in both research and development expenses and selling, general and administrative expenses in the unaudited condensed consolidated statements of operations was as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Depreciation expense $ 1,341 $ 716 $ 2,556 $ 1,375

Goodwill had a carrying value of $ 3.2 million as of March 31, 2022 and December 31, 2021.

Goodwill had a carrying value of $ 3.2 million as of June 30, 2022 and December 31, 2021.

Other Accrued Liabilities

Other accrued liabilities consisted of the following (in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Accrued purchases $ 8,292 $ 6,755

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Achievement below the threshold level would result in no shares being eligible to vest in respect of the PSUs and PBOs.

In the first quarter of 2022, we awarded PSUs ("2022 PSUs") and PBOs ("2022 PBOs"), each of which commence vesting based upon the achievement of various weighted performance goals, including total revenues, research and development revenue, product revenue excluding sales of CDX-616 to Pfizer for use in the manufacture of a critical intermediate for its proprietary active pharmaceutical ingredient, nirmatrelvir, which Pfizer markets, sells and distributes, in combination with the active pharmaceutical ingredient ritonavir, as its PAXLOVID™ product, operating expenses excluding cost of product revenue, strategic performance enzyme deliverables, strategic biotherapeutics deliverables, organization and infrastructure upgrades, corporate developments, and significant events that can be publicly announced.

As of March 31, 2022, we estimated that the 2022 PSUs and 2022 PBOs performance goals would be achieved at 100 % and 50 % of the target level, respectively, and recognized stock-based compensation expenses accordingly.

In the first quarter of 2022, we awarded PSUs ("2022 PSUs") and PBOs ("2022 PBOs"), each of which commence vesting based upon the achievement of various weighted performance goals, including total revenues, research and development revenue, product revenue (excluding sales of CDX-616 to Pfizer for its use in the manufacture of a critical intermediate for nirmatrelvir, an active pharmaceutical ingredient (API) in its PAXLOVID™ product), operating expenses excluding cost of product revenue, strategic performance enzyme deliverables, strategic biotherapeutics deliverables, organization and infrastructure upgrades, corporate developments, and significant events that can be publicly announced, subject to the recipient's continued service.

As of June 30, 2022, we estimated that the 2022 PSUs and 2022 PBOs performance goals would be achieved at 92 % and 46 % of the target level, respectively, and recognized stock-based compensation expenses accordingly.

In 2021, we awarded PSUs ("2021 PSUs") and PBOs ("2021 PBOs"), each of which commence vesting based upon the achievement of various weighted performance goals, including total revenues, product revenue, performance enzymes pipeline advancements, biotherapeutics pipeline advancements, organization and infrastructure upgrades, and significant events that can be publicly announced.

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Stock-based compensation expense is included in the unaudited condensed consolidated statements of operations as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Research and development $ 959 $ 597 $ 1,895 $ 1,074

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The following table presents total stock-based compensation expense by security type included in the unaudited condensed consolidated statements of operations (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Stock options $ 794 $ 682 $ 1,600 $ 1,347

RSUs and RSAs 1,333 690 2,495 1,232

PSUs 442 573 1,314 1,043

PBOs 662 899 1,660 1,909

Total $ 3,231 $ 2,844 $ 7,069 $ 5,531

As of March 31, 2022, unr ecognized stock-based compensation expense, net of expected forfeitures, was $ 6.6 million related to unvested stock options, $ 9.2 million related to unvested RSUs and RSAs, $ 2.5 million related to unvested PSUs, and $ 4.5 million related to unvested PBOs based on current estimates of the level of achievement.

Stock-based compensation expense for these awards will be recognized through the year 2026.

As of June 30, 2022, unrecognized stock-based compensation expense, net of expected forfeitures, was $ 5.8 million related to unvested stock options, $ 8.4 million related to unvested RSUs and RSAs, $ 1.8 million related to unvested PSUs, and $ 3.5 million related to unvested PBOs based on current estimates of the level of achievement.

Stock-based compensation ex pense for these awards will be recognized through 2026.

Capital Stock

Exercise of Options

For the three months ended March 31, 2022 and March 31, 2021, we issued 77,600 and 118,437 shares, respectively, upon option exercises at a weighted-average exercise price of $ 2.33 and $ 10.33 per share, respectively, with net cash proceeds of $ 0.2 million and $ 1.2 million, respectivel y.

For the six months ended June 30, 2022 and June 30, 2021, we issued 174,600 and 212,631 shares, respectively, upon option exercises at a weighted-average exercise price of $ 2.47 and $ 8.03 per share, respectively, with net cash proceeds of $ 0.4 million and $ 1.7 million, respectively.

Equity Distribution Agreement

We filed a Registration Statement on Form S-3 with the SEC, under which we may sell common stock, preferred stock, debt securities, warrants, purchase contracts, and units from time to time in one or more offerings.

We filed a shelf Registration Statement on Form S-3 with the SEC, under which we may sell common stock, preferred stock, debt securities, warrants, purchase contracts, and units from time to time in one or more offerings.

The registration statement became effective on May 7, 2021.

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With the exception of certain expenses, we will pay PSC up to 8 % of the gross sales price of the shares sold pursuant to the EDA for a combined amount of commission and reimbursement of PSC's expenses and fees.

During the three months ended March 31, 2022, no shares of our common stock were issued pursuant to the EDA.

As of March 31, 2022, $ 50.0 million worth of shares remained available for sale under the EDA.

During the three and six months ended June 30, 2022, no shares of our common stock were issued pursuant to the EDA.

As of June 30, 2022, $ 50.0 million worth of shares remained available for sale under the EDA.

Commitments and Contingencies

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Pursuant to the terms of the RWC Lease, we exercised our right to deliver a letter of credit in lieu of a security deposit.

The letter of credit is collateralized by deposit balances held by the bank in the amount of $ 1.1 million a s of March 31, 2022 and December 31, 2021, and are recorded as non-current restricted cash on the unaudited condensed consolidated balance sheets.

The letter of credit is collateralized by deposit balances held by the bank in the amount of $ 1.1 million as of June 30, 2022 and December 31, 2021, and are recorded as non-current restricted cash on the unaudited condensed consolidated balance sheets.

In January 2021, we entered into a lease agreement with ARE-San Francisco No.

63, LLC (“ARE”) to lease a portion of a facility comprising approximately 36,593 rentable square feet in San Carlos, California to serve as additional office and research and development laboratory space (the “San Carlos Space”).

63, LLC (“ARE”) to lease a portion of a facility consisted of approximately 36,593 rentable square feet in San Carlos, California to serve as additional office and research and development laboratory space (the “San Carlos Space”).

The terms include an initial annualized base rent of $ 2.5 million, subject to scheduled 3 % annual rent increases, an annualized additional allowance payment of $ 0.4 million, plus certain operating expenses.

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We entered into a short-term office lease in San Carlos, California during the second quarter of 2021 and this lease expired in April 2022.

Our remaining future commitment pursuant to this lease is nominal as of March 31, 2022.

Our remaining future commitment pursuant to this lease is nil as of June 30, 2022.

We are required to restore certain areas of the Redwood City and San Carlos facilities that we are renting to their original form.

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We review the estimated obligation each reporting period and make adjustments if our estimates change.

We recorded asset retirement obligations of $ 0.5 million an d $ 0.4 million as of March 31, 2022 and December 31, 2021, respectively, which are included in other liabilities on the unaudited condensed consolidated balance sheets.

Accretion expense related to our asset retirement obligations was nominal in the three months ended March 31, 2022 and 2021.

We recorded asset retirement obligations of 0.5 million an d $ 0.4 million as of June 30, 2022 and December 31, 2021, respectively, which are included in other liabilities on the unaudited condensed consolidated balance sheets.

Accretion expense related to our asset retirement obligations was nominal in the three and six months ended June 30, 2022 and 2021.

Lease and other information

Lease costs, amounts included in measurement of lease obligations and other information related to non-cancellable operating leases and finance leases were as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Finance lease costs $ — $ 27 $ 18 $ 53

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Weighted-average discount rate 5.4 %

Three Months Ended March 31,

Six Months Ended June 30,

Operating cash flows from operating leases $ 2,817 $ 2,093

As of March 31, 2022, our maturity analysis of annual undiscounted cash flows of the non-cancellable operating leases are as follows (in thousands):

As of June 30, 2022, our maturity analysis of annual undiscounted cash flows of the non-cancellable operating leases are as follows (in thousands):

Years ending December 31, Operating Leases

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Lease obligations $ 46,109

Reconciliation of operating lease liabilities as shown within the unaudited condensed consolidated balance sheets

Current portion of lease obligations - Operating leases $ 5,103

Long-term lease obligations - Operating leases 41,006

Total operating lease liabilities $ 46,109

Other Commitments

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The right to take draws on the Term Debt expired on December 31, 2021.

On October 1, 2024, loans drawn under the Revolving Line of Credit terminate.

On October 1, 2024, loans drawn, if any, under the Revolving Line of Credit terminate.

Advances made under the Revolving Line of Credit bear interest at a variable annual rate equal to the greater of (i) 4.25 % or (ii) the sum of (A) the prime rate plus (B) 1.00 %.

As of March 31, 2022 and December 31, 2021, we have not drawn from the Credit Facility.

As of June 30, 2022 and December 31, 2021, we have not drawn from the Credit Facility.

Our obligations under the Credit Facility are secured by a lien on substantially all of our personal property other than our intellectual property.

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A failure to comply with these covenants could permit the lender to exercise remedies against us and the collateral securing the Credit Facility, including foreclosure of our properties securing the Credit Facilities and our cash.

As of March 31, 2022, we were in compliance with the covenants for the Credit Facility.

As of June 30, 2022, we were in compliance with the covenants for the Credit Facility.

Legal Proceedings

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In addition to our initial equity investment and the shares we have received under the MAI Agreement, in April 2021, we purchased an additional 1,000,000 shares of MAI's Series A preferred stock for $ 0.6 million and in September 2021, we purchased 9,198,423 shares of MAI's Series B preferred stock for $ 7.0 million.

We recognize d $ 0.2 million and $ 0.1 million in research and development revenue from transactions with MAI in the three months ended March 31, 2022 and 2021, respectively.

We received nil shares and 1,428,342 shares of MAI's Series A and B preferred stock from research and development services we provided to MAI in the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, we have 16,705,320 shares of MAI's Series A and B preferred stock that we have earned or purchased since executing the Stock Purchase Agreement with MAI.

The carrying value of our investment in MAI Series A and B preferred stock was $ 12.7 million as of March 31, 2022 and December 31, 2021.

We had nil and $ 0.2 million in deferred revenue as of March 31, 2022 and December 31, 2021 respectively.

Payment for the services rendered was received in the form of additional shares of Series A and Series B preferred stock.

We recognized nil and $ 0.2 million i n research and development revenue from transactions with MAI in the three and six months ended June 30, 2022 , respectively, and we recognized $ 0.3 million and $ 0.5 million in research and development service transactions with MAI in the three and six months ended June 30, 2021, respectively .

We recei ved nil shares of MAI's Series A and B preferred stock from research and development services we provided to MAI in the three and six months ended June 30, 2022 , and we received 714,171 and 1,428,342 shares of MAI's Series A and B preferred stock from research and development services we provided to MAI in the three and six months ended June 30, 2021, respectively.

As of June 30, 2022 we have 16,705,320 shares of MAI's Series A and B preferred stock that we have earned or purchased since executing the Stock Purchase Agreement with MAI.

During the second quarter of 2022, we sold certain enzyme products to MAI pursuant to the purchase order we received from MAI during the quarter.

We recognized $ 0.1 million in product revenue from transactions with MAI in the three and six months ended June 30, 2022, respectively.

The carrying value of our investment in MAI Series A and B preferred stock was $ 12.7 million as of June 30, 2022 and December 31, 2021.

We h ad nil and $ 0.2 million in deferred revenue from MAI as of June 30, 2022 and December 31, 2021 respectively.

Payment for the services rendered was received in the form of additional shares of MAI's Series A and Series B preferred stock.

On August 2, 2022, we announced that we had executed a Commercial License and Enzyme Supply Agreement with MAI ( “MAI Supply Agreement”) that will enable MAI to utilize an evolved terminal deoxynucleotidyl transferase (TdT) enzyme in MAI’s Fully Enzymatic Synthesis™ (or FES™) technology.

Segment, Geographical and Other Revenue Information

7 unchanged sentences

Our CODM does not review asset information by business segment in assessing performance or allocating resources, and accordingly, we do not report asset information by business segment.

All of our long lived assets are located in the United States.

Factors considered in determining the two reportable segments of the Company include the nature of business activities, the management structure directly accountable to our CODM for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors.

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The following table provides financial information by our reportable business segments along with a reconciliation to consolidated loss before income taxes (in thousands):

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021

Performance Enzymes Novel Biotherapeutics Total Performance Enzymes Novel Biotherapeutics Total

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Loss before income taxes $ ( 2,532 ) $ ( 4,257 )

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

Performance Enzymes Novel Biotherapeutics Total Performance Enzymes Novel Biotherapeutics Total

Product revenue $ 65,335 $ — $ 65,335 $ 24,943 $ — $ 24,943

Research and development revenue 4,294 4,117 8,411 10,872 7,670 18,542

Total revenues 69,629 4,117 73,746 35,815 7,670 43,485

Costs and operating expenses:

Cost of product revenue 19,791 — 19,791 8,536 — 8,536

Research and development (1)

13,051 23,424 36,475 11,502 11,799 23,301

Selling, general and administrative (1)

7,416 1,400 8,816 5,988 1,221 7,209

Total segment costs and operating expenses 40,258 24,824 65,082 26,026 13,020 39,046

Income (loss) from operations $ 29,371 $ ( 20,707 ) 8,664 $ 9,789 $ ( 5,350 ) 4,439

Corporate costs (2)

( 16,994 ) ( 16,335 )

Unallocated depreciation and amortization ( 2,549 ) ( 1,426 )

Loss before income taxes $ ( 10,879 ) $ ( 13,322 )

(1) Research and development expenses and selling, general and administrative expenses exclude depreciation and amortization of finance leases.

(2) Corporate costs include unallocated selling, general and administrative expenses, interest income, and other expense, net.

(2) Corporate costs include unallocated selling, general and administrative expenses, interest income, and other income (expense), net.

The following table provides stock-based compensation expense included in income (loss) from operations (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Performance Enzymes Novel Biotherapeutics Corporate cost Total Performance Enzymes Novel Biotherapeutics Corporate cost Total

Stock-based compensation $ 1,283 $ 358 $ 1,590 $ 3,231 $ 1,115 $ 257 $ 1,472 $ 2,844

Six Months Ended June 30,

Performance Enzymes Novel Biotherapeutics Corporate cost Total Performance Enzymes Novel Biotherapeutics Corporate cost Total

Stock-based compensation $ 2,770 $ 768 $ 3,531 $ 7,069 $ 2,109 $ 495 $ 2,927 $ 5,531

Significant Customers

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Percentage of Total Revenues for the

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Customer A 62 % 15 % 62 % 10 %

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Percentage of Accounts Receivables as of

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Customer A 67 % 62 %

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Geographic revenues are identified by the location of the customer and consist of the following (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Americas $ 3,614 $ 5,844 $ 7,347 $ 10,773

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Identifiable long-lived assets by location was as follows (in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

United States $ 65,400 $ 65,457

Identifiable goodwill by reporting unit was as follows (in thousands):

As of March 31, 2022 and December 31, 2021

As of June 30, 2022 and December 31, 2021

Performance Enzymes Novel Biotherapeutics Total

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The following table summarizes the financial assets allowance for credit losses (in thousands):

Three Months Ended March 31,

Three and Six Months Ended June 30,

Balance at beginning of period $ 416 $ 74

Provision for credit losses — —

Write-offs ( 257 ) —

Adjustment to the existing allowance ( 50 ) —

Balance at end of period $ 109 $ 74

The following tables summarize accounts receivable by aging category (in thousands):

March 31, 2022

June 30, 2022

Current 31-60 Days 61-90 Days 91 Days and over Total over 31 Days Total balance

3 unchanged sentences

Accounts receivable $ 22,697 $ 536 $ 569 $ 1,151 $ 2,256 $ 24,953

Subsequent Events

On July 14, 2022, the Company entered into an Enzyme Supply Agreement, effective as of October 30, 2021, with Pfizer Inc.

(the “Pfizer Supply Agreement”), covering the manufacture, sale and purchase of the Company's proprietary enzyme product, CDX-616, for use by Pfizer in the manufacture of nirmatrelvir, an API in its PAXLOVID™ (nirmatrelvir tablets;

ritonavir tablets) antiviral therapeutic, which is currently authorized for emergency use by the FDA for the treatment of mild to moderate COVID-19.

In addition to defining terms under which Pfizer has and will continue to purchase quantities of CDX-616 from the Company, Pfizer will, pursuant to the terms of the Pfizer Supply Agreement, pay Codexis a retainer fee of $ 25.9 million which we received in August 2022 , which is being paid in lieu of certain existing orders for delivery of the CDX-616 enzyme product in early 2023, which have been cancelled.

The retainer fee is creditable against future orders of CDX-616 used to manufacture PAXLOVID™ and for fees associated with any new development and licensing agreements with Pfizer entered into prior to December 31, 2022.

On July 18, 2022, Codexis' Board of Directors appointed Dr.

Stephen Dilly, a current Board member, as the Company's new president and chief executive officer, effective August 9, 2022.

Dilly succeeds John Nicols, our current president and chief executive officer, who notified the Board of his intention to retire from these roles effective August 8, 2022.

In connection with the appointment of Dr.

Dilly as president and chief executive officer, the Board reconstituted its Audit Committee and appointed Byron Dorgan, Chair of the Board, as a member of the Audit Committee to fill the seat previously held by Dr.

On July 18, 2022, the Company and Mr.

Nicols entered into a Transition and Separation Agreement, pursuant to which Mr.

Nicols will continue to serve as the Company's president and chief executive officer through August 8, 2022, at which time he will retire from the Company and will be employed thereafter as a strategic advisor through August 7, 2024, unless Mr.

Nicols' employment terminate sooner in accordance with the Transition and Separation Agreement.

The Transition and Separation Agreement provides for Mr.

Nicols to continue to serve as a member of the Board through the 2023 annual meeting of the Company’s stockholders.

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-Q

Item 1. Financial Statements