false0001779020 --12-31Q30001779020dnmr:LiborMarketIndexRateMember2021-09-300001779020us-gaap:LandAndLandImprovementsMember2020-12-310001779020dnmr:CashSettledOptionsMember2020-10-012020-12-310001779020us-gaap:RetainedEarningsMember2020-12-310001779020dnmr:ResearchAndDevelopmentMember2021-09-300001779020us-gaap:CommonStockMember2021-06-300001779020us-gaap:AdditionalPaidInCapitalMember2019-12-310001779020dnmr:LegacyDanimerWarrantsMember2020-12-310001779020dnmr:PrivateWarrantsMember2020-07-012020-09-300001779020us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-09-300001779020dnmr:LegacyDanimerWarrantsMember2021-07-012021-09-300001779020us-gaap:CommonStockMember2021-01-012021-09-300001779020dnmr:NMTCNotesMember2020-12-310001779020dnmr:TwoThousandAndTwentyIncentivePlanMember2021-03-100001779020us-gaap:LondonInterbankOfferedRateLIBORMemberdnmr:TwentyNineteenTermLoanMembersrt:MaximumMember2020-07-012020-07-310001779020dnmr:PublicWarrantsMember2020-12-3100017790202020-04-012020-06-300001779020dnmr:PublicWarrantsMember2021-04-012021-06-300001779020us-gaap:MeasurementInputRiskFreeInterestRateMembersrt:MaximumMember2021-01-012021-09-3000017790202021-08-110001779020dnmr:NovomerIncMember2021-08-112021-08-110001779020us-gaap:RetainedEarningsMember2020-01-012020-09-300001779020dnmr:ThirdAnniversaryMember2021-09-300001779020us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001779020us-gaap:MeasurementInputSharePriceMember2021-09-300001779020us-gaap:CommonStockMember2021-07-012021-09-300001779020dnmr:EbitdaMetricMembersrt:MaximumMemberus-gaap:PerformanceSharesMember2021-07-232021-07-230001779020dnmr:TwentyNineteenTermLoanMember2019-03-310001779020us-gaap:RetainedEarningsMember2020-07-012020-09-300001779020srt:MaximumMemberus-gaap:OfficeEquipmentMember2021-01-012021-09-300001779020us-gaap:MeasurementInputRiskFreeInterestRateMember2021-09-300001779020srt:MinimumMemberus-gaap:MeasurementInputExpectedTermMember2021-01-012021-09-300001779020dnmr:LegacyDanimerWarrantsMember2020-07-012020-09-300001779020us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001779020dnmr:VehicleAndEquipmentNotesMember2021-09-300001779020dnmr:RevolvingLoansMemberus-gaap:BaseRateMember2021-04-292021-04-290001779020dnmr:ResearchAndDevelopmentMember2020-01-012020-03-310001779020us-gaap:MachineryAndEquipmentMember2021-09-300001779020srt:MinimumMemberdnmr:TwoThousandNineteenSubordinatedTermLoanMember2021-03-180001779020us-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300001779020us-gaap:LondonInterbankOfferedRateLIBORMemberdnmr:TwentyNineteenTermLoanMembersrt:MinimumMember2020-07-012020-07-310001779020us-gaap:ConstructionInProgressMember2020-12-310001779020us-gaap:OfficeEquipmentMember2020-12-310001779020dnmr:LegacyDanimerOptionsMember2020-01-012020-09-3000017790202021-01-012021-09-300001779020dnmr:ResearchAndDevelopmentMember2021-04-012021-06-3000017790202021-07-012021-09-300001779020us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-3000017790202021-06-3000017790202021-04-012021-06-300001779020us-gaap:VehiclesMember2021-09-300001779020dnmr:TwoThousandNineteenSubordinatedTermLoanMember2021-09-300001779020us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300001779020dnmr:TwentyNineteenTermLoanMember2021-09-300001779020dnmr:JulyTwentyThreeTwoThousandAndTwentyOneMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2021-09-300001779020dnmr:ResearchAndDevelopmentMember2020-07-012020-09-300001779020us-gaap:BuildingMembersrt:MinimumMember2021-01-012021-09-300001779020dnmr:LegacyDanimerOptionsMember2021-01-012021-06-300001779020dnmr:JulyTwentyThreeTwoThousandAndTwentyOneMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2021-09-300001779020us-gaap:PerformanceSharesMember2021-09-300001779020us-gaap:MeasurementInputRiskFreeInterestRateMembersrt:MinimumMember2021-01-012021-09-300001779020dnmr:PublicWarrantsMember2021-06-300001779020dnmr:LegacyDanimerWarrantsMember2020-01-012020-12-310001779020dnmr:PrivateWarrantsMember2021-04-012021-06-300001779020us-gaap:MeasurementInputExpectedTermMember2021-09-300001779020us-gaap:RetainedEarningsMember2020-09-300001779020dnmr:JulyTwentyThreeTwoThousandAndTwentyOneMemberdnmr:ShareBasedCompensationAwardTrancheFiveMember2021-01-012021-09-300001779020dnmr:AssetBackedLendingArrangementMember2020-12-310001779020dnmr:TwoThousandNineteenSubordinatedTermLoanMember2021-01-012021-03-310001779020dnmr:ResearchAndDevelopmentMember2021-01-012021-03-310001779020srt:MinimumMemberus-gaap:PatentsMember2021-01-012021-09-300001779020us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001779020us-gaap:CommonStockMember2020-07-012020-09-3000017790202020-01-012020-12-310001779020us-gaap:CostOfSalesMember2020-01-012020-09-300001779020dnmr:PaycheckProtectionProgramLoanMember2021-04-012021-06-300001779020dnmr:TwoThousandAndTwentyIncentivePlanMember2020-12-310001779020dnmr:NovomerTechnologyMember2021-01-012021-09-300001779020dnmr:MortgageNotesMember2020-12-310001779020us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001779020dnmr:SecondAnniversaryMember2021-09-300001779020us-gaap:OfficeEquipmentMember2021-09-300001779020us-gaap:ShareBasedCompensationAwardTrancheThreeMemberdnmr:AugustTwelveTwoThousandAndTwentyOneMember2021-09-3000017790202020-07-012020-09-300001779020us-gaap:PrimeRateMemberdnmr:TwoThousandNineteenSubordinatedTermLoanMember2019-03-012019-03-310001779020dnmr:PaycheckProtectionProgramLoanMember2021-09-300001779020srt:MaximumMemberus-gaap:MachineryAndEquipmentMember2021-01-012021-09-300001779020us-gaap:CostOfSalesMember2020-07-012020-09-300001779020us-gaap:RestrictedStockMember2021-07-012021-09-300001779020dnmr:PublicWarrantsMember2021-03-310001779020srt:MaximumMemberus-gaap:VehiclesMember2021-01-012021-09-300001779020us-gaap:RetainedEarningsMember2019-12-310001779020us-gaap:PerformanceSharesMemberdnmr:ReturnOnEquityMetricMember2021-07-232021-07-230001779020dnmr:TwentyNineteenTermLoanMember2020-12-310001779020dnmr:NovomerIncMember2021-08-110001779020us-gaap:LandAndLandImprovementsMember2021-01-012021-09-3000017790202021-09-300001779020dnmr:PublicWarrantsMember2021-01-012021-09-300001779020us-gaap:MeasurementInputExercisePriceMember2020-12-310001779020srt:MaximumMemberus-gaap:MeasurementInputExpectedTermMember2021-01-012021-09-300001779020dnmr:PublicWarrantsMember2021-09-300001779020us-gaap:MeasurementInputPriceVolatilityMember2020-01-012020-12-310001779020dnmr:LegacyDanimerOptionsMember2020-07-012020-09-300001779020dnmr:TwoThousandNineteenSubordinatedTermLoanMember2019-03-012019-03-310001779020dnmr:PrivateWarrantsMember2021-01-012021-03-310001779020us-gaap:MeasurementInputSharePriceMembersrt:MinimumMember2020-01-012020-12-310001779020srt:MinimumMemberus-gaap:MeasurementInputExpectedTermMember2020-01-012020-12-310001779020dnmr:TruistBankMember2021-04-292021-04-290001779020us-gaap:ProductMember2021-07-012021-09-300001779020us-gaap:LeaseholdImprovementsMember2020-12-310001779020us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001779020dnmr:PrivateWarrantsMember2021-09-300001779020us-gaap:RetainedEarningsMember2021-01-012021-09-300001779020us-gaap:ProductMember2020-01-012020-09-300001779020srt:MaximumMemberus-gaap:FurnitureAndFixturesMember2021-01-012021-09-300001779020srt:MinimumMember2021-07-012021-09-300001779020us-gaap:LandAndLandImprovementsMember2021-09-300001779020srt:MaximumMemberus-gaap:PatentsMember2021-01-012021-09-300001779020dnmr:LegacyDanimerOptionsMember2020-12-290001779020us-gaap:AdditionalPaidInCapitalMember2020-12-310001779020us-gaap:MeasurementInputPriceVolatilityMember2021-09-3000017790202020-09-300001779020us-gaap:AdditionalPaidInCapitalMember2021-09-300001779020dnmr:TwentyNineteenTermLoanMember2021-01-290001779020us-gaap:MachineryAndEquipmentMember2020-12-310001779020dnmr:EquipmentLoansMemberdnmr:LiborMarketIndexRateMember2021-04-292021-04-290001779020dnmr:LegacyDanimerOptionsMember2021-01-012021-09-300001779020dnmr:TwoThousandTwentyEmployeeStockPurchasePlanMember2021-09-300001779020dnmr:EbitdaMetricMembersrt:MinimumMemberus-gaap:PerformanceSharesMember2021-07-232021-07-230001779020dnmr:PublicWarrantsMember2020-07-012020-09-300001779020srt:MaximumMemberus-gaap:MeasurementInputPriceVolatilityMember2021-01-012021-09-3000017790202021-03-3100017790202020-10-012020-12-310001779020dnmr:TwoThousandNineteenSubordinatedTermLoanMember2020-01-012020-12-310001779020srt:MinimumMemberus-gaap:PerformanceSharesMemberdnmr:ReturnOnEquityMetricMember2021-07-232021-07-230001779020dnmr:PrivateWarrantsMember2020-12-310001779020dnmr:LiborMarketIndexRateMemberdnmr:RevolvingLoansMember2021-04-292021-04-2900017790202021-03-100001779020us-gaap:RetainedEarningsMember2020-06-300001779020dnmr:ResearchAndDevelopmentMember2020-12-310001779020us-gaap:LeaseholdImprovementsMember2021-09-300001779020dnmr:AssetBackedLendingArrangementMember2021-09-300001779020dnmr:NMTCNotesMember2021-09-300001779020us-gaap:CommonStockMember2020-12-310001779020dnmr:ResearchAndDevelopmentMember2021-07-012021-09-300001779020dnmr:PublicWarrantsMember2021-06-162021-06-160001779020us-gaap:RetainedEarningsMember2021-06-300001779020us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001779020us-gaap:FurnitureAndFixturesMember2021-09-300001779020dnmr:PublicWarrantsMember2021-07-012021-09-300001779020us-gaap:CommonStockMember2019-12-310001779020dnmr:LegacyDanimerWarrantsMember2021-01-012021-03-310001779020dnmr:TwoThousandTwentyEmployeeStockPurchasePlanMember2021-01-012021-09-300001779020srt:MinimumMemberus-gaap:OfficeEquipmentMember2021-01-012021-09-300001779020srt:MaximumMember2021-07-012021-09-300001779020us-gaap:LeaseholdImprovementsMember2021-01-012021-09-3000017790202020-12-310001779020us-gaap:ServiceMember2020-01-012020-09-300001779020dnmr:AssetBackedLendingArrangementMember2021-04-292021-04-290001779020us-gaap:CostOfSalesMember2021-07-012021-09-300001779020us-gaap:MeasurementInputRiskFreeInterestRateMembersrt:MinimumMember2020-01-012020-12-310001779020dnmr:TwoThousandNineteenSubordinatedTermLoanMember2019-03-310001779020dnmr:CapitalExpenditureLineMemberdnmr:TruistBankMember2021-04-290001779020dnmr:RevolvingLoansMember2021-04-292021-04-290001779020dnmr:FirstAnniversaryMember2021-09-300001779020dnmr:ResearchAndDevelopmentMember2019-12-310001779020dnmr:LegacyDanimerOptionsMember2021-07-012021-09-300001779020us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300001779020us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001779020us-gaap:ShareBasedCompensationAwardTrancheThreeMemberdnmr:AugustTwelveTwoThousandAndTwentyOneMember2021-01-012021-09-300001779020us-gaap:CommonStockMember2020-09-300001779020us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001779020us-gaap:VehiclesMember2020-12-310001779020us-gaap:RestrictedStockMember2020-01-012020-09-300001779020us-gaap:RetainedEarningsMember2021-09-300001779020dnmr:ResearchAndDevelopmentMember2020-04-012020-06-300001779020us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300001779020us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:PerformanceSharesMember2021-07-012021-09-300001779020srt:MinimumMemberus-gaap:MeasurementInputExercisePriceMember2021-09-300001779020dnmr:PaycheckProtectionProgramLoanMember2020-04-300001779020srt:MaximumMember2021-01-012021-09-300001779020dnmr:ResearchAndDevelopmentMember2020-10-012020-12-310001779020us-gaap:ProductMember2021-01-012021-09-300001779020dnmr:JulyTwentyThreeTwoThousandAndTwentyOneMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2021-01-012021-09-300001779020us-gaap:CostOfSalesMember2021-01-012021-09-300001779020us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-07-012020-09-300001779020us-gaap:CommonStockMember2021-09-300001779020us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:EmployeeStockOptionMember2021-07-012021-09-300001779020dnmr:AssetBackedLendingArrangementMemberdnmr:TruistBankMember2021-04-290001779020dnmr:LegacyDanimerWarrantsMember2020-12-2900017790202019-12-310001779020us-gaap:AdditionalPaidInCapitalMember2020-09-300001779020dnmr:EbitdaMetricMemberus-gaap:PerformanceSharesMember2021-07-232021-07-230001779020us-gaap:EmployeeStockOptionMember2021-09-3000017790202021-11-100001779020dnmr:ResearchAndDevelopmentMember2021-01-012021-09-300001779020dnmr:EquipmentLoansMemberus-gaap:BaseRateMember2021-04-292021-04-290001779020dnmr:PrivateWarrantsMember2020-01-012020-09-300001779020dnmr:TwoThousandAndTwentyIncentivePlanMember2021-09-300001779020us-gaap:ServiceMember2021-01-012021-09-300001779020dnmr:NovomerIncMember2021-09-300001779020dnmr:PublicWarrantsMember2021-07-012021-09-300001779020us-gaap:BuildingMembersrt:MaximumMember2021-01-012021-09-300001779020us-gaap:ConstructionInProgressMember2021-09-300001779020us-gaap:BuildingMember2021-09-300001779020us-gaap:ProductMember2020-07-012020-09-3000017790202020-06-300001779020us-gaap:AdditionalPaidInCapitalMember2020-06-300001779020us-gaap:BuildingMember2020-12-310001779020us-gaap:VehiclesMembersrt:MinimumMember2021-01-012021-09-300001779020dnmr:TwoThousandTwentyEmployeeStockPurchasePlanMember2021-03-100001779020dnmr:TwoThousandNineteenSubordinatedTermLoanMember2020-12-310001779020dnmr:MortgageNotesMember2021-09-300001779020us-gaap:AdditionalPaidInCapitalMember2021-06-300001779020us-gaap:MachineryAndEquipmentMembersrt:MinimumMember2021-01-012021-09-300001779020dnmr:LegacyDanimerWarrantsMember2021-01-012021-09-300001779020dnmr:TwentyNineteenTermLoanMember2020-07-012020-07-310001779020us-gaap:ServiceMember2021-07-012021-09-300001779020dnmr:PrivateWarrantsMember2021-01-012021-09-300001779020dnmr:NovomerIncMember2021-01-012021-09-300001779020us-gaap:RetainedEarningsMember2021-07-012021-09-300001779020dnmr:PrivateWarrantsMember2021-01-012021-09-300001779020dnmr:LegacyDanimerWarrantsMember2020-01-012020-09-300001779020srt:MaximumMemberus-gaap:MeasurementInputExercisePriceMember2021-09-300001779020dnmr:TwentyNineteenTermLoanMember2019-03-212019-03-310001779020srt:MaximumMemberus-gaap:PerformanceSharesMemberdnmr:ReturnOnEquityMetricMember2021-07-232021-07-230001779020dnmr:PrivateWarrantsMember2021-07-012021-09-300001779020us-gaap:MeasurementInputSharePriceMembersrt:MaximumMember2021-01-012021-09-300001779020dnmr:LegacyDanimerOptionsMember2020-12-282020-12-290001779020dnmr:JulyTwentyThreeTwoThousandAndTwentyOneMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2021-01-012021-09-300001779020dnmr:VehicleAndEquipmentNotesMember2020-12-310001779020dnmr:PublicWarrantsMember2021-01-012021-03-310001779020us-gaap:RestrictedStockMember2021-01-012021-09-300001779020dnmr:NeatPhaProductionCapacityMetricMemberus-gaap:PerformanceSharesMember2021-07-232021-07-230001779020us-gaap:PrimeRateMemberdnmr:TwoThousandNineteenSubordinatedTermLoanMember2021-03-182021-03-180001779020dnmr:ResearchAndDevelopmentMember2020-01-012020-12-310001779020srt:MinimumMemberus-gaap:MeasurementInputPriceVolatilityMember2021-01-012021-09-3000017790202020-01-012020-09-300001779020dnmr:TwoThousandNineteenSubordinatedTermLoanMember2021-06-300001779020us-gaap:CommonStockMember2020-01-012020-09-300001779020dnmr:PublicWarrantsMember2021-06-160001779020dnmr:LegacyDanimerOptionsMember2016-01-012016-12-310001779020us-gaap:FurnitureAndFixturesMember2020-12-310001779020us-gaap:RestrictedStockMember2020-07-012020-09-3000017790202020-01-012020-03-310001779020dnmr:LimrLoanMember2021-04-292021-04-290001779020us-gaap:ServiceMember2020-07-012020-09-300001779020us-gaap:CommonStockMember2020-06-300001779020us-gaap:MeasurementInputExercisePriceMember2021-09-300001779020us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001779020srt:MinimumMemberus-gaap:FurnitureAndFixturesMember2021-01-012021-09-3000017790202021-01-012021-03-310001779020us-gaap:MeasurementInputSharePriceMembersrt:MinimumMember2021-01-012021-09-300001779020dnmr:PublicWarrantsMember2020-01-012020-09-300001779020dnmr:PaycheckProtectionProgramLoanMember2020-12-31utr:lbxbrli:pureiso4217:USDxbrli:sharesxbrli:sharesiso4217:USD

 

 

o

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number: 001-39280

 

DANIMER SCIENTIFIC, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

84-1924518

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

140 Industrial Boulevard
Bainbridge, GA

39817

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (229) 243-7075

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A Common stock, $0.0001 par value per share

 

DNMR

 

New York Stock Exchange

 

 

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of November 10, 2021, the registrant had 100,344,315 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements (Unaudited)

2

 

Condensed Consolidated Balance Sheets

2

 

Condensed Consolidated Statements of Operations

3

 

Condensed Consolidated Statements of Stockholders' Equity

4

 

Condensed Consolidated Statements of Cash Flows

5

 

Notes to Condensed Consolidated Financial Statements

6

Item 2.

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

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

29

Item 4.

Controls and Procedures

29

 

 

 

PART II.

OTHER INFORMATION

29

 

 

 

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

30

Item 6.

Exhibits

30

Signatures

31

 

FORWARD-LOOKING STATEMENTS

Certain statements contained herein, as well as in other filings we make with the United States Securities and Exchange Commission (“SEC”) and other written and oral information we release, regarding our future performance constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, the impact on our business, operations and financial results of the COVID-19 pandemic (which, among other things, may affect many of the items listed below); the demand for our products and services; revenue growth; effects of competition; supply chain and technology initiatives; inventory and in-stock positions; state of the economy; state of the credit markets, including mortgages, home equity loans, and consumer credit; impact of tariffs; demand for credit offerings; management of relationships with our employees, suppliers and vendors, and customers; international trade disputes, natural disasters, public health issues (including pandemics and related quarantines, shelter-in-place orders, and similar restrictions), and other business interruptions that could disrupt supply or delivery of, or demand for, our products or services; continuation of equity programs; net earnings performance; earnings per share; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity price inflation and deflation; the ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims, and litigation; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of regulatory changes; financial outlook; and the integration of acquired companies into our organization and the ability to recognize the anticipated synergies and benefits of those acquisitions.

Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events. You should not rely on our forward-looking statements. These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control, dependent on the actions of third parties, or currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Part II, Item 1A, "Risk Factors" and elsewhere in this report and as also may be described from time to time in future reports we file with the SEC. You should read such information in conjunction with our Condensed Consolidated Financial Statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this report. There also may be other factors that we cannot anticipate or that are not described in this report, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations.

Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the SEC.

 

 


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Danimer Scientific, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

 

 

 

 September 30,

 

 

December 31,

 

(in thousands, except share data)

 

 2021

 

 

2020

 

Assets:

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

194,226

 

 

$

377,581

 

Accounts receivable, net

 

 

12,832

 

 

 

6,605

 

Income tax receivable, net

 

 

1,073

 

 

 

-

 

Inventories

 

 

24,146

 

 

 

13,642

 

Prepaid expenses and other current assets

 

 

3,553

 

 

 

3,089

 

Contract assets

 

 

3,043

 

 

 

1,466

 

Total current assets

 

 

238,873

 

 

 

402,383

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

222,533

 

 

 

106,795

 

Intangible assets, net

 

 

86,663

 

 

 

1,801

 

Goodwill

 

 

66,581

 

 

 

-

 

Right-of-use assets

 

 

18,541

 

 

 

19,387

 

Leverage loans receivable

 

 

13,408

 

 

 

13,408

 

Restricted cash

 

 

2,071

 

 

 

2,316

 

Loan fees

 

 

1,427

 

 

 

-

 

Other assets

 

 

146

 

 

 

111

 

Total assets

 

$

650,243

 

 

$

546,201

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

20,379

 

 

$

10,610

 

Accrued liabilities

 

 

8,561

 

 

 

9,220

 

Unearned revenue and contract liabilities

 

 

233

 

 

 

2,455

 

Current portion of lease liability

 

 

2,947

 

 

 

3,000

 

Current portion of long-term debt, net

 

 

334

 

 

 

25,201

 

Total current liabilities

 

 

32,454

 

 

 

50,486

 

 

 

 

 

 

 

 

Private warrants liability

 

 

30,910

 

 

 

82,860

 

Long-term lease liability, net

 

 

22,459

 

 

 

24,175

 

Long-term debt, net

 

 

29,536

 

 

 

31,386

 

Deferred income taxes

 

 

4,733

 

 

 

-

 

Other long-term liabilities

 

 

1,072

 

 

 

1,250

 

Total liabilities

 

$

121,164

 

 

$

190,157

 

 

 

 

 

 

 

 

Commitments and Contingencies (Note 14)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Common stock, $0.0001 par value; 200,000,000 shares authorized: 100,324,315 and 84,535,640 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

 

$

10

 

 

$

8

 

Additional paid-in capital

 

 

635,513

 

 

 

414,819

 

Accumulated deficit

 

 

(106,444

)

 

 

(58,783

)

Total stockholders’ equity

 

 

529,079

 

 

 

356,044

 

Total liabilities and stockholders’ equity

 

$

650,243

 

 

$

546,201

 

 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

 

 

2


 

Danimer Scientific, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

 

 

Three Months Ended September 30,

 

 

Nine months ended September 30,

 

(in thousands, except share and per share data)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

12,397

 

 

$

11,249

 

 

$

34,715

 

 

$

31,004

 

Services

 

 

972

 

 

 

1,586

 

 

 

6,306

 

 

 

4,302

 

Total revenue

 

 

13,369

 

 

 

12,835

 

 

 

41,021

 

 

 

35,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

13,601

 

 

 

9,188

 

 

 

37,786

 

 

 

25,058

 

Selling, general and administrative

 

 

26,592

 

 

 

3,370

 

 

 

55,791

 

 

 

9,178

 

Research and development

 

 

5,010

 

 

 

2,190

 

 

 

11,604

 

 

 

5,565

 

(Gain) loss on sale of assets

 

 

-

 

 

 

-

 

 

 

33

 

 

 

(9

)

Total costs and expenses

 

 

45,203

 

 

 

14,748

 

 

 

105,214

 

 

 

39,792

 

Loss from operations

 

 

(31,834

)

 

 

(1,913

)

 

 

(64,193

)

 

 

(4,486

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Gain on remeasurement of private warrants

 

 

28,392

 

 

 

-

 

 

 

6,435

 

 

 

-

 

Interest expense, net

 

 

(246

)

 

 

(334

)

 

 

(668

)

 

 

(1,431

)

Gain on forgiveness of debt

 

 

-

 

 

 

-

 

 

 

1,776

 

 

 

-

 

Loss on loan extinguishment

 

 

-

 

 

 

-

 

 

 

(2,604

)

 

 

-

 

Other income (expense), net

 

 

90

 

 

 

108

 

 

 

170

 

 

 

297

 

Total nonoperating income (expense)

 

 

28,236

 

 

 

(226

)

 

 

5,109

 

 

 

(1,134

)

Loss before income taxes

 

 

(3,598

)

 

 

(2,139

)

 

 

(59,084

)

 

 

(5,620

)

Income taxes

 

 

11,423

 

 

 

-

 

 

 

11,423

 

 

 

-

 

Net income (loss)

 

$

7,825

 

 

$

(2,139

)

 

$

(47,661

)

 

$

(5,620

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share

 

$

0.08

 

 

$

(0.07

)

 

$

(0.53

)

 

$

(0.20

)

Diluted net income (loss) per share

 

$

0.08

 

 

$

(0.07

)

 

$

(0.53

)

 

$

(0.20

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used to compute (1)

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share

 

 

98,160,626

 

 

 

29,317,058

 

 

 

90,614,910

 

 

 

28,699,250

 

Dilutive effect of warrants and stock options

 

 

5,360,126

 

 

 

-

 

 

 

-

 

 

 

-

 

Diluted net income (loss) per share

 

 

103,520,752

 

 

 

29,317,058

 

 

 

90,614,910

 

 

 

28,699,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) 2020 Amounts retroactively restated for Business Combination

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

 

 

3


 

Danimer Scientific, Inc.

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(in thousands)

 

2021

 

2020

 

 

2021

 

2020

 

Common stock: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

9

 

 

$

3

 

 

 

$

8

 

 

$

3

 

Issuance of common stock

 

 

1

 

 

 

1

 

 

 

 

2

 

 

 

1

 

Balance, end of period

 

 

10

 

 

 

4

 

 

 

 

10

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional paid-in capital: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

620,808

 

 

 

91,905

 

 

 

 

414,819

 

 

 

66,503

 

Exercise of warrants, net of issuance costs

 

 

(6

)

 

 

-

 

 

 

 

138,196

 

 

 

-

 

Fair value of private warrants converted to public warrants

 

 

-

 

 

 

-

 

 

 

 

45,515

 

 

 

-

 

Stock-based compensation expense

 

 

14,397

 

 

 

221

 

 

 

 

35,093

 

 

 

523

 

Stock issued under stock compensation plans

 

 

316

 

 

 

331

 

 

 

 

2,782

 

 

 

331

 

Beneficial conversion feature on convertible notes

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

93

 

Conversion of debt to common stock

 

 

-

 

 

 

655

 

 

 

 

-

 

 

 

655

 

Issuance of common stock, net of issuance costs

 

 

(2

)

 

 

3,995

 

 

 

 

(892

)

 

 

29,002

 

Balance, end of period

 

 

635,513

 

 

 

97,107

 

 

 

 

635,513

 

 

 

97,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated deficit:

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

(114,269

)

 

 

(53,411

)

 

 

 

(58,783

)

 

 

(49,930

)

Net income (loss)

 

 

7,825

 

 

 

(2,139

)

 

 

 

(47,661

)

 

 

(5,620

)

Balance, end of period

 

 

(106,444

)

 

 

(55,550

)

 

 

 

(106,444

)

 

 

(55,550

)

Total stockholders' equity

 

$

529,079

 

 

$

41,561

 

 

 

$

529,079

 

 

$

41,561

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) 2020 Amounts retroactively restated for Business Combination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

4


 

Danimer Scientific, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

 

Nine Months Ended

 

 

 

September 30,

 

(in thousands)

 

 2021

 

 

 2020

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(47,661

)

 

$

(5,620

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Gain on remeasurement of private warrants

 

 

(6,435

)

 

 

-

 

Stock-based compensation

 

 

35,093

 

 

 

523

 

Depreciation and amortization

 

 

7,489

 

 

 

2,788

 

Deferred income taxes

 

 

(11,423

)

 

 

-

 

Loss on write-off of deferred loan costs

 

 

1,900

 

 

 

-

 

Amortization of debt issuance costs and debt discounts

 

 

337

 

 

 

1,367

 

Single lease cost (benefit)

 

 

(942

)

 

 

354

 

Gain on forgiveness of debt

 

 

(1,776

)

 

 

-

 

Other

 

 

183

 

 

 

(9

)

Interest incurred but not paid

 

 

-

 

 

 

610

 

Changes in operating assets and liabilities, net of effects of acquisition:

 

 

 

 

 

 

Accounts receivable, net

 

 

(6,331

)

 

 

(2,629

)

Inventories

 

 

(9,471

)

 

 

(6,168

)

Prepaid expenses and other current assets

 

 

(1,194

)

 

 

(3,454

)

Contract assets

 

 

(1,578

)

 

 

(584

)

Other assets

 

 

40

 

 

 

-

 

Accounts payable

 

 

887

 

 

 

2,388

 

Accrued and other long-term liabilities

 

 

(4,338

)

 

 

1,763

 

Unearned revenue and contract liabilities

 

 

(2,221

)

 

 

(1,744

)

Net cash used in operating activities

 

 

(47,441

)

 

 

(10,415

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(96,798

)

 

 

(25,178

)

Acquisition of Novomer, net of cash acquired

 

 

(151,179

)

 

 

-

 

Proceeds from sales of property, plant and equipment

 

 

340

 

 

 

9

 

Net cash used in investing activities

 

 

(247,637

)

 

 

(25,169

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from exercise of warrants, net of issuance costs

 

 

138,196

 

 

 

-

 

Proceeds from exercise of stock options

 

 

2,676

 

 

 

331

 

Proceeds from long-term debt

 

 

169

 

 

 

4,416

 

Proceeds from employee stock purchase plan

 

 

106

 

 

 

-

 

Proceeds from issuance of common stock, net of issuance costs

 

 

(892

)

 

 

29,002

 

Cash paid for debt issuance costs

 

 

(1,691

)

 

 

(95

)

Principal payments on long-term debt

 

 

(27,086

)

 

 

(1,198

)

Net cash provided by financing activities

 

 

111,478

 

 

 

32,456

 

Net decrease in cash and cash equivalents and restricted cash

 

 

(183,600

)

 

 

(3,128

)

Cash and cash equivalents and restricted cash-beginning of period

 

 

379,897

 

 

 

9,278

 

Cash and cash equivalents and restricted cash-end of period

 

$

196,297

 

 

$

6,150

 

Supplemental cash flow information

 

 

 

 

 

 

Cash paid for interest, net of interest capitalized

 

$

375

 

 

$

628

 

Cash paid for operating leases

 

$

2,380

 

 

$

2,103

 

Supplemental non-cash disclosure

 

 

 

 

 

 

Changes in accounts payable and accrued liabilities related to purchase of property, plant and equipment

 

$

9,880

 

 

$

(5,070

)

 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

5


 

 

Danimer Scientific, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1. Basis of Presentation

Description of Business

Danimer Scientific, Inc., together with its subsidiaries (the “Company,” “Danimer”, “we”, “us”, or “our”), is a performance polymer company specializing in bioplastic replacements for traditional petroleum-based plastics. Our common stock is listed on the New York Stock Exchange under the symbol “DNMR”.

Financial Statements

We have prepared these condensed consolidated financial statements (“Financial Statements”) in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the rules and regulations of the SEC. In the opinion of management, our Financial Statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly our financial position, results of operations, stockholders’ equity, and cash flows at the dates and for the periods presented. The Financial Statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our Amended Annual Report on Form 10-K/A for the year ended December 31, 2020. Results for interim periods are not necessarily indicative of the results for the year.

We cannot predict the ongoing impact of the COVID-19 pandemic on the increased volatility in global economic and political environments, market demand for our products, supply chain disruptions, possible workforce availability, exchange rate and commodity price volatility and availability of financing, and their impact to our total revenue, production volumes, costs and overall financial condition and available funding. In preparing the Financial Statements in conformity with U.S. GAAP, we have considered and, where appropriate, reflected the effects of the COVID-19 pandemic on our operations. The pandemic continues to provide significant challenges to the U.S. and global economies.

Note 2. Business Combinations

Novomer

On August 11, 2021, we acquired all of the outstanding shares of Novomer, Inc. (“Novomer”), a privately held company, in exchange for $153.9 million in cash, gross of cash acquired, subject to certain customary adjustments as set forth in the merger agreement. We also entered into employment or consulting agreements with, and granted stock options to, certain key employees and consultants of Novomer. Novomer uses its proprietary thermal catalytic conversion process to produce a unique type of PHA, referred to under its brand name as Rinnovo, that can be incorporated into some of our products as a complement to our existing PHA polymer at reduced cost. We have included Novomer's results in the Financial Statements since August 11, 2021. For the period ended September 30, 2021, Novomer recorded a net loss of $1.5 million.

As a private company, Novomer had not yet adopted the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 842, Leases (“ASC 842”). We applied ASC 842 to the operating lease for Novomer's primary operating facility and recorded a right-of-use asset of $2.0 million and a lease liability of $2.0 million. At September 30, 2021, we have recorded contingent purchase price payable, which is payable to the sellers upon our collection of an income tax refund receivable arising from a prior period. All of these amounts are included in the table below that sets forth the preliminary fair values of assets acquired and liabilities assumed:

(in thousands)

 

 

 

Cash and restricted cash

 

$

2,741

 

Property, plant and equipment

 

 

15,591

 

Other assets acquired

 

 

4,285

 

Acquired technology

 

 

85,400

 

Goodwill

 

 

66,581

 

Deferred tax liability

 

 

(16,159

)

Liabilities assumed

 

 

(4,019

)

Contingent purchase price payable

 

 

(500

)