Filed pursuant to Rule 424(b)(3)
Registration No. 333-252515
PROSPECTUS SUPPLEMENT NO. 13
(to Prospectus dated February 16, 2021)
Danimer Scientific, Inc.
Up to 32,435,961 Shares of Common Stock
Up to 16,279,253 Shares of Common Stock Issuable Upon Exercise of Warrants and Options
This prospectus supplement supplements the prospectus dated February 16, 2021 (as supplemented or amended from time to time, the “Prospectus”), which forms a part of our registration statement on Form S-1 (No. 333-252515). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our quarterly report on Form 10-Q, filed with the Securities and Exchange Commission on November 15, 2021 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement. The Prospectus and this prospectus supplement relate to the issuance by us of up to an aggregate of up to 16,279,253 shares of our Class A common stock, $0.0001 par value per share (“Common Stock”), which consists of (i) up to 6,000,000 shares of Common Stock that are issuable upon the exercise of 6,000,000 warrants (the “Private Warrants”) originally issued in a private placement in connection with the initial public offering of Live Oak Acquisition Corp., our predecessor company (“Live Oak”), (ii) up to 10,000,000 shares of Common Stock that are issuable upon the exercise of 10,000,000 warrants (the “Public Warrants” and, together with the Private Warrants, the “Warrants”) originally issued in the initial public offering of Live Oak and (iii) up to 279,253 shares of Common Stock issuable upon exercise of Non-Plan Legacy Danimer Options. We will receive the proceeds from any exercise of any Warrants for cash.
The Prospectus and this prospectus supplement also relate to the offer and sale from time to time by the selling securityholders named in the Prospectus (the “Selling Securityholders”), or their permitted transferees, of (i) up to 32,435,961 shares of Common Stock (including up to 6,000,000 shares of Common Stock that may be issued upon exercise of the Private Warrants) and (ii) up to 6,000,000 Private Warrants. We will not receive any proceeds from the sale of shares of Common Stock or the Private Warrants by the Selling Securityholders pursuant to the Prospectus and this prospectus supplement.
Our registration of the securities covered by the Prospectus and this prospectus supplement does not mean that the Selling Securityholders will offer or sell any of the shares. The Selling Securityholders may sell the shares of Common Stock covered by the Prospectus and this prospectus supplement in a number of different ways and at varying prices. We provide more information about how the Selling Securityholders may sell the shares in the section entitled “Plan of Distribution.”
Our Common Stock is listed on The New York Stock Exchange under the symbol “DNMR”. On November 16, 2021, the closing price of our Common Stock was $14.76. Our Public Warrants were previously traded on The New York Stock Exchange under the symbol “DNMR WS”; however, the Public Warrants ceased trading on the New York Stock Exchange and were delisted following their redemption.
This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.
See the section entitled “Risk Factors” beginning on page 4 of the Prospectus to read about factors you should consider before buying our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is November 15, 2021.
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 |
140 Industrial Boulevard |
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
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Page |
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PART I. |
|
|
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|
|
Item 1. |
2 |
|
|
2 |
|
|
3 |
|
|
4 |
|
|
5 |
|
|
6 |
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 |
Item 3. |
27 |
|
Item 4. |
28 |
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|
|
|
PART II. |
28 |
|
|
|
|
Item 1. |
28 |
|
Item 1A. |
Risk Factors |
|
Item 2. |
29 |
|
Item 6. |
29 |
|
30 |
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 |
) |
Total preliminary purchase price |
|
$ |
153,920 |
|
The preliminary estimated goodwill is attributable to the strategic opportunities and synergies that we expect to arise from the acquisition and the value of its existing workforce. The goodwill is not deductible for federal income tax purposes.
The final purchase price determination is subject to customary post-close adjustments and our estimates of the fair values of assets acquired and liabilities assumed are preliminary and could change due to future events.
We plan to test acquired goodwill and intangibles for impairment annually each November 1.
6
The following table discloses pro forma revenues and earnings for the combined Danimer-Novomer entity as if the acquisition of Novomer took place on January 1, 2020. The pro forma revenue and losses from operations do not necessarily reflect what the combined entity's revenue and losses from operations would have been had the acquisition taken place at that time, and this pro forma financial information may not be useful in predicting our future financial results. The actual results may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The following includes proforma adjustments to reflect amortization of acquired technology intangible assets and to reflect $2.6 million of transaction costs in the first quarter of 2020 instead of the three and nine months ended September 30, 2021.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(in thousands) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Revenue |
|
$ |
13,369 |
|
|
$ |
12,864 |
|
|
$ |
41,056 |
|
|
$ |
35,335 |
|
Loss from operations |
|
$ |
(30,377 |
) |
|
$ |
(4,099 |
) |
|
$ |
(67,969 |
) |
|
$ |
(14,613 |
) |
Live Oak
Live Oak Acquisition Corp. (“Live Oak”) was incorporated in the State of Delaware on May 24, 2019 as a special purpose acquisition company formed for the purpose of effecting a business combination with one or more businesses. Live Oak completed its initial public offering in May 2020. On December 29, 2020, Live Oak consummated a business combination (“Business Combination”) with Meredian Holdings Group, Inc. (“Legacy Danimer”) with Legacy Danimer surviving the merger as a wholly owned subsidiary of Live Oak. In connection with the Business Combination, Live Oak changed its name to Danimer Scientific, Inc.
For financial accounting and reporting purposes, Legacy Danimer was deemed the accounting acquirer, Live Oak was treated as the accounting acquiree, and the Business Combination was accounted for as a reverse recapitalization. Effectively, the Business Combination was treated as the equivalent of Legacy Danimer issuing stock for the net assets of Live Oak, accompanied by a recapitalization. Under this method of accounting, the historical financial statements of Legacy Danimer are our historical financial statements. The net assets of Live Oak are stated at historical costs, with no goodwill or other intangible assets recorded, and were consolidated with Legacy Danimer’s financial statements on December 29, 2020.
Note 3. Inventories
Inventories consisted of the following:
|
|
September 30, |
|
|
December 31, |
|
||
(in thousands) |
|
2021 |
|
|
2020 |
|
||
Raw materials |
|
$ |
11,720 |
|
|
$ |
6,825 |
|
Work in process |
|
|
2,182 |
|
|
|
133 |
|
Finished goods and related items |
|
|
10,244 |
|
|
|
6,684 |
|
Total inventories |
|
$ |
24,146 |
|
|
$ |
13,642 |
|
At September 30, 2021 and December 31,2020, finished goods and related items included $4.8 million and $3.0 million of finished neat PHA.
Note 4. Property, Plant and Equipment
Property, plant and equipment, net, consisted of the following:
(in thousands) |
|
Estimated Useful Life (Years) |
|
September 30, 2021 |
|
|
December 31, 2020 |
|
||
Land and improvements |
|
20 |
|
$ |
92 |
|
|
$ |
92 |
|
Leasehold improvements |
|
Shorter of useful life or lease term |
|
|
24,476 |
|
|
|
20,932 |
|
Buildings |
|
15-40 |
|
|
2,114 |
|
|
|
2,089 |
|
Machinery and equipment |
|
5-20 |
|
|
95,493 |
|
|
|
64,164 |
|
Motor vehicles |
|
7-10 |
|
|
874 |
|
|
|
693 |
|
Furniture and fixtures |
|
7-10 |
|
|
414 |
|
|
|
221 |
|
Office equipment |
|
3-10 |
|
|
3,202 |
|
|
|
2,089 |
|
Construction in progress |
|
N/A |
|
|
122,079 |
|
|
|
36,146 |
|
|
|
|
|
|
248,744 |
|
|
|
126,426 |
|
Accumulated depreciation and amortization |
|
|
|
|
(26,211 |
) |
|
|
(19,631 |
) |
Property, plant and equipment, net |
|
|
|
$ |
222,533 |
|
|
$ |
106,795 |
|
7
We reported depreciation and amortization expense (which included amortization of intangible assets) as follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(in thousands) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Cost of revenue |
|
$ |
2,110 |
|
|
|
644 |
|
|
$ |
5,899 |
|
|
$ |
2,080 |
|
Selling, general and administrative |
|
|
123 |
|
|
|
159 |
|
|
|
315 |
|
|
|
219 |
|
Research and development |
|
|
946 |
|
|
|
176 |
|
|
|
1,275 |
|
|
|
489 |
|
Total depreciation and amortization expense |
|
$ |
3,179 |
|
|
$ |
979 |
|
|
$ |
7,489 |
|
|
$ |
2,788 |
|
Construction in progress consists primarily of the conversion and build-out of our facility in Winchester, Kentucky. Property, plant and equipment includes capitalized interest of $5.4 million and $5.1 million as of September 30, 2021 and December 31, 2020, respectively. For the three and nine months ended September 30, 2021 and 2020, interest costs of $0.1 million and $0.3 million and $1.3 million and $3.1 million, respectively, were capitalized to property, plant and equipment.
Note 5. Intangible Assets
Our intangible assets consist of both patented and unpatented technological know-how, including that of Novomer. The values of Novomer's patents and unpatented know-how, collectively the “Novomer Technology”, are inseparable.
We capitalize patent defense and application costs. Patent costs are amortized on a straight-line basis over their estimated useful lives, which range from 13 to 16 years. The Novomer Technology is amortized over its estimated 20 year life. Intangible assets, net, consisted of the following:
|
|
September 30, |
|
|
December 31, |
|
||
(in thousands) |
|
2021 |
|
|
2020 |
|
||
Intangible assets, gross |
|
$ |
94,065 |
|
|
$ |
8,297 |
|
Capitalized patent costs not yet subject to amortization |
|
|
817 |
|
|
|
469 |
|
Intangible assets subject to amortization, gross |
|
|
93,248 |
|
|
|
7,828 |
|
Accumulated amortization, beginning balance |
|
|
(6,496 |
) |
|
|
(5,996 |
) |
Amortization in the quarter ended: |
|
|
|
|
|
|
||
March 31 |
|
|
(124 |
) |
|
|
(125 |
) |
June 30 |
|
|
(125 |
) |
|
|
(125 |
) |
September 30 |
|
|
(657 |
) |
|
|
(125 |
) |
December 31 |
|
|
- |
|
|
|
(125 |
) |
Accumulated amortization, ending balance |
|
|
(7,402 |
) |
|
|
(6,496 |
) |
Intangible assets subject to amortization, net |
|
|
85,846 |
|
|
|
1,332 |
|
Total intangible assets, net |
|
$ |
86,663 |
|
|
$ |
1,801 |
|
We expect intangible assets currently subject to amortization will amortize over the coming years as follows:
(in thousands) |
|
|
|
|
Year Ending December 31: |
|
Amortization Expense |
|
|
2021 remaining |
|
$ |
1,192 |
|
2022 |
|
|
4,770 |
|
2023 |
|
|
4,606 |
|
2024 |
|
|
4,271 |
|
2025 |
|
|
4,271 |
|
2026 and thereafter |
|
|
66,736 |
|
8
Note 6. Accrued Liabilities
The components of accrued liabilities were as follows:
|
|
September 30, |
|
|
December 31, |
|
||
(in thousands) |
|
2021 |
|
|
2020 |
|
||
Compensation and related expenses |
|
$ |
2,440 |
|
|
$ |
5,395 |
|