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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 June 30, 2022

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 August 9, 2022, the registrant had 101,170,634 shares of common stock, $0.0001 par value per share, outstanding.

 

 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements (Unaudited)

3

 

Condensed Consolidated Balance Sheets

3

 

Condensed Consolidated Statements of Operations

4

 

Condensed Consolidated Statements of Stockholders' Equity

5

 

Condensed Consolidated Statements of Cash Flows

6

 

Notes to Condensed Consolidated Financial Statements

7

Item 2.

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

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

30

Item 4.

Controls and Procedures

30

 

 

 

PART II.

OTHER INFORMATION

31

 

 

 

Item 1.

Legal Proceedings

31

Item 1A.

Risk Factors

31

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

31

Item 5.

Other Information

31

Item 6.

Exhibits

31

Signatures

32

 

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 and the ongoing conflict in Ukraine (each of 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)

 

 

 

June 30,

 

 

December 31,

 

(in thousands, except share and per share data)

 

2022

 

 

2021

 

Assets:

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

140,388

 

 

$

286,487

 

Accounts receivable, net

 

 

18,224

 

 

 

17,149

 

Other receivables, net

 

 

1,408

 

 

 

3,836

 

Inventories, net

 

 

32,729

 

 

 

24,573

 

Prepaid expenses and other current assets

 

 

5,394

 

 

 

4,737

 

Contract assets, net

 

 

3,900

 

 

 

3,576

 

Total current assets

 

 

202,043

 

 

 

340,358

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

408,885

 

 

 

316,181

 

Intangible assets, net

 

 

82,495

 

 

 

84,659

 

Goodwill

 

 

62,663

 

 

 

62,649

 

Right-of-use assets

 

 

19,133

 

 

 

19,240

 

Leverage loans receivable

 

 

13,408

 

 

 

13,408

 

Restricted cash

 

 

449

 

 

 

481

 

Loan fees

 

 

1,413

 

 

 

1,397

 

Other assets

 

 

228

 

 

 

224

 

Total assets

 

$

790,717

 

 

$

838,597

 

 

 

 

 

 

 

 

Liabilities and Stockholders' equity:

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

11,748

 

 

$

20,790

 

Accrued liabilities

 

 

10,994

 

 

 

18,777

 

Unearned revenue and contract liabilities

 

 

2,290

 

 

 

214

 

Current portion of lease liability

 

 

3,337

 

 

 

3,337

 

Current portion of long-term debt, net

 

 

2,242

 

 

 

357

 

Total current liabilities

 

 

30,611

 

 

 

43,475

 

 

 

 

 

 

 

 

Private warrants liability

 

 

2,571

 

 

 

9,578

 

Long-term lease liability, net

 

 

22,412

 

 

 

22,693

 

Long-term debt, net

 

 

262,032

 

 

 

260,934

 

Deferred income taxes

 

 

483

 

 

 

1,014

 

Other long-term liabilities

 

 

753

 

 

 

638

 

Total liabilities

 

$

318,862

 

 

$

338,332

 

 

 

 

 

 

 

 

Commitments and Contingencies (Note 15)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Common stock, $0.0001 par value; 200,000,000 shares authorized: 101,114,861 and 100,687,820 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

$

10

 

 

$

10

 

Additional paid-in capital

 

 

647,566

 

 

 

619,145

 

Accumulated deficit

 

 

(175,721

)

 

 

(118,890

)

Total stockholders’ equity

 

 

471,855

 

 

 

500,265

 

Total liabilities and stockholders’ equity

 

$

790,717

 

 

$

838,597

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3


 

 

 

DANIMER SCIENTIFIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(in thousands, except share and per share data)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

11,575

 

 

$

11,294

 

 

$

24,791

 

 

$

22,318

 

Services

 

 

1,128

 

 

 

3,177

 

 

 

2,655

 

 

 

5,334

 

Total revenue

 

 

12,703

 

 

 

14,471

 

 

 

27,446

 

 

 

27,652

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

14,934

 

 

 

12,460

 

 

 

30,999

 

 

 

24,185

 

Selling, general and administrative

 

 

20,975

 

 

 

19,079

 

 

 

43,211

 

 

 

29,199

 

Research and development

 

 

8,913

 

 

 

3,975

 

 

 

16,044

 

 

 

6,594

 

Loss on sale of assets

 

 

1

 

 

 

33

 

 

 

1

 

 

 

33

 

Total costs and expenses

 

 

44,823

 

 

 

35,547

 

 

 

90,255

 

 

 

60,011

 

Loss from operations

 

 

(32,120

)

 

 

(21,076

)

 

 

(62,809

)

 

 

(32,359

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on remeasurement of private warrants

 

 

2,012

 

 

 

58,740

 

 

 

7,007

 

 

 

(21,957

)

Interest, net

 

 

(652

)

 

 

(203

)

 

 

(1,644

)

 

 

(352

)

Gain on forgiveness of debt

 

 

-

 

 

 

1,776

 

 

 

-

 

 

 

1,776

 

Loss on loan extinguishment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,604

)

Other, net

 

 

75

 

 

 

11

 

 

 

84

 

 

 

10

 

Total nonoperating income (expense):

 

 

1,435

 

 

 

60,324

 

 

 

5,447

 

 

 

(23,127

)

(Loss) income before income taxes

 

 

(30,685

)

 

 

39,248

 

 

 

(57,362

)

 

 

(55,486

)

Income taxes

 

 

240

 

 

 

-

 

 

 

531

 

 

 

-

 

Net (loss) income

 

$

(30,445

)

 

$

39,248

 

 

$

(56,831

)

 

$

(55,486

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net (loss) income per share

 

$

(0.30

)

 

$

0.44

 

 

$

(0.56

)

 

$

(0.64

)

Diluted net (loss) income per share

 

$

(0.30

)

 

$

0.39

 

 

$

(0.56

)

 

$

(0.64

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used to compute:

 

 

 

 

 

 

 

 

 

 

 

 

Basic net (loss) income per share

 

 

101,047,650

 

 

 

88,806,086

 

 

 

100,888,185

 

 

 

86,760,615

 

 Effect of dilutive instruments

 

 

-

 

 

 

12,718,858

 

 

 

-

 

 

 

-

 

Diluted net (loss) income per share

 

 

101,047,650

 

 

 

101,524,944

 

 

 

100,888,185

 

 

 

86,760,615

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

4


 

DANIMER SCIENTIFIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(in thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Common stock:

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

10

 

 

$

8

 

 

$

10

 

 

$

8

 

Issuance of common stock

 

 

-

 

 

 

1

 

 

 

-

 

 

 

1

 

Balance, end of period

 

 

10

 

 

 

9

 

 

 

10

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional paid-in capital:

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

633,213

 

 

 

435,782

 

 

 

619,145

 

 

 

414,819

 

Stock-based compensation expense

 

 

14,233

 

 

 

14,031

 

 

 

27,983

 

 

 

20,696

 

Fair value of private warrants converted to public warrants

 

 

-

 

 

 

31,593

 

 

 

-

 

 

 

45,515

 

Stock issued under stock compensation plans

 

 

120

 

 

 

1,275

 

 

 

493

 

 

 

2,466

 

Exercise of warrants, net of issuance costs

 

 

-

 

 

 

138,202

 

 

 

-

 

 

 

138,202

 

Issuance of common stock, net of issuance costs

 

 

-

 

 

 

(75

)

 

 

-

 

 

 

(890

)

Costs related to warrants

 

 

-

 

 

 

-

 

 

 

(55

)

 

 

-

 

Balance, end of period

 

 

647,566

 

 

 

620,808

 

 

 

647,566

 

 

 

620,808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated deficit:

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

(145,276

)

 

 

(153,517

)

 

 

(118,890

)

 

 

(58,783

)

Net (loss) income

 

 

(30,445

)

 

 

39,248

 

 

 

(56,831

)

 

 

(55,486

)

Balance, end of period

 

 

(175,721

)

 

 

(114,269

)

 

 

(175,721

)

 

 

(114,269

)

Total stockholders' equity

 

$

471,855

 

 

$

506,548

 

 

$

471,855

 

 

$

506,548

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


 

DANIMER SCIENTIFIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

Six Months Ended

 

 

June 30,

(in thousands)

 

2022

 

 

2021

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

 

$

(56,831

)

 

$

(55,486

)

 

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

 

 

 

 

 

 

 

(Gain) loss on remeasurement of private warrants

 

 

(7,007

)

 

 

21,957

 

 

Stock-based compensation

 

 

27,983

 

 

 

20,696

 

 

Depreciation and amortization

 

 

8,588

 

 

 

4,311

 

 

Inventory reserves

 

 

597

 

 

 

-

 

 

Deferred income taxes

 

 

(531

)

 

 

-

 

 

Loss on write-off of deferred loan costs

 

 

-

 

 

 

1,900

 

 

Amortization of debt issuance costs and debt discounts

 

 

1,152

 

 

 

207

 

 

Gain on forgiveness of debt

 

 

-

 

 

 

(1,776

)

 

Amortization of right-of-use assets and lease liability

 

 

(173

)

 

 

(806

)

 

Contract asset reserve

 

 

1,216

 

 

 

-

 

 

Other

 

 

872

 

 

 

66

 

 

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

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(2,166

)

 

 

(3,229

)

 

Other receivables

 

 

2,692

 

 

 

(235

)

 

Inventories, net

 

 

(10,838

)

 

 

(4,011

)

 

Prepaid expenses and other current assets

 

 

1,434

 

 

 

(1,520

)

 

Contract assets

 

 

(1,540

)

 

 

(1,552

)

 

Other assets

 

 

(5

)

 

 

40

 

 

Accounts payable

 

 

(2,693

)

 

 

1,967

 

 

Accrued and other long-term liabilities

 

 

(2,220

)

 

 

(3,537

)

 

Unearned revenue and contract liabilities

 

 

2,077

 

 

 

(1,633

)

 

Net cash used in operating activities

 

 

(37,393

)

 

 

(22,641

)

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(108,850

)

 

 

(51,906

)

 

Acquisition of Novomer, net of cash acquired

 

 

(14

)

 

 

-

 

 

Proceeds from sales of property, plant and equipment

 

 

55

 

 

 

340

 

 

Net cash used in investing activities

 

 

(108,809

)

 

 

(51,566

)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from exercise of warrants, net of issuance costs

 

 

-

 

 

 

138,202

 

 

Proceeds from long-term debt

 

 

-

 

 

 

169

 

 

Cash paid for debt issuance costs

 

 

(279

)

 

 

(1,684

)

 

Proceeds from exercise of stock options

 

 

197

 

 

 

2,375

 

 

Proceeds from employee stock purchase plan

 

 

296

 

 

 

92

 

 

Principal payments on long-term debt

 

 

(88

)

 

 

(27,075

)

 

Cost related to warrants