10-Q

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.

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 8, 2023, the registrant had 102,035,267 shares of common stock, $0.0001 par value per share, outstanding.

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 Part I, Item 2, 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.

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

Note 1. Basis of Presentation

Description of Business

Danimer Scientific, Inc., together with its subsidiaries (“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”.

The Company (formerly Live Oak Acquisition Corp. (“Live Oak”)), was originally incorporated in the State of Delaware on May 24, 2019 as a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization, or similar business combination with one or more businesses. Live Oak completed its initial public offering in May 2020. On December 29, 2020 (“Closing Date”), Live Oak consummated a business combination (“Business Combination”) with Meredian Holdings Group, Inc. (“MHG” or “Legacy Danimer”), with Legacy Danimer surviving the merger as a wholly owned subsidiary of Live Oak. The Business Combination was accounted for as a reverse recapitalization, meaning that Legacy Danimer was treated as the accounting acquirer and Live Oak was treated as the accounting acquiree. 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. In connection with the Business Combination, Live Oak changed its name to Danimer Scientific, Inc. On August 11, 2021, we closed the acquisition of Novomer, Inc. (integrated into our business as “Danimer Catalytic Technologies”).

Financial Statements

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and consolidate all assets and liabilities of the Company and its wholly owned subsidiaries. GAAP requires us to make certain estimates and assumptions in recording assets, liabilities, sales and expenses as well as in the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. All intercompany transactions and balances have been eliminated. Certain reclassifications have been made to previously reported amounts to conform to the current presentation. In preparing these condensed consolidated financial statements, we have considered and, where appropriate, included the effects of the COVID-19 pandemic on our operations. The pandemic continues to provide significant challenges to the U.S. and global economies.

We do not have any material items of other comprehensive income (loss); accordingly, there is no difference between net loss and comprehensive (loss) income for the three and six month periods ended June 30, 2023 or 2022, so a separate Statement of Comprehensive Income (Loss) that would otherwise be required is not presented.

Recently Issued Accounting Pronouncements

There have been


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)


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


		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	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

PART II.	OTHER INFORMATION	28

Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 6.	Exhibits	28
Signatures		29


	June 30,			December 31,
(in thousands, except share and per share data)	2023			2022
Assets:
Current assets:
Cash and cash equivalents	$	90,771		$	62,792
Accounts receivable, net		12,998			17,989
Other receivables, net		1,481			1,635
Inventories, net		29,866			32,743
Prepaid expenses and other current assets		5,441			5,225
Contract assets, net		4,818			4,687
Total current assets		145,375			125,071

Property, plant and equipment, net		454,136			453,949
Intangible assets, net		79,332			80,941
Right-of-use assets		19,153			19,028
Leverage loans receivable		31,446			31,446
Restricted cash		14,467			1,609
Other assets		344			226
Total assets	$	744,253		$	712,270

Liabilities and Stockholders' equity:
Current liabilities:
Accounts payable	$	3,558		$	14,977
Accrued liabilities		4,985			5,001
Deferred revenue		875			-
Current portion of lease liability		3,337			3,337
Current portion of long-term debt, net		1,847			1,972
Total current liabilities		14,602			25,287

Private warrants liability		245			212
Long-term lease liability, net		22,001			22,114
Long-term debt, net		375,994			286,398
Deferred income taxes		44			200
Other long-term liabilities		1,083			447
Total liabilities	$	413,969		$	334,658

Commitments and contingencies (Note 14)

Stockholders' equity:
Common stock, $0.0001 par value; 200,000,000 shares authorized: 101,938,376 and 101,804,454 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	$	10		$	10
Additional paid-in capital		704,802			676,250
Accumulated deficit		(374,528	)		(298,648	)
Total stockholders’ equity		330,284			377,612
Total liabilities and stockholders’ equity	$	744,253		$	712,270


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except share and per share data)	2023			2022			2023			2022
Revenue:
Products	$	12,174		$	11,575		$	23,270		$	24,791
Services		691			1,128			1,521			2,655
Total revenue		12,865			12,703			24,791			27,446

Costs and expenses:
Cost of revenue		19,433			14,934			37,642			30,999
Selling, general and administrative		16,844			20,975			35,543			43,211
Research and development		7,709			8,913			14,784			16,044
Loss on sale of assets		-			1			170			1
Total costs and expenses		43,986			44,823			88,139			90,255
Loss from operations		(31,121	)		(32,120	)		(63,348	)		(62,809	)
Nonoperating income (expense):
Gain (loss) on remeasurement of private warrants		1,083			2,012			(33	)		7,007
Interest, net		(9,162	)		(652	)		(12,548	)		(1,644	)
Loss on loan extinguishment		(102	)		-			(102	)		-
Other, net		-			75			-			84
Total nonoperating income (expense):		(8,181	)		1,435			(12,683	)		5,447
Loss before income taxes		(39,302	)		(30,685	)		(76,031	)		(57,362	)
Income taxes		61			240			151			531
Net loss	$	(39,241	)	$	(30,445	)	$	(75,880	)	$	(56,831	)

Basic and diluted net loss per share	$	(0.38	)	$	(0.30	)	$	(0.74	)	$	(0.56	)

Weighted average number of shares used to compute:
Basic and diluted net loss per share		101,938,376			101,047,650			101,917,585			100,888,185


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


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


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2023			2022			2023			2022
Common stock:
Balance, beginning of period	$	10		$	10		$	10		$	10
Issuance of common stock		-			-			-			-
Balance, end of period		10			10			10			10

Additional paid-in capital:
Balance, beginning of period		690,893			633,213			676,250			619,145
Stock-based compensation expense		13,909			14,233			27,974			27,983
Warrants issued with Senior Secured Term Loan		-			-			510			-
Stock issued under stock compensation plans		-			120			129			493
Shares retained for employee taxes		-			-			(61	)		-
Costs related to warrants		-			-			-			(55	)
Balance, end of period		704,802			647,566			704,802			647,566

Accumulated deficit:
Balance, beginning of period		(335,287	)		(145,276	)		(298,648	)		(118,890	)
Net loss		(39,241	)		(30,445	)		(75,880	)		(56,831	)
Balance, end of period		(374,528	)		(175,721	)		(374,528	)		(175,721	)
Total stockholders' equity	$	330,284		$	471,855		$	330,284		$	471,855