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The unaudited condensed Consolidated Financial Statements for the three- and six-month periods ended June 30, 2023, included herein, have been prepared in accordance with International Accounting Standard 34 ( IAS 34 ) Interim Financial Reporting as issued by the International Accounting Standards Board ( IASB ). The consolidated financial statements are presented in U.S. dollars. All references in this interim report to $ and U.S. dollars mean U.S. dollars and all references to and euros mean euros, unless otherwise noted.
This interim report, including Management's Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements within the meaning of applicable securities laws, including the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act. All statements other than present and historical facts and conditions contained in this interim report, including statements regarding our future results of operations and financial position, business strategy, plans and our objectives for future operations, are forward-looking statements. When used in this interim report, the words anticipate, believe, can, could, estimate, expect, intend, is designed to, may, might, plan, potential, predict, objective, should, or the negative of these and similar expressions identify forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties and are made in light of information currently available to us. Actual results, performance or events may differ materially from those projected in any forward-looking statement. Many important factors may adversely affect such forward-looking statements and cause actual results to differ from those in any forward-looking statement, including, without limitation, inconclusive clinical trial results or clinical trials failing to achieve one or more endpoints; early data not being repeated in ongoing or future clinical trials; promising preclinical data not yielding positive clinical results; failures to secure required regulatory approvals; disruptions from failures by third-parties on whom we rely in connection with our clinical trials; delays or negative determinations by regulatory authorities; changes or increases in oversight and regulation; increased competition; manufacturing delays or problems; inability to achieve enrollment targets; disagreements with our collaboration partners or failures of collaboration partners to pursue product candidates; legal challenges, including product liability claims or intellectual property disputes; commercialization factors, including regulatory approval and pricing determinations; disruptions to access to raw materials or starting material; delays or disruptions at our in-house manufacturing facilities; proliferation and continuous evolution of new technologies; capital resource constraints; dislocations in the capital markets; and other important factors described under Risk Factors and Special Note Regarding Forward-Looking Statements in our Annual Report on Form 20-F filed with the Securities and Exchange Commission (the SEC ) on March 14, 2023 (the Annual Report ) and under Risk Factors in the interim reports that we file with the SEC. As a result of these factors, we cannot assure you that the forward-looking statements in this interim report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
We own various trademark registrations and applications, and unregistered trademarks and service marks, including Cellectis , TALEN and our corporate logos, and all such trademarks and service marks appearing in this interim report are the property of Cellectis. The trademarks Calyxt , PlantSpring , BioFactory , Plant Cell Matrix and PCM are owned by Calyxt an equity method investee of the Company.. All other trade names, trademarks and service marks of other companies appearing in this interim report are the property of their respective holders. Solely for convenience, the trademarks and trade names in this interim report may be referred to without the and symbols, but such references, or the failure of such symbols to appear, should not be construed as any indication that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend to use or display other companies' trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
As used in this interim report, the terms Cellectis, we, our, us, and the Company refer to Cellectis S.A. and its subsidiaries, taken as a whole (in the case of Calyxt, Inc., only until May 31, 2023), unless the context otherwise requires. References to Calyxt refer to Calyxt, Inc. (renamed Cibus, Inc,. as of May 31,, 2023) and its subsidiaries, taken as a whole. With respect to disclosures relating to the period before May 31, 2023, references to the Group refer to Cellectis S.A., Cellectis, Inc., Cellectis Biologics, Inc. and Calyxt, Inc., collectively until May 31, 2023. With respect to disclosures relating to the period after May 31, 2023, references to the Group refer to Cellectis S.A., Cellectis, Inc. and Cellectis Biologics, Inc.
| PART I FINANCIAL INFORMATION | 3 | |
| Item 1. | Condensed Consolidated Financial Statements (Unaudited) | 3 |
| Item 2. | Management's Discussion & Analysis of Financial Condition and Results of Operations | 39 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risks | 51 |
| Item 4. | Controls and Procedures | 51 |
| PART II OTHER INFORMATION | 51 | |
| Item 1. | Legal Proceedings | 51 |
| Item 1A. | Risk Factors | 51 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 51 |
| Item 3. | Default Upon Senior Securities | 51 |
| Item 4. | Mine Safety Disclosures | 51 |
| Item 5. | Other Information | 51 |
| Item 6. | Exhibits | 51 |
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| As of | |||||||||
| Notes | December 31, 2022 | June 30, 2023 | |||||||
| ASSETS | |||||||||
| Non-current assets | |||||||||
| Intangible assets | 718 | 695 | |||||||
| Property, plant, and equipment | 8 | 63,621 | 59,231 | ||||||
| Right-of-use assets | 7 | 44,275 | 41,457 | ||||||
| Non-current financial assets | 9 | 8,791 | 13,006 | ||||||
| Total non-current assets | 117,406 | 114,389 | |||||||
| Current assets | |||||||||
| Trade receivables | 10.1 | 772 | 422 | ||||||
| Subsidies receivables | 10.2 | 14,496 | 19,488 | ||||||
| Other current assets | 10.3 | 9,078 | 7,869 | ||||||
| Current financial assets | 11.1 | 7,907 | 1,120 | ||||||
| Cash and cash equivalents | 11.2 | 89,789 | 84,386 | ||||||
| Total current assets | 122,043 | 113,285 | |||||||
| Total assets held for sale | 5 | 21,768 | - | ||||||
| TOTAL ASSETS | 261,216 | 227,674 | |||||||
| LIABILITIES | |||||||||
| Shareholders' equity | |||||||||
| Share capital | 15 | 2,955 | 3,491 | ||||||
| Premiums related to the share capital | 15 | 583,122 | 476,224 | ||||||
| Currency translation adjustment | ( 28,605 | ) | ( 37,050 | ) | |||||
| Retained earnings | ( 333,365 | ) | ( 305,392 | ) | |||||
| Net income (loss) | ( 106,139 | ) | ( 40,715 | ) | |||||
| Total shareholders' equity - Group Share | 117,968 | 96,558 | |||||||
| Non-controlling interests | 7,973 | 0 | |||||||
| Total shareholders' equity | 125,941 | 96,558 | |||||||
| Non-current liabilities | |||||||||
| Non-current financial liabilities | 12 | 20,531 | 40,270 | ||||||
| Non-current lease debts | 12 | 49,358 | 46,157 | ||||||
| Non-current provisions | 18 | 2,390 | 2,641 | ||||||
| Total non-current liabilities | 72,279 | 89,068 | |||||||
| Current liabilities | - | ||||||||
| Current financial liabilities | 12 | 5,088 | 5,185 | ||||||
| Current lease debts | 12 | 7,872 | 8,270 | ||||||
| Trade payables | 12 | 21,456 | 19,229 | ||||||
| Deferred revenues and contract liabilities | 14 | 59 | 241 | ||||||
| Current provisions | 18 | 477 | 1,029 | ||||||
| Other current liabilities | 13 | 13,179 | 8,093 | ||||||
| Total current liabilities | 48,131 | 42,047 | |||||||
| Total liabilities related to asset held for sale | 5 | 14,864 | - | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 261,216 | 227,674 |
The accompanying notes form an integral part of these unaudited condensed Consolidated Interim Financial Statements
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
$ in thousands, except per share amounts
| For the six-month period ended June 30, | |||||||||
| Notes | 2022 * | 2023 | |||||||
| Revenues and other income | |||||||||
| Revenues | 4.1 | 2,972 | 317 | ||||||
| Other income | 4.1 | 3,551 | 5,242 | ||||||
| Total revenues and other income | 6,523 | 5,560 | |||||||
| Operating expenses | |||||||||
| Cost of revenue | 4.2 | ( 714 | ) | ( 389 | ) | ||||
| Research and development expenses | 4.2 | ( 52,231 | ) | ( 43,225 | ) | ||||
| Selling, general and administrative expenses | 4.2 | ( 10,893 | ) | ( 8,914 | ) | ||||
| Other operating income (expenses) | 774 | ( 83 | ) | ||||||
| Total operating expenses | ( 63,064 | ) | ( 52,612 | ) | |||||
| Operating income (loss) | ( 56,541 | ) | ( 47,053 | ) | |||||
| Financial income | 4.4 | 12,263 | 33,041 | ||||||
| Financial expenses | 4.4 | ( 3,050 | ) | ( 21,461 | ) | ||||
| Net Financial gain (loss) | 9,213 | 11,580 | |||||||
| Income tax | ( 258 | ) | |||||||
| Income (loss) from continuing operations | ( 47,328 | ) | ( 35,731 | ) | |||||
| Income (loss) from discontinued operations | ( 6,883 | ) | ( 10,377 | ) | |||||
| Net income (loss) | ( 54,211 | ) | ( 46,108 | ) | |||||
| Attributable to shareholders of Cellectis | ( 50,858 | ) | ( 40,715 | ) | |||||
| Attributable to non-controlling interests | ( 3,352 | ) | ( 5,393 | ) | |||||
| Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis | 17 | ||||||||
| Basic net income (loss) attributable to shareholders of Cellectis per share ($ /share) | ( 1.12 | ) | ( 0.76 | ) | |||||
| Diluted net income (loss) attributable to shareholders of Cellectis per share ($ /share) | ( 1.12 | ) | ( 0.76 | ) | |||||
| Basic net income (loss) attributable to shareholders of Cellectis per share ($ /share) from discontinued operations | ( 0.08 | ) | ( 0.09 | ) | |||||
| Diluted net income (loss) attributable to shareholders of Cellectis per share ($ /share) from discontinued operations | ( 0.08 | ) | ( 0.09 | ) |
* These amounts reflect adjustments made in connection with the presentation of the discontinued operation (Note 5)
The accompanying notes form an integral part of these unaudited condensed Consolidated Interim Financial Statements
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the six-month period ended June 30,
| For the six-month period ended June 30, | |||||||||
| 2022 * | 2023 | ||||||||
| Net income (loss) | ( 54,211 | ) | ( 46,108 | ) | |||||
| Actuarial gains and losses | 1,218 | ( 42 | ) | ||||||
| Other comprehensive income (loss) that will not be reclassified subsequently to income or loss from continued operations | 1,218 | ( 42 | ) | ||||||
| Currency translation adjustment | ( 20,315 | ) | 2,272 | ||||||
| Other comprehensive income (loss) that will be reclassified subsequently to income or loss from continuing operations | ( 20,315 | ) | 2,272 | ||||||
| Other comprehensive income (loss) from discontinued operations | 8,337 | ( 1,233 | ) | ||||||
| Total Comprehensive income (loss) | ( 64,971 | ) | ( 45,111 | ) | |||||
| Attributable to shareholders of Cellectis | ( 61,246 | ) | ( 41,172 | ) | |||||
| Attributable to non-controlling interests | ( 3,725 | ) | ( 3,939 | ) |
* These amounts reflect adjustments made in connection with the presentation of the discontinued operation (Note 5)
The accompanying notes form an integral part of these unaudited condensed Consolidated Interim Financial Statements
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
($ in thousands, except per share amounts)
| For the three-month period ended June 30, | ||||||||
| 2022 * | 2023 | |||||||
| Revenues and other income | ||||||||
| Revenues | 1,307 | 178 | ||||||
| Other income | 1,416 | 1,823 | ||||||
| Total revenues and other income | 2,723 | 2,001 | ||||||
| Operating expenses | ||||||||
| Cost of revenue | ( 329 | ) | ( 55 | ) | ||||
| Research and development expenses | ( 25,630 | ) | ( 22,144 | ) | ||||
| Selling, general and administrative expenses | ( 4,830 | ) | ( 3,950 | ) | ||||
| Other operating income (expenses) | 753 | 490 | ||||||
| Total operating expenses | ( 30,036 | ) | ( 25,660 | ) | ||||
| Operating income (loss) | ( 27,313 | ) | ( 23,659 | ) | ||||
| Financial revenues | 9,992 | 32,266 | ||||||
| Financial expenses | ( 1,691 | ) | ( 16,284 | ) | ||||
| Financial gain (loss) | 8,301 | 15,982 | ||||||
| Income tax | ( 258 | ) | ||||||
| Income (loss) from continuing operations | ( 19,012 | ) | ( 7,935 | ) | ||||
| Income (loss) from discontinued operations | ( 442 | ) | ( 5,647 | ) | ||||
| Net income (loss) | ( 19,454 | ) | ( 13,583 | ) | ||||
| Attributable to shareholders of Cellectis | ( 18,946 | ) | ( 10,648 | ) | ||||
| Attributable to non-controlling interests | ( 506 | ) | ( 2,935 | ) | ||||
| Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis | ||||||||
| Basic net income (loss) attributable to shareholders of Cellectis per share ($ /share) | ( 0.42 | ) | ( 0.19 | ) | ||||
| Diluted net income (loss) attributable to shareholders of Cellectis per share ($ /share) | ( 0.42 | ) | ( 0.19 | ) | ||||
| Basic net income (loss) attributable to shareholders of Cellectis per share ($ /share) from discontinued operations | 0.00 | ( 0.05 | ) | |||||
| Diluted net income (loss) attributable to shareholders of Cellectis per share ($ /share) from discontinued operations | 0.00 | ( 0.05 | ) |
* These amounts reflect adjustments made in connection with the presentation of the discontinued operation (Note 5)
The accompanying notes form an integral part of these unaudited condensed Consolidated Interim Financial Statements
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| For the three-month period ended June 30, | ||||||||||
| 2022 * | 2023 | |||||||||
| Net income (loss) | ( 19,454 | ) | ( 13,583 | ) | ||||||
| Actuarial gains and losses | 791 | ( 21 | ) | |||||||
| Other comprehensive income (loss) that will not be reclassified subsequently to income or loss from continued operations | 791 | ( 21 | ) | |||||||
| Currency translation adjustment | ( 15,282 | ) | 4,751 | |||||||
| Other comprehensive income (loss) that will be reclassified subsequently to income or loss from continuing operations | ( 15,282 | ) | 4,751 | |||||||
| Other comprehensive income (loss) from discontinued operations | 6,412 | ( 4,906 | ) | |||||||
| Total Comprehensive income (loss) | ( 27,533 | ) | ( 13,760 | ) | ||||||
| Attributable to shareholders of Cellectis | ( 26,522 | ) | ( 11,139 | ) | ||||||
| Attributable to non-controlling interests | ( 1,011 | ) | ( 2,620 | ) |
* These amounts reflect adjustments made in connection with the presentation of the discontinued operation (Note 5)
The accompanying notes form an integral part of these unaudited condensed Consolidated Interim Financial Statements
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED CASH FLOWS
| For the six-month period ended June 30, | ||||||||||
| Notes | 2022 * | 2023 | ||||||||
| Cash flows from operating activities | ||||||||||
| Net income (loss) for the period | ( 54,211 | ) | ( 46,108 | ) | ||||||
| Net loss for the period of discontinued operations | ( 6,807 | ) | ( 10,377 | ) | ||||||
| Net (loss) income for the period of continuing operations | ( 47,404 | ) | ( 35,730 | ) | ||||||
| Adjustment to reconcile net income (loss) to cash provided by (used in) operating activities | ||||||||||
| Adjustments for | ||||||||||
| Intercompany transactions between continuing and discontinued operations (1) | 76 | |||||||||
| Amortization and depreciation | 9,402 | 8,875 | ||||||||
| Net loss (income) on disposals | 155 | 0 | ||||||||
| Net financial loss (gain) | 4.4 | ( 9,213 | ) | ( 11,580 | ) | |||||
| Income tax | 258 | |||||||||
| Expenses related to share-based payments | 4,327 | 3,265 | ||||||||
| Provisions | ( 113 | ) | 671 | |||||||
| Other non-cash items | ( 460 | ) | ||||||||
| Realized foreign exchange gain (loss) | ( 381 | ) | 15 | |||||||
| Interest (paid) / received | 86 | 1,416 | ||||||||
| Operating cash flows before change in working capital | ( 43,524 | ) | ( 32,810 | ) | ||||||
| Decrease (increase) in trade receivables and other current assets | ( 2,879 | ) | 996 | |||||||
| Decrease (increase) in subsidies receivables | ( 2,807 | ) | ( 4,649 | ) | ||||||
| (Decrease) increase in trade payables and other current liabilities | 796 | ( 7,441 | ) | |||||||
| (Decrease) increase in deferred income | 202 | 180 | ||||||||
| Change in working capital | ( 4,687 | ) | ( 10,915 | ) | ||||||
| Net cash flows provided by (used in) operating activities of continuing operations | ( 48,212 | ) | ( 43,725 | ) | ||||||
| Net cash flows provided by (used in) operating activities of discontinued operations | ( 11,970 | ) | ( 3,644 | ) | ||||||
| Net cash flows provided by (used in) operating activities | ( 60,181 | ) | ( 47,369 | ) | ||||||
| Cash flows from investment activities | ||||||||||
| Calyxt's cash and cash equivalents disposed of (2) | ( 1,642 | ) | ||||||||
| Acquisition of property, plant and equipment | 8 | ( 1,541 | ) | ( 483 | ) | |||||
| Net change in non-current financial assets | 9 | ( 252 | ) | 489 | ||||||
| Net cash flows provided by (used in) investing activities of continuing operations | ( 1,793 | ) | ( 1,636 | ) | ||||||
| Net cash flows provided by (used in) investing activities of discontinued operations | ( 744 | ) | 79 | |||||||
| Cash flows provided by (used in) investment activities | ( 2,537 | ) | ( 1,558 | ) | ||||||
| Cash flows from financing activities | ||||||||||
| Increase in share capital of Cellectis after deduction of transaction costs | 15 | 23,561 | ||||||||
| Increase in borrowings | 12 | 5,969 | 22,507 | |||||||
| Decrease in borrowings | 12 | ( 2,547 | ) | |||||||
| Interest paid on financial debt | ( 176 | ) | ( 155 | ) | ||||||
| Payments on lease debts | 12 | ( 5,693 | ) | ( 5,550 | ) | |||||
| Net cash flows provided by financing activities of continuing operations | 100 | 37,817 | ||||||||
| Net cash flows provided by (used in) financing activities of discontinued operations | 10,207 | 1,781 | ||||||||
| Net cash flows provided by (used in) financing activities | 10,307 | 39,597 | ||||||||
| (Decrease) increase in cash and cash equivalents | ( 52,411 | ) | ( 9,329 | ) | ||||||
| Cash and cash equivalents at the beginning of the year | 185,636 | 93,216 | ||||||||
| Effect of exchange rate changes on cash | ( 3,785 | ) | 499 | |||||||
| Cash from discontinued operations | 11,316 | |||||||||
| Cash from continuing operations | 118,123 | 84,386 | ||||||||
| Cash and cash equivalents at the end of the period | 11 | 129,440 | 84,386 |
* These amounts reflect adjustments made in connection with the presentation of the discontinued operation (Note 5)
(1)Net cash flows used in operating activities from continuing and discontinued operations being presented separately, the effect of intercompany transactions between the two categories is presented within the cash flows of each, although these transactions are fully eliminated in the Group's financial statements.
(2)On the date of loss of control, Calyxt's cash and cash equivalents were derecognized. For better clarity, this impact is presented in investing activities separately from cash flows from discontinued operations.
The accompanying notes form an integral part of these unaudited condensed Consolidated Interim Financial Statements
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
$ in thousands, except share data
| Share Capital Ordinary Shares | Equity | ||||||||||||||||||||||||||||
| Notes | Number of shares | Amount | Premiums related to share capital | Currency translation adjustment | Retained earnings (deficit) | Income (Loss) | attributable to shareholders of Cellectis | Non controlling interests | Total Shareholders' Equity | ||||||||||||||||||||
| As of January 1, 2022 | 45,484,310 | 2,945 | 934,696 | ( 18,021 | ) | ( 584,129 | ) | ( 114,197 | ) | 221,293 | 15,181 | 236,474 | |||||||||||||||||
| Net Loss | ( 50,858 | ) | ( 50,858 | ) | ( 3,352 | ) | ( 54,211 | ) | |||||||||||||||||||||
| Other comprehensive income (loss) | ( 11,605 | ) | 1,218 | ( 10,387 | ) | ( 373 | ) | ( 10,760 | ) | ||||||||||||||||||||
| Total comprehensive income (loss) | ( 11,605 | ) | 1,218 | ( 50,858 | ) | ( 61,246 | ) | ( 3,725 | ) | ( 64,971 | ) | ||||||||||||||||||
| Allocation of prior period loss | ( 114,197 | ) | 114,197 | ||||||||||||||||||||||||||
| Issuance of Calyxt's common stock and exercise of Calyxt's pre-funded warrants | 1,402 | 1,402 | 1,331 | 2,733 | |||||||||||||||||||||||||
| Transaction with subsidiaries | 2,152 | 2,152 | ( 2,152 | ) | |||||||||||||||||||||||||
| Exercise of share warrants, employee warrants, stock-options and free-shares vesting Cellectis | 26,500 | 1 | ( 1 | ) | 0 | 0 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 16 | 5,331 | 5,331 | 954 | 6,285 | ||||||||||||||||||||||||
| Other movements | ( 372,744 | ) | 372,744 | ||||||||||||||||||||||||||
| As of June 30, 2022 | 45,510,810 | 2,946 | 567,284 | ( 29,626 | ) | ( 320,812 | ) | ( 50,858 | ) | 168,933 | 11,588 | 180,522 | |||||||||||||||||
| As of January 1, 2023 | 45,675,968 | 2,955 | 583,122 | ( 28,605 | ) | ( 333,365 | ) | ( 106,139 | ) | 117,968 | 7,973 | 125,941 | |||||||||||||||||
| Net Loss | ( 40,715 | ) | ( 40,715 | ) | ( 5,393 | ) | ( 46,108 | ) | |||||||||||||||||||||
| Other comprehensive income (loss) | ( 415 | ) | ( 42 | ) | ( 458 | ) | 1,454 | 997 | |||||||||||||||||||||
| Total comprehensive income (loss) | ( 415 | ) | ( 42 | ) | ( 40,715 | ) | ( 41,172 | ) | ( 3,939 | ) | ( 45,111 | ) | |||||||||||||||||
| Allocation of prior period loss | ( 106,139 | ) | 106,139 | ||||||||||||||||||||||||||
| Capital increase of Cellectis (1) | 9,907,800 | 536 | 24,482 | 25,017 | 25,017 | ||||||||||||||||||||||||
| Transaction costs related to Cellectis' capital increase (2) | ( 1,455 | ) | ( 1,455 | ) | ( 1,455 | ) | |||||||||||||||||||||||
| Operation between shareholders (3) | 342 | 342 | ( 342 | ) | |||||||||||||||||||||||||
| Loss of control over Calyxt (4) | ( 4,440 | ) | ( 4,440 | ) | |||||||||||||||||||||||||
| OCI Reclassification pursuant to Calyxt's deconsolidation (5) | ( 8,030 | ) | ( 12 | ) | ( 8,042 | ) | ( 8,042 | ) | |||||||||||||||||||||
| Non-cash stock-based compensation expense | 16 | 4,053 | 4,053 | 852 | 4,905 | ||||||||||||||||||||||||
| Other movements (6) | ( 133,976 | ) | 133,824 | ( 152 | ) | ( 105 | ) | ( 257 | ) | ||||||||||||||||||||
| As of June 30, 2023 | 55,583,768 | 3,491 | 476,224 | ( 37,050 | ) | ( 305,392 | ) | ( 40,715 | ) | 96,558 | 0 | 96,558 |
(1)During the six-month period ended June 30, 2023, 9,907,800 shares were issued in a February 2023 follow-on offering of American Depositary Shares (ADSs) with gross proceeds of $24.8 million (the Cellectis Follow-on Offering).
(2)These costs correspond to the issuance costs incurred in 2023 in connection with the Cellectis Follow-on Offering as a reduction of share premium, in addition to the $0.6 million costs incurred and deducted from Equity in the fourth quarter of 2022. The total transaction costs for this Cellectis Follow-on Offering amount to $2.0 million.
(3)Operations between shareholders during the six months period ended June 30, 2023 correspond to the reduction in Cellectis' percentage of interest in Calyxt from 49.1% at December 31, 2022 to 48.0% at May 31, 2023, without change in the consolidation method until May 31, 2023.
(4)On May 31, 2023, Calyxt consummated the Merger (as defined below) with Cibus Global. As from the consummation of the Merger, Cellectis has lost control over Calyxt and we proceeded with its deconsolidation. The net impact on Total Shareholders' Equity corresponds to the derecognition of minority interests in Calyxt for $4.4 million.
(5)We have reclassified at the date of loss of control amounts previously recognized in other comprehensive income related to Calyxt that should be reclassified in profit or loss according to IFRS 10.
(6)During the annual shareholders meeting of June 27, 2023, the shareholders, in accordance with French Law, approved the absorption of $134.0 million of retained earnings into share premium. This transaction has no impact on the total equity, comprehensive income (loss), assets (including cash) nor liabilities.
The accompanying notes form an integral part of these unaudited condensed Consolidated Interim Financial Statements
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Cellectis S.A. (hereinafter Cellectis or we ) is a limited liability company ( soci t anonyme ) registered and domiciled in Paris, France.
We are a clinical stage biotechnological company, employing our core proprietary technologies to develop products based on gene-editing with a portfolio of allogeneic Chimeric Antigen Receptor T-cells ( UCART ) product candidates in the field of immuno-oncology and gene-edited hematopoietic stem and progenitors cells ( HSPC ) product candidates in other therapeutic indications.
Our UCART product candidates, based on gene-edited T-cells that express Chimeric Antigen Receptors ( CARs ), seek to harness the power of the immune system to target and eradicate cancers. We believe that CAR-based immunotherapy is one of the most promising areas of cancer research, representing a new paradigm for cancer treatment. We are designing next-generation immunotherapies that are based on gene-edited CAR T-cells. Our gene-editing technologies allow us to create allogeneic CAR T-cells, meaning they are derived from healthy donors rather than the patients themselves. We believe that the allogeneic production of CAR T-cells will allow us to develop cost-effective, off-the-shelf products that are capable of being stored and distributed worldwide. Our gene-editing expertise also enables us to develop product candidates that feature additional safety and efficacy attributes, including control properties designed to prevent them from attacking healthy tissues, to enable them to tolerate standard oncology treatments, and to equip them to resist mechanisms that inhibit immune-system activity.
Together with our focus on immuno-oncology, we are using, through our HEAL platform, our gene-editing technologies to develop HSPC product candidates in genetic diseases.
Cellectis S.A., Cellectis, Inc., Cellectis Biologics, Inc. (and Calyxt, Inc. until 31 May 2023), as a consolidated group of companies, are sometimes referred to as the Group.
On May 31, 2023, Calyxt, Inc. completed its all-stock, reverse merger business combination with Cibus Global, LLC ( Cibus Global ) (the Merger ). Among other things, as part of the Merger, each share of Calyxt's common stock, par value $0.0001 per share, existing and outstanding immediately prior to the Merger remained outstanding as a share of Class A common stock, par value $0.0001 per share ( Class A Common Stock ), without any conversion or exchange thereof, and Calyxt issued approximately 16,527,484 shares of Class A Common Stock to unitholders of Cibus Global based on an exchange ratio set forth in the agreement and plan of merger (the Merger Agreement ) for the Merger. Following the closing of the Merger, effective on June 1, 2023, the combined company operates under the name of Cibus, Inc. (referred to as Cibus ). Cellectis' equity interest in Calyxt was reduced to 2.9% after the closing of the Merger, which resulted in Cellectis losing control of Calyxt. Calyxt is therefore no longer consolidated since June 1, 2023.
Note 2. Accounting principles
2.1 Basis for preparation
The Interim Consolidated Financial Statements of Cellectis as of, and for the six-month period ended, June 30, 2023 were approved by our Board of Directors on August 3, 2023.
The Interim Consolidated Financial Statements are presented in thousands of U.S. dollars. See Note 2.2.
The Interim Consolidated Financial Statements as of, and for the six-month period ended June 30, 2023 have been prepared in accordance with International Accounting Standard ( IAS ) 34 Interim Financial Reporting, as issued by the International Accounting Standards Board ( IASB ).
The Interim Consolidated Financial Statements as of and for the six-month period ended June 30, 2023 have been prepared using the same accounting policies and methods as those applied for the year ended December 31, 2022, except as described below related to the new or amended accounting standards applied.
IFRS include International Financial Reporting Standards ( IFRS ), International Accounting Standards ( the IAS ), as well as the interpretations issued by the Standards Interpretation Committee ( the SIC ), and the International Financial Reporting Interpretations Committee ( IFRIC ).
Application of new or amended accounting standards or new amendments
The following pronouncements and related amendments have been adopted by us from January 1, 2023 but had no significant impact on the Interim Consolidated Financial Statements:
-IFRS 17 Insurance Contracts (including Amendments to IFRS 17 issued in June 2020 and Amendment to IFRS 17 - Initial Application of IFRS 17 and IFRS 9 Comparative Information issued in December 2021) (issued in May 2017 and Effective for the accounting periods as of January 1, 2023)
-Amendments to IAS 1 Classification of Liabilities as Current or Non-current (issued in July 2020 and Effective for the accounting periods as of January 1, 2023)
-Amendments to IAS 8 Definition of Accounting Estimates (issued on 12 February 2021 and Effective for the accounting periods as of January 1, 2023)
-Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies (issued in March 2021 and Effective for the accounting periods as of January 1, 2023)
-Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (issued in May 2021 and Effective for the accounting periods as of January 1, 2023)
Accounting standards, interpretations and amendments issued but not yet effective
The following pronouncements and related amendments are applicable for first quarter accounting periods beginning after January 1, 2024, or later, as specified below. The Group has not early adopted any of these pronouncements and amendments. We are currently evaluating if the adoption of these pronouncements and amendments will have a material impact on our results of operations, financial position, or cash flows:
-Amendments to IAS 1 regarding the classification of liabilities (issued in January 2020 and Effective for the accounting periods as of January 1, 2024)
-Amendments to IAS 1 regarding the classification of debt with covenants (issued in October 2022 and Effective for the accounting periods as of January 1, 2024)
-Amendment to IFRS 16 to clarify how a seller-lessee subsequently measures sale and leaseback transactions (issued in September 2022 and Effective for the accounting periods as of January 1, 2024)
The consolidated financial statements were prepared on a going concern basis. With cash and cash equivalents of $84,386 thousand as of June 30, 2023, the Company believes it has sufficient resources to continue operating for at least twelve months following the consolidated financial statements' publication.
Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves uncertainties, and actual results could vary as a result of a number of factors. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect or chose to revise our strategy to extend our cash runway.
To the extend that the company has built its cash forecast to support its ability to continue as a going concern, management considers to have the ability to extend the cash runway even further by prioritizing some clinical programs, save SG&A expenses, raising funds on the markets.
2.2 Currency of the financial statements
The Interim Consolidated Financial Statements are presented in U.S. dollars, which differs from the functional currency of Cellectis, which is the euro. We believe that this presentation enhances the comparability with peers, which primarily present their financial statements in U.S. dollars.
All financial information (unless indicated otherwise) is presented in thousands of U.S. dollars.
The statements of financial position of consolidated entities having a functional currency different from the U.S. dollar are translated into U.S. dollars at the closing exchange rate (spot exchange rate at the statement of financial position date) and the statements of operations, statements of comprehensive income (loss) and statements of cash flows of such consolidated entities are translated at the average period to date exchange rate. The resulting translation adjustments are included in equity under the caption Accumulated other comprehensive income (loss) in the Statements of Changes in Shareholders' Equity.
2.3 Consolidated entities and non-controlling interests
We control all the legal entities included in the consolidation. An investor controls an investee when the investor is exposed to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Control requires power, exposure to variability of returns and a linkage between the two.
To have power, the investor needs to have existing rights that give it the current ability to direct the relevant activities that significantly affect the investee's returns.
In order to ascertain control, potential voting rights which are substantial are taken into consideration.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.
All intra-Group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full in the consolidation.
Investments in associates
Associates are entities in which the Group has significant influence in respect of financial and operating policy decisions, but not control. Significant influence is assessed through voting rights.
Investments in associates are accounted for under the equity method and are initially recognized at cost.
The consolidated financial statements include the Group's share of the total comprehensive income of associates from the date when significant influence is obtained until the date it ceases.
If the Group's share of losses exceeds its equity interest, the carrying amount of investments consolidated under the equity method is reduced to zero and the Group ceases to recognize its share of future losses unless the Group has a legal or constructive obligation to bear a portion of future losses or to make payments on behalf of the associate.
Note 3. Scope of consolidation and non-consolidated entities
Consolidated entities
As of June 30, 2023, Cellectis S.A. owns 100% of Cellectis, Inc., which owns 100% of Cellectis Biologics, Inc.
For the six-month periods ended June 30, 2023 the consolidated group of companies (sometimes referred to as the Group ) includes Cellectis S.A., Cellectis, Inc. and Cellectis Biologics, Inc and Calyxt, Inc. through May 31, 2023, the date of deconsolidation. See Non-consolidated entities below.
For the six-month periods ended June 30, 2022 the consolidated group of companies (sometimes referred to as the Group ) includes Cellectis S.A., Cellectis, Inc., Cellectis Biologics, Inc and Calyxt, Inc.
Investments in associates
On December 29, 2022, we entered into a Collaboration Agreement with Primera Therapeutics, Inc. ( Primera ) (the Primera Collaboration Agreement ). Under the Primera Collaboration Agreement, Primera and Cellectis will be co-developing a mitochondrial DNA engineering toolbox for therapies to treat mitochondrial diseases.
Cellectis brings its experience in groundbreaking gene editing research, technology, manufacturing and clinical development. In consideration for Cellectis giving access to Primera to its expertise and knowledge in the gene editing field, and for the Cellectis' development activities pursuant to the development plan agreed upon the parties. The Primera Collaboration Agreement also grants Primera a right to exercise an exclusive worldwide option to obtain a license from Cellectis on up to five product candidates developed under the Primera Collaboration Agreement. Upon Primera exercising the option, Cellectis would be eligible to receive milestone payments and royalty payments on the net sales of the products developed under the Primera Collaboration Agreement.
Pursuant to the Primera Collaboration Agreement, on May 17, 2023, Cellectis and Primera entered into a Subscription Agreement and a Shareholders Agreement under which Cellectis received 234,570 shares of common stock of Primera, representing a 19.0% ownership interest and 19% of the voting rights in Primera at that date, and a right to designate a director to the Primera's board of directors.
Consequently, we consider that, since May 17, 2023, we have a significant influence over Primera as defined by IAS 28 because, in addition to voting rights, Cellectis receives and actively holds a seat on Primera's Board and Cellectis provides Primera with access to essential technical information. Therefore, our investment on Primera is accounted for using the equity method starting on May 17, 2023.
On initial recognition, the investment in an associate is recognized at cost. We consider that the best estimate of the fair value of the consideration given to Primera is the fair market value of Primera's shares received by Cellectis. The fair value of the investment is immaterial.