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The unaudited condensed Consolidated Financial Statements for the three and nine month periods ended September 30, 2024, 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; regulatory developments in the United States and European Union and its member countries, and other countries; 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 or disputes with respect to a licensing agreement; any failure to achieve potential benefits or our licensing agreements with licensees or to enter into future arrangements; the ability and willingness of licensees to actively pursue development activities under our collaboration agreements; 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; the rate and degree of market acceptance of, and demand for, our product candidates; dislocations in the capital markets; our ability to attract and retain key scientific and management personnel; 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 April 29, 2024 (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. 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. 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. | Interim Condensed Consolidated Financial Statements (Unaudited) | 3 |
| Item 2. | Management's Discussion & Analysis of Financial Condition and Results of Operations | 44 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risks | 55 |
| Item 4. | Controls and Procedures | 55 |
| PART II OTHER INFORMATION | 56 | |
| Item 1. | Legal Proceedings | 56 |
| Item 1A. | Risk Factors | 56 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 56 |
| Item 3. | Default Upon Senior Securities | 56 |
| Item 4. | Mine Safety Disclosures | 56 |
| Item 5. | Other Information | 56 |
| Item 6. | Exhibits | 56 |
PART I FINANCIAL INFORMATION
Item 1. Unaudited Interim Condensed Consolidated Financial Statements
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| As of | |||||||||
| Notes | December 31, 2023 | September 30, 2024 | |||||||
| ASSETS | |||||||||
| Non-current assets | |||||||||
| Intangible assets | 671 | 691 | |||||||
| Property, plant and equipment | 8 | 54,681 | 48,956 | ||||||
| Right-of-use assets | 7 | 38,060 | 32,225 | ||||||
| Non-current financial assets | 9 | 7,853 | 7,651 | ||||||
| Other non-current assets | 9 | - | 11,120 | ||||||
| Deferred tax assets | 4.5 | - | 803 | ||||||
| Total non-current assets | 101,265 | 101,445 | |||||||
| Current assets | |||||||||
| Trade receivables | 10.1 | 569 | 11,180 | ||||||
| Subsidies receivables | 10.2 | 20,900 | 15,661 | ||||||
| Other current assets | 10.3 | 7,722 | 6,643 | ||||||
| Current financial assets | 11 | 67,107 | 101,860 | ||||||
| Cash and cash equivalents | 11 | 136,708 | 159,087 | ||||||
| Total current assets | 233,005 | 294,431 | |||||||
| TOTAL ASSETS | 334,270 | 395,876 | |||||||
| LIABILITIES | |||||||||
| Shareholders' equity | |||||||||
| Share capital | 15 | 4,365 | 5,906 | ||||||
| Premiums related to the share capital | 15 | 522,785 | 607,153 | ||||||
| Currency translation adjustment | (36,690 | ) | (35,154 | ) | |||||
| Retained earnings (deficit) | (304,707 | ) | (405,798 | ) | |||||
| Net income (loss) | (101,059 | ) | (42,683 | ) | |||||
| Total shareholders' equity - Group Share | 84,695 | 129,424 | |||||||
| Total shareholders' equity | 84,695 | 129,424 | |||||||
| Non-current liabilities | |||||||||
| Non-current financial liabilities | 12 | 49,125 | 61,575 | ||||||
| Non-current lease debts | 12 | 42,948 | 36,683 | ||||||
| Non-current provisions | 18 | 2,200 | 2,427 | ||||||
| Deferred tax liabilities | 4.5 | 158 | 118 | ||||||
| Total non-current liabilities | 94,431 | 100,802 | |||||||
| Current liabilities | |||||||||
| Current financial liabilities | 12 | 5,289 | 5,350 | ||||||
| Current lease debts | 12 | 8,502 | 8,508 | ||||||
| Trade payables | 19,069 | 18,511 | |||||||
| Deferred income and contract liabilities | 14 | 110,325 | 122,006 | ||||||
| Current provisions | 18 | 1,740 | 899 | ||||||
| Other current liabilities | 13 | 10,219 | 10,376 | ||||||
| Total current liabilities | 155,144 | 165,650 | |||||||
| Total liabilities | 249,575 | 266,452 | |||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 334,270 | 395,876 |
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial Statements
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
$ in thousands, except share and per share amounts
| For the nine-month period ended September 30, | |||||||||
| Notes | 2023* | 2024 | |||||||
| Revenues and other income | |||||||||
| Revenues | 4.1 | 472 | 28,789 | ||||||
| Other income | 4.1 | 6,731 | 5,263 | ||||||
| Total revenues and other income | 7,203 | 34,052 | |||||||
| Operating expenses | |||||||||
| Research and development expenses | 4.2 | (62,690 | ) | (69,670 | ) | ||||
| Selling, general and administrative expenses | 4.2 | (12,141 | ) | (14,153 | ) | ||||
| Other operating income (expenses) | 4.2 | (96 | ) | 896 | |||||
| Total operating expenses | (74,926 | ) | (82,926 | ) | |||||
| Operating income (loss) | (67,723 | ) | (48,874 | ) | |||||
| Financial income | 4.4 | 16,133 | 29,727 | ||||||
| Financial expenses | 4.4 | (23,085 | ) | (24,049 | ) | ||||
| Net Financial gain (loss) | (6,952 | ) | 5,677 | ||||||
| Income tax | 4.5 | (365 | ) | 514 | |||||
| Income (loss) from continuing operations | (75,040 | ) | (42,683 | ) | |||||
| Income (loss) from discontinued operations | 5 | 8,392 | - | ||||||
| Net income (loss) | (66,648 | ) | (42,683 | ) | |||||
| Attributable to shareholders of Cellectis | (59,264 | ) | (42,683 | ) | |||||
| Attributable to non-controlling interests | (7,384 | ) | - | ||||||
| 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) | (1.09 | ) | (0.49 | ) | |||||
| Diluted net income (loss) attributable to shareholders of Cellectis, per share ($ /share) | (1.09 | ) | (0.49 | ) | |||||
| Basic net income (loss) attributable to shareholders of Cellectis from discontinued operations, per share ($ /share) | 0.29 | - | |||||||
| Diluted net income (loss) attributable to shareholders of Cellectis from discontinued operations, per share ($ /share) | 0.29 | - | |||||||
| Number of shares used for computing | |||||||||
| Basic | 54,231,943 | 87,355,605 | |||||||
| Diluted | 54,231,943 | 87,355,605 |
* These amounts reflect Calyxt's adjustments as presented in Cellectis 2023 20F (Note 3)
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial Statements
UNAUDITED INTERIM CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the nine-month period ended September 30,
| For the nine-month period ended September 30, | |||||||||
| 2023* | 2024 | ||||||||
| Net income (loss) | (66,648 | ) | (42,683 | ) | |||||
| Actuarial gains and losses | 55 | (8 | ) | ||||||
| Currency translation adjustment | 1,602 | 1,536 | |||||||
| Other comprehensive income (loss) from discontinued operations | (994 | ) | - | ||||||
| Total other comprehensive income (loss) | 663 | 1,527 | |||||||
| Total Comprehensive income (loss) | (65,985 | ) | (41,156 | ) | |||||
| Attributable to shareholders of Cellectis | (60,086 | ) | (41,156 | ) | |||||
| Attributable to non-controlling interests | (5,899 | ) | 0 |
* These amounts reflect Calyxt's adjustments as presented in Cellectis 2023 20F (Note 3)
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial Statements
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
$ in thousands, except share and per share amounts
| For the three-month period ended September 30, | |||||||||
| Notes | 2023* | 2024 | |||||||
| Revenues and other income | |||||||||
| Revenues | 4.1 | 155 | 16,200 | ||||||
| Other income | 4.1 | 1,489 | 1,851 | ||||||
| Total revenues and other income | 1,644 | 18,050 | |||||||
| Operating expenses | |||||||||
| Research and development expenses | 4.2 | (19,075 | ) | (23,829 | ) | ||||
| Selling, general and administrative expenses | 4.2 | (3,227 | ) | (5,167 | ) | ||||
| Other operating income (expenses) | (12 | ) | 175 | ||||||
| Total operating expenses | (22,314 | ) | (28,820 | ) | |||||
| Operating income (loss) | (20,671 | ) | (10,769 | ) | |||||
| Financial income | 4.4 | 4,919 | 3,062 | ||||||
| Financial expenses | 4.4 | (1,624 | ) | (15,408 | ) | ||||
| Net Financial gain (loss) | 3,295 | (12,346 | ) | ||||||
| Income tax | (106 | ) | 59 | ||||||
| Income (loss) from continuing operations | (17,482 | ) | (23,056 | ) | |||||
| Income (loss) from discontinued operations | 0 | - | |||||||
| Net income (loss) | (17,482 | ) | (23,056 | ) | |||||
| Attributable to shareholders of Cellectis | (17,482 | ) | (23,056 | ) | |||||
| Attributable to non-controlling interests | (0 | ) | - | ||||||
| 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) | (0.31 | ) | (0.23 | ) | |||||
| Diluted net income (loss) attributable to shareholders of Cellectis, per share ($ /share) | (0.31 | ) | (0.23 | ) | |||||
| Basic net income (loss) attributable to shareholders of Cellectis from discontinued operations, per share ($ /share) | 0.00 | - | |||||||
| Diluted net income (loss) attributable to shareholders of Cellectis from discontinued operations, per share ($ /share) | 0.00 | - | |||||||
| Number of shares used for computing | |||||||||
| Basic | 55,583,768 | 100,093,635 | |||||||
| Diluted | 55,583,768 | 100,093,635 |
* These amounts reflect Calyxt's adjustments as presented in Cellectis 2023 20F (Note 3)
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial Statements
UNAUDITED INTERIM CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the three-month period ended September 30,
| For the three-month period ended September 30, | |||||||||
| 2023* | 2024 | ||||||||
| Net income (loss) | (17,482 | ) | (23,056 | ) | |||||
| Actuarial gains and losses | 97 | (67 | ) | ||||||
| Currency translation adjustment | (652 | ) | 2,923 | ||||||
| Other comprehensive income (loss) from discontinued operations | 221 | - | |||||||
| Total other comprehensive income (loss) | (334 | ) | 2,856 | ||||||
| Total Comprehensive income (loss) | (17,816 | ) | (20,200 | ) | |||||
| Attributable to shareholders of Cellectis | (17,829 | ) | (20,200 | ) | |||||
| Attributable to non-controlling interests | 13 | 0 |
* These amounts reflect Calyxt's adjustments as presented in Cellectis 2023 20F (Note 3)
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial Statements
UNAUDITED INTERIM CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
| For the nine-month period ended September 30, | |||||||||
| Notes | 2023* | 2024 | |||||||
| Cash flows from operating activities | |||||||||
| Net income (loss) for the period | (66,648 | ) | (42,683 | ) | |||||
| Net loss for the period from discontinued operations | 8,392 | - | |||||||
| Net (loss) income for the period from continuing operations | (75,040 | ) | (42,683 | ) | |||||
| Adjustment to reconcile net income (loss) to cash provided by (used in) operating activities | |||||||||
| Adjustments for | |||||||||
| Amortization and depreciation | 13,341 | 14,017 | |||||||
| Net loss (income) on disposals | 0 | (62 | ) | ||||||
| Net financial loss (gain) | 6,952 | (5,677 | ) | ||||||
| Income tax | 365 | (514 | ) | ||||||
| Expenses related to share-based payments | 612 | 2,283 | |||||||
| Provisions | 679 | (739 | ) | ||||||
| Realized foreign exchange gain (loss) | 177 | 254 | |||||||
| Operating cash flows before change in working capital | (52,914 | ) | (33,122 | ) | |||||
| Decrease (increase) in trade receivables and other current assets (1) | 11 | 499 | 48,305 | ||||||
| Decrease (increase) in subsidies and tax receivables | (6,193 | ) | (5,772 | ) | |||||
| (Decrease) increase in trade payables and other current liabilities | (4,548 | ) | (899 | ) | |||||
| (Decrease) increase in deferred revenues and contract liabilities | 59 | 6,769 | |||||||
| Change in working capital | (10,183 | ) | 48,404 | ||||||
| Interest received | 2,277 | 7,754 | |||||||
| Net cash flows provided by (used in) operating activities of continuing operations | (60,819 | ) | 23,036 | ||||||
| Net cash flows provided by (used in) operating activities of discontinued operations | (3,645 | ) | - | ||||||
| Net cash flows provided by (used in) operating activities | (64,463 | ) | 23,036 | ||||||
| Cash flows from investment activities | |||||||||
| Acquisition of intangible assets | - | (65 | ) | ||||||
| Calyxt's cash and cash equivalents disposed of | (1,627 | ) | - | ||||||
| Acquisition of property, plant and equipment | 8 | (797 | ) | (2,033 | ) | ||||
| Net change in non-current financial assets | 9 | 489 | (3 | ) | |||||
| Sale of current financial assets | 11 | 0 | 14,756 | ||||||
| Acquisition of current financial assets | 11 | 0 | (98,803 | ) | |||||
| Net cash flows provided by (used in) investing activities of continuing operations | (1,936 | ) | (86,147 | ) | |||||
| Net cash flows provided by (used in) investing activities of discontinued operations | 79 | - | |||||||
| Cash flows provided by (used in) investment activities | (1,858 | ) | (86,147 | ) | |||||
| Cash flows from financing activities | |||||||||
| Increase in share capital of Cellectis after deduction of transaction costs (1) | 15 | 23,614 | 82,823 | ||||||
| Increase in borrowings | 12 | 28,282 | 16,317 | ||||||
| Decrease in borrowings | 12 | (3,831 | ) | (3,954 | ) | ||||
| Interest paid on financial debt | (229 | ) | (631 | ) | |||||
| Payments on lease debts | 12 | (8,332 | ) | (8,367 | ) | ||||
| Net cash flows provided by financing activities of continuing operations | 39,504 | 86,188 | |||||||
| Net cash flows provided by (used in) financing activities of discontinued operations | 1,781 | - | |||||||
| Net cash flows provided by (used in) financing activities | 41,285 | 86,188 | |||||||
| (Decrease) increase in cash and cash equivalents | (25,035 | ) | 23,077 | ||||||
| Cash and cash equivalents at the beginning of the year | 93,216 | 136,708 | |||||||
| Effect of exchange rate changes on cash | (822 | ) | (697 | ) | |||||
| Cash from continuing operations | 67,358 | 159,087 | |||||||
| Cash and cash equivalents at the end of the period | 11 | 67,358 | 159,087 |
* These amounts reflect Calyxt's adjustments as presented in Cellectis 2023 20F (Note 3)
(1) The $140.0 million cash received from AZ related to Cellectis' capital increase is recorded as cash-flows from operating activities for $57.0 million (for the SIA derivative) and as cash-flows from financing activities for $83.0 million see note 2.4
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial Statements
UNAUDITED INTERIM CONDENSED 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, 2023 | 45,675,968 | 2,955 | 583,122 | (28,605 | ) | (333,365 | ) | (106,139 | ) | 117,968 | 7,973 | 125,941 | ||||||||||||||||||||||||
| Net Income (loss) | (59,264 | ) | (59,264 | ) | (7,384 | ) | (66,648 | ) | ||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (877 | ) | 55 | - | (822 | ) | 1,485 | 663 | ||||||||||||||||||||||||||||
| Total comprehensive income (loss) | (877 | ) | 55 | (59,264 | ) | (60,086 | ) | (5,899 | ) | (65,985 | ) | |||||||||||||||||||||||||
| Allocation of prior period loss | (106,139 | ) | 106,139 | - | - | |||||||||||||||||||||||||||||||
| Capital increase of Cellectis | 15 | 9,907,800 | 537 | 24,536 | 25,073 | - | 25,073 | |||||||||||||||||||||||||||||
| Transaction costs related to Cellectis' capital increase | 15 | (1,459 | ) | (1,459 | ) | (1,458 | ) | |||||||||||||||||||||||||||||
| Operation between shareholders | 343 | 343 | (343 | ) | - | |||||||||||||||||||||||||||||||
| Loss of control over Calyxt | - | (3,625 | ) | (3,625 | ) | |||||||||||||||||||||||||||||||
| OCI Reclassification pursuant to Calyxt's deconsolidation | (8,024 | ) | (12 | ) | (8,036 | ) | - | (8,036 | ) | |||||||||||||||||||||||||||
| Non-cash stock-based compensation expense | 16 | 2,466 | - | 2,466 | 2,006 | 4,472 | ||||||||||||||||||||||||||||||
| Other movements | (134,273 | ) | 134,125 | (148 | ) | (111 | ) | (259 | ) | |||||||||||||||||||||||||||
| As of September 30, 2023* | 55,583,768 | 3,492 | 474,391 | (37,506 | ) | (304,994 | ) | (59,264 | ) | 76,121 | 0 | 76,123 | ||||||||||||||||||||||||
| As of January 1, 2024 | 71,751,201 | 4,365 | 522,785 | (36,690 | ) | (304,707 | ) | (101,059 | ) | 84,695 | - | 84,695 | ||||||||||||||||||||||||
| Net Income (loss) | (42,683 | ) | (42,683 | ) | - | (42,683 | ) | |||||||||||||||||||||||||||||
| Other comprehensive income (loss) | 1,536 | (8 | ) | - | 1,527 | 0 | 1,527 | |||||||||||||||||||||||||||||
| Total comprehensive income (loss) | 1,536 | (8 | ) | (42,683 | ) | (41,156 | ) | 0 | (41,156 | ) | ||||||||||||||||||||||||||
| Allocation of prior period loss (1) | (101,059 | ) | 101,059 | |||||||||||||||||||||||||||||||||
| Capital increase of Cellectis (2) | 15 | 28,000,000 | 1,522 | 140,006 | 141,527 | 141,527 | ||||||||||||||||||||||||||||||
| Transaction costs related to Cellectis' capital increase (3) | 15 | (208 | ) | (208 | ) | (208 | ) | |||||||||||||||||||||||||||||
| Derecognition of AZ SIA derivative | 2.4 | (57,638 | ) | (57,638 | ) | (57,638 | ) | |||||||||||||||||||||||||||||
| Exercise of share warrants, employee warrants, stock-options and vesting of free-shares | 15 | 342,672 | 19 | 6 | (25 | ) | 0 | 0 | ||||||||||||||||||||||||||||
| Non-cash stock-based compensation expense | 16 | 2,283 | 2,283 | - | 2,283 | |||||||||||||||||||||||||||||||
| Other movements | (79 | ) | (79 | ) | - | (79 | ) | |||||||||||||||||||||||||||||
| As of September 30, 2024 | 100,093,873 | 5,906 | 607,153 | (35,154 | ) | (405,798 | ) | (42,683 | ) | 129,424 | (0 | ) | 129,424 |
* These amounts reflect Calyxt's adjustments as presented in Cellectis 2023 20F (Note 3)
(1) The loss for the year ended December 31, 2023 is allocated to retained earnings following the allocation decision of the Annual General Meeting of shareholders on June 28, 2024.
(2) During the nine-months ended September 30, 2024, 28,000,000 shares were issued on May 3, 2024 in connection with the AstraZeneca Subsequent Investment Agreement (the SIA ) of $140.0 million at a price of $5 per share.
(3) The transaction costs recognized as a reduction of share premium during the nine-months ended September 30, 2024 correspond to the $0.2 million issuance cost related to AstraZeneca additional investment (the SIA ).
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial Statements.
NOTES TO THE UNAUDITED INTERIM CONDENSED 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 progenitor 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 May 31, 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 Unaudited Interim Condensed Consolidated Financial Statements of Cellectis as of, and for the nine-month period ended September 30, 2024 were approved by our Board of Directors on November 4, 2024.
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 nine-month period ended September 30, 2024 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 nine-month period ended September 30, 2024 have been prepared using the same accounting policies and methods as those applied for the year ended December 31, 2023, except as described below related to the new or amended accounting standards applied.
IFRS Accounting Standards 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, 2024 but had no significant impact on the Interim Consolidated Financial Statements:
-Amendments to IAS 1 regarding the classification of liabilities as current or non-current (issued in November 2022 and effective for the accounting periods as of January 1, 2024)
-Amendment to IFRS 16 to clarify how a seller-lessee accounts for variable lease payments that arise in a sale-and-leaseback transaction (issued in February 2023 and effective for the accounting periods as of January 1, 2024)
-Amendments to IAS 7 and IFRS 7 regarding the supplier finance arrangements (issued in May 2023 and effective for the accounting periods as of January 1, 2024)
Accounting standards, interpretations and amendments issued but not yet effective
The following pronouncements and related amendments are applicable for periods beginning after January 1, 2025, or later, as specified below :
-Amendments to IAS 21 regarding the lack of exchangeability of foreign currency (issued in August 2023 and effective for the accounting periods as of January 1, 2025)
-Amendments to IFRS 1 regarding the first-time adoption of International Financial Reporting Standards, to IFRS 7 regarding the financial instruments: disclosures and its accompanying guidance on implementing, to IFRS 9 regarding the financial instruments, to IFRS 10 regarding the consolidated financial statements and to IAS 7 regarding the statement of cash flows (issued in July 2024 and effective for the accounting periods as of January 1, 2026)
-IFRS 18 Presentation and Disclosure in Financial Statements (issued in July 2024 and effective for the accounting periods as of January 1, 2027)
-IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued in July 2024 and effective for the accounting periods as of January 1, 2027)
The Group has not early adopted any of these pronouncements and amendments and is in progress to assess if any impact.
The Interim Condensed Consolidated Financial Statements were prepared on a going concern basis.
With cash and cash equivalents of $159.1 million and deposit of $100.3 million as of September 30, 2024, the Company believes its cash and cash equivalents and deposits will be sufficient to fund its operations into 2027 and therefore for at least twelve months following the unaudited interim condensed 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 risks and 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 choose to revise our strategy to extend our cash runway.
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 Currency translation adjustment 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 for the applicable periods presented. 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 an entity as a subsidiary begins when the Group obtains control over the entity and ceases when the Group loses control of the entity.
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 and other qualitative factors.
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 additional losses unless the Group has a legal or constructive obligation to bear a portion of additional losses or to make payments on behalf of the associate.
2.4 Accounting treatment of significant transactions affecting the period
We present in this Note 2.4 the accounting treatment applied in the condensed consolidated financial statements of Cellectis as of December 31, 2023 and for the nine-month period ended September 30, 2024 concerning the collaboration and investment agreements entered into with AstraZeneca Holdings B.V. ( AZ Holdings ) and AstraZeneca Ireland Limited ( AZ Ireland ) and, together with AZ Holdings and their respective affiliates, AstraZeneca . The purpose of this Note 2.4 is to bring together information on these transactions and their accounting treatment in the Group's financial statements. It is supplemented by information on the specific financial statement items impacted by these transactions in the notes to the financial statements dedicated to these items hereafter.
On November 1, 2023, Cellectis and AstraZeneca announced that they entered into a Joint Research and Collaboration Agreement (the AZ JRCA ) and an Initial Investment Agreement ( IIA ).
Pursuant to the AZ JRCA, AZ Ireland and Cellectis agreed to collaborate to develop up to 10 novel cell and gene therapy candidate products, selected from a larger pool of potential targets identified by AZ Ireland, for human therapeutic, prophylactic, palliative, and analgesic purposes. Each party will be responsible for performing research and development
activities based on research plans (each a Research Plan ) to be agreed upon throughout the initial five-year collaboration term under the AZ JRCA.
Pursuant to the IIA, AZ Holdings made an initial equity investment of $80 million in Cellectis by subscribing to 16,000,000 ordinary shares at a price of $5.00 per share (the Initial Investment ). Following the Initial Investment, AZ Holdings owned approximately 22% of the share capital and 21% of the voting rights of the Company.
Following this first equity investment of AZ Holdings on November 14, 2023, Cellectis and AZ Holdings signed the SIA for an additional equity investment of $140 million ( the Subsequent Investment ) by AZ Holdings that was subject to the fulfilment of certain closing conditions. The additional investment was made by way of subscription of 10,000,000 class A convertible preferred shares and 18,000,000 class B convertible preferred shares, in each case at a price of $5.00 per share. Both classes of preferred shares benefit from a liquidation preference and are convertible into ordinary shares with the same rights as the outstanding ordinary shares on a one-for-one basis. This additional investment was completed on May 3, 2024.
Analysis of the Joint Research Collaboration Agreement
In addition to an upfront payment of $25 million made by AZ Ireland to Cellectis under the AZ JRCA, AZ Ireland agreed to reimburse Cellectis for its budgeted research costs associated with targets identified under the AZ JRCA. Cellectis is also eligible to receive an option exercise fee and development, regulatory and sales-related milestone payments, ranging from $70 million up to $220 million, per each of the 10 candidate products, plus tiered royalties, which may range from mid-) single to low-double digits, based on the sale of Licensed Products (as defined in the AZ JRCA).
As part of our analysis of the AZ JRCA under IFRS 15 requirements, we concluded that the $25 million upfront payment is to be included in the transaction price at contract inception and allocated to each research activity performance on a reasonable basis.
On March 4, 2024, AZ Ireland and Cellectis approved the first Research Plan under the AZ JRCA. As a result of this milestone, Cellectis is entitled, pursuant to the AZ JRCA, to receive the corresponding $10 million milestone payment. Based on our measurement of the progress of our performance obligation, this milestone payment has been recognized in the amount of $3.9 million in revenue in the nine-month period ended September 30, 2024, with the residual amount classified as deferred income as of September 30, 2024.
On September 13, 2024, AZ Ireland and Cellectis approved two additional Research Plans under the AZ JRCA. As a result of these milestones, Cellectis is entitled, pursuant to the AZ JRCA, to receive the corresponding $2 million and $5 million milestone payments. Based on our measurement of the progress of our performance obligation, those milestone payments have been recognized respectively in the amount of $0.5 million and $0.04 million in revenue in the nine-month period ended September 30, 2024, with the residual amount classified as deferred income as of September 30, 2024.
Interdependence of the Initial Investment Agreement and the Subsequent Investment Agreement with the AZ JRCA