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PRELIMINARY NOTE The unaudited condensed Consolidated Financial Statements for the three-month and nine-month periods ended

Key Takeaway: unaudited condensed Consolidated Financial Statements for the three-month and nine-month periods ended September 30, 2018, included herein, have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standa

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unaudited condensed Consolidated Financial Statements for the three-month and nine-month periods ended September 30, 2018, included herein, have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as
issued by the International Accounting Standards Board ( IASB ). The consolidated financial statements are presented in U.S. dollars. Effective in the third quarter of 2017, Cellectis changed the presentation currency of its consolidated
financial statements from euro to the U.S. dollar in order to enhance comparability with its peers, which primarily present their financial statements in U.S. dollars. All references in this interim report to $, US$,
U.S.$, U.S. dollars, dollars, and USD 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 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. Actual results, performance or events may differ materially from those
projected in any forward-looking statement. Factors that may cause actual results to differ from those in any forward-looking statement include, without limitation, those 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 on March 13, 2018 (the Annual Report ). 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 trademark Calyxt is owned by Calyxt. 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, unless the context otherwise requires. References to Calyxt refer to
PART I FINANCIAL INFORMATION 3
Item 1. Condensed Financial Statements (Unaudited) 3
Item 2. Management s Discussion & Analysis of Financial Condition and Results of Operations 41
Item 3. Quantitative and Qualitative Disclosures About Market Risks 55
Item 4. Controls and Procedures 56
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. Condensed Financial Statements
INTERIM STATEMENTS OF
CONSOLIDATED FINANCIAL POSITION
As of
Notes December 31, 2017 as restated (*) September 30, 2018 Unaudited
ASSETS
Non-current assets
Intangible assets 1,431 1,352
Property, plant, and equipment 5 7,226 8,299
Other non-current financial assets 1,004 657
Total non-current assets 9,661 10,308
Current assets
Inventories 250 223
Trade receivables 6.1 2,753 1,813
Subsidies receivables 6.2 9,524 15,616
Other current assets 6.3 13,713 15,925
Current financial assets 7.1 40,602 139
Cash and cash equivalents 7.2 256,380 475,775
Total current assets 323,221 509,491
TOTAL ASSETS 332,882 519,799
LIABILITIES
Shareholders equity
Share capital 11 2,367 2,765
Premiums related to the share capital 11 614,037 823,353
Treasury share reserve (297 )
Currency translation adjustment 1,834 (13,561 )
Retained earnings (deficit) (253,702 ) (326,484 )
Net income (loss) (99,368 ) (55,425 )
Total shareholders equity Group Share 264,872 430,648
Non-controlling interests 19,113 40,672
Total shareholders equity 283,985 471,320
Non-current liabilities
Non-current financial liabilities 8 13 209
Non-current provisions 14 3,430 2,907
Total non-current liabilities 3,443 3,116
Current liabilities
Current financial liabilities 8 21 277
Trade payables 8 9,460 15,597
Deferred revenues and deferred income 10 27,975 20,252
Current provisions 14 1,427 1,503
Other current liabilities 9 6,570 7,734
Total current liabilities 45,453 45,362
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 332,882 519,799
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED STATEMENTS OF CONSOLIDATED OPERATIONS
For the nine-month period ended September 30,
$ in thousands, except per share amounts
For the nine-month periods ended September 30,
Notes 2017 2018
Revenues and other income
Revenues 3.1 19,416 11,861
Other income 3.1 7,286 6,592
Total revenues and other income 26,702 18,453
Operating expenses
Royalty expenses 3.2 (1,748 ) (2,016 )
Research and development expenses 3.2 (58,525 ) (55,169 )
Selling, general and administrative expenses 3.2 (31,830 ) (36,772 )
Other operating income (expenses) 317 (138 )
Total operating expenses (91,787 ) (94,095 )
Operating income (loss) (65,085 ) (75,642 )
Financial gain (loss) (9,969 ) 13,598
Income tax
Net income (loss) (75,054 ) (62,044 )
Attributable to shareholders of Cellectis (72,266 ) (55,425 )
Attributable to non-controlling interests (2,788 ) (6,619 )
Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis 13
Basic net income (loss) per share ($ /share) (2.03 ) (1.38 )
Diluted net income (loss) per share ($ /share) (2.03 ) (1.38 )
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the nine-month periods ended September 30,
For the nine-month periods ended September 30,
2017 2018
Net income (loss) (75,054 ) (62,044 )
Actuarial gains and losses
Other comprehensive income (loss) that will not be reclassified subsequently to income or loss
Currency translation adjustment 21,276 (16,071 )
Other comprehensive income (loss) that will be reclassified subsequently to income or loss 21,276 (16,071 )
Total Comprehensive income (loss) (53,778 ) (78,114 )
Attributable to shareholders of Cellectis (50,621 ) (70,821 )
Attributable to non-controlling interests (3,157 ) (7,294 )
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED STATEMENTS OF CONSOLIDATED OPERATIONS
For the three-month periods ended September 30,
$ in thousands, except per share amounts
For the three-month periods ended September 30,
Notes 2017 2018
Revenues and other income
Revenues 3.1 6,122 906
Other income 3.1 1,131 1,286
Total revenues and other income 7,253 2,192
Operating expenses
Royalty expenses 3.2 (569 ) (868 )
Research and development expenses 3.2 (20,289 ) (18,694 )
Selling, general and administrative expenses 3.2 (12,153 ) (11,562 )
Other operating income (expenses) 54 30
Total operating expenses (32,956 ) (31,096 )
Operating income (loss) (25,703 ) (28,904 )
Financial gain (loss) (3,393 ) 3,591
Net income (loss) (29,096 ) (25,313 )
Attributable to shareholders of Cellectis (26,154 ) (22,805 )
Attributable to non-controlling interests (2,942 ) (2,508 )
Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis 13
Basic net income (loss) per share ( $ /share) (0.73 ) (0.54 )
Diluted net income (loss) per share ( $ /share) (0.73 ) (0.54 )
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the three-month periods ended September 30,
For the three-month periods ended September 30,
2017 2018
Net income (loss) (29,096 ) (25,313 )
Actuarial gains and losses
Other comprehensive income (loss) that will not be reclassified subsequently to income or loss
Currency translation adjustment 8,877 (2,224 )
Other comprehensive income (loss) that will be reclassified subsequently to income or loss 8,877 (2,224 )
Total Comprehensive income (loss) (20,219 ) (27,537 )
Attributable to shareholders of Cellectis (16,901 ) (25,030 )
Attributable to non-controlling interests (3,318 ) (2,507 )
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED CASH FLOWS
For the nine-month periods ended September 30,
For the nine-month periods ended September 30,
Notes 2017 2018
Cash flows from operating activities
Net loss for the period (75,054 ) (62,044 )
Reconciliation of net loss and of the cash provided by (used in) operating activities
Adjustments for
Amortization and depreciation 1,972 1,730
Net loss (income) on disposals 13 87
Net financial loss (gain) 9,969 (13,598 )
Expenses related to share-based payments 38,940 29,164
Provisions 301 (364 )
Other non cash items 418
Interest (paid) / received 790 4,928
Operating cash flows before change in working capital 23,069 (39,679 )
Decrease (increase) in inventories 7 19
Decrease (increase) in trade receivables and other current assets (1,954 ) (1,749 )
Decrease (increase) in subsidies receivables (6,688 ) (6,502 )
(Decrease) increase in trade payables and other current liabilities 1,866 7,357
(Decrease) increase in deferred income (12,977 ) (6,981 )
Change in working capital (19,746 ) (7,856 )
Net cash flows provided by (used in) operating activities (42,814 ) (47,535 )
Cash flows from investment activities
Proceeds from disposal of property, plant and equipment 6,957 19
Acquisition of intangible assets (266 ) 4
Acquisition of property, plant and equipment (1,867 ) (2,419 )
Net change in non-current financial assets (120 ) 223
Sale (Acquisition) of current financial assets (2,407 ) 39,853
Net cash flows provided by (used in) investing activities 2,297 37,680
Cash flows from financing activities
Increase in share capital net of transaction costs 2,085 186,433
Shares of Calyxt issued to third parties 38,144 49,665
Decrease in borrowings (30 ) (65 )
Treasury shares 114 297
Net cash flows provided by financing activities 40,313 236,330
(Decrease) increase in cash (204 ) 226,475
Cash and cash equivalents at the beginning of the year 254,568 256,380
Effect of exchange rate changes on cash 9,498 (7,080 )
Cash and cash equivalents at the end of the period 7 263,862 475,775
The accompanying notes form an integral part of these unaudited condensed Interim Consolidated Financial
UNAUDITED STATEMENTS OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY
For the nine-month periods ended September 30,
$ in thousands, except share data
Share Capital Ordinary Shares Equity
Notes Number of shares Amount Premiums related to share capital Treasury shares reserve Currency translation adjustment Retained earnings (deficit) Income (Loss) attributable to shareholders of Cellectis Non controlling interests Total Shareholders Equity
As of January 1, 2017, as restated (*) 35,335,060 2,332 568,185 (416 ) (22,086 ) (209,651 ) (67,255 ) 271,109 1,876 272,984
Net Loss (72,266 ) (72,266 ) (2,788 ) (75,054 )
Other comprehensive income (loss) 21,645 21,645 (369 ) 21,276
Total comprehensive income (loss) 21,645 (72,266 ) (50,621 ) (3,157 ) (53,778 )
Allocation of prior period loss (67,255 ) 67,255
Capital Increase 14.1 466,950 26 (26 )
Transaction with subsidiaries (1) 23,745 23,745 14,399 38,144
Treasury shares 114 114 114
Exercise of share warrants and employee warrants 126,730 7 2,078 2,085 2,085
Non-cash stock-based compensation expense 12 34,325 34,325 4,615 38,940
Other movements (36 ) (1 ) (38 ) (38 )
As of September 30, 2017, as restated (*) 35,928,740 2,365 604,551 (302 ) (441 ) (253,188 ) (72,266 ) 280,719 17,733 298,451
As of January 1, 2018, as restated (*) 35,960,062 2,367 614,037 (297 ) 1,834 (253,702 ) (99,368 ) 264,872 19,113 283,985
Net Loss (55,425 ) (55,425 ) (6,619 ) (62,044 )
Other comprehensive income (loss) (15,396 ) (15,396 ) (675 ) (16,071 )
Total comprehensive income (loss) (15,396 ) (55,425 ) (70,821 ) (7,294 ) (78,114 )
Allocation of prior period loss (99,368 ) 99,368
Capital Increase 6,146,000 379 178,209 178,588 178,588
Transaction with subsidiaries (1) 26,680 26,680 22,986 49,665
Treasury shares 297 (59 ) 238 238
Exercise of share warrants, employee warrants and stock options 11 323,364 19 7,825 7,845 7,845
Non-cash stock-based compensation expense 12 23,282 23,282 5,882 29,164
Other movements (35 ) (35 ) (15 ) (50 )
As of September 30, 2018 42,429,426 2,765 823,353 (13,561 ) (326,484 ) (55,425 ) 430,648 40,672 471,320
The accompanying notes form an integral part of these unaudited condensed
Interim Consolidated 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
best-in-class products in the emerging field of immuno-oncology. Our product candidates, based on gene-edited T-cells that
express chimeric antigen receptors, or CARs, seek to harness the power of the immune system to target and eradicate cancers. Our gene-editing technologies allow us to create allogeneic CAR T-cells, meaning
they are derived from healthy donors rather than the patients themselves. In addition to our focus on immuno-oncology, we are exploring the use of our gene-editing technologies in other therapeutic applications, as well as through our subsidiary,
Calyxt, to develop healthier food products for a growing population.
Note 2. Accounting principles
2.1 Basis for preparation
The Interim Consolidated
Financial Statements of Cellectis as of September 30, 2018 and for the three-month and nine-month periods ended September 30, 2018 were approved by our board of directors on November 13, 2018.
The Interim Consolidated Financial Statements are presented in U.S. dollars. See Note 2.3.
The Interim Consolidated Financial Statements as of September 30, 2018 and for the three-month and nine-month periods ended September 30, 2018 have
been prepared in accordance with IAS 34 Interim Financial Reporting, as endorsed by the International Accounting Standards Board ( IASB ).
Interim Consolidated Financial Statements as of September 30, 2018 and for the three-month and nine-month periods ended September 30, 2018 have been prepared using the same accounting policies and methods as those applied for the year
ended December 31, 2017 except as described below related to the new or amended 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 standards or new amendments
The following pronouncements and related amendments have been adopted by us from January 1, 2018 but had no significant impact on the Interim Consolidated
Financial Statements (see Note 2.2 for discussion of IFRS 15 adoption):
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, 2019. We do not
anticipate that the adoption of these pronouncements and amendments will have a material impact on our results of operations, financial position or cash flows.
IFRS 16 Leases is applicable for annual periods beginning on or after January 1, 2019. IFRS 16
aligns the accounting treatment of operating leases with that already applied to finance leases (i.e. recognition in the balance sheet of future lease payments and the associated rights of use). Cellectis is assessing the potential impact on its
consolidated financial statements resulting from the application of IFRS 16. Commitments related to facility leases and sale and lease back arrangements are disclosed in Note 15. A number of these contracts might be required to be recorded on the
statement of financial position (as a right-of-use asset and the related financial obligation) under IFRS16. We are evaluating the impact of adopting this
2.2 IFRS15 application
IFRS 15 Revenue from Contracts with Customers establishes a comprehensive framework for determining whether, how much and when revenue is
recognized. It replaces existing revenue recognition guidance, including IAS 18 Revenue . IFRS 15 is effective for annual reporting periods beginning on or after January 1, 2018.
The different categories of contracts with customers of Cellectis, which have been reviewed are:
Cellectis applied IFRS 15 with effect from January 1, 2018 using the retrospective method. The application of IFRS 15 leads to a deferral of
collaboration revenue (specifically milestone payments) from fiscal year 2015 with a negative opening equity adjustment of $1.9 million as of December 31, 2017. Except for this opening equity impact presented below, IFRS 15 has no impact
in the financial statements for fiscal years 2016 and 2017.
December 31, 2017 as presented IFRS 15 restatement December 31, 2017 as restated
Total non-current assets 9,661 9,661
Total current assets 323,221 323,221
TOTAL ASSETS 332,882 332,882
Shareholders equity
Share capital 2,367 2,367
Premiums related to the share capital 614,037 614,037
Treasury share reserve (297 ) (297 )
Currency translation adjustment 1,978 (144 ) 1,834
Retained earnings (deficit) (251,927 ) (1,775 ) (253,702 )
Net income (loss) (99,368 ) (99,368 )
Total shareholders equity Group Share 266,791 (1,919 ) 264,873
Non-controlling interests 19,113 19,113
Total shareholders equity 285,904 (1,919 ) 283,985
Total non-current liabilities 3,443 3,443
Current liabilities
Current financial liabilities 21 21
Trade payables 9,460 9,460
Deferred revenues and deferred income 26,056 1,919 27,975
Current provisions 1,427 1,427
Other current liabilities 6,570 6,570
Total current liabilities 43,534 1,919 45,453
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 332,882 332,882
Share Capital Ordinary Shares Equity
Number of shares Amount Premiums related to share capital Treasury shares reserve Currency translation adjustment Retained earnings (deficit) Income (Loss) attributable to shareholders of Cellectis Non controlling interests Total Shareholders Equity
As of January 1, 2017, as presented 35,335,060 2,332 568,185 (416 ) (22,174 ) (207,875 ) (67,255 ) 272,795 1,876 274,671
IFRS 15 restatement 89 (1,775 ) (1,687 ) (1,687 )
As of January 1, 2017, as restated 35,335,060 2,332 568,185 (416 ) (22,086 ) (209,651 ) (67,255 ) 271,109 1,876 272,984
Share Capital Ordinary Shares Equity
Number of shares Amount Premiums related to share capital Treasury shares reserve Currency translation adjustment Retained earnings (deficit) Income (Loss) attributable to shareholders of Cellectis Non controlling interests Total Shareholders Equity
As of January 1, 2018, as presented 35,960,062 2,367 614,037 (297 ) 1,978 (251,927 ) (99,368 ) 266,791 19,113 285,904
IFRS 15 restatement (144 ) (1,775 ) (1,919 ) (1,919 )
As of January 1, 2018, as restated 35,960,062 2,367 614,037 (297 ) 1,834 (253,702 ) (99,368 ) 264,872 19,113 283,985
As of December 31, 2017, as presented IFRS 15 restatement As of December 31, 2017, as restated
$ in thousands
Deferred revenues 26,056 1,919 27,975
Total Deferred revenue and deferred income 26,056 1,919 27,975
2.3 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
decided to change the reporting currency from euro to U.S. dollars in the third quarter 2017, using the retrospective method. We believe that this change will enhance the comparability with peers which primarily present their financial statements in
U.S. dollars. Please refer to the Annual Report on Form 20-F for further information.
Last updated: Nov 13, 2018