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PRELIMINARY NOTE The unaudited Condensed Consolidated Financial Statements for the three-month and six-month periods ended

Key Takeaway: unaudited Condensed Consolidated Financial Statements for the three-month and six-month periods ended June 30, 2019, included herein, have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Bo

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unaudited Condensed Consolidated Financial Statements for the three-month and six-month periods ended June 30, 2019, 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 in order to enhance comparability with Cellectis peers,
which primarily present their financial statements in U.S. dollars. All references in this interim report to $, U.S. dollars, and 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 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, as amended
on April 25, 2019 (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 trademarks Calyxt and Calyno are 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 Calyxt, 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 47
Item 3. Quantitative and Qualitative Disclosures About Market Risks 60
Item 4. Controls and Procedures 60
PART II OTHER INFORMATION 61
Item 1. Legal Proceedings 61
Item 1A. Risk Factors 61
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 61
Item 3. Default Upon Senior Securities 61
Item 4. Mine Safety Disclosures 61
Item 5. Other Information 61
Item 6. Exhibits 61
PART I FINANCIAL INFORMATION
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
As of
Notes December 31, 2018 June 30, 2019*
ASSETS
Non-current assets
Intangible assets 1,268 1,209
Property, plant, and equipment 6 10,041 12,320
Right-of-use assets 5 47,876
Other non-current financial assets 1,891 4,755
Total non-current assets 13,199 66,161
Current assets
Inventories 275 986
Trade receivables 7.1 2,971 2,990
Subsidies receivables 7.2 17,173 21,335
Other current assets 7.3 15,333 16,495
Current financial assets 8.1 388 389
Cash and cash equivalents 8.2 451,501 396,967
Total current assets 487,641 439,163
TOTAL ASSETS 500,840 505,323
LIABILITIES
Shareholders equity
Share capital 12 2,765 2,766
Premiums related to the share capital 12 828,525 834,830
Currency translation adjustment (16,668 ) (18,903 )
Retained deficit (326,628 ) (406,078 )
Net income (loss) (78,693 ) (48,791 )
Total shareholders equity - Group Share 409,301 363,824
Non-controlling interests 40,970 41,284
Total shareholders equity 450,272 405,108
Non-current liabilities
Non-current lease debts 9 1,018 45,710
Non-current provisions 15 2,681 2,684
Total non-current liabilities 3,699 48,394
Current liabilities
Current lease debts 9 333 2,104
Trade payables 9 15,883 19,760
Deferred revenues and contract liabilities 11 20,754 20,385
Current provisions 15 1,530 2,928
Other current liabilities 10 8,369 6,643
Total current liabilities 46,869 51,821
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 500,840 505,323
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial
UNAUDITED STATEMENTS OF CONSOLIDATED OPERATIONS
For the six-month period ended June 30,
$ in thousands, except per share amounts
For the six-month period ended June 30,
Notes 2018 2019*
Revenues and other income
Revenues 3.1 11,076 2,188
Other income 3.1 5,340 4,172
Total revenues and other income 16,417 6,360
Operating expenses
Cost of revenue 3.2 (1,138 ) (1,403 )
Research and development expenses 3.2 (36,441 ) (39,987 )
Selling, general and administrative expenses 3.2 (25,224 ) (23,309 )
Other operating income (expenses) (171 ) 29
Total operating expenses (62,975 ) (64,670 )
Operating income (loss) (46,558 ) (58,310 )
Financial gain (loss) 10,040 3,849
Income tax
Net income (loss) (36,518 ) (54,461 )
Attributable to shareholders of Cellectis (32,422 ) (48,791 )
Attributable to non-controlling interests (4,096 ) (5,670 )
Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis 14
Basic net income (loss) per share ($ /share) (0.83 ) (1.15 )
Diluted net income (loss) per share ($ /share) (0.83 ) (1.15 )
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the six-month periods ended June 30,
For the six-month period ended June 30,
2018 2019
Net income (loss) (36,518 ) (54,461 )
Actuarial gains and losses (271 )
Other comprehensive income (loss) that will not be reclassified subsequently to income or loss (271 )
Currency translation adjustment (14,060 ) (1,990 )
Other comprehensive income (loss) that will be reclassified subsequently to income or loss (14,060 ) (1,990 )
Total Comprehensive income (loss) (50,578 ) (56,723 )
Attributable to shareholders of Cellectis (45,791 ) (51,298 )
Attributable to non-controlling interests (4,787 ) (5,425 )
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial
UNAUDITED STATEMENTS OF CONSOLIDATED OPERATIONS
For the three-month period ended June 30,
$ in thousands, except per share amounts
For the three-month period ended June 30,
Notes 2018 2019
Revenues and other income
Revenues 3.1 5,049 1,152
Other income 3.1 3,295 1,780
Total revenues and other income 8,343 2,932
Operating expenses
Cost of revenue 3.2 (559 ) (815 )
Research and development expenses 3.2 (18,042 ) (25,421 )
Selling, general and administrative expenses 3.2 (11,248 ) (11,818 )
Other operating income (expenses) (189 ) (3 )
Total operating expenses (30,039 ) (38,058 )
Operating income (loss) (21,696 ) (35,126 )
Financial gain (loss) 11,958 (1,512 )
Income tax
Net income (loss) (9,738 ) (36,637 )
Attributable to shareholders of Cellectis (7,256 ) (33,447 )
Attributable to non-controlling interests (2,482 ) (3,190 )
Basic / Diluted net income (loss) per share attributable to shareholders of Cellectis 14
Basic net income (loss) per share ( $ /share) (0.17 ) (0.79 )
Diluted net income (loss) per share ( $ /share) (0.17 ) (0.79 )
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
For the three-month periods ended June 30,
For the three-month period ended June 30,
2018 2019
Net income (loss) (9,738 ) (36,637 )
Actuarial gains and losses (271 )
Other comprehensive income (loss) that will not be reclassified subsequently to income or loss (271 )
Currency translation adjustment (18,186 ) 3,368
Other comprehensive income (loss) that will be reclassified subsequently to income or loss (18,186 ) 3,368
Total Comprehensive income (loss) (27,924 ) (33,541 )
Attributable to shareholders of Cellectis (24,615 ) (30,333 )
Attributable to non-controlling interests (3,310 ) (3,208 )
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED CASH FLOWS
For the six-month period ended June 30,
For the six-month period ended June 30,
Notes 2018 2019
Cash flows from operating activities
Net loss for the period (36,518 ) (54,461 )
Reconciliation of net loss and of the cash provided by (used in) operating activities
Adjustments for
Amortization and depreciation 1,262 3,215
Net loss (income) on disposals 67 356
Net financial loss (gain) (10,040 ) (3,848 )
Expenses related to share-based payments 21,023 11,810
Provisions (342 ) 1,155
Interest (paid) / received 3,354 4,146
Operating cash flows before change in working capital (21,194 ) (37,627 )
Decrease (increase) in inventories 12 (709 )
Decrease (increase) in trade receivables and other current assets (2,695 ) (3,436 )
Decrease (increase) in subsidies receivables (5,086 ) (4,266 )
(Decrease) increase in trade payables and other current liabilities 3,509 2,370
(Decrease) increase in deferred income (7,069 ) 54
Change in working capital (11,330 ) (5,985 )
Net cash flows provided by (used in) operating activities (32,523 ) (43,613 )
Cash flows from investment activities
Proceeds from disposal of property, plant and equipment 20
Acquisition of intangible assets 1 (29 )
Acquisition of property, plant and equipment (1,186 ) (4,811 )
Net change in non-current financial assets 277 (2,866 )
Sale (Acquisition) of current financial assets 20,192 161
Net cash flows provided by (used in) investing activities 19,304 (7,545 )
Cash flows from financing activities
Increase in share capital net of transaction costs 185,992
Shares of Calyxt issued to third parties 48,761 (251 )
Payments on lease debts (45 ) (1,748 )
Treasury shares (291 )
Net cash flows provided by financing activities 234,417 (1,999 )
(Decrease) increase in cash 221,198 (53,157 )
Cash and cash equivalents at the beginning of the year 256,380 451,501
Effect of exchange rate changes on cash (6,364 ) (1,377 )
Cash and cash equivalents at the end of the period 8 471,215 396,967
The accompanying notes form an integral part of these unaudited Interim Condensed Consolidated Financial
UNAUDITED STATEMENTS OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY
For the six-month period ended June 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, 2018, as restated (*) 35,960,062 2,367 614,037 (297 ) 1,835 (253,702 ) (99,368 ) 264,873 19,113 283,986
Net Loss (32,422 ) (32,422 ) (4,096 ) (36,518 )
Other comprehensive income (loss) (13,369 ) (13,369 ) (691 ) (14,060 )
Total comprehensive income (loss) (13,369 ) (32,422 ) (45,791 ) (4,787 ) (50,578 )
Allocation of prior period loss (99,368 ) 99,368
Capital Increase 6,146,000 379 178,171 178,550 178,550
Transaction with subsidiaries (1) 26,299 26,299 22,463 48,761
Treasury shares (291 ) (291 ) (291 )
Exercise of share warrants, employee warrants and stock options 11 300,306 18 7,424 7,442 7,442
Non-cash stock-based compensation expense 12 16,730 16,730 4,293 21,023
Other movements (84 ) (84 ) (36 ) (120 )
As of June 30, 2018 42,406,368 2,764 816,363 (587 ) (11,534 ) (326,856 ) (32,422 ) 447,728 41,046 488,774
As of January 1, 2019 42,430,069 2,765 828,525 (16,668 ) (326,628 ) (78,693 ) 409,301 40,970 450,272
Net Loss (48,791 ) (48,791 ) (5,670 ) (54,461 )
Other comprehensive income (loss) (2,235 ) (271 ) (2,507 ) 245 (2,262 )
Total comprehensive income (loss) (2,235 ) (271 ) (48,791 ) (51,298 ) (5,425 ) (56,723 )
Allocation of prior period loss (78,693 ) 78,693
Capital Increase 15,600 1 (1 )
Transaction with subsidiaries (2) (481 ) (481 ) 230 (251 )
Non-cash stock-based compensation expense 12 6,302 6,302 5,509 11,810
Other movements 3 (3 )
As of June 30, 2019 42,445,669 2,766 834,830 (18,903 ) (406,078 ) (48,791 ) 363,824 41,284 405,108
The accompanying notes form an integral part of these unaudited Interim Condensed 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 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 cancer 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. 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. 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 to develop healthier food
products for a growing population.
Cellectis S.A., Cellectis, Inc., Cellectis Biologics Inc. (which was incorporated on January 18, 2019) and
Calyxt, Inc. are sometimes referred to as a consolidated group of companies as the Group.
Note 2. Accounting principles
2.1 Basis for preparation
The Interim Condensed
Consolidated Financial Statements of Cellectis as of June 30, 2019 and for the three-month and six-month periods ended June 30, 2019 were approved by our Board of Directors on August 5, 2019.
The Interim Condensed Consolidated Financial Statements are presented in U.S. dollars. See Note 2.4.
The Interim Condensed Consolidated Financial Statements as of June 30, 2019 and for the three-month and six-month
periods ended June 30, 2019 have been prepared in accordance with IAS 34 Interim Financial Reporting, as issued by the International Accounting Standards Board ( IASB ).
The Interim Condensed Consolidated Financial Statements as of June 30, 2019 and for the three-month and six-month
periods ended June 30, 2019 have been prepared using the same accounting policies and methods as those applied for the year ended December 31, 2018, 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, 2019 but had no significant impact on the Interim Condensed
Consolidated Financial Statements:
Standards, interpretations and amendments issued but not yet effective
The following pronouncements and related amendments are applicable for accounting periods beginning after January 1, 2020. 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:
2.2 IFRS16 application
Since January 1, 2019, Cellectis has applied the new standard IFRS 16 Leases .
Under this standard, a financial asset and a financial liability are recognized for Group leases that meet the standard s criteria.
The financial statements for the 2018 financial year have not been restated in accordance with the transition options of IFRS 16 elected by the Group since
Cellectis has applied the modified retrospective approach.
The Group uses the two capitalization exemptions provided by the standard:
The Group has also applied the following practical expedients at the transition date:
The following discount
rates have been applied:
The main changes introduced by IFRS 16 are the following:
Capitalization of the right-of-use assets for real-estate lease contracts:
Identified lease contracts mainly concern Cellectis Headquarters and R&D buildings in Paris, New York and Raleigh, North Carolina, USA and
Calyxt s Headquarters and its production and storage areas in Roseville, Minnesota, USA.
For purposes of IFRS 16, the lease term corresponds to the non-terminable period as extended, if applicable, by renewal options whose exercise by the Group are reasonably certain.
The discount rate used to calculate the lease debt has been determined, for each portfolio of assets, according to the incremental borrowing rate at the
The sale and lease-back agreement entered into by Calyxt in the third quarter of 2017 has a defined lease term and was classified as an
operating lease agreement under IAS 17. According to IFRS 16, this lease receives the standard accounting treatment for operating leases existing at the date of initial application and the value of the right-of-use asset is adjusted for the amount of the net deferred losses recognized in the statement of financial position immediately before the date of initial application, which was $1.8 million.
Accounting for the other-assets leases:
contracts identified correspond to office and laboratory equipment.
The cumulative effect of initially applying IFRS 16 has been recognized as an adjustment to the opening
balance sheet at the date of initial application, January 1, 2019, as presented in the table below:
1st January, 2019 as presented IFRS 16 restatement 1st January, 2019 as restated
ASSETS
Non-current assets
Intangible assets 1,268 1,268
Property, plant, and equipment 10,041 (1,309 ) 8,732
Right-of-use assets 37,569 37,569
Other non-current financial assets 1,891 1,891
Total non-current assets 13,199 36,260 49,460
Current assets
Inventories 275 275
Trade receivables 2,971 2,971
Subsidies receivables 17,173 17,173
Other current assets 15,333 (2,139 ) 13,194
Current financial assets 388 388
Cash and cash equivalents 451,501 451,501
Total current assets 487,641 (2,139 ) 485,502
TOTAL ASSETS 500,840 34,121 534,961
LIABILITIES
Shareholders equity
Share capital 2,765 2,765
Premiums related to the share capital 828,525 828,525
Treasury share reserve
Currency translation adjustment (16,668 ) (16,668 )
Retained earnings (deficit) (326,628 ) (326,628 )
Net income (loss) (78,693 ) (78,693 )
Total shareholders equity - Group Share 409,301 409,301
Non-controlling interests 40,970 40,970
Total shareholders equity 450,272 450,272
Non-current liabilities
Non-current lease debts 1,018 31,720 32,737
Non-current provisions 2,681 (639 ) 2,042
Total non-current liabilities 3,699 31,081 34,779
Current liabilities
Current lease debts 333 3,743 4,076
Trade payables 15,883 15,883
Deferred revenues and contract liabilities 20,754 (299 ) 20,454
Current provisions 1,530 (403 ) 1,127
Other current liabilities 8,369 8,369
Total current liabilities 46,869 3,041 49,910
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 500,840 34,121 534,961
Last updated: Aug 6, 2019