Full Press Release Details
Table of Contents
unaudited first quarter consolidated Financial Statements 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 statemens are presented in euros. 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 21, 2016
(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.
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.
| PART I FINANCIAL INFORMATION | 2 | |||||
| Item 1. | Financial Statements (Unaudited) | 2 | ||||
| Item 2. | Management s Discussion & Analysis of Financial Condition and Results of Operations | 20 | ||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risks | 27 | ||||
| Item 4. | Controls and Procedures | 27 | ||||
| PART II OTHER INFORMATION | 27 | |||||
| Item 1. | Legal Proceedings | 27 | ||||
| Item 1A. | Risk Factors | 27 | ||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 27 | ||||
| Item 3. | Default Upon Senior Securities | 28 | ||||
| Item 4. | Mine Safety Disclosures | 28 | ||||
| Item 5. | Other Information | 28 | ||||
| Item 6. | Exhibits | 28 |
Table of Contents
Item 1. Financial Statements (Unaudited)
INTERIM STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
| As of | ||||||||||
| Notes | December 31, 2015 | March 31, 2016 | ||||||||
| ASSETS | ||||||||||
| Non-current assets | ||||||||||
| Intangible assets | 956 | 1,161 | ||||||||
| Property, plant, and equipment | 6 | 5,043 | 11,656 | |||||||
| Other non-current financial assets | 845 | 821 | ||||||||
| Total non-current assets | 6,844 | 13,638 | ||||||||
| Current assets | ||||||||||
| Inventories and accumulated costs on orders in process | 158 | 103 | ||||||||
| Trade receivables | 6,035 | 5,609 | ||||||||
| Subsidies receivables | 7 | 9,102 | 11,151 | |||||||
| Other current assets | 8 | 4,685 | 7,629 | |||||||
| Current financial assets | 9.1 | 86,120 | ||||||||
| Cash and cash equivalents | 9.2 | 314,238 | 190,393 | |||||||
| Total current assets | 334,218 | 301,005 | ||||||||
| TOTAL ASSETS | 341,062 | 314,643 | ||||||||
| LIABILITIES | ||||||||||
| Shareholders equity | ||||||||||
| Share capital | 10 | 1,759 | 1,761 | |||||||
| Premiums related to the share capital | 420,682 | 434,251 | ||||||||
| Treasury share reserve | (184 | ) | (190 | ) | ||||||
| Currency translation adjustment | (1,631 | ) | (3,526 | ) | ||||||
| Retained earnings | (137,188 | ) | (157,729 | ) | ||||||
| Net income (loss) | (20,544 | ) | (29,464 | ) | ||||||
| Total shareholders equity - Group Share | 262,894 | 245,104 | ||||||||
| Non-controlling interests | 725 | 829 | ||||||||
| Total shareholders equity | 263,619 | 245,932 | ||||||||
| Non-current liabilities | ||||||||||
| Non-current financial debt | 12.1 | 66 | 55 | |||||||
| Non-current provisions | 14 | 437 | 454 | |||||||
| Total non-current liabilities | 503 | 509 | ||||||||
| Current liabilities | ||||||||||
| Current financial debt | 12.1 | 1,921 | 1,896 | |||||||
| Trade payables | 6,611 | 7,912 | ||||||||
| Deferred revenues and deferred income | 13 | 54,758 | 50,168 | |||||||
| Current provisions | 14 | 953 | 1,038 | |||||||
| Other current liabilities | 15 | 12,697 | 7,189 | |||||||
| Total current liabilities | 76,940 | 68,202 | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS EQUITY | 341,062 | 314,643 |
The accompanying notes form an integral part of these unaudited interim condensed Consolidated Financial
Table of Contents
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED OPERATIONS
For the three months ended March 31
in thousands, except per share amounts
| For the three-month period ended March 31, | ||||||||||
| Notes | 2015 | 2016 | ||||||||
| Revenues and other income | ||||||||||
| Revenues | 16 | 8,428 | 6,978 | |||||||
| Other income | 16 | 791 | 2,521 | |||||||
| Total revenues and other income | 9,219 | 9,499 | ||||||||
| Operating expenses and other operating income (expenses) | ||||||||||
| Royalty expenses | (427 | ) | (433 | ) | ||||||
| Research and development expenses (1) | 17 | (7,436 | ) | (18,870 | ) | |||||
| Selling, general and administrative expenses (1) | 17 | (5,359 | ) | (10,529 | ) | |||||
| Other operating income | 350 | 122 | ||||||||
| Redundancy plan | 14 | 207 | 1 | |||||||
| Other operating expenses | (112 | ) | (199 | ) | ||||||
| Total operating expenses and other operating income (expenses) | (12,777 | ) | (29,908 | ) | ||||||
| Operating income (loss) | (3,558 | ) | (20,409 | ) | ||||||
| Financial gain (loss) | 18 | 9,874 | (9,055 | ) | ||||||
| Net income (loss) | 6,316 | (29,464 | ) | |||||||
| Attributable to shareholders of Cellectis | 6,146 | (29,464 | ) | |||||||
| Attributable to non-controlling interests | 171 |
The accompanying notes form an integral part of these unaudited interim condensed Consolidated Financial Statements
Table of Contents
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED COMPREHENSIVE LOSS
For the three months ended March 31
| For the three-month period ended March 31, | ||||||||
| 2015 | 2016 | |||||||
| Net income (loss) | 6,316 | (29,464 | ) | |||||
| Currency translation adjustment | (1,218 | ) | (1,931 | ) | ||||
| Other comprehensive loss that will be reclassified subsequently to income or loss | (1,218 | ) | (1,931 | ) | ||||
| Total Comprehensive income (loss) | 5,099 | (31,395 | ) | |||||
| Attributable to shareholders of Cellectis | 4,993 | (31,359 | ) | |||||
| Attributable to non-controlling interests | 106 | (36 | ) |
The accompanying notes form an integral part of these unaudited interim condensed Consolidated Financial
Table of Contents
UNAUDITED INTERIM STATEMENTS OF CONSOLIDATED CASH FLOWS
For the three months ended March 31 ( in thousands)
| For the three-month period ended March 31, | ||||||||||
| Notes | 2015 | 2016 | ||||||||
| Cash flows from operating activities | ||||||||||
| Net loss for the period | 6,316 | (29,464 | ) | |||||||
| Reconciliation of net loss and of the cash used for operating activities | ||||||||||
| Adjustments for | ||||||||||
| Amortization and depreciation | 329 | 477 | ||||||||
| Net loss on disposals | 26 | |||||||||
| Net finance expenses (revenue) | (9,847 | ) | 9,055 | |||||||
| Expenses related to share-based payments | 840 | 13,414 | ||||||||
| Provisions | (814 | ) | 99 | |||||||
| Interest (paid) / received | 18 | 559 | ||||||||
| Operating cash flows before change in working capital | (3,131 | ) | (5,860 | ) | ||||||
| Decrease (increase) in inventories | 54 | |||||||||
| Decrease (increase) in trade receivables and other current assets | (132 | ) | (2,526 | ) | ||||||
| Decrease (increase) in subsidies receivables | 3,210 | (2,813 | ) | |||||||
| (Decrease) increase in trade payables and other current liabilities | 3,948 | (3,892 | ) | |||||||
| (Decrease) increase in deferred income | (5,113 | ) | (4,554 | ) | ||||||
| Change in working capital | 1,912 | (13,731 | ) | |||||||
| Net cash flows provided by (used in) operating activities | (1,219 | ) | (19,591 | ) | ||||||
| Cash flows from investment activities | ||||||||||
| Proceeds from disposal of property, plant and equipment | 50 | |||||||||
| Acquisition of intangible assets | (9 | ) | (260 | ) | ||||||
| Acquisition of property, plant and equipment | 6 | (2,745 | ) | (6,628 | ) | |||||
| Net change in non-current financial assets | (233 | ) | 4 | |||||||
| Acquisition of current financial assets | 9.1 | (86,078 | ) | |||||||
| Net cash flows provided by (used in) investing activities | (2,937 | ) | (92,962 | ) | ||||||
| Cash flows from financing activities | ||||||||||
| Increase in share capital net of transaction costs | 305 | 298 | ||||||||
| Decrease in borrowings | (84 | ) | (34 | ) | ||||||
| Treasury shares | 82 | (6 | ) | |||||||
| Net cash flows provided by (used in) financing activities | 302 | 257 | ||||||||
| (Decrease) increase in cash | (3,854 | ) | (112,296 | ) | ||||||
| Cash and cash equivalents at the beginning of the year | 112,347 | 314,238 | ||||||||
| Effect of exchange rate changes on cash | 9,895 | (11,550 | ) | |||||||
| Cash from continuing operations | 118,387 | 190,393 | ||||||||
| Cash and cash equivalents at the end of the period | 9.2 | 118,387 | 190,393 |
The accompanying notes form an integral part of these unaudited interim condensed Consolidated Financial
Table of Contents
UNAUDITED INTERIM STATEMENTS OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY
For the three months ended March 31
in thousands, except share data
| Share Capital Ordinary Shares | Equity | |||||||||||||||||||||||||||||||||||||||||
| Number of shares | Amount | Premiums | Treasury shares | Currency translation adjustment | Retained earnings (deficit) | Income (Loss) | attributable to shareholders of Cellectis | Non controlling interests | Total Shareholders Equity | |||||||||||||||||||||||||||||||||
| As of January 1, 2015 | 29,446,721 | 1,472 | 192,842 | (251 | ) | (762 | ) | (132,536 | ) | 20 | 60,787 | (1,259 | ) | 53,448 | ||||||||||||||||||||||||||||
| Net Loss | 6,146 | 6,146 | 171 | 6,316 | ||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (1,153 | ) | 0 | (1,153 | ) | (65 | ) | (1,218 | ) | |||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | (1,153 | ) | 0 | 6,146 | 4,993 | 106 | 5,099 | |||||||||||||||||||||||||||||||||||
| Allocation of prior period loss | 20 | (20 | ) | |||||||||||||||||||||||||||||||||||||||
| Capital Increase | 10 | 5,500,000 | 275 | 194,604 | 194,879 | 194,879 | ||||||||||||||||||||||||||||||||||||
| Treasury shares | 82 | 82 | 82 | |||||||||||||||||||||||||||||||||||||||
| Exercise of share warrants and employee warrants | 10 | 91,237 | 5 | 428 | 433 | 433 | ||||||||||||||||||||||||||||||||||||
| Share based compensation | 707 | 707 | 133 | 840 | ||||||||||||||||||||||||||||||||||||||
| Other movements | (3 | ) | (3 | ) | (3 | ) | ||||||||||||||||||||||||||||||||||||
| As of March 31, 2015 | 35,037,958 | 1,752 | 388,581 | (169 | ) | (1,915 | ) | (132,518 | ) | 6,146 | 261,877 | (1,020 | ) | 260,857 | ||||||||||||||||||||||||||||
| As of January 1, 2016 | 35,178,614 | 1,759 | 420,682 | (184 | ) | (1,632 | ) | (137,188 | ) | (20,544 | ) | 262,894 | 725 | 263,619 | ||||||||||||||||||||||||||||
| Net Loss | (29,464 | ) | (29,464 | ) | (29,464 | ) | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (1,895 | ) | (1,895 | ) | (36 | ) | (1,931 | ) | ||||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | (1,895 | ) | (29,464 | ) | (31,359 | ) | (36 | ) | (31,395 | ) | ||||||||||||||||||||||||||||||||
| Allocation of prior period loss | (20,544 | ) | 20,544 | |||||||||||||||||||||||||||||||||||||||
| Treasury shares | (6 | ) | (6 | ) | (6 | ) | ||||||||||||||||||||||||||||||||||||
| Exercise of share warrants and employee warrants | 10 | 50,000 | 3 | 296 | 298 | 298 | ||||||||||||||||||||||||||||||||||||
| Share based compensation | 13,274 | 13,274 | 140 | 13,414 | ||||||||||||||||||||||||||||||||||||||
| Other movements | 3 | 3 | 3 | |||||||||||||||||||||||||||||||||||||||
| As of March 31, 2016 | 35,228,614 | 1,761 | 434,252 | (190 | ) | (3,526 | ) | (157,729 | ) | (29,464 | ) | 245,103 | 829 | 245,932 |
The accompanying notes form an integral part of these unaudited interim condensed Consolidated Financial
Table of Contents
NOTES TO THE UNAUDITED 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 gene-editing company, employing our core proprietary technologies to develop 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 to develop healthier food products for a growing population.
We view our operations and manage our business in two operating and reportable segments that are engaged in the following activities:
(1) Therapeutics, which is focused on the development of products in the field of immuno-oncology and of novel therapies outside immuno-oncology to treat other human diseases; (2) Plants, which is focused on the development of new
generation plant products in the field of agricultural biotechnology on our own or through alliances with other companies in the agricultural industry.
Note 2. Basis of presentation and statement of compliance
All financial information (unless indicated otherwise) is presented in thousands of euros.
2.1 Compliance with the IFRS accounting framework
The first quarter Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards
( IFRS ) as issued by the International Accounting Standards Board ( IASB ), whose application is mandatory for the quarter ended March 31, 2016.
These Consolidated Financial Statements as of and for the quarter ended March 31, 2016 were approved by our Board of Directors on
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 ).
The Interim Consolidated Financial Statements for the three months ended March 31, 2016 have been prepared using the same accounting
policies and methods as those applied for the year ended December 31, 2015.
2.2 Application of new or amended standards or new amendments
The following pronouncements and related amendments have been adopted by us from January 1, 2016 but had no significant
impact on the first quarter Consolidated Financial Statements:
Table of Contents
2.3 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, 2017.
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 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, with early adoption permitted. We are assessing the potential impact on our consolidated financial statements resulting from the application of IFRS 15.
In January 2016, the IASB issued IFRS 16 (Leases), which is effective for annual periods beginning on or after January 1, 2019. This new
standard 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).
Note 3. Consolidated entities
December 31, 2015 and for the first quarter 2016, the consolidated group of companies includes Cellectis S.A., Cellectis, Inc. and Calyxt, Inc.
Our 2015 first quarter Consolidated Financial Statements include the operations of Cellectis S.A.; our two French subsidiaries, Cellectis
Bioresearch and Ectycell; our three U.S. subsidiaries, Calyxt, Inc. (formerly Cellectis Plant Sciences Inc.), Cellectis, Inc. and Cellectis Bioresearch Inc. Non-controlling shareholders hold a 24.5% interest in Cellectis Bioresearch, Cellectis
Bioresearch Inc. and Ectycell as of March 31, 2015.
Note 4. Reportable segments
Reportable segments are identified as components of an enterprise that have discrete financial information available for evaluation by the
Chief Operating Decision Maker ( CODM ), for purposes of performance assessment and resource allocation.
We view our operations and manage our business in
two operating and reportable segments that are engaged in the following activities:
Table of Contents
The operations of Cellectis S.A., the parent company, are presented entirely in the Therapeutics segment.
There are intersegment transactions between the two reportable segments, including allocation of corporate general and administrative expenses
by Cellectis S.A. to its subsidiaries and allocation of research and development expenses to the reportable segments.
transactions are generally priced based on provisions of service agreements signed between our legal entities, according to which services are to be allocated at cost plus a mark-up of between 4% and 10%, depending on the nature of the service.
According to a cash pooling agreement signed with subsidiaries, interests are allocated/paid to segments at 12-month Euribor plus 5%.
Information related to each reportable segment is set out below. Segment revenues and other income, Research and development expenses,
Selling, general and administrative expenses, and Royalties and other operating income and expenses, and Operating profit or loss (without non-cash stock-based expense) are used by the CODM to measure performance. The CODM does not review any asset
or liability information by segment or by region. The operating profit or loss includes the impact of the operations between segments while the intra-segment operations are eliminated.
| For the three-month period ended March 31, 2015 | For the three-month period ended March 31, 2016 | |||||||||||||||||||||||
| in thousands | ||||||||||||||||||||||||
| Plants | Therapeutics | Total reportable segments | Plants | Therapeutics | Total reportable segments | |||||||||||||||||||
| Segment revenues and other income | 120 | 9,099 | 9,219 | 97 | 9,741 | 9,837 | ||||||||||||||||||
| Inter-segment revenues | (338 | ) | (338 | ) | ||||||||||||||||||||
| External revenues and other income | 120 | 9,099 | 9,219 | 97 | 9,402 | 9,499 | ||||||||||||||||||
| Research and development expenses | (496 | ) | (6,940 | ) | (7,436 | ) | (1,053 | ) | (17,818 | ) | (18,870 | ) | ||||||||||||
| Selling, general and administrative expenses | (309 | ) | (5,050 | ) | (5,359 | ) | (902 | ) | (9,627 | ) | (10,529 | ) | ||||||||||||
| Royalties and other operating income and expenses | 41 | (23 | ) | 18 | (293 | ) | (216 | ) | (509 | ) | ||||||||||||||
| Total operating expenses | (765 | ) | (12,012 | ) | (12,777 | ) | (2,248 | ) | (27,660 | ) | (29,908 | ) | ||||||||||||
| Operating income (loss) before tax | (645 | ) | (2,913 | ) | (3,558 | ) | (2,151 | ) | (18,258 | ) | (20,409 | ) | ||||||||||||
| Depreciation and amortization | (29 | ) | (300 | ) | (329 | ) | (50 | ) | (427 | ) | (477 | ) | ||||||||||||
| Expenses related to share-based payments | (141 | ) | (699 | ) | (840 | ) | (440 | ) | (12,974 | ) | (13,414 | ) | ||||||||||||
| Capital expenditure | 63 | 2,691 | 2,754 | 6,138 | 1,476 | 7,614 |
Note 5. Impairment tests
Our cash-generating units ( CGUs ) correspond to the operating/reportable segments: Therapeutics and Plants. No indicator of
impairment has been identified for either of the CGUs for the three-month period ended March 31, 2016.
Table of Contents
Note 6. Property, plant and equipment