Market Overview

Calyxt Reports Financial Results for Second Quarter and Half-Year 2018

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As of June 30th,
successfully contracted over 17,000 high-oleic / no trans-fat soybean
acres with 78 growers.

~20 small to large food company customers engaged across food
services and food ingredient applications

Calyxt's high-fiber wheat & improved quality alfalfa transitioned
to phase II

Advanced two product candidates from ‘discovery' to ‘phase 1'
development

Completed move to new concept-to-fork facility in Roseville, Minn.

Successful follow-on offering increases cash position to over $105M

Calyxt,
Inc.
(NASDAQ:CLXT), a consumer-centric, food- and
agriculture-focused company, today announced its results for the
three-month period and the first half period ended June 30, 2018.

The first half of 2018 saw significant growth of the Company's lead
product candidate, a non-GMO, high-oleic soybean variety, designed to
yield soybean oil with over 80% oleic oil content that is completely
trans fat free. With over 17,000 acres planted, Calyxt surpassed its
initial goal of 12,000 acres, with over 90% of existing farmers
re-planting. With the commercial launch of this product in the US later
this year, Calyxt is well positioned within the industry, following the
FDA ban on all trans fats in the U.S. going into effect in 2018. Calyxt
also welcomes the recently unveiled World Health Organization's plan to
remove all trans fats worldwide from the food chain by 2023.

The recent move into its new state-of-the-art, farm-to-kitchen facility
enables Calyxt to accelerate and expand its product pipeline, with a
continued focus on a variety of pressing health- and agronomic needs.

High-Oleic Soybean Update:

  • We successfully completed planting over 17,000 acres with 78 growers.
    In spite of a wet spring this year, some farmers were still able to
    plant early. Certain growing regions in our grower network have seen
    more than average rainfall this year.
  • Over 90% of existing farmers signed up to re-plant Calyxt high-oleic
    soybeans this year. Furthermore, on average, repeat farmers doubled
    their Calyxt acres year over year.
  • Our field agronomists are providing in-season technical support to
    farmers growing Calyxt high-oleic soybean variety so that growers have
    a positive experience and optimize their farming operations for Calyxt
    variety.
  • Overall crop quality looks good to excellent.
  • ~20 small to large food company customers engaged across food services
    and food ingredient applications which includes frying (such as chips
    and French fries), frying meats, both salty and healthy snacks,
    baking, nut butter and meat replacement products.

Pipeline Update:

  • Calyxt's high-fiber wheat and improved quality alfalfa product
    candidates have advanced to phase II, moving into field-testing.
  • Calyxt has used its proprietary gene editing technology, TALEN®, to
    produce a small, precise deletion in the wheat genome, an outcome
    similar to what occurs in nature, to develop its high-fiber wheat
    product. Calyxt's high-fiber white flour contains more than three
    times the amount of dietary fiber than in commodity white flour. A
    single serving of Calyxt's high-fiber wheat flour could provide more
    than 100 percent of the recommended daily value.
  • Calyxt's improved quality alfalfa targets a reduction in the lignin
    content of the plant, thus potentially improving its digestibility for
    animal nutrition. This allows for improved fiber digestibility for the
    animal, resulting in better animal health, increased milk production
    and weight gain for beef cattle, as well as more sustainable animal
    farming
  • Calyxt announced the successful transfer of improved quality alfalfa
    seed and plants developed by Calyxt at its research and development
    facility to S&W Seeds for field evaluation and testing. The
    collaboration between Calyxt and S&W is focused on providing enhanced
    traits in alfalfa that can drive improved productivity, while
    decreasing input costs to meet the growing global demand for improved
    quality alfalfa seeds.

Regulatory & IP:

  • Bayer CropScience agreed to settle a lawsuit brought by Calyxt in the
    Delaware Chancery Court. Bayer will destroy any technology, related
    product and confidential information covered by a 2013 License
    Agreement, and will permanently abandon patent applications that are
    based on or include data related to the covered technology. This
    settlement confirms Bayer and its subsidiaries have no access to
    Calyxt technology or intellectual property.
  • Calyxt's high-fiber wheat and improved quality alfalfa products have
    been declared non-regulated articles in March 2018 and October 2017,
    respectively, under the Biotechnology Regulatory Services' "Am I
    Regulated?" process of the Animal and Plant Health Inspection Service
    (APHIS), an agency of the U.S. Department of Agriculture (USDA). These
    products are two of a total of seven Calyxt products that have been
    deemed non-regulated by the USDA, including powdery mildew-resistant
    wheat, high-oleic soybeans, high-oleic / low-linolenic soybeans, cold
    storable potatoes and reduced browning potatoes.

Completion of New Facility:

  • We completed our move to our new facility in June and decommissioning
    of our old facility was completed.
  • Our new facility will provide a framework for automation and
    super-charging our capabilities to make products in the near future,
    as well as food company ingredient support capabilities as we launch
    our high-oleic soybean oil.

Follow-On Offering:

  • On May 22, 2018, Calyxt completed an upsized follow-on offering of its
    common stock for $60.9M in gross proceeds.
  • Calyxt sold 4,057,500 shares of common stock at $15.00 per share,
    including 457,500 shares pursuant to the exercise in full, of the
    underwriters' option to purchase additional shares and 550,000 shares
    purchased by Cellectis at $15.00 per share.
  • With a cash balance of $105.6 million at June 30, 2018, we anticipate
    to have sufficient cash to fund the business until late 2020.

Financial Highlights

Cash and cash equivalents were $105.6 million at June 30, 2018. We
intend to continue to judiciously manage the use of cash and expect to
have sufficient cash to fund the business until late 2020. Cellectis
remains our majority shareholder with 70.24% of our common stock as of
June 30, 2018.

Pursuant to the follow-on offering, in aggregate, the Company received
net proceeds of approximately $57.0 million, after deducting
underwriting discounts and commissions of $3.2 million and offering
expenses totaling approximately $0.7 million. As part of the follow-on
offering, Cellectis purchased 550,000 shares of common stock for a value
of $8.3 million, the proceeds of which are included in the net proceeds
of approximately $57.0 million.

For the three months ended June 30, 2018, we incurred losses from
operations of $7.6 million and used net cash in operating activities of
$2.3 million. For the six months ended June 30, 2018, we incurred losses
from operations of $11.9 million and used net cash in operating
activities of $8.8 million. The first semester cash spend includes
spending on high-oleic soybean seed production to support our Spring
2018 planting of high-oleic soybeans.

Looking forward for the rest of 2018, we anticipate that our operating
cash spend will be in the range of $2.0 to $2.2 million per month
excluding working capital for grain purchases in the later part of 2018.
Cash will be used to expand our R&D team to advance key products in the
portfolio and continue to build our commercial capabilities.

       

 

Calyxt, Inc.

Condensed Balance Sheets

(Amounts in Thousands, Except Share Data and Per Share Data)

 
June 30,
2018
December 31,
2017
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 105,620 $ 56,664
Trade accounts receivable
Due from related parties 102 167
Prepaid expenses and other current assets 1,475 626
 
Total current assets 107,197 57,457
Property and equipment, net 21,337 14,353
Other long-term assets 307 357
 
Total assets $ 128,841   $ 72,167  
 
Liabilities and stockholders' equity
Current liabilities:
Due to related parties $ 1,337 $ 1,350
Accounts payable 1,110 1,023
Accrued salaries, wages, and other compensation 627 945
Accrued liabilities 1,959 893
Current deferred revenue 9 43
 
Total current liabilities 5,042 4,254
Non-current deferred revenue 116 289
Finance lease obligations and other long term liabilities 17,444 10,148
 
Total liabilities 22,602 14,691
Stockholders' equity:
Common stock, $0.0001 par value; 275,000,000 shares authorized,
32,336,106· and 27,718,780 shares issued and outstanding as of June
30, 2018 and December 31, 2017, respectively
3 3
 
Preferred stock, $0.0001 par value; 50,000,000 shares authorized, no
shares
issued or outstanding as of June 30, 2018 and December
31, 2017, respectively
 
Additional paid-in capital 172,730 112,021
Accumulated deficit (66,494 ) (54,548 )
 
Total stockholders' equity 106,239 57,476
 
Total liabilities and stockholders' equity $ 128,841   $ 72,167  
 

       

Calyxt, Inc.

Condensed Statements of Operations

(Amounts in Thousands except Shares Outstanding and Per Share
Amounts)

 
Three Months Ended
June 30,
Six Months Ended
June 30,
  2018         2017     2018         2017  
(unaudited)
Revenue $ 196 $ 223 $ 207 $ 278
Operating expenses:
Cost of revenue
Research and development 3,093 1,453 4,186 2,719
Selling, general, and administrative   4,595     2,010     7,809     3,588  
Total operating expenses   7,688     3,463     11,995     6,307  
Loss from operations (7,492 ) (3,240 ) (11,788 ) (6,029 )
Interest expense, net (72 ) (30 ) (140 ) (44 )
Foreign currency transaction loss   (12 )   (125 )   (18 )   (154 )
Loss before income taxes (7,576 ) (3,395 ) (11,946 ) (6,227 )
Income tax expense                
Net loss $ (7,576 ) $ (3,395 ) $ (11,946 ) $ (6,227 )
Basic and diluted loss per share $ (0.25 ) $ (0.17 ) $ (0.41 ) $ (0.32 )
Weighted average shares outstanding—basic and diluted   29,840,827     19,600,000     28,851,491     19,600,000  
 

                   

Calyxt, Inc.

Condensed Statement of Stockholders' Equity

(Amounts in Thousands except Shares Outstanding)

 
Shares
Outstanding
Common
Stock
Additional
Paid-In
Capital
Accumulated
Deficit
Total
Stockholders'
Equity
Balances at December 31, 2017 27,718,780 $ 3 $ 112,021 $ (54,548 ) $ 57,476
 
Net loss (11,946 ) (11,946 )
Common shares issued upon exercise of options and other 559,826 1,241 1,241
Stock-based compensation 2,427 2,427
Issuance of common stock 4,057,500   -   57,041     57,041  
 
Balances at June 30, 2018 (unaudited) 32,336,106 $ 3 $ 172,730 $ (66,494 ) $ 106,239  
 

   

Calyxt, Inc.

Condensed Statements of Cash Flows

(Amounts in Thousands)

 
Six Months Ended
June 30,
2018     2017
(unaudited)
Operating activities
Net loss $ (11,946 ) $ (6,227 )
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation 371 268
Stock-based compensation 2,427 692
Unrealized transaction gain (loss) on related party activity 6 (156 )
Changes in operating assets and liabilities:
Trade accounts receivable - 110
Due to/from related parties 47 1,213
Prepaid expenses and other assets (799 ) (448 )
Accounts payable 87 284
Accrued salaries, wages, and other compensation (318 ) 10
Accrued liabilities 1,504 369
Deferred revenue   (207 )   (178 )
 
Net cash used in operating activities (8,828 ) (4,063 )
 
Investing activities
Purchases of property and equipment, net (498 ) (608 )
 
Net cash used in investing activities (498 ) (608 )
 
Financing activities
Advance from Parent - 3,000
Costs incurred related to the issuance of stock (665 ) (834 )
Proceeds from common stock issuance 57,706 -
Proceeds from the exercise of stock options   1,241     -  
 
Net cash provided by financing activities   58,282     2,166  
 
Net decrease in cash and cash equivalents 48,956 (2,505 )
Cash and cash equivalents—beginning of period   56,664     5,026  
 
Cash and cash equivalents—end of period $ 105,620   $ 2,521  
 
Supplemental cash flow information
Interest paid $ 207 $ -
Supplemental non-cash investing and financing transactions:
Property and equipment included in financing lease obligation $ 7,096 $ -
Offering costs in accounts payable and accrued liabilities $ 445 $ 1,269
 

About Calyxt

Calyxt, Inc. is a consumer-centric, food- and agriculture-focused
company. Calyxt is pioneering a paradigm shift to deliver healthier food
ingredients, such as healthier oils and high fiber wheat, for consumers
and crop traits that benefit the environment and reduce pesticide
applications, such as disease tolerance, for farmers. Calyxt develops
non-transgenic crops leveraging processes that occur in nature by
combining its leading gene-editing technology and technical expertise
with its innovative commercial strategy. Calyxt is located in
Minneapolis-St. Paul, MN, and is listed on the Nasdaq market (ticker: CLXT).

For further information please visit our website: www.calyxt.com
Calyxt™
and the corporate logo are trademarks owned by Calyxt, Inc.
TALEN®
is a registered trademark owned by the Cellectis S.A.

Calyxt Forward-Looking Statements

This communication contains "forward-looking statements" within the
meaning of the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. In some cases, you can identify these
statements by forward-looking words such as "may," "might," "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue," the negative of these terms and
other comparable terminology. These forward-looking statements, which
are subject to risks, uncertainties and assumptions about us, may
include projections of our future financial performance, our anticipated
growth strategies and anticipated trends in our business. These
statements are only predictions based on our current expectations and
projections about future events. There are important factors that could
cause our actual results, level of activity, performance or achievements
to differ materially from the results, level of activity, performance or
achievements expressed or implied by the forward-looking statements,
including those factors discussed under the caption entitled "Risk
Factors" in our Annual Report on Form 10-K, along with our other filings
with the U.S. Securities and Exchange Commission. We do not assume any
obligation to publicly provide revisions or updates to any
forward-looking statements, whether as a result of new information,
future developments or otherwise, should circumstances change, except as
otherwise required by applicable laws.

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