Filed pursuant to Rule 424(b)(3)
Registration No. 333-252515
PROSPECTUS SUPPLEMENT NO. 23
(to Prospectus dated February 16, 2021)
Danimer Scientific, Inc.
Up to 32,435,961 Shares of Common Stock
Up to 16,279,253 Shares of Common Stock Issuable Upon Exercise of
Warrants and Options
This prospectus supplement supplements the prospectus dated
February 16, 2021 (as supplemented or amended from time to time,
the “Prospectus”), which forms a part of our registration statement
on Form S-1 (No. 333-252515). This prospectus supplement is being
filed to update and supplement the information in the Prospectus
with the information contained in our quarterly report on Form
10-Q, filed with the Securities and Exchange Commission on May 10,
2022 (the “Quarterly Report”). Accordingly, we have attached the
Quarterly Report to this prospectus supplement. The Prospectus and
this prospectus supplement relate to the issuance by us of up to an
aggregate of up to 16,279,253 shares of our Class A common stock,
$0.0001 par value per share (“Common Stock”), which consists of (i)
up to 6,000,000 shares of Common Stock that are issuable upon the
exercise of 6,000,000 warrants (the “Private Warrants”) originally
issued in a private placement in connection with the initial public
offering of Live Oak Acquisition Corp., our predecessor company
(“Live Oak”), (ii) up to 10,000,000 shares of Common Stock that are
issuable upon the exercise of 10,000,000 warrants (the “Public
Warrants” and, together with the Private Warrants, the “Warrants”)
originally issued in the initial public offering of Live Oak and
(iii) up to 279,253 shares of Common Stock issuable upon exercise
of Non-Plan Legacy Danimer Options. We will receive the proceeds
from any exercise of any Warrants for cash.
The Prospectus and this prospectus supplement also relate to the
offer and sale from time to time by the selling securityholders
named in the Prospectus (the “Selling Securityholders”), or their
permitted transferees, of (i) up to 32,435,961 shares of Common
Stock (including up to 6,000,000 shares of Common Stock that may be
issued upon exercise of the Private Warrants) and (ii) up to
6,000,000 Private Warrants. We will not receive any proceeds from
the sale of shares of Common Stock or the Private Warrants by the
Selling Securityholders pursuant to the Prospectus and this
prospectus supplement.
Our registration of the securities covered by the Prospectus and
this prospectus supplement does not mean that the Selling
Securityholders will offer or sell any of the shares. The Selling
Securityholders may sell the shares of Common Stock covered by the
Prospectus and this prospectus supplement in a number of different
ways and at varying prices. We provide more information about how
the Selling Securityholders may sell the shares in the section
entitled “Plan
of Distribution.”
Our Common Stock is listed on The New York Stock Exchange under the
symbol “DNMR”. On August 9, 2022, the closing price of our Common
Stock was $4.07. Our Public Warrants were previously traded on The
New York Stock Exchange under the symbol “DNMR WS”; however, the
Public Warrants ceased trading on the New York Stock Exchange and
were delisted following their redemption.
This prospectus supplement updates and supplements the information
in the Prospectus and is not complete without, and may not be
delivered or utilized except in combination with, the Prospectus,
including any amendments or supplements thereto. This prospectus
supplement should be read in conjunction with the Prospectus and if
there is any inconsistency between the information in the
Prospectus and this prospectus supplement, you should rely on the
information in this prospectus supplement.
See the section entitled “Risk
Factors”
beginning on page 4 of the Prospectus to read about factors you
should consider before buying our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement or the
Prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The date of this prospectus supplement is August 9,
2022.
o
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For the quarterly period ended June 30, 2022
OR
|
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For the transition period from
Commission File Number: 001-39280
DANIMER SCIENTIFIC, INC.
(Exact Name of Registrant as Specified in its Charter)
|
|
|
Delaware
|
84-1924518
|
|
( State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
140 Industrial Boulevard
Bainbridge, GA
|
39817
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Registrant’s telephone number, including area code: (229)
243-7075
Securities registered pursuant to Section 12(b) of the
Act:
|
|
|
|
|
|
Title of each class
|
|
Trading
Symbol(s)
|
|
Name of each exchange on which registered
|
|
Class A Common stock, $0.0001 par value per share
|
|
DNMR
|
|
New York Stock Exchange
|
|
|
|
|
|
|
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes ☒ No
☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
|
|
|
|
|
|
|
|
Large accelerated filer
|
|
☒
|
|
Accelerated filer
|
|
☐
|
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☒
|
|
Emerging growth company
|
|
☐
|
|
|
|
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
☒
As of August 9, 2022, the registrant had 101,170,634 shares of
common stock, $0.0001 par value per share, outstanding.
Table of Contents
FORWARD-LOOKING STATEMENTS
Certain statements contained herein, as well as in other filings we
make with the United States Securities and Exchange Commission
(“SEC”) and other written and oral information we release,
regarding our future performance constitute "forward-looking
statements" as defined in the Private Securities Litigation Reform
Act of 1995. Forward-looking statements may relate to, among other
things, the impact on our business, operations and financial
results of the COVID-19 pandemic and the ongoing conflict in
Ukraine (each of which, among other things, may affect many of the
items listed below); the demand for our products and services;
revenue growth; effects of competition; supply chain and technology
initiatives; inventory and in-stock positions; state of the
economy; state of the credit markets, including mortgages, home
equity loans, and consumer credit; impact of tariffs; demand for
credit offerings; management of relationships with our employees,
suppliers and vendors, and customers; international trade disputes,
natural disasters, public health issues (including pandemics and
related quarantines, shelter-in-place orders, and similar
restrictions), and other business interruptions that could disrupt
supply or delivery of, or demand for, our products or services;
continuation of equity programs; net earnings performance; earnings
per share; capital allocation and expenditures; liquidity; return
on invested capital; expense leverage; stock-based compensation
expense; commodity price inflation and deflation; the ability to
issue debt on terms and at rates acceptable to us; the impact and
expected outcome of investigations, inquiries, claims, and
litigation; the effect of accounting charges; the effect of
adopting certain accounting standards; the impact of regulatory
changes; financial outlook; and the integration of acquired
companies into our organization and the ability to recognize the
anticipated synergies and benefits of those
acquisitions.
Forward-looking statements are based on currently available
information and our current assumptions, expectations and
projections about future events. You should not rely on our
forward-looking statements. These statements are not guarantees of
future performance and are subject to future events, risks and
uncertainties – many of which are beyond our control, dependent on
the actions of third parties, or currently unknown to us – as well
as potentially inaccurate assumptions that could cause actual
results to differ materially from our expectations and projections.
These risks and uncertainties include, but are not limited to,
those described in Part II, Item 1A, "Risk Factors" and elsewhere
in this report and as also may be described from time to time in
future reports we file with the SEC. You should read such
information in conjunction with our Condensed Consolidated
Financial Statements and related notes and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations"
in this report. There also may be other factors that we cannot
anticipate or that are not described in this report, generally
because we do not currently perceive them to be material. Such
factors could cause results to differ materially from our
expectations.
Forward-looking statements speak only as of the date they are made,
and we do not undertake to update these statements other than as
required by law. You are advised, however, to review any further
disclosures we make on related subjects in our periodic filings
with the SEC.
PART I—FINANCIAL
INFORMATION
Item
1. FINANCIAL STATEMENTS (UNAUDITED)
DANIMER SCIENTIFIC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
(in thousands, except share and per share data)
|
|
2022
|
|
|
2021
|
|
|
Assets:
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
140,388
|
|
|
$
|
286,487
|
|
|
Accounts receivable, net
|
|
|
18,224
|
|
|
|
17,149
|
|
|
Other receivables, net
|
|
|
1,408
|
|
|
|
3,836
|
|
|
Inventories, net
|
|
|
32,729
|
|
|
|
24,573
|
|
|
Prepaid expenses and other current assets
|
|
|
5,394
|
|
|
|
4,737
|
|
|
Contract assets, net
|
|
|
3,900
|
|
|
|
3,576
|
|
|
Total current assets
|
|
|
202,043
|
|
|
|
340,358
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
408,885
|
|
|
|
316,181
|
|
|
Intangible assets, net
|
|
|
82,495
|
|
|
|
84,659
|
|
|
Goodwill
|
|
|
62,663
|
|
|
|
62,649
|
|
|
Right-of-use assets
|
|
|
19,133
|
|
|
|
19,240
|
|
|
Leverage loans receivable
|
|
|
13,408
|
|
|
|
13,408
|
|
|
Restricted cash
|
|
|
449
|
|
|
|
481
|
|
|
Loan fees
|
|
|
1,413
|
|
|
|
1,397
|
|
|
Other assets
|
|
|
228
|
|
|
|
224
|
|
|
Total assets
|
|
$
|
790,717
|
|
|
$
|
838,597
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' equity:
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
11,748
|
|
|
$
|
20,790
|
|
|
Accrued liabilities
|
|
|
10,994
|
|
|
|
18,777
|
|
|
Unearned revenue and contract liabilities
|
|
|
2,290
|
|
|
|
214
|
|
|
Current portion of lease liability
|
|
|
3,337
|
|
|
|
3,337
|
|
|
Current portion of long-term debt, net
|
|
|
2,242
|
|
|
|
357
|
|
|
Total current liabilities
|
|
|
30,611
|
|
|
|
43,475
|
|
|
|
|
|
|
|
|
|
|
Private warrants liability
|
|
|
2,571
|
|
|
|
9,578
|
|
|
Long-term lease liability, net
|
|
|
22,412
|
|
|
|
22,693
|
|
|
Long-term debt, net
|
|
|
262,032
|
|
|
|
260,934
|
|
|
Deferred income taxes
|
|
|
483
|
|
|
|
1,014
|
|
|
Other long-term liabilities
|
|
|
753
|
|
|
|
638
|
|
|
Total liabilities
|
|
$
|
318,862
|
|
|
$
|
338,332
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Common stock,
$0.0001 par value; 200,000,000 shares authorized: 101,114,861 and
100,687,820 shares issued and outstanding at June 30, 2022 and
December 31, 2021, respectively
|
|
$
|
10
|
|
|
$
|
10
|
|
|
Additional paid-in capital
|
|
|
647,566
|
|
|
|
619,145
|
|
|
Accumulated deficit
|
|
|
(175,721
|
)
|
|
|
(118,890
|
)
|
|
Total stockholders’ equity
|
|
|
471,855
|
|
|
|
500,265
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
790,717
|
|
|
$
|
838,597
|
|
The accompanying notes are an integral part of these condensed
consolidated financial statements.
3
DANIMER SCIENTIFIC, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
(in thousands, except share and per share data)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
$
|
11,575
|
|
|
$
|
11,294
|
|
|
$
|
24,791
|
|
|
$
|
22,318
|
|
|
Services
|
|
|
1,128
|
|
|
|
3,177
|
|
|
|
2,655
|
|
|
|
5,334
|
|
|
Total revenue
|
|
|
12,703
|
|
|
|
14,471
|
|
|
|
27,446
|
|
|
|
27,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
14,934
|
|
|
|
12,460
|
|
|
|
30,999
|
|
|
|
24,185
|
|
|
Selling, general and administrative
|
|
|
20,975
|
|
|
|
19,079
|
|
|
|
43,211
|
|
|
|
29,199
|
|
|
Research and development
|
|
|
8,913
|
|
|
|
3,975
|
|
|
|
16,044
|
|
|
|
6,594
|
|
|
Loss on sale of assets
|
|
|
1
|
|
|
|
33
|
|
|
|
1
|
|
|
|
33
|
|
|
Total costs and expenses
|
|
|
44,823
|
|
|
|
35,547
|
|
|
|
90,255
|
|
|
|
60,011
|
|
|
Loss from operations
|
|
|
(32,120
|
)
|
|
|
(21,076
|
)
|
|
|
(62,809
|
)
|
|
|
(32,359
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on remeasurement of private warrants
|
|
|
2,012
|
|
|
|
58,740
|
|
|
|
7,007
|
|
|
|
(21,957
|
)
|
|
Interest, net
|
|
|
(652
|
)
|
|
|
(203
|
)
|
|
|
(1,644
|
)
|
|
|
(352
|
)
|
|
Gain on forgiveness of debt
|
|
|
-
|
|
|
|
1,776
|
|
|
|
-
|
|
|
|
1,776
|
|
|
Loss on loan extinguishment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,604
|
)
|
|
Other, net
|
|
|
75
|
|
|
|
11
|
|
|
|
84
|
|
|
|
10
|
|
|
Total nonoperating income (expense):
|
|
|
1,435
|
|
|
|
60,324
|
|
|
|
5,447
|
|
|
|
(23,127
|
)
|
|
(Loss) income before income taxes
|
|
|
(30,685
|
)
|
|
|
39,248
|
|
|
|
(57,362
|
)
|
|
|
(55,486
|
)
|
|
Income taxes
|
|
|
240
|
|
|
|
-
|
|
|
|
531
|
|
|
|
-
|
|
|
Net (loss) income
|
|
$
|
(30,445
|
)
|
|
$
|
39,248
|
|
|
$
|
(56,831
|
)
|
|
$
|
(55,486
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net (loss) income per share
|
|
$
|
(0.30
|
)
|
|
$
|
0.44
|
|
|
$
|
(0.56
|
)
|
|
$
|
(0.64
|
)
|
|
Diluted net (loss) income per share
|
|
$
|
(0.30
|
)
|
|
$
|
0.39
|
|
|
$
|
(0.56
|
)
|
|
$
|
(0.64
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net (loss) income per share
|
|
|
101,047,650
|
|
|
|
88,806,086
|
|
|
|
100,888,185
|
|
|
|
86,760,615
|
|
|
Effect of dilutive instruments
|
|
|
-
|
|
|
|
12,718,858
|
|
|
|
-
|
|
|
|
-
|
|
|
Diluted net (loss) income per share
|
|
|
101,047,650
|
|
|
|
101,524,944
|
|
|
|
100,888,185
|
|
|
|
86,760,615
|
|
The accompanying notes are an integral part of these condensed
consolidated financial statements.
4
DANIMER SCIENTIFIC, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF STOCKHOLDERS' EQUITY
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
(in thousands)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
Common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period
|
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
8
|
|
|
Issuance of common stock
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
Balance, end of period
|
|
|
10
|
|
|
|
9
|
|
|
|
10
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period
|
|
|
633,213
|
|
|
|
435,782
|
|
|
|
619,145
|
|
|
|
414,819
|
|
|
Stock-based compensation expense
|
|
|
14,233
|
|
|
|
14,031
|
|
|
|
27,983
|
|
|
|
20,696
|
|
|
Fair value of private warrants converted to public
warrants
|
|
|
-
|
|
|
|
31,593
|
|
|
|
-
|
|
|
|
45,515
|
|
|
Stock issued under stock compensation plans
|
|
|
120
|
|
|
|
1,275
|
|
|
|
493
|
|
|
|
2,466
|
|
|
Exercise of warrants, net of issuance costs
|
|
|
-
|
|
|
|
138,202
|
|
|
|
-
|
|
|
|
138,202
|
|
|
Issuance of common stock, net of issuance costs
|
|
|
-
|
|
|
|
(75
|
)
|
|
|
-
|
|
|
|
(890
|
)
|
|
Costs related to warrants
|
|
|
-
|
|
|
|
-
|
|
|
|
(55
|
)
|
|
|
-
|
|
|
Balance, end of period
|
|
|
647,566
|
|
|
|
620,808
|
|
|
|
647,566
|
|
|
|
620,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated deficit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period
|
|
|
(145,276
|
)
|
|
|
(153,517
|
)
|
|
|
(118,890
|
)
|
|
|
(58,783
|
)
|
|
Net (loss) income
|
|
|
(30,445
|
)
|
|
|
39,248
|
|
|
|
(56,831
|
)
|
|
|
(55,486
|
)
|
|
Balance, end of period
|
|
|
(175,721
|
)
|
|
|
(114,269
|
)
|
|
|
(175,721
|
)
|
|
|
(114,269
|
)
|
|
Total stockholders' equity
|
|
$
|
471,855
|
|
|
$
|
506,548
|
|
|
$
|
471,855
|
|
|
$
|
506,548
|
|
The accompanying notes are an integral part of these condensed
consolidated financial statements.
5
DANIMER SCIENTIFIC, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
(in thousands)
|
|
2022
|
|
|
2021
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(56,831
|
)
|
|
$
|
(55,486
|
)
|
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
(Gain) loss on remeasurement of private warrants
|
|
|
(7,007
|
)
|
|
|
21,957
|
|
|
|
Stock-based compensation
|
|
|
27,983
|
|
|
|
20,696
|
|
|
|
Depreciation and amortization
|
|
|
8,588
|
|
|
|
4,311
|
|
|
|
Inventory reserves
|
|
|
597
|
|
|
|
-
|
|
|
|
Deferred income taxes
|
|
|
(531
|
)
|
|
|
-
|
|
|
|
Loss on write-off of deferred loan costs
|
|
|
-
|
|
|
|
1,900
|
|
|
|
Amortization of debt issuance costs and debt discounts
|
|
|
1,152
|
|
|
|
207
|
|
|
|
Gain on forgiveness of debt
|
|
|
-
|
|
|
|
(1,776
|
)
|
|
|
Amortization of right-of-use assets and lease liability
|
|
|
(173
|
)
|
|
|
(806
|
)
|
|
|
Contract asset reserve
|
|
|
1,216
|
|
|
|
-
|
|
|
|
Other
|
|
|
872
|
|
|
|
66
|
|
|
|
Changes in operating assets and liabilities, net of effects of
acquisition:
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(2,166
|
)
|
|
|
(3,229
|
)
|
|
|
Other receivables
|
|
|
2,692
|
|
|
|
(235
|
)
|
|
|
Inventories, net
|
|
|
(10,838
|
)
|
|
|
(4,011
|
)
|
|
|
Prepaid expenses and other current assets
|
|
|
1,434
|
|
|
|
(1,520
|
)
|
|
|
Contract assets
|
|
|
(1,540
|
)
|
|
|
(1,552
|
)
|
|
|
Other assets
|
|
|
(5
|
)
|
|
|
40
|
|
|
|
Accounts payable
|
|
|
(2,693
|
)
|
|
|
1,967
|
|
|
|
Accrued and other long-term liabilities
|
|
|
(2,220
|
)
|
|
|
(3,537
|
)
|
|
|
Unearned revenue and contract liabilities
|
|
|
2,077
|
|
|
|
(1,633
|
)
|
|
|
Net cash used in operating activities
|
|
|
(37,393
|
)
|
|
|
(22,641
|
)
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(108,850
|
)
|
|
|
(51,906
|
)
|
|
|
Acquisition of Novomer, net of cash acquired
|
|
|
(14
|
)
|
|
|
-
|
|
|
|
Proceeds from sales of property, plant and equipment
|
|
|
55
|
|
|
|
340
|
|
|
|
Net cash used in investing activities
|
|
|
(108,809
|
)
|
|
|
(51,566
|
)
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from exercise of warrants, net of issuance
costs
|
|
|
-
|
|
|
|
138,202
|
|
|
|
Proceeds from long-term debt
|
|
|
-
|
|
|
|
169
|
|
|
|
Cash paid for debt issuance costs
|
|
|
(279
|
)
|
|
|
(1,684
|
)
|
|
|
Proceeds from exercise of stock options
|
|
|
197
|
|
|
|
2,375
|
|
|
|
Proceeds from employee stock purchase plan
|
|
|
296
|
|
|
|
92
|
|
|
|
Principal payments on long-term debt
|
|
|
(88
|
)
|
|
|
(27,075
|
)
|
|
|
Cost related to warrants
|
|
|
(55
|
)
|
|
|
-
|
|
|
|
Proceeds from issuance of common stock, net of issuance
costs
|
|
|
-
|
|
|
|
(890
|
)
|
|
|
Net cash provided by financing activities
|
|
|
71
|
|
|
|
111,189
|
|
|
|
Net (decrease) increase in cash and cash equivalents and restricted
cash
|
|
|
(146,131
|
)
|
|
|
36,982
|
|
|
|
Cash and cash equivalents and restricted cash-beginning of
period
|
|
|
286,968
|
|
|
|
379,897
|
|
|
|
Cash and cash equivalents and restricted cash-end of
period
|
|
$
|
140,837
|
|
|
$
|
416,879
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid for interest, net of interest capitalized
|
|
$
|
481
|
|
|
$
|
242
|
|
|
|
Cash paid for operating leases
|
|
$
|
1,771
|
|
|
$
|
1,589
|
|
|
|
Supplemental non-cash disclosure:
|
|
|
|
|
|
|
|
|
Inventory consumed in constructing property, plant and
equipment
|
|
$
|
2,084
|
|
|
$
|
-
|
|
|
|
Changes in accounts payable and accrued liabilities related to
purchase of PP&E
|
|
$
|
(11,797
|
)
|
|
$
|
5,983
|
|
|
The accompanying notes are an integral part of these condensed
consolidated financial statements.
6
DANIMER SCIENTIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
Description of Business
Danimer Scientific, Inc., together with its subsidiaries
(“Company”, “Danimer”, “we”, “us”, or “our”), is a performance
polymer company specializing in bioplastic replacements for
traditional petroleum-based plastics. Our common stock is listed on
the New York Stock Exchange under the symbol “DNMR”.
The Company (formerly Live Oak Acquisition Corp. (“Live Oak”)), was
originally incorporated in the State of Delaware on May 24, 2019 as
a special purpose acquisition company formed for the purpose of
effecting a merger, capital stock exchange, asset acquisition,
stock purchase, recapitalization, reorganization, or similar
business combination with one or more businesses. Live Oak
completed its initial public offering in May 2020. On December 29,
2020, Live Oak consummated a business combination (“Business
Combination”) pursuant to an Agreement and Plan of Merger, dated as
of October 3, 2020 (as amended by Amendment No. 1, dated as of
October 8, 2020, and Amendment No. 2, dated as of December 11, 2020
(collectively “Merger Agreement”), by and among Live Oak, Green
Merger Corp. (“Merger Sub.”), and Meredian Holdings Group, Inc.
(“Legacy Danimer”). Immediately upon consummation of the Business
Combination, Merger Sub. merged with and into Legacy Danimer, with
Legacy Danimer surviving the merger as a wholly owned subsidiary of
Live Oak. In connection with the Business Combination, Live Oak
changed its name to Danimer Scientific, Inc.
On August 11, 2021, we closed the acquisition of Novomer, Inc.
(integrated into our business as “Danimer Catalytic Technologies”).
Our consolidated results include those of Danimer Catalytic
Technologies from the acquisition date forward. Refer to Note 2 for
further discussion of the acquisition.
Financial Statements
The accompanying condensed consolidated financial statements are
prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”) and consolidate all assets and liabilities of
the Company and its wholly owned subsidiaries. GAAP requires us to
make certain estimates and assumptions in recording assets,
liabilities, sales and expenses as well as in the disclosure of
contingent assets and liabilities. Actual results could differ from
those estimates. All intercompany transactions and balances have
been eliminated. Certain reclassifications have been made to
previously reported amounts to conform to the current presentation.
In preparing these condensed consolidated financial statements, we
have considered and, where appropriate, included the effects of the
COVID-19 pandemic on our operations. The pandemic continues to
provide significant challenges to the U.S. and global
economies.
Since we do not have any items of other comprehensive income or
loss, there is no difference between net (loss) income and
comprehensive (loss) income for the three and six month periods
ended June 30, 2022 or 2021, so a separate condensed consolidated
statement of comprehensive (loss) income that would otherwise be
required is not presented.
Recently Issued Accounting Pronouncements
There have been no new accounting pronouncements not yet effective
that we believe will have a significant effect, or potential
significant effect, on our condensed consolidated financial
statements.
Note 2. Business Combination
Danimer Catalytic Technologies
On August 11, 2021, we acquired all of the outstanding shares of
Novomer, Inc., a privately held company, in exchange for $153.9
million in cash, gross of cash acquired, subject to certain
customary adjustments as set forth in the merger agreement. We also
entered into employment or consulting agreements with, and granted
stock options to, certain key employees and consultants of Novomer
Inc. We have also recorded contingent purchase price payable that
will be payable to the sellers upon our collection of an income tax
refund receivable. We have integrated Novomer, Inc. into our
business as Danimer Catalytic Technologies.
Danimer Catalytic Technologies uses its proprietary thermal
catalytic conversion process to produce a unique type of PHA,
referred to under its brand name as Rinnovo, that can be
incorporated into some of our products as a complement to our
existing PHA polymer at reduced cost.
7
The table below sets forth the preliminary fair values of assets
acquired and liabilities assumed including the adjustments recorded
in the six months ended June 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
June 30,
|
|
|
(in thousands)
|
|
2021
|
|
|
Adjustments
|
|
|
2022
|
|
|
Cash and restricted cash
|
|
$
|
2,741
|
|
|
$
|
-
|
|
|
$
|
2,741
|
|
|
Property, plant and equipment
|
|
|
18,622
|
|
|
|
-
|
|
|
|
18,622
|
|
|
Other assets acquired
|
|
|
2,302
|
|
|
|
-
|
|
|
|
2,302
|
|
|
Right-of-use asset
|
|
|
2,715
|
|
|
|
-
|
|
|
|
2,715
|
|
|
Acquired technology
|
|
|
84,400
|
|
|
|
-
|
|
|
|
84,400
|
|
|
Goodwill
|
|
|
62,649
|
|
|
|
14
|
|
|
|
62,663
|
|
|
Deferred tax liability
|
|
|
(14,246
|
)
|
|
|
-
|
|
|
|
(14,246
|
)
|
|
Lease liability
|
|
|
(2,759
|
)
|
|
|
-
|
|
|
|
(2,759
|
)
|
|
Liabilities assumed
|
|
|
(2,004
|
)
|
|
|
(14
|
)
|
|
|
(2,018
|
)
|
|
Contingent purchase price payable
|
|
|
(500
|
)
|
|
|
-
|
|
|
|
(500
|
)
|
|
Total preliminary purchase price
|
|
$
|
153,920
|
|
|
$
|
-
|
|
|
$
|
153,920
|
|
We have recognized the assets acquired and liabilities assumed at
their estimated acquisition date fair values, with the excess of
the purchase price over the estimated fair values of the
identifiable net assets acquired recorded as goodwill.
The accounting for the business combination is based on currently
available information and is considered preliminary. The final
accounting for the business combination may differ materially from
that presented above as future events may provide additional
information about the realizability of other assets or the
existence of other liabilities at the acquisition date. In
addition, income tax returns for 2021 have yet to be filed, and we
are validating certain state income tax allocations, which could
result in changes to acquisition-date deferred tax
liability.
The preliminary estimated goodwill is attributable to the strategic
opportunities and synergies that we expect to arise from the
acquisition and the value of its existing workforce. The goodwill
is not deductible for federal income tax purposes.
The following table compares pro forma revenue and loss from
operations for the combined entity for the three and six months
ended June 30, 2021 as if the acquisition had taken place on
January 1, 2021 to actual results for the three and six months
ended June 30, 2022. These pro forma results do not necessarily
reflect what the combined entity's results would have been had the
acquisition taken place at that time, and this pro forma financial
information may not be useful in predicting our future financial
results. The actual results might have differed significantly from
the pro forma amounts reflected herein due to a variety of factors.
The following includes pro forma adjustments to reflect
amortization of acquired technology intangible assets. We do not
disclose pro forma impact related to income taxes or
earnings-per-share as we do not believe those are useful to the
reader in our situation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
(in thousands)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
Revenue
|
|
$
|
12,703
|
|
|
$
|
14,492
|
|
|
$
|
27,446
|
|
|
$
|
27,687
|
|
|
Loss from operations
|
|
|
(32,120
|
)
|
|
|
(23,921
|
)
|
|
|
(62,809
|
)
|
|
|
(40,193
|
)
|
During the three and six months ended June 30, 2022, Danimer
Catalytic Technologies incurred $2.9 and $5.8 million in expenses,
respectively, including amortization expense.
Note 3. Fair Value Considerations
Fair value is defined as the price we would receive to sell an
asset, or pay to transfer a liability, in a timely transaction with
an independent buyer in the principal market, or in the absence of
a principal market, the most advantageous market for the investment
or liability. GAAP provides a three-tier hierarchy for measuring
fair value based on the inputs to valuation techniques used to
measure fair value. The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or
liabilities and the lowest priority to unobservable
inputs.
The three levels of the fair value hierarchy are as
follows:
Level 1 - Unadjusted quoted prices in active markets that are
accessible at the measurement date for identical assets and
liabilities;
Level 2 - Observable inputs other than quoted prices in active
markets, such as quoted prices for similar assets and liabilities
in active markets, quoted prices for identical or similar assets
and liabilities in markets that are not active, or other inputs
that are observable or can be corroborated by observable market
data; and
Level 3 - Unobservable inputs reflecting management’s assumptions,
consistent with reasonably available assumptions made by other
market participants. These valuations require significant
judgment.
8
Level 1
The carrying amounts of our cash and cash equivalents and
restricted cash were measured using quoted market prices in active
markets and represent Level 1 investments. Our other financial
instruments such as accounts receivable, accounts payable and
accrued expenses, approximate their fair values due to their short
maturities. The fair value of our Notes (see Note 11), based on
trades made around June 30, 2022, was approximately $186.1
million.
We value our restricted stock that does not include market or
performance factors at the closing price of a share of our common
stock on the grant date.
We value our restricted stock with performance factors at the
closing price of a share of our common stock on each period end
date, or $4.56 at June 30, 2022, since such grants include a cash
settlement feature.
Level 2
We value our restricted stock that contain a market-based vesting
provision using a Monte Carlo simulation, which takes into account
a large number of potential stock price scenarios over time and
incorporates varied assumptions about volatility and exercise
behavior for those various scenarios. These assumptions are based
on market data but cannot be directly observed. A fair value is
determined for each potential outcome. There were no restricted
stock units that contained a market-based vesting condition issued
during the three and six months ended June 30, 2022.
Level 3
We use the Black-Scholes option pricing model to value stock
options, including ESPP awards, and our outstanding warrants to
purchase shares of our common stock at an exercise price of $11.50
per share, subject to adjustments, that had been privately placed
prior to the Business Combination (“Private Warrants”). The Private
Warrants and stock options with a cash-settlement feature are
re-valued each period end, and all other stock options are valued
on the date of grant only. Other than this mark to market factor,
we recognize this expense on a straight-line basis over the
respective vesting periods. Since our stock price history as a
publicly traded company is shorter in duration than the expected
lives of our options (other than ESPP awards), we use a peer group
to assess volatility. We have not paid and do not currently
anticipate paying a cash dividend on our common stock, so we have
set the expected annual dividend yield to zero for all
calculations. We used risk-free rates equal to the U.S. Treasury
yield curves in effect as of the valuation dates for durations
equal to the expected lives of each option. We use the simplified
method under Staff Accounting Bulletin Topic 14, defined as the
mid-point between the vesting period and the contractual term for
each grant, to determine the expected lives of stock options and we
use the remaining contractual life of the warrants as their
expected life.
The following table sets forth the fair values we calculated and
the ranges of values used in our Black Scholes calculations for
stock options, other than ESPP awards.
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
Three Months Ended June 30,
|
|
|
|
2022
|
|
2022
|
|
2021
|
|
Share prices of our common stock
|
|
$4.56
|
|
$4.04 - $4.56
|
|
$15.89 - $38.33
|
|
Expected volatilities
|
|
47.05%
|
|
45.72% - 47.39%
|
|
41.50% - 41.50%
|
|
Risk-free rates of return
|
|
2.97%
|
|
2.81% - 2.98%
|
|
1.05% - 1.05%
|
|
Expected option terms (years)
|
|
5.28
|
|
5.06 - 6.00
|
|
6.00 - 6.00
|
|
Calculated option values
|
|
$1.05
|
|
$0.33 - $2.32
|
|
$18.52 - $18.52
|
The table below sets forth the inputs we used in our Black Scholes
models for Private Warrants valuations and the fair values
determined.
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2022
|
|
|
December 31, 2021
|
|
|
Share price of our common stock
|
|
$
|
4.56
|
|
|
$
|
8.52
|
|
|
Expected volatility
|
|
|
50.9
|
%
|
|
|
47.6
|
%
|
|
Risk-free rate of return
|
|
|
2.95
|
%
|
|
|
1.11
|
%
|
|
Expected warrant term (years)
|
|
|
3.50
|
|
|
|
3.99
|
|
|
Fair value determined per warrant
|
|
$
|
0.66
|
|
|
$
|
2.45
|
|
9
Note 4. Inventories, net
Inventories, net consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
(in thousands)
|
|
2022
|
|
|
2021
|
|
|
Raw materials
|
|
$
|
18,535
|
|
|
$
|
11,555
|
|
|
Work in process
|
|
|
981
|
|
|
|
928
|
|
|
Finished goods and related items
|
|
|
13,213
|
|
|
|
12,090
|
|
|
Total inventories, net
|
|
$
|
32,729
|
|
|
$
|
24,573
|
|
At June 30, 2022 and December 31, 2021, finished goods and related
items included $5.9 million and $5.6 million of finished neat PHA.
Inventory at June 30, 2022 is stated net of reserves of $0.6
million related to interim assessments to reduce the carrying value
of inventory to the lower of cost or net realizable
value.
Note 5. Property, Plant and Equipment, net
Property, plant and equipment, net, consisted of the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
(in thousands)
|
|
Estimated Useful Life (Years)
|
|
2022
|
|
|
2021
|
|
|
Land and improvements
|
|
20
|
|
$
|
92
|
|
|
$
|
92
|
|
|
Leasehold improvements
|
|
Shorter of useful life or lease term
|
|
|
28,036
|
|
|
|
27,845
|
|
|
Buildings
|
|
15-40
|
|
|
2,156
|
|
|
|
2,156
|
|
|
Machinery and equipment
|
|
5-20
|
|
|
100,977
|
|
|
|
97,923
|
|
|
Motor vehicles
|
|
7-10
|
|
|
921
|
|
|
|
912
|
|
|
Furniture and fixtures
|
|
7-10
|
|
|
443
|
|
|
|
420
|
|
|
Office equipment
|
|
3-10
|
|
|
3,509
|
|
|
|
3,368
|
|
|
Construction in progress
|
|
N/A
|
|
|
308,148
|
|
|
|
212,647
|
|
|
|
|
|
|
|
444,282
|
|
|
|
345,363
|
|
|
Accumulated depreciation and amortization
|
|
|
|
|
(35,397
|
)
|
|
|
(29,182
|
)
|
|
Property, plant and equipment, net
|
|
|
|
$
|
408,885
|
|
|
$
|
316,181
|
|
We reported depreciation and amortization expense (which included
amortization of intangible assets) as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
(in thousands)
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
Cost of revenue
|
|
$
|
2,289
|
|
|
$
|
1,951
|
|
|
$
|
4,517
|
|
|
$
|
3,790
|
|
|
Selling, general and administrative
|
|
|
163
|
|
|
|
177
|
|
|
|
323
|
|
|
|
273
|
|
|
Research and development
|
|
|
1,876
|
|
|
|
83
|
|
|
|
3,748
|
|
|
|
248
|
|
|
Total depreciation and amortization expense
|
|
$
|
4,328
|
|
|
$
|
2,211
|
|
|
$
|
8,588
|
|
|
$
|
4,311
|
|
Construction in progress consists primarily of the early stages of
construction of our Greenfield facility in Bainbridge, Georgia and
the build-out of our facility in Winchester, Kentucky, as noted in
the table below.
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2022
|
|
|
December 31,
2021
|
|
|
Georgia
|
|
$
|
155,329
|
|
|
$
|
83,660
|
|
|
Kentucky
|
|
|
150,016
|
|
|
|
128,289
|
|
|
New York
|
|
|
2,803
|
|
|
|
698
|
|
|
|
|
$
|
308,148
|
|
|
$
|
212,647
|
|
We anticipate placing the Phase II expansion of our facility in
Winchester, Kentucky in service during the quarter ending September
30, 2022. We do not have an expected in-service date for our
Greenfield facility in Bainbridge, Georgia at this time, since that
project is still in an early stage of completion.
Property, plant and equipment includes gross capitalized interest
of $9.3 million and $5.7 million as of June 30, 2022 and December
31, 2021, respectively. For the three months ended June 30, 2022
and 2021, interest costs of $2.0 million and $0.05 million,
respectively, were capitalized to property, plant and equipment.
For the six months ended June 30, 2022 and 2021, interest costs of
$3.6 million and $0.3 million, respectively, were capitalized to
property, plant and equipment.
10
Note 6. Intangible Assets and Goodwill
Intangible Assets
Our recognized intangible assets consist of patents and the
unpatented technological know-how of Danimer Catalytic
Technologies. Our legacy patents were initially recorded at cost.
The values of Danimer Catalytic Technologies' patents and
unpatented know-how are inseparable and represent their
acquisition-date fair value, less subsequent
amortization.
We capitalize the costs of patent acquisition as well as the costs
of the defense of patents when we believe a successful defense of
that patent is probable and that a successful defense increases the
value of the patent. Patent costs are amortized on a straight-line
basis over their estimated useful lives, which range from 13 to 20
years. Our intangible portfolio has an estimated weighted average
useful life of 19 years.
Intangible assets, net, consisted of the following: