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Amyris, Inc. (AMRS) SEC Filing 10-Q Quarterly Report for the period ending Thursday, September 30, 2021

Amyris, Inc.

CIK: 1365916 Ticker: AMRS
FOR IMMEDIATE RELEASE AMYRIS, INC. REPORTS SECOND QUARTER 2021 FINANCIAL RESULTS • Another record quarter of underlying revenue • Another record quarter of consumer revenue and significant gross margin expansion • Strong cash position and robust outlook into second half 2021 Emeryville, CA – August 5, 2021 – Amyris, Inc. (Nasdaq: AMRS), a leading synthetic biotechnology company active in the Clean Health, Beauty and Wellness markets through its consumer brands and a top supplier of sustainable and natural ingredients, today announced financial results for its second quarter ended June 30, 2021. “With Q2 we completed another quarter of strong strategic and operational execution,” said John Melo, President and Chief Executive Officer. “We delivered record underlying revenue driven by record consumer revenue while significantly improving margins year-over-year. Two of our homegrown clean beauty brands, Biossance and Pipette, delivered record revenue with Biossance doubling revenue versus the prior year quarter. The performance of these brands is evidence of the rapidly growing consumer demand for high performance, affordable, and sustainable clean beauty products. In addition to our reported revenue, we had sales of $2.4 million that did not make the quarter cutoff. During Q2, we made significant efforts and investments in marketing and supply chain for the Q3 launch of our new brands: Rose Inc., JVN, Terasana and Olika which will add significant new revenue to our consumer portfolio in the second half.” “We are making good progress with the construction of our new Brazil ingredients manufacturing plant and expect to complete construction by the end of this year,” Mr. Melo added. “Early in the quarter, we completed a strategic transaction with Ingredion for the exclusive licensing of our Reb M sweetener from fermentation. We are aggressively working towards human trials to support worldwide accessibility to our RNA COVID-19 vaccine. Pre-clinical results have demonstrated a strong potential to become a highly competitive booster and RNA delivery technology.” “2021 is on track to be another record year with expected total revenue north of $400 million and positive adjusted EBITDA. As leaders in the creation of sustainable ingredients and products through clean chemistry and a strong product commercialization track record, we set ambitious operational and financial goals and are planning to reach $2 billion revenue in 2025. With our expanding ingredients pipeline and partnerships, strong manufacturing demand, and rapid consumer sales growth, we have confidence that we can achieve our objectives, while constantly finding ways to challenge the status quo and effect positive change for people and the planet,” concluded Mr. Melo. Q2 2021 Financial Highlights • Total revenue of $52.3 million included record underlying and consumer revenue and included $10 million of proceeds resulting from the strategic Reb M sweetener transaction. Total underlying revenue (product and collaboration revenue) increased 41% to $42.3 million compared to Q2 2020 revenue driven by a 59% increase in consumer sales, and a 25% increase in ingredient sales. Q2 consumer revenue achieved a new record with Biossance doubling its revenue compared to the prior year quarter. • Non-GAAP gross margin of $27 million, or 51% of revenue, improved from $11 million or 36% of revenue in Q2 2020. Excluding the $10 million contribution from the strategic Reb M sweetener transaction, gross


The following information was filed by Amyris, Inc. (AMRS) on Thursday, August 5, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 30, 2021

-OR-
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-34885

AMYRIS, INC.
(Exact name of registrant as specified in its charter) 
Delaware
55-0856151
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Amyris, Inc.
5885 Hollis Street, Suite 100
Emeryville, CA 94608
(510) 450-0761
(Address and telephone number of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareAMRSThe Nasdaq Stock Market, LLC

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, a 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 filerAccelerated filer
Non-accelerated filerSmaller 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 ☒

Shares outstanding of the Registrant's common stock:
Class
Outstanding as of November 3, 2021
Common Stock, $0.0001 par value per share
308,238,879




AMYRIS, INC.
TABLE OF CONTENTS
Page
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.







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PART I
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
AMYRIS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS






3



(Unaudited)
(In thousands, except shares and per share amounts)September 30,
2021
December 31, 2020
Assets
Current assets:
Cash and cash equivalents$114,887 $30,152 
Restricted cash286 309 
Accounts receivable, net of allowance of $939 and $137, respectively
34,920 32,846 
Accounts receivable - related party, net of allowance of $0 and $0, respectively
10,841 12,110 
Contract assets3,513 4,178 
Contract assets - related party2,000 1,203 
Inventories72,062 42,862 
Deferred cost of products sold - related party9,182 9,801 
Prepaid expenses and other current assets30,373 13,103 
Total current assets278,064 146,564 
Property, plant and equipment, net53,124 32,875 
Deferred cost of products sold, noncurrent - related party3,061 9,939 
Restricted cash, noncurrent961 961 
Recoverable taxes from Brazilian government entities13,005 8,641 
Right-of-use assets under financing leases, net7,996 9,994 
Right-of-use assets under operating leases, net10,989 10,136 
Goodwill128,692 — 
Intangible assets, net39,662 — 
Other assets6,753 3,704 
Total assets$542,307 $222,814 
Liabilities, Mezzanine Equity and Stockholders' Deficit
Current liabilities:
Accounts payable$80,645 $41,045 
Accrued and other current liabilities62,681 30,707 
Financing lease liabilities1,182 4,170 
Operating lease liabilities6,786 5,226 
Contract liabilities3,486 4,468 
Debt, current portion (includes instrument measured at fair value of $0 and $53,387, respectively)
24,614 54,748 
Related party debt, current portion280,633 22,689 
Total current liabilities460,027 163,053 
Long-term debt, net of current portion12,099 26,170 
Related party debt, net of current portion (includes instrument measured at fair value of $0 and $123,164, respectively)
5,000 159,452 
Financing lease liabilities, net of current portion63 — 
Operating lease liabilities, net of current portion7,722 9,732 
Derivative liabilities21,465 8,698 
Acquisition-related contingent consideration (Note 3 and Note 7)65,077 — 
Other noncurrent liabilities24,179 22,754 
Total liabilities595,632 389,859 
Commitments and contingencies
Mezzanine equity:
Contingently redeemable common stock5,000 5,000 
Contingently redeemable noncontrolling interest28,520 — 
Stockholders’ deficit:
Preferred stock - $0.0001 par value, 5,000,000 shares authorized as of September 30, 2021 and December 31, 2020; — shares issued and outstanding as of September 30, 2021 and December 31, 2020
— — 
Common stock - $0.0001 par value, 350,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 307,832,019 and 244,951,446 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively
31 24 
Additional paid-in capital2,358,441 1,957,224 
Accumulated other comprehensive loss(52,134)(47,375)
Accumulated deficit(2,395,506)(2,086,692)
Total Amyris, Inc. stockholders’ deficit(89,168)(176,819)
Noncontrolling interest2,323 4,774 
Total stockholders' deficit(86,845)(172,045)
Total liabilities, mezzanine equity and stockholders' deficit$542,307 $222,814 

See the accompanying notes to the unaudited condensed consolidated financial statements.






4



AMYRIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands, except shares and per share amounts)2021202020212020
Revenue:
Renewable products (includes related party revenue of $6,214, $88, $12,495 and $193, respectively)
$36,508 $27,577 $101,859 $70,619 
Licenses and royalties (includes related party revenue of $6,000, $0, $149,612 and $3,750, respectively)
6,006 3,563 160,806 9,714 
Collaborations, grants and other (includes related party revenue of $2,000, $750, $6,000 and $5,019, respectively)
5,352 3,118 14,376 13,060 
Total revenue (includes related party revenue of $14,214, $838, $168,107 and $8,962, respectively)
47,866 34,258 277,041 93,393 
Cost and operating expenses:
Cost of products sold40,252 25,822 93,332 60,710 
Research and development23,824 18,197 69,580 52,288 
Sales, general and administrative70,635 38,321 162,897 100,838 
Total cost and operating expenses134,711 82,340 325,809 213,836 
Loss from operations(86,845)(48,082)(48,768)(120,443)
Other income (expense):
Interest expense(4,321)(6,627)(14,857)(41,747)
Gain (loss) from change in fair value of derivative instruments4,778 1,999 (12,826)(6,498)
Gain (loss) from change in fair value of debt52,294 34,360 (204,359)2,908 
Loss upon extinguishment of debt(680)(2,606)(27,058)(51,954)
Other income (expense), net690 (49)40 1,452 
Total other income (expense), net52,761 27,077 (259,060)(95,839)
Loss before income taxes and loss from investment in affiliate(34,084)(21,005)(307,828)(216,282)
Provision for income taxes(58)(83)(170)(273)
Income (loss) from investment in affiliate181 (366)(567)(1,058)
Net loss(33,961)(21,454)(308,565)(217,613)
Less: income (loss) attributable to noncontrolling interest1,017 (1,702)(249)(3,809)
Net loss attributable to Amyris, Inc.(32,944)(23,156)(308,814)(221,422)
Less: loss allocated to participating securities— 6,832 787 15,369 
Net loss attributable to Amyris, Inc. common stockholders, basic$(32,944)$(83,475)$(308,027)$(273,204)
Net loss per share attributable to common stockholders, basic$(0.11)$(0.37)$(1.07)$(1.44)
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic300,888,579 227,267,553 286,919,463 189,192,973 
— 
Net loss per share attributable to common stockholders, diluted$(0.27)$(0.41)$(1.07)$(1.46)
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, diluted317,568,913 242,732,234 286,919,463 191,506,499 

See the accompanying notes to the unaudited condensed consolidated financial statements.






5




AMYRIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2021202020212020
Comprehensive loss:
Net loss$(33,961)$(21,454)$(308,565)$(217,613)
Foreign currency translation adjustment(7,494)(797)(4,759)(5,701)
Total comprehensive loss(41,455)(22,251)(313,324)(223,314)
Income (loss) attributable to noncontrolling interest1,017 (1,702)(249)(3,809)
Comprehensive loss attributable to Amyris, Inc.$(40,438)$(23,953)$(313,573)$(227,123)

See the accompanying notes to the unaudited condensed consolidated financial statements.






6



AMYRIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT AND MEZZANINE EQUITY
(Unaudited)

Preferred StockCommon Stock
(In thousands, except number of shares)SharesAmountSharesAmountAdditional Paid-in CapitalAccumulated Other Comprehensive LossAccumulated DeficitNoncontrolling InterestTotal Stockholders' DeficitMezzanine Equity - Contingently Redeemable Common Stock Mezzanine Equity - Contingently Redeemable Noncontrolling Interest
Balances at December 31, 20208,280 $— 244,951,446 $24 1,957,224 $(47,375)$(2,086,692)$4,774 $(172,045)$5,000 $— 
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock— — 496,341 — (2)— — — (2)— — 
Issuance of common stock upon conversion of debt principal, net of 2,600,000 pre-delivery shares returned to Amyris
— — 5,827,164 110,574 — — — 110,575 — — 
Issuance of common stock upon exercise of stock options— — 377,542 — 1,920 — — — 1,920 — — 
Issuance of common stock upon exercise of warrants— — 15,557,480 32,217 — — — 32,219 — — 
Issuance of common stock upon exercise of warrants - related party— — 6,056,944 — — — — — — — — 
Stock-based compensation— — — — 4,281 — — — 4,281 — — 
Foreign currency translation adjustment— — — — (2,038)— — (2,038)— — 
Net loss attributable to Amyris, Inc.— — — — — $(291,251)$1,200 (290,051)— $— 
Balances at March 31, 20218,280 $— 273,266,917 $27 $2,106,214 $(49,413)$(2,377,943)$5,974 $(315,141)$5,000 $— 
Issuance of contingently redeemable noncontrolling interest— — — — (14,520)— — — (14,520)— 28,520 
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock— — 880,603 — (1,479)— — — (1,479)— — 
Issuance of common stock as purchase consideration in business combination— — 225,784 — 3,167 — — — 3,167 — — 
Issuance of common stock in public offering— — 8,805,345 130,792 — — — 130,793 — — 
Issuance of common stock upon conversion of debt principal— — 2,862,772 38,632 — — — 38,633 — — 
Issuance of common stock upon conversion of preferred stock(8,280)— 1,943,659 — — — — — — — — 
Issuance of common stock upon ESPP purchase— — 145,112 — 321 — — — 321 — — 
Issuance of common stock upon exercise of stock options— — 145,200 — 860 — — — 860 — — 
Issuance of common stock upon exercise of warrants— — 1,381,940 — 6,622 — — — 6,622 — — 
Issuance of common stock upon exercise of warrants - related party— — 8,057,966 5,744 — — — 5,745 — — 
Stock-based compensation— — — — 8,747 — — — 8,747 — — 
Foreign currency translation adjustment— — — — — 4,773 — — 4,773 — — 
Net income attributable to Amyris, Inc.— — — — $15,381 $66 15,447 — $— 
Balances at June 30, 2021— $— 297,715,298 $30 $2,285,100 $(44,640)$(2,362,562)$6,040 $(116,032)$5,000 $28,520 
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock— — 1,180,864 — — — — — — — — 
Issuance of common stock as purchase consideration in business combinations— — 3,580,479 — 53,251 — — — 53,251 — — 
Issuance of common stock upon exercise of stock options— — 77,500 — 351 — — — 351 — — 
Issuance of common stock upon exercise of warrants— — 1,499,648 — — — — — — — — 
Issuance of common stock upon exercise of warrants - related party— — 3,778,230 10,834 — — — 10,835 — — 
Stock-based compensation— — — — 8,905 — — — 8,905 — — 
Foreign currency translation adjustment— — — — — (7,494)— — (7,494)— — 
Distribution to noncontrolling interest— — — — — — — (2,700)(2,700)— — 
Net loss attributable to Amyris, Inc.— — — — — (32,944)(1,017)(33,961)— — 
Balances at September 30, 2021— $— 307,832,019 $31 $2,358,441 $(52,134)$(2,395,506)$2,323 $(86,845)$5,000 $28,520 






7



Preferred StockCommon Stock
(In thousands, except number of shares)SharesAmountSharesAmountAdditional Paid-in CapitalAccumulated Other Comprehensive LossAccumulated DeficitNoncontrolling InterestTotal Stockholders' DeficitMezzanine Equity - Contingently Redeemable Common Stock Mezzanine Equity - Contingently Redeemable Noncontrolling Interest
Balances at December 31, 20198,280 $— 117,742,677 $12 1,543,668 $(43,804)$(1,755,653)$609 $(255,168)$5,000 $— 
Issuance of common stock and warrants upon conversion of debt principal and accrued interest— — 6,337,594 21,259 — — — 21,260 — — 
Issuance of common stock in private placement — — 3,484,321 — 10,000 — — — 10,000 — — 
Issuance of common stock in private placement - related party— — 10,505,652 27,188 — — — 27,189 — — 
Issuance of common stock upon exercise of warrants— — 1,160,929 — 3,332 — — — 3,332 — — 
Issuance of common stock upon exercise of warrants - related party— — 24,165,166 68,763 — — — 68,765 — — 
Exercise of common stock rights warrant - related party— — — — 15,000 — — — 15,000 — — 
Issuance of common stock right warrant - related party— — — — 8,904 — — — 8,904 — — 
Modification of previously issued common stock warrants— — — — 1,286 — — — 1,286 — — 
Derecognition of liability warrants to equity— — — — 5,200 — — — 5,200 — — 
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock— — 495,581 — (8)— — — (8)— — 
Stock-based compensation— — — — 3,504 — — — 3,504 — — 
Foreign currency translation adjustment— — — — — (2,549)— — (2,549)— — 
Net loss attributable to Amyris, Inc.— — — — — — (87,844)— (87,844)— — 
Balances at March 31, 20208,280 — 163,891,920 16 1,708,096 (46,353)(1,843,497)609 (181,129)5,000 — 
Issuance of preferred and common stock in private placement, net of issuance costs72,156 32,614,573 160,014 160,017 — — 
Issuance of preferred stock in private placement - related party, net of issuance costs30,000 — — 30,000 30,000 — — 
Issuance of common stock upon exercise of warrants132,746 — — — — — 
Issuance of common stock subsequent to exercise of common stock rights warrant in previous period - related party5,226,481 (1)— — — 
Fair value of pre-delivery shares released to holder in connection with debt amendment— — 10,478 10,478 — — 
Derecognition of liability warrants to equity— — 6,550 6,550 — — 
Fair value of modification to previously issued common stock warrants— — 1,067 1,067 — — 
Return of pre-delivery shares previously issued in connection with debt agreement(1,363,636)— — — — — 
Issuance of common stock upon conversion of debt principal and accrued interest, and the related derecognition of derivative liability to equity3,246,489 — 15,778 15,778 — — 
Stock-based compensation— — 2,931 2,931 — — 
Issuance of common stock upon ESPP purchase144,523 — 421 421 — — 
Issuance of common stock upon exercise of stock options5,227 — 16 16 — — 
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock720,100 — (98)(98)— — 
Foreign currency translation adjustment— — — (2,355)(2,355)— — 
Net loss attributable to Amyris, Inc.— — — (110,422)2,107 (108,315)— — 
Balances at June 30, 2020110,436 $— 204,618,423 $20 $1,935,252 $(48,708)$(1,953,919)$2,716 $(64,639)$5,000 $— 
Adjustment to costs incurred in connection with June 2020 issuance of preferred and common stock in private placement20 20 — — 
Issuance of common stock upon automatic conversion of Series E preferred stock(102,156)— 34,052,084 (4)— — — 
Beneficial conversion feature related to issuance of Series E preferred stock67,151 67,151 — — 
Deemed dividend upon conversion of Series E preferred stock into common stock(67,151)(67,151)— — 
Stock-based compensation— 3,438 3,438 — — 
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock515,478 — (295)(295)— — 
Foreign currency translation adjustment— (797)(797)— — 
Net loss attributable to Amyris, Inc.— (23,156)1,702 (21,454)— — 
Balances at September 30, 20208,280 $— 239,185,985 $24 $1,938,411 $(49,505)$(1,977,075)$4,418 $(83,727)$5,000 $— 

See the accompanying notes to the unaudited condensed consolidated financial statements.






8



AMYRIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS






9



(Unaudited)
Nine Months Ended Sep 30,
(In thousands)20212020
Operating activities
Net loss$(308,565)$(217,613)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss (gain) from change in fair value of debt204,359 (2,908)
Loss upon extinguishment of debt27,058 51,954 
Stock-based compensation21,933 9,873 
Loss from change in fair value of derivative instruments12,826 6,498 
Depreciation and amortization6,526 6,740 
Amortization of right-of-use assets under operating leases2,455 2,103 
Accretion of debt discount2,672 3,119 
Loss from investment in affiliate567 1,058 
Amortization of intangible assets480 — 
Loss (gain) on foreign currency exchange rates106 (583)
Non-cash interest expense in connection with release of pre-delivery shares to holder in connection with debt amendment— 10,478 
Contract asset credit loss reserve— 8,342 
Non-cash interest expense in connection with modification of warrants— 1,066 
Non-cash interest expense added to debt principal— 100 
Other— 55 
Changes in assets and liabilities:
Accounts receivable(1,163)(7,736)
Contract assets(132)(1,939)
Inventories(27,317)(10,561)
Deferred cost of products sold - related party7,497 (4,820)
Prepaid expenses and other assets(26,073)696 
Accounts payable39,570 (20,201)
Accrued and other liabilities3,061 (1,259)
Lease liabilities(3,758)(3,352)
Contract liabilities(1,265)3,077 
Net cash provided by (used in) operating activities(39,163)(165,813)
Investing activities
Purchases of property, plant and equipment(22,119)(9,619)
Acquisitions, net of cash acquired(18,462)— 
Net cash used in investing activities(40,581)(9,619)
Financing activities
Proceeds from issuance of common stock in public offering, net of issuance costs130,793 — 
Proceeds from exercises of warrants38,841 3,332 
Proceeds from exercises of warrants - related party16,580 13,998 
Proceeds from issuance of contingently redeemable noncontrolling interest in subsidiary10,000 — 
Proceeds from exercises of common stock options3,131 16 
Proceeds from issuance of common stock upon ESPP purchase321 421 
Principal payments on debt(25,938)(46,766)
Principal payments on financing leases(2,993)(2,578)
Distribution to noncontrolling interest(2,700)— 
Issuance costs incurred in connection with debt modification(2,500)— 
Payment of minimum employee taxes withheld upon net share settlement of restricted stock units(1,481)(401)
Proceeds from issuance of common and preferred stock in private placement, net of issuance costs— 170,037 
Proceeds from issuance of common and preferred stock in private placement, net of issuance costs - related party— 45,000 
Proceeds from issuance of debt, net of issuance costs— 15,279 
Proceeds from exercise of common stock rights warrant - related party— 15,000 
Net cash provided by financing activities164,054 213,338 
Effect of exchange rate changes on cash, cash equivalents and restricted cash402 (36)
Net increase in cash, cash equivalents and restricted cash84,712 37,870 
Cash, cash equivalents and restricted cash at beginning of period31,422 1,699 
Cash, cash equivalents and restricted cash at end of the period$116,134 $39,569 
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents$114,887 $38,280 
Restricted cash, current286 329 
Restricted cash, noncurrent961 960 
Total cash, cash equivalents and restricted cash$116,134 $39,569 







10



See the accompanying notes to the unaudited condensed consolidated financial statements.






11



AMYRIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
(Unaudited)
Nine Months Ended September 30,
(In thousands)20212020
Supplemental disclosures of cash flow information:
Cash paid for interest$5,459 $13,858 
Supplemental disclosures of non-cash investing and financing activities:
Accrued interest added to debt principal$— $2,056 
Acquisition of right-of-use assets under operating leases$3,397 $— 
Common stock and warrants issued in exchange for debt principal and accrued interest reduction$149,208 $27,650 
Common stock issued as purchase consideration in business combinations$56,418 $— 
Contingently redeemable noncontrolling interest issued in subsidiary in exchange for settlement of other liabilities$4,000 $— 
Derecognition of derivative liabilities to equity upon extinguishment of debt$59 $6,461 
Derecognition of derivative liabilities upon authorization of shares$— $6,550 
Derecognition of derivative liabilities upon exercise of warrants$— $5,200 
Fair value of embedded features in connection with private placement$— $2,962 
Fair value of warrants and embedded features recorded as debt discount in connection with debt issuances$— $188 
Fair value of warrants and embedded features recorded as debt discount in connection with debt issuances - related party$— $747 
Goodwill recorded in connection with business combinations$130,927 $— 
Intangible assets recorded in connection with business combinations$40,707 $— 
Reclassification of Additional paid-in capital to Mezzanine equity in connection with issuance of contingently redeemable noncontrolling interest in subsidiary$14,520 $— 
Unpaid property, plant and equipment balances in accounts payable and accrued liabilities at end of period$5,756 $2,100 
Warrants exercised in exchange for debt principal and interest reduction$— $69,618 

See the accompanying notes to the unaudited condensed consolidated financial statements.






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AMYRIS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

As a leading synthetic biotechnology company and a top supplier of sustainable and natural ingredients, Amyris, Inc. and its subsidiaries (collectively, Amyris or the Company) leverage its proprietary Lab-to-MarketTM operating platform to engineer, manufacture and market high performance, natural and sustainably sourced products. This platform is comprised of computational, strain construction, screening, and analytics tools, advanced lab automation, and data integration. Through its Lab-to-Market platform, the Company rapidly engineers microbes and uses them as catalysts to metabolize renewable, plant-sourced sugars into high-value ingredients that the Company manufactures at industrial scale. The Company has successfully developed, produced and commercialized many distinct molecules.

The accompanying unaudited condensed consolidated financial statements of Amyris, Inc. should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 (the 2020 Form 10-K), from which the condensed consolidated balance sheet as of December 31, 2020 is derived. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the accompanying interim condensed consolidated financial statements do not include all the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

Significant Accounting Policies

Note 1, "Basis of Presentation and Summary of Significant Accounting Policies", to the audited consolidated financial statements in the 2020 Form 10-K includes a discussion of the significant accounting policies and estimates used in the preparation of the Company’s condensed consolidated financial statements. Except as noted below, there have been no material changes to the Company's significant accounting policies and estimates during the nine months ended September 30, 2021.

Acquisitions

When the Company acquires a controlling financial interest in an entity or group of assets that are determined to meet the definition of a business, the acquisition method described in ASC Topic 805, Business Combinations, is applied. The Company allocates the purchase consideration paid to acquire the business to the assets and liabilities acquired based on estimated fair values at the acquisition date, with the excess of purchase price over the estimated fair value of the net assets acquired recorded as goodwill. The determination of fair values of identifiable assets and liabilities requires significant judgments and estimates and the use of valuation techniques when market value is not readily available. If during the measurement period (a period not to exceed 12 months from the acquisition date) the Company receives additional information that existed as of the acquisition






13



date but at the time of the original allocation described above was unknown, the Company makes the appropriate adjustments to the purchase price allocation in the reporting period in which the adjustments are identified.

Contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with ASC 805, “Contingencies”, as appropriate, with the corresponding gain or loss being recognized in profit or loss.

See Note 7, “Acquisitions”.

Goodwill

Goodwill represents the excess of the cost over the fair value of net assets acquired from the Company's business combinations. Goodwill is not subject to amortization and is assessed for impairment using fair value measurement techniques on an annual basis, during the fourth quarter, or more frequently if facts and circumstance warrant such a review. Goodwill is assigned to reporting units within the company. The Company has the option to first perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value. However, the Company may elect to bypass the qualitative assessment and proceed directly to the quantitative impairment tests, whereby the fair value of a reporting unit is compared with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired. If the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is recognized in an amount equal to the excess, up to the carrying value of the goodwill. No impairment of goodwill has occurred during the periods presented in these condensed consolidated financial statements.

Intangible Assets

Intangible assets are comprised primarily of customer relationships, trademarks and trade names, developed technology, patents and other acquired through business combinations. Intangible assets are recorded at cost less accumulated amortization and impairment losses, if any.

Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Amortization periods of assets with finite lives are based on management’s estimates at the date of acquisition. The fair value of intangibles assets is determined based on a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. We believe the assumptions are representative of those a market participant would use in estimating fair value. The fair values of the intangible assets were determined to be Level 3 under the fair value hierarchy. Level 3 inputs are unobservable inputs for an asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available thereby allowing for fair value estimates to be made in situations in which there is little, if any, market activity for an asset or liability at the measurement date. For more information on the fair value hierarchy, see Note 3 of the Notes to the Condensed Consolidated Financial Statements. We consider the period of expected cash flows and underlying data used to measure the fair value of the intangible assets when selecting a useful life. Intangible assets with finite useful lives are amortized using an accelerated amortization method reflecting the pattern in which the asset will be consumed if that pattern can be reliably determined. If that pattern cannot be reliably determined, a straight-line amortization method is utilized.

Intangible assets are evaluated periodically for impairment by taking into account events or changes in circumstances that may warrant revised estimates of useful lives or that indicate the carrying value of an asset group may not be recoverable. If this evaluation indicates that the value of the intangible asset may be impaired, an assessment is made of the recoverability of the net carrying value of the intangible asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated discounted future cash flows of the asset group over the estimated useful life, an impairment will be recorded to reduce the net carrying value of the related intangible asset to its fair value and may require an adjustment to the remaining amortization period.

Use of Estimates and Judgements

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgements and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences may be material to the condensed consolidated financial statements. Significant estimates and judgements used in these consolidated financial statements are discussed in the relevant






14



accounting policies below or specifically discussed in the Notes to Consolidated Financial Statements where such transactions are disclosed.

Accounting Standards or Updates Recently Adopted

In the nine months ended September 30, 2021, the Company adopted these accounting standards or updates:

Accounting for Income Taxes. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for the Company in the first quarter of fiscal year 2021. The adoption of this standard did not have any impact on the Company’s condensed consolidated financial statements.

Equity Securities, Equity-method Investments and Certain Derivatives. In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. ASU 2020-01 became effective for the Company in the first quarter of 2021. The adoption of this standard did not have any impact on the Company’s condensed consolidated financial statements.

Accounting Standards or Updates Not Yet Adopted

Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to measure all expected credit losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity's portfolio. ASU 2016-13 will be effective for the Company in the first quarter of 2023. The Company is currently evaluating the impact this standard will have on its consolidated financial statements and related disclosures.

Convertible Debt, and Derivatives and Hedging. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures.

2. Balance Sheet Details

Allowance for Doubtful Accounts
(In thousands)Balance at Beginning of PeriodProvisionsWrite-offs, NetBalance at End of Period
Nine months ended September 30, 2021$137 $806 $(4)$939 
Nine months ended September 30, 2020$45 $57 $— $102 

Inventories
(In thousands)September 30, 2021December 31, 2020
Raw materials$29,368 $11,800 
Work-in-process6,443 10,760 
Finished goods36,251 20,302 
Inventories$72,062 $42,862 







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Deferred cost of products sold - related party
(In thousands)September 30, 2021December 31, 2020
Deferred cost of products sold - related party$9,182 $9,801 
Deferred cost of products sold, noncurrent - related party3,061 9,939 
Total $12,243 $19,740 

Amounts reported as "Deferred cost of products sold - related party" are in connection with an agreement with Koninklijke DSM N.V. (DSM) under which DSM will provide capacity for sweetener production at DSM's Brotas, Brazil manufacturing facility through December 2022. The deferred cost of products sold asset is being expensed to cost of products sold on a units of production basis as the Company's sweetener product is sold over the five-year term of the supply agreement. During the three and nine months ended September 30, 2021, the Company expensed $0.2 million and $3.5 million, respectively, of the deferred cost of products sold asset to cost of products sold. During the three and nine months ended September 30, 2020, the Company expensed $0.7 million and $2.0 million, respectively, of the deferred cost of products sold asset to cost of products sold. Inception-to-date amortization through September 30, 2021 totaled $8.3 million.

Prepaid expenses and other current assets
(In thousands)September 30, 2021December 31, 2020
Prepayments, advances and deposits$23,043 $6,637 
Non-inventory production supplies3,306 3,989 
Recoverable taxes from Brazilian government entities1,065 1,063 
Other2,959 1,414 
Total prepaid expenses and other current assets$30,373 $13,103 

Property, Plant and Equipment, Net
(In thousands)September 30, 2021December 31, 2020
Machinery and equipment$51,641 $50,415 
Leasehold improvements45,195 45,197 
Computers and software8,399 6,741 
Furniture and office equipment, vehicles and land3,714 3,507 
Construction in progress28,646 7,250 
137,595 113,110 
Less: accumulated depreciation and amortization(84,471)(80,235)
Property, plant and equipment, net$53,124 $32,875 

During the three and nine months ended September 30, 2021 and 2020, depreciation and amortization expense, including amortization of right-of-use assets under financing leases, was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2021202020212020
Depreciation and amortization expense$2,226 $1,905 $4,300 $5,300 

Goodwill

The changes in the carrying amount of goodwill were as follows:
(In thousands)
September 30, 2021
Balance at beginning of year
$— 
Acquisitions
130,927 
Effect of currency translation adjustment(2,235)
Ending balance
$128,692 

Additions to goodwill during the nine months ended September 30, 2021 related to acquisitions completed during the period. See Note 7, "Acquisitions".






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Intangible Assets, Net

During the nine months ended September 30, 2021, the Company recorded $40.1 million of intangible assets which related to customer relationships, and trademarks and trade names, developed technology and patents as a result of the acquisitions completed during the period. See Note 7, "Acquisitions".

The following table summarizes the components of intangible assets (in thousands, except estimated useful life):
September 30, 2021
Amounts in thousandsEstimated Useful Life
(in Years)
GrossAccumulated AmortizationNet
Trademarks and trade names10$11,472 $(301)$11,171 
Customer relationships
5 - 16
8,187 (124)8,063 
Developed technology1219,884 (50)19,834 
Patents17600 (6)594 
Total intangible assets$40,143 $(481)$39,662 

The Company amortizes intangible assets on a straight-line basis over their useful lives. Amortization expense for intangible assets was approximately $0.3 million and $0.5 million for the three and nine months ended September 30, 2021 and is included in general and administrative expenses.

Total future amortization estimated as of September 30, 2021 is as follows (in thousands):

Amounts in thousands
2021 (remainder)
$496 
2022
2,287 
2023
3,551 
2024
4,590 
2025
4,792 
Thereafter
23,946 
Total future amortization
$39,662 

Leases

Operating Leases

The Company has operating leases primarily for administrative offices, laboratory equipment and other facilities. The operating leases have remaining terms that range from 1 to 10 years, and often include one or more options to renew. These renewal terms can extend the lease term for an additional 1 to 5 years and are included in the lease term when it is reasonably certain that the Company will exercise the option. The operating leases are classified as ROU assets under operating leases on the Company's condensed consolidated balance sheets and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make operating lease payments is included in "Lease liabilities" and "Lease liabilities, net of current portion" on the Company's condensed consolidated balance sheets. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company had $11.0 million and $10.1 million of right-of-use assets as of September 30, 2021 and December 31, 2020, respectively. Operating lease liabilities were $14.5 million and $15.0 million as of September 30, 2021 and December 31, 2020, respectively. During the three months ended September 30, 2021 and 2020, respectively, the Company recorded $2.3 million and $2.1 million of operating lease amortization that was charged to expense, of which $0.3 million and $0.3 million was recorded to cost of products sold. During the nine months ended September 30, 2021 and 2020, respectively, the Company recorded $5.8 million and $5.9 million of operating lease amortization that was charged to expense, of which $0.7 million and $0.9 million was recorded to cost of products sold.







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Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company has certain contracts for real estate and marketing which may contain lease and non-lease components which it has elected to treat as a single lease component.

Information related to the Company's right-of-use assets and related lease liabilities were as follows:

Nine Months Ended September 30,
20212020
Cash paid for operating lease liabilities, in thousands$5,659$5,759
Right-of-use assets obtained in exchange for new operating lease obligations, in thousands$3,397$—
Weighted-average remaining lease term3.52.5
Weighted-average discount rate17.6%18.0%

Financing Leases

The Company has financing leases primarily for laboratory equipment. Assets purchased under financing leases are included in "Right-of-use assets under financing leases, net" on the condensed consolidated balance sheets. For financing leases, the associated assets are depreciated or amortized over the shorter of the relevant useful life of each asset or the lease term. Accumulated amortization of assets under financing leases totaled $6.1 million and $4.6 million as of September 30, 2021 and December 31, 2020, respectively.

Maturities of Financing and Operating Leases

Maturities of lease liabilities as of September 30, 2021 were as follows:
Years ending December 31:
(In thousands)
Financing
Leases
Operating
Leases
Total Leases
2021 (Remaining Three Months)$1,205 $2,143 $3,348 
202221 8,896 8,917 
202321 4,157 4,178 
202421 739 760 
202521 613 634 
Thereafter15 5,406 5,421 
Total lease payments1,304 21,954 23,258 
Less: amount representing interest(59)(7,446)(7,505)
Total lease liability$1,245 $14,508 $15,753 
Current lease liability$1,182 $6,786 $7,968 
Noncurrent lease liability63 7,722 7,785 
Total lease liability$1,245 $14,508 $15,753 

Other Assets
(In thousands)September 30, 2021December 31, 2020
Advance payment for manufacturing equipment$3,000 $— 
Equity-method investment2,472 2,380 
Deposits130 128 
Other1,151 1,196 
Total other assets$6,753 $3,704 








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Accrued and Other Current Liabilities
(In thousands)September 30, 2021December 31, 2020
Beauty Labs deferred consideration payable(1)
$31,921 $— 
Accrued interest9,112 9,327 
Payroll and related expenses8,491 8,230 
Asset retirement obligation(2)
3,371 3,041 
Professional services3,304 994 
Contract termination fees2,554 5,344 
Tax-related liabilities907 656 
Ginkgo partnership payments obligation878 878 
Other2,143 2,237 
Total accrued and other current liabilities$62,681 $30,707 
______________
(1)    The Beauty Labs deferred consideration will be settled with Amyris common stock in February 2022.See Note 7, "Acquisitions", for additional information.
(2)    The asset retirement obligation represents liabilities incurred but not yet discharged in connection with our 2013 abandonment of a partially constructed facility in Pradópolis, Brazil.


Other noncurrent liabilities
(In thousands)September 30, 2021December 31, 2020
Liability in connection with acquisition of equity-method investment$8,196 $6,771 
Ginkgo partnership payments obligation, net of current portion8,076 7,277 
Liability for unrecognized tax benefit7,666 7,496 
Contract liabilities, net of current portion111 111 
Other130 1,099 
Total other noncurrent liabilities$24,179 $22,754 







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3. Fair Value Measurement

Liabilities Measured and Recorded at Fair Value on a Recurring Basis

The following tables summarize liabilities measured at fair value, and the respective fair value by input classification level within the fair value hierarchy:
(In thousands)September 30, 2021December 31, 2020
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Liabilities
Foris Convertible Note (LSA Amendment)$— $— $273,137 $273,137 $— $— $123,164 $123,164 
Contingent consideration— — 65,077 65,077 — — — — 
Freestanding derivative instruments issued in connection with other debt and equity instruments— — 21,340 21,340 — — 8,451 8,451 
Embedded derivatives bifurcated from debt instruments— — 125 125 — — 247 247 
Senior Convertible Notes— — — — — — 53,387 53,387 
Total liabilities measured and recorded at fair value$— $— $359,679 $359,679 $— $— $185,249 $185,249 

The Company did not hold any financial assets to be measured and recorded at fair value on a recurring basis as of September 30, 2021 and December 31, 2020. Also, there were no transfers between the levels during the nine months ended September 30, 2021 or the year ended December 31, 2020.

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgements and consider factors specific to the asset or liability. The method of determining the fair value of embedded derivative liabilities is described subsequently in this note. Market risk associated with embedded derivative liabilities relates to the potential reduction in fair value and negative impact to future earnings from a decrease in interest rates.

Changes in fair value of derivative liabilities are presented as gains or losses in the condensed consolidated statements of operations in the line captioned "Gain (loss) from change in fair value of derivative instruments".

Changes in the fair value of debt that is accounted for at fair value are presented as gains or losses in the condensed consolidated statements of operations in the line captioned "Gain (loss) from change in fair value of debt".

Fair Value of Debt — Foris Convertible Note

At September 30, 2021, the contractual outstanding principal of the Foris Convertible Note was $50.0 million, and fair value was $273.1 million. The Company remeasured the fair value of the Foris Convertible Note under a binomial lattice model (which is discussed in further detail below) using the following inputs: (i) $13.73 stock price, (ii) 15% discount yield, (iii) 0.07% risk free interest rate (iv) 45% equity volatility and (v) 5% probability of change in control. The Company assumed that if a change of control event were to occur, it would occur at the end of the calendar year. For the three and nine months ended September 30, 2021, the Company recorded a gain of $52.3 million and a loss of $150.0 million, respectively, related to change in fair value of the Foris Convertible Note. The most sensitive input to the valuation model is the Company’s stock price in relation to the $3.00 conversion price.

Fair Value of Debt — Senior Convertible Notes

During the nine months ended September 30, 2021, the holders of the Senior Convertible notes elected to convert all of their $30.0 million principal into common stock. See Note 4, "Debt", for additional information.

For the three and nine months ended September 30, 2021, the Company recorded losses of zero and $54.4 million, respectively, from change in fair value of debt in connection with fair value remeasurement of the Senior Convertible Notes, as follows:






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In thousands
Fair value at December 31, 2020$53,387 
Loss from change in fair value54,386 
Less: principal converted into common stock(30,020)
Less: fair value adjustment extinguished upon conversion of debt principal(77,753)
Fair value at September 30, 2021$— 

Binomial Lattice Model

A binomial lattice model was used to determine whether the Foris Convertible Note and the Senior Convertible Notes (Debt Instruments) would be converted, called or held at each decision point. Within the lattice model, the following assumptions are made: (i) the convertible note will be converted early if the conversion value is greater than the holding value and (ii) the convertible note will be called if the holding value is greater than both (a) redemption price and (b) the conversion value at the time. If the convertible note is called, the holder will maximize their value by finding the optimal decision between (1) redeeming at the redemption price and (2) converting the convertible note. Using this lattice method, the Company valued the Debt Instruments using the "with-and-without method", where the fair value of the Debt Instruments including the embedded and freestanding features is defined as the "with," and the fair value of the Debt Instruments excluding the embedded and freestanding features is defined as the "without." This method estimates the fair value of the Debt Instruments by looking at the difference in the values of the Debt Instruments with the embedded and freestanding derivatives and the fair value of the Debt Instruments without the embedded and freestanding features. The lattice model uses the stock price, conversion price, maturity date, risk-free interest rate, estimated stock volatility, estimated credit spread and other instrument-specific assumptions. The Company remeasures the fair value of the Debt Instruments and records the change as a gain or loss from change in fair value of debt in the statement of operations for each reporting period.

Derivative Liabilities Recognized in Connection with the Issuance of Debt Instruments

The following table provides a reconciliation of the beginning and ending balances for the Company's derivative liabilities recognized in connection with the issuance of debt instruments, either freestanding or embedded, measured at fair value using significant unobservable inputs (Level 3):
(In thousands)Derivative Liability
Balance at December 31, 2020$8,698 
Change in fair value of derivative instruments12,826 
Derecognition on settlement or extinguishment(59)
Balance at September 30, 2021$21,465 

Freestanding Derivative Instruments

On February 28, 2020, the Company entered into forbearance agreements with certain affiliates of the Schottenfeld Group LLC (the Lenders) related to certain defaults under the Schottenfeld Notes. In connection with entering into the forbearance agreements, the Company committed to issuing warrants (Warrants) to the Lenders under certain contingent events for 1.9 million shares of common stock at a $2.87 purchase price and a two-year term. The contingent obligation to issue the Warrants did not meet the derivative scope exception or equity classification criteria and was accounted for as a derivative liability and remeasured each reporting period until settled or extinguished with subsequent changes in fair value recorded through the statement of operations. The fair value of the Warrants derivative liability was determined using a Black-Scholes-Merton option pricing model based on the input assumptions for liability classified warrants table in the valuation methodology section below. At September 30, 2021, the fair value of the contingently issuable Warrants derivative liability was $21.3 million. For the three and nine months ended September 30, 2021, the Company recorded a $4.8 million gain and a $12.9 million loss, respectively, on change in fair value of the freestanding derivative instruments.

Valuation Methodology and Approach to Measuring the Derivative Liabilities

Substantially all the outstanding liabilities associated with the Company’s derivatives at September 30, 2021 and December 31, 2020 represent the fair value of freestanding equity instruments. See Note 4, "Debt", and Note 6, "Stockholders' Deficit" for further information regarding these host instruments. There is no current observable market for these types of






21



derivatives and, as such, the Company determined the fair value of the freestanding instruments using the Black-Scholes-Merton option pricing model, which is discussed in more detail below.

The Company used the Black-Scholes-Merton option pricing model to determine the fair value of its liability classified warrants as of September 30, 2021 and December 31, 2020. Input assumptions for these freestanding instruments are as follows:
Range for the Period
Input assumptions for liability classified warrants:September 30, 2021December 31, 2020
Fair value of common stock on issue date
$13.73
$2.56 – $6.18
Exercise price of warrants
$2.87
$2.87 – $3.25
Expected volatility
107%
94% – 117%
Risk-free interest rate
0.28%
0.13% – 1.58%
Expected term in years
2
1 – 2
Dividend yield0.0 %0.0 %

Changes in valuation assumptions can have a significant impact on the valuation of the freestanding derivative liabilities and debt that the Company elects to account for at fair value. For example, all other things being equal, generally, an increase in the Company’s stock price, change of control probability, risk-adjusted yields term to maturity/conversion or stock price volatility increases the value of the derivative liability.

Acquisition related contingent consideration

The fair value of acquisition related contingent consideration (Earnout Payments) was determined using a Monte Carlo simulation to estimate the probability of the acquired business units achieving the relevant financial and operational milestones. The model results reflect the time value of money, non-performance risk within the required time frame and the risk due to uncertainty in the estimated cash flows. Key inputs to the Monte Carlo simulation for the Costa Brazil acquisition were: Revenue Risk Adjustment of 27%, Annual Revenue Volatility of 68%, EBITDA Risk Adjustment of 32%, and Annual EBITDA Volatility of 85%. Key inputs to the Monte Carlo simulations for the Olika, MG Empower and Beauty Labs acquisitions were: Revenue Risk Adjustment of 1.5% to 2.3% and Annual Revenue Volatility of 12.5% to 15%. A significant decrease or increase in an acquired business unit’s financial performance and the timing of such changes could materially decrease or increase the fair value of contingent consideration period over period. Contingent consideration is recorded in other liabilities in the accompanying consolidated balance sheets.

The fair value of contingent consideration is classified as Level 3. The changes in fair value are as follows:
(In thousands)September 30, 2021
Beginning balance January 1, 2021
$— 
Costa Brazil
8,100 
MG Empower4,071 
Olika13,778 
Beauty Labs39,128 
Change in fair value of contingent consideration
— 
Ending balance September 30, 2021
$65,077 

Any change in the fair value of the contingent consideration liability is recognized in general and administrative expense and reflects the changes in the business unit’s expected performance over the remaining earnout period and the Company’s estimate of the likelihood of achieving the applicable operational milestones (see Note 7, “Acquisitions”).

Assets and Liabilities Recorded at Carrying Value

Financial Assets and Liabilities

The carrying amounts of certain financial instruments, such as cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and other current accrued liabilities, approximate fair value due to their relatively short maturities and low market interest rates, if applicable. Loans payable and credit facilities are recorded at carrying value,






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which is representative of fair value at the date of acquisition. The Company estimates the fair value of these instruments using observable market-based inputs (Level 2). The carrying amount (the total amount of net debt presented on the balance sheet) of the Company's debt at September 30, 2021 and at December 31, 2020, excluding the debt instruments recorded at fair value, was $49.2 million and $86.5 million, respectively. The fair value of such debt at September 30, 2021 and at December 31, 2020 was $54.6 million and $83.3 million, respectively, and was determined by (i) discounting expected cash flows using current market discount rates estimated for certain of the debt instruments and (ii) using third-party fair value estimates for the remaining debt instruments.

4. Debt

Net carrying amounts of debt are as follows:
September 30, 2021December 31, 2020
(In thousands)PrincipalUnaccreted Debt DiscountChange in Fair ValueNetPrincipalUnaccreted Debt DiscountChange in Fair ValueNet
Convertible notes payable
Senior convertible notes$— $— $— $— $30,020 $— $23,367 $53,387 
Related party convertible notes payable
Foris convertible note (due July 2022)50,041 — 223,096 273,137 50,041 — 73,123 123,164 
Loans payable and credit facilities
Ginkgo note (due October 2022)12,000 — — 12,000 12,000 — — 12,000 
Naxyris note(1) (due July 2022)
23,914 (248)23,666 23,914 (493)— 23,421 
Nikko notes (maturity date January 2026)128 — — 128 2,802 (759)— 2,043 
Schottenfeld notes— — — — 12,500 (240)— 12,260 
Other loans payable (revolving)919 — — 919 1,227 — — 1,227 
36,961 (248)— 36,713 52,443 (1,492)— 50,951 
Related party loans payable
DSM notes (due April 2022)10,000 (2,504)— 7,496 33,000 (2,443)— 30,557 
Foris note (due December 2022)5,000 — — 5,000 5,000 — — 5,000 
15,000 (2,504)— 12,496 38,000 (2,443)— 35,557 
Total debt$102,002 $(2,752)$223,096 322,346 $170,504 $(3,935)$96,490 263,059 
Less: current portion(305,247)(77,437)
Long-term debt, net of current portion$17,099 $185,622 

(1) Naxyris was a related party at December 31, 2020, but ceased to be a related party upon Carole Piwnica’s departure from the Company’s Board of Directors on May 29, 2021. For the purpose of comparability, the condensed consolidated balance sheets classify the Naxyris note as nonrelated party debt at both September 30, 2021 and December 31, 2020.

Senior Convertible Notes Conversions

On February 4, 2021, the Company received a notice of conversion from HT Investments MA, LLC (HT) with respect to $20.0 million of its outstanding Senior Convertible Notes, pursuant to which the Company was required to issue 5.7 million shares of common stock per the conversion price stated in the agreement and cancelled the outstanding Note. Also, under the terms of the Senior Convertible Note, HT was required to return 2.6 million shares of common stock outstanding under the Pre-Delivery Shares provision once the Company had fully repaid the principal balance. HT fulfilled its obligation to return these shares in accordance with the contractual requirement, and as a result the Company net settled the $20 million principal conversion by issuing 3.1 million of incremental shares to HT. Upon conversion of the HT Senior Convertible Note, the Company recorded a $31.9 million loss upon extinguishment of debt, which was primarily comprised of a fair value adjustment upon repayment of the note's principal.

On May 18 and 26, 2021, the Company received notices of conversion from Blackwell Partners LLS - Series B (Blackwell) and Silverback Opportunistic Credit Master Fund Limited (Silverback) with respect to $10.0 million of their outstanding Senior Convertible Notes, pursuant to which the Company was required to issue 2.9 million shares of common stock per the conversion price stated in the agreement and cancelled the outstanding Notes. Upon conversion of the Blackwell and Silverback Senior Convertible Notes, the Company recorded a $0.9 million gain upon extinguishment of debt related to accrued interest that was no longer due upon conversion.






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See the Company's 2020 Form 10-K, Note 4, “Debt” for additional information regarding the Senior Convertible Notes.

Schottenfeld Note Exchange

On March 1, 2021, the Company entered into an Exchange and Settlement Agreement (Exchange Agreement) with Schottenfeld Opportunities Fund II, L.P. and certain other holders of notes under the Credit and Security Agreement dated November 14, 2019 (Schottenfeld Notes). Pursuant to the terms of the Exchange Agreement, the Company paid all accrued and unpaid interest on the $12.5 million principal balance outstanding under the Schottenfeld Notes, and issued 4.1 million net shares of common stock in a cashless exchange and cancellation of all amounts due and outstanding under the Notes and related loan documents and all warrants held by each of the holders of Schottenfeld Notes.

Upon conversion of the Schottenfeld note balance, the Company recorded a $28.9 million loss upon extinguishment of debt, which primarily represented the fair value of common shares issued in excess of debt principal extinguished.

See the Company's 2020 Form 10-K, Note 4, “Debt” for additional information regarding the Schottenfeld Notes.

DSM Notes Amendments and Repayment

On December 28, 2017, the Company and DSM Finance, a wholly owned subsidiary of Koninklijke DSM N.V. (DSM), entered into a credit agreement (the DSM Credit Agreement) to make available to the Company an unsecured credit facility of $25.0 million. On December 28, 2017, the Company borrowed $25.0 million under the DSM Credit Agreement and issued a promissory note to DSM Finance. The $25 million Note matures on December 31, 2021 and accrues interest at 10% per annum, payable quarterly.

On September 17, 2019, the Company and DSM entered into a credit agreement (the 2019 DSM Credit Agreement) to make available to the Company a secured credit facility in an aggregate principal amount of $8.0 million. In September 2019, the Company borrowed the $8.0 million in three installments. The promissory notes issued under the 2019 DSM Credit Agreement (i) mature on August 7, 2022, (ii) accrue interest at a rate of 12.5% per annum, payable quarterly and (iii) are secured by a first-priority lien on certain Company intellectual property licensed to DSM.

In March 2021, the Company entered into amendments (the March 2021 Amendments) to the $25 million Note and the $8 million Note that provided for (i) the prepayment of the $8 million Note, (ii) a $15 million partial prepayment of the $25 million Note and (iii) extension of the maturity date from December 31, 2021 to April 15, 2022 for the remaining $10 million principal balance under the $25 million Note, in exchange for a $2.5 million prepayment fee The Company repaid $23 million on March 31, 2021 to extinguish the $8 million Note and to partially repay the $25 million Note.

The Company evaluated the March 2021 Amendments, and concluded the before and after cash flows resulting from the amendments were not significantly different and accounted for the amendments to the Notes as a debt modification. Consequently, the $2.5 million Prepayment Fee was recorded as an incremental debt discount to the remaining $10 million principal balance under the $25 million Note. The Company will accrete the adjusted discount over the Note’s amended remaining term using the effective interest method.

See the Company's 2020 Form 10-K, Note 4, “Debt” for additional information regarding the DSM notes.

Nikko Note Extinguishment

In July 2021, the Company repaid the remaining $2.5 million principal on a note owed to Nikko Chemicals Co., Ltd. The note was scheduled to mature in December 2029. At the repayment date, there was $0.7 million of unaccreted debt discount on the note, which the Company extinguished, resulting in a $0.7 million loss on extinguishment of debt for the three months ended September 30, 2021.

Future Minimum Payments

Future minimum payments under the Company's debt agreements as of September 30, 2021 are as follows:






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(In thousands)Loans
Payable and Credit Facilities
Related Party Convertible NotesRelated Party Loans Payable and Credit FacilitiesTotal
2021 (Remaining Three Months)$2,155 $— $500 $2,655 
202238,381 59,578 16,898 114,857 
202333 — — 33 
202432 — — 32 
202530 — — 30 
Thereafter— — 
Total future minimum payments40,637 59,578 17,398 117,613 
Less: amount representing interest(3,676)(9,537)(2,398)(15,611)
Present value of minimum debt payments36,961 50,041 15,000 102,002 
Less: current portion of debt principal(24,862)(50,041)(10,000)(84,903)
Noncurrent portion of debt principal$12,099 $— $5,000 $17,099 

5. Mezzanine Equity

Gates Foundation

Contingently redeemable common stock as of September 30, 2021 and December 31, 2020 is comprised of proceeds from shares of common stock sold on May 10, 2016 to the Bill & Melinda Gates Foundation (the Gates Foundation). In connection with the stock sale, the Company and the Gates Foundation entered into an agreement under which the Company agreed to expend an aggregate amount not less than the proceeds from the stock sale to develop a yeast strain that produces artemisinic acid and/or amorphadiene at a low cost and to supply such artemisinic acid and amorphadiene to companies qualified to convert artemisinic acid and amorphadiene to artemisinin for inclusion in artemisinin combination therapies used to treat malaria. If the Company defaults on its obligation to use the proceeds from the stock sale as set forth above or defaults under certain other commitments in the agreement, the Gates Foundation will have the right to request that the Company redeem, or facilitate the purchase by a third party, the shares then held by the Gates Foundation at a price per share equal to the greater of (i) the closing price of the Company’s common stock on the trading day prior to the redemption or purchase, as applicable, or (ii) an amount equal to $17.10 plus a compounded annual return of 10%. The Company concluded a redemption event was not probable to occur. As of September 30, 2021, the Company's remaining research and development obligation under this arrangement was $0.3 million.

Ingredion Contingently Redeemable Noncontrolling Interest in Subsidiary

On June 1, 2021, the Company entered into a Membership Interest Purchase Agreement (MIPA) with Ingredion Corporation (Ingredion) to purchase 31% of the member units in RealSweet LLC (RealSweet), a 100% owned Amyris, Inc. subsidiary. Total consideration was $28.5 million in the form of a $10 million cash payment, the exchange of a $4 million payable previously due to Ingredion and $14.5 million of manufacturing intellectual property rights. The terms of the MIPA provide both parties with put/call rights under certain circumstances, including the occurrence of either or both of the following: (i) a change in ownership of fifty percent (50%) or more of the voting shares of such Member; or (ii) a change in the right to appoint or remove a majority of the board of directors of such Member. The Company concluded this change in control provision was not solely within its control and Ingredion’s contingently redeemable noncontrolling interest should be reflected outside of permanent equity in accordance with SEC’s Accounting Series Release 268, Presentation in Financial Statements of Redeemable Preferred Stocks (ASR 268).

The redemption price of this common-share noncontrolling interest is considered to be at fair value on the redemption date. Ingredion’s noncontrolling interest is not currently redeemable and the Company concluded a contingent redemption event is not probable to occur. The primary redemption contingency relates to a decrease in Ingredion’s ownership percentage below 8.4%, which is not likely to occur given that capital transactions require the unanimous consent of each member. Consequently, the noncontrolling interest will not be subsequently remeasured to its redemption amount until such contingency event and the related redemption are probable to occur; however, the Company will continue to reflect the attribution of any losses and distribution of dividends to the noncontrolling interest each quarter in accordance with ASC 810-10. The Company recorded the $28.5 million noncontrolling interest in RealSweet as Mezzanine equity - contingently redeemable noncontrolling interest, which represents the value of Ingredion’s 31% ownership interest in the net assets of the RealSweet subsidiary and recorded a $14.5 million decrease to additional paid in capital for the difference between the fair value of the consideration received and Ingredion's ownership interest claims against the net assets of the RealSweet subsidiary. Under the terms of the MIPA, Amyris, Inc., is funding the cash construction costs of the project, which are estimated to be approximately $72 million. As of






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September 30, 2021, the Company has funded approximately $42.5 million towards the project and has $40.3 million of contractual purchase commitments for construction related costs.

6. Stockholders' Deficit

Primary Offering

On April 8, 2021, the Company entered into an underwriting agreement (the Underwriting Agreement) with J.P. Morgan Securities LLC and Cowen and Company, LLC (the Underwriters), pursuant to which the Company agreed to issue and sell 7,656,822, at a public offering price of $15.75 per share. Under the terms of the Underwriting Agreement, the Company granted the Underwriters a 30-day option to purchase up to an additional 1,148,523 shares of Common Stock from Amyris. The Underwriters exercised this option in full.

Net proceeds to the Company from the 8,805,345 new shares issued by the Company were $130.8 million (inclusive of the underwriters’ option to purchase additional shares), after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

Warrants and Rights Activity Summary

In connection with various debt and equity transactions (see Note 4, “Debt” above, and Note 4, "Debt" and Note 6, “Stockholders’ Deficit” in Part II, Item 8 of the 2020 Form 10-K), the Company has issued warrants exercisable for shares of common stock. The following table summarizes warrants outstanding at September 30, 2021:
TransactionYear IssuedExpiration DateNumber Outstanding as of September 30, 2021Exercise Price per Share as of September 30, 2021
Silverback warrant2020July 10, 20221,000,000 $3.25 
January 2020 warrant exercise right shares2020January 31, 2022431,378 $2.87 
May 2019 6.50% Note Exchange warrants2019January 31, 2022960,225 $2.87 
May 2017 cash warrants2017July 10, 20221,863,056 $2.87 
May 2017 dilution warrant2017July 10, 202256,910 $— 
July 2015 related party debt exchange2015July 29, 202558,690 $0.15 
Other2011December 23, 20211,406 $160.05 
4,371,665 

Warrant Exercises

During the nine months ended September 30, 2021, warrant-holders exercised warrants to purchase 40.1 million shares of the Company’s common stock at a weighted-average exercise price of $2.67 per share, for proceeds to the Company of $55.4 million.






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7. Acquisitions

The purchase accounting for the net assets acquired, including goodwill, and the fair value of the contingent consideration for the following acquisitions is preliminarily recorded based on available information and incorporates management's best estimates. The purchase accounting for taxes remains preliminary pending receipt of certain information required to finalize the determination of fair value. The net assets acquired in the transaction are generally recorded at their estimated acquisition-date fair values, while transaction costs associated with the acquisition are expensed as incurred. These transactions were accounted for by the acquisition method, and accordingly, the results of operations were included in the Company’s consolidated financial statements from their respective acquisition dates. Pro forma financial information is not presented as amounts are not material to the Company’s consolidated financial statements.

Costa Brazil

On May 7, 2021, the Company acquired 100% of the outstanding equity of Upland 1 LLC, also known as Costa Brazil, a privately held company providing consumer products made and inspired by pure, potent, enriching ingredients, sustainably sourced from the Brazilian Amazon. The acquisition allows the Company to further expand its consumer product offering and to leverage its science platform and fermentation technology to develop and scale Costa Brazil products.

Costa Brazil was acquired for total purchase consideration with a fair value of $11.6 million. The following table summarizes the components of the purchase consideration:
(In thousands)Paid at ClosingContingent ConsiderationTotal
Cash payments
$314 $— $314 
Amyris common stock value
3,167 70,000 73,167 
Fair value adjustments
— (61,900)(61,900)
Total consideration
$3,481 $8,100 $11,581 

Total contractual contingent payments based on achieving 100% of the at-target measurement range from $0 to $70 million and are payable annually up to $10 million each year for six years after acquisition plus a one-time $10 million payment, upon the successful achievement of annual product revenue targets and certain cost milestones. The $70 million of at-target contingent consideration payments have been adjusted to fair value based on the passage of time and likelihood of achieving the relevant milestones (see Note 3, "Fair Value Measurement") and are recorded as other liabilities in the accompanying condensed consolidated balance sheets. Allocation of the contingent consideration payments between short-term and long-term liabilities on the accompanying consolidated balance sheets is based on management’s best estimates of when the relevant milestone will be achieved.

The $11.6 million total purchase consideration is allocated to tangible net assets, identifiable intangible assets related to trademarks, trade names, website domain names, other social media intellectual property and customer relationships based on the estimated fair value of each asset. The excess purchase price over the fair value of the net assets and identifiable intangible assets was recorded as goodwill. Goodwill represents the value of the acquired workforce, time to market and the synergies generated between the Company and Costa Brazil (see Note 2, "Balance Sheet Details").

The following table summarizes the purchase price allocation:
(In thousands)
Net tangible assets
$(540)
Trademarks, trade names and other intellectual property
6,949 
Customer relationships
1,158 
Goodwill
4,014 
Total consideration
$11,581 

Acquisition-related costs totaled $0.3 million and are included in general and administrative expense.

MG Empower Ltd.

On August 11, 2021, the Company entered into a Share Purchase Agreement with MG Empower Ltd. (MG Empower) and the securityholders of MG Empower for the acquisition of the outstanding shares of MG Empower, a U.K.-based privately held company providing influencer marketing and digital innovation services. Amyris' acquisition of MG Empower represents its






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continued investment in the future of marketing innovation by establishing a unique operating model that places digital technology and influencer marketing at the core of its consumer growth strategy.

MG Empower was acquired for total purchase consideration of $14.6 million, consisting of cash of $3.1 million, Amyris stock of $7.4 million and contingent consideration with a fair value of $4.1 million. The contingent consideration consists of three potential payments (the Earnout Payments) of up to $20.0 million in total that are based on achieving certain thresholds of revenue for the calendar years ending on December 31, 2022, December 31, 2023 and December 31, 2024. The portion of the Earnout Payments due to the nonemployee shareholders are treated as consideration transferred, the fair value of which in the amount of $4.1 million is recorded as other liabilities in the accompanying condensed consolidated balance sheets. Allocation of the contingent consideration payments between short-term and long-term liabilities on the accompanying consolidated balance sheets is based on management’s best estimates of when the relevant milestone will be achieved.

The following table summarizes the purchase price allocation:
(In thousands)
Net tangible assets
$(800)
Trademarks, trade names and other intellectual property
1,900 
Customer relationships and influencer network database
2,600 
Goodwill
10,871 
Total consideration
$14,571 

Olika Inc.

On August 11, 2021, the Company entered into an Agreement and Plan of Merger and Reorganization with OLIKA Inc. (Olika), and the other parties thereto, and a Note Purchase Agreement with Olika and the selling stockholders party thereto, for the acquisition of Olika and the purchase of outstanding notes from certain Olika noteholders, respectively. Olika was a privately held company specializing in the clean wellness category, combining safe and effective ingredients and nature-inspired design packages. The acquisition of Olika furthers the Company's growth in clean health and beauty, and complements the Company's family of consumer brands.

Olika was acquired for total purchase consideration of $29.9 million, consisting of cash of $1.8 million, Amyris stock of $14.3 million and contingent consideration with a fair value of $13.8 million. The contingent consideration consists of i) two potential payments of $5.0 million each that are based on achieving certain thresholds of revenue for the calendar years ending on December 31, 2022 and December 31, 2023 (the Revenue Earnout Payments) and; ii) two potential payments of $2.5 million each that are based on continuing employment of certain key management during predetermined measurement periods (the Retention Earnout Payments). The Revenue Earnout Payments to all selling stockholders and the portion of the Retention Earnout Payments to the nonemployee shareholders totaling $15.0 million are treated as consideration transferred. The aggregate fair value of $13.8 million is recorded as other liabilities in the accompanying condensed consolidated balance sheets. Allocation of the contingent consideration payments between short-term and long-term liabilities on the accompanying consolidated balance sheets is based on management’s best estimates of when the relevant milestone will be achieved.

The following table summarizes the purchase price allocation:
(In thousands)
Net tangible assets
$1,764 
Trademarks, trade names and other intellectual property
1,500 
Customer relationships
4,500 
Patents
600 
Goodwill
21,545 
Total consideration
$29,909 

Beauty Labs International, Ltd.

On August 31, 2021, the Company entered into a Share Purchase Agreement with Beauty Labs International Limited (Beauty Labs) and the shareholders and warrant holders of Beauty Labs as set forth therein, and an Option Cancellation Agreement with Beauty Labs and the option holders of Beauty Labs as set forth therein for the acquisition of the outstanding shares of Beauty Labs and the cancellation of outstanding Beauty Labs warrants and stock options, respectively. Beauty Labs is a U.K.-based data sciences and machine learning technology company that has developed one of the leading consumer






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applications for "try before you buy" color cosmetics. The acquisition of Beauty Labs accelerates the Company's growth and market leadership in clean beauty by adding digital innovation, machine learning and data science to further enhance the consumer experience of its family of consumer brands.

Beauty Labs was acquired for total purchase consideration of $115.9 million, consisting of cash of $15.2 million (including deferred cash consideration of $1.9 million payable to the shareholders of Beauty Labs shortly after the acquisition), Amyris stock of $61.6 million (including deferred stock consideration of $30 million payable within six months after the closing date) and contingent consideration with a fair value of $39.1 million. The contingent consideration consists of two potential payments that are based on future revenue of up to $31.3 million each, with additional payments due in case of overperformance (together, the Earnout Payments) for the calendar years ending on December 31, 2022 and December 31, 2023. The portion of the Earnout Payments due to the nonemployee shareholders are treated as consideration transferred, the fair value of which in the amount of $39.1 million is recorded as other liabilities in the accompanying condensed consolidated balance sheets. Allocation of the contingent consideration payments between short-term and long-term liabilities on the accompanying consolidated balance sheets is based on management’s best estimates of when the relevant milestone will be achieved.

The following table summarizes the purchase price allocation:
(In thousands)
Net tangible assets
$(134)
Trademarks, trade names and other intellectual property
1,200 
Developed technology
20,300 
Goodwill
94,499 
Total consideration
$115,865 






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8. Net Loss per Share Attributable to Common Stockholders

The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The two-class method also requires losses for the period to be allocated between common stock and participating securities based on their respective rights if the participating security contractually participates in losses. The Company’s convertible preferred stock are participating securities as they contractually entitle the holders of such shares to participate in dividends and contractually require the holders of such shares to participate in the Company’s losses.

The following table presents the calculation of basic and diluted loss per share:

Three Months Ended September 30,Nine Months Ended September 30,
(In thousands, except shares and per share amounts)2021202020212020
Numerator:
Net loss attributable to Amyris, Inc.$(32,944)$(23,156)$(308,814)$(221,422)
Less: deemed dividend to preferred stockholders upon conversion of Series E preferred stock— (67,151)— (67,151)
Less: loss allocated to participating securities— 6,832 787 15,369 
Net loss attributable to Amyris, Inc. common stockholders, basic$(32,944)$(83,475)$(308,027)$(273,204)
Adjustment to earnings allocated to participating securities— 744 — 120 
Interest on convertible debt767 1,081 — 317 
Gain from change in fair value of debt(52,294)(17,221)— (5,945)
Net loss attributable to Amyris, Inc. common stockholders, diluted$(84,471)$(98,871)$(308,027)$(278,712)
Denominator:
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic300,888,579 227,267,553 286,919,463 189,192,973 
Net loss per share, basic$(0.11)$(0.37)$(1.07)$(1.44)
Weighted-average shares of common stock outstanding300,888,579 227,267,553 286,919,463 189,192,973 
Effect of dilutive convertible debt16,680,334 15,464,681 — 2,313,526 
Weighted-average shares of common stock equivalents used in computing net loss per share of common stock, diluted317,568,913 242,732,234 286,919,463 191,506,499 
Net loss per share, diluted$(0.27)$(0.41)$(1.07)$(1.46)

For the three months ended September 30, 2021 and 2020 and for the nine months ended September 30, 2020, basic income per share differed from diluted loss per share, because the inclusion of all potentially dilutive securities outstanding was dilutive. For the nine months ended September 30, 2021, basic loss per share equaled diluted loss per share, because the inclusion of all potentially dilutive securities outstanding was antidilutive. The following table presents outstanding shares of potentially dilutive securities:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Period-end common stock warrants4,256,06543,298,7414,256,06543,298,741
Convertible promissory notes(1)
16,680,3348,574,399
Period-end stock options to purchase common stock3,157,2796,571,7033,157,2796,571,703
Period-end restricted stock units14,127,1097,722,63014,127,1097,722,630
Period-end preferred stock1,943,6611,943,661
Total potentially dilutive securities excluded from computation of diluted loss per share21,540,45359,536,73538,220,78768,111,134
______________
(1)    The potentially dilutive effect of convertible promissory notes was computed based on conversion ratios in effect as of the respective period end dates. A portion of the convertible promissory notes issued carries a provision for a reduction in conversion price under certain circumstances, which could potentially increase the dilutive shares outstanding. Another portion of the convertible promissory notes issued carries a provision for an increase in the conversion rate under certain circumstances, which could also potentially increase the dilutive shares outstanding.






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9. Commitments and Contingencies

Guarantor Arrangements

The Company has agreements whereby it indemnifies its executive officers and directors for certain events or occurrences while the executive officer or director is serving in his or her official capacity. The indemnification period remains enforceable for the executive officer's or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits its exposure and enables the Company to recover a portion of any future payments. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. Accordingly, the Company had no liabilities recorded for these agreements as of September 30, 2021 and December 31, 2020.

The Foris Convertible Note (see Note 4, "Debt") is collateralized by first-priority liens on substantially all of the Company's assets, including Company intellectual property, other than certain Company intellectual property licensed to DSM and the Company's shares of Aprinnova. Certain of the Company’s subsidiaries have guaranteed the Company’s obligations under the Foris Convertible Note.

The obligations of the Company under the Naxyris Note (see Note 4, "Debt") are (i) guaranteed by the Subsidiary Guarantors and (ii) secured by a perfected security interest in substantially all of the assets of the Company and the Subsidiary Guarantors (the Collateral), junior in payment priority to Foris subject to certain limitations and exceptions, as well as the terms of the Intercreditor Agreement.

Other Matters

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but will only be recorded when one or more future events occur or fail to occur. The Company's management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgement. In assessing loss contingencies related to legal proceedings that are pending against and by the Company or unasserted claims that may result in such proceedings, the Company's management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be reasonably estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

On April 3, 2019, a securities class action complaint was filed against Amyris and our CEO, John G. Melo, and former CFO, Kathleen Valiasek, in the U.S. District Court for the Northern District of California. The complaint seeks unspecified damages on behalf of a purported class that would comprise all persons and entities that purchased or otherwise acquired our securities between March 15, 2018 and March 19, 2019. The complaint, which was amended by the lead plaintiff on September 13, 2019, alleges securities law violations based on statements and omissions made by the Company during such period. On October 25, 2019, the defendants filed a motion to dismiss the securities class action complaint, which was denied by the court on October 5, 2020. The Company filed its answer to the securities class action complaint on October 26, 2020. In early 2021, the parties attended court-ordered mediation, but as the case did not settle, the parties commenced discovery. On July 30, 2021, plaintiffs filed a motion seeking class certification and the Company filed its opposition on September 24, 2021.

Subsequent to the filing of the securities class action complaint described above, on June 21, 2019 and October 1, 2019, respectively, two separate purported shareholder derivative complaints were filed in the U.S. District Court for the Northern District of California (Bonner v. Doerr, et al., and Carlson v. Doerr, et al.) based on similar allegations to those made in the securities class action complaint and naming the Company, and certain of the Company’s current and former officers and directors, as defendants. The derivative lawsuits sought to recover, on the Company’s behalf, unspecified damages purportedly sustained by the Company in connection with allegedly misleading statements and omissions made in connection with the Company’s securities filings. The derivative lawsuits were dismissed on October 18, 2019 (Bonner) and December 10, 2019 (Carlson), without prejudice. On November 3, 2020, Bonner re-filed its derivative complaint against the Company in San






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Mateo County Superior Court. The Company filed its demurrer to the complaint on January 13, 2021 and attended a preliminary hearing on April 22, 2021. An additional shareholder derivative complaint (Kimbrough v. Melo, et al.), substantially identical to the Bonner complaint, was filed on December 18, 2020 in the United States District Court for the Northern District of California. On February 19, 2021, the Company filed its motion to dismiss the Kimbrough complaint. In response, the Kimbrough complaint was dismissed in federal court on March 4, 2021 and refiled in state court on March 12, 2021. By agreement, the Kimbrough and Bonner complaints were consolidated for all purposes on April 9, 2021. The motion to dismiss was granted without prejudice on June 30, 2021, whereby the plaintiffs must file an amended complaint. The Company believes the securities class action and derivative complaints lack merit, and intends to continue to defend itself vigorously. Given the early stage of these proceedings, it is not yet possible to reliably determine any potential liability that could result from these matters.

On September 10, 2020, LAVVAN, Inc. (Lavvan) filed a suit against the Company in the United States District Court for the Southern District of New York alleging breach of contract, patent infringement, and trade secret misappropriation in connection with that certain Research, Collaboration and License Agreement between Lavvan and Amyris, dated March 18, 2019, as amended (Cannabinoid Agreement). The Company filed motions to compel arbitration or to dismiss on October 2, 2020. On October 30, Lavvan filed its opposition to the motions and the Company filed its reply to such opposition on November 13, 2020. The court denied the Company's motions on July 26, 2021, and the Company appealed the court's ruling regarding its motion to compel arbitration on July 27, 2021. The Company believes the suit lacks merit and intends to continue to defend itself vigorously. Given the early stage of these proceedings, it is not yet possible to reliably determine any potential liability that could result therefrom.

The Company is subject to disputes and claims that arise or have arisen in the ordinary course of business and that have not resulted in legal proceedings or have not been fully adjudicated. Such matters that may arise in the ordinary course of business are subject to many uncertainties and outcomes, and are not predictable with reasonable assurance; therefore, an estimate of all the reasonably possible losses cannot be determined at this time. If one or more of these legal disputes or claims resulted in settlements or legal proceedings that were resolved against the Company for amounts in excess of management’s expectations, the Company’s condensed consolidated financial statements for the relevant reporting period could be materially adversely affected.

10. Revenue Recognition, and Contract Assets and Liabilities

Disaggregation of Revenue

The following table presents revenue by major product and service, as well as by primary geographical market, based on the location of the customer:
Three Months Ended September 30,
(In thousands)20212020
Renewable Products