AMYRIS, INC. - Quarter Report: 2019 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended September 30, 2019



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

For the Transition Period from to

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 class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	AMRS	The 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 x No o

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 x No o

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 filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	x
Emerging growth company	o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Shares outstanding of the Registrant's common stock:

Class Outstanding as of October 31, 2019

Common Stock, $0.0001 par value per share 105,502,887

EXPLANATORY NOTE

As described in additional detail in the Explanatory Note to our Annual Report on Form 10-K filed on October 1, 2019 for the fiscal year ended December 31, 2018 (the 2018 Form 10-K), on April 5, 2019 and May 14, 2019, the Audit Committee of the Board of Directors of the Company (the Board) and the Board, respectively, determined that the Company would restate its interim condensed consolidated financial statements for the quarterly and year-to-date periods ended March 31, 2018, June 30, 2018 and September 30, 2018 (collectively, the 2018 Non-Reliance Periods). The Company also disclosed that investors should no longer rely upon (i) the Company’s previously released condensed consolidated financial statements for the 2018 Non-Reliance Periods, (ii) earnings releases for the 2018 Non-Reliance Periods and (iv) other communications relating to the Company’s previously released condensed consolidated financial statements for the 2018 Non-Reliance Periods. The restated financial statements for such periods are included in Part II, Item 8 of the 2018 Form 10-K/A filed on October 4, 2019.

This Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2019 reflects the comparative restated quarterly financial data for the three and nine months ended September 30, 2018 contained in the 2018 Form 10-K/A filed on October 4, 2019.

AMYRIS, INC.

TABLE OF CONTENTS



		Page
	PART I
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	4
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018	5
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2019 and 2018	6
	Condensed Consolidated Statements of Stockholders’ Deficit and Mezzanine Equity for the Interim Periods Ended September 30, 2019 and 2018	7
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018	9
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
Item 4.	Controls and Procedures	54

	PART II
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults Upon Senior Securities	55
Item 5.	Other Information	56
Item 6.	Exhibits	57
SIGNATURES

PART I

ITEM 1. FINANCIAL STATEMENTS

AMYRIS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In thousands, except shares and per share amounts)	September 30, 2019			December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	1,632		$	45,353
Restricted cash	476			741
Accounts receivable, net of allowance of $116 and $642	17,072			16,003
Accounts receivable - related party, net of allowance of $21 and $0	3,692			1,349
Contract assets	2,567			—
Accounts receivable, unbilled - related party	—			8,021
Inventories	15,944			9,693
Deferred cost of products sold - related party	968			489
Prepaid expenses and other current assets	12,849			10,566
Total current assets	55,200			92,215
Property, plant and equipment, net	24,436			19,756
Accounts receivable, unbilled, noncurrent - related party	1,203			1,203
Deferred cost of products sold, noncurrent - related party	15,894			2,828
Restricted cash, noncurrent	960			960
Recoverable taxes from Brazilian government entities	2,866			3,005
Right-of-use assets under leases (Note 2)	21,936			—
Other assets	5,620			7,958
Total assets	$	128,115		$	127,925
Liabilities, Mezzanine Equity and Stockholders' Deficit
Current liabilities:
Accounts payable	$	24,925		$	26,844
Accrued and other current liabilities	42,686			28,979
Lease liabilities (Note 2)	7,973			—
Contract liabilities	4,737			8,236
Debt, current portion (instrument measured at fair value $63,152 and $57,918, respectively)	65,495			124,010
Related party debt, current portion	13,221			23,667
Total current liabilities	159,037			211,736
Long-term debt, net of current portion	20,045			43,331
Related party debt, net of current portion	105,482			18,689
Lease liabilities, net of current portion (Note 2)	15,472			—
Derivative liabilities	9,357			42,796
Other noncurrent liabilities	26,801			23,192
Total liabilities	336,194			339,744
Commitments and contingencies (Note 8)
Mezzanine equity:
Contingently redeemable common stock (Note 5)	5,000			5,000
Stockholders’ deficit:
Preferred stock - $0.0001 par value, 5,000,000 shares authorized as of September 30, 2019 and December 31, 2018, and 14,656 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	—			—
Common stock - $0.0001 par value, 250,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 103,400,207 and 76,564,829 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	10			8
Additional paid-in capital	1,507,298			1,346,996
Accumulated other comprehensive loss	(44,545		)	(43,343		)
Accumulated deficit	(1,676,779		)	(1,521,417		)
Total Amyris, Inc. stockholders’ deficit	(214,016		)	(217,756		)
Noncontrolling interest	937			937
Total stockholders' deficit	(213,079		)	(216,819		)
Total liabilities, mezzanine equity and stockholders' deficit	$	128,115		$	127,925

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

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)	2019			2018			2019			2018
Revenue:
Renewable products (includes related party revenue of $0, $13, $2 and $308, respectively)	$	17,363		$	9,639		$	41,367		$	21,467
Licenses and royalties (includes related party revenue of $0, ($39), $40,302 and $7,366, respectively)	2,305			142			43,387			7,584
Grants and collaborations (includes related party revenue of $844, $1,197, $3,886 and $3,667, respectively)	15,285			4,534			27,267			18,182
Total revenue (includes related party revenue of $844, $1,171, $44,190 and $11,341, respectively)	34,953			14,315			112,021			47,233
Cost and operating expenses:
Cost of products sold	20,654			8,574			53,482			20,423
Research and development	19,032			16,445			56,093			49,939
Sales, general and administrative	33,341			27,239			92,456			64,793
Total cost and operating expenses	73,027			52,258			202,031			135,155
Loss from operations	(38,074		)	(37,943		)	(90,010		)	(87,922		)
Other income (expense):
Loss on divestiture	—			—			—			(1,778		)
Interest expense	(16,857		)	(9,180		)	(44,608		)	(28,738		)
Loss from change in fair value of derivative instruments	(398		)	(24,797		)	(2,437		)	(61,164		)
Loss from change in fair value of debt	(2,055		)	—			(18,629		)	—
Loss upon extinguishment of debt	(2,721		)	—			(8,596		)	(26		)
Other income (expense), net	1,076			(2,533		)	920			(2,009		)
Total other expense, net	(20,955		)	(36,510		)	(73,350		)	(93,715		)
Loss before income taxes	(59,029		)	(74,453		)	(163,360		)	(181,637		)
Provision for income taxes	(533		)	—			(533		)	—
Net loss attributable to Amyris, Inc.	(59,562		)	(74,453		)	(163,893		)	(181,637		)
Less: deemed dividend to preferred shareholder on issuance and modification of common stock warrants	—			—			(34,964		)	—
Less: deemed dividend related to proceeds discount and issuance costs upon conversion of Series D preferred stock	—			(6,852		)	—			(6,852		)
Less: losses allocated to participating securities	1,655			4,491			6,233			12,824
Net loss attributable to Amyris, Inc. common stockholders	$	(57,907	)	$	(76,814	)	$	(192,624	)	$	(175,665	)

Loss per share attributable to common stockholders, basic and diluted	$	(0.56	)	$	(1.26	)	$	(2.11	)	$	(3.15	)
Weighted-average shares of common stock outstanding used in computing loss per share of common stock, basic and diluted	103,449,612			60,966,071			91,344,150			55,735,571

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

AMYRIS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2019			2018			2019			2018
Comprehensive loss:
Net loss attributable to Amyris, Inc.	$	(59,562	)	$	(74,453	)	$	(163,893	)	$	(181,637	)
Foreign currency translation adjustment	(1,066		)	(194		)	(1,202		)	(1,158		)
Comprehensive loss attributable to Amyris, Inc.	$	(60,628	)	$	(74,647	)	$	(165,095	)	$	(182,795	)

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

AMYRIS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT AND MEZZANINE EQUITY

(Unaudited)



	Preferred Stock			Common Stock
(In thousands, except number of shares)	Shares	Amount		Shares	Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Noncontrolling Interest		Total Stockholders' Deficit			Mezzanine Equity - Common Stock
Balances at December 31, 2018	14,656	$	—	76,564,829	$	8	$	1,346,996		$	(43,343	)	$	(1,521,417	)	$	937	$	(216,819	)	$	5,000
Cumulative effect of change in accounting principle for ASU 2017-11 (see "Recently Adopted Accounting Pronouncements" in Note 1)	—	—		—	—		32,512			—			8,531			—		41,043			—
Issuance of common stock upon exercise of warrants	—	—		450,568	—		1			—			—			—		1			—
Issuance of common stock upon exercise of stock options	—	—		3,612	—		13			—			—			—		13			—
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock	—	—		191,672	—		(9		)	—			—			—		(9		)	—
Stock-based compensation	—	—		—	—		3,452			—			—			—		3,452			—
Fair value of bifurcated embedded conversion feature in connection with debt modification	—	—		—	—		398			—			—			—		398			—
Foreign currency translation adjustment	—	—		—	—		—			964			—			—		964			—
Net loss	—	—		—	—		—			—			(66,243		)	—		(66,243		)	—
Balances at March 31, 2019	14,656	—		77,210,681	8		1,383,363			(42,379		)	(1,579,129		)	937		(237,200		)	5,000
Issuance of common stock in private placement, net of issuance costs	—	—		3,610,944	—		14,221			—			—			—		14,221			—
Issuance of common stock in private placement - related party, net of issuance costs	—	—		10,478,338	1		39,499			—			—			—		39,500			—
Issuance of common stock upon conversion of debt	—	—		7,101,468	1		34,650			—			—			—		34,651			—
Issuance of common stock upon ESPP purchase		—		131,460	—		464			—			—			—		464			—
Issuance of common stock upon exercise of warrants	—	—		2,064,606	—		—			—			—			—		—			—
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock	—	—		589,241	—		(347		)	—			—			—		(347		)	—
Issuance of warrants in connection with debt accounted for at fair value	—	—		—	—		4,428			—			—			—		4,428			—
Stock-based compensation	—	—		—	—		3,375			—			—			—		3,375			—
Other	—	—		—	—		(238		)	—			—			—		(238		)	—
Foreign currency translation adjustment	—	—		—	—		—			(1,100		)	—			—		(1,100		)	—
Net loss	—	—		—	—		—			—			(38,088		)	—		(38,088		)	—
Balances at June 30, 2019	14,656	—		101,186,738	10		1,479,415			(43,479		)	(1,617,217		)	937		(180,334		)	5,000
Issuance of common stock and warrants upon conversion of debt	—	—		1,767,632	—		7,829			—			—			—		7,829			—
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock	—	—		445,837	—		(271		)	—			—			—		(271		)	—
Issuance of warrants in connection with related party debt issuance	—	—		—	—		13,279			—			—			—		13,279			—
Issuance of warrants in connection with related party debt modification	—	—		—	—		2,882			—			—			—		2,882			—
Issuance of warrants in connection with debt accounted for at fair value	—	—		—	—		930			—			—			—		930			—
Stock-based compensation	—	—		—	—		3,234			—			—			—		3,234			—
Foreign currency translation adjustment	—	—		—	—		—			(1,066		)	—			—		(1,066		)	—
Net loss	—	—		—	—		—			—			(59,562		)	—		(59,562		)	—
Balances at September 30, 2019	14,656	$	—	103,400,207	$	10	$	1,507,298		$	(44,545	)	$	(1,676,779	)	$	937	$	(213,079	)	$	5,000

AMYRIS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT AND MEZZANINE EQUITY, Continued

(Unaudited)



	Preferred Stock				Common Stock
(In thousands, except number of shares)	Shares		Amount		Shares	Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Noncontrolling Interest		Total Stockholders' Deficit			Mezzanine Equity - Common Stock
Balances at December 31, 2017	22,171		$	—	45,637,433	$	5	$	1,114,546		$	(42,156	)	$	(1,290,420	)	$	937	$	(217,088	)	$	5,000
Cumulative effect of change in accounting principle for ASC 606 (see "Significant Accounting Policies" in Note 1)	—		—		—	—					—			(803		)	—		(803		)	—
Issuance of common stock upon exercise of warrants	—		—		162,392	—		835			—			—			—		835			—
Issuance of common stock in private placement, net of issuance costs	—		—		13,529	—		92			—			—			—		92			—
Issuance of common stock upon exercise of stock options	—		—		7,004	—		81			—			—			—		81			—
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock	—		—		30,489	—		(66		)	—			—			—		(66		)	—
Stock-based compensation	—		—		—	—		1,278			—			—			—		1,278			—
Other	—		—		—	—		93			—			—			—		93			—
Foreign currency translation adjustment	—		—		—	—		—			(137		)	—			—		(137		)	—
Net loss	—		—		—	—		—						(92,802		)	—		(92,802		)	—
Balances at March 31, 2018	22,171		—		45,850,847	5		1,116,859			(42,293		)	(1,384,025		)	937		(308,517		)	5,000
Issuance of common stock upon exercise of warrants	—		—		3,638,938	—		24,788			—			—			—		24,788			—
Issuance of warrants	—		—		—	—		9,438			—			—			—		9,438			—
Issuance of common stock in private placement, net of issuance costs	—		—		191,639	—		1,323			—			—			—		1,323			—
Issuance of common stock upon conversion of preferred stock	(2,837	)	—		450,307	—		—			—			—			—		—			—
Issuance of common stock upon exercise of stock options	—		—		36,051	—		195			—			—			—		195			—
Issuance of common stock upon ESPP purchase	—		—		87,768	—		269			—			—			—		269			—
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock	—		—		85,130	—		(147		)	—			—			—		(147		)	—
Stock-based compensation	—		—		—	—		1,900			—			—			—		1,900			—
Foreign currency translation adjustment	—		—		—	—		—			(827		)	—			—		(827		)	—
Net loss	—		—		—	—		—			—			(14,382		)	—		(14,382		)	—
Balances at June 30, 2018	19,334		—		50,340,680	5		1,154,625			(43,120		)	(1,398,407		)	937		(285,960		)	5,000
Issuance of common stock upon exercise of warrants	—		—		12,558,721	1		80,978			—			—			—		80,979			—
Issuance of warrants	—		—		—	—		30,097			—			—			—		30,097			—
Stock-based compensation	—		—		—	—		2,937			—			—			—		2,937			—
Issuance of common stock upon exercise of stock options	—		—		18,695	—		53											53			—
Issuance of common stock upon conversion of preferred stock	(4,678	)	—		1,098,173	—		—			—			—			—		—			—
Issuance of common stock and payment of minimum employee taxes withheld upon net share settlement of restricted stock	—		—		74,176	—		(11		)	—			—			—		(11		)	—
Foreign currency translation adjustment	—		—		—	—		—			(194		)	—			—		(194		)	—
Net loss	—		—		—	—		—			—			(74,453		)			(74,453		)	—
Balances at September 30, 2018	14,656		$	—	64,090,445	$	6	$	1,268,679		$	(43,314	)	$	(1,472,860	)	$	937	$	(246,552	)	$	5,000

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

AMYRIS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Nine Months Ended September 30,
(In thousands)	2019			2018
Operating activities
Net loss	$	(163,893	)	$	(181,637	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss from change in fair value of debt	18,629			—
Stock-based compensation	10,061			6,115
Amortization of debt discount	9,701			12,244
Amortization of right-of-use assets under operating leases	10,237			—
Loss upon extinguishment of debt	8,596			26
Expense for warrants issued for covenant waivers	5,358			—
Depreciation and amortization	2,691			3,957
Loss from change in fair value of derivative liability	2,437			61,164
Impairment of property, plant and equipment	1,263			—
Loss on disposal of property, plant and equipment	122			943
Gain on foreign currency exchange rates	(361		)	(1,132		)
Changes in assets and liabilities:
Accounts receivable	(3,482		)	2,226
Contract assets	(2,567		)	—
Accounts receivable, unbilled - related party	8,021			7,457
Inventories	(6,609		)	(890		)
Deferred cost of products sold - related party	(13,545		)	—
Prepaid expenses and other assets	(4,445		)	(2,387		)
Accounts payable	(2,050		)	(4,795		)
Accrued and other liabilities	22,310			8,348
Lease liabilities	(12,453		)	—
Contract liabilities	(3,488		)	(1,086		)
Net cash used in operating activities	(113,467		)	(89,447		)
Investing activities
Purchases of property, plant and equipment	(9,013		)	(6,362		)
Net cash used in investing activities	(9,013		)	(6,362		)
Financing activities
Proceeds from issuance of debt, net of issuance costs	89,217			36,643
Proceeds from issuance of common stock in private placements, net of issuance costs - related party	39,500			—
Proceeds from issuance of common stock in private placements, net of issuance costs	14,221			1,415
Proceeds from issuance of common stock upon ESPP purchase	464			269
Proceeds from exercises of common stock options	13			329
Proceeds from exercises of warrants	1			60,544
Principal payments on debt	(63,675		)	(41,970		)
Payment of minimum employee taxes withheld upon net share settlement of restricted stock units	(627		)	(224		)
Principal payments on financing leases	(372		)	(846		)
Net cash provided by financing activities	78,742			56,160
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(248		)	(101		)
Net decrease in cash, cash equivalents and restricted cash	(43,986		)	(39,750		)
Cash, cash equivalents and restricted cash at beginning of period	47,054			61,012
Cash, cash equivalents and restricted cash at end of the period	$	3,068		$	21,262

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	$	1,632		$	19,045
Restricted cash, current	476			1,258
Restricted cash, noncurrent	960			959
Total cash, cash equivalents and restricted cash	$	3,068		$	21,262

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

AMYRIS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued

(Unaudited)



	Nine Months Ended September 30,
(In thousands)	2019		2018
Supplemental disclosures of cash flow information:
Cash paid for interest	$	10,390	$	14,783
Supplemental disclosures of non-cash investing and financing activities:
Right-of-use assets under operating leases recorded upon adoption of ASC 842 (Note 2)	$	29,713	$	—
Lease liabilities recorded upon adoption of ASC 842 (Note 2)	$	33,552	$	—
Cumulative effect of change in accounting principle for ASU 2017-11 (Note 2)	$	41,043	$	—
Issuance of common stock upon conversion of convertible notes	$	42,479	$	—
Fair value of warrants recorded as debt discount in connection with debt issuances - related party	$	16,155	$	—
Fair value of warrants recorded as debt discount in connection with debt issuances	$	8,965	$	—
Acquisition of right-of-use assets under operating leases	$	2,361	$	—
Accrued interest added to debt principal	$	986	$	2,029
Fair value of warrants recorded as debt discount in connection with debt modification	$	398	$	—
Acquisition of property, plant and equipment under accounts payable, accrued liabilities and notes payable	$	134	$	783
Derecognition of derivative liabilities upon exercise of warrants	$	—	$	85,912
Financing of equipment	$	—	$	764

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

AMYRIS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

Amyris, Inc. (Amyris or the Company) is a leading industrial biotechnology company that applies its technology platform to engineer, manufacture and sell high performance, natural, sustainably-sourced products into the Health & Wellness, Clean Beauty, and Flavor & Fragrance markets. The Company's proven technology platform enables the Company to rapidly engineer microbes and use them as catalysts to metabolize renewable, plant-sourced sugars into large volume, high-value ingredients. The Company's biotechnology platform and industrial fermentation process replace existing complex and expensive manufacturing processes. The Company has successfully used its technology to develop and produce many distinct molecules at commercial volumes.

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/A for the year ended December 31, 2018 (the 2018 Form 10-K/A), from which the condensed consolidated balance sheet as of December 31, 2018 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, since they are interim statements, the accompanying condensed consolidated financial statements do not include all of 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.

Raizen Joint Venture Agreement

On May 10, 2019, the Company and Raizen Energia S.A. (Raizen) entered into a joint venture agreement relating to the formation and operation of a joint venture relating to the production, sale and commercialization of alternative sweetener products. In connection with the formation of the joint venture, among other things, (i) the joint venture will construct a manufacturing facility on land owned by Raizen and leased to the joint venture (the Sweetener Plant), (ii) the Company will grant to the joint venture an exclusive, royalty-free, worldwide, license to certain technology owned by the Company relevant to the joint venture’s business, and (iii) the Company and Raizen will enter into a shareholders agreement setting forth the rights and obligations of the parties with respect to, and the management of, the joint venture. The formation of the joint venture is subject to certain conditions, including certain regulatory approvals and the achievement of certain technological and economic milestones relating to the Company’s existing production of its alternative sweetener product. If such conditions are not satisfied by December 31, 2019, the joint venture will automatically terminate. However, the termination date can be extended by mutual agreement of the parties. In addition, notwithstanding the satisfaction of the closing conditions, Raizen may elect not to consummate the formation and operation of the joint venture, in which event, the Company will retain the right to construct and operate the Sweetener Plant.

Upon the closing of the joint venture, each party will make an initial capital contribution to the joint venture of 2.5 million Brazilian Real (R$2.5 million) and the joint venture will be owned 50% by the Company and 50% by Raizen. Within 60 days of the formation, the parties will make an aggregate cash contribution to the joint venture of U.S.$9.0 million to purchase certain fixed assets currently owned by the Company and located at the site of the Company’s former joint venture with Sao Martinho S.A. in Pradopolis, Brazil for U.S.$3.0 million, as well as to pay for costs related to the removal and transportation of such assets to the site of the Sweetener Plant. In addition, within six months of the formation, the Company will contribute to the joint venture its existing supply agreements related to its alternative sweetener product, subject to certain exceptions, in exchange for shares of dividend-bearing preferred stock in the joint venture, which will be entitled, for a period of 10 years commencing from the initial date of operation of the Sweetener Plant, to certain priority fixed cumulative dividends including, in the event that certain technological and economic milestones are met in any fiscal quarter, a percentage of the operating cash flow of the joint venture in such quarter.

After the formation of the joint venture, subject to certain exceptions, the parties will not conduct activities similar or identical to the joint venture except through the joint venture. In the event that certain technological and economic milestones are not met in any fiscal year beginning with the third fiscal year after formation of the joint venture and ending with the seventh fiscal year after formation of the joint venture, Raizen shall have the right to sell all of its shares in the joint venture to the Company at a price per share equal to the higher of the book value and the amount of Raizen’s investments in the joint venture, as adjusted for Raizen’s cost of capital.

The Company is evaluating the accounting treatment for its future interest in the joint venture under ASC 810, Consolidations and ASC 323, Equity Method and Joint Ventures and will conclude once the corporate governance and economic participation structure is finalized and the formation of the joint venture is consummated.

Going Concern

The Company has incurred significant operating losses since its inception and expects to continue to incur losses and negative cash flows from operations for at least the next 12 months following the issuance of these condensed consolidated financial statements. As of September 30, 2019, the Company had negative working capital of $103.8 million (compared to negative working capital of $119.5 million as of December 31, 2018), and an accumulated deficit of $1.7 billion.

As of September 30, 2019, the Company's debt (including related party debt), net of debt discount of $37.5 million, totaled $204.2 million, of which $78.7 million is classified as current. The Company's debt service obligations through September 30, 2020 are $109.3 million, including $27.4 million of anticipated cash interest payments. The Company's debt agreements contain various covenants, including certain restrictions on the Company's business that could cause the Company to be at risk of defaults, such as restrictions on additional indebtedness and cross-default clauses. A failure to comply with, or cure non-compliance events or obtain waivers for covenant violations, and other provisions of the Company’s debt instruments, including any failure to make a payment when required, would generally result in events of default under such instruments, which could permit acceleration of such indebtedness. If such indebtedness is accelerated, it would generally constitute an event of default under the Company’s other outstanding indebtedness, permitting acceleration of a substantial portion of the Company's outstanding indebtedness. On September 16, 2019, the Company failed to pay an aggregate of $63.6 million of outstanding principal and accrued interest on the Second Exchange Note (see Note 4, “Debt”), when due. Such failure resulted in an event of default under the Second Exchange Note and also triggered cross-defaults under other debt instruments of the Company with an aggregate principal amount of approximately $148.7 million, which permitted the holders of such indebtedness to accelerate the amounts owing under such instruments. The Company subsequently received waivers from all the holders of the $148.7 million principal amount of such debt instruments to waive their right to accelerate. As a result, the indebtedness with respect to which the Company has obtained such waivers continues to be classified as long-term debt on the Company’s balance sheet. The indebtedness reflected by the Second Exchange Note continues to be classified as a current liability on the Company’s balance sheet. On November 8, 2019, the Company entered into a Securities Exchange Agreement with certain private investors (the “Investors”), pursuant to which, upon the purchase by the Investors of the Second Exchange Note, the Second Exchange Note would be exchanged for new senior convertible notes with an aggregate principal amount of $66.0 million (see Note 12, “Subsequent Events”). In connection with the entry into the Securities Exchange Agreement, (i) the holder of the Second Exchange Note and the Investors entered into a Securities Purchase Agreement providing for the purchase by the Investors of the Second Exchange Note and (ii) the Company and the holder of the Second Exchange Note entered into an agreement by which such holder agreed to immediately dismiss its complaint against the Company (see Note 8, “Commitments and Contingencies”) with prejudice upon the purchase of the Second Exchange Note by the Investors.

Cash and cash equivalents of $1.6 million as of September 30, 2019 are not sufficient to fund expected future negative cash flows from operations and cash debt service obligations through September 30, 2020. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's ability to continue as a going concern will depend, in large part, on its ability to raise additional capital through equity offerings or debt financings and extend or refinance existing debt maturities by restructuring a majority of its convertible debt, which is uncertain and outside the control of the Company. Further, the Company's operating plan for the 12 months ending September 30, 2020 contemplates a significant reduction in its net operating cash outflows as compared to the year ended December 31, 2018, resulting from (i) revenue growth from sales of existing and new products with positive gross margins, (ii) significantly increased cash inflows from grants and collaborations, and (iii) reduced production costs as a result of manufacturing and technical developments. If the Company is unable to complete these actions, it expects to be unable to meet its operating cash flow needs and its obligations under its existing debt facilities. This could result in an acceleration of its obligation to repay all amounts outstanding under those facilities, and it may be required to obtain additional equity or debt financing, which may not occur timely or on reasonable terms, if at all, and/or liquidate its assets. In such a scenario, the value the Company receives for its assets in liquidation or dissolution could be significantly lower than the value reflected in these condensed consolidated financial statements.

Significant Accounting Policies

Note 1, "Basis of Presentation and Summary of Significant Accounting Policies", to the audited consolidated financial statements in the 2018 Form 10-K/A includes a discussion of the significant accounting policies and estimates used in the preparation of the Company’s consolidated financial statements. There have been no material changes to the Company's significant accounting

policies and estimates during the three and nine months ended September 30, 2019, except for the Company's adoption of these accounting standards on January 1, 2019:

•Accounting Standards Codification (ASC) Topic 842 (ASC 842), Leases; and


•	ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): Accounting for Certain Financial Instruments with Down Round Features.

Revenue Recognition

The Company recognizes revenue from the sale of renewable products, licenses of and royalties from intellectual property, and grants and collaborative research and development services. Revenue is measured based on the consideration specified in a contract with a customer and recognized when, or as, the Company satisfies a performance obligation by transferring control over a product or service to a customer. The Company generally does not incur costs to obtain new contracts. The costs to fulfill a contract are expensed as incurred.

The Company accounts for a contract when it has approval and commitment to perform from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance and collectability of the consideration is probable. Changes to contracts are assessed for whether they represent a modification or should be accounted for as a new contract. The Company considers the following indicators among others when determining whether it is acting as a principal in the transaction and recording revenue on a gross basis: (i) the Company is primarily responsible for fulfilling the promise to provide the specified goods or service, (ii) the Company has inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer and (iii) the Company has discretion in establishing the price for the specified good or service. If a transaction does not meet the Company's indicators of being a principal in the transaction, then the Company is acting as an agent in the transaction and the associated revenues are recognized on a net basis.

The Company’s significant contracts and contractual terms with its customers are presented in Note 10, "Revenue Recognition" in Part II, Item 8 of the 2018 Form 10-K/A.

The Company recognizes revenue when control has passed to the customer. The following indicators are evaluated in determining when control has passed to the customer: (i) the Company has a right to payment for the product or service, (ii) the customer has legal title to the product, (iii) the Company has transferred physical possession of the product to the customer, (iv) the customer has the significant risk and rewards of ownership of the product and (v) the customer has accepted the product. The Company’s renewable products are delivered to customers from the Company’s facilities with shipping terms typically specifying F.O.B. shipping point.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company's contracts may contain multiple performance obligations if a promise to transfer the individual goods or services is separately identifiable from other promises in the contracts and, therefore, is considered distinct. For contracts with multiple performance obligations, the Company determines the standalone selling price of each performance obligation and allocates the total transaction price using the relative selling price basis.

The following is a description of the principal goods and services from which the Company generates revenue.

Renewable Product Sales

Revenues from renewable product sales are recognized as a distinct performance obligation on a gross basis as the Company is acting as a principal in these transactions, with the selling price to the customer recorded net of discounts and allowances. Revenues are recognized at a point in time when control has passed to the customer, which typically is upon the renewable products leaving the Company’s facilities with the first transportation carrier. The Company, on occasion, may recognize revenue under a bill and hold arrangement, whereby the customer requests and agrees to purchase product but requests delivery at a later date. Under these arrangements, control transfers to the customer when the product is ready for delivery, which occurs when the product is identified separately as belonging to the customer, the product is ready for shipment to the customer in its current form, and the Company does not have the ability to direct the product to a different customer. It is at this point that the Company has the right to payment, the customer obtains legal title, and the customer has the significant risks and rewards of ownership. The Company’s renewable product sales do not include rights of return. Returns are accepted only if the product does not meet product specifications and such nonconformity is communicated to the Company within a set number of days of delivery. The Company offers a two-year assurance-type warranty to replace squalane products that do not meet Company-established criteria as set forth in the

Company’s trade terms. An estimate of the cost to replace the squalane products sold is made based on a historical rate of experience and recognized as a liability and related expense when the renewable product sale is consummated.

Licenses and Royalties

Licensing of Intellectual Property: When the Company’s intellectual property licenses are determined to be distinct from the other performance obligations identified in the arrangement, revenue is recognized from non-refundable, up-front fees allocated to the license at a point in time when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For intellectual property licenses that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front-fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognized.

Royalties from Licensing of Intellectual Property: The Company earns royalties from the licensing of its intellectual property whereby the licensee uses the intellectual property to produce and sell its products to its customers and the Company shares in the profits.

When the Company’s intellectual property license is the only performance obligation, or it is the predominant performance obligation in arrangements with multiple performance obligations, the Company applies the sales-based royalty exception and revenue is estimated and recognized at a point in time when the licensee’s product sales occur. Estimates of sales-based royalty revenues are made using the most likely outcome method, which is the single amount in a range of possible amounts derived from the licensee’s historical sales volumes and sales prices of its products and recent commodity market pricing data and trends.

When the Company’s intellectual property license is not the predominant performance obligation in arrangements with multiple performance obligations, the royalty represents variable consideration and is allocated to the transaction price of the predominant performance obligation which generally is the supply of renewable products to the Company's customers. Revenue is estimated and recognized at a point in time when the renewable products are delivered to the customer. Estimates of the amount of variable consideration to include in the transaction price are made using the expected value method, which is the sum of probability-weighted amounts in a range of possible amounts determined based on the cost to produce the renewable product plus a reasonable margin for the profit share. The Company only includes an amount of variable consideration in the transaction price to the extent it is probable that a significant reversal in the cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Also, the transaction price is reduced for estimates of customer incentive payments payable by the Company for certain customer contracts.

Grants and Collaborative Research and Development Services

Collaborative Research and Development Services: The Company earns revenues from collaboration agreements with customers to perform research and development services to develop new molecules using the Company’s technology and to scale production of the molecules for commercialization and use in the collaborator’s products. The collaboration agreements generally include providing the Company's collaborators with research and development services and with licenses to the Company’s intellectual property to use the technology underlying the development of the molecules and to sell its products that incorporate the technology. The terms of the Company's collaboration agreements typically include one or more of the following: advance payments for the research and development services that will be performed, nonrefundable upfront license payments, milestone payments to be received upon the achievement of the milestone events defined in the agreements, and royalty payments upon the commercialization of the molecules in which the Company shares in the customer’s profits.

Collaboration agreements are evaluated at inception to determine whether the intellectual property licenses represent distinct performance obligations separate from the research and development services. If the licenses are determined to be distinct, the non-refundable upfront license fee is recognized as revenue at a point in time when the license is transferred to the licensee and the licensee is able to use and benefit from the license while the research and development service fees are recognized over time as the performance obligations are satisfied. The research and development service fees represent variable consideration. Estimates of the amount of variable consideration to include in the transaction price are made using the expected value method, which is the sum of probability-weighted amounts in a range of possible amounts. The Company only includes an amount of variable consideration in the transaction price to the extent it is probable that a significant reversal in the cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Revenue is recognized over time using either an input-based measure of labor hours expended or a time-based measure of progress towards the satisfaction of the performance obligations. The measure of progress is evaluated each reporting period and, if necessary, adjustments are made to the measure of progress and the related revenue recognized.

Collaboration agreements that include milestone payments are evaluated at inception to determine whether the milestone events are considered probable of achievement and estimates are made of the amount of the milestone payments to include in the transaction price using the most likely amount method which is the single amount in a range of possible amounts. If it is probable that a significant revenue reversal will not occur, the estimated milestone payment amount is included in the transaction price. Each reporting period, the Company re-evaluates the probability of achievement of the milestone events and any related constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative basis, which would affect collaboration revenues in the period of adjustment. Generally, revenue is recognized using an input-based measure of progress towards the satisfaction of the performance obligations, which can be based on labor hours expended or time-based in proportion to the estimated total project effort or total projected time to complete. The measure of progress is evaluated each reporting period and, if necessary, adjustments are made to the measure of progress and the related revenue recognized. Certain performance obligations are associated with milestones agreed between the Company and its customer. Revenue generated from the performance of services in accordance with these milestones is recognized upon confirmation from the customer that the milestone has been achieved. In these cases, amounts recognized are constrained to the amount of consideration received upon achievement of the milestone.

The Company generally invoices its collaborators on a monthly or quarterly basis, or upon the completion of the effort or achievement of a milestone, based on the terms of each agreement. Contract liability arises from amounts received in advance of performing the research and development activities and is recognized as revenue in future periods as the performance obligations are satisfied.

Grants: The Company earns revenues from grants with government agencies to, among other things, provide research and development services to develop molecules using the Company’s technology, and create research and development tools to improve the timeline and predictability for scaling molecules from proof of concept to market by reducing time and costs. Grants typically consist of research and development milestone payments to be received upon the achievement of the milestone events defined in the agreements.

The milestone payments are evaluated at inception to determine whether the milestone events are considered probable of achievement and estimates are made of the amount of the milestone payments to include in the transaction price using the most likely amount method which is the single amount in a range of possible amounts. If it is probable that a significant revenue reversal will not occur, the estimated milestone payment amount is included in the transaction price. Each reporting period, the Company re-evaluates the probability of achievement of the milestone events and any related constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative basis, which would affect collaboration revenues in the period of adjustment. Revenue is recognized over time using a time-based measure of progress towards the satisfaction of the performance obligations. The measure of progress is evaluated each reporting period and, if necessary, adjustments are made to the measure of progress and the related revenue recognized.

For descriptions of the Company's other significant accounting policies, see the 2018 Form 10-K/A.

Accounting Standards or Updates Recently Adopted

In the nine months ended September 30, 2019, the Company adopted these accounting standards or updates:

Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires the recognition of lease liabilities and right-of-use (ROU) assets on the balance sheet arising from lease transactions at the lease commencement date and the disclosure of key information about leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided entities the option to use the effective date as the date of initial application on transition to the new guidance. The Company elected this transition method, and as a result, the Company did not adjust comparative information for prior periods. The Company elected certain additional practical expedients permitted by the new guidance allowing the Company to carry forward historical accounting related to lease identification and classification for existing leases upon adoption.

The Company adopted this standard on January 1, 2019 using the modified retrospective approach and elected the package of practical expedients permitted under transition guidance, which allowed the Company to carry forward its historical assessments of: (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs, where applicable. The Company did not elect the practical expedient allowing the use-of-hindsight which would require the Company to reassess the lease term of its leases based on all facts and circumstances through the effective date and did not elect the practical expedient pertaining to land easements as this is not applicable to the Company’s current contracts. The Company elected the post-transition practical expedient to not separate lease components from non-lease components for all leases of manufacturing equipment. The Company

also elected a policy of not recording leases on its condensed consolidated balance sheets when the leases have a term of 12 months or less and the Company is not reasonably certain to elect an option to purchase the leased asset.

The adoption of this standard had the net effect of increasing both assets and liabilities by $25.7 million, after considering prepaid and other current and noncurrent assets previously recorded on the condensed consolidated balance sheet, but did not have a material impact on the condensed consolidated statements of operations or cash flows. The most significant impact relates to (1) the recognition of new ROU assets and lease liabilities on the balance sheet for the Company's operating leases; and (2) providing significant new disclosures about the Company's leasing activities.

Upon adoption, the Company recognized operating lease liabilities of $33.6 million, based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Company also recognized ROU assets of $29.7 million, which represents the operating lease liability, adjusted for prepaid expenses and deferred rent. The difference between the operating lease ROU assets and lease liabilities reflects the net of advanced rent payments and deferred rent balances that were derecognized at the time of adoption.

Financial Instruments with "Down Round" Features In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): Accounting for Certain Financial Instruments with Down Round Features. The amendments of this ASU update the classification analysis of certain equity-linked financial instruments, or embedded features, with down round features, as well as clarify existing disclosure requirements for equity-classified instruments. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The accounting standard update became effective in the first quarter of fiscal year 2019, and the Company adopted the standard using a modified retrospective approach. Since the adoption of ASU 2017-11 would have classified the warrants effected as equity at inception, the cumulative-effect adjustment should (i) record the issuance date value of the warrants as if they had been equity classified at the issuance date, (ii) reverse the effects of changes in the fair value of the warrants that had been recorded in the statement of operations of each period, and (iii) eliminate the derivative liabilities from the balance sheet. Upon adoption, the Company (i) recorded an increase of $32.5 million to additional paid-in capital, (ii) recorded a decrease to accumulated deficit of $8.5 million and (iii) decreased the warrant liability by $41.0 million.

Recent Accounting Standards or Updates Not Yet Effective

Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which amends ASC 820, Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The accounting standard update will be effective beginning in the first quarter of fiscal 2020, with removed and modified disclosures to be adopted on a retrospective basis, and new disclosures to be adopted on a prospective basis. The Company is in the initial stages of evaluating the impact of the standard on its condensed consolidated financial statements.

Collaborative Revenue Arrangements In November 2018, the FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606, that clarifies the interaction between the guidance for certain collaborative arrangements and Topic 606, the new revenue recognition standard. A collaborative arrangement is a contractual arrangement under which two or more parties actively participate in a joint operating activity and are exposed to significant risks and rewards that depend on the activity’s commercial success. The ASU provides guidance on how to assess whether certain transactions between collaborative arrangement participants should be accounted for within the revenue recognition standard. The accounting standard update will be effective beginning in the first quarter of fiscal year 2020 retroactively. The Company does not believe that the impact of the new standard on its condensed consolidated financial statements will be material.

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 become effective for the Company beginning in the first quarter of fiscal year 2020. The Company does not believe that the impact of the new standard on its condensed consolidated financial statements will be material.

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 condensed consolidated 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.

2. Balance Sheet Details

Inventories



(In thousands)	September 30, 2019		December 31, 2018
Raw materials	$	5,753	$	3,901
Work-in-process	2,243		539
Finished goods	7,948		5,253
Inventories	$	15,944	$	9,693

Deferred cost of products sold - related party



(In thousands)	September 30, 2019		December 31, 2018
Deferred cost of products sold - related party	$	968	$	489
Deferred cost of products sold, noncurrent - related party	15,894		2,828
Total	$	16,862	$	3,317

In November 2018, the Company amended the supply agreement with DSM to secure capacity at the Brotas 1 facility for sweetener production through 2022. See Note 10, “Revenue Recognition” in Part II, Item 8 of the 2018 Form 10-K/A for information regarding the November 2018 Supply Agreement Amendment. The supply agreement was included as an element of a combined transaction with DSM, which resulted in a fair value allocation of $24.4 million to the manufacturing capacity fees, of which $3.3 million was recorded as deferred cost of products sold at December 31, 2018. During the nine months ended September 30, 2019, the Company paid an additional $14.1 million of reservation capacity fees, which was recorded as additional deferred cost of products sold. The remaining $6.9 million capacity fees will be recorded as deferred cost of products sold in the period the additional payments are made to DSM. The deferred cost of products sold asset is 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. Each quarter, the Company evaluates its future production volumes and adjusts the unit cost to be expensed over the remaining estimated production volume. During the three and nine months ended September 30, 2019, the Company expensed $0.4 million and $0.5 million, respectively, of the deferred cost of products sold asset to cost of products sold. The deferred cost of products sold asset is evaluated for recoverability at each period end.

Prepaid expenses and other current assets



(In thousands)	September 30, 2019		December 31, 2018
Prepayments, advances and deposits	$	3,706	$	5,644
Recoverable taxes from Brazilian government entities	3,270		631
Other	5,873		4,291
Total prepaid expenses and other current assets	$	12,849	$	10,566

Property, Plant and Equipment, Net



(In thousands)	September 30, 2019			December 31, 2018
Machinery and equipment	$	47,960		$	43,713
Leasehold improvements	41,152			39,922
Computers and software	10,305			9,987
Furniture and office equipment, vehicles and land	3,330			3,016
Construction in progress	650			1,749
	103,397			98,387
Less: accumulated depreciation and amortization	(78,961		)	(78,631		)
Property, plant and equipment, net	$	24,436		$	19,756

During the three and nine months ended September 30, 2019 and 2018, the Company capitalized the following amounts of internal labor costs required to automate, integrate and ready certain laboratory and plant equipment for its intended use:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Capitalized internal labor	$	—	$	501	$	320	$	2,083

During the three and nine months ended September 30, 2019 and 2018, Depreciation and amortization expense, including amortization of assets under capital leases, was as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Depreciation and amortization expense	$	969	$	1,013	$	2,691	$	3,957

Leases

Operating Leases

The Company has entered into operating leases primarily for administrative offices, laboratory equipment and other facilities. The operating leases have remaining terms that range from 1 year to 5 years, and often include one or more options to renew. These renewal terms can extend the lease term from 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 September 30, 2019 Consolidated Balance Sheet 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 September 30, 2019 Consolidated Balance Sheet. Based on the present value of the lease payments for the remaining lease term of the Company's existing leases, the Company recognized right-of-use assets of $29.7 million and lease liabilities for operating leases of $33.6 million on January 1, 2019. Operating lease right-of-use assets and liabilities commencing after January 1, 2019 are recognized at commencement date based on the present value of lease payments over the lease term. As of September 30, 2019, total right-of-use assets and operating lease liabilities were $21.9 million and $23.1 million, respectively. All operating lease expense is recognized on a straight-line basis over the lease term. In the three and nine months ended September 30, 2019, respectively, the Company recorded $4.7 million and $14.1 million of operating lease amortization that was charged to expense, of which $1.7 million and $5.2 million was recorded to cost of products sold.

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, 2019
Cash paid for operating lease liabilities, in thousands	$	15,908
Right-of-use assets obtained in exchange for new operating lease obligations⁽¹⁾	$	32,074
Weighted-average remaining lease term	2.6
Weighted-average discount rate	17.5		%

(1) Includes $29.7 million for operating leases existing on January 1, 2019 and $2.4 million for operating leases that commenced during the nine months ended September 30, 2019.

Financing Leases

The Company has entered into financing leases primarily for laboratory and computer equipment. Assets purchased under financing leases are included in "Property, plant and equipment, 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. Property, plant and equipment, net includes $2.3 million and $5.0 million of machinery and equipment under financing leases as of September 30, 2019 and December 31, 2018, respectively. Accumulated amortization of assets under financing leases totaled $1.1 million and $2.3 million as of September 30, 2019 and December 31, 2018, respectively.

Maturities of Financing and Operating Leases

Maturities of lease liabilities as of September 30, 2019 were as follows:



Years ending December 31: (In thousands)	Financing Leases			Operating Leases			Total Leases
2019 (remaining three months)	$	116		$	3,346		$	3,462
2020	198			9,652			9,850
2021	1			7,220			7,221
2022	—			7,392			7,392
2023	—			3,033			3,033
Thereafter	—			—			—
Total lease payments	315			30,643			30,958
Less: amount representing interest	(8		)	(7,505		)	(7,513		)
Total lease liability	$	307		$	23,138		$	23,445

Current lease liability	$	295		$	7,678		$	7,973
Noncurrent lease liability	12			15,460			15,472
Total lease liability	$	307		$	23,138		$	23,445

Other Assets



(In thousands)	September 30, 2019		December 31, 2018
Contingent consideration	$	4,286	$	4,286
Deposits	293		2,465
Other	1,041		1,207
Total other assets	$	5,620	$	7,958

Accrued and Other Current Liabilities



(In thousands)	September 30, 2019		December 31, 2018
Accrued interest	$	15,297	$	3,853
Payroll and related expenses	7,677		9,220
Contract termination fees	5,241		4,092
Ginkgo partnership payments obligation	3,267		2,155
Asset retirement obligation	2,990		3,063
Professional services	2,854		1,173
Tax-related liabilities	2,402		2,139
Other	2,958		3,284
Total accrued and other current liabilities	$	42,686	$	28,979

Other noncurrent liabilities



(In thousands)	September 30, 2019		December 31, 2018
Refund liability	$	12,500	$	—
Liability for unrecognized tax benefit	7,115		6,582
Ginkgo partnership payments obligation, net of current portion	4,937		6,185
Contract liability, net of current portion (Note 9)	1,449		1,587
Deferred rent, net of current portion⁽¹⁾	—		6,440
Contract termination fees, net of current portion	—		1,530
Other	800		868
Total other noncurrent liabilities	$	26,801	$	23,192

(1)Deferred rent at December 31, 2018 was reclassified to ROU asset upon the adoption on January 1, 2019 of ASC 842, "Leases".

In April 2019, the Company assigned the Value Sharing Agreement to DSM. See Note 9, "Revenue Recognition and Contract Assets and Liabilities" for further information. The assignment was accounted for as a contract modification under ASC 606 that resulted in $12.5 million of prepaid variable consideration to the Company. The $12.5 million of prepaid variable consideration is recorded as a refund liability and represents a stand ready obligation to refund some or all of the $12.5 million prepaid consideration if certain criteria outlined in the assignment agreement is not met before December 2021. The Company will update its assessment of amounts it expects to be entitled to keep at the end of each reporting period, by reducing the refund liability and recording additional license and royalty revenue, as the criterion is met.

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, 2019								December 31, 2018
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Liabilities
6% Convertible Notes	$	—	$	—	$	63,152	$	63,152	$	—	$	—	$	57,918	$	57,918
Freestanding derivative instruments in connection with the issuance of debt and equity instruments	—		—		8,325		8,325		—		—		42,796		42,796
Embedded derivative instruments in connection with the issuance of debt instruments	—		—		1,032		1,032		—		—		—		—
Total liabilities measured and recorded at fair value	$	—	$	—	$	72,509	$	72,509	$	—	$	—	$	100,714	$	100,714

There were no transfers between levels during the periods presented.

6% Convertible Notes

The Company issued $60.0 million of 6% Convertible Notes on December 10, 2018 and elected the fair value option of accounting for this instrument. At September 30, 2019, outstanding principal was $62.8 million, and the fair value was $63.2 million, which was measured at the noteholders’ put option price of 125% of outstanding principal. See Note 4, “Debt” for further information related to this debt instrument and the noteholders’ put option. For the nine months ended September 30, 2019, the Company recorded a $18.6 million loss from change in fair value of debt in connection with the 6% Convertible Notes, as follows:



In thousands
Fair value at December 31, 2018	$	57,918
Less: principal paid	(13,395		)
Loss on change in fair value	18,629
Fair value at September 30, 2019	$	63,152

Derivative Liabilities Recognized in Connection with the Issuance of Debt and Equity 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 and equity instruments – either freestanding or compound embedded – measured at fair value using significant unobservable inputs (Level 3):



(In thousands)	Equity-related Derivative Liability			Debt-related Derivative Liability			Total Derivative Liability
Balance at December 31, 2018	$	41,272		$	1,524		$	42,796
Derecognition upon adoption of ASU 2017-11	(39,513		)	(1,524		)	(41,037		)
Fair value of derivative liabilities issued during the period	—			8,959			8,959
Change in fair value of derivative liabilities	2,039			398			2,437
Derecognition on extinguishment	(3,798		)	—			(3,798		)
Balance at September 30, 2019	$	—		$	9,357		$	9,357

As of September 30, 2019, a $3.8 million derivative liability recorded in connection with the November 2018 Securities Purchase Agreement with DSM was settled and extinguished through a cash payment in April 2019.

Also, during the three and nine months ended September 30, 2019, the Company issued three debt instruments with an embedded mandatory redemption feature and a related freestanding liability classified warrant with conversion rate adjustment and antidilution provisions. See Note 4, “Debt” for a description of the transactions and the initial accounting treatment for these debt related derivatives. There is no current observable market for these types of derivatives and, as such, the Company determined the fair value of the embedded mandatory redemption feature using a probability weighted discounted cash flow model measuring the fair value of the debt instrument both with and without the embedded feature and the freestanding warrant derivative using a Black-Scholes option pricing model. See Note 6, “Stockholders’ Deficit” for information regarding the initial Black-Scholes assumptions use to fair value the freestanding liability warrant.

The freestanding liability warrant issued on September 10, 2019 had an initial fair value of $7.9 million and was recorded as a derivative liability and a debt discount. The warrant will be remeasured each reporting period until settled or extinguished with subsequent changes in fair value recorded through the statement of operations as a gain or loss on change in fair value of derivative liabilities. At September 30, 2019 the warrant derivative had a fair value of $8.3 million. The $0.4 million increase in fair value was recorded as a loss on change in fair value of derivative liabilities in the statement of operations during the three and nine months ended September 30, 2019.

The embedded mandatory redemption features were measured using a probability weighted discounted cash flow model to determine if the debt instruments would be called or held at each decision point. Within the model, the following assumption is made: the note will be called early if the change in control redemption value is greater than the holding value. If the note is called, the holder will maximize their value by finding the optimal decision between (i) redeeming at the redemption price and (ii) holding the instrument until maturity. Using this assumption, the Company valued the embedded derivatives on a "with-and-without method", where the fair value of each note including the embedded derivative is defined as the "with", and the fair value of each note excluding the embedded derivatives is defined as the "without". This method estimates the fair value of the embedded derivatives by comparing the fair value differential between the with and without mandatory redemption feature. The model incorporates the mandatory redemption price, time to maturity, risk-free interest rate, estimated credit spread and estimated probability of a change in control default event. The collective fair value of the three embedded derivatives totaled $1.0 million at issuance date and was recorded as a derivative liability and a debt discount. There has been no change to the collective fair value of the three derivatives from issuance date to September 30, 2019.

Assets and Liabilities Recorded at Carrying Value

Financial Assets and Liabilities

The carrying amounts of certain financial instruments, such as cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities and low market interest rates, if applicable. Loans payable, credit facilities and convertible notes are recorded at carrying value (except for the 6% Convertible Notes, which are recorded at fair value), which is representative of fair value at the date of acquisition. For loans payable and credit facilities recorded at carrying value, the Company estimates fair value using observable market-based inputs (Level 2); for convertible notes, the Company estimates fair value based on rates currently offered for instruments with similar maturities and terms (Level 3). The carrying amount (the total amount of net debt presented on the balance sheet) of the Company's debt at September 30, 2019, excluding the 6% Convertible Notes that the Company records at fair value, was $141.1 million. The fair value of such debt at September 30, 2019 was $153.8 million 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, 2019										December 31, 2018
(In thousands)	Principal		Unamortized Debt (Discount) Premium			Change in Fair Value		Net Balance			Principal		Unamortized Debt (Discount) Premium			Change in Fair Value			Net Balance
Convertible notes payable
6% convertible notes	$	62,825	$	—		$	327	$	63,152		$	60,000	$	—		$	(2,082	)	$	57,918
August 2013 financing convertible note	—		—			—		—			4,415		(70		)	—			4,345
2015 Rule 144A convertible notes	—		—			—		—			37,887		(2,413		)	—			35,474
2014 Rule 144A convertible notes	—		—			—		—			24,004		(867		)	—			23,137
	62,825		—			327		63,152			126,306		(3,350		)	(2,082		)	120,874
Related party convertible notes payable
2014 Rule 144A convertible notes	9,705		—			—		9,705			24,705		(1,038		)	—			23,667

Loans payable and credit facilities
Ginkgo note	12,000		(3,377		)	—		8,623			12,000		(4,047		)	—			7,953
Nikko notes	9,122		(938		)	—		8,184			4,598		(1,047		)	—			3,551
Schottenfeld notes	12,500		(8,151		)			4,349			—		—			—			—
Other loans payable	1,280		—			—		1,280			312		—			—			312
GACP secured term loan facility	—		—			—		—			36,000		(1,349		)	—			34,651
	34,902		(12,466		)	—		22,436			52,910		(6,443		)	—			46,467
Related party loans payable
Foris secured term loan facility	71,041		(8,829		)	—		62,212			—		—			—			—
Foris unsecured note	19,000		(6,681		)	—		12,319			—		—			—			—
DSM notes	33,000		(5,135		)	—		27,865			25,000		(6,311		)	—			18,689
Naxyris note	10,957		(4,403		)	—		6,554			—		—			—			—
	133,998		(25,048		)	—		108,950			25,000		(6,311		)	—			18,689
Total debt	241,430		(37,514		)	327		204,243			228,921		(17,142		)	(2,082		)	209,697
Less: current portion								(78,716		)									(147,677		)
Long-term debt, net of current portion								$	125,527										$	62,020

August 2013 Financing Convertible Note

On January 14, 2019, Wolverine Flagship Fund Trading Limited (Wolverine) agreed to waive payment of the August 2013 Financing Convertible Note held by Wolverine at its January 15, 2019 maturity until July 15, 2019 in exchange for a fee, payable on or prior to July 15, 2019, of $0.6 million. The due date of the waiver fee was extended to October 13, 2019 and was subsequently paid on October 29, 2019. The Company concluded that the maturity date extension represented a debt modification, and the fee was accounted for as additional debt discount to be amortized over the remaining term.

On July 8, 2019, $5.1 million principal balance of the convertible note and unpaid interest was exchanged for 1.8 million shares of common stock with a total fair value of $5.9 million or $3.30 per share and a warrant to purchase 1.1 million shares of common stock with a fair value of $1.9 million. The Company recorded a $2.7 million loss on debt extinguishment in the three and nine months ended September 30, 2019 for the difference between the carrying value of the debt and the sum of the fair values of the common stock and warrant. See Note 6, “Stockholders’ Deficit” for additional information regarding the fair value measurement of the common stock and warrant issued in connection with this exchange.

Foris Credit Agreements

On April 8, 2019, the Company and Foris entered into a credit agreement to make available to the Company an unsecured credit facility in an aggregate principal amount of $8.0 million (the April Foris Credit Agreement), which the Company borrowed in full on April 8, 2019 and issued to Foris a promissory note in the principal amount of $8.0 million (the April Foris Note). The April Foris Note has a maturity date of October 14, 2019, which has no stated interest rate. The Company agreed to pay Foris a

fee of $1.0 million, payable on or prior to the maturity date; provided, that the fee will be reduced to $0.5 million if the Company repays the April Foris Note in full by July 15, 2019. The Company accrues this fee as interest expense over the six-month term of the note.

On June 11, 2019, the Company and Foris entered into a credit agreement to make available to the Company an unsecured credit facility in an aggregate principal amount of $8.5 million, which the Company borrowed in full on June 11, 2019 and issued to Foris a promissory note in the principal amount of $8.5 million (the June Foris Note). The June Foris Note (i) accrues interest at a rate of 12.5% per annum and is payable on the maturity date or the earlier repayment or other satisfaction of the June Foris Note, and (ii) matured on August 28, 2019.

On July 10, 2019, the Company and Foris entered into a credit agreement to make available to the Company an unsecured credit facility in an aggregate principal amount of $16.0 million (the July Foris Credit Agreement), of which the Company borrowed $8.0 million on July 10, 2019 and $8.0 million on July 26, 2019 and issued to Foris promissory notes, each in the principal amount of $8.0 million, on such dates (the July Foris Notes). The July Foris Notes (i) accrue interest at a rate of 12.5% per annum, which is payable on the maturity date or the earlier repayment or other satisfaction of the applicable July Foris Note, and (ii) mature on December 31, 2019.

In connection with the entry into the July Foris Credit Agreement, the Company and Foris amended the warrant issued to Foris on August 17, 2018 to reduce the exercise price of such warrant from $7.52 per share to $2.87 per share. The warrant modification resulted in $4.0 million of incremental value which was accounted for as a debt discount to the $16 million July Foris Notes. See Note 6, “Stockholders’ Deficit” for additional information regarding the fair value measurement of the modified warrant.

On August 14, 2019, the April Foris Note, the June Foris Note and the July Foris Notes were added to the loans under the LSA, made subject to the LSA and secured by the security interest in the collateral granted to Foris under the LSA, and such notes were cancelled in connection therewith. See "LSA Assignment, Amendments and Waiver" below for further information.

2015 and 2014 Rule 144A Convertible Notes

On April 16, 2019, the Company repaid in cash the $37.9 million outstanding principal, as well as accrued and unpaid interest, under its 9.50% Convertible Senior Notes due 2019 (the 2015 Rule 144A Convertible Notes).

On May 10, 2019, the Company exchanged $13.5 million aggregate principal amount of its 6.50% Convertible Senior Note (the 2014 Rule 144A Convertible Notes) held by certain non-affiliated investors, including accrued and unpaid interest thereon for an aggregate of 3.5 million shares of common stock and warrants to purchase an aggregate of 1.4 million shares of common stock at an exercise price of $5.02 per share, with an exercise term of two years from issuance, in a private exchange pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act of 1933, as amended (the Securities Act).

On May 14, 2019, the Company exchanged $5.0 million aggregate principal amount of the 2014 Rule 144A Convertible Notes held by Foris, including accrued and unpaid interest thereon, for 1.1 million shares of common stock and a warrant to purchase up to 0.4 million shares of common stock at an exercise price of $4.56 per share, with an exercise term of two years from issuance, in a private exchange pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act. On August 28, 2019, the Company and Foris agreed to reduce the exercise price of such warrant from $4.56 per share to $3.90 per share. See “August 2019 Foris Credit Agreements” below and Note 6, “Stockholders’ Deficit” for additional information.

On May 15, 2019, the Company exchanged $10.0 million aggregate principal amount of the 2014 Rule 144A Convertible Notes held by Maxwell (Mauritius) Pte Ltd for 2.5 million shares of common stock in a private exchange pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act.

The Company evaluated the May 2019 exchanges described above and concluded that the transactions resulted in a debt extinguishment. The Company recorded a $5.9 million loss on debt extinguishment of the 2014 144A Convertible Notes in the three months ended June 30, 2019. The loss represented the difference between the $30.8 million fair value of 7.1 million common shares issued upon exchange, $3.8 million fair value of warrants issued to purchase 1.7 million shares of common stock and $0.4 million of fees incurred, less the $29.1 million carrying value of the debt that was extinguished. See Note 6. "Stockholders’ Deficit" for further information regarding the fair value measurement of the common stock and warrants issued in connection with the May 2019 exchanges discussed above.

On May 15, 2019, the Company exchanged $9.7 million aggregate principal amount of the 2014 Rule 144A Convertible Notes held by Total Raffinage Chimie (Total) for a new senior convertible note with an equal principal amount and with substantially identical terms, except that the new note had a maturity date of June 14, 2019, in a private exchange pursuant to the exemption

from registration under Section 3(a)(9) of the Securities Act. Effective June 14, 2019, the Company and Total agreed to extend the maturity date of the new note from June 14, 2019 to July 18, 2019.

Effective July 18, 2019, the Company and Total agreed to (i) further extend the maturity date of the new note from July 18, 2019 to August 28, 2019 and (ii) increase the interest rate on the new note to 10.5% per annum, beginning July 18, 2019. Effective August 28, 2019, the Company and Total agreed to (i) further extend the maturity date of the new note from August 28, 2019 to October 28, 2019 and (ii) increase the interest rate on the new note to 12% per annum, beginning August 28, 2019. See Note 12, “Subsequent Events” for information regarding further modifications to the new note subsequent to September 30, 2019.

The Company accounted for the series of exchanges with Total as a debt modification; however, no additional fees were paid, and the modifications had no impact on the debt discount or interest expense in the three and nine months ended September 30, 2019.

6% Convertible Notes Exchanges

On May 15, 2019 and June 24, 2019, the Company exchanged $53.3 million and $4.7 million principal amount, respectively, of the 6% Convertible Notes, including accrued and unpaid interest thereon, representing all then-outstanding 6% Convertible Notes, for new senior convertible notes with an equal principal amount and warrants to purchase up to 2.0 million and 0.2 million shares of common stock, respectively, at an exercise price of $5.12 per share, with an exercise term of two years from issuance, in private exchanges pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act. The new notes have substantially identical terms as the 6% Convertible Notes being exchanged, except that (i) the holders agreed to waive, until July 22, 2019, certain covenants relating to the effectiveness of the registration statement covering the shares of common stock issuable upon conversion of, or otherwise pursuant to, the new notes and the filing by the Company of reports with the SEC and (ii) during the period from July 22, 2019 to July 29, 2019, inclusive, the holders have the right to require the Company to redeem the new notes, in whole or in part, at a price equal to 125% of the principal amount being redeemed. Since the Company has elected the fair value accounting option for the 6% Convertible Notes and records all changes in fair value through the gain/loss on change in fair value of debt line item in the statement of operations each reporting period, this exchange is not required to be evaluated for modification or extinguishment accounting treatment. However, the Company considered the issuance of the warrant as compensation to the noteholders for waiving certain covenant violations during the period, and recorded a $4.4 million increase to additional paid in capital and a charge to interest expense for the fair value of the equity-classified May 15, 2019 and June 24, 2019 warrants. See Note 6, “Stockholders’ Deficit” for information regarding the fair value measurement and issuance of this warrant.

On July 24, 2019, the Company further exchanged $53.3 million principal amount of the previously-exchanged 6% Convertible Senior Notes, as well as the warrant to purchase up to 2.0 million shares of common stock issued on May 15, 2019, for a new senior convertible note with a principal amount of $68.3 million (the Second Exchange Note) and a new warrant to purchase up to 2.0 million shares of common stock at an exercise price of $2.87 per share, with an exercise term of two years from May 15, 2019 (the Second Exchange Warrant) in a private exchange pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act. The Second Exchange Note and Second Exchange Warrant have substantially similar terms as the note and warrant, respectively, issued on May 15, 2019, except that (i) the principal amount of the Second Exchange Note would be $68.3 million, reflecting accrued and unpaid interest and late charges under the exchanged note and a 25% premium accruing as a result of the Company’s failure to make an installment payment on the exchanged note due July 1, 2019 in the amount of $6.4 million, provided that upon an event of default under the Second Exchange Note, the Company would not be required to redeem the Second Exchange Note in cash at a price greater than the intrinsic value of the shares of common stock underlying the Second Exchange Note, (ii) the Second Exchange Note bears interest at a rate of 18% per annum, (iii) the holder agreed to extend its waiver of certain covenant breaches relating to the failure by the Company to timely file periodic reports with the SEC from July 22, 2019 to September 16, 2019, (iv) the Company is required to (A) make principal payments on the Second Exchange Note in the amount of $3.2 million on each of August 2, 2019 and August 22, 2019, and (B) pay all remaining amounts then outstanding under the Second Exchange Note on September 16, 2019, and if the Company fails to make any such payment on the applicable payment date, the conversion price of the Second Exchange Note would be reset to the volume-weighted average price of the common stock on the trading day immediately following the Company’s filing of a Current Report on Form 8-K with respect to its failure to make the payment due on September 16, 2019, if such volume-weighted average price is lower than the conversion price of the Second Exchange Note then in effect, subject to a price floor and (v) the Second Exchange Warrant has an exercise price of $2.87 per share. Since the Company has elected the fair value accounting option for the 6% Convertible Notes and records all changes in fair value through the gain/loss on change in fair value of debt line item in the statement of operations each reporting period, this second note exchange is not required to be evaluated for modification or extinguishment accounting treatment. However, the Company considered the modification of the warrant as compensation to the noteholder for waiving certain covenant violations during the period, and recorded a $0.9 million increase to additional paid in capital and a charge to interest expense for the

incremental fair value of the modification. See Note 6, “Stockholders’ Deficit” for information regarding the fair value measurement of this warrant modification.

On July 26, 2019, one of the holders of $4.7 million principal amount of the 6% Convertibles Notes issued on June 24, 2019, exercised their right to require the Company to redeem such note in whole at a price equal to 125% of the principal amount being redeemed, plus accrued and unpaid interest on such note to the date of repayment. Redemption of such note was initially due on July 30, 2019 and subsequently extended to August 30, 2019. The Company redeemed such note in full on August 30, 2019.

On September 16, 2019, the Company failed to pay an aggregate of $63.6 million of outstanding principal and accrued interest on the Second Exchange Note when due. The failure resulted in an event of default under the Second Exchange Note and also triggered cross-defaults under other debt instruments of the Company which permitted the holders of such indebtedness to accelerate the amounts owing under such instruments. The Company subsequently received waivers from all holders of such other debt instruments to waive the right to accelerate. As a result, the indebtedness with respect to which the Company has obtained such waivers continues to be classified as long-term on the Company’s balance sheet. The indebtedness reflected by the Second Exchange Note continues to be classified as a current liability on the Company’s balance sheet. In addition, as a result of the payment default, the conversion price of the Second Exchange Note is subject to adjustment in accordance with the terms of the Second Exchange Note.

On November 8, 2019, the Company entered into a Securities Exchange Agreement with certain private investors (the “Investors”), pursuant to which, upon the purchase by the Investors of the Second Exchange Note, the Second Exchange Note would be exchanged for new senior convertible notes with an aggregate principal amount of $66.0 million (see Note 12, “Subsequent Events”). In connection with the entry into the Securities Exchange Agreement, (i) the holder of the Second Exchange Note and the Investors entered into a Securities Purchase Agreement providing for the purchase by the Investors of the Second Exchange Note and (ii) the Company and the holder of the Second Exchange Note entered into an agreement by which such holder agreed to immediately dismiss its complaint against the Company (see Note 8, “Commitments and Contingencies”) with prejudice upon the purchase of the Second Exchange Note by the Investors.

Nikko Loan Agreement

On July 29, 2019, the Company and Nikko Chemicals Co., Ltd. (Nikko) entered into a loan agreement (the Nikko Loan Agreement) to make available to the Company secured loans in an aggregate principal amount of $5.0 million, to be issued in separate installments of $3.0 million and $2.0 million, respectively, with each installment being subject to certain closing conditions, including the entry into certain commercial agreements and other arrangements relating to the Aprinnova JV (see Note 11, “Related Party Transactions” in Part II, Item 8 of the 2018 Form 10-K/A). On July 30, 2019, the Company borrowed the first installment of $3.0 million under the Nikko Loan Agreement and received net cash proceeds of $2.8 million, with the remaining $0.2 million being withheld by Nikko as prepayment of the interest payable on such loan through the maturity date. On August 8, 2019, the Company borrowed the remaining $2.0 million available under the Nikko Loan Agreement and received net cash proceeds of $1.9 million, with the remaining $0.1 million being withheld by Nikko as prepayment of the interest payable on such loan through the maturity date. The loans (i) mature on December 18, 2020, (ii) accrue interest at a rate of 5% per annum from and including the applicable loan date through the maturity date, which interest is required to be prepaid in full on the date of the applicable loan, and (iii) are secured by a first-priority lien on 12.8% of the Aprinnova JV interests owned by the Company.

Aprinnova Working Capital Loan

Effective July 31, 2019, the Company and Nikko agreed to extend the term of the Second Aprinnova Note (see Note 5, “Debt” in Part II, Item 8 of the 2018 Form 10-K/A) from August 1, 2019 to August 1, 2020.

LSA Assignment, Amendments and Waivers

On April 4, 2019, the Company and GACP Finance Co., LLC (GACP) amended the Loan and Security Agreement, dated June 29, 2018 (as amended, the LSA), to (i) effective December 31, 2018, eliminate the conditions giving rise to the early maturity date, so that loans under the GACP Term Loan Facilities would have a maturity date of July 1, 2021, (ii) remove certain Company intellectual property related to the Cannabinoid Agreement from the lien granted by the Company to GACP under the LSA, (iii) eliminate the Company’s ability to obtain an incremental term loan facility, (iv) eliminate the Company’s reinvestment rights with respect to mandatory prepayments upon asset sales, (v) restrict the Company’s ability to pay interest and principal on other indebtedness without the consent of GACP, and (vi) provide that the Company must have at all times at least $15 million of unrestricted, unencumbered cash subject to a control agreement in favor of GACP. Also, on April 4, 2019, the Company and GACP entered into a waiver agreement, pursuant to which GACP agreed to waive breaches of certain covenants under the LSA occurring prior to, as of and after December 31, 2018 through April 8, 2019, including covenants related to quarterly minimum revenues,

minimum liquidity amounts and a minimum asset coverage ratio. In connection with such waiver, the Company agreed to pay GACP fees of $0.8 million, which the Company paid in April 2019. This waiver fee was recorded as interest expense in the statement of operations in the nine months ended September 30, 2019.

On April 15, 2019, the Company, GACP and Foris Ventures, LLC (Foris), an entity affiliated with director John Doerr of Kleiner Perkins Caufield & Byers, a current stockholder, and an owner of greater than five percent of the Company’s outstanding common stock) entered into a Loan Purchase Agreement, pursuant to which Foris agreed to purchase and assume from GACP, and GACP agreed to sell and assign to Foris, the outstanding loans under the LSA and all documents and assets related thereto. In connection with such purchase and assignment, the Company agreed to repay Foris $2.5 million of the purchase price and accrued interest paid by Foris to GACP (the LSA Obligation). The Company accounted for the LSA Obligation as a debt modification and recorded the $2.5 million fee as additional debt discount to be amortized to interest expense under the effective interest method over the remaining term of the LSA. The closing of the loan purchase and assignment occurred on April 16, 2019.

On August 14, 2019, the Company and Foris entered into an Amendment No 5 and Waiver to the LSA (the LSA Amendment and Waiver), pursuant to which (i) the maturity date of the loans under the LSA was extended from July 1, 2021 to July 1, 2022, (ii) the interest rate for the loans under the LSA was modified from the sum of (A) the greater of (x) the prime rate as reported in the Wall Street Journal or (y) 4.75% plus (B) 9% to the greater of (A) 12% or (B) the rate of interest payable with respect to any indebtedness of the Company, (iii) the amortization of the loans under the LSA was delayed until December 16, 2019, (iv) certain accrued and future interest and agency fee payments under the LSA were delayed until December 16, 2019, (v) certain covenants under the LSA, including related definitions, were amended to provide the Company with greater operational and financial flexibility, including, without limitation, to permit the incurrence of the indebtedness under the Naxyris Loan Facility (as described below) and the granting of liens with respect thereto, subject to the terms of an intercreditor agreement between Foris and Naxyris S.A. (Naxyris) governing the respective rights of the parties with respect to, among other things, the assets securing the Naxyris Loan Agreement (as defined below) and the LSA (the Intercreditor Agreement), (vi) certain outstanding unsecured promissory notes issued by the Company to Foris on April 8, 2019, June 11, 2019, July 10, 2019 and July 26, 2019 (as described in the “Foris Credit Agreements” section above), in an aggregate principal amount of $32.5 million, as well as the $2.5 million LSA Obligation, were added to the loans under the LSA, made subject to the LSA and secured by the security interest in the collateral granted to Foris under the LSA, and such promissory notes and contractual obligation were canceled in connection therewith, and (vii) Foris agreed to waive certain existing defaults under the LSA, including with respect to covenants related to quarterly minimum revenues, minimum liquidity amounts and a minimum asset coverage ratio. After giving effect to the LSA Amendment and Waiver, there is $71.0 million aggregate principal amount of loans outstanding under the LSA. The Company also issued to Foris a warrant (the LSA Warrant) on August 14, 2019 to purchase up to 1.4 million shares of common stock at an exercise price of $2.87 per share, with an exercise term of two years from issuance. The warrant had a fair value of $2.9 million which was measured using a Black-Scholes option pricing model. See Note 6, “Stockholders’ Deficit” for further information regarding the fair value measurement and issuance of this warrant.

Due to multiple changes in key provisions of the LSA from April 15, 2019 through August 14, 2019, the Company analyzed the before and after cash flows resulting from the increased principal balance, decreased interest rate, extended maturity date, waiver of default interest and the fair value of the new LSA Warrant provided to Foris in order to determine if these changes result in a modification or extinguishment of the original LSA. Based on the combined before and after cash flows of the five separate note balances making up the new principal balance of the LSA and the fair value of the LSA warrant, the change in cash flows was not significantly different. Consequently, the LSA Amendment and Waiver was accounting for as a debt modification with the $2.9 million fair value of the LSA Warrant recorded as an increase to additional paid in capital and as a debt discount to be amortized to interest expense under the effective interest method over the remaining term of the LSA.

See Note 12, “Subsequent Events” for more information regarding the LSA.

Naxyris Loan and Security Agreement

On August 14, 2019, the Company, certain of the Company’s subsidiaries (the Subsidiary Guarantors) and, as lender, Naxyris, an existing stockholder of the Company and an investment vehicle owned by Naxos Capital Partners SCA Sicar, which is affiliated with NAXOS S.A.R.L. (Switzerland), for which director Carole Piwnica serves as director, entered into a Loan and Security Agreement (the Naxyris Loan Agreement) to make available to the Company a secured term loan facility in an aggregate principal amount of up to $10.4 million (the Naxyris Loan Facility), which the Company borrowed in full on August 14, 2019. In connection with the funding of the Naxyris Loan Facility, the Company paid Naxyris an upfront fee of $0.4 million.

Loans under the Naxyris Loan Facility have a maturity date of July 1, 2022 and accrue interest at a rate per annum equal to the greater of (i) 12% or (ii) the rate of interest payable with respect to any indebtedness of the Company plus 25 basis points,

which interest will be payable monthly in arrears, provided that all interest accruing from and after August 14, 2019 through December 1, 2019 shall be due and payable on December 15, 2019.

The obligations of the Company under the Naxyris Loan Facility 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.

Mandatory prepayments of the outstanding amounts under the Naxyris Loan Facility will be required upon the occurrence of certain events, including asset sales, a change in control, and the incurrence of additional indebtedness, subject to certain exceptions and reinvestment rights. Outstanding amounts under the Naxyris Loan Facility must also be prepaid to the extent that the borrowing base exceeds the outstanding principal amount of the loans under the Naxyris Loan Facility. In addition, the Company may at its option prepay the outstanding principal amount of the loans under the Naxyris Loan Facility in full before the maturity date. Any prepayment of the loans under the Naxyris Loan Facility prior to the maturity date, whether pursuant to a mandatory or optional prepayment, is subject to a prepayment charge equal to one year’s interest at the then-current interest rate for the Naxyris Loan Facility. Upon any repayment of the loans under the Naxyris loan facility, whether on the maturity date or earlier pursuant to an optional or mandatory prepayment, the Company will pay Naxyris an end of term fee based on a percentage of the aggregate amount borrowed. In addition, (i) the Company will be required to pay a fee equal to 6% of any amount the Company fails to pay within three business days of its due date and (ii) any interest that is not paid when due will be added to principal and will bear compound interest at the applicable rate.

The affirmative and negative covenants in the Naxyris Loan Agreement relate to, among other items: (i) payment of taxes; (ii) financial reporting; (iii) maintenance of insurance; and (iv) limitations on indebtedness, liens, mergers, consolidations and acquisitions, transfers of assets, dividends and other distributions in respect of capital stock, investments, loans and advances, and corporate changes. The Naxyris Loan Agreement also contains financial covenants, including covenants related to minimum revenue, liquidity, and asset coverage.

The Naxyris Loan Facility also contained a mandatory redemption feature that was not clearly and closely related to the debt host instrument, and thus, required bifurcation and separate accounting as a derivative liability. The embedded feature had an initial fair value of $0.3 million and was recorded as a derivative liability and a debt discount to be amortized to interest expense under the effective interest method over the term of the Naxyris Loan Facility. See Note 3, “Fair Value Measurements” for information regarding the fair value measurement and subsequent accounting for the embedded mandatory redemption feature.

In connection with the entry into the Naxyris Loan Agreement, on August 14, 2019 the Company issued to Naxyris a warrant (the Naxyris LSA Warrant) to purchase up to 2.0 million shares of common stock at an exercise price of $2.87 per share, with an exercise term of two years from issuance. See Note 6, “Stockholders’ Deficit” for information regarding the fair value measurement and issuance of this warrant. The warrant had a $4.0 million Black-Scholes fair value and a $3.0 million relative fair value after allocating the Naxyris Loan Facility proceeds to the $0.3 million fair value of the embedded mandatory redemption feature contained in the Naxyris Loan Facility, and allocating on a residual basis, to the relative fair values of the Naxyris Loan Facility and the Naxyris LSA Warrant. The $3.0 million relative fair value of the Naxyris LSA Warrant was recorded as an increase to additional paid in capital and as a debt discount to be amortized to interest expense under the effective interest method over the term of the Naxyris Loan Agreement.

In addition to the $3.0 million relative fair value of the Naxyris LSA Warrant and the $0.3 million fair value of the embedded mandatory redemption feature, the Naxyris Loan Facility contained $0.4 million original issue discount, $0.5 million mandatory end of term fee and $0.3 million of issuances costs, all totaling $4.5 million. All such amounts were recorded as a debt discount to be amortized as interest expense over the term of the Naxyris Loan Agreement.

See Note 12, “Subsequent Events” for more information regarding the Naxyris Loan Agreement.

August 2019 Foris Credit Agreements

On August 28, 2019, the Company and Foris entered into a credit agreement to make available to the Company an unsecured credit facility in an aggregate principal amount of $19.0 million (the August 2019 Foris Credit Agreement), which the Company borrowed in full on August 28, 2019 and issued to Foris a promissory note in the principal amount of $19.0 million (the August 2019 Foris Note). The August 2019 Foris Note (i) accrues interest at a rate of 12% per annum from and including August 28, 2019, which interest is payable quarterly in arrears on each March 31, June 30, September 30 and December 31, beginning December 31, 2019, and (ii) matures on January 1, 2023. The Company may at its option repay the amounts outstanding under the August

2019 Foris Note before the maturity date, in whole or in part, at a price equal to 100% of the amount being repaid plus accrued and unpaid interest on such amount to the date of repayment.

The August 2019 Foris Note also contained a mandatory redemption feature that was not clearly and closely related to the debt host instrument, and thus, required bifurcation and separate accounting as a derivative liability. The embedded feature had an initial fair value of $0.5 million and was recorded as a derivative liability and a debt discount to be amortized to interest expense under the effective interest method over the term of the August 2019 Foris Note. See Note 3, “Fair Value Measurements” for information regarding the fair value measurement and subsequent accounting for the embedded mandatory redemption feature.

In connection with the entry into the August 2019 Foris Credit Agreement, on August 28, 2019 the Company issued to Foris a warrant (the August 2019 Foris Warrant) to purchase up to 4.9 million shares of Common Stock at an exercise price of $3.90 per share, with an exercise term of two years from issuance in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act. See Note 6, “Stockholders’ Deficit” for information regarding the fair value measurement and issuance of this warrant. The warrant had a $8.7 million Black-Scholes fair value and a $5.2 million relative fair value after allocating the August 2019 Foris Note proceeds to the $0.5 million fair value of the embedded mandatory redemption feature contained in the August 2019 Foris Note, and allocating on a residual basis, to the relative fair values of the August 2019 Foris Note and the August 2019 Foris Warrant. The $5.2 million relative fair value of the August 2019 Foris Warrant was recorded as an increase to additional paid in capital and as a debt discount to be amortized to interest expense under the effective interest method over the term of the August 2019 Foris Note.

Also, on August 28, 2019 in connection with the entry into the August 2019 Foris Credit Agreement, the Company and Foris amended the warrant to purchase up to 3.9 million shares of common stock issued to Foris on April 26, 2019 to reduce the exercise price of such warrant from $5.12 per share to $3.90 per share, and amended the warrant to purchase up to 0.4 million shares of common stock issued to Foris on May 14, 2019 to reduce the exercise price of such warrant from $4.56 per share to $3.90 per share. The warrant modifications resulted in $1.1 million of incremental value which was recorded as an increase to additional paid in capital and as a debt discount to be amortized to interest expense under the effective interest method over the term of the August 2019 Foris Note. See Note 6, “Stockholders’ Deficit” for additional information regarding the fair value measurement of these warrant modifications.

In addition to the $5.2 million relative fair value of the August 2019 Foris Warrant, the $0.5 million fair value of the embedded mandatory redemption feature, and $1.1 million incremental value related to the warrant modifications, the Company incurred $0.1 million of legal fees in connection the issuing the August 2019 Foris Note. These amounts totaled $6.8 million and were recorded as a debt discount to be amortized as interest expense under the effective interest method over the term of the August 2019 Foris Note.

September 2019 Credit Agreements

On September 10, 2019, the Company entered into separate credit agreements (the Investor Credit Agreements) with each of Schottenfeld Opportunities Fund II, L.P., Phase Five Partners, LP and Koyote Trading, LLC (the Investors) to make available to the Company unsecured credit facilities in an aggregate principal amount of $12.5 million, which the Company borrowed in full on September 10, 2019 and issued to the Investors separate promissory notes in the aggregate principal amount of $12.5 million (the Investor Notes). Each Investor Note (i) accrues interest at a rate of 12% per annum from and including September 10, 2019, which interest is payable quarterly in arrears on each March 31, June 30, September 30 and December 31, beginning December 31, 2019, and (ii) matures on January 1, 2023. The Company may at its option repay the amounts outstanding under the Investor Notes before the maturity date, in whole or in part, at a price equal to 100% of the amount being repaid plus accrued and unpaid interest on such amount to the date of repayment.

The Investor Notes also contained a mandatory redemption feature that was not clearly and closely related to the debt host instrument, and thus, required bifurcation and separate accounting as a derivative liability. The embedded feature had an initial fair value of $0.3 million and was recorded as a derivative liability and a debt discount to be amortized to interest expense under the effective interest method over the term of the Investor Notes. See Note 3, “Fair Value Measurements” for information regarding the fair value measurement and subsequent accounting for the embedded mandatory redemption feature.

In connection with the September 10, 2019 Investor Credit Agreements, the Company issued to the Investors warrants (the September 2019 Investor Warrants) to purchase up to an aggregate of 3.2 million shares of common stock at an exercise price of $3.90 per share, with an exercise term of two years from issuance in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act. See Note 6, “Stockholders’ Deficit” for information regarding the fair value measurement and issuance of these warrants. The September 2019 Investor

Warrants had a $7.9 million fair value which was recorded as a derivative liability and a debt discount to be amortized to interest expense under the effective interest method over the term of the Investor Notes.

DSM Credit Agreement

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, to be issued in separate installments of $3.0 million, $3.0 million and $2.0 million, respectively, with each installment being subject to certain closing conditions, including the payment of certain existing obligations of the Company to DSM. On September 17, 2019, the Company borrowed the first installment of $3.0 million under the 2019 DSM Credit Agreement, all of which proceeds were used to pay certain existing obligations of the Company to DSM, and issued to DSM a promissory note in the principal amount of $3.0 million. On September 19, 2019, the Company borrowed the second installment of $3.0 million under the 2019 DSM Credit Agreement, all of which proceeds were used to pay certain existing obligations of the Company to DSM, and issued to DSM a promissory note in the principal amount of $3.0 million. On September 23, 2019, the Company borrowed the final installment of $2.0 million under the 2019 DSM Credit Agreement, $1.5 million of which proceeds were used to pay certain existing obligations of the Company to DSM, and issued to DSM a promissory note in the principal amount of $2.0 million. 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 from and including the applicable date of issuance, which interest is payable quarterly in arrears on each January 1, April 1, July 1 and October 1, beginning January 1, 2020, and (iii) are secured by a first-priority lien on certain Company intellectual property licensed to DSM. The Company may at its option repay the amounts outstanding under the 2019 DSM Credit Agreement before the maturity date, in whole or in part, at a price equal to 100% of the amount being repaid plus accrued and unpaid interest on such amount to the date of repayment. In addition, the Company is required to repay the amounts outstanding under the 2019 DSM Credit Agreement (i) in an amount equal to the gross cash proceeds, if any, received by the Company upon the exercise by DSM of any of the common stock purchase warrants issued by the Company to DSM on May 11, 2017 or August 7, 2017 (see Note 7, “Stockholders’ Deficit” in Part II, Item 8 of the 2018 Form 10-K/A) and (ii) in full upon the request of DSM at any time following the receipt by the Company of at least $50.0 million of gross cash proceeds from one or more sales of equity securities of the Company on or prior to June 30, 2020. In connection with issuance of the 2019 DSM Credit Agreement, the Company incurred $0.3 million of legal fees which were recorded as a debt discount to be amortized as interest expense under the effective interest method over the term of the 2019 DSM Credit Agreement.

Ginkgo Note Amendment

On September 29, 2019, in connection with Ginkgo Bioworks, Inc. (Ginkgo) granting certain waivers under the November 2017 Ginkgo Note and the Ginkgo Partnership Agreement (see Note 5, “Debt” and Note 10, "Revenue Recognition" in Part II, Item 8 of the 2018 Form 10-K/A), (i) the Company and Ginkgo amended the November 2017 Ginkgo Note to increase the interest rate from 10.5% per annum to 12% per annum, beginning October 1, 2019 and (ii) the Company agreed to pay Ginkgo a cash waiver fee of $1.3 million, payable in installments on December 15, 2019 and March 31, 2020. The Company accounted for this amendment as a modification and accrued the $1.3 million waiver fee in other current liabilities and a charge to interest expense during the three months ended September 30, 2019.

See Note 12, “Subsequent Events” for information regarding debt transactions subsequent to September 30, 2019.

Future Minimum Payments

Future minimum payments under the Company's debt agreements as of September 30, 2019 are as follows:



(In thousands)	Convertible Notes			Loans Payable and Credit Facilities			Related Party Convertible Notes			Related Party Loans Payable and Credit Facilities			Total
2019 (remaining three months)	$	66,506		$	2,737		$	10,124		$	9,955		$	89,322
2020	—			9,356			—			21,807			31,163
2021	—			3,342			—			45,963			49,305
2022	—			15,177			—			83,277			98,454
2023	—			12,899			—			19,000			31,899
Thereafter	—			2,268			—			—			2,268
Total future minimum payments	66,506			45,779			10,124			180,002			302,411
Less: amount representing interest	(3,681		)	(10,877		)	(419		)	(46,004		)	(60,981		)
Less: future conversion of accrued interest to principal	—			—			—			—			—
Present value of minimum debt payments	62,825			34,902			9,705			133,998			241,430
Less: current portion of debt principal	(62,825		)	(2,534		)	(9,705		)	(6,842		)	(81,906		)
Noncurrent portion of debt principal	$	—		$	32,368		$	—		$	127,156		$	159,524

5. Mezzanine Equity

Mezzanine equity at September 30, 2019 and December 31, 2018 is comprised of proceeds from shares of common stock sold on May 10, 2016 to the Bill & Melinda Gates Foundation (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 in 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%.

As of September 30, 2019, the Company's remaining research and development obligation under this arrangement was $0.5 million.

6. Stockholders' Deficit

Private Placements

On April 16, 2019, the Company sold and issued to Foris 6,732,369 shares of common stock at a price of $2.87 per share, for aggregate proceeds to the Company of $20.0 million (the Foris Investment), as well as a warrant to purchase up to 5.4 million shares of common stock at an exercise price of $2.87 per share, with an exercise term of two years from issuance, in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act, for aggregate cash proceeds to the Company of $20.0 million. The Company evaluated the warrants for derivative liability treatment and concluded that the instruments met the indexation criteria to be accounted for in equity.

On April 26, 2019, the Company sold and issued (i) 2,832,440 shares of common stock at a price of $5.12 per share, as well as a warrant to purchase up to 4.0 million shares of common stock at an exercise price of $5.12 per share, with an exercise term of two years from issuance, to Foris and (ii) an aggregate of 2,043,781 shares of common stock at a price of $4.02 per share, as well as warrants to purchase up to an aggregate of 1.6 million shares of common stock at an exercise price of $5.02 per share, with an exercise term of two years from issuance, to certain other non-affiliated investors, in each case in private placements pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act, for aggregate cash proceeds to the Company of $15.0 million from Foris and and $8.2 million from non-affiliated investors, for a total of $23.2 million. The Company evaluated the warrants for derivative liability treatment and concluded that the instruments met the indexation criteria to be accounted for in equity.

On April 29, 2019, the Company sold and issued (i) 913,529 shares of common stock at a price of $4.76 per share, as well as warrants to purchase up to an aggregate of 1.2 million shares of common stock at an exercise price of $4.76 per share, with an exercise term of two years from issuance, to affiliates of Vivo Capital LLC (Vivo), an entity affiliated with director Frank Kung

and which owns greater than five percent of our outstanding common stock and has the right to designate one member of the Company’s Board of Directors) and (ii) an aggregate of 0.3 million shares of common stock at a price of $4.02 per share, as well as warrants to purchase up to an aggregate of 0.3 million shares of common stock at an exercise price of $5.02 per share, with an exercise term of two years from issuance, to certain other non-affiliated investors, in each case in private placements pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act, for aggregate cash proceeds to the Company of $4.5 million from Vivo and $1.3 million from non-affiliated investors, for a total of $5.8 million. The Company evaluated the warrants for derivative liability treatment and concluded that the instruments met the indexation criteria to be accounted for in equity.

On May 3, 2019, the Company sold and issued 1.2 million shares of common stock at a price of $4.02 per share, as well as a warrant to purchase up to 1.0 million shares of common stock at an exercise price of $5.02 per share, with an exercise term of two years from issuance, to a non-affiliated investor in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act, for aggregate cash proceeds to the Company of $5 million. The Company evaluated the warrants for derivative liability treatment and concluded that the instruments met the indexation criteria to be accounted for in equity.

The exercise price of the warrants issued in the foregoing private placements is subject to standard adjustments but does not contain any anti-dilution protection, and the warrants only permit “cashless” or “net” exercise after the six-month anniversary of issuance of the applicable warrant, and only to the extent that there is not an effective registration statement covering the resale of the shares of common stock underlying the applicable warrant. In addition, in connection with the foregoing private placements, the Company agreed not to effect any exercise or conversion of any Company security, and the investors agreed not to exercise or convert any portion of any Company security, to the extent that after giving effect to such exercise or conversion, the applicable investor, together with its affiliates, would beneficially own in excess of 19.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise or conversion, and the warrant contained a similar limitation. The Company is seeking stockholder approval for Foris to exceed such limitation in accordance with Nasdaq rules and regulations at its 2019 annual meeting of stockholders.

August 2013 Financing Convertible Note Conversion into Equity

On July 8, 2019, Wolverine exchanged $5.1 million principal and accrued and unpaid interest related to its August 2013 Financing Convertible Note for 1.8 million shares of common stock and a warrant to purchase 1.1 million shares of common stock in a private exchange pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act. The common stock had a fair value of $5.9 million or $3.30 per share and the warrant had a fair value of $1.9 million. The Company concluded the warrant is a freestanding instrument that is legally detachable and separately exercisable from the convertible note and will be classified in equity as the warrant is both indexed to the Company’s own stock and meets the equity classification criteria. As such, the Company will account for the fair value of the warrant within equity and will not subsequently remeasured to fair value at each reporting period, unless new events trigger a requirement for the warrant to be reclassified to an asset or liability. The fair value of the warrant was measured using the Black-Scholes option pricing model, with the following parameters: stock price $3.33, strike price $2.87, volatility 94%, risk-free interest rate 1.88%, and expected dividend yield 0%. See Note 4, “Debt” for additional information regarding the loss on debt extinguishment.

2014 Rule 144A Convertible Notes Exchanges

On May 10, 2019, the Company exchanged $13.5 million aggregate principal amount of the 2014 Rule 144A Convertible Notes held by certain non-affiliated investors, including accrued and unpaid interest thereon, for an aggregate of 3.5 million shares of common stock and warrants to purchase an aggregate of 1.4 million shares of common stock at an exercise price of $5.02 per share, with an exercise term of two years from issuance, in a private exchange pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act.

On May 14, 2019, the Company exchanged $5.0 million aggregate principal amount of the 2014 Rule 144A Convertible Notes held by Foris, including accrued and unpaid interest thereon, for 1.1 million shares of common stock and a warrant to purchase up to 0.4 million shares of common stock at an exercise price of $4.56 per share, with an exercise term of two years from issuance, in a private exchange pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act. On August 28, 2019, the Company and Foris agreed to reduce the exercise price of such warrant from $4.56 per share to $3.90 per share. See “August 2019 Foris Warrant Issuance” below for additional information.

The Company issued 7.1 million shares of common stock with a fair value totaling $30.8 million based on the Company's closing stock price at the date of each exchange upon exchange of the 2014 Rule 144A Convertible Notes described above. The Company also issued warrants to purchase a total of 1.7 million shares of common stock with a fair value of $3.8 million. The Company concluded the warrants are freestanding instruments that are legally detachable and separately exercisable from the convertible notes and will be classified in equity as the warrants are both indexed to the Company’s own stock and meet the equity classification criteria. As such, the Company will account for the fair value of the warrants within equity and will not subsequently remeasured to fair value at each reporting period, unless new events trigger a requirement for the warrants to be reclassified to an asset or liability. The warrants were measured using the Black-Scholes option pricing model with the following parameters: stock price $4.27 - $4.54, strike price $4.56 - $5.02, volatility 96%, risk-free interest rate 2.20% - 2.26%, and expected dividend yield 0%. The warrant had a fair value of $5.9 million that was recorded as a loss of debt extinguishment. See Note 4, "Debt" for information about the accounting treatment for this debt exchange and fair value of the warrant.

The exercise price of the warrants issued in the foregoing exchanges is subject to standard adjustments but does not contain any anti-dilution protection, and the warrants only permit “cashless” or “net” exercise after the six-month anniversary of the exercisability of the applicable warrant, and only to the extent that there is not an effective registration statement covering the resale of the shares of common stock underlying the applicable warrant. In addition, (i) the exercisability of the warrant issued to Foris is subject to stockholder approval in accordance with Nasdaq rules and regulations, which the Company is seeking at its 2019 annual meeting of stockholders, and (ii) each other warrant provides that the Company may not effect any exercise of such warrant to the extent that, after giving effect to such exercise, the applicable holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of common stock outstanding after giving effect to such exercise.

Standstill Agreement

In connection with the September 10, 2019 entry into the Investor Credit Agreements discussed in Note 4, “Debt” and the issuance of the September 2019 Investor Warrants discussed in the "Warrant - September 2019 Investor Warrants" section below, the Company and the Investors entered into a Standstill Agreement (the Investor Standstill Agreement), pursuant to which the Investors agreed that, until the earliest to occur of (i) the Investors no longer beneficially owning any shares underlying the warrants, (ii) the Company entering into a definitive agreement involving the direct or indirect acquisition of all or a majority of the Company’s equity securities or all or substantially all of the Company’s assets or (iii) a person or group, with the prior approval of the Company’s Board of Directors (the Board), commencing a tender offer for all or a majority of the Company's equity securities, neither the Investors nor any of their respective affiliates (together, the Investor Group) will (without the prior written consent of the Board), among other things, (i) acquire any loans, debt securities, equity securities, or assets of the Company or any of its subsidiaries, or rights or options with respect thereto, except that the Investor Group shall be permitted to (a) purchase the shares underlying the warrants pursuant to the exercise of the warrants and (b) acquire beneficial ownership of up to 6.99% of the Company's common stock, or (ii) make any proposal, public announcement, solicitation or offer with respect to, or otherwise solicit, seek or offer to effect, or instigate, encourage, or assist any third party with respect to: (a) any business combination, merger, tender offer, exchange offer, or similar transaction involving the Company or any of its subsidiaries; (b) any restructuring, recapitalization, liquidation, or similar transaction involving the Company or any of its subsidiaries; (c) any acquisition of any of the Company’s loans, debt securities, equity securities or assets, or rights or options with respect thereto; or (d) any proposal to seek representation on the Board or otherwise seek to control or influence the management, Board, or policies of the Company, in each case subject to certain exceptions.

Warrants

In connection with various debt and equity transactions (see Note 4, “Debt” above and Note 5, "Debt" and Note 7, “Stockholders’ Deficit” in Part II, Item 8 of the 2018 Form 10-K/A), the Company has issued warrants exercisable for shares of common stock. The following table summarizes warrants activity for the current year interim periods ended September 30, 2019:



Transaction	Outstanding at December 31, 2018	Exercises		Outstanding at March 31, 2019	Additional Warrants Issued	Exercises		Outstanding at June 30, 2019	Additional Warrants Issued	Expiration		Outstanding at September 30, 2019
July 2015 related party debt exchange	663,228	(471,204	)	192,024	245,558	(245,558	)	192,024	—	—		192,024
July 2015 private placement	81,197	(8,547	)	72,650	—	—		72,650	—	—		72,650
February 2016 related party private placement	171,429	—		171,429	—	—		171,429	—	—		171,429
May 2017 cash and dilution warrants	6,292,798	—		6,292,798	4,795,924	(1,924,673	)	9,164,049	—	—		9,164,049
August 2017 cash and dilution warrants	3,968,116	—		3,968,116	3,028,983	—		6,997,099	—	—		6,997,099
April 2018 warrant exercise agreements	3,616,174	—		3,616,174	—	—		3,616,174	—	(3,616,174	)	—
August 2018 warrant exercise agreements	12,097,164	—		12,097,164	—	—		12,097,164	—	—		12,097,164
April 2019 PIPE warrants	—	—		—	8,084,770	—		8,084,770	—	—		8,084,770
April 2019 Foris warrant	—	—		—	5,424,804	—		5,424,804	—	—		5,424,804
May 2019 6.50% Note Exchange Warrants	—	—		—	1,744,241	—		1,744,241	—	—		1,744,241
May-June 2019 6% Note Exchange Warrants	—	—		—	2,181,818	—		2,181,818	—	—		2,181,818
July 2019 Wolverine warrant	—	—		—	—	—		—	1,080,000	—		1,080,000
August 2019 Foris LSA warrant	—	—		—	—	—		—	1,438,829	—		1,438,829
August 2019 Foris Credit Agreement warrant	—	—		—	—	—		—	4,871,795	—		4,871,795
August 2019 Naxyris LSA warrant	—	—		—	—	—		—	2,000,000	—		2,000,000
September 2019 Investor Credit Agreement warrant	—	—		—	—	—		—	3,205,128	—		3,205,128
Other	1,406	—		1,406	—	—		1,406	—	—		1,406
	26,891,512	(479,751	)	26,411,761	25,506,098	(2,170,231	)	49,747,628	12,595,752	(3,616,174	)	58,727,206

Due to certain down-round adjustments to other equity-related instruments during the three months ended June 30, 2019, approximately 8.1 million shares became available under the May 2017 and August 2017 cash and dilution warrants and the Temasek Funding Warrant (see Note 7, “Stockholders’ Deficit” in Part II, Item 8 of the 2018 Form 10-K/A). Approximately 2.6 million shares were exercised under the May 2017 and August 2017 dilution warrants and the Temasek Funding Warrant during the nine months ended September 30, 2019, which resulted in zero proceeds to the Company. A portion of the warrant exercises occurring during the nine months ended September 30, 2019 was net share settled, and 2.5 million shares were issued upon exercise of warrants during the nine months ended September 30, 2019.

July 2019 Foris Credit Agreement Warrant Modification

In connection with the entry into the July Foris Credit Agreement on July 10, 2019 (see Note 4, “Debt”), the Company and Foris amended a warrant to purchase up to 4.9 million shares of common stock issued to Foris on August 17, 2018 to reduce the exercise price of such warrant from $7.52 per share to $2.87 per share. The warrant modification was measured on a before and after modification basis using a Black-Scholes option pricing model with the following parameters: stock price $3.21, strike price $2.87, volatility 124%, risk-free interest rate 1.82%, term 0.9 years, and expected dividend yield 0%. The warrant had an incremental fair value of $4.0 million, which was accounted for as an increase to additional paid in capital and a debt discount to the $16 million July Foris Notes. See Note 4, “Debt” for additional information regarding the debt discount recorded in connection with the modification of the warrant.

6% Convertible Note Exchange Warrants and Modification

In connection with the May 15, 2019 and June 24, 2019 6% Convertible Note Exchanges (see Note 4, “Debt”), the Company issued warrants to purchase up to 2.0 million and 0.2 million shares of common stock, respectively, at an exercise price of $5.12 per share, with an exercise term of two years from issuance, in private exchanges pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act. The exercise price of the warrants is subject to standard adjustments, but the warrants do not contain anti-dilution protection, and the warrants only permit “cashless” or “net” exercise after the six-month anniversary of issuance, and only to the extent that there is not an effective registration statement covering the resale of the shares of common stock underlying the applicable warrant. In addition, the holders may not exercise the warrants, and the Company may not affect any exercise of the warrants, to the extent that, after giving effect to such exercise, the applicable holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of common stock outstanding after giving effect to such exercise.

The Company concluded the warrants are freestanding instruments that are legally detachable and separately exercisable from the convertible notes and will be classified in equity as the warrants are both indexed to the Company’s own stock and meet the equity classification criteria. As such, the Company will account for the fair value of the warrants within equity and will not subsequently remeasured to fair value at each reporting period, unless new events trigger a requirement for the warrants to be reclassified to an asset or liability. The fair value of the warrants totaled $4.4 million and were measured using the Black-Scholes option pricing model with the following parameters: 94% - 96% volatility, 1.72% - 2.16% risk-free interest rate, $3.55 - $4.39 issuance-date stock price, term 2.0 years, and 0% expected dividend yield. The Company concluded that the $4.4 million fair value

of the equity-classified May 15, 2019 and June 24, 2019 warrants should be recorded as an increase to additional paid in capital and a charge to interest expense in the statement of operations at the date of issuance. See Note 4, “Debt” for additional information regarding the accounting for the fair value of these warrants.

Further, on July 24, 2019, Company exchanged the May 15, 2019 warrant to purchase up to 2.0 million shares of common stock, for a new warrant to purchase up to 2.0 million shares of common stock at an exercise price of $2.87 per share, with an exercise term of two years from May 15, 2019 (the Second Exchange Warrant) in a private exchange pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act. The Second Exchange Warrant has substantially identical terms as the original warrant issued on May 15, 2019, except that the exercise price was reduced from $5.12 to $2.87 per share. The warrant modification was measured on a before and after modification basis using a Black-Scholes option pricing model with the following parameters: strike price $2.87, volatility 93%, risk-free interest rate 1.86%, term 1.8 years, and expected dividend yield 0%; and resulted in $0.9 million of incremental fair value. The Company concluded that the increase in the fair value of the Second Exchange Warrant should be recorded as an increase to additional paid in capital and a charge to interest expense in the statement of operations at the date of modification. See Note 4, “Debt” for additional information regarding the charge to interest expense in connection with the fair value of this warrant.

LSA Warrant Issuance

In connection with the entry into the LSA Amendment and Waiver (see Note 4, “Debt”), on August 14, 2019 the Company issued to Foris a warrant to purchase up to 1.4 million shares of Common Stock at an exercise price of $2.87 per share, with an exercise term of two years from issuance. The exercise price of the warrant is subject to standard adjustments but does not contain any anti-dilution protection, and the warrant only permit “cashless” or “net” exercise after the six-month anniversary of issuance, and only to the extent that there is not an effective registration statement covering the resale of the shares of common stock underlying the warrant. Pursuant to the terms of the warrant, Foris may not exercise the LSA Warrant to the extent that, after giving effect to such exercise, Foris, together with its affiliates, would beneficially own in excess of 19.99% of the number of shares of common stock outstanding after giving effect to such exercise, unless the Company has obtained stockholder approval to exceed such limit in accordance with Nasdaq rules and regulations, which the Company is seeking at its 2019 annual meeting of stockholders. The Company concluded the warrant is a freestanding instrument that is legally detachable and separately exercisable from the LSA Amendment and Waiver and will be classified in equity as the warrant is both indexed to the Company’s own stock and meet the equity classification criteria. As such, the Company will account for the fair value of the warrant within equity and will not subsequently remeasured to fair value at each reporting period, unless new events trigger a requirement for the warrants to be reclassified to an asset or liability. The warrant was measured using the Black-Scholes option pricing model with the following parameters: stock price $3.59, strike price $2.87, volatility 94%, risk-free interest rate 1.58%, term 2.0 years, and expected dividend yield 0%. The warrant had a fair value of $2.9 million which was recorded as an increase to additional paid in capital and as a debt discount to be amortized to interest expense under the effective interest method over the remaining term of the LSA. See Note 4, “Debt” for further information regarding the accounting treatment for the fair value of this warrant.

Naxyris LSA Warrant Issuance

In connection with the entry into the Naxyris Loan Agreement (see Note 4, “Debt”), on August 14, 2019 the Company issued to Naxyris a warrant to purchase up to 2.0 million shares of the Company’s common stock, par value $0.0001 per share at an exercise price of $2.87 per share, with an exercise term of two years from issuance. The exercise price of the warrant is subject to standard adjustments and permits “cashless” or “net” exercise any time after issuance. The Company concluded the warrant is a freestanding instrument that is legally detachable and separately exercisable from the Naxyris Loan Facility and will be classified in equity as the warrant is both indexed to the Company’s own stock and meet the equity classification criteria. As such, the Company will account for the fair value of the warrant within equity and will not subsequently remeasured to fair value at each reporting period, unless new events trigger a requirement for the warrants to be reclassified to an asset or liability. The warrant was measured using the Black-Scholes option pricing model with the following parameters: stock price $3.59, strike price $2.87, volatility 94%, risk-free interest rate 1.58%, term 2.0 years, and expected dividend yield 0%. The warrant had a $4.0 million Black-Scholes fair value and a $3.0 million relative fair value after allocating the Naxyris Loan Facility proceeds to the $0.3 million fair value of an embedded mandatory redemption feature contained in the Naxyris Loan Facility, and allocating on a residual basis, to the relative fair values of the Naxyris Loan Facility and the Naxyris LSA Warrant. See Note 4, “Debt” for further information regarding the initial accounting treatment for the embedded mandatory redemption feature and the accounting treatment for the relative fair value of this warrant, and see Note 3, “Fair Value Measurements” for information regarding the fair value measurement and subsequent accounting for the embedded mandatory redemption feature.

August 2019 Foris Warrant Issuance

In connection with the entry into the August 2019 Foris Credit Agreement (see Note 4, “Debt”), on August 28, 2019 the Company issued to Foris a warrant to purchase up to 4.9 million shares of Common Stock at an exercise price of $3.90 per share, with an exercise term of two years from issuance in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act. The exercise price of the warrant is subject to standard adjustments but does not contain any anti-dilution protection, and the warrant only permits “cashless” or “net” exercise after the six-month anniversary of issuance, and only to the extent that there is not an effective registration statement covering the resale of the shares of common stock underlying the warrant. In addition, Foris may not exercise the warrant to the extent that, after giving effect to such exercise, Foris, together with its affiliates, would beneficially own in excess of 19.99% of the number of shares of common stock outstanding after giving effect to such exercise, unless the Company has obtained stockholder approval to exceed such limit in accordance with Nasdaq rules and regulations, which the Company is seeking at its 2019 annual meeting of stockholders. The Company concluded the warrant is a freestanding instrument that is legally detachable and separately exercisable from the August 2019 Foris Note and will be classified in equity as the warrant is both indexed to the Company’s own stock and meet the equity classification criteria. As such, the Company will account for the fair value of the warrant within equity and will not subsequently remeasured to fair value at each reporting period, unless new events trigger a requirement for the warrants to be reclassified to an asset or liability. The warrant was measured using the Black-Scholes option pricing model with the following parameters: stock price $3.67, strike price $3.90, volatility 94%, risk-free interest rate 1.50%, term 2.0 years, and expected dividend yield 0%. The warrant had a $8.7 million Black-Scholes fair value and a $5.2 million relative fair value after allocating the August 2019 Foris Note proceeds to the $0.5 million fair value of an embedded mandatory redemption feature contained in the August 2019 Foris Note, and allocating on a residual basis, to the relative fair values of the August 2019 Foris Note and the August 2019 Foris Warrant. See Note 4, “Debt” for further information regarding the initial accounting treatment for the embedded mandatory redemption feature and the accounting treatment for the relative fair value of this warrant, and see Note 3, “Fair Value Measurements” for information regarding the fair value measurement and subsequent accounting for the embedded mandatory redemption feature.

Also, on August 28, 2019 in connection with the entry into the August 2019 Foris Credit Agreement, the Company and Foris amended the warrant to purchase up to 3.9 million shares of common stock issued to Foris on April 26, 2019 to reduce the exercise price of such warrant from $5.12 per share to $3.90 per share, and amended the warrant to purchase up to 0.4 million shares of common stock issued to Foris on May 14, 2019 to reduce the exercise price of such warrant from $4.56 per share to $3.90 per share (see above under “Private Placements” for more information regarding these warrants). The warrant modifications were measured on a before and after modification basis using a Black-Scholes option pricing model with the following parameters: stock price $3.67, strike price $3.90, volatility 98% - 100%, risk-free interest rate 1.50%, term 1.7 years, and expected dividend yield 0%, resulting in $1.1 million of incremental fair value, which was accounted for as an increase to additional paid in capital and a debt discount to the $19 million August 2019 Foris Note. See Note 4, “Debt” for additional information regarding the debt discount recorded in connection with the modification of these warrants.

September 2019 Investor Warrants Issuance

In connection with the entry into the Investor Credit Agreements (see Note 4, “Debt”), on September 10, 2019, the Company issued to the Investors warrants (the Investor Warrants) to purchase up to an aggregate of 3.2 million shares of common stock at an exercise price of $3.90 per share, with an exercise term of two years from issuance in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act. The exercise price of the warrants is subject to standard adjustments but does not contain any anti-dilution protection, and the warrants only permit “cashless” or “net” exercise after the six-month anniversary of issuance of the applicable warrant, and only to the extent that there is not an effective registration statement covering the resale of the shares of common stock underlying the applicable warrant. In addition, no Investor may exercise its warrant to the extent that, after giving effect to such exercise, such Investor, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of common stock outstanding after giving effect to such exercise. In addition, the Company agreed to file a registration statement providing for the resale by the Investors of the shares of common stock underlying the warrants with the SEC within 60 days following the date of the issuance of the warrants and to use commercially reasonable efforts to (i) cause such registration statement to become effective within 120 days following the date of the issuance of the warrants and (ii) keep such registration statement effective until the Investors no longer beneficially own any such shares of common stock or such shares of common stock are eligible for resale under Rule 144 under the Securities Act without regard to volume limitations. If the Company fails to file the registration statement by the filing deadline or the registration statement is not declared effective by the effectiveness deadline, or the Company fails to maintain the effectiveness of the registration statement as required by the warrants, then the exercise price of the warrants will be reduced by 10%, and by an additional 5% if such failure continues for longer than 90 days, subject to an exercise price floor of $3.31 per share, provided that upon the cure by the Company of such failure, the exercise price of the warrants will revert to $3.90 per share.

The Company concluded the Investor Warrants are freestanding instruments that are legally detachable and separately exercisable from the Investor Notes and should be classified and accounted for as a liability because the warrants contain certain price and share count adjustment protection and other modification protection provisions that cause the warrants to not meet the

fixed-for-fixed criterion, and thus, are not considered indexed to the Company’s stock. As such, the Company has accounted for the Investor Warrants as a liability and will subsequently remeasure to fair value at each reporting period with changes in fair value recorded in the statement of operations. The warrants were measured using the Black-Scholes option pricing model with the following parameters as of the September 10, 2019 issuance date and September 30, 2019 balance sheet date, respectively: stock price $4.56 and $4.76, strike price $3.90, volatility 94% and 95%, risk-free interest rate 1.67% and 1.63%, term 2.0 years, and expected dividend yield 0%. The warrants had an initial fair value of $7.9 million and was recorded as a derivative liability and debt discount to be amortized to interest expense under the effective interest method over the term of the Investor Notes; at September 30, 2019, the fair value of the warrants was $8.3 million. See Note 4, “Debt” for further information regarding the initial accounting treatment for this liability classified warrant and see Note 3, “Fair Value Measurements” for information regarding the subsequent fair value measurement.

See Note 12, “Subsequent Events” for information regarding warrant issuances subsequent to September 30, 2019.

7. Loss per Share

For the three and nine months ended September 30, 2019 and September 30, 2018, basic loss per share was the same as diluted loss per share, because the inclusion of all potentially dilutive securities outstanding was antidilutive.

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)	2019			2018			2019			2018
Numerator:
Net loss attributable to Amyris, Inc.	$	(59,562	)	$	(74,453	)	$	(163,893	)	$	(181,637	)
Less: deemed dividend to preferred shareholder on issuance and modification of common stock warrants	—			—			(34,964		)	—
Less: deemed dividend related to proceeds discount and issuance costs upon conversion of Series D preferred stock	—			(6,852		)	—			(6,852		)
Less: losses allocated to participating securities	1,655			4,491			6,233			12,824
Net loss attributable to Amyris, Inc. common stockholders	$	(57,907	)	$	(76,814	)	$	(192,624	)	$	(175,665	)
	—			—			—			—
Denominator:
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic and diluted	103,449,612			60,966,071			91,344,150			55,735,571
Loss per share attributable to common stockholders, basic and diluted	$	(0.56	)	$	(1.26	)	$	(2.11	)	$	(3.15	)

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted loss per share of common stock because including them would have been antidilutive:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Period-end stock options to purchase common stock	5,398,834	5,449,701	5,398,834	5,449,701
Convertible promissory notes⁽¹⁾	14,259,214	9,397,134	14,259,214	9,397,134
Period-end common stock warrants	52,612,330	25,986,432	52,612,330	25,986,432
Period-end restricted stock units	4,543,190	5,324,092	4,543,190	5,324,092
Period-end preferred stock	2,955,732	2,955,732	2,955,732	2,955,732
Total potentially dilutive securities excluded from computation of diluted loss per share	79,769,300	49,113,091	79,769,300	49,113,091

______________

⁽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.

8. Commitments and Contingencies

Contingencies

The Company has levied indirect taxes on sugarcane-based biodiesel sales that took place several years ago by Amyris Brasil Ltda. (see Note 13, “Divestiture” in Part II, Item 8 of the 2018 Form 10-K/A) to customers in Brazil, based on advice from external legal counsel. In the absence of definitive rulings from the Brazilian tax authorities on the appropriate indirect tax rate to be applied to such product sales, the actual indirect rate to be applied to such sales could differ from the rate the Company levied.

On April 3, 2019, a securities class action complaint was filed against Amyris and our CEO, John G. Melo, and former CFO (and current Chief Business Officer), 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 alleges securities law violations based on statements and omissions made by the Company during such period. 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., Case No. 4:19-cv-03621 and Carlson v. Doerr, et al., Case No. 4:19-cv-06230) based on similar allegations to those made in the securities class action complaint described above. On October 18, 2019, the first of these derivative cases was dismissed. The remaining derivative complaint names Amyris, Inc. as a nominal defendant and certain of the Company’s current and former officers and directors as additional defendants. The derivative lawsuit seeks 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 complaint also seeks a series of changes to the Company’s corporate governance policies, restitution to the Company from the individual defendants, and an award of attorneys’ fees. This case is in the initial pleadings stage. The Company believes that complaint lacks merit, and intends 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 November 1, 2019 CVI Investments, Inc. (“CVI”) filed a complaint against the Company in the United States District Court for the Southern District of New York. The complaint contained causes of action for breach of contract and declaratory judgment. Both causes of action arise out of the Company’s alleged failure to issue shares under a Senior Convertible Note originally issued by the Company to CVI in December 2018 (the “Note”). Under the Note, as modified in two subsequent amendments (See Note 4, Debt, 6% Convertible Notes Exchanges), the Company would repay in cash or common stock over time with interest and certain other charges. Through the complaint, CVI sought to convert certain amounts owed under the Note into shares of the Company’s common stock. The complaint was never served on the Company. On November 8, 2019 the Company and CVI entered into an agreement by which CVI agreed to immediately dismiss its complaint with prejudice upon the satisfaction by the Company of all amounts due under the Note pursuant to the Second Note Exchange Agreement.

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 are not predictable with reasonable assurance and therefore an estimate of all the reasonably possible losses cannot be determined at this time. Therefore, 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 consolidated financial statements for the relevant reporting period could be materially adversely affected.

Other Matters

Certain conditions may exist as of the date the condensed consolidated 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.

9. 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)	2019								2018
	Renewable Products		Licenses and Royalties		Grants and Collaborations		Total		Renewable Products		Licenses and Royalties		Grants and Collaborations		Total
Europe	$	2,609	$	2,305	$	1,354	$	6,268	$	1,176	$	142	$	3,909	$	5,227
United States	9,927		—		9,114		19,041		4,883		—		625		5,508
Asia	2,398		—		4,789		7,187		3,544		—		—		3,544
South America	2,272		—		28		2,300		36		—		—		36
Other	157		—		—		157		—		—		—		—
	$	17,363	$	2,305	$	15,285	$	34,953	$	9,639	$	142	$	4,534	$	14,315

	Nine Months Ended September 30,
(In thousands)	2019								2018
	Renewable Products		Licenses and Royalties		Grants and Collaborations		Total		Renewable Products		Licenses and Royalties		Grants and Collaborations		Total
Europe	$	7,565	$	43,387	$	6,180	$	57,132	$	6,597	$	7,584	$	11,725	$	25,906
United States	22,806		—		16,015		38,821		9,184		—		6,457		15,641
Asia	8,015		—		5,038		13,053		5,335		—		—		5,335
South America	2,787		—		34		2,821		251		—		—		251
Other	194		—		—		194		100		—		—		100
	$	41,367	$	43,387	$	27,267	$	112,021	$	21,467	$	7,584	$	18,182	$	47,233

Significant Revenue Agreements During the Nine Months Ended September 30, 2019

Cannabinoid Agreement

On May 2, 2019, the Company consummated a research, collaboration and license agreement (the Cannabinoid Agreement) with LAVVAN, Inc., a newly formed investment-backed company (Lavvan), for up to $300 million to develop, manufacture and commercialize cannabinoids, subject to certain closing conditions. Under the agreement, the Company would perform research and development activities and Lavvan would be responsible for the manufacturing and commercialization of the cannabinoids developed under the agreement. The Cannabinoid Agreement is being principally funded on a milestone basis, with the Company also entitled to receive certain supplementary research and development funding from Lavvan. The Company could receive aggregate funding of up to $300 million over the term of the Cannabinoid Agreement if all of the milestones are achieved. Additionally, the Cannabinoid Agreement provides for profit share to the Company on Lavvan's gross profit margin once products are commercialized; these payments will be due for the next 20 years. On May 2, 2019, the parties consummated the transactions contemplated by the Cannabinoid Agreement, including the formation of a special purpose entity to hold certain intellectual property created during the collaboration (the Cannabinoid Collaboration IP), the licensing of certain Company intellectual property to Lavvan, the licensing of the Cannabinoid Collaboration IP to the Company and Lavvan, and the granting by the Company to Lavvan of a lien on the Company background intellectual property being licensed to Lavvan under the Cannabinoid Agreement, which lien would be subordinated to the lien on such intellectual property under the LSA (see Note 5, “Debt” in Part II, Item 8 of the 2018 Form 10-K/A).

The Cannabinoid Agreement is accounted for as a revenue contract under ASC 606, with the total transaction price estimated and updated on a quarterly basis, subject to the variable consideration constraint guidance in ASC 606 using the most likely outcome method to estimate the variable consideration associated with the identified performance obligations, which the Company concluded to be research and development services. The Company estimated the total unconstrained transaction price to be $135 million, based on a high probability of achieving certain underlying milestones. As of September 30, 2019, the Company has constrained $165 million of variable consideration related to milestones that have not met the criteria under ASC 606 necessary to be included in the transaction price. The Company determined the performance obligation is delivered over time and that revenue recognition is based on an input measure of progress of hours incurred compared to total estimated hours to be incurred (i.e., proportional performance). Estimates of variable consideration are updated quarterly, with cumulative adjustments to revenue recorded as necessary. The Company recognized $8.2 million and $11.7 million of collaboration revenue under the Cannabinoid Agreement for the three and nine months ended September 30, 2019 based on proportional performance delivered to date. At September 30, 2019, $1.7 million of the $11.7 million of collaboration revenues recognized in the nine months ended September 30, 2019 was recorded as a contract asset. See the "Contract Assets and Liabilities" section below for further information regarding this contract asset.

DSM Agreements

On April 16, 2019, the Company assigned to DSM, and DSM assumed, all of the Company’s rights and obligations under the December 2017 DSM Value Sharing Agreement, as amended, for aggregate consideration to the Company of $57.0 million, which included $7.4 million of the third and final annual royalty payment due under the original agreement received on March 29, 2019 (see Note 10, "Revenue Recognition" in Part II, Item 8 of the 2018 Form 10-K/A). On April 16, 2019, the Company received net cash of $21.7 million, with the remaining $27.9 million used by the Company to offset past due trade payables (including interest) under the 2017 Supply Agreement, the obligation under the November 2018 Securities Purchase Agreement, and manufacturing capacity fees under the provisions of Amendment No. 1 to the 2017 Supply Agreement (see Note 11, "Related Party Transactions" in Part II, Item 8 of the 2018 Form 10-K/A). The original Value Sharing Agreement was accounted for as a single performance obligation in connection with a license with fixed and determinable consideration and variable consideration that was accounted for pursuant to the sales-based royalty scope exception. The April 16, 2019 assignment of the Value Sharing Agreement was accounted for as a contract modification under ASC 606, resulting in additional fixed and determinable consideration of $37.1 million and variable consideration of $12.5 million in the form of a stand ready refund obligation. The effect of the contract modification on the transaction price, and on the Company’s measure of progress toward complete satisfaction of the performance obligation, was recognized as an adjustment to revenue at the date of the contract modification on a cumulative catch-up basis. As a result, the Company recognized $37.1 million of licenses and royalties revenue in the nine months ended September 30, 2019, due to fully satisfying the performance obligation. The $12.5 million of prepaid variable consideration is recorded as a refund liability in other noncurrent liabilities and represents a stand ready obligation to refund some or all of the $12.5 million prepaid consideration if certain criteria outlined in the assignment agreement is not met before December 2021. The Company will update its assessment of amounts it expects to be entitled to keep at the end of each reporting period, by reducing the refund liability and recording additional license and royalty revenue as the criteria is met. The Company also recognized $3.6 million of previously deferred revenue under the December 2017 DSM Value Sharing Agreement, as the remaining underlying performance obligation was fully satisfied through the April 16, 2019 assignment of the Value Sharing Agreement to DSM.

In addition, on April 16, 2019 the Company and DSM entered into amendments to the 2017 Supply Agreement and the 2017 Performance Agreement, as well as the Quota Purchase Agreement relating to the December 2017 sale of Amyris Brasil to DSM (see Note 10, “Revenue Recognition” and Note 13, “Divestiture” in Part II, Item 8 of the 2018 Form 10-K/A), pursuant to which (i) DSM agreed to reduce certain manufacturing costs and fees paid by the Company related to the production of farnesene under the Supply Agreement through 2021, as well as remove the priority of certain customers over the Company with respect to production capacity at the Brotas, Brazil facility, (ii) the Company agreed to provide DSM rights to conduct certain process and downstream recovery improvements under the Performance Agreement at facilities other than the Brotas, Brazil facility in exchange for DSM providing the Company with a license to such improvements and (iii) the Company released DSM from its obligation to provide manufacturing and support services under the Quota Purchase Agreement in connection with the Company’s planned new manufacturing facility, which is no longer to be located at the Brotas, Brazil location.

In connection with the significant revenue agreements discussed above and others previously disclosed (see Note 10, “Revenue Recognition” in Part II, Item 8 of the 2018 Form 10-K/A), the Company recognized the following revenues for the three and nine months ended September 30, 2019 and 2018:



	Three Months Ended September 30,
(In thousands)	2019								2018
	Renewable Products		Licenses and Royalties		Grants and Collaborations		Total		Renewable Products		Licenses and Royalties			Grants and Collaborations		Total
DSM - related party	$	—	$	—	$	844	$	844	$	—	$	(39	)	$	1,197	$	1,158
Givaudan	3,312		—		—		3,312		525		—			1,500		2,025
Firmenich	4,556		2,305		400		7,261		903		181			1,212		2,296
Lavvan	—		—		8,238		8,238		—		—			—		—
Subtotal revenue from significant revenue agreements	7,868		2,305		9,482		19,655		1,428		142			3,909		5,479
Revenue from all other customers	9,495		—		5,803		15,298		8,211		—			625		8,836
Total revenue from all customers	$	17,363	$	2,305	$	15,285	$	34,953	$	9,639	$	142		$	4,534	$	14,315

	Nine Months Ended September 30,
(In thousands)	2019								2018
	Renewable Products		Licenses and Royalties		Grants and Collaborations		Total		Renewable Products		Licenses and Royalties			Grants and Collaborations		Total
DSM - related party	$	2	$	40,302	$	3,886	$	44,190	$	—	$	7,366		$	3,667	$	11,033
Givaudan	6,127		—		—		6,127		3,710		—			4,358		8,068
Firmenich	6,439		3,085		1,413		10,937		1,110		218			3,698		5,026
Lavvan	—		—		11,742		11,742		—		—			—		—
Subtotal revenue from significant revenue agreements	12,568		43,387		17,041		72,996		4,820		7,584			11,723		24,127
Revenue from all other customers	28,799		—		10,226		39,025		16,647		—			6,459		23,106
Total revenue from all customers	$	41,367	$	43,387	$	27,267	$	112,021	$	21,467	$	7,584		$	18,182	$	47,233

Contract Assets and Liabilities

When a contract results in revenue being recognized in excess of the amount the Company has invoiced or has the right to invoice to the customer, a contract asset is recognized. Contract assets are transferred to accounts receivable, net when the rights to the consideration become unconditional.

Contract liabilities consist of payments received from customers, or such consideration that is contractually due, in advance of providing the product or performing services such that control has not passed to the customer.

Trade receivables related to revenue from contracts with customers are included in accounts receivable on the condensed consolidated balance sheets, net of the allowance for doubtful accounts. Trade accounts receivable are recorded at the point of renewable product sale or in accordance with the contractual payment terms for licenses and royalties, and grants and collaborative research and development services for the amount payable by the customer to the Company for sale of goods or the performance of services.

Contract Balances

The following table provides information about accounts receivable, contract liabilities and refund liability from contracts with customers:



(In thousands)	September 30, 2019		December 31, 2018
Accounts receivable, net	$	17,072	$	16,003
Accounts receivable - related party, net	$	3,692	$	1,349
Contract assets	$	2,567	$	—
Accounts receivable, unbilled - related party	$	—	$	8,021
Accounts receivable, unbilled, noncurrent - related party	$	1,203	$	1,203
Contract liabilities, current	$	4,737	$	8,236
Contract liabilities, noncurrent⁽¹⁾	$	1,449	$	1,587
Refund liability - related party	$	12,500	$	—

(1)As of September 30, 2019 and December 31, 2018, contract liabilities, noncurrent is presented in Other Noncurrent Liabilities in the condensed consolidated balance sheets.

Accounts receivable, unbilled - related party decreased from December 31, 2018 to September 30, 2019, primarily as the result of issuing an $8.0 million invoice and receiving early payment from DSM in April 2019 for the final installment of the December 2017 minimum guaranteed value share payments originally due on December 31, 2019. The Company received a $7.4 million cash payment in April 2019 and the $0.6 million difference between the original amount due and the $7.4 million cash payment was recorded as a $0.4 million reduction of royalty revenue during the quarter and a $0.2 million charge to interest expense. The contract asset balance at September 30, 2019 consists of $1.7 million related to the Lavvan collaboration agreement and $0.8 million related to the Yifan collaboration agreements (see Note 10, "Revenue Recognition" in Part II, Item 8 of the 2018 Form 10-K/A for information regarding the Yifan collaboration agreements), for which the Company does not yet have the contractual right to bill.

Remaining Performance Obligations

The following table provides information regarding the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) based on the Company's existing agreements with customers as of September 30, 2019.



(In thousands)	As of September 30, 2019
Remaining 2019	$	12,523
2020	77,029
2021	48,354
2022 and thereafter	333
Total from all customers	$	138,239

In accordance with the disclosure provisions of ASC 606, the table above excludes estimated future revenues for performance obligations that are part of a contract that has an original expected duration of one year or less or a performance obligation with variable consideration that is recognized using the sales-based royalty exception for licenses of intellectual property. Additionally, approximately $180.9 million of estimated future revenue is excluded from the table above, as that amount represents constrained variable consideration.

10. Related Party Transactions

Related Party Debt

See Note 4, "Debt" above for related party debt as of September 30, 2019 and December 31, 2018.

Related Party Accounts Receivable and Unbilled Receivables

Related party accounts receivable and unbilled receivables as of September 30, 2019 and December 31, 2018 were as follows:



(In thousands)	September 30, 2019		December 31, 2018
Related party accounts receivable:
DSM	$	3,692	$	1,071
Novvi	—		188
Total	—		90
	$	3,692	$	1,349
Related party accounts receivable, unbilled, current:
DSM	$	—	$	8,021
Related party accounts receivable, unbilled, noncurrent:
DSM	$	1,203	$	1,203

11. Stock-based Compensation

The Company’s stock option activity and related information for the nine months ended September 30, 2019 was as follows:



	Quantity of Stock Options		Weighted- average Exercise Price		Weighted-average Remaining Contractual Life, in Years	Aggregate Intrinsic Value, in Thousands
Outstanding - December 31, 2018	5,390,270		$	11.55	8.5	$	29
Granted	270,633		$	3.67
Exercised	(3,612	)	$	5.48
Forfeited or expired	(251,557	)	$	18.00
Outstanding - September 30, 2019	5,405,734		$	10.57	8.1	$	705
Vested or expected to vest after September 30, 2019	4,781,072		$	11.28	8.0	$	682
Exercisable at September 30, 2019	1,247,627		$	28.74	6.3	$	416

The Company’s restricted stock units (RSUs) activity and related information for the nine months ended September 30, 2019 was as follows:



	Quantity of Restricted Stock Units		Weighted-average Grant-date Fair Value		Weighted-average Remaining Contractual Life, in Years
Outstanding - December 31, 2018	5,294,803		$	5.50	1.7
Awarded	1,148,866		$	3.73
RSUs released	(1,389,466	)	$	4.98
RSUs forfeited	(511,013	)	$	4.91
Outstanding - September 30, 2019	4,543,190		$	5.07	1.5
Vested or expected to vest after September 30, 2019	4,196,792		$	5.08	1.4

Stock-based compensation expense related to employee and non-employee options, RSUs and ESPP during the three and nine months ended September 30, 2019 and 2018 was allocated to research and development expense and sales, general and administrative expense as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Research and development	$	663	$	495	$	2,002	$	1,191
Sales, general and administrative	2,571		2,442		8,058		4,924
Total stock-based compensation expense	$	3,234	$	2,937	$	10,060	$	6,115

As of September 30, 2019, there was unrecognized compensation expense of $24.9 million related to stock options and RSUs. The Company expects to recognize this expense over a weighted-average period of 2.8 years.

Evergreen Shares for 2010 Equity Incentive Plan and 2010 Employee Stock Purchase Plan

In February 2019, the Board approved increases to the number of shares available for issuance under the Company's 2010 Equity Incentive Plan (the Equity Plan) and 2010 Employee Stock Purchase Plan (the Purchase Plan). These shares in connection with the Equity Plan represented an automatic annual increase in the number of shares available for grant and issuance under the Equity Plan of 3,828,241 shares. This increase is equal to approximately 5.0% of the 76,564,829 total outstanding shares of the Company’s common stock as of December 31, 2018. This automatic increase was effective as of January 1, 2019. These shares in connection with the Purchase Plan represented an automatic annual increase in the number of shares reserved for issuance under the Purchase Plan of 383,824 shares. This increase is equal to approximately 0.5% of the 76,564,829 total outstanding shares of the Company’s common stock as of December 31, 2018. This automatic increase was effective as of January 1, 2019.

12. Subsequent Events

LSA Amendments, Additional Loan and Warrant Issuance

On October 10, 2019, the Company, the Subsidiary Guarantors and Foris entered into Amendment No. 6 to the LSA (the October 2019 LSA Amendment), pursuant to which the maximum loan commitment of Foris under the LSA (see Note 4, “Debt”) was increased by $10.0 million. In connection with the entry into the October 2019 LSA Amendment, on October 11, 2019, the Company borrowed an additional $10.0 million from Foris under the LSA (the October 2019 LSA Loan), which loan is subject to the terms and provisions of the LSA, including the lien on substantially all of the assets of the Company and the Subsidiary Guarantors. After giving effect to the LSA Loan, there is $81.0 million aggregate principal amount of loans outstanding under the LSA.

Also, in connection with the entry into the October 2019 LSA Amendment, on October 11, 2019 the Company issued to Foris a warrant to purchase up to 2.0 million shares of common stock, at an exercise price of $2.87 per share, with an exercise term of two years from issuance (the October 2019 Foris Warrant). Pursuant to the terms of the October 2019 Foris Warrant, Foris may not exercise the October 2019 Foris Warrant to the extent that, after giving effect to such exercise, Foris, together with its affiliates, would beneficially own in excess of 19.99% of the number of shares of Common Stock outstanding after giving effect to such exercise, unless the Company has obtained stockholder approval to exceed such limit, which the Company is seeking at its 2019 annual meeting of stockholders. The October 2019 Foris Warrant was issued in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act.

On October 28, 2019, the Company, the Subsidiary Guarantors and Foris entered into an amended and restated LSA (as amended and restated, the A&R LSA), pursuant to which, among other things, certain covenants and related definitions were amended to permit the incurrence of the indebtedness under the October 2019 Naxyris Loan (as defined below), subject to the terms of an amended and restated intercreditor agreement, dated October 28, 2019, between Foris and Naxyris governing the respective rights of the parties with respect to, among other things, the assets securing the A&R Naxyris LSA (as defined below) and the A&R LSA, and additional covenants were added relating to, among other things, maintenance of intellectual property, compliance with laws, delivery of reports and repayment of indebtedness.

Series B Preferred Stock Beneficial Ownership Limitation

On October 24, 2019, the Company filed a certificate of amendment (the Certificate of Amendment) to the Certificate of Designation (the Certificate of Designation) relating to the Company’s Series B 17.38% Convertible Preferred Stock, par value $0.0001 per share (the Series B Preferred Stock), with the Secretary of State of Delaware. The Company had originally filed the Certificate of Designation on May 8, 2017, pursuant to which the conversion of the Series B Preferred Stock was subject to a beneficial ownership limitation of 4.99%, or such other percentage as determined by the holder, not to exceed 9.99% of the number of shares of the Company’s common stock outstanding after giving effect to such conversion (the Beneficial Ownership Limitation). In addition, pursuant to the Certificate of Designation, each share of Series B Preferred Stock automatically converted on October 9, 2017, subject to the Beneficial Ownership Limitation.

Pursuant to the Certificate of Amendment, the Beneficial Ownership Limitation was eliminated, permitting the conversion of any outstanding shares of Series B Preferred Stock, the conversion of which was previously prevented by the Beneficial Ownership Limitation. As such, on October 24, 2019, the remaining 6,376.28 shares of Series B Preferred Stock, which were all held by Foris, automatically converted into 1.0 million shares of the Company’s common stock, including the related Make-Whole shares (see Note 7, “Stockholders’ Deficit” in Part II, Item 8 of the 2018 Form 10-K/A).

Naxyris LSA Amendment

On October 28, 2019, the Company, the Subsidiary Guarantors and Naxyris amended and restated the Naxyris Loan Agreement (as amended and restated, the A&R Naxyris LSA), pursuant to which the maximum loan commitment of Naxyris under the Naxyris Loan Facility (see Note 4, “Debt”) was increased by $10.4 million. In connection with the entry into the A&R Naxyris LSA, on October 29, 2019, the Company borrowed an additional $10.4 million from Naxyris under the A&R Naxyris LSA (the October 2019 Naxyris Loan), which loan is subject to the terms and provisions of the A&R Naxyris LSA, including the lien on substantially all of the assets of the Company and the Subsidiary Guarantors. In connection with the funding of the October 2019 Naxyris Loan, the Company paid Naxyris an upfront fee of $0.4 million. After giving effect to the October 2019 Naxyris LSA Loan, there is $20.9 million aggregate principal amount of loans outstanding under the A&R Naxyris LSA.

Also, in connection with the entry into the A&R Naxyris LSA, on October 28, 2019 the Company issued to Naxyris a warrant to purchase up to 2.0 million shares of common stock, at an exercise price of $3.87 per share, with an exercise term of two years from issuance (the Naxyris October 2019 Warrant). The Naxyris October 2019 Warrant was issued in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act, and Regulation D promulgated under the Securities Act.

Second Exchange Note Exchange Agreement

On November 8, 2019, the Company entered into a Securities Exchange Agreement with certain private investors, pursuant to which, upon the purchase by the investors of the Second Exchange Note (see Note 4, “Debt”) from its current holder, the Second Exchange Note would be exchanged for new senior convertible notes with an aggregate principal amount of $66.0 million (the “New Notes”) that (i) bear interest at 5% per annum, which interest is payable monthly in arrears beginning February 1, 2020, in either cash or, at the Company’s option, subject to the satisfaction of certain equity conditions, in shares of common stock at a discount to the then-current market price, subject to a price floor (the “Installment Conversion Price”), (ii) are convertible into shares of the Company’s common stock at an initial conversion price of $5.00 per share, and (iii) mature on September 30, 2022, in a private exchange pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act. The New Notes will be payable in monthly installments beginning February 1, 2020 in either cash or, at the Company’s option, subject to the satisfaction of certain equity conditions, in shares of common stock at the Installment Conversion Price. Each installment payment will reduce the principal amount under the New Notes by 90% of the amount of such installment payment.

The New Notes contain customary terms and covenants, including (i) a restriction on the Company’s ability to incur additional indebtedness, (ii) covenants related to minimum revenue, liquidity, financing activity and the conversion or exchange of existing indebtedness into equity, (iii) certain events of default, after which the holders may (A) require the Company to redeem all or any portion of their New Notes in cash at a price equal to 115% of the amount being redeemed and (B) convert all or any portion of their New Notes at a discount to the Installment Conversion Price and (iv) certain other events, after which the holders may convert all or any portion of their New Notes at a discount to the Installment Conversion Price.

The Company may at its option redeem the New Notes, in full, at a price equal to 115% of the greater of (A) the principal amount of the New Notes being redeemed and (B) the intrinsic value of the shares of Common Stock underlying the principal amount of the New Notes being redeemed. In addition, the Company is required to (i) redeem the New Notes in an aggregate amount of $10.0 million following the receipt by the Company of at least $75.0 million of aggregate net cash proceeds from one or more financing transactions, at a price equal to 110% of the amount being redeemed and (ii) redeem the New Notes in an aggregate amount of $10.0 million on December 31, 2019, at a price equal to 110% of the amount being redeemed, in each case unless such redemption is deferred by the holder.

The issuance of shares upon conversion of the New Notes or otherwise is limited by (i) a 4.99% beneficial ownership limitation, and (ii) the limitation imposed by Nasdaq Listing Standard Rule 5635(d), unless the Company’s obtains stockholder approval to exceed such limit. Under the New Notes, the Company will agree to use commercially reasonable efforts to obtain such approval on or prior to May 31, 2020.

The Securities Exchange Agreement prohibits the Company, subject to certain exceptions, from (i) disposing of any common stock or securities convertible into or exchangeable for shares of common stock from the date of the Securities Exchange Agreement through 90 days after the closing of the exchange and (ii) effecting or entering into an agreement to effect a variable rate transaction while the New Notes are outstanding.

The closing of the issuance and sale of the New Notes is expected to occur on or about November 12, 2019, subject to customary closing conditions, including the purchase by the investors of the Second Exchange Note.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. These discussions contain forward-looking statements reflecting our current expectations that involve risks and uncertainties which are subject to safe harbors under the Securities Act of 1933, as amended (the Securities Act), and the Securities Exchange Act of 1934 (the Exchange Act). These forward-looking statements include, but are not limited to, statements concerning our strategy of achieving a significant reduction in net cash outflows in 2019 and 2020, aspects of our future operations, our future financial position, including obtaining project financing for a new manufacturing facility, expectations for our future revenues, margins and projected costs, expectations regarding demand and acceptance for our technologies and products, introductions of new products, growth opportunities and trends in the market in which we operate, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q, in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the 2018 Form 10-K) and in our other filings with the Securities and Exchange Commission. We do not assume any obligation to update any forward-looking statements.

Overview and Recent Developments

Amyris, Inc. (the Company, Amyris, we, us or our) is a leading industrial biotechnology company that applies its technology platform to engineer, manufacture and sell high performance, natural, sustainably-sourced products into the Health & Wellness, Clean Beauty, and Flavor & Fragrance markets. Our proven technology platform enables us to rapidly engineer microbes and use them as catalysts to metabolize renewable, plant-sourced sugars into large volume, high-value ingredients. Our biotechnology platform and industrial fermentation process replace existing complex and expensive manufacturing processes. We have successfully used our technology to develop and produce nine distinct molecules at commercial volumes, leading to more than 15 commercial ingredients used by thousands of leading global brands.

We were founded in 2003 in the San Francisco Bay area by a group of scientists from the University of California, Berkeley. Our first major milestone came in 2005 when, through a grant from the Bill & Melinda Gates Foundation, we developed technology capable of creating microbial strains that produce artemisinic acid, which is a precursor of artemisinin, an effective anti-malarial drug. In 2008, we granted royalty-free licenses to allow Sanofi-Aventis to produce artemisinic acid using our technology. Building on our success with artemisinic acid, in 2007 we began applying our technology platform to develop, manufacture and sell sustainable alternatives to a broad range of markets.

We focused our initial development efforts primarily on the production of Biofene®, our brand of renewable farnesene, a long-chain, branched hydrocarbon molecule that we manufacture through fermentation using engineered microbes. Our farnesene derivatives are sold in thousands of products as nutraceuticals, skincare products, fragrances, solvents, polymers, and lubricant ingredients. The commercialization of farnesene pushed us to create a more cost efficient, faster and accurate development process in the lab and drive manufacturing costs down. This investment has enabled our technology platform to rapidly develop microbial strains and commercialize target molecules. In 2014, we began manufacturing additional molecules for the Flavor & Fragrance industry; in 2015 we began investing to expand our capabilities to other small molecule chemical classes beyond terpenes via our collaboration with the Defense Advanced Research Projects Agency (DARPA); and in 2016 we expanded into proteins.

We have invested over $600 million in infrastructure and technology to create microbes that produce molecules from sugar or other feedstocks at commercial scale. This platform has been used to design, build, optimize and upscale strains producing nine distinct molecules at commercial volumes, leading to more than 15 commercial ingredients used by thousands of leading global brands. Our time to market for molecules has decreased from seven years to less than a year for our most recent molecule, mainly due to our ability to leverage the technology platform we have built.

Our technology platform has been in active use since 2007 and has been integrated with our commercial production since 2011, creating an organism development process that we believe makes us an industry leader in the successful scale-up and commercialization of biotech-produced ingredients. The key performance characteristics of our platform that we believe differentiate us include our proprietary computational tools, strain construction tools, screening and analytics tools, and advanced lab automation and data integration. Having this fully integrated with our large-scale manufacturing process and capability enables us to always engineer with the end specification and requirements guiding our technology. Our state-of-the-art infrastructure

includes industry-leading strain engineering and lab automation located in Emeryville, California, pilot scale production facilities in Emeryville, California and Campinas, Brazil, a demonstration-scale facility in Campinas, Brazil and a commercial-scale production facility in Leland, North Carolina, which is owned and operated by our Aprinnova joint venture to convert our Biofene into squalane and other final products.

We are able to use a wide variety of feedstocks for production, but have focused on accessing Brazilian sugarcane for our large-scale production because of its renewability, low cost and relative price stability. We have also successfully used other feedstocks such as sugar beets, corn dextrose, sweet sorghum and cellulosic sugars at various manufacturing facilities.

Several years ago, we made the strategic decision to transition our business model from collaborating and commercializing molecules in low margin commodity markets to higher margin specialty markets. We began the transition by first commercializing and supplying farnesene-derived squalane as a cosmetic ingredient sold to formulators and distributors. We also entered into collaboration and supply agreements for the development and commercialization of molecules within the Flavor & Fragrance and Clean Beauty markets where we utilize our strain generation technology to develop molecules that meet the customer’s rigorous specifications.

During this transition, we solidified the business model of partnering with our customers to create sustainable, high performing, low-cost molecules that replace an ingredient in their supply chain, commercially scale and manufacture those molecules, and share in the profits earned by our customers once our customers sell their products into these specialty markets. These three steps constitute our collaboration revenues, renewable product revenues, and royalty revenues.

During 2017, we completed several development agreements with DSM and others for new products such as Vitamin A, a human nutrition molecule and others, and in late 2018 we began commercial production and shipment of a new sweetener product developed from the Reb M molecule, which is a superior sweetener and sugar replacement. Our goal is to bring two to three new molecules per year to commercial production in the future.

In 2017, we decided to monetize the use of one of our lower margin molecules, farnesene, in the Vitamin E and Lubricants specialty markets while retaining any associated royalties, and licensed farnesene to Koninklijke DSM N.V. (DSM) for use in these fields. Also in 2017, we sold to DSM our subsidiary Amyris Brasil Ltda. (Amyris Brasil), which operated our purpose-built, large-scale manufacturing facility located in Brotas, Brazil.

The Brotas facility was built to batch manufacture one commodity product at a time (originally for high-volume production of biofuels, a business Amyris has exited), which is an inefficient manufacturing process that is not suited for the high margin specialty markets in which we operate today. We currently manufacture nine specialty products and expect to increase the number of specialty products we manufacture by two to three products a year. The inefficiencies we experienced included having to idle the facility for two weeks at a time to prepare for the next product batch manufacture. These inefficiencies caused our cost of goods sold to be significantly higher. As part of the December 2017 sale of Brotas, we contracted with DSM for the use of Brotas to manufacture products for us to fulfill our product supply commitments to our customers until our new production facility becomes operational.

In September 2019, we obtained the necessary permits and broke ground on our Specialty Ingredients Plant (SIP). We expect the facility to be fully operational in Q1 of 2021. This facility will allow us to manufacture five products at once and to produce both our specialty ingredients portfolio and our new sweetener product. During construction, we are manufacturing our products at four contract manufacturing sites in Brazil, the U.S. and Spain.

In addition, in May 2019 we entered into an agreement with Raizen Energia S.A. (Raizen) for the formation and operation of a joint venture relating to the production, sale and commercialization of alternative sweetener products whereby the parties would construct a manufacturing facility exclusively for sweetener molecules on land owned by Raizen and leased to the joint venture; see Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details.

Also, in May 2019, we consummated a research, collaboration and license agreement with LAVVAN, Inc., a newly formed investment-backed company (Lavvan), for up to $300 million to develop, manufacture and commercialize cannabinoids. Under the Cannabinoid Agreement, we would perform research and development activities and Lavvan would be responsible for the commercialization of the cannabinoids developed under the agreement. The Cannabinoid Agreement is being principally funded on a milestone basis, with Amyris also entitled to receive certain supplementary research and development funding from Lavvan. We could receive aggregate funding of up to $300 million over the term of the Cannabinoid Agreement if all of the milestones are achieved. Additionally, the Cannabinoid Agreement provides for profit share to Amyris on Lavvan's gross profit margin once products are commercialized; these payments will be due for the next 20 years.

We believe that industrial synthetic biology represents a third industrial revolution, bringing together biology and engineering to generate new, more sustainable materials to meet the growing global demand for bio-based replacements for petroleum-based and traditional animal- or plant-derived ingredients. We continue to build demand for our current portfolio of products through an extensive sales network provided by our collaboration partners that represent leading companies for our target market sectors. We also have a small group of direct sales and distributors who support our Clean Beauty market. Via our partnership model, our partners invest in the development of each molecule to bring it from the lab to commercial scale and use their extensive sales force to sell our ingredients and formulations to their customers as part of their core business. We capture long-term revenue both through the production and sale of the molecule to our partners and through royalty revenues from our partners' product sales to their customers.

Sales and Revenue

We recognize revenue from product sales, license fees and royalties, and grants and collaborations.

We have research and development collaboration arrangements for which we receive payments from our collaborators, which include DARPA, DSM, Firmenich SA (Firmenich), Givaudan International SA (Givaudan), and others. Some of our collaboration arrangements provide for advance payments to us in consideration for grants of exclusivity or research efforts that we will perform. In 2017 we signed collaboration agreements for an infant nutrition ingredient, and in 2018 we signed a collaboration agreement for two vitamins that we expect will contribute to our collaboration revenue and ultimately product sales. Our collaboration agreements, which may require us to achieve milestones prior to receiving payments, are expected to contribute revenues from product sales and royalties if and when they are commercialized. See Note 10, “Revenue Recognition” in Part II, Item 8 of the 2018 Form 10-K/A for additional information.

All of our non-government partnerships include commercial terms for the supply of molecules we successfully upscale and produce at commercial volumes. The first molecule to generate revenue for us outside of farnesene was a fragrance molecule launched in 2015. Since the launch, the product has continued to grow in sales year over year. In 2016, we launched our second fragrance molecule and in 2017, we launched our third fragrance molecule as well as our first cosmetic active ingredient. Our partners for these molecules are indicating continued strong growth due to their cost advantaged position, high purity and sustainable production method. We are continuing to identify new opportunities to apply our technology and deliver sustainable access to key molecules. As a result, we have a pipeline that we believe can deliver two to three new molecules each year over the coming years with a flavor ingredient, a cosmetic active ingredient and a fragrance molecule. In 2019, we are commercially producing and shipping our Reb M product that we believe is a superior sweetener and sugar replacement for food and beverages.

As part of the DSM acquisition in 2017 of our farnesene for Vitamin E business, we would receive a royalty payment on certain sales by Nenter & Co., Inc. of Vitamin E utilizing farnesene produced and sold by DSM from our technology. In addition, DSM would be obligated to pay us minimum royalties totaling $18.1 million for 2019 and 2020, of which we received $9.3 million as a discounted accelerated payment (from an original payment amount of $10.0 million) during 2018. In April 2019, we assigned the right to receive such royalty payments to DSM for total consideration of $57 million, which included $7.4 million for early payment of the third and final annual royalty payment due under the original Value Sharing Agreement. See Note 9, "Revenue Recognition", in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

We have several other collaboration molecules in our development pipeline with partners including DSM, Givaudan and Firmenich that we expect will contribute revenues from product sales and royalties if and when they are commercialized.

Critical Accounting Policies and Estimates

Management's discussion and analysis of results of operations and financial condition are based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP). We believe that the critical accounting policies described in this section are those that significantly impact our financial condition and results of operations and require the most difficult, subjective or complex judgements, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. Because of this uncertainty, actual results may vary from these estimates.

Our most critical accounting estimates include:


•	Recognition of revenue including arrangements with multiple performance obligations;


•	Valuation and allocation of fair value to various elements of complex related party transactions;


•	The identification and valuation of freestanding and embedded derivatives, which impacts gains or losses on such derivatives, the carrying value of debt, preferred stock, interest expense and deemed dividends; and


•	The valuation of debt for which we have elected fair value accounting.

For more information about our critical accounting estimates and policies, see Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" in Part I, Item 1 of this Quarterly Report on Form 10-Q and in Part II, Item 8 of the 2018 Form 10-K/A.

Results of Operations

Revenue



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Revenue
Renewable products	$	17,363	$	9,639	$	41,367	$	21,467
Licenses and royalties	2,305		142		43,387		7,584
Grants and collaborations	15,285		4,534		27,267		18,182
Total revenue	$	34,953	$	14,315	$	112,021	$	47,233

Three Months Ended September 30, 2019 and 2018

Total revenue increased by 144% to $35.0 million for the three months ended September 30, 2019 compared to the same period in 2018. The increase was comprised of a $10.8 million increase in grants and collaborations revenue, a $7.7 million increase in renewable products revenue, and a $2.2 million increase in licenses and royalties revenue.

Renewable products revenue increased by 80% to $17.4 million for the three months ended September 30, 2019 compared to the same period in 2018, with increases among all renewable products, led by RebM, Squalene and Biossance.

Licenses and royalties revenue increased by $2.2 million for the three months ended September 30, 2019 compared to the same period in 2018.

Grants and collaborations revenue increased by 237% to $15.3 million for the three months ended September 30, 2019 compared to the same period in 2018, primarily due to collaboration revenue from Lavvan.

Nine Months Ended September 30, 2019 and 2018

Total revenue increased by 137% to $112.0 million for the nine months ended September 30, 2019 compared to the same period in 2018. The increase was comprised of a $35.8 million increase in licenses and royalties revenue, a $19.9 million increase in renewable products revenue and a $9.1 million increase in grants and collaborations revenue.

Renewable products revenue increased by 93% to $41.4 million for the nine months ended September 30, 2019 compared to the same period in 2018, with increases among all renewable products, led by RebM, Squalene and Biossance.

Licenses and royalties revenue increased by 472% to $43.4 million for the nine months ended September 30, 2019 compared to the same period in 2018, primarily due to $40.3 million of royalty revenue from DSM related to the assignment of the December 2017 Value Sharing Agreement (see Note 9, “Revenue Recognition” in Part I, Item 1 of this Quarterly Report on Form 10-Q) during the current period, as compared to $7.4 million from DSM during the prior year period.

Grants and collaborations revenue increased by 50% to $27.3 million for the nine months ended September 30, 2019 compared to the same period in 2018, primarily due to increases from Lavvan and Yifan collaborations, partly offset by decreases from DARPA, Givaudan and Firmenich.

Costs and Operating Expenses



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Cost and operating expenses
Cost of products sold	$	20,654	$	8,574	$	53,482	$	20,423
Research and development	19,032		16,445		56,093		49,939
Sales, general and administrative	33,341		27,239		92,456		64,793
Total cost and operating expenses	$	73,027	$	52,258	$	202,031	$	135,155

Cost of Products Sold

Cost of products sold includes the raw materials, labor and overhead, amounts paid to contract manufacturers, inventory write-downs, and costs related to production scale-up. Because of our product mix, our overall cost of products sold does not necessarily increase or decrease proportionately with changes in our renewable product revenues.

Three Months Ended September 30, 2019 and 2018

Cost of products sold increased by 141% to $20.7 million for the three months ended September 30, 2019, compared to the same period in 2018, primarily due to costs associated with an increase in volume of products sold.

Nine Months Ended September 30, 2019 and 2018

Cost of products sold increased by 162% to $53.5 million for the nine months ended September 30, 2019, compared to the same period in 2018, primarily due to an increase in volume of products sold. The remainder of the increase was due to costs associated with ramping up our RebM sweetener production, which we began shipping in late 2018.

Research and Development Expenses

Three Months Ended September 30, 2019 and 2018

Research and development expenses increased by 16% to $19.0 million for the three months ended September 30, 2019, compared to the same period in 2018, primarily due to increases in employee compensation and equipment rental costs, and a decrease in capitalization of labor costs.

Nine Months Ended September 30, 2019 and 2018

Research and development expenses increased by 12% to $56.1 million for the nine months ended September 30, 2019, compared to the same period in 2018, primarily due to an increase in employee compensation and a decrease in capitalization of labor costs.

Sales, General and Administrative Expenses

Three Months Ended September 30, 2019 and 2018

Sales, general and administrative expenses increased by 22% to $33.3 million for the three months ended September 30, 2019, compared to the same period in 2018, primarily due to increases in employee compensation, outside services, audit fees and new product marketing costs. The increase in employee compensation was driven by increased head count, the timing of changes in our compensation plan for most non-executive level employees, and increased stock-based compensation related to increased head count.

Nine Months Ended September 30, 2019 and 2018

Sales, general and administrative expenses increased by 43% to $92.5 million for the nine months ended September 30, 2019, compared to the same period in 2018, primarily due to increases in employee compensation, outside services, audit fees and new product marketing costs. The increase in employee compensation was driven by increased head count, the timing of changes in our compensation plan for most non-executive level employees, and increased stock-based compensation related to increased head count.

Other Expense, Net



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2019			2018			2019			2018
Other income (expense):
Loss on divestiture	$	—		$	—		$	—		$	(1,778	)
Interest expense	(16,857		)	(9,180		)	(44,608		)	(28,738		)
Loss from change in fair value of derivative instruments	(398		)	(24,797		)	(2,437		)	(61,164		)
Loss from change in fair value of debt	(2,055		)	—			(18,629		)	—
Loss upon extinguishment of debt	(2,721		)	—			(8,596		)	(26		)
Other income (expense), net	1,076			(2,533		)	920			(2,009		)
Total other expense, net	$	(20,955	)	$	(36,510	)	$	(73,350	)	$	(93,715	)

Three Months Ended September 30, 2019 and 2018

Total other expense, net was $21.0 million for the three months ended September 30, 2019, compared to $36.5 million for the same period in 2018. The $15.6 million decrease was primarily due to a $24.4 million decrease in loss from change in fair value of derivative instruments, partly offset by a $7.7 million increase in interest expense, which was substantially all related to default and penalty interest and waiver fees, a $2.7 million loss upon extinguishment of debt in 2019 and a $2.1 million loss from change in fair value of debt in 2019. The decrease in loss from change in fair value of derivative instruments was due to the extinguishment of certain equity-related derivatives in the second and third quarter of 2018, which no longer impact the 2019 quarters, and in part, as the result of adopting ASU 2017-11, "Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): Accounting for Certain Financial Instruments with Down Round Features" which eliminated the need to record a derivative liability for equity instruments with down-round anti-dilution provisions. See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" and Note 3, "Fair Value Measurement" in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of the adoption impact to our condensed consolidated financial statements.

Nine Months Ended September 30, 2019 and 2018

Total other expense, net was $73.4 million for the nine months ended September 30, 2019, compared to $93.7 million for the same period in 2018. The $20.4 million decrease was primarily due to a $58.7 million decrease in loss from change in fair value of derivative instruments, partly offset by an $18.6 million loss from change in fair value of debt in 2019, a $15.9 million increase in interest expense, a significant portion of which was related to default and penalty interest and waiver fees, and an $8.6 million increase in loss upon extinguishment of debt. The decrease in loss from change in fair value of derivative instruments was due to the extinguishment of certain equity-related derivatives in the second and third quarter of 2018, which no longer impact the 2019 quarters, and in part, as the result of adopting ASU 2017-11, as described in the previous paragraph.

Provision for Income Taxes

Three and Nine Months Ended September 30, 2019 and 2018

For the three and nine months ended September 30, 2019, we recorded a $0.5 million provision for income taxes related to accrued interest on uncertain tax positions.

For the three and nine months ended September 30, 2018, provision for income taxes was $0.

Liquidity and Capital Resources



(In thousands)	September 30, 2019			December 31, 2018
Working capital deficit	$	(103,837	)	$	(119,521	)
Cash and cash equivalents	$	1,632		$	45,353
Debt and capital lease obligations	$	227,688		$	210,376
Accumulated deficit	$	(1,676,779	)	$	(1,521,417	)



	Nine Months Ended September 30,
(In thousands)	2019			2018
Net cash (used in) provided by:
Operating activities	$	(113,467	)	$	(89,447	)
Investing activities	$	(9,013	)	$	(6,362	)
Financing activities	$	78,742		$	56,160

Liquidity. We have incurred significant operating losses since our inception, and we expect to continue to incur losses and negative cash flows from operations through at least the next 12 months following issuance of the condensed consolidated financial statements. As of September 30, 2019, we had negative working capital of $103.8 million, (compared to negative working capital of $119.5 million as of December 31, 2018), an accumulated deficit of $1.7 billion, and cash and cash equivalents of $1.6 million (compared to $45.4 million as of December 31, 2018).

As of September 30, 2019, our debt (including related party debt), net of deferred discount and issuance costs of $37.5 million, totaled $204.2 million, of which $78.7 million is classified as current. Our debt agreements contain various covenants, including certain restrictions on our business that could cause us to be at risk of defaults, such as restrictions on additional indebtedness and cross-default clauses. A failure to comply with the covenants, or cure non-compliance or obtain waivers for covenants violations, and other provisions of our debt instruments, including any failure to make a payment when required, would generally result in events of default under such instruments, which could permit acceleration of such indebtedness. If such indebtedness is accelerated, it would generally also constitute an event of default under our other outstanding indebtedness, permitting acceleration of a substantial portion of our outstanding indebtedness.

On September 16, 2019, we failed to pay an aggregate of $63.6 million of outstanding principal and accrued interest on the Second Exchange Note (see Note 4, “Debt” in Part I, Item 1 of this Quarterly Report on Form 10-Q) when due. The payment failure resulted in an event of default under the Second Exchange Note and also triggered cross-defaults under other debt instruments of Amyris which permitted the holders of such indebtedness to accelerate the amounts owing under such instruments. We subsequently received waivers from all holders of such other debt instruments to waive the right to accelerate. As a result, the indebtedness with respect to which Amyris has obtained such waivers continues to be classified as long-term on our balance sheet. The indebtedness reflected by the Second Exchange Note continues to be classified as a current liability on our balance sheet. In addition, as a result of the payment default, the conversion price of the Second Exchange Note is subject to adjustment in accordance with the terms of the Second Exchange Note. On November 8, 2019, the Company entered into a Securities Exchange Agreement with certain private investors (the “Investors”), pursuant to which, upon the purchase by the Investors of the Second Exchange Note, the Second Exchange Note would be exchanged for new senior convertible notes with an aggregate principal amount of $66.0 million (see Note 12, “Subsequent Events”, in Part I, Item 1 of this Form 10-Q). In connection with the entry into the Securities Exchange Agreement, (i) the holder of the Second Exchange Note and the Investors entered into a Securities Purchase Agreement providing for the purchase by the Investors of the Second Exchange Note and (ii) the Company and the holder of the Second Exchange Note entered into an agreement by which such holder agreed to immediately dismiss its complaint against the Company (see Note 8, “Commitments and Contingencies”, in Part I, Item 1 of this Form 10-Q) with prejudice upon the purchase of the Second Exchange Note by the Investors.

Our condensed consolidated financial statements as of and for the three and nine months ended September 30, 2019 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Due to the factors described above, there is substantial doubt about our ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. Our ability to continue as a going concern will depend, in large part, on our ability to extend existing debt maturities by restructuring a majority of our convertible debt, which is uncertain and outside management's control. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, which could have a material adverse effect on our financial condition. In addition, if we are unable to continue as a going concern, we may be unable to meet our obligations under our existing debt facilities, which could result in an acceleration of our obligation to repay all amounts outstanding under those facilities, and we may be forced to liquidate our assets. In such a scenario, the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.

Our operating plan for the next 12 months contemplates a significant reduction in our net operating cash outflows as compared to the year ended December 31, 2018, resulting from (i) revenue growth from sales of existing and new products with positive gross margins, (ii) significantly increased cash inflows from grants and collaborations, and (iii) reduced production costs as a result of manufacturing and technical developments. If we are unable to complete these actions, we expect to be unable to meet our operating cash flow needs and our obligations under our existing debt facilities.

If we are unable to generate sufficient cash contributions from product sales, licenses and royalties, and payments from existing and new collaboration partners, and new financing commitments due to contractual restrictions and covenants, we will need to obtain additional funding from equity or debt financings, which may not occur in a timely manner or on reasonable terms, if at all, agree to burdensome covenants, grant further security interests in our assets, enter into collaboration and licensing arrangements that require us to relinquish commercial rights, or grant licenses on terms that are not favorable.

If we do not achieve our planned operating results, our ability to continue as a going concern would be jeopardized and we may need to take the following actions to support our liquidity needs during the next 12 months:


•	Shift focus to existing products and customers with significantly reduced investment in new product and commercial development efforts;


•	Reduce expenditures for third party contractors, including consultants, professional advisors and other vendors;


•	Reduce or delay uncommitted capital expenditures, including expenditures related to the construction and commissioning of the new production facility in Brazil, non-essential facility and lab equipment, and information technology projects; and


•	Closely monitor our working capital position with customers and suppliers, as well as suspend operations at pilot plants and demonstration facilities.

Implementing this plan could have a negative impact on our ability to continue our business as currently contemplated, including, without limitation, delays or failures in our ability to:


•	Achieve planned production levels;


•	Develop and commercialize products within planned timelines or at planned scales; and


•	Continue other core activities.

We expect to fund operations for the foreseeable future with cash and investments currently on hand, cash inflows from collaborations, grants, product sales, licenses and royalties, and equity and debt financings, to the extent necessary. Some of our research and development collaborations are subject to risks that we may not meet milestones. Future equity and debt financings, if needed, are subject to the risk that we may not be able to secure financing in a timely manner or on reasonable terms, if at all. Our planned working capital and capital expenditure needs for the remainder of 2019 are dependent on significant inflows of cash from renewable product sales, license and royalties and existing collaborations, as well as additional funding from new collaborations.

Cash Flows during the Nine Months Ended September 30, 2019 and 2018

Cash Flows from Operating Activities

Our primary uses of cash from operating activities are costs related to the production and sale of our products and personnel-related expenditures, offset by cash received from renewable product sales, licenses and royalties, and grants and collaborations.

For the nine months ended September 30, 2019, net cash used in operating activities was $113.5 million, consisting primarily of a $163.9 million net loss, partially offset by $68.7 million of favorable non-cash adjustments that were primarily comprised of an $18.6 million loss on change in fair value of debt, $10.1 million of stock-based compensation, $9.7 million of debt discount accretion and $10.2 million of amortization of right-of-use assets. Additionally, there was an $18.3 million net increase in working capital balances.

For the nine months ended September 30, 2018, net cash used in operating activities was $89.4 million, consisting of a $181.6 million net loss, $83.3 million of favorable non-cash adjustments and an $8.9 million net decrease in working capital balances. The non-cash adjustments were primarily comprised of a $61.2 million loss from change in fair value of derivative liabilities and $12.2 million of debt discount accretion.

Cash Flows from Investing Activities

For the nine months ended September 30, 2019 and September 30, 2018, net cash used in investing activities was $9.0 million, and $6.4 million, respectively, comprised of property, plant and equipment purchases.

Cash Flows from Financing Activities

For the nine months ended September 30, 2019, net cash provided by financing activities was $78.7 million, primarily comprised of $53.6 million of net proceeds from common stock issuances and $89.2 million of net proceeds from debt issuances, offset by $63.7 million of debt principal payments.

For the nine months ended September 30, 2018, net cash provided by financing activities was $56.2 million, primarily comprised of $60.5 million proceeds from exercises of warrants and $36.6 million of proceeds from debt issuances, offset by $42.0 million of debt principal payments.

Off-Balance Sheet Arrangements

At September 30, 2019, we did not have any material off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.

Contractual Obligations

The following is a summary of our contractual obligations as of September 30, 2019:



Payable by year ending December 31, (In thousands)	Total		2019		2020		2021		2022		2023		Thereafter
Principal payments on debt	$	241,430	$	75,658	$	12,918	$	31,297	$	87,803	$	31,793	$	1,961
Interest payments on debt (1)	60,981		13,664		18,245		18,008		10,651		106		307
Financing and operating leases	30,958		3,462		9,850		7,221		7,392		3,033		—
Manufacturing reservation fee	6,893		6,893		—		—		—		—		—
Partnership payment obligation	11,112		2,381		3,175		3,175		2,381		—		—
Contract termination fee	3,670		1,830		1,840		—		—		—		—
Total	$	355,044	$	103,888	$	46,028	$	59,701	$	108,227	$	34,932	$	2,268

____________________

⁽¹⁾

Does not include any obligations related to make-whole interest or down-round provisions. Fixed and variable interest rates are described in Note 5, "Debt" in Part II, Item 8 of the Annual Report on Form 10-K/A. Future interest payments shown above for variable-rate debt instruments are measured on the basis of interest rates for such instruments as of September 30, 2019. The fixed interest rates are more fully described in Note 5, "Debt" in Part II, Item 8 of the Annual Report on Form 10-K/A.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit of possible controls and procedures.

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of September 30, 2019. This conclusion was based on the material weaknesses in our internal control over financial reporting described in Part II, Item 9A, “Controls and Procedures” of our 2018 Form 10-K/A. The material weaknesses have not been remediated as of September 30, 2019.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis. If not remediated, the material weaknesses in our internal control over financial reporting described in the 2018 Form 10-K/A could result in a material misstatement of our annual or interim consolidated financial statements that would not be prevented or detected on a timely basis.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended September 30, 2019, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II

ITEM 1. LEGAL PROCEEDINGS

On April 3, 2019, a securities class action complaint was filed against Amyris and our CEO, John G. Melo, and former CFO (and current Chief Business Officer), 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 alleges securities law violations based on statements and omissions made by the Company during such period. 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., Case No. 4:19-cv-03621 and Carlson v. Doerr, et al., Case No. 4:19-cv-06230) based on similar allegations to those made in the securities class action complaint described above. The first derivative complaint (Bonner) was dismissed on October 18, 2019, and the remaining derivative complaint (Carlson) names Amyris, Inc. as a nominal defendant and certain of the Company’s current and former officers and directors as additional defendants. The derivative lawsuit seeks 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 complaint also seeks a series of changes to the Company’s corporate governance policies, restitution to the Company from the individual defendants, and an award of attorneys’ fees. This case is in the initial pleadings stage. We believe the complaint lacks merit, and intend to defend ourselves 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.

We may be involved, from time to time, in legal proceedings and claims arising in the ordinary course of our business. Such matters are subject to many uncertainties and there can be no assurance that legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on our business, results of operations, financial position or cash flows.

ITEM 1A. RISK FACTORS

The risks described in Part I, Item 1A, "Risk Factors" in our 2018 Form 10-K could materially and adversely affect our business, financial condition and results of operations, and the trading price of our common stock could decline. These risk factors do not identify all risks that we face; our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. The “Risk Factors” section of the 2018 Form 10-K remains current in all material respects.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

See Note 4, “Debt” and Note 6, “Stockholders’ Deficit” in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding unregistered sales of equity securities during the three months ended September 30, 2019.

No underwriters or agents were involved in the issuance or sale of such securities. The securities were issued in private placements pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act, or in private exchanges pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act. The investors participating in the offerings or exchanges acquired the applicable securities for investment purposes only and without intent to resell, were able to fend for themselves in these transactions, and are accredited investors as defined in Rule 501 of Regulation D promulgated under Section 3(b) of the Securities Act. These purchasers had adequate access, through their relationships with us, to information about us.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

During the three months ended September 30, 2019, we failed to make required interest and/or principal payments under the November 2017 Ginkgo Note, the LSA and the Second Exchange Note (see Note 5, “Debt” and Note 16, “Subsequent Events”

in Part II, Item 8 of the 2018 Form 10-K/A and Note 4, “Debt” and Note 12, “Subsequent Events” in Part I, Item 1 of this Quarterly Report on Form 10-Q). The total amounts of such defaults were, (a) in respect of interest under the November 2017 Ginkgo Note, $0.2 million for which payment was due July 31 and August 31, (b) in respect of interest and principal under the LSA, failure to pay $1.2 million of interest due on July 1 and August 1, and to pay principal of $0.9 million on July 1, and (c) in respect of interest and principal under the Second Exchange Note, $63.6 million. On August 14, 2019, we received an extension for such interest and principal payments under the LSA until December 16, 2019; see Note 4, “Debt” in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information. On September 29, 2019, we received an extension for such interest payments under the November 2017 Ginkgo Note until December 15, 2019; see Note 4, “Debt” in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS



Exhibit No.	Description
4.01	Form of Common Stock Purchase Warrant issued July 8, 2019 by registrant to Wolverine Flagship Fund Trading Limited (found at Exhibit A, herein)
4.02	Promissory Note issued July 10, 2019 by registrant to Foris Ventures, LLC
4.03	Warrant Amendment Agreement, dated July 10, 2019, between registrant and Foris Ventures, LLC
4.04	Senior Convertible Note Maturity Extension, dated July 24, 2019, between registrant and Total Raffinage Chimie
4.05	Form of Senior Convertible Note issued July 24, 2019 by registrant to CVI Investments, Inc. (found at Exhibit A, herein)
4.06	Form of Common Stock Purchase Warrant issued July 24, 2019 by registrant to CVI Investments, Inc. (found at Exhibit B, herein)
4.07	Promissory Note issued July 26, 2019 by registrant to Foris Ventures, LLC
4.08	Common Stock Purchase Warrant issued August 14, 2019 by registrant to Naxyris S.A.
4.09	Common Stock Purchase Warrant issued August 14, 2019 by registrant to Foris Ventures, LLC
4.10	Promissory Note issued August 28, 2019 by registrant to Foris Ventures, LLC
4.11	Common Stock Purchase Warrant issued August 28, 2019 by registrant to Foris Ventures, LLC
4.12	Warrant Amendment Agreement, dated August 28, 2019, between registrant and Foris Ventures, LLC
4.13	Warrant Amendment Agreement, dated August 28, 2019, between registrant and Foris Ventures, LLC
4.14	Senior Convertible Note Maturity Extension, dated September 4, 2019, between registrant and Total Raffinage Chimie
4.15	Form of Promissory Note issued September 10, 2019 by registrant to certain accredited investors (found at Exhibit A, herein)
4.16	Form of Common Stock Purchase Warrant issued September 10, 2019 by registrant to certain accredited investors
4.17	Form of Promissory Note issued September 17, 2019, September 19, 2019 and September 23, 2019 by registrant to DSM Finance B.V.
10.01	Exchange Agreement, dated July 2, 2019, between registrant and Wolverine Flagship Fund Trading Limited
10.02	Credit Agreement, dated July 10, 2019, between registrant and Foris Ventures, LLC
10.03	Second Exchange Agreement, dated July 24, 2019, between registrant and CVI Investments, Inc.
10.04	Loan Agreement, dated July 29, 2019, between registrant and Nikko Chemicals Co., Ltd.
10.05	Loan and Security Agreement, dated August 14, 2019, among registrant, certain of registrant’s subsidiaries and Naxyris S.A.
10.06	Amendment No 5 to Loan Agreement and Waiver, dated August 14, 2019, among registrant, certain of registrant’s subsidiaries and Foris Ventures, LLC
10.07	Credit Agreement, dated August 28, 2019, between registrant and Foris Ventures, LLC
10.08	Form of Credit Agreement, dated September 10, 2019, between registrant and certain accredited investors
10.09	Standstill Agreement, dated September 10, 2019, among registrant and certain accredited investors
10.10	Credit Agreement, dated September 17, 2019, between registrant and DSM Finance B.V.
31.01	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(c) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.02	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(c) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.01^a	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.02^a	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.



	AMYRIS, INC.

By:	/s/ John G. Melo
	John G. Melo
	President and Chief Executive Officer (Principal Executive Officer)
	November 12, 2019

By:	/s/ Jonathan Wolter
	Jonathan Wolter
	Interim Chief Financial Officer (Principal Financial Officer)
	November 12, 2019