GreenLight Biosciences Holdings, PBC - Quarter Report: 2023 March (Form 10-Q)

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2023


☐	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: 001-39894

GreenLight Biosciences Holdings, PBC

(Exact Name of Registrant as Specified in its Charter)


Delaware	85-1914700
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
29 Hartwell Avenue Lexington, Massachusetts	02421
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 616-8188

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, par value $0.0001 per share	GRNA	Nasdaq Global Market
Warrants, each exercisable for one share of Common Stock for $11.50 per share	GRNAW	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of May 8, 2023, the registrant had 151,681,314 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	4
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022	5
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three months ended March 31, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
Signatures		46

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) includes forward-looking statements regarding, among other things, the business and financial plans, strategies, and prospects of GreenLight Biosciences Holdings, PBC (“we,” “us,” “our,” the “Company” or “New GreenLight”). These statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that the plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, it cannot assure you that it will achieve or realize these plans, intentions, or expectations. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes”, “estimates”, “expects”, “projects”, “forecasts”, “may”, “might”, “will”, “should”, “seeks”, “plans”, “scheduled”, “possible”, “anticipates”, “intends”, “aims”, “works”, “focuses”, “aspires”, “strives” or “sets out” or similar expressions. Forward-looking statements are not guarantees of performance. Forward-looking statements involve a number of risks, uncertainties (many of which are beyond the Company’s control) or other factors that may cause actual results or performance to differ materially from those expressed or implied by these forward-looking statements. You should not place undue reliance on these statements, which speak only as of the date these statements were made. These risks and uncertainties include, but are not limited to, the following risks, uncertainties (some of which are beyond the Company’s control) or other factors:

•

We have incurred significant operating losses since inception. Our recurring losses from operations raise substantial doubt regarding our ability to continue as a going concern;

•

We are an early-stage biotechnology company without any products or services currently available for sale and we may not be able to successfully develop or bring products or services to market;

•

We have not generated any product revenues to date and expect to incur losses and negative cash flow for the foreseeable future;

•

Failure to timely access the Company’s cash on deposit with Silicon Valley Bank (“SVB”) and the ability to access its cash equivalents and marketable securities may result in a material adverse effect on the Company, its business operations, financial condition and results of operations.

•

Our receipt of a written non-binding indication of interest from a strategic acquiror may or may not result in an actual completed transaction. The uncertainty surrounding the outcome could adversely impact our business operations, interfere with our ability to attract and retain personnel, result in the incurrence of significant expenses and cause our stock price to be subject to significant fluctuation or otherwise be adversely impacted depending on the outcome of such transaction process.

•

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect the Company’s current and projected business operations and its financial condition and results of operations.

•

We will require substantial additional capital to complete our research and development activities, and, if additional funds are not available, we may need to significantly scale back or cease our business;

•

Due to our limited resources and access to capital, we must make decisions on the allocation of resources to certain programs and product candidates; these decisions may prove to be wrong and may adversely affect our business;

•

If we fail to regain compliance with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access capital markets could be negatively impacted;

•

An active trading market for our common stock may never develop or be sustained;

•

The market price of our common stock may be volatile, which could result in substantial losses for investors;

•

We have not yet succeeded and may not succeed in demonstrating the efficacy and safety of any of our product candidates in clinical trials or in obtaining marketing approval thereafter. We have not yet completed a clinical trial of any product candidate and we have not yet assessed safety of any product candidate in humans. As such, there may be adverse effects from treatment with any of our current or future product candidates that we cannot predict at this time;

•

We may not be able to obtain regulatory approval for the Company’s product candidates, which is taking longer than anticipated and which cannot be assured or Emergency Use Authorization even if vaccine candidates are approved by regulators;

•

The risk that failure by us or our vendors to comply with regulatory requirements, including good manufacturing practices, may materially delay preclinical studies, clinical trials or regulatory approval, any of which may impact commercialization of the affected product candidates;

•

The risk that the Company’s product candidates will have adverse side effects or other unintended consequences, which could impair their marketability;

•

The risk that the Company’s product candidates do not satisfy other legal and regulatory requirements for marketability in one or more jurisdictions;

•

The risks of enhanced regulatory scrutiny of solutions utilizing messenger ribonucleic acid (“mRNA”) as a basis;

•

The potential inability to achieve the Company’s goals regarding scalability, affordability and speed of commercialization of its product candidates;

•

Changes in the industries in which the Company operates;

•

Changes in laws and regulations affecting the business of the Company;

•

The potential inability to implement or achieve business plans, forecasts, and other expectations; and

•

Our corporate restructuring and the associated headcount reduction may not result in anticipated savings, could result in total costs and expenses that are greater than expected and could disrupt our business.

•

other factors detailed in the “Risk Factors” sections of this Report, the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

The risks described above are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can the Company assess the impact of all such risk factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. Some of these risks and uncertainties may in the future be amplified by the ongoing macroeconomic conditions, and there may be additional risks that the Company considers immaterial or which are unknown. The Company does not undertake any obligation to update or revise any forward-looking

statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

TRADEMARKS

This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this quarterly report on Form 10-Q may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable owner will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

GREENLIGHT BIOSCIENCES HOLDINGS, PBC

Condensed Consolidated Balance Sheets (unaudited)

(In thousands, except share and per share data)


	MARCH 31, 2023			DECEMBER 31, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	32,350		$	68,097
Prepaid expenses and other current assets		5,347			3,214
Total Current Assets		37,697			71,311
Restricted cash		1,411			1,321
Property and equipment, net		40,441			41,365
Operating lease right-of-use assets		32,740			32,766
Other assets		1,400			1,835
TOTAL ASSETS	$	113,689		$	148,598
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,073		$	839
Accrued expenses		11,478			13,544
Operating lease liabilities, current portion		4,083			3,358
Long-term debt, current portion		13,782			13,229
Deferred revenue		47			3,866
Other current liabilities		724			724
Total Current Liabilities		31,187			35,560
Warrant liabilities		15			242
Operating lease liabilities, net of current portion		48,702			49,569
Long-term debt, net of current portion		10,858			14,326
Other liabilities		991			839
TOTAL LIABILITIES		91,753			100,536
COMMITMENTS AND CONTINGENCIES (Note 17)
STOCKHOLDERS’ EQUITY
Common stock, $0.0001 par value; 500,000,000 shares authorized, 151,681,314 and 151,587,165 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		15			15
Preferred Stock, $0.0001 par value; 10,000,000 shares authorized, no shares issues and outstanding at March 31, 2023 and December 31, 2022, respectively		—			—
Additional paid-in capital		471,028			468,685
Accumulated deficit		(449,107	)		(420,638	)
TOTAL STOCKHOLDERS’ EQUITY		21,936			48,062
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	113,689		$	148,598

See notes to condensed consolidated financial statements.

GREENLIGHT BIOSCIENCES HOLDINGS, PBC

Condensed Consolidated Statements of Operations (unaudited)

(In thousands, except share and per share data)


	THREE MONTHS ENDED MARCH 31,
	2023			2022
REVENUE:
License and collaboration revenue	$	3,820		$	—
Grant revenue		—			257
Total revenue		3,820			257
OPERATING EXPENSES:
Research and development		23,168			27,281
General and administrative		8,944			9,755
Total operating expenses		32,112			37,036
LOSS FROM OPERATIONS		(28,292	)		(36,779	)
OTHER INCOME (EXPENSE):
Interest and other income (expense), net		603			4
Interest expense		(1,007	)		(1,073	)
Change in fair value of warrant liabilities		227			(359	)
Total other income (expense), net		(177	)		(1,428	)
Net loss	$	(28,469	)	$	(38,207	)
Net loss per share — basic and diluted	$	(0.19	)	$	(0.34	)
Weighted-average common stock outstanding — basic and diluted		151,614,008			113,558,404

See notes to condensed consolidated financial statements.

GREENLIGHT BIOSCIENCES HOLDINGS, PBC

Condensed Consolidated Statements of Stockholders’ Equity (unaudited)

(In thousands, except share and per share data)


	COMMON STOCK $0.0001 PAR VALUE				ADDITIONAL PAID-IN		ACCUMULATED			TOTAL STOCKHOLDERS’
	SHARES		AMOUNT		CAPITAL		DEFICIT			EQUITY
Balances at January 1, 2023		151,587,165	$	15	$	468,685	$	(420,638	)	$	48,062
Exercise of common stock options		94,149		—		35		—			35
Stock-based compensation expense		—		—		2,308		—			2,308
Net loss		—		—		—		(28,469	)		(28,469	)
Balance at March 31, 2023		151,681,314	$	15	$	471,028	$	(449,107	)	$	21,936

	COMMON STOCK $0.0001 PAR VALUE				ADDITIONAL PAID-IN		ACCUMULATED			TOTAL STOCKHOLDERS’
	SHARES		AMOUNT		CAPITAL		DEFICIT			EQUITY (DEFICIT)
Balances at January 1, 2022		96,575,107	$	10	$	223,584	$	(253,569	)	$	(29,975	)
Cashless exercise of Legacy GreenLight preferred stock warrants		490,031		—		460		—			460
Cashless exercise of Legacy GreenLight common stock warrants		170,981		—		1,183		—			1,183
Reclassification of Legacy GreenLight common stock warrants to equity		—		—		352		—			352
Conversion of convertible notes		6,719,116		1		18,290		—			18,291
Conversion of convertible notes - PIPE Investors		3,525,000		—		35,250		—			35,250
Business Combination transaction, net of transaction costs of $26.7 million		15,285,374		2		72,987		—			72,989
Vesting of restricted stock awards		1,567		—		—		—			—
Exercise of common stock options		79,055		—		22		—			22
Stock-based compensation expense		—		—		2,187		—			2,187
Exercise of public warrants		105,120		—		1,209		—			1,209
Other		29,154		—		79		(14	)		65
Net loss		—		—		—		(38,207	)		(38,207	)
Balances at March 31, 2022		122,980,505	$	13	$	355,603	$	(291,790	)	$	63,826

See notes to condensed consolidated financial statements.

GREENLIGHT BIOSCIENCES HOLDINGS, PBC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)


	THREE MONTHS ENDED MARCH 31,
	2023			2022
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(28,469	)	$	(38,207	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		2,334			2,096
Gain on disposal of property and equipment		—			(9	)
Stock-based compensation expense		2,308			2,187
Non-cash interest expense		109			335
Change in fair value of warrant liabilities		(227	)		359
Change in operating lease right of use asset		1,031			1,631
Changes in operating assets and liabilities
Prepaid expenses and other assets		(1,842	)		(6,259	)
Accounts receivable		—			(5,000	)
Accounts payable		233			(1,952	)
Accrued expenses, lease liabilities and other liabilities		(2,718	)		(9,435	)
Deferred revenue		(3,819	)		4,743
Net cash used in operating activities		(31,060	)		(49,511	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment		—			37
Purchases of property and equipment		(1,608	)		(287	)
Net cash used in investing activities		(1,608	)		(250	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from business combination, net of transaction costs		—			80,491
Proceeds from issuance of convertible debt - PIPE Investors		—			21,750
Proceeds from stock option exercises		35			22
Principal payments on debt		(2,941	)		(815	)
Exercise of public warrants		—			1,209
Principal payments on finance lease obligations		(83	)		(160	)
Net cash provided by financing activities		(2,989	)		102,497
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(35,657	)		52,736
Cash, cash equivalents and restricted cash, beginning of period		69,418			31,808
Cash, cash equivalents and restricted cash, end of period	$	33,761		$	84,544
SUPPLEMENTAL DISCLOSURE OF CASH-FLOW INFORMATION
Cash paid for interest	$	744		$	620
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Property and equipment included in accrued expenses and accounts payable	$	396		$	1,313
Conversion of convertible debt to equity	$	—		$	53,541
Legacy GreenLight cashless warrant exercises	$	—		$	1,643
Warrant liabilities assumed in the Business Combination	$	—		$	1,341
Deferred financing costs in accrued expenses and accounts payable	$	—		$	1,948

	THREE MONTHS ENDED MARCH 31,
	2023			2022
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	$	32,350		$	83,223
Restricted cash		1,411			1,321
Total cash, cash equivalents and restricted cash	$	33,761		$	84,544

See notes to condensed consolidated financial statements.

GREENLIGHT BIOSCIENCES HOLDINGS, PBC

Notes to Unaudited Condensed Consolidated Financial Statements

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Organization

GreenLight Biosciences Holdings, PBC (formerly known as Environmental Impact Acquisition Corp.) (“New GreenLight,” “ENVI” or the “Company”) was incorporated in Delaware on July 2, 2020. The Company has developed technology to create high-performing, natural ribonucleic acid (“RNA”) products to address global sustainability challenges and promote healthier plants, foods, and people.

The Company is located and headquartered in Lexington, Massachusetts. The Company has additional lab and office space in Durham, North Carolina, additional lab and office space in Woburn, Massachusetts, additional lab and office space in Medford, Massachusetts, a research station in Spain, and a manufacturing facility in Rochester, New York. The Company’s revenues and expenses are primarily derived from operations in the United States. Since its inception, the Company has devoted substantially all of its efforts to research and development activities, including the development of the Company’s cell-free RNA production process. The Company does not currently generate revenue from sales of any products.

On August 9, 2021, ENVI entered into the business combination agreement (“Business Combination Agreement”) with its wholly owned subsidiary, Honey Bee Merger Sub, Inc. (“Merger Sub”) and GreenLight Biosciences, Inc. ("Greenlight"), which was incorporated in Delaware in 2008. Pursuant to the Business Combination Agreement, on February 2, 2022 (the "Closing Date"), Merger Sub merged with and into GreenLight (the “Merger”), with GreenLight surviving the Merger as a wholly owned subsidiary of ENVI (the Merger, together with the other transactions contemplated by the Business Combination Agreement, the “Business Combination”). In connection with the consummation of the Merger on the Closing Date, ENVI changed its name to GreenLight Biosciences Holdings, PBC (“New GreenLight”) and became a public benefit corporation. References to “Legacy GreenLight” refer to GreenLight Biosciences, Inc. prior to the consummation of the Business Combination.

Although New GreenLight was the legal acquirer of GreenLight in the Business Combination, GreenLight is deemed to be the accounting acquirer, and the historical financial statements of GreenLight became the basis for the historical financial statements of New GreenLight upon the closing of the Business Combination. New GreenLight, together with its wholly owned subsidiaries, GreenLight Biosciences, Inc., GreenLight Pandemic Response, Inc. (“GLPRI”), GreenLight Security Corporation (“GLSC”), and GreenLight Biosciences España, S.L. ("GLESP") is referred to on a consolidated basis as the “Company”.

Upon the closing of the Business Combination, each share of Legacy GreenLight stock was exchanged for shares of Class A common stock in an amount determined by application of the exchange ratio of approximately 0.6656 (the “Exchange Ratio”). In connection with the Business Combination, the Company entered into subscription agreements with subscribers who agreed to purchase an aggregate of 12,425,000 shares of Class A common stock for a purchase price of $124.3 million (the “PIPE”), all of which were issued on the effective date. Of the total $124.3 million of PIPE proceeds, $13.5 million was received in December 2021 and $21.8 million was received in January 2022 in the form of convertible notes. Upon the closing of the Business Combination, these convertible notes converted into Class A common stock.

In total, the Company received proceeds of $136.4 million inclusive of the PIPE and after redemptions which provided the Company with cash of $109.7 million, which is net of transaction costs of $26.7 million consisting of equity underwriting, legal, and other professional fees, all of which were recorded to additional paid‐in capital as a reduction of proceeds. Further, the Company assumed the outstanding Public Warrants to purchase 10,350,000 shares of the Company’s common stock at $11.50 per share and the outstanding Private Placement Warrants to purchase 2,062,500 shares of the Company’s Class A common stock at $11.50 per share. The Public and Private Placement Warrants expire five years after the completion of the Business Combination. Both the Private Placement Warrants and Public Warrants are further described in the Business Combination Agreement.

Legacy GreenLight was deemed to be the accounting acquirer in the Business Combination. The determination was primarily based on Legacy GreenLight's stockholders having a majority of the voting power in the combined Company, Legacy GreenLight having the ability to appoint a majority of the Board of Directors of the Company, Legacy GreenLight’s existing management team comprising the senior management of the combined Company, Legacy GreenLight comprising the ongoing operations of the combined Company and the combined Company assuming GreenLight’s name. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy GreenLight issuing stock for the net assets of ENVI, accompanied by a recapitalization. The net assets of ENVI are stated at historical cost, with no goodwill or other intangible assets recorded.

Futhermore, the historical financial statements of Legacy GreenLight became the historical financial statements of the combined Company upon the consummation of the Business Combination. As a result, the financial statements included in this report reflect (i) the historical operating results of Legacy GreenLight prior to the Business Combination; (ii) the combined results of ENVI and Legacy GreenLight following the close of the Business Combination; (iii) the assets and liabilities of Legacy GreenLight at their historical cost;

and (iv) Legacy GreenLight’s equity structure for all periods presented, as affected by the recapitalization presentation after completion of the Business Combination.

In accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparable periods up to February 2, 2022, to reflect the number of shares of the Company’s common stock, $0.0001 par value per share, issued to Legacy GreenLight’s stockholders in connection with the Business Combination. As such, the shares and corresponding capital amounts and earnings per share related to Legacy GreenLight’s outstanding convertible preferred stock and Legacy GreenLight's common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio of 0.6656 established in the Business Combination. Legacy GreenLight’s convertible preferred stock previously classified as temporary equity was retroactively adjusted, converted into common stock and reclassified to permanent equity as a result of the reverse recapitalization. See Note 3 - Business Combination for further details of the Business Combination.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). All intercompany transactions and balances have been eliminated in consolidation. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed consolidated or omitted pursuant to such rules and regulations. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from our audited financial statements but does not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for the fair statement of the Company’s financial position, results of operations, and cash flows for the interim periods presented. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for any subsequent quarter, the fiscal year ending December 31, 2023, or any other period.

Liquidity and Going Concern

Since its inception, the Company has devoted substantially all of its resources to building its platform and advancing development of its portfolio of programs, establishing, and protecting its intellectual property, conducting research and development activities, organizing, and staffing the Company, business planning, raising capital and providing general and administrative support for these operations. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Current and future programs will require significant research and development efforts, including extensive field trials, preclinical and clinical trials, and regulatory approvals prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

As presented in the financial statements, the Company has incurred substantial losses since inception and incurred net losses of approximately $28.5 million and $38.2 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the Company had an accumulated deficit of approximately $449.1 million and cash and cash equivalents of approximately $32.4 million. Cash used in operating activities totaled approximately $31.1 million and $49.5 million for three months ended March 31, 2023 and 2022, respectively. The Company expects to generate operating losses and negative operating cash flows for the foreseeable future.

As of the issuance date of the Company's unaudited interim condensed consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022, the Company estimates that its existing cash and cash equivalents of approximately $32.4 million as of March 31, 2023 will last through the second quarter of 2023 but will not be sufficient to fund its operations for twelve months from the date these interim financial statements are issued. The Company is evaluating a range of opportunities to extend its cash runway, including management of program spending, platform licensing collaborations and potential financing activity.

The Company will not generate any revenue from product sales unless and until it successfully completes development and obtains regulatory approval for one or more of its product candidates. If the Company obtains regulatory approval for any of its product

candidates, it expects to incur significant expenses related to developing its internal commercialization capability to support product sales, marketing, and distribution.

As a result, the Company will need substantial additional funding to support its operating activities as it advances its product candidates through development, seeks regulatory approval and prepares for and, if any of its product candidates are approved, proceeds to commercialization. Until such time as the Company can generate significant revenue from product sales, if ever, the Company expects to finance its operating activities through a combination of equity offerings, debt financings, and license and development agreements in connection with any future collaborations. Adequate funding may not be available to the Company on acceptable terms, or at all. As described below in Item 2 of this Form 10-Q, the Company received a non-binding indication of interest from Fall Line Endurance Fund, L.P. to acquire all of the outstanding capital stock of the Company. The terms of any potential agreement between GreenLight and Fall Line would be contingent on certain conditions, including completion of due diligence review and negotiation of definitive transaction documents, as well as certain to be identified Company stockholders agreeing to roll their existing equity in connection with the Proposed Transaction. GreenLight’s Board of Directors through a Special Committee thereof is carefully evaluating Fall Line’s indication of interest within the context of the ongoing review of various alternatives and in consultation with its retained financial and legal advisors. No assurance can be given that a definitive transaction with respect to Fall Line’s indication of interest or any other potential transaction will eventually be consummated.

If the Company is unable to obtain funding or if the funding it does obtain is insufficient to support its current operational plans, the Company will be forced to delay, reduce, or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. In the event the Company is unable to secure additional outside capital to fund our obligations when they become due over the next 12 months, the Company will be required to seek other strategic alternatives, which may include, among others, scaling back or discontinuing certain or all operations to reduce costs, closure of operations, sale of certain of our assets, a sale of the entire company to strategic or financial investors, and/or seeking protection under the U.S. bankruptcy laws.

Although management continues to pursue plans to raise additional funding, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.

Based on its recurring losses from operations incurred since inception, expectation of continuing operating losses for the foreseeable future, and need to raise additional capital to finance its future operations, the Company has concluded that there is substantial doubt about its ability to continue as a going concern within one year after the issuance date of these condensed consolidated financial statements.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described in Note 2 to the Company’s consolidated financial statements included in the 2022 Form 10-K. There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2023.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, and the disclosure of contingent assets and liabilities as of and during the reporting period. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, the accrual of research and development costs, the fair values of common stock (as defined below), useful lives assigned to property and equipment, and the fair value of warrant liabilities. The Company assesses estimates on an ongoing basis; however, actual results could materially differ from those estimates.

Concentrations of Credit Risk

The Company has no significant off-balance sheet credit risk. Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash, cash equivalents, restricted cash and accounts receivable. The Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash and cash equivalents in financial institutions that it believes have high credit quality, has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Concentration of credit risk with respect to accounts receivable is limited to customers with whom the Company has entered into collaboration agreements.

On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver and SVB was subsequently transferred into a new entity, Silicon Valley Bridge Bank, N.A (“SVB Bridge Bank”). On March 12, 2023, the U.S. Treasury Department, the Federal Reserve and the FDIC jointly announced enabling actions that fully protect all SVB depositors’ insured and uninsured deposits, and that such depositors would have access to all of their funds starting March 13, 2023. On March 13, 2023, the Company was able to access its full deposits with SVB Bridge Bank. On March 27, 2023, First Citizens Bank & Trust Company assumed all of SVB's deposits and loans. In light of the foregoing, the Company does not believe that it has exposure to loss as a result of SVB's receivership. As of March 31, 2023, the Company held $18.6 million in SVB and has not experienced any losses on its deposits of cash, cash equivalents and restricted cash.

Leases

The Company determines if an arrangement is a lease or contains a lease at inception. Our lease agreements are generally for office and laboratory facilities under operating leases and certain equipment under financing leases, and the determination of whether such agreements contain leases generally does not require significant estimates or judgments. Our leases may also contain non-lease components such as payments of maintenance, utilities, and taxes, which we have elected to account for separately, as these amounts are readily determinable. For leases with terms greater than 12 months, the Company records a related right-of-use (“ROU”) asset and lease liability at the present value of lease payments over the term, discounted using our incremental borrowing rate (“IBR”) over the lease term (or, if readily determinable, the rate implicit in the lease). Many leases include fixed rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. The right-of-use asset is measured at cost, which includes the initial measurement of the lease liability and initial direct costs incurred and excludes lease incentives.

The lease term used to measure right-of-use lease assets and lease liabilities may include renewal options which are deemed reasonably certain to be exercised. Operating lease costs are recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. This new standard is effective for the Company in the fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be applied as a cumulative-effect adjustment to retained earnings. The Company adopted ASU 2016-03 as of January 1, 2023, with no impact on our condensed consolidated financial statements or the related disclosures.

3. BUSINESS COMBINATION

On February 2, 2022, Legacy GreenLight consummated a Business Combination with ENVI. The Business Combination, and the PIPE financing which was entered into as of the same date, are further described in Note 1 - Nature of Business and Basis of Presentation.

Upon the closing of the Business Combination, the Company's certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of all classes of capital stock to 510,000,000 shares, of which 500,000,000 were designated as common stock and 10,000,000 were designated as preferred stock, both having a par value of $0.0001 per share.

Upon the closing of the Business Combination, holders of Legacy GreenLight common stock and preferred stock received shares of common stock in an amount determined by application of the Exchange Ratio. Legacy GreenLight additionally converted all of its convertible notes, including both the GLPRI issued convertible notes and the PIPE prepayment notes, to shares of common stock.

For periods prior to the Business Combination, the reported share and per share amounts have been retroactively converted by applying the Exchange Ratio. The consolidated assets, liabilities, and results of operations prior to the Business Combination are those of Legacy GreenLight.

The following table reconciles the elements of the Business Combination to the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Stockholders’ Deficit:


	BUSINESS COMBINATION (in thousands)
Cash - ENVI trust and cash (net of redemptions)	$	12,123
Cash - PIPE Investors, including proceeds from conversion of Convertible notes - PIPE Investors		124,250
Gross proceeds		136,373
Less: total transaction costs		(26,660	)
Less: cash proceeds from Convertible notes - PIPE Investors		(35,250	)
Add: transaction costs paid in 2021		4,080
Cash proceeds from Business Combination received in 2022		78,543

Less: transaction costs paid in 2021		(4,080	)
Less: warrant liabilities assumed		(1,341	)
Less: net liabilities assumed in the Business Combination		(133	)
Reverse merger, net of transactions costs	$	72,989

The number of shares of common stock outstanding immediately following the consummation of the Business Combination was as follows:


	Number of Shares
Common stock, outstanding prior to the Business Combination		20,700,000
Less: Redemption of ENVI shares		(19,489,626	)
ENVI Public Shares		1,210,374
ENVI Sponsor Shares		5,175,000
Shares issued in PIPE financing		12,425,000
Business combination and PIPE financing shares		18,810,374
Legacy GreenLight shares (1)		104,011,760
Total shares of common stock immediately after Business Combination		122,822,134

(1) - The number of Legacy GreenLight shares was determined from the shares of Legacy GreenLight outstanding immediately prior to the closing of the Business Combination converted at the Exchange Ratio. All fractional shares were rounded down.

Public Warrants

The Company concluded that following the close of the transaction the Public Warrants met the criteria for equity classification. As of the Closing Date, the 10,350,000 shares of Public Warrants were classified as equity as described within Note 11 - Warrants and recognized in additional paid-in capital.

Private Placement Warrants

As of the Closing Date, the total value of the liability associated with the Private Placement Warrants was $1.3 million. The Company concluded that the 2,062,500 shares of Private Warrants met the definition of a liability as described in Note 11 - Warrants and have been classified as such on the balance sheet. At March 31, 2023, the fair value of the warrant liability was an immaterial amount.

4. LICENSE AGREEMENT

Acuitas License Agreement

In August 2020, the Company entered into a Development and Option Agreement (the “Development and Option Agreement”) with Acuitas Therapeutics, Inc. (“Acuitas”). Under the terms of the Development and Option Agreement, the parties agreed to a program for the joint development of certain products combining the Company’s mRNA constructs with Acuitas’ liquid nanoparticle technology (“Acuitas LNP Technology”). Upon entering the Development and Option Agreement, the Company incurred a $0.8 million technology access fee. Under the Development and Option Agreement, the Company may reserve up to three specified targets (“Reserved Targets”) for development of therapeutic products related to such targets, using the Acuitas LNP Technology. In order to reserve a Reserved Target,

the Company must provide a target reservation notice to Acuitas and must pay a target reservation and maintenance fee of $0.1 million per target per contract year. For each Reserved Target, the Company may also reserve up to three additional vaccine or antibody targets meant to be included within the same product as the Reserved Target (“Additional Targets”), which incur additional target reservation fees per contract year. Under the Development and Option Agreement, the Company is required to maintain at least one Reserved Target.

Under the Development and Option Agreement, the Company has the right to exercise a license option to develop and commercialize one or more therapeutic products relating to each Reserved Target. In the event that the Company exercises the options, the Company will pay $1.5 million for the first non-exclusive license, approximately $1.8 million for the second non-exclusive license and approximately $2.8 million for the third non-exclusive license. Under the terms of the Development and Option Agreement, the Company is also responsible for the full-time employee funding obligations and reimbursements to Acuitas for certain development and material costs incurred by them, which totaled approximately $0.5 million in 2021. The Company did not incur any full-time employee funding obligations reimbursable to Acuitas for the three months ended March 31, 2023.

In January 2021, the Company exercised the first option under the Development and Option Agreement and entered into a non-exclusive license agreement with Acuitas (the “Acuitas License Agreement”), under which the Company was granted a non-exclusive, worldwide, sublicensable license under the Acuitas LNP Technology to research, develop, manufacture, and commercially exploit vaccine products consisting of certain of the Company’s mRNA constructs and Acuitas' LNP technology. In connection with the option exercise, the Company paid Acuitas an option exercise fee of $1.5 million. Under the Acuitas License Agreement, the Company is required to pay Acuitas an annual license maintenance fee of $1.0 million for the first and second targets and $0.8 million for the third target until the Company achieves a particular development milestone. Acuitas is entitled to receive potential clinical and regulatory milestone payments in the low double-digit millions for this exercised option. With respect to the sale of each licensed product, the Company is also obligated to pay Acuitas percentage royalties in the low single digits on net sales of the licensed products by the Company and its affiliates and sublicensees in a given country until the last to occur, in such country, of (i) the expiration or abandonment of all licensed patent rights covering the licensed product, (ii) expiration of any regulatory exclusivity for the licensed product, or (iii) ten years from the first commercial sale of the licensed product.

The option exercise fee under the Development and Option Agreement was recorded as research and development expense upon the Company’s exercise of the first option. Additionally, the technology access fees, target reservation and maintenance fees, expenses associated with the full-time employee funding obligations and reimbursements for development and material costs incurred by Acuitas are recorded as research and development expense when incurred. The annual maintenance fee will be recorded as an expense on an annual basis based on the stated amount for the applicable year. Upon determination that a milestone payment is probable to occur, the amount of the milestone payment will be recorded as research and development expense. As the triggering of these milestone payments was not considered probable as of March 31, 2023 and December 31, 2022, no expense has been recorded during these periods. The royalty payment is contingent upon sales of licensed products under the Acuitas License Agreement. As such, when such expenses are considered probable and estimable at the commencement of sales, the Company will accrue royalty expense for the amount the Company is obligated to pay.

The Company recorded an aggregate of $0.4 million and $0.3 million of research and development expenses, consisting of the technology access fees, option exercise fee and technology maintenance fees, for the three months ended March 31, 2023 and 2022, respectively.

5. LICENSE AND COLLABORATION AGREEMENT

Serum License Agreement

In March 2022, the Company entered into a License Agreement (the “Agreement”) with Serum Institute of India Private Limited (“SIIPL”), pursuant to which the Company granted SIIPL an exclusive, sub-licensable, royalty-bearing license to use the Company’s proprietary technology platform to develop, manufacture and commercialize up to three mRNA products in all territories other than the United States, the 27 member states of the European Union, the United Kingdom, Australia, Japan, New Zealand, Canada, South Korea, China, Hong Kong, Macau, and Taiwan (the “SIIPL Territory”). The first licensed product target will be a shingles product target, and SIIPL has an option to select the additional two licensed product targets through the end of 2024. Under the terms of the Agreement with SIIPL, the Company will provide research services related to the shingles product target to develop a “proof of concept” and will provide manufacturing technology transfer services. In addition, GreenLight retains the option to purchase research and clinical trial data, developed by SIIPL, for 50% of the cost of the research studies and clinical trials for use in the Company’s own development.

SIIPL is responsible for the development, formulation, filling and finishing, registration and commercialization of the products in the SIIPL Territory, subject to oversight from a joint steering committee composed of representatives of the Company and SIIPL. SIIPL will use commercially reasonable efforts to develop and obtain regulatory approval for the products in the countries in the SIIPL

Territory. The License Agreement includes terms customary in the industry for provisions related to sublicensing, intellectual property, and termination, and customary representations and warranties of GreenLight and SIIPL, along with certain customary covenants, including confidentiality, limitation of liability and indemnity provisions.

Pursuant to the License Agreement, SIIPL will pay the Company an upfront license fee of $5.0 million, as well as payments upon additional target selection and reservation of exclusivity. The Company may receive up to a total of an additional $17.0 million in development, regulatory and commercial (net sales) based milestone payments across all three product targets, as well as manufacturing technology transfer payments up to $10.0 million. SIIPL shall pay royalty payments in the mid-double digits, based on the net sales of products resulting from the licensed technology for the term of the License Agreement. The License Agreement shall terminate on a product-by-product and country-by-country basis on the later of the expiration of the patent rights owned by the Company or the tenth anniversary of the first commercial sale of the applicable product(s) in the applicable country.

The Company has determined that the Agreement falls within the scope of ASC 606, Revenue Recognition, ("ASC 606") as it includes a customer-vendor relationship as defined by ASC 606 and thus represents a contract with a customer. The Company has determined that the license of IP granted is not distinct from the research services, which includes manufacturing technology transfer services, and thus should be combined. The Agreement contains a single performance obligation for the combined License of IP and research services. Revenue from the contract is being recognized over time, using an input-method based on labor costs as a percentage of total expected labor costs. The Company has determined that variable consideration from the development and regulatory payments of up to $17.0 million, as well as the remaining $5.0 million of the manufacturing technology transfer payment, in the Agreement should be fully constrained as of March 31, 2023, and commercial milestones and royalties will be recognized in the period the underlying sales occur. For the three months ended March 31, 2023, the Company has recorded revenue of $3.8 million from the Agreement and the remaining amount of billed and unconstrained consideration is recorded as deferred revenue. There was no revenue recorded under the Agreement for the three months ended March 31, 2022. Based on current estimated timelines, the Company expects to recognize the deferred revenue over approximately 12 months and is classified as current in the condensed consolidated balance sheet as of March 31, 2023.

6. FAIR VALUE MEASUREMENTS

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of March 31, 2023 and December 31, 2022:


DESCRIPTION	MARCH 31, 2023		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
	($ in thousands)
Asset
Money market funds	$	32,350	$	32,350	$	—	$	—
Total assets measured at fair value	$	32,350	$	32,350	$	—	$	—
Liability
Warrant liabilities	$	15	$	—	$	—	$	15
Total liabilities measured at fair value	$	15	$	—	$	—	$	15


DESCRIPTION	DECEMBER 31, 2022		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
	($ in thousands)
Asset
Money market funds	$	68,097	$	68,097	$	—	$	—
Total assets measured at fair value	$	68,097	$	68,097	$	—	$	—
Liability
Warrant liabilities	$	242	$	—	$	—	$	242
Total liabilities measured at fair value	$	242	$	—	$	—	$	242

Money market funds were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy.

There have been no transfers between fair value levels during the three months ended March 31, 2023 and 2022, respectively. The carrying values of other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

The fair value of the common stock warrant liabilities was determined using the Black-Scholes option-pricing model with the assumptions as disclosed in Note 11 - Warrants. These assumptions include significant judgments including the fair value of the underlying common stock and volatility. An increase or decrease in the estimated fair value or changes in volatility will result in increases or decreases in the fair value of the warrant liabilities and such changes could be material.

The carrying value of each of the Horizon term loan and the SVB term loan as of March 31, 2023, and December 31, 2022 approximates their fair value as the interest rate approximates the market rate for loans with similar terms and risk characteristics. The carrying value of the equipment financing does not approximate its fair value because the instrument bears interest at a rate that is not compared to those available to the Company for a similar instrument as of March 31, 2023. The Company estimated the fair value of the equipment financing using a discounted cash flow analysis and prevailing market terms as of March 31, 2023. The carrying value and fair value of the equipment financing was $5.0 million and $4.8 million as of March 31, 2023. See Note 10 - Debt for further detail of all outstanding debt as of March 31, 2023.

The following table presents a roll-forward of the aggregate fair values of the Company’s liabilities for which fair value is determined by Level 3 inputs for the three months ended March 31, 2023 (in thousands):


	WARRANT LIABILITY
Balance—December 31, 2022	$	242
Change in fair value of warrants		(227	)
Balance—March 31, 2023	$	15

7. GRANT REVENUE

In July 2020, the Company was approved to receive a grant from the Bill & Melinda Gates Foundation in the amount of approximately $3.3 million. As of December 31, 2021, the Company had received the entire grant award, of which approximately $2.4 million was received during the year ended December 31, 2020, and the remaining approximately $0.9 million was received during the year ended December 31, 2021. The grant funds are to be used for the sole purpose of research for in vivo gene therapy for sickle cell disease and to explore new, low-cost capabilities for the in vivo functional cure of sickle cell and or durable suppression of HIV in developing countries. The Company incurred research and development costs of approximately $0.3 million associated with this grant for the three months ended March 31, 2022. The Company has recognized revenue of approximately $0.3 million for the three months ended March 31, 2022. The Company did not incur any research and development costs and has not recognized any revenue for the three months ended March 31, 2023 associated with this grant. As of March 31, 2023, we ceased any ongoing research work under such grant, completed close-out activities and are in the process of returning any remaining unused funds to the Gates Foundation. The Company has recorded $0.8 million in other current liabilities on the condensed consolidated balance sheet as of March 31, 2023 and December 31, 2022, respectively, as we are required to return all unspent funds to the Gates Foundation.

8. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following as of March 31, 2023 and December 31, 2022:


	MARCH 31, 2023			DECEMBER 31, 2022
	($ in thousands)
Leasehold improvements	$	25,196		$	25,175
Laboratory equipment		25,162			24,373
Manufacturing and farm equipment		1,495			1,450
Computer hardware and software		1,394			1,338
Furniture and fixtures		702			702
Construction in progress		1,847			1,348
Total		55,796			54,386
Less: Accumulated depreciation and amortization		(15,355	)		(13,021	)
Property and equipment, net	$	40,441		$	41,365

As of March 31, 2023 and December 31, 2022, property and equipment, net included capital lease assets of approximately $2.6 million and $2.6 million, respectively, with accumulated amortization of approximately $2.1 million and $2.0 million, respectively. Depreciation and amortization expense for the three months ended March 31, 2023 and 2022 was approximately $2.3 million and $2.1 million, respectively.

9. ACCRUED EXPENSES

Accrued expenses as of March 31, 2023 and December 31, 2022 consisted of the following:


	MARCH 31, 2023		DECEMBER 31, 2022
	($ in thousands)
Accrued employee compensation and benefits	$	6,304	$	5,998
Accrued research and development		1,448		3,041
Accrued professional fees		1,281		1,152
Accrued other		2,445		3,353
Total accrued expenses	$	11,478	$	13,544

10. DEBT

A summary of the outstanding debt as of March 31, 2023 is as follows (in thousands):


AS OF MARCH 31, 2023
DESCRIPTION	ISSUANCE DATE(S)	MATURITY DATE(S)	INTEREST RATE			PRINCIPAL BALANCE OUTSTANDING		UNAMORTIZED DEBT DISCOUNT			DEBT BALANCE
Trinity Equipment Financing	March 2021 - August 2021	March 2024 - August 2024	9.48% - 9.73%			$	4,963	$	(120	)	$	4,843
Term Loan – Silicon Valley Bank	September 2021	September 2024		8.25	%		6,000		(74	)		5,926
Term Loan – Horizon	December 2021	July 2025		13.75	%		14,000		(285	)		13,715
Finance Lease							156		—			156
Total Debt							25,119		(479	)		24,640
Less: current portion												(13,782	)
Total long-term											$	10,858

A summary of the outstanding debt as of December 31, 2022 is as follows (in thousands):


AS OF DECEMBER 31, 2022
DESCRIPTION	ISSUANCE DATE(S)	MATURITY DATE(S)	STATED INTEREST RATE			PRINCIPAL BALANCE OUTSTANDING		UNAMORTIZED DEBT DISCOUNT			DEBT BALANCE
Trinity Equipment Financing	March 2021 - August 2021	March 2024 - August 2024	9.48% - 9.73%			$	5,905	$	(146	)	$	5,759
Term Loan - Silicon Valley Bank	September 2021	September 2024		7.75	%		7,000		(98	)		6,902
Term Loan - Horizon	December 2021	July 2025		13.25	%		15,000		(343	)		14,657
Finance Lease							237		—			237
Total Debt							28,142		(587	)		27,555
Less: current portion												(13,229	)
Total long-term											$	14,326

Convertible Instruments -PIPE Investors

In December 2021, certain new and existing investors in GreenLight (the “Prepaying PIPE Investors”) agreed to purchase from GreenLight convertible instruments with an aggregate principal amount of approximately $35.3 million (the “PIPE Instruments”). The Company received $13.5 million in December 2021 and $21.8 million in January 2022.

In conjunction with entering into the PIPE Instruments, each PIPE Investor entered into a side letter agreement (the “Side Letter”) with GreenLight, which required the PIPE Investor to tender its PIPE Instrument as a corresponding payment for all or a portion of such PIPE Investor’s purchase of shares upon the closing of a business combination.

In February 2022, in accordance with the Business Combination, $35.3 million of the PIPE Instruments were surrendered, cancelled, and converted into shares of common stock. The Company determined that the cancellation and conversion of the PIPE Instruments represented an extinguishment for accounting purposes.

Term Loan – Horizon

In December 2021, the Company entered into a loan and security agreement with Horizon Technology Finance Corporation and Powerscourt Investments XXV, LP (together, “Horizon”), which provided for a term loan facility in an aggregate principal amount of up to $25.0 million, $15.0 million of which was borrowed at the closing and the remainder of which may be borrowed following the achievement of certain milestones, but not after June 30, 2022. As of June 30, 2022, the Company had not borrowed, and could no longer borrow the remainder of the term loan.

Accrued interest is payable monthly. The principal of each term loan must be repaid in equal monthly installments beginning February 1, 2023, with a scheduled final maturity date of July 1, 2025. The Company may prepay the term loans in full, but not in part, without premium or penalty, other than a premium equal to (i) 3% of the principal amount of any prepayment made within 12 months after the applicable funding date, (ii) 2% of the principal amount of any prepayment made between 12 and 24 months after the applicable funding date and (iii) 1% of the principal amount of any prepayment made more than 24 months after the applicable funding date. On the earlier of the scheduled final maturity date and the prepayment in full of the term loans, the Company must pay a final payment fee equal to 3.0% of the original principal amount of the funded term loans. The final payment is being accreted to interest expense over the term of the loan using the effective interest method and is being recorded in other liabilities on the Company's condensed consolidated balance sheets.

The debt was recorded based on proceeds received net of related debt issuance costs of approximately $0.6 million, which is being amortized over the term of this financing agreement. The debt issuance costs include the fair value of approximately $0.4 million for the warrants the Company is committed to issue in conjunction with this financing. The warrants were issued on January 19, 2022. See Note 11 - Warrants for further discussion of the warrants.

Term Loan – Silicon Valley Bank

In September 2021, the Company entered into a loan and security agreement with Silicon Valley Bank (“SVB”), which provided for a term loan facility in an aggregate principal amount of up to $15.0 million, $10.0 million of which was borrowed at the closing and the remainder of which may be borrowed following the achievement of certain milestones, but not after March 31, 2022. As of March 31, 2022, the Company had not borrowed, and could no longer borrow the remainder of the term loan. On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver and SVB was subsequently transferred into a new entity, Silicon Valley Bridge Bank, N.A (“SVB Bridge Bank”).

The loan and security agreement with SVB contains customary affirmative and negative covenants and customary events of default; it does not contain a financial covenant. The loan and security agreement with SVB also includes the obligation for the Company to

maintain cash in accounts with SVB in amounts sufficient to repay all loan obligations, which if not met constitutes an event of default under the agreement.

Accrued interest is payable monthly. The principal of each term loan must be repaid in equal monthly installments beginning April 1, 2022, with a scheduled final maturity date of September 1, 2024. On the earlier of the scheduled final maturity date and the prepayment in full of the term loans, the Company must pay a final payment fee equal to 4.0% of the original principal amount of the term loans. The final payment is being accreted to interest expense over the term of the loan using the effective interest method. GreenLight may prepay the term loans in increments of $5.0 million and without premium or penalty, other than a premium equal to (i) with respect to any prepayment made on or before September 22, 2022, 3% of the principal so prepaid, (ii) with respect to any prepayment made after September 22, 2022 and on or before September 22, 2023, 2% of the principal so prepaid and (iii) with respect to any prepayment made after September 22, 2023 and on or before September 1, 2024, 1% of the principal so prepaid. GreenLight granted a first-priority, perfected security interest in substantially all of its present and future personal property and assets, excluding intellectual property, to secure its obligations to SVB.

The debt was recorded based on proceeds received net of related debt issuance costs of approximately $0.3 million. The debt issuance costs include the fair value of approximately $0.2 million for the 34,427 warrants to purchase shares of common stock the Company previously issued in conjunction with this financing. No additional common warrants were issued in conjunction with this financing. Total debt issuance costs of approximately $0.4 million is being amortized over the term of this financing agreement.

Equipment Financing

On March 29, 2021, the Company entered into a master equipment financing agreement with Trinity Capital (Trinity) authorizing equipment financing in the aggregate of approximately $11.3 million with advances to be made as follows: (1) up to $5.0 million at execution of the agreement and (2) the remaining balance to be drawn at the Company’s option but no later than September 1, 2021. The monthly payment factors are determined by Trinity based on the Prime Rate reported in The Wall Street Journal on the first day of the month in which a financing schedule is executed, which as of the effective date of the equipment financing agreement was 3.25%. As of March 31, 2023, the Company had drawn the entire $11.3 million on multiple advances, which is repayable over a 36-month period that commenced on the advance date. The historical cost of the assets subject to a lien under this financing arrangement is approximately $14.7 million.

The debt was recorded based on proceeds received net of related debt issuance costs of approximately $0.4 million, which are being amortized over the term of this financing agreement. The debt issuance costs include the fair value of approximately $0.1 million for the 146,325 warrants to purchase shares of common stock the Company issued in conjunction with this financing.

Convertible Notes

In connection with the Merger (See Note 3 - Business Combination), $16.8 million of the Company’s outstanding convertible notes, which were issued in 2020, and accrued interest of $1.6 million converted into 10.1 million shares of Series D Preferred Stock. Concurrently with the business combination, the Series D Preferred Stock was exchanged for shares of common stock of New GreenLight in February of 2022.

Loan Interest Expense and Amortization

Interest expense for the three months ended March 31, 2023 and 2022 consisted of the following:


	THREE MONTHS ENDED MARCH 31,
	2023		2022
	($ in thousands)
Interest paid or accrued	$	898	$	804
Non-cash amortization of debt discount and deferred financing cost		109		224
Total	$	1,007	$	1,028

Scheduled future principal payments on total outstanding debt, as of March 31, 2023 are as follows (in thousands):


	MARCH 31, 2023
Remainder of 2023	$	10,591
2024		11,028
2025		3,500
Total	$	25,119

11.

WARRANTS

Common Stock Warrants classified as Liabilities

Private Placement Warrants

The Private Placement Warrants may not be redeemed by the Company so long as the Private Placement Warrants are held by the initial purchasers, or such purchasers’ permitted transferees. The Private Placement Warrants have terms and provisions identical to those of the Public Warrants which are discussed below, including as to exercise price, exercisability, and exercise period, except if the Private Placement Warrants are held by someone other than the initial purchasers’ permitted transferees, then the Private Placement Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. On the Closing Date and as of March 31, 2023, there were 2,062,500 Private Warrants issued and outstanding. These warrants are recognized as liabilities on the condensed consolidated balance sheets and were measured at their inception date fair value and subsequently remeasured at each reporting period with changes recorded as a component of other income (expense) in the Company’s condensed consolidated statements of operations.

The fair value of the Private Placement Warrants upon initial recognition, as of December 31, 2022 and as of March 31, 2023 was estimated to be approximately $1.3 million, $0.2 million and $15 thousand, respectively, and was measured using a Black-Scholes option-pricing model with the following assumptions:


Valuation Assumptions	AS OF MARCH 31, 2023			AS OF DECEMBER 31, 2022			INITIAL RECOGNITION (AS OF FEBRUARY 2, 2022)
Fair value of common stock	$	0.43		$	1.18		$	8.82
Risk free interest rate		3.70	%		4.05	%		1.59	%
Volatility		69.0	%		69.0	%		15.9	%
Expected term (in years)		3.75			4.17			5.00

Common Stock Warrants classified as Equity

Horizon Debt Warrants

In connection with the Loan Agreement the Company entered into with Horizon in December 2021, the Company issued warrants to Horizon to purchase 85,552 shares of the Company’s common stock at an exercise price per share of $5.26 for the $15.0 million drawn commitment. Upon issuance of these warrants in January 2022, the Company reassessed the classification of the warrants and noted that there was no variability in the number of shares or the exercise price of the warrants. The Company determined that the warrants met the requirements for equity classification and the fair value of $0.4 million was reclassified to equity as of March 31, 2022.

The warrants' fair value upon issuance was estimated to be approximately $0.4 million, and was measured using a Black-Scholes option-pricing model with the following assumptions:


Valuation Assumptions	AT ISSUANCE (AS OF JANUARY 19, 2022)
Fair value of common stock	$	5.89
Risk free interest rate		1.50	%
Expected volatility		59.60	%
Expected term (in years)		10.00

In connection with Loan Agreement the Company entered into with Horizon which provided for a term loan facility in an aggregate principal amount of up to $25.0 million, of which $15.0 million was borrowed at the closing (See Note 10 - Debt), the Company issued warrants for both the $15.0 million loan drawn at the closing and the remaining $10.0 million available commitment which had different terms and conditions. In conjunction with the $10.0 million available commitment, the Company made available to Horizon a warrant to purchase up 57,034 shares, of which 28,517 shares of the Company’s common stock were issued at an exercise price per share of $5.26. These warrants were recognized as liabilities and were measured at their inception date fair value and subsequently remeasured at each reporting period with changes recorded as a component of other income in the Company’s condensed consolidated statements of

operations. The warrant issued for the $10.0 million available commitment is summarized below as a liability-classified Common Stock Warrant.

Warrant Class

Inception Date Fair Value (in thousands)

Issuance Date

Exercise Price

Expiration Date

Common stock warrant

28,517

249

January 19, 2022

5.26

The earlier of March 29, 2031 or the date of a qualifying acquisition

The warrant’s fair value upon issuance and as of June 30, 2022 was estimated to be approximately $0.2 million and $35 thousand, respectively, and was measured using a probability weighted Black-Scholes option-pricing model with the following assumptions:


Valuation Assumptions	AT ISSUANCE (AS OF JANUARY 19, 2022)			AS OF JUNE 30, 2022
Fair value of common stock	$	5.89		$	2.21
Risk free interest rate		1.50	%		2.39	%
Expected volatility		59.60	%		59.60	%
Expected term (in years)		10.50			10.00

At June 30, 2022, the Warrants were determined to have met the requirements for equity classification and the fair value of $35 thousand was reclassified to equity.

Public Warrants

Each Public Warrant entitles the holder to the right to purchase one share of common stock at an exercise price of $11.50 per share. No fractional shares will be issued upon exercise of the Public Warrants. The Company may elect to redeem the Public Warrants subject to certain conditions, in whole and not in part, at a price of $0.01 per Public Warrant if (i) 30 days’ prior written notice of redemption is provided to the holders, and (ii) the last reported sale price of the Company’s common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders. Upon issuance of a redemption notice by the Company, the warrant holders have a period of 30 days to exercise for cash, or on a cashless basis. On the Closing Date, there were 10,350,000 Public Warrants issued and outstanding.

In March 2022, 105,120 of the Public Warrants were exercised into shares of the Company's common stock for a total exercise price of $1.2 million in cash.

The following table presents a summary of the Company’s warrants activity from December 31, 2022 to March 31, 2023:


	COMMON STOCK WARRANTS
Warrants Outstanding, December 31, 2022		12,383,304
Issued		—
Exercised		—
Warrants Outstanding, March 31, 2023		12,383,304

12.

STOCKHOLDERS' EQUITY

Authorized shares

The Company was authorized to issue 500,000,000 shares of $0.0001 par value common stock and 10,000,000 shares of $0.0001 par value preferred stock as of March 31, 2023 and December 31, 2022, respectively.

As of March 31, 2023 and December 31, 2022, the total number of shares of common stock issued and outstanding was 151,681,314 and 151,587,165, respectively. As of each March 31, 2023 and December 31, 2022, there were 12,383,304 warrants to purchase the Company’s common stock outstanding. As of March 31, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

Legacy Greenlight Redeemable Convertible Preferred Stock

In connection with the Business Combination, Legacy Redeemable Convertible Preferred Stock previously classified as temporary equity was retroactively adjusted, converted into common stock at an exchange ratio of approximately 0.6656, and reclassified to permanent equity as a result of the reverse recapitalization. As of March 31, 2023 and December 31, 2022, there was no Legacy Redeemable Convertible Preferred Stock authorized, issued or outstanding, respectively.

13. STOCK-BASED COMPENSATION

2022 Stock Incentive Plan

On February 1, 2022, stockholders approved the New GreenLight 2022 Equity and Incentive Plan, or the “New GreenLight Equity Plan”, or “Equity Plan”, replacing the GreenLight 2012 Equity Plan (the “2012 Plan”), pursuant to which the Company’s Board of Directors may grant stock options, both incentive stock options and nonstatutory stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, dividend equivalent rights, or cash awards to employees, directors and consultants. In connection with the adoption of the Equity Plan, no further option grants are permitted under the 2012 Plan and any expirations, cancellations, or terminations under the 2012 Plan are available for issuance under the Equity Plan. There are 31,750,000 registered shares of common stock reserved for issuance under the Equity Plan. On January 1, 2023, the number of shares reserved and available for issuance under the Equity Plan increased by 6,063,486 shares of common stock pursuant to a provision in the Equity Plan that provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2023, by 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser number as determined by the compensation committee of the board of directors. As of March 31, 2023, 14,494,674 shares remain available for future grants under the Equity Plan.

The Plan is administered by the Company’s Board of Directors (the “Board”). The exercise prices, vesting and other restrictions are determined at the discretion of the Board, except that the exercise price per share of incentive stock options may not be less than 100% of the fair market value of the common stock on the date of grant. Stock options awarded under the Plan expire ten years after the grant date unless the Board sets a shorter term. Vesting periods for awards under the plans are determined at the discretion of the Board. Incentive stock options granted to employees and non-statutory options and restricted stock awards granted to employees, officers, members of the Board, advisors, and consultants of the Company typically vest over four or five years.

The fair value of stock option awards is estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:


	THREE MONTHS ENDED MARCH 31,
	2023			2022
Fair value of underlying common stock	$	0.56		$	9.15
Weighted average risk-free interest rate		3.89	%		2.56	%
Expected term (in years)		6.07			6.00
Expected volatility		56.97	%		56.28	%
Expected dividend yield		0.00	%		0.00	%

The following table summarizes the activity of the Company’s stock options under the Plan for the three months ended March 31, 2023:


						AVERAGE		AGGREGATE
				WEIGHTED-		REMAINING		INTRINSIC
				AVERAGE		CONTRACTUAL		VALUE
	SHARES			EXERCISE PRICE		TERM (in years)		(in thousands)
Outstanding at December 31, 2022		23,051,188		$	2.35		7.8	$	7,192
Granted		229,500			0.97		—		—
Exercised		(94,149	)		0.37		—		—
Cancelled or forfeited		(755,414	)		3.11		—		—
Outstanding at March 31, 2023		22,431,125			2.25		7.6		355
Vested and expected to vest at March 31, 2023		22,431,125			2.25		7.6		355
Exercisable at March 31, 2023		11,015,527		$	1.11		6.3	$	333

The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2023 and 2022 was $0.56 per share and $5.06 per share, respectively.

As of March 31, 2023, total unrecognized compensation expense related to stock options totaled approximately $20.3 million, which is expected to be recognized over a weighted-average period of 2.8 years.

The aggregate intrinsic value of common stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The intrinsic value of options exercised for the three months ended March 31, 2023 and 2022, was approximately $9 thousand and $0.6 million, respectively.

Restricted Stock

The fair value of each restricted common stock award is estimated on the date of grant based on the fair value of the Company’s common stock on that same date. The Company did not have any restricted stock activity during the three months ended March 31, 2023. The total fair value of restricted stock that vested during the three months ended March 31, 2022 was approximately $25 thousand.

Stock-Based Compensation Expense

Stock-based compensation expense recorded as research and development and general and administrative expenses, for employees, directors and non-employees during the three months ended March 31, 2023 and 2022 is as follows:


	THREE MONTHS ENDED MARCH 31,
	2023		2022
	($ in thousands)
Research and development	$	1,308	$	504
General and administrative		1,000		1,683
Total stock-based compensation expense	$	2,308	$	2,187

The Company recognized additional stock-based compensation expense associated with 292,650 shares subject to GreenLight options that vest based on both a liquidity and a service condition. At the date of grant in 2020, achievement of the conditions in the performance-based award was deemed not probable and, accordingly, the grant date fair value of the award was zero based upon the probable outcome of such conditions. The liquidity condition is satisfied upon the occurrence of certain events, including a merger or acquisition or other business combination transaction involving the Company and a publicly traded special purpose acquisition company or other similar entity and, as a result, the liquidity condition for certain of GreenLight’s options was satisfied upon the completion of the Business Combination. Assuming achievement of the highest level of performance, the performance-based award would have had a grant date fair value of $0.2 million. In December 2021, the Company’s Board of Directors voted to extend the length of time to allow for the performance vesting to occur by March 31, 2022. The fair value of the award, as modified, was $2.1 million as of the modification date. Upon closing of the Business Combination, the Company recognized approximately $1.4 million of incremental stock-based compensation expense associated with these options during the three months ended March 31, 2022, and the remainder is being recognized over the remaining service period.

14. NET LOSS PER SHARE

The following table summarizes the computation of basic and diluted net loss per share:


(In thousands, except shares and per share data)	THREE MONTHS ENDED MARCH 31,
	2023			2022
Numerator:
Net loss	$	(28,469	)	$	(38,207	)
Denominator:
Weighted-average common stock outstanding		151,614,008			113,558,404
Net loss per share, basic and diluted	$	(0.19	)	$	(0.34	)

The Company’s potential dilutive securities include unvested restricted stock, common stock options and common stock warrants. The Company excluded the following potential common stock, presented based on amounts outstanding at period end, from the computation of diluted net loss per share because including them would have had an anti-dilutive effect:


	AS OF MARCH,
	2023		2022
Unvested restricted stock		—		2,664
Options to purchase common stock		22,431,125		18,505,366
Common stock warrants		12,383,304		12,383,304
Total		34,814,429		30,891,334

15. INCOME TAXES

The Company did not record U.S. federal, state or foreign income tax expense for the three months ended March 31, 2023 and 2022 due to the Company’s historical net operating losses, forecasted continued net operating losses, and the Company’s recognition of a full valuation allowance.

The Company's effective tax rate differs from the statutory rate, primarily due to the Company’s history of incurring losses, which have not been benefited, other permanent differences, and withholding taxes. Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain.

16. LEASES

The Company adopted Accounting Standards Codification ("ASC") 842, Leases, during the quarter ended December 31, 2022, with an effective date of January 1, 2022, using the modified retrospective approach and utilizing the effective date as its date of initial application. The Company's condensed consolidated financial statements presented for fiscal year 2022 have been adjusted to reflect the impact of adoption of ASC 842 as of the effective date of January 1, 2022. As a result of implementing this guidance, the Company recorded an operating right-of-use asset of $15.2 million and an operating lease liabilities of $15.9 million, respectively, as of January 1, 2022 and also derecognized total deferred rent liabilities and unamortized lease incentives of $0.7 million that existed as of December 31, 2021. The adoption of this standard did not have a significant impact on the Company’s Consolidated Statements of Operations as of December 31, 2022.

As of March 31, 2022 the adoption of ASC 842 resulted in the recognition of operating lease right-of-use assets of $31.7 million and current and noncurrent operating lease liabilities of $6.3 million and $26.8 million, respectively, on the Company’s condensed consolidated balance sheet. The adoption of ASC 842 for the three months ended March 31, 2022 resulted in an impact to the condensed consolidated statement of cash flows of an increase of $1.6 million in other non-cash operating lease cost, a net change in accrued expenses, lease liabilities and other liabilities of $1.4 million and deferred rent of $0.3 million. The adoption of ASC 842 had no material impact to the condensed consolidated statement of operations for the three months ended March 31, 2022.

The Company leases certain laboratory and office spaces under operating leases and certain equipment under financing leases. Determination if an arrangement is a lease occurs at inception. For leases with terms greater than 12 months, the Company records a related right-of-use (“ROU”) asset and lease liability at the present value of lease payments over the term. Many leases include fixed rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. The Company’s leases generally do not provide an implicit rate, and thus the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company has elected not to record a ROU asset and lease obligation for short-term leases (with terms less than 12 months) or separate non-lease components from associated lease components for all asset classes. As a result, all contract consideration is allocated to the single lease component.

The Company leases certain of its facilities under non-cancellable operating and financing leases expiring at various dates through 2042. The Company is also responsible for utilities, maintenance, insurance, and property taxes under these leases which are variable payments. Our lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms. We often receive customary incentives from our landlords, such as reimbursements for tenant improvements and rent abatement periods, which effectively reduce the total lease payments owed for these leases. Leases are classified as operating or financing at commencement. Certain leases include options to renew or terminate at the Company’s discretion. The lease terms include periods covered by these options if it is reasonably certain the Company will renew or not terminate.

The following table reconciles the right of use operating and finance leases and corresponding liabilities to the balance sheet as of March 31, 2023 and December 31, 2022, respectively (in thousands):


	CLASSIFICATION ON THE CONDENSED CONSOLIDATED BALANCE SHEET	MARCH 31, 2023		DECEMBER 31, 2022
Assets:
Right of use asset - operating lease	Right-of-use assets	$	32,740	$	32,766
Right of use asset - financing lease	Property and equipment, net		469		519
Total lease assets		$	33,209	$	33,285
Liabilities:
Current:
Operating lease liabilities, current	Lease liabilities, current portion		4,083		3,358
Finance lease liabilities, current	Long-term debt, current portion		134		210
Non-current:
Operating lease liabilities, net of current portion	Lease liabilities, net of current portion		48,702		49,569
Finance lease liabilities, net of current portion	Long-term debt, net of current portion		22		28
Total lease liabilities		$	52,941	$	53,165

The following table provides the components of the Company's lease costs for the three months ended March 31, 2023 and 2022, respectively (in thousands):


	THREE MONTHS ENDED MARCH 31
	2023		2022
Operating lease costs	$	2,498	$	2,519
Short-term lease costs		8		140
Variable lease costs		764		86
Total operating lease costs	$	3,270	$	2,745

Finance lease costs:
Amortization of right-of-use assets		50		47
Interest on lease liabilities		3		6
Total finance lease costs	$	53	$	53

Total lease costs	$	3,323	$	2,798

Other information related to leases for the three months ended March 31, 2023 and 2022, respectively were as follows (in thousands):


	THREE MONTHS ENDED MARCH 31
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	2,470		$	2,040
Operating cash flows for finance leases		3			6
Finance cash flows for finance leases		83			160

Right-of-use assets obtained in exchange for operating lease liabilities	$	791		$	18,100

Operating Leases
Weighted average remaining lease term (years)		9.33			9.08
Weighted average incremental borrowing rate		11.16	%		11.09	%

Finance Leases
Weighted average remaining lease term (years)		0.75			1.33
Weighted average incremental borrowing rate		7.67	%		5.75	%

A summary of the Company's future minimum lease payments under noncancelable leases as of March 31, 2023, is as follows:


	MARCH 31, 2023
	OPERATING LEASES			FINANCE LEASES
	($ in thousands)
Remainder of 2023	$	6,828		$	130
2024		9,568			32
2025		8,280			—
2026		8,204			—
2027		8,185			—
Thereafter		46,183			—
Total future minimum lease payments		87,248			162
Less: imputed interest		(34,463	)		(6	)
Total	$	52,785		$	156

17. COMMITMENTS AND CONTINGENCIES

Legal proceedings

Legal claims may arise from time to time in the normal course of business. There are no such claims during the respective three months ended March 31, 2023 and 2022, that are expected to have a material effect on the Company’s condensed consolidated financial statements.

Other funding commitments

In December 2020, the Company entered into an assignment and license agreement with Bayer CropScience LLP (“Bayer”) under which the Company may be obligated to make milestone and royalty payments. These payment obligations are contingent upon future events, such as achieving certain development, regulatory, and commercial milestones or generating product sales. The timing of these events is uncertain; accordingly, the Company cannot predict the period during which these payments may become due. The Company has agreed to pay up to $2.0 million in milestone payments under this assignment and license agreement when certain development milestones are met. The Company assessed the milestones for the three months ended March 31, 2023 and concluded no such milestone payments were deemed probable nor due.

In November 2021, the Company entered into a manufacturing and development contract service agreement with a contract development and manufacturing organization for the Company’s mRNA COVID-19 vaccine. Based on the Company’s minimum purchase commitments, the Company expects to pay the organization a minimum of approximately $8.8 million in service fees under the agreement, excluding the cost of raw materials. The Company has incurred $5.9 million in costs under this service arrangement for the year ended December 31, 2022, with the remainder in 2023. For the three months ended March 31, 2023, the Company did incur any costs under this service agreement.

18. RELATED PARTY TRANSACTIONS

The Company is party to a Lease Agreement (the “Farmland Lease”) with Mendocino View Farm, LLC, which is a wholly-owned subsidiary of Fall Line Endurance Fund, LP (“Fall Line”). Fall Line is a greater than 5% shareholder of the Company and Eric O’Brien, a director on the Company’s Board of Directors, is the co-founder and Managing Director of Fall Line. Pursuant to the terms of the Farmland Lease, the Company is leasing approximately 81.25 acres of farmland for research and development purposes at an annual rental rate of $0.1 million plus operating expenses. The initial term of the Farmland Lease is ten years, which commenced on January 1, 2023, subject to an option to extend for an additional ten years. Under the Farmland Lease, the Company agreed to pay $0.4 million as additional rent, payable in two installments of $0.2 million on each of January 1, 2023 and January 1, 2024. Fall Line provided the Company an allowance of $0.1 million towards tenant improvements. Either party under the Farmland Lease may terminate the Farmland Lease subject to a termination fee of $0.2 million. Finally, the Company has a right of first offer to purchase the leased farmland in the event Fall Line intends to sell all or any portion of the leased farmland.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the financial condition and results of operations of GreenLight Biosciences Holdings

PBC and its consolidated subsidiaries should be read together with the Company’s unaudited condensed consolidated financial statements, together with the related notes thereto, included elsewhere in this Quarterly Report on Form 10-Q (this “Report”) and the Company’s audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. This discussion contains forward-looking statements that involve numerous risks and uncertainties, including, but not limited to, those described under the heading “Risk Factors” in Item 1A of Part II of this Report and Item IA of Part I of the Company’s Annual Report for the year ended December 31, 2022. See “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Report. All references to years, unless otherwise noted, refer to the Company’s fiscal years, which end on December 31. For purposes of this section, all references to “we,” “us,” “our,” “New GreenLight” or the “Company” refer to GreenLight Biosciences Holdings PBC and its consolidated subsidiaries.

Overview

GreenLight Biosciences Holdings, PBC is a pre-commercial stage biotechnology company with a proprietary cell-free ribonucleic acid (RNA) production platform for the discovery, development, and commercialization of high-performing products to promote healthier plants, foods, and people. Our vision is to pave the way for a sustainable planet through widely available and affordable RNA products. We are developing RNA products for plant and life science applications to advance crop management, plant protection, animal health, vaccine development and pandemic preparation. We have a pipeline of product candidates across various stages of development.

Since our inception in 2008, we have devoted substantially all of our efforts and financial resources to conducting research and development activities for our programs, acquiring, in-licensing, and discovering product candidates, securing related intellectual property rights, raising capital, and organizing and staffing our company. We do not have any products approved for sale and have not generated any revenue from product sales. From our founding through March 31, 2023, we have funded our operations primarily through proceeds from the sale of our capital stock, the Business Combination (including the related PIPE financing), the August 2022 PIPE Financing (as defined below), debt financings, the issuance of convertible notes and collaboration agreements.

We have incurred significant operating losses since inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or future product candidates. Our net losses were $28.5 million and $38.2 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023 and December 31, 2022 we had an accumulated deficit of $449.1 million and $420.6 million, respectively. Notwithstanding our recent corporate realignment, we expect to continue to incur significant expenses and operating losses as we pursue our remaining programs, particularly if and as we:

•

conduct field and clinical trials for our product candidates;

•

continue to develop additional product candidates;

•

maintain, expand, and protect our intellectual property portfolio;

•

hire additional and/or replacement clinical, scientific manufacturing and commercial personnel;

•

expand external and/or establish internal commercial manufacturing sources and secure supply chain capacity sufficient to provide commercial quantities of any product candidates for which we may obtain regulatory approval;

•

acquire or in-license other product candidates and technologies;

•

seek regulatory approvals for any product candidates that successfully complete field trials or clinical trials;

•

establish a sales, marketing, and distribution infrastructure to commercialize any products for which we may obtain regulatory approval; and

•

add operational, financial and management information systems and personnel to support our product development, clinical execution and planned future commercialization efforts, as well as to support our operations as a public company.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. We expect to finance our operations through the sale of equity securities, debt financings or other capital sources, which may continue to include collaborations with other companies or other strategic transactions. The fundraising environment for early-stage biotechnology companies like ours continues to be extremely challenging, and we may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise sufficient capital or enter into such agreements or arrangements as and when needed, we may have to significantly delay, scale back, or discontinue the development and

commercialization of one or more of our product candidates and delay or discontinue the pursuit of potential in-license or acquisition opportunities.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to further reduce or terminate our operations. The Company expects that its existing cash and cash equivalents of $32.4 million as of March 31, 2023 will last through the second quarter of 2023 but will not be sufficient to fund its operations for twelve months from the date these interim financial statements are issued. We are continuing to evaluate a range of additional opportunities to extend cash runway, including management of program spending, platform licensing collaborations and potential financing activities. In the event the Company is unable to secure additional outside capital to fund our obligations prior to the end of the second quarter of 2023, the Company will be required to seek other strategic alternatives, which may include, among others, scaling back or discontinuing certain or all operations to reduce costs, closure of operations, sale of certain of our assets, a sale of the entire company to strategic or financial investors, and/or seeking protection under the U.S. bankruptcy laws.

Macroeconomic Conditions

We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability, including in Europe, and record inflation. GreenLight’s business, financial condition and results of operations could be materially and adversely affected by any negative impact on the global economy and capital markets resulting from these global economic conditions, particularly if such conditions are prolonged or worsen.

Economic uncertainty in various global markets, including the U.S. and Europe, caused by political instability and conflict and economic challenges caused by the ongoing COVID-19 pandemic, have led to market disruptions, including significant volatility in commodity prices, credit and capital market instability and supply chain interruptions, which have caused record inflation globally. While we recognize that the United States public health emergency for COVID-19 is planned to end in May 2023, the full impact of the ongoing COVID-19 pandemic to date and current macroeconomic conditions, including changes in inflation, interest rates and overall economic conditions and uncertainties on our business, operations and product development timelines and plans remains uncertain, and will depend on certain developments, including its impact on our field trial completion, clinical trial initiation and enrollment, trial sites, contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other third parties with whom we do business, as well as its impact on regulatory authorities and our key scientific and management personnel.

While we are experiencing limited financial and operational impacts at this time, given the global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with these macroeconomic conditions, including potential uncertainty with the stability of banks and other financial institutes in light of the Silicon Valley Bank closure in March 2023, it is impossible to predict the extent to which GreenLight’s operations will be impacted in the short and long term, or the ways in which such instability could impact our business and results of operations. The extent and duration of these market disruptions, whether as a result of the military conflict between Russia and Ukraine, geopolitical tensions, record inflation or otherwise, are impossible to predict, but could be substantial. Furthermore, the impacts from the COVID-19 pandemic have resulted and will likely continue to result in significant disruptions to the global economy and capital markets around the world. GreenLight cannot predict the future progression or full impact of the outbreak and its effects on GreenLight’s business and operations. We continue to closely monitor the global economic and geopolitical conditions as we evolve our business continuity plans, clinical development plans and response strategy.

Recent Developments

Indication of Interest from Fall Line

On March 29, 2023, the Company received a non-binding indication of interest from Fall Line Endurance Fund, L.P. (“Fall Line”) to acquire all of the outstanding capital stock of the Company (the “Proposed Transaction”). The terms of any potential agreement between GreenLight and Fall Line would be contingent on certain conditions, including completion of due diligence review and negotiation of definitive transaction documents, as well as certain to be identified Company stockholders agreeing to roll their existing equity in connection with the Proposed Transaction. GreenLight’s Board of Directors through a special committee thereof (the “Special Committee”) is carefully evaluating Fall Line’s indication of interest within the context of the ongoing review of various alternatives and in consultation with its retained financial and legal advisors. No assurance can be given that a definitive transaction with respect to Fall Line’s indication of interest or any other potential transaction will eventually be consummated. GreenLight does not intend to make further announcements about any of the various alternatives that are being evaluated unless and until GreenLight’s Board of Directors and/or the Special Committee has approved a specific transaction or otherwise determines that further disclosure is appropriate or

necessary. As of March 31, 2023, Fall Line had a beneficial ownership percentage of 5.9% based on 151,681,314 shares of GreenLight Common Stock issued and outstanding as of March 31, 2023.

Business Combination and Public Company Costs

On August 9, 2021, the Company and Merger Sub entered into the Business Combination Agreement with GreenLight Biosciences, Inc. (the "Business Combination Agreement" and the transactions contemplated by the Business Combination Agreement, the "Business Combination"). On February 2, 2022, the Business Combination was consummated, pursuant to which Merger Sub merged with and into GreenLight Biosciences, Inc., with GreenLight Biosciences, Inc. surviving the Merger as a wholly owned subsidiary of the Company. On February 2, 2022, in connection with the consummation of the Merger, the Company changed its name to GreenLight Biosciences Holdings, PBC and became a public benefit corporation.

Immediately before the closing of the Business Combination, the Company held approximately $207.0 million in a trust account for its public stockholders. In connection with the Business Combination, the Company's public stockholders redeemed shares of public common stock for $194.9 million, and the funds remaining after such redemptions became available to finance transaction expenses and the future operations of the Company. In connection with the Business Combination, the Company entered into agreements with new investors and existing investors in GreenLight Biosciences, Inc. to subscribe for and purchase an aggregate of approximately 12.4 million shares of the Company's Class A Common Stock (the “February 2022 PIPE Financing”). The February 2022 PIPE Financing was consummated on February 2, 2022 and resulted in gross proceeds of approximately $136.4 million (of which $35.3 million had been advanced to GreenLight Biosciences, Inc. by the Prepaying PIPE Investors).

The Merger was accounted for as a reverse recapitalization, whereby for accounting and financial reporting purposes, GreenLight Biosciences, Inc. was the acquirer. A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the Company represent the continuation of the consolidated financial statements of GreenLight Biosciences, Inc. in many respects. The shares of the Company remaining after redemptions of shares of the Company's public common stock and the unrestricted net cash and cash equivalents on the date the Business Combination was consummated were accounted for as a capital infusion to GreenLight Biosciences, Inc.

The most significant change in the Company's financial position and results of operations resulting from the consummation of the Business Combination (including the February 2022 PIPE Financing) was an estimated cash inflow (as compared to GreenLight Biosciences, Inc. balance sheet at December 31, 2021) of approximately $136.4 million, prior to payment of the transaction costs. Total direct and incremental transaction costs of $26.7 million were treated as a reduction of the cash proceeds with capital raising costs being deducted from GreenLight Biosciences, Inc.'s additional paid-in capital.

As a consequence of the Business Combination, GreenLight Biosciences, Inc. effectively became the successor to a publicly traded and Nasdaq-listed company, which required it to hire additional personnel and is requiring it to implement procedures and processes to address public company regulatory requirements and customary practices. The Company has incurred and expects to continue to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.

Financial Overview

Components of Our Results of Operations

Revenue

For the three months ended March 31, 2023, we have not recognized any revenue from product sales. If our development efforts for our product candidates are successful and result in regulatory approval, or license agreements with third parties, we may generate revenue in the future from product sales or license agreements. However, there can be no assurance as to when we will generate such revenue, if at all.

License and Collaboration Revenue

License revenue is related to our license agreement with Serum Institute of India Private Limited (“SIIPL”) which was entered into in March 2022, pursuant to which the Company granted SIIPL an exclusive, sub-licensable, royalty-bearing license to use the Company’s proprietary technology platform to develop, manufacture and commercialize up to three mRNA products. The first licensed product target will be a shingles product target, and SIIPL has an option to select the additional two licensed product targets through the end of 2024. Under the terms of the Agreement with SIIPL, the Company will provide research services related to the shingles product target to develop a “proof of concept” and will provide manufacturing technology transfer services. In addition, GreenLight retains the option to purchase research and clinical trial data, developed by SIIPL, for 50% of the cost of the research studies and clinical trials for use in the Company’s own development.

Grant Revenue

In July 2020, we entered into a grant agreement with the Bill & Melinda Gates Foundation to advance research in in vivo gene therapy for sickle cell disease and to explore new, low-cost capabilities for the in vivo functional cure of sickle cell and/or durable suppression of HIV in developing countries. We were approved to receive a grant of $3.3 million in the aggregate. As of December 31, 2022, we had received the entire grant amount. The grant agreement provides for payments to reimburse qualifying costs, including general and administrative costs, incurred to perform our obligations under the agreement. Revenue from this grant agreement is recognized as the qualifying costs related to the grant are incurred, and any amounts received in excess of revenue recognized are initially recorded as deferred revenue on our condensed consolidated balance sheets and later recognized as revenue when qualified costs are incurred. As of March 31, 2023, we ceased any ongoing research work under such grant, completed close-out related activities and are in the process of returning any remaining unused funds to the Gates Foundation

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our product candidates. We expense research and development costs as incurred. These expenses include:

Program expenses

•

external research and development expenses incurred under agreements with CMOs, CROs, universities and research laboratories that conduct our field trials, preclinical studies and development services;

•

costs related to manufacturing material for our field trials and preclinical studies;

•

laboratory supplies and research materials;

•

payments made in cash or equity securities under third-party licensing agreements and acquisition agreements; and

•

costs related to compliance with regulatory requirements;

Personnel expenses

•

employee-related expenses, including salaries, bonuses, benefits, stock-based compensation, and other related costs for employees involved in research and development efforts;

Facilities and other expenses

•

costs of outside consultants engaged in research and development functions, including their fees and travel expenses; and

•

facilities, depreciation, and other allocated expenses, which include direct and allocated expenses for rent, utilities, and insurance.

Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks using data such as information provided to us by our vendors and analyzing the progress of our field trials and preclinical studies or other services performed.

This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered.

Our direct research and development expenses are tracked on a program-by-program basis for our product candidates and consist primarily of external costs, such as fees paid to outside consultants, CROs, CMOs and research laboratories in connection with our pre-clinical development, field trials, process development, manufacturing, and clinical development activities. Our direct research and development expenses by program also include fees incurred under license, acquisition, and option agreements. We do not allocate costs associated with our discovery efforts, laboratory supplies, employee costs or facility expenses, including depreciation or other indirect costs, to specific programs because these costs are deployed across multiple programs and, as such, are not separately classified. We use internal resources primarily to conduct our research and discovery as well as for managing our pre-clinical development, field trials, process development, manufacturing, and clinical development activities.

General and Administrative Expenses

General and administrative expense consists primarily of employee-related costs, including salaries, bonuses, benefits, stock-based compensation, and other related costs. General and administrative expense also includes professional services, including legal, accounting and audit services, consulting fees and facility costs not otherwise included in research and development expenses, insurance, and other general administrative expenses.

We anticipate that our general and administrative expenses will increase commensurate with future commercialization of our products and expansion of research collaboration work. We also have incurred significantly increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses associated with operating as a public company.

Other (Expense) Income, Net

Other (expense) income, net consists of interest income, interest expense and any change in the fair value of our warrant liabilities.

Income and Other Income, net

Income and other income, net primarily consists of income earned in connection with our investments in money market funds.

Interest Expense

Interest expense consists of interest on outstanding borrowings under our loan agreements with Trinity Capital, Silicon Valley Bank and Horizon Technology Finance. Interest expense also includes amortization of debt discount and debt issuance costs.

Fair Value of Warrant Liabilities

Change in fair value of warrant liabilities consists of the remeasurement gains or losses associated with changes in the fair value of the warrant liabilities. Until settlement, fluctuations in the fair value of our warrant liabilities are based on the remeasurement at each reporting period.

Provision for Income Taxes

Our income tax provision consists of an estimate for U.S. federal, state and foreign income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in tax law. There is no provision for U.S. federal, state, and foreign income taxes for the three months ended March 31, 2023 and 2022, respectively, as we have historically incurred net operating losses, and expect to continue to generate net operating losses. Based on this history of net operating losses, we also maintain a full valuation allowance against our U.S. federal and state deferred tax assets.

Results of Operations

Comparison of the Three Months Ended March 31, 2023 and 2022

The following table summarizes our results of operations for the three months ended March 31, 2023 and 2022:


	THREE MONTHS ENDED MARCH 31,						INCREASE /
Dollars (in thousands)	2023			2022			(DECREASE)
License and collaboration revenue	$	3,820		$	—		$	3,820
Grant revenue		—			257			(257	)
Total revenue		3,820			257			3,563
Operating expenses:
Research and development		23,168			27,281			(4,113	)
General and administrative		8,944			9,755			(811	)
Total operating expenses		32,112			37,036			(4,924	)
Loss from operations		(28,292	)		(36,779	)		8,487
Other income (expense):
Interest and other income, net		603			4			599
Interest expense		(1,007	)		(1,073	)		66
Change in fair value of warrant liability		227			(359	)		586
Total other income (expense), net		(177	)		(1,428	)		1,251
Net loss	$	(28,469	)	$	(38,207	)	$	9,738

License and Collaboration Revenue

For the three months ended March 31, 2023, we recognized $3.8 million of revenue from our license and collaboration agreement with SIIPL primarily related to the delivery of IP and research services, which includes manufacturing technology transfer services. We did not recognize any revenue under this agreement for the three months ended March 31, 2022.

Grant Revenue

There was no grant revenue was recorded for the three months ended March 31, 2023, compared to grant revenue of $0.3 million for the three months ended March 31, 2022. All of our grant revenue is derived from a grant made by the Bill & Melinda Gates Foundation in July 2020. The decrease in grant revenue was due to the fact that we ceased any ongoing research work under this grant as of December 31, 2022.

Research and Development Expenses


	THREE MONTHS ENDED MARCH 31,				INCREASE /
Dollars (in thousands)	2023		2022		(DECREASE)
Program expense	$	4,399	$	7,988	$	(3,589	)
Personnel costs		11,107		12,628		(1,521	)
Other		7,662		6,665		997
Total research and development expenses	$	23,168	$	27,281	$	(4,113	)

Research and development expense was $23.2 million for the three months ended March 31, 2023, compared to $27.3 million for the three months ended March 31, 2022. The decrease of $4.1 million resulted primarily from decreased program costs of $3.6 million related to research and development materials and manufacturing costs, decreased headcount supporting research and development activities which resulted in decreased personnel costs of $1.5 million, offset by an increase in other research and development costs of approximately $1.0 million, primarily related to an increase in rental expense as we expanded our footprints and entered into multiple leases during 2022 and an increase in depreciation expense due to an increase in capitalized expenditures for lab equipment and lab space leasehold improvements.

General and Administrative Expenses

General and administrative expense was $8.9 million for the three months ended March 31, 2023, compared to $9.8 million for the three months ended March 31, 2022. The decrease of $0.9 million was primarily due to a decrease of $0.7 million of professional fees,

decreased personnel costs of $0.4 million; offset by an increase of $0.2 million related to facilities and other administrative expenses as we expanded our footprints and entered into multiple leases during 2022.

Interest and other income, net

Interest and other income, net was $0.6 million for the three months ended March 31, 2023 compared to an insignificant amount for the three months ended March 31, 2022. This increase was driven by an increase in our cash and cash equivalents due to capital raises in 2022 and an increase in the interest rate yield on our cash and cash equivalents.

Interest Expense

Interest expense was $1.0 million for the three months ended March 31, 2023, compared to $1.1 million for the three months ended March 31, 2022. The decrease is primarily related to principal payments on our debt offset by an increase in interest rates on our variable rate debt.

Change in Fair Value of Warrant Liabilities

Other income attributable to the change in the fair value of warrant liabilities as $0.2 million for the three months ended March 31, 2023 compared to an expense of $0.3 million for the three months ended March 31, 2022. The decrease of $0.5 million in the fair value of our warrant liabilities was due to the decrease in the fair value of the private placement warrants.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have generated recurring net losses. We do not have any products approved for sale and have not yet commercialized any product. Since our inception, we have funded our operations primarily through proceeds from the issuance of capital stock and to a lesser extent through debt financings, the issuance of convertible notes and collaboration agreements. From our founding through March 31, 2023, we have raised proceeds from the sale of our capital stock, the Business Combination (including the related PIPE financing), the August 2022 PIPE Financing, and from the issuance of debt and convertible notes. As of March 31, 2023, we had cash and cash equivalents of $32.4 million.

Private Placement and Securities Subscription Agreement

On August 11, 2022, we entered into Securities Subscription Agreements (the “August 2022 PIPE Subscription Agreements”) with certain institutional accredited investors (collectively, the “August 2022 PIPE Investors”), providing for the sale by us of 27,640,301 shares (the “August 2022 PIPE Shares”) of our Class A common stock at a purchase price of $3.92 per share, in a private placement (the “August 2022 PIPE Financing”). The August 2022 PIPE Shares were issued simultaneously with the execution and delivery of the August 2022 PIPE Subscription Agreements. The aggregate gross proceeds from the August 2022 PIPE Financing was approximately $108.3 million. The gross proceeds do not reflect transaction costs of $2.3 million. We are using the net proceeds from the August 2022 PIPE Financing to fund ongoing clinical development and commercialization of our existing product pipeline.

Business Combination and PIPE Financing

In February 2022, we consummated the Business Combination with ENVI, which generated gross proceeds to New GreenLight of approximately $136.4 million, including $124.3 million from the February 2022 PIPE Financing and $12.1 million from the trust account (after redemptions). The gross proceeds do not reflect transaction costs of $26.7 million. For more information, see “—Recent Developments—Business Combination and Public Company Costs” above.

Horizon Loan Agreement

In December 2021, we entered into a loan and security agreement with Horizon Technology Finance Corporation and Powerscourt Investments XXV, LP (together, “Horizon”), which provided for a term loan facility in an aggregate principal amount of up to $25.0 million, $15.0 million of which was borrowed at the closing and the remainder of which may be borrowed following the achievement of certain milestones, but not after June 30, 2022. As of June 30, 2022, we had not borrowed, and could no longer borrow the remainder of the term loan. Under the agreement, in January 2022 the lenders were granted 10-year warrants to purchase shares of common stock of GreenLight. The warrants are exercisable in the aggregate for a number of shares equal to 3% of the total term loan facility (assuming we borrow the full facility amount of $25.0 million) divided by the exercise price of the warrants. Upon the closing of the Business Combination, the warrants became warrants to purchase shares of New GreenLight Common Stock based on the exchange ratio under the Business Combination Agreement.

Accrued interest is payable monthly. Under the terms of our agreement, this loan accrues interest at a floating rate per annum equal to the one-month prime rate as reported in the Wall Street Journal on a date that is 5 business days prior to the funding date of the Loan plus 5.75%. The principal of each term loan must be repaid in equal monthly installments beginning February 1, 2023 (or August 1, 2023 if we borrow any of the remaining $10.0 million), with a scheduled final maturity date of July 1, 2025. We may prepay the term loans in full, but not in part, without premium or penalty, other than a premium equal to (i) 3% of the principal amount of any prepayment made within 12 months after the applicable funding date, (ii) 2% of the principal amount of any prepayment made between 12 and 24 months after the applicable funding date and (iii) 1% of the principal amount of any prepayment made more than 24 months after the applicable funding date. On the earlier of the scheduled final maturity date and the prepayment in full of the term loans, we must pay a final payment fee equal to 3.0% of the original principal amount of the funded term loans.

The agreement contains customary affirmative and negative covenants (including an obligation to maintain certain amounts of cash in accounts subject to springing control in favor of the lenders) and customary events of default; it does not contain a financial covenant. We granted a second-priority, perfected security interest in substantially all of our present and future personal property and assets, excluding intellectual property, to secure our obligations to the lenders, which security interest is subordinated to the security interest granted to Silicon Valley Bank.

In April 2021, we entered into a joinder agreement with Horizon pursuant to which the Company became a party to the Horizon loan agreements as a co-borrower. Under the joinder agreement, the Company also granted Horizon a continuing security interest in its existing and after-acquired personal property and assets, excluding intellectual property.

Silicon Valley Bank Loan Agreement

In September 2021, we entered into a loan and security agreement with Silicon Valley Bank, or SVB, providing for a term loan facility in an aggregate principal amount of up to $15.0 million, $10.0 million of which we borrowed at the closing and the remainder of which we may borrow following the achievement of certain milestones, but not after March 31, 2022. We did not borrow any additional amounts from SVB before March 31, 2022. At the closing, we granted SVB a 10-year warrant to purchase up to 34,427 shares of GreenLight Common Stock (assuming we borrow the entire $15.0 million from SVB and giving effect to the reverse recapitalization). Upon the closing of the Business Combination, the warrants became warrants to purchase shares of New GreenLight Common Stock based on the exchange ratio under the Business Combination Agreement. On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver and SVB was subsequently transferred into a new entity, Silicon Valley Bridge Bank, N.A (“SVB Bridge Bank”).

Accrued interest is payable monthly. Under the terms of our agreement, this loan accrues interest at a floating rate per annum equal to the greater of (i) three and one half of one percent (3.50%) and (ii) the prime rate (as stated in the Wall Street Journal) plus the prime rate margin of one quarter of one percent (0.25%). The principal of each term loan must be repaid in equal monthly installments beginning April 1, 2022 (or October 1, 2022, if the Company borrows any of the remaining $5.0 million), with a scheduled final maturity date of September 1, 2024. On the earlier of the scheduled final maturity date and the prepayment in full of the term loans, the Company must pay a final payment fee equal to 4.0% of the original principal amount of the term loans. The Company may prepay the term loans in increments of $5.0 million and without premium or penalty, other than a premium equal to (i) with respect to any prepayment made on or before September 22, 2022, 3% of the principal so prepaid, (ii) with respect to any prepayment made after September 22, 2022 and on or before September 22, 2023, 2% of the principal so prepaid and (iii) with respect to any prepayment made after September 22, 2023 and on or before September 1, 2024, 1% of the principal so prepaid.

The loan and security agreement with SVB contains customary affirmative and negative covenants (including an obligation to maintain cash in accounts at SVB at all times in amounts sufficient to repay all loan obligations, which if not met constitute an event of default under the agreement) and customary events of default; it does not contain a financial covenant. We granted a first-priority, perfected security interest in substantially all of our present and future personal property and assets, excluding intellectual property, to secure our obligations to SVB.

In April 2021, we entered into a joinder agreement and first amendment to loan and security agreement with SVB pursuant to which the Company became a party to the SVB loan agreements as a borrower. Under these agreements, the Company also granted SVB a continuing security interest in its existing and after-acquired personal property and assets, excluding intellectual property. These agreements also amended certain terms of the original SVB loan agreement to, among other things, add representations, affirmative and negative covenants, and events of default regarding the Company’s obligations as a public benefit corporation. Under the amended terms, it is an event of default for there to be any pending or threatened litigation by a shareholder alleging that we or our directors failed to satisfy any obligations under Delaware law regarding our status as a public benefit corporation, if the litigation is likely to result in a final monetary judgment against us in excess of $250,000. In addition, if any action, investigation, or proceeding is pending or known to be threatened in writing against us with respect to such a claim, the bank may not need to make further loans to us.

Trinity Capital Equipment Financing Agreement

In March 2021, we entered into a master equipment financing agreement with Trinity Capital (Trinity) authorizing equipment financing with an aggregate borrowing capacity of $11.3 million, with up to $5.0 million available immediately and the remaining principal balance available to be drawn before September 2021. We entered into this loan to finance our capital purchases associated primarily with our research and manufacturing programs. The monthly payment factors for each draw are determined by Trinity based on the Prime Rate reported in the Wall Street Journal on the first day of the month in which an equipment financing schedule for such draw is executed. As of December 31, 2022, the Company had drawn the entire $11.3 million, which is repayable in monthly installments starting April 2021.

Funding Future Operations; Going Concern

The Company estimates that its existing cash and cash equivalents of $32.4 million as of March 31, 2023 will last through the second quarter of 2023 but will not be sufficient to fund its operations for twelve months from the date these interim financial statements are issued. As a result, there is substantial doubt about our ability to continue as a going concern for at least one year from the date of issuance of these financial statements, as discussed in Note 1 - Nature of Business and Basis of Presentation of the notes to our condensed consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022, included elsewhere herein.

Based on our existing cash and cash equivalents, we are evaluating a range of opportunities to extend cash runway, including management of program spending, platform licensing collaborations and potential financing activities. In the event the Company is unable to secure additional outside capital to fund our obligations when they become due over the next 12 months, the Company will be required to seek other strategic alternatives, which may include, among others, scaling back or discontinuing certain or all operations to reduce costs, closure of operations, sale of certain of our assets, a sale of the entire company to strategic or financial investors, and/or seeking protection under the U.S. bankruptcy laws.

We expect to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates through preclinical and clinical development and field trials, seek regulatory approval, and pursue commercialization of any approved product candidates. We anticipate that our general and administrative expenses will increase commensurate with future commercialization of our products and expansion of research collaboration work. In addition, in light of the completion of the Business Combination, we have and expect to continue to incur higher costs associated with operating as a public company. Because of the numerous risks and uncertainties associated with research, development, and commercialization of our product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future capital requirements will depend on many factors, including:

•

the design, initiation, timing, costs, progress, and results of our planned clinical trials and field trials;

•

the progress of preclinical development and possible clinical trials of our current and future earlier- stage programs;

•

the scope, progress, results and costs of our research programs and preclinical development of any additional product candidates that we may pursue;

•

the development requirements of other product candidates that we may pursue;

•

our headcount and associated costs and establish a commercial infrastructure;

•

the timing and amount of milestone and royalty payments that we are required to make or eligible to receive under our current or future collaboration and license agreements;

•

the outcome, timing and cost of meeting regulatory requirements established by the FDA, EPA and other regulatory authorities;

•

the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;

•

the cost of expanding, maintaining, and enforcing our intellectual property portfolio, including filing, prosecuting, defending, and enforcing our patent claims and other intellectual property rights;

•

the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or any of our product candidates;

•

the effect of competing technological and market developments;

•

the cost and timing of completion of commercial-scale manufacturing activities;

•

the extent to which we partner our programs, acquire or in-license other product candidates and technologies or enter into additional collaborations;

•

the revenue, if any, received from commercial sales of any future product candidates for which we receive marketing approval; and

•

the costs of operating as a public company.

Until we can generate product revenues to support our cost structure, if any, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, and other similar arrangements. To the extent that we raise additional capital through the sale of equity or convertible securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation, dividend, redemption, and other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Cash Flows

The following table summarizes our cash flows for each of the periods presented:


	THREE MONTHS ENDED MARCH 31,						INCREASE /
	2023			2022			(DECREASE)
Net cash (used in) operating activities	$	(31,060	)	$	(49,511	)	$	18,451
Net cash (used in) investing activities		(1,608	)		(250	)		(1,358	)
Net cash provided by (used in) financing activities		(2,989	)		102,497			(105,486	)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(35,657	)	$	52,736		$	(88,393	)

Operating Activities

Cash flows from operating activities represent the cash receipts and disbursements related to all our activities other than investing and financing activities. Operating cash flow is derived by adjusting our net loss for non-cash operating items such as depreciation, amortization, and stock-based compensation as well as changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our results of operations.

During the three months ended March 31, 2023, operating activities used $31.1 million of cash, primarily resulting from our net loss of $28.5 million, adjusted for non-cash items and the effect of changes in operating assets and liabilities. Non-cash adjustments primarily include depreciation and amortization expense of $2.3 million, stock-based compensation expense of $2.3 million, and amortization of right-of-use assets of $1.0 million; offset by a change in the fair value of our warrant liabilities of $0.2 million. Net cash used by changes in our operating assets and liabilities consisted primarily of a decrease in deferred revenue of $3.8 million, a decrease of $2.7 million in accrued expenses, lease liabilities and other liabilities, a $1.8 million increase in prepaid expenses and other current assets, and an increase in accounts payable of $0.2 million. The decrease in accrued expenses was due to reduced level of research activities and the increase in prepaid expenses and other assets was due to operating costs to support our operations as a public company, including insurance policies. The decrease in deferred revenue was due to revenue recognized on our license agreement we entered into with SIIPL in 2022.

During the three months ended March 31, 2022, operating activities used $49.5 million of cash, primarily resulting from our net loss of $38.2 million, adjusted for non-cash items and the effect of changes in operating assets and liabilities. Non-cash adjustments primarily include stock-based compensation of $2.2 million, depreciation and amortization expense of $2.1 million and amortization of right-of-use assets of $1.6 million. Net cash used by changes in our operating assets and liabilities for the three months ended March 31, 2022 consisted primarily of a $2.0 million decrease in accounts payable, a $9.4 million decrease in accrued expenses, lease liabilities and other liabilities, a $6.3 million increase in prepaid expenses and other current assets, and an increase of $5.0 million in accounts receivable, partially offset by an increase in deferred revenue of $4.7 million. The increase in cash used in accounts payable and accrued expenses related to our increased level of operating activities and timing of vendor invoicing and payments. The increase in cash used for prepaid expenses and other assets was due to our increased level of research collaborations and manufacturing development activities related to our product candidates. The increase in deferred revenue was due to our license agreement we entered into with SIIPL in March 2022.

Investing Activities

During the three months ended March 31, 2023, investing activities used $1.6 million of cash, consisting primarily of purchases of property and equipment related primarily to purchases of laboratory equipment and facilities improvements.

During the three months ended March 31, 2022, investing activities used $0.3 million of cash, consisting of purchases of property and equipment, of which a substantial majority related to laboratory and facilities improvements in Research Triangle Park, North Carolina and purchases of laboratory equipment and facilities improvements for our manufacturing facility in Rochester, New York.

Financing Activities

During the three months ended March 31, 2023, financing activities used $3.0 million of cash, which was primarily related to repayments on our debt and finance lease obligations.

During the three months ended March 31, 2022, financing activities provided $102.5 million of cash, consisting primarily of $80.5 million of net proceeds from the Business Combination, net of transaction costs, a $21.8 million in proceeds from issuance of convertible debt from PIPE Investors, and $1.2 million of proceeds from the exercise of public warrants, which were partially offset by $0.8 million of repayments on our secured debt and term loan payable.

Contractual Obligations and Commitments

Operating Lease Obligations

We have non-cancelable operating lease obligations, consisting primarily of lease payment obligations for our facilities, including our headquarters in Lexington, Massachusetts, comprised of office and laboratory space; office, laboratory and greenhouse space in Durham, North Carolina; laboratory and office space in Medford and Woburn, Massachusetts; our manufacturing facilities in Rochester, New York; and farm land located in Spain. The leases for these facilities expire on various dates through 2042, unless extended.

In December 2022, the Company entered into a lease for farm land located in Colusa County, California, which commenced in January 2023. The lease term expires in December 2032. The base rent for this lease is approximately $0.1 million per year, subject to annual increases based on the consumer price index beginning on January 1, 2024.

See Note 16, Leases, of the notes to our condensed consolidated financial statements for the three months ended March 31, 2023 and 2022, for further information on our operating lease obligations.

Purchase Obligations

In the normal course of business, we enter into contracts with third parties for field trials, preclinical studies and research and development supplies. These contracts generally do not contain minimum purchase commitments and provide for termination on notice, and therefore are cancellable contracts.

License Agreement Obligations

In December 2020, we entered into an assignment and license agreement with Bayer CropScience LLP (“Bayer”) under which we may be obligated to make milestone and royalty payments. These payment obligations are contingent upon future events, such as achieving certain development, regulatory, and commercial milestones or generating product sales. The timing of these events is uncertain; accordingly, we cannot predict the period during which these payments may become due. We have agreed to pay up to $2.0 million in milestone payments under this assignment and license agreement when certain development milestones are met. The Company assessed the milestones for the three months ended March 31, 2023 and concluded no such milestone payments were deemed probable nor due.

In August 2020, we entered into a license agreement with Acuitas Therapeutics, Inc. (“Acuitas”) under which we are obligated to make potential milestone payments, royalty payments, or both. These payment obligations are contingent upon future events, such as achieving certain clinical and regulatory milestones and generating product sales. Such payments are dependent upon the development of products using the intellectual property licensed under the agreements and are contingent upon the occurrence of future events. The potential clinical and regulatory milestone payments that Acuitas is entitled to receive is in the low double-digit millions for the first option exercised. With respect to the sale of each licensed products, the Company is also obligated to pay Acuitas royalties in the low single digit percentages on net sales of the licensed products by the Company and its affiliates and sublicensees in a given country until the last to occur, in such country, of (i) the expiration or abandonment of all licensed patent rights covering the licensed product, (ii) expiration of any regulatory exclusivity for the licensed product, or (iii) ten years from the first commercial sale of the licensed product. For the three months ended March 31, 2023, none of these events were deemed probable and hence no expenses were recorded.

Debt Obligations

See Note 10, Debt, of the notes to our condensed consolidated financial statements included elsewhere in this filing for further information on our future debt repayment obligations.

Manufacturing Commitments and Obligations

In November 2021, we engaged Samsung Biologics Co., Ltd. (“Samsung”) as a contract development and manufacturing organization for scale up and commercial scale production of our mRNA COVID-19 vaccine pursuant to a Master Services Agreement and a Product Specific Agreement with Samsung (collectively, the “Samsung Agreements”). Pursuant to the Samsung Agreements, we must, among other things, (a) pay Samsung service fees for its pharmaceutical development and manufacturing services, (b) purchase certain minimum quantities of drug products, and (c) pay Samsung, on a minimum take-or-pay basis for each year under the agreement, for our minimum purchase commitments, as determined under the terms of the Samsung Agreements. Based on our minimum purchase commitments, we expect to pay Samsung a minimum of approximately $8.8 million in service fees under the Samsung Agreements, excluding the cost of raw materials. For the three months ended March 31, 2023, the Company did not incur any costs under this service agreement. We incurred approximately $5.9 million in costs under this service agreement for the year ended December 31, 2022.

Critical Accounting Policies and Significant Judgments and Estimates

Our condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. On a recurring basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in an estimate, if any, will be reflected in the condensed consolidated financial statements prospectively from the date of the change in the estimate.

During the three months ended March 31, 2022, there have been no updates to our critical accounting estimates from those disclosed in "Management's Discussion and Analysis of Financial Condition" in our Form 10-K for the year ended December 31, 2022.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Recently Adopted Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is provided in Note 2 - Summary of Significant Accounting Policies to our condensed consolidated financial statements appearing elsewhere herein.

Emerging Growth Company and Smaller Reporting Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding nonbinding stockholder advisory votes on executive compensation and any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective, have not filed and not withdrawn a Securities Act registration statement that has not become effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the

new or revised standard. This may make comparison of the Company's financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

The Company will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of ENVI’s initial public offering, (b) in which the Company has total annual gross revenue of at least $1.235 billion, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of its common equity that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our voting and non-voting Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to certain market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.

Interest Rate Risk

As of March 31, 2023 and December 31, 2022, we had cash and cash equivalents which consisted of cash and money market funds. Interest income is sensitive to changes in the general level of interest rates; however, due to the nature of these investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our investment portfolio.

We have exposure to interest rate risk from our variable rate debt. We do not hedge our exposure to changes in interest rates. As of March 31, 2023, we had $20.0 million in variable rate debt outstanding. A 10% change in interest rates would have an immaterial impact on annualized interest expense.

Foreign Currency Exchange Risk

Our reporting and functional currency is the U.S. dollar. We currently do not have significant exposure to foreign currencies as we hold no foreign exchange contracts, option contracts, or other foreign hedging arrangements. Our operations may be subject to fluctuations in foreign currency exchange rates in the future.

Effects of Inflation

Inflation generally affects us by increasing our cost of labor and research and development contract costs. We do not believe that inflation currently has had a material effect on our business, financial condition or results of operations. Our operations may be affected by inflation in the future.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2023. We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Due to the material weaknesses identified as of December 31, 2021, two of which remain unremediated as of March 31, 2023, which are disclosed in Management's Annual Report on Internal Control Over Financial Reporting, the CEO and the CFO concluded that the disclosure controls were not effective, to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure and were not effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.

Previously Reported Material Weaknesses on Internal Control over Financial Reporting

In the Annual Report Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 28, 2023, management concluded that our internal control over financial reporting was not effective as of December 31, 2022. In the evaluation, management determined that we did not maintain effective internal control over financial reporting as of December 31, 2022, due to unremediated material weakness in our internal control over financial reporting which are as follows:

•

The failure to maintain a sufficient complement of personnel in its accounting and reporting department to ensure adequate segregation of duties such that appropriate review and monitoring of its financial records are executed.

•

The failure to design and implement adequate information systems controls including access and change management controls.

Remediation Plan

We are committed and are taking steps necessary to remediate the control deficiencies that constituted the above material weakness by implementing changes to our internal control over financial reporting. During the year ended December 31, 2022, we made the following enhancements to our control environment including the following:

•

We implemented a new ERP system with defined user roles to ensure proper segregation of duties within our accounting systems which will provide a stronger internal control infrastructure for financial reporting and for our internal control procedures;

•

We engaged internal control consultants to assist us in performing a financial reporting risk assessment as well as identifying and designing our system of internal controls necessary to mitigate the risks identified;

Our remediation activities are continuing in 2023. In addition to the above activities, we expect to engage in additional activities including:

•

Identify and document the remaining controls needed to mitigate the risks identified in our comprehensive risk assessment of our financial reporting processes; and

•

Perform routine testing of the operating effectiveness of the identified controls over financial reporting including general IT controls.

Changes in Internal Control over Financial Reporting

Other than the material weakness referenced above, there have been no additional changes in our internal control over financial reporting identified in connection with the evaluation of such internal control required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act that occurred during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We currently are not a party to any material litigation or other material legal proceedings. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business.

Item 1A. Risk Factors

Investing in our securities involves a high degree of risk. Before you decide to invest in any of our securities, you should

consider carefully the risks described in the section of our Annual Report entitled “Item 1A. Risk Factors”, as well as the risks described below. If any of these risks actually occur, our business, results of operations and financial condition would likely be materially and adversely affected. In these circumstances, the market price of our securities could decline, and you may lose part or all of your investment. This Report also contains forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, the risks referred to in this paragraph.

Our receipt of a written non-binding indication of interest from a strategic acquiror may or may not result in an actual completed transaction. The uncertainty surrounding the outcome could materially and adversely impact the Company’s business operations, interfere with its ability to attract and retain personnel, result in the incurrence of significant expenses and cause the Company’s stock price to be subject to significant fluctuation or otherwise be adversely impacted depending on the outcome of such transaction process.

There can be no assurance that this indication of interest will eventually lead to a binding offer with terms acceptable to all parties. Even if a binding offer is accepted, a transaction may not be completed if pre-closing matters such as regulatory approvals, due diligence and other conditions are not completed satisfactorily or within specified time frames. To the extent the trading price of the Company’s common stock reflects a market assumption that a transaction will be completed, the Company’s stock price could be adversely impacted if a transaction does not take place. Additionally, the Company is subject to a number of other risks during this time associated with the indication of interest by the strategic acquiror. Particularly, the Board’s and management’s attention could be diverted from normal business operations to focus on the potential transaction and the Company could incur significant advisory and legal costs related to evaluating the proposal, all of which could adversely impact financial results. Further, as a result of the potential for a future transaction, the Company may not be able to retain key personnel, who may be uncertain about their future roles. Moreover, the Company may experience difficulty in attracting or retaining personnel across all areas of the business due to the uncertainty related to this matter.

The Company estimates that its existing cash and cash equivalents of $32.4 million as of March 31, 2023 will last through the second quarter of 2023. We will require substantial additional funds to complete our research and development activities, and, if additional funds are not available, we may need to significantly scale back or cease our business.

We have incurred substantial losses since inception and incurred net losses of approximately $28.5 million and $38.2 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, we had an accumulated deficit of approximately $449.1 million and cash and cash equivalents of approximately $32.4 million. Cash used in operating activities totaled approximately $31.1 million and $49.5 million for three months ended March 31, 2023 and 2022, respectively. The Company expects to generate operating losses and negative operating cash flows for the foreseeable future. As of March 31, 2023 and for the three months ended March 31, 2023, we estimate that our existing cash and cash equivalents of approximately $32.4 million as of March 31, 2023 will last through June 30, 2023 but will not be sufficient to fund our operations for twelve months from the date hereof, and we will need to raise additional capital to continue our operations and to implement our business plan, which capital may not be available on acceptable terms or at all.

We have invested and will continue to invest in property, plant and equipment, and human capital and will require substantial funds to bring the current products in our product pipeline to market and to grow our business by researching, developing, and protecting products not currently in our product pipeline. Our current available funds are not sufficient for all of these activities and, as a result, there is substantial doubt about our ability to continue as a going concern.

Based on our history of losses, we do not expect that we will be able to fund our longer-term capital and liquidity needs through our current cash balances and operating cash flow alone. To fund our longer-term capital and liquidity needs, we will need to secure additional capital. The amount of capital we will need will be subject to change depending on, among other things, the success of our efforts to grow revenue and our efforts to continue to effectively manage expenses.

Our financing needs may also increase substantially depending on the results of our research, trials and development for products and costs arising from additional regulatory approvals. We may not succeed in raising additional funds in a timely manner. The timing of our need for additional funds will depend on a number of factors, which are difficult to predict or may be outside of our control, including:

•

the resources, time and costs required to initiate and complete our research and development and to initiate and complete studies and trials and to obtain regulatory approvals for additions to our product pipeline;

•

progress in our research and development programs;

•

the timing and amount of milestone, royalty and other payments; and

•

costs necessary to protect any intellectual property rights.

If our estimates and predictions relating to any of these factors are incorrect, we may need to modify our business plans.
Our ability to raise funds will depend upon many factors, including conditions in the debt and equity capital markets, as well as investor perception of our creditworthiness and prospects. If we are unable to raise funds on acceptable terms, we may not be able to execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements. In the event the Company is unable to secure additional outside capital to fund our obligations before the end of the second quarter of 2023, the Company will be required to seek other strategic alternatives, which may include, among others, scaling back or discontinuing certain or all operations to reduce costs, closure of operations, sale of certain of our assets, a sale of the entire company to strategic or financial investors, and/or seeking protection under the U.S. bankruptcy laws. This may seriously harm our business, financial condition and results of operations. If we are not able to continue operations, investors may suffer a complete loss of their investments in our securities.

Investors should not rely on outdated financial projections.

In connection with the Business Combination, we disclosed certain projections of GreenLight’s potential financial performance in future years. As previously disclosed, these projections were prepared solely for GreenLight’s internal use, capital budgeting and other management purposes, were finalized as of June 30, 2021 and were not updated to reflect events after that date. Also, as previously disclosed, the projections were not prepared with a view toward public disclosure or with a view toward complying with U.S. GAAP, the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Readers were cautioned not to rely on the prospective financial information because actual results are likely to differ materially from the prospective financial information. In light of the substantial passage of time since June 30, 2021, the projections have become outdated and do not represent the current views of management. We reiterate our prior caution not to rely on the previously published and now outdated financial projections. We have not undertaken any obligation to publish any financial projections.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The information required by this item has been previously reported.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable

Item 5. Other Information.

None.

Item 6. Exhibits.

Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).


Exhibit Number		Description
3.1		Certificate of Incorporation of GreenLight Biosciences Holdings, PBC (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 7, 2022).
3.2		Amended and Restated Bylaws of GreenLight Biosciences Holdings, PBC (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 7, 2022).
4.1		Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 21, 2020).
4.2		Warrant Agreement, dated January 13, 2021, between Environmental Impact Acquisition Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 20, 2021).
4.3		Description of the Company’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form 10-K filed with the Securities and Exchange Commission on March 31, 2022).
10.1		License Agreement, dated March 10, 2022, between GreenLight Biosciences, Inc. and Serum Institute of India Private Limited (incorporated by reference to Exhibit 10.32 to Post-Effective Amendment No. 1 to Form S-1 Registration Statement filed with the Securities and Exchange Commission on April 5, 2022).
10.2		Form of Securities Subscription Agreement, dated as of August 11, 2022, between GreenLight Biosciences Holdings, PBC and each purchaser named in the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 15, 2022).
10.3		Commercial Lease, dated March 9, 2022, by and between ARE-MA Region No. 8, LLC and GreenLight Biosciences Inc. (incorporated by reference to Exhibit 10.34 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on September 26, 2022).
10.4		First Amendment to Commercial Lease, dated September 12, 2022, by and between ARE-NC REGION NO. 17, LLC and GreenLight Biosciences Inc. (incorporated by reference to Exhibit 10.35 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on September 26, 2022).
10.5		Third Amendment to Commercial Lease, dated September 12, 2022, by and between ARE-NC REGION NO. 17, LLC and GreenLight Biosciences Inc. (incorporated by reference to Exhibit 10.36 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on September 26, 2022).
10.6		Development and Option Agreement, dated August 24, 2020, by and between Acuitas Therapeutics, Inc. and GreenLight Biosciences, Inc. (incorporated by reference to Exhibit 10.22 to the Registration Statement on Form S-4 filed with the Securities and Exchange Commission on October 19, 2021).
10.7		Collaboration and License Agreement, by and between the Company and EpiVax Therapeutics, Inc., dated January 8, 2023 (incorporated by reference to Exhibit 10.31 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2023).
10.8		Assignment and License Agreement dated December 10, 2020 by and between Bayer CropScience LLP and GreenLight Biosciences, Inc. (incorporated by reference to Exhibit 10.24 to the Registration Statement on Form S-4 filed with the Securities and Exchange Commission on October 19, 2021).
10.9		Master Equipment Financing Agreement, dated March 29, 2021, by and between Trinity Capital Inc. and GreenLight Biosciences, Inc. (incorporated by reference to Exhibit 10.25 to the Registration Statement on Form S-4 filed with the Securities and Exchange Commission on September 7, 2021, as amended).
10.10		Master Services Agreement, dated November 24, 2021, between Samsung Biologics Co., LTD. and GreenLight Biosciences, Inc, as amended (incorporated by reference to Exhibit 10.33 to the Registration Statement on Form S-4 filed with the Securities and Exchange Commission on December 6, 2021).
10.11		Product Specific Agreement, dated November 24, 2021, between Samsung Biologics Co., LTD. and GreenLight Biosciences, Inc. (incorporated by reference to Exhibit 10.34 to the Registration Statement on Form S-4 filed with the Securities and Exchange Commission on December 23, 2021).
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	GreenLight Biosciences Holdings, PBC

Date: May 11, 2023	By:	/s/ Andrey J. Zarur
		Andrey J. Zarur
		President and Chief Executive Officer

Date: May 11, 2023	By:	/s/ Susan Keefe
		Susan Keefe
		Chief Financial Officer