GREENLIGHT BIOSCIENCES HOLDINGS PBC 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 audited consolidated
financial statements, together with the related notes thereto, included
elsewhere in this Annual Report on Form 10-K (this "Report"). 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 I of this Report. 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
Overview
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
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
•
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;
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acquire or in-license other product candidates and technologies;
•
seek regulatory approvals for any product candidates that successfully complete field trials or clinical trials;
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establish a sales, marketing, and distribution infrastructure to commercialize any products for which we may obtain regulatory approval; and
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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
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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
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
Economic uncertainty in various global markets, including the
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
Recent Developments Human Health Programs COVID-19 Vaccine Program
As previously announced, GreenLight received approval from the
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to the Rwanda FDA and the
Shingles Vaccine Program
GreenLight has selected a lead candidate to progress towards clinical
development after evaluation of multiple antigen designs and formulations in
animal studies. Based on immunological response evaluations in pre-clinical
studies of three potential candidates, the pre-clinical data from these studies
showed that the lead vaccine candidate: (a) induced antibody levels similar to
comparator vaccine (current standard of care), (b) was more potent than
comparator vaccine at inducing strong cellular immune response, and (c)
maintained memory B and T cells responses at levels similar to comparator
vaccine, 3 months after vaccine candidate administration, demonstrating
durability of the immune response. The
Plant Health Programs
Colorado Potato Beetle Program - CalanthaTM
Subject to receiving regulatory approval and applicable state registrations in
the US, we anticipate and are in active preparations for commercial launch prior
to the end of 2023. As part of this effort, we are in active discussions with
territory-relevant distributors across the US as potential partners to support
our planned commercial launch. Furthermore, we are planning to submit CalanthaTM
for regulatory approval in the EU,
Varroa Mite Program
In
Multitarget Solutions
GreenLight is expanding certain dsRNA-based fungal, insecticide, and acaricide programs into solutions that are designed to address multiple targets.
A complex of diseases that impacts a wide range of crops and plants consisting of multiple species that are slightly genetically diverse. GreenLight has further developed its powdery mildew solution by modifying our lead sequence to enable potential control of multiple targets (i.e. cucurbits PM, cereal PM, and ornamentals PM in addition to original target of vine PM). Our field trials have demonstrated that sprayed unformulated (naked) dsRNA decreases disease severity in grapes and performed similarly to the biological standard in field trials. In a similar field trial on zucchini, data showed that our naked dsRNA sequences performed well but inferior to field trial standards. However, when formulated with adjuvants, our trial results showed that our formulated dsRNA provided a larger reduction in disease severity compared to the industry standard. We are targeting the first regulatory submission of our powdery mildew program in 2024 in the US.
Gray Mold + 92
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Gray mold is a disease that impacts a wide range of crops and plants. GreenLight has modified its lead sequences to add additional target species (i.e. sclerotinia sclerotiorum in addition to original target of botrytis cinerea as described above). Data from recent field trials show that dsRNA can provide multi-species control with commercially relevant spray intervals and naked dsRNA applied on snap beans performed similar to the chemical standard. We are targeting our first regulatory submission of our gray mold program for 2025.
Systemic Delivery
We are in the very early stages of development of potential systemic delivery solutions. Through data from early experiments and subsequent field trial studies conducted last year, GreenLight has demonstrated stability of RNA through a standard seed treatment process and dsRNA delivery into plants, showing decreased fusarium disease severity in lettuce seed treatment field trials across two locations and three lettuce varieties and very preliminary indications of herbicidal activity.
Business Combination and Public Company Costs
On
Immediately before the closing of the Business Combination, the Company held
approximately
The Merger was accounted for as a reverse recapitalization, whereby for
accounting and financial reporting purposes,
The most significant change in the Company's financial position and results of
operations resulting from the consummation of the Business Combination
(including the
As a consequence of the Business Combination,
Financial Overview
Components of Our Results of Operations
Revenue
For the year ended
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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
Pursuant to the License Agreement, SIIPL will pay the Company an upfront license
fee of
Grant Revenue
In
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;
•
costs to fulfill our obligations under the grant agreement with the
•
costs related to compliance with regulatory requirements;
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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.
Other Income, net
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,
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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
Results of Operations
Comparison of the Years Ended
The following table summarizes our results of operations for the years endedDecember 31, 2022 and 2021: YEARS ENDED DECEMBER 31, INCREASE / 2022 2021 (DECREASE) ($ in thousands) License and collaboration revenue$ 6,384 $ -$ 6,384 Grant revenue 396 1,595 (1,199 ) Total revenue 6,780 1,595 5,185 Operating expenses: Research and development 133,810 89,832 43,978 General and administrative 35,930 20,321 15,609 Restructuring expenses 959 - 959 Total operating expenses 170,699 110,153 60,546 Loss from operations (163,919 ) (108,558 ) (55,361 ) Other income (expenses): Other income, net 895 37 858 Interest expense (4,123 ) (2,419 ) (1,704 ) Change in fair value of warrant liability 1,184 (1,370 ) 2,554 Total other expense, net (2,044 ) (3,752 ) 1,708 Net loss before income tax (165,963 ) (112,310 ) (53,653 ) Income tax expense 1,092 - 1,092 Net loss$ (167,055 ) $ (112,310 ) $ (54,745 )
License and Collaboration Revenue
For the year ended
Grant Revenue
Grant revenue was
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Research and Development Expenses
YEARS ENDED
DECEMBER 31, INCREASE /
2022 2021 (DECREASE)
($ in thousands)
Program expense $ 57,143 $ 36,323 $ 20,820
Personnel costs 48,875 35,844 13,031
Other 27,792 17,665 10,127
Total research and development expenses
Research and development expense was
Our headcount supporting research and development activities increased, which
generated additional personnel-related costs of
General and Administrative Expenses
General and administrative expense was
Restructuring Expenses
Restructuring expense was
Other Income, net
For the year ended
Interest Expense
Interest expense was
Change in Fair Value of Warrant Liabilities
Other income attributable to the change in fair value of warrant liabilities was
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Income Tax Expense
For the year ended
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
Private Placement and Securities Subscription Agreement
On
Business Combination and PIPE Financing
In
Horizon Loan Agreement
In
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
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
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property and assets, excluding intellectual property, to secure our obligations
to the lenders, which security interest is subordinated to the security interest
granted to
In
Silicon Valley Bank Loan Agreement
In
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
The loan and security agreement with SVB contains customary affirmative and negative covenants (including the obligation to maintain all of its cash in accounts at SVB, including at all times 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
On
Trinity Capital Equipment Financing Agreement
In
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Funding Future Operations; Going Concern
The Company estimates that its existing cash and cash equivalents of
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.
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 incurred and expect to incur continuing 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,
•
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
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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:
YEARS ENDED
DECEMBER 31, INCREASE /
2022 2021 (DECREASE)
($ in thousands)
Net cash (used in) operating activities
200,851 43,531 157,320
Net increase (decrease) in cash, cash
equivalents
and restricted cash $ 37,610 $ (63,340 ) $ 100,950
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 2022, net cash used in operating activities was
During 2021, net cash used in operating activities was
Investing Activities
During 2022, investing activities used
During 2021, investing activities used
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Financing Activities
During 2022, financing activities provided
During 2021, financing activities provided
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
In
In
In
In
See Note 16, Leases, of the notes to our consolidated financial statements for
the years ended
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
In
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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 year ended
Debt Obligations
See Note 10, Debt, of the notes to our consolidated financial statements included elsewhere in this filing for further information on our future debt repayment obligations.
Manufacturing Commitments and Obligations
In
Critical Accounting Policies and Significant Judgments and Estimates
Our consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in
We believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Revenue Recognition
License and Collaboration Revenue
In
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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 us 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 us an upfront license fee of
We have 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. We have 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 will be recognized over time, using an input-method based on labor costs as a percentage of total expected labor costs. We use key assumptions in recognizing revenue, which include estimated development timelines, actual internal and external costs incurred, estimated costs to be incurred, and probabilities of technical success.
Research and Development Expense
We have committed significant resources into the research and development of our product candidates and intend to continue to do so for the foreseeable future. Research and development expenses are generally expensed as incurred.
Research and development expenses are comprised of costs incurred in performing research and development activities, including salary, benefits, share-based compensation, and other employee-related expenses; laboratory supplies and other direct expenses; facilities expenses; third-party contractual costs relating to nonclinical studies and clinical trial activities and related contract manufacturing expenses, development of manufacturing processes and other outside expenses.
Clinical trial expenses include expenses associated with contract research organizations, or CROs. The invoicing from CROs for services rendered can lag several months. We accrue the cost of services rendered in connection with CRO activities based on our estimate of site management, monitoring costs, project management costs, and investigator fees. We maintain regular communication with our CRO vendors to gauge the reasonableness of our estimates. We make estimates of our clinical trial accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us. If timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, we assess our estimates of accrued expenses accordingly. Differences between actual clinical trial expenses and estimated clinical trial expenses recorded have not been material and are adjusted for in the period in which they become known. However, if we incorrectly estimate activity levels associated with the CRO services at a given point in time, we could be required to record material adjustments in future periods.
Stock-Based Compensation
We measure stock-based awards granted to employees, non-employees and directors based on their fair value on the date of the grant using the Black-Scholes option-pricing model for options and the fair value of our Common Stock for restricted common stock awards. Compensation expense for those awards is recognized over the requisite service period, which is generally the vesting period of the respective award for employees and directors and the period during which services are performed for non-employees. We use the straight-line method to record the expense of awards with service-based vesting conditions. We recognize stock-based compensation for performance awards based on grant date fair value over the service period to the extent achievement of the performance condition is probable.
The fair value of our stock option awards is estimated using a Black-Scholes option-pricing model that uses the following inputs: (1) fair value of our Common Stock, (2) assumptions we make for the expected volatility of our common stock, (3) the expected term of our stock option awards, (4) the risk-free interest rate for a period that approximates the expected term of our stock option awards, and (5) our expected dividend yield, if any. The computation of expected volatility is based on an average historical share price volatility based on an analysis of reported data for a peer group of comparable publicly traded companies,
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which were selected based upon industry similarities. However, these estimates
are neither predictive nor indicative of the future performance of the our
stock. Due to our limited operating history and a lack of company specific
historical and implied volatility data, we have based our estimate of expected
volatility on the historical volatility of stock of companies within our defined
peer group. The interest rate for periods within the expected term of the award
is based on the
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
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 consolidated financial statements appearing elsewhere herein.
We adopted ASC 842 during the quarter ended
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
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
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value of our voting and non-voting Common Stock held by non-affiliates is less
than
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