AMYRIS, INC. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. These discussions contain forward-looking statements reflecting our current expectations that involve risks and uncertainties which are subject to safe harbors under the Securities Act of 1933, as amended (the Securities Act), and the Securities Exchange Act of 1934 (the Exchange Act). These forward-looking statements include, but are not limited to, statements concerning our strategy of achieving a significant reduction in net cash outflows in 2020 and 2021, aspects of our future operations, our future financial position, including obtaining project financing for a new manufacturing facility, expectations for our future revenues, margins and projected costs, expectations regarding demand and acceptance for our technologies and products, introductions of new products, growth opportunities and trends in the market in which we operate, prospects and plans and objectives of management. The words "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q, in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2019 (the 2019 Form 10-K) and in our other filings with theSecurities and Exchange Commission . We do not assume any obligation to update any forward-looking statements.
Overview
As a leading biotechnology company, we apply our technology platform to engineer, manufacture and sell high performance, natural, sustainably sourced products into theClean Health & Beauty , and Flavor & Fragrance markets. Our proven technology platform enables us to rapidly engineer microbes and use them as catalysts to metabolize renewable, plant-sourced sugars into large volume, high-value ingredients. Our platform, combined with our proprietary fermentation process, replaces existing complex and expensive manufacturing processes. We have successfully used our technology to develop and produce nine distinct molecules at commercial volumes, leading to more than 17 commercial ingredients used by thousands of leading global brands. We believe that synthetic biology represents a third industrial revolution, bringing together biology and engineering to generate new, more sustainable materials to meet the growing global demand for bio-based replacements for petroleum-based and traditional animal- or plant-derived ingredients. We continue to build demand for our current portfolio of products through an extensive sales network provided by our collaboration partners that represent leading companies for our target market sectors. We also have a small group of direct sales and distributors who support our Clean Beauty market and proprietary sweetener product, purecane. Via our partnership model, our partners invest in the development of each molecule to bring it from the lab to commercial-scale and use their extensive sales force to sell our ingredients and formulations to their customers as part of their core business. We capture long-term revenue both through the production and sale of the molecule to our partners and through royalty revenues from our partners' product sales to their customers. We were founded in 2003 in theSan Francisco Bay area by a group of scientists from theUniversity of California ,Berkeley . Our first major milestone came in 2005 when, through a grant from theBill & Melinda Gates Foundation , we developed technology capable of creating microbial strains that produce artemisinic acid, a precursor of artemisinin, an effective anti-malarial drug. Building on our success with artemisinic acid, in 2007 we began applying our technology platform to develop, manufacture and sell sustainable alternatives to a broad range of markets. We focused our initial development efforts primarily on the production of Biofene®, our brand of renewable farnesene, a long-chain, branched hydrocarbon molecule that we manufacture through fermentation using engineered microbes. The commercialization of farnesene pushed us to create a more cost efficient, faster and accurate development process in the lab and to drive manufacturing costs down. This investment has enabled our technology platform to rapidly develop microbial strains and commercialize target molecules. In 2014, we began manufacturing additional molecules for the Flavor & Fragrance industry; in 2015 we began investing to expand our capabilities to other small molecule chemical classes beyond terpenes via our collaboration with theDefense Advanced Research Projects Agency (DARPA); and in 2016 we expanded into proteins. Several years ago, we made the strategic decision to transition our business model from collaborating and commercializing molecules in low margin commodity markets to higher margin specialty markets. We began the transition by first commercializing and supplying farnesene-derived squalane as a cosmetic ingredient sold to formulators and distributors. We also entered into collaboration and supply agreements for the development and commercialization of molecules within the 42 -------------------------------------------------------------------------------- Flavor & Fragrance and Clean Beauty markets where we utilize our strain generation technology to develop molecules that meet the customer's rigorous specifications. During this transition, we solidified the business model of partnering with our customers to create sustainable, high performing, low-cost molecules that replace an ingredient in their supply chain, commercially scale and manufacture those molecules, and share in the profits earned by our customers once our customer sells its product into these specialty markets. These three steps constitute our grants and collaborations revenues, renewable product revenues, and royalty revenues. During 2017, we completed several development agreements with DSM and others for new products such as Vitamin A, a human nutrition molecule and others, and in late 2018 we began commercial production and shipment of an alternative sweetener product developed from the Reb M molecule, purecane, which is a superior sweetener and sugar replacement. We monetized the use of one of our lower margin molecules, farnesene, in the Vitamin E and Lubricants specialty markets while retaining any associated royalties, and licensed farnesene to DSM for use in these fields. We also sold our subsidiary Amyris Brasil Ltda. (Amyris Brasil), which operated our purpose-built, large-scale manufacturing facility located in Brotas,Brazil , to DSM inDecember 2017 . The Brotas facility was built to batch manufacture one commodity product at a time (originally for high-volume production of biofuels, a businessAmyris has exited), which is an inefficient manufacturing process that is not suited for the high margin specialty markets in which we operate today. The inefficiencies we experienced included having to idle the facility for two weeks at a time to prepare for the next product batch manufacture, causing significantly higher costs of products sold. As a result, we are building a new purpose-built, large-scale specialty ingredients plant inBrazil , which we anticipate will allow for the manufacture of five products concurrently, including our alternative sweetener product, and over 10 different products annually. InSeptember 2019 , we obtained the necessary permits and broke ground on our new specialty ingredients plant and expect the facility to be fully operational in the first quarter of 2021. During construction, we are manufacturing our products at four contract manufacturing sites inBrazil , theU.S. andSpain . Finally, as part of theDecember 2017 sale of Brotas, we contracted with DSM for the use of Brotas to manufacture products for us to fulfill our product supply commitments to our customers until the new production facility is built and becomes operational; inNovember 2018 , we amended the supply agreement with DSM to secure capacity at the Brotas facility for production of our alternative sweetener product through 2022. InMay 2019 we entered into an agreement withRaizen Energia S.A. (Raizen) for the formation and operation of a joint venture relating to the production, sale and commercialization of alternative sweetener products whereby the parties would construct a manufacturing facility exclusively for sweetener molecules on land owned by Raizen and leased to the joint venture. Also, inMay 2019 , we consummated a research, collaboration and license agreement withLAVVAN, Inc. , a newly formed investment-backed company (Lavvan), for up to$300 million to develop, manufacture and commercialize cannabinoids. Under the Cannabinoid Agreement, we perform research and development activities and Lavvan is responsible for the commercialization of the cannabinoids developed. The Cannabinoid Agreement is being principally funded on a milestone basis, withAmyris also entitled to receive certain supplementary research and development funding from Lavvan. We could receive aggregate funding of up to$300 million over the term of the Cannabinoid Agreement if all of the milestones are achieved. Additionally, the Cannabinoid Agreement provides for profit share toAmyris on Lavvan's gross profit margin once products are commercialized; these payments will be due for the next 20 years. OnApril 24, 2020 , theFood and Drug Administration ("FDA") granted the Company full Over-the-Counter approval for product listing in theU.S. of its alcohol-based hand sanitizer. Sold through its Clean Beauty brand, Biossance, this hand sanitizer addresses critical public and institutional health needs during the current COVID-19 pandemic. The Company is currently pursuing a similar regulatory approval process in theEuropean Union . The Company's Reb M sweetener achieved national approvals by the Columbian INVIMA Food Safety, Brazilian ANVISA, and Health Canada Authorities onJanuary 29 ,April 15 , andApril 17, 2020 , respectively; each of these approvals allow for immediate distribution ofAmyris's sweetener product in these markets. OnApril 28, 2020 ,Amyris's Aprinnova joint venture received new chemical approval by theChina Ministry of Environment of its hemisqualane ingredient; this approval authorizes unlimited quantity importation to supply theChina cosmetic manufacturing industry. Finally, onMay 5, 2020 , the Company's infant nutritional ingredient (known as HMO (2'-FL)), received validation by a medical Panel of Experts as Generally Recognized As Safe ("GRAS"), an important step toward FDA GRAS approval of this ingredient. We have invested over$700 million in infrastructure and technology to create microbes that produce molecules from sugar or other feedstocks at commercial scale. We have focused on accessing Brazilian sugarcane for our large-scale production because of its renewability, low cost and relative price stability. Our time to market for molecules has decreased from seven years to less than a year for our most recent molecule, mainly due to our ability to leverage the technology platform we have built. The key performance characteristics of our platform that we believe differentiate us include our proprietary computational tools, strain construction tools, screening and analytics tools, and advanced lab automation and data integration. Our state-of-the-art infrastructure includes industry-leading strain engineering and lab automation located inEmeryville, California , pilot- 43 -------------------------------------------------------------------------------- scale production facilities inEmeryville, California andCampinas, Brazil , a demonstration-scale facility inCampinas, Brazil and a commercial-scale production facility inLeland, North Carolina , which is owned and operated by our Aprinnova joint venture to convert our Biofene into squalane and other products.
Sales and Revenue
We recognize revenue from product sales, license fees and royalties, and grants and collaborations.
We have research and development collaboration arrangements for which we receive payments from our collaboration partners, which includeDARPA , DSM,Firmenich SA (Firmenich),Givaudan International SA (Givaudan), Lavvan and others. Some of our collaboration arrangements provide for advance payments to us in consideration for grants of exclusivity or research efforts that we will perform. In 2017 we signed collaboration agreements for an infant nutrition ingredient, and in 2018 and 2019 we signed a collaboration agreement for four vitamins that we expect will contribute to our collaboration revenue and ultimately product sales. Also, in 2019 we signed a collaboration agreement for up to$300 million to develop cannabinoids. Our collaboration agreements, which may require us to achieve milestones prior to receiving payments, are expected to contribute revenues from product sales and royalties if and when they are commercialized. See Note 9, "Revenue Recognition" in Part II, Item 8 of our 2019 Form 10-K for additional information. All of our non-government partnerships include commercial terms for the supply of molecules we successfully upscale and produce at commercial volumes. The first molecule to generate revenue for us outside of farnesene was a fragrance molecule launched in 2015. Since the launch, the product has continued to grow in sales year over year. In 2016, we launched our second fragrance molecule and in 2017, we launched our third fragrance molecule as well as our first cosmetic active ingredient. Our partners for these molecules are indicating continued strong growth due to their cost advantaged position, high purity and sustainable production method. We are continuing to identify new opportunities to apply our technology and deliver sustainable access to key molecules. As a result, we have a pipeline that we believe can deliver two to three new molecules each year over the coming years with a flavor ingredient, a cosmetic active ingredient and a fragrance molecule. In 2019, we commercially produced and shipped our Reb M product that is a sweetener and sugar replacement for food and beverages. Concurrent with the 2017 sale of Amyris Brasil and the Brotas facility, we entered into a series of commercial agreements with DSM that included (i) a license agreement to DSM of our farnesene product for DSM to use in the Vitamin E and lubricant specialty markets and (ii) a royalty agreement, pursuant to which DSM agreed to pay us specified royalties representing a portion of the profit on the sale of Vitamin E produced from farnesene sold under a supply agreement withNenter & Co., Inc. (Nenter) which was assigned to DSM. Under the terms of the royalty agreement, DSM was obligated to pay us minimum royalties totaling$18.1 million for 2019 and 2020. InJune 2018 , we received the 2019 non-refundable minimum royalty payment totaling$9.3 million (net of a$0.7 million early payment discount) and inMarch 2019 , we received the 2020 non-refundable payment totaling$7.4 million (net of a$0.7 million early payment discount). InApril 2019 , we assigned the right to receive such royalty payments under the Vitamin E royalty agreement to DSM for total consideration of$57 million , of which approximately$40.3 million was recognized as royalty revenue in 2019 and$3.8 million was recognized as royalty revenue in 2020. See Note 9, "Revenue Recognition" and Note 10, "Related Party Transactions" in Part I, Item 1 of this Quarterly Report on Form 10-Q and Part II, Item 8 of our 2019 Form 10-K for information regarding the accounting treatment of the assignment of Vitamin E royalty agreement and for a full listing of our agreements with DSM.
We have several other collaboration molecules in our development pipeline with partners including DSM, Givaudan, Firmenich and Lavvan that we expect will contribute revenues from product sales and royalties if and when they are commercialized.
Critical Accounting Policies and Estimates
Management's discussion and analysis of results of operations and financial condition are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in theU.S. (U.S. GAAP). We believe that the critical accounting policies described in this section are those that significantly impact our financial condition and results of operations and require the most difficult, subjective or complex judgements, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. Because of this uncertainty, actual results may vary from these estimates. Our most critical accounting estimates include: •Recognition of revenue for arrangements with service delivery over time and multiple performance obligations; •Valuation and allocation of fair value to various elements of complex related party transactions; 44 -------------------------------------------------------------------------------- •The valuation of freestanding and embedded derivatives, which impacts gains or losses on such derivatives, the carrying value of debt, interest expense and deemed dividends; and •The valuation of debt for which we have elected fair value accounting. For more information about our critical accounting estimates and policies, see Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" in Part I, Item 1 of this Quarterly Report on Form 10-Q and in Part II, Item 8 of our 2019 Form 10-K. 45 --------------------------------------------------------------------------------
Results of Operations
Revenue
Three Months Ended March 31,
(In thousands) 2020 2019
Revenue
Renewable products $ 17,854 $ 11,884
Licenses and royalties 5,161 118
Grants and collaborations 6,115 2,372
Total revenue $ 29,130 $ 14,374
Total revenue increased by 103% to $29.1 million for the three months ended
March 31, 2020 compared to the same period in 2019. The increase was comprised
of a $6.0 million increase in renewable products revenue, a $5.0 million
increase in licenses and royalties revenue and a $3.7 million increase in grants
and collaborations revenue.
Renewable products revenue increased by 50% to
Licenses and royalties revenue increased by
Grants and collaborations revenue increased by 158% to
Costs and Operating Expenses
Three Months Ended March 31,
(In thousands) 2020 2019
Cost and operating expenses
Cost of products sold $ 11,790 $ 17,707
Research and development 17,126 17,839
Sales, general and administrative 32,014 28,253
Total cost and operating expenses
Cost of Products Sold
Cost of products sold includes the raw materials, labor and overhead, amounts paid to contract manufacturers, inventory write-downs, and costs related to production scale-up. Because of our product mix, our overall cost of products sold does not necessarily increase or decrease proportionately with changes in our renewable product revenues. Cost of products sold decreased by 33% to$11.8 million for the three months endedMarch 31, 2020 compared to the same period in 2019, primarily due to improved manufacturing efficiency compared to the first quarter of 2019 which was significantly impacted by certain non-recurring costs related to the launch of our new sweetener product.
Research and Development Expenses
Research and development expenses decreased by 4% to
Sales, General and Administrative Expenses
Sales, general and administrative expenses increased by 13% to$32.0 million for the three months endedMarch 31, 2020 compared to the same period in 2019, primarily due to increases in marketing expense and employee compensation costs related to our consumer product lines. 46 --------------------------------------------------------------------------------
Other Expense, Net
Three Months Ended March 31,
(In thousands) 2020 2019
Other income (expense):
Interest expense (15,002) (12,534)
Gain (loss) from change in fair value of derivative instruments 3,282 (2,039)
Loss from change in fair value of debt (16,503) (2,130)
Loss upon extinguishment of debt (27,319) -
Other expense, net (411) (115)
Total other expense, net $ (55,953) $ (16,818)
Total other expense, net was $56.0 million for the three months ended March 31,
2020 , compared to $16.8 million for the same period in 2019. The $39.1 million
increase was primarily due to a $27.3 million loss upon extinguishment of debt
in 2020 and a $14.4 million increase in loss from change in fair value of debt.
The loss upon extinguishment of debt and loss from change in fair value of debt
in the first quarter of 2020 and the increase in interest expense from the first
quarter of 2019 to the first quarter of 2020 were primarily related to (i) the
write-off of unamortized debt discounts upon the modification of a debt
instrument accounted for as an extinguishment, (ii) upfront expense recognition
of fees paid to lenders and the fair value of warrants issued in connection with
debt principal conversions, refinancing and forbearance agreements and (iii)
default interest related to events of default under most of our debt
instruments.
Provision for Income Taxes
For the three months endedMarch 31, 2020 , we recorded a$0.1 million provision for income taxes related to accrued interest on uncertain tax positions. For the three months endedMarch 31, 2019 , the provision for income taxes was zero. 47 -------------------------------------------------------------------------------- .
Liquidity and Capital Resources
March 31, December 31,
(In thousands) 2020 2019
Working capital deficit
Three Months Ended March 31,
(In thousands) 2020 2019
Net cash (used in) provided by:
Operating activities $ (46,375) $ (36,980)
Investing activities $ (1,040) $ (3,046)
Financing activities $ 49,663 $ (222)
Liquidity. We have incurred significant operating losses since our inception,
and we expect to continue to incur losses and negative cash flows from
operations for at least the next 12 months following the filing of this
Quarterly Report on Form 10-Q. As of March 31, 2020 , we had negative working
capital of $107.3 million (compared to negative working capital of $87.5 million
as of December 31, 2019 ), and an accumulated deficit of $1.8 billion .
As of March 31, 2020 , our outstanding debt principal (including related party
debt) totaled $208.5 million , of which $90.9 million is classified as current.
Our debt agreements contain various covenants, including certain restrictions on
our business that could cause us to be at risk of defaults, such as restrictions
on additional indebtedness, material adverse effect and cross default
provisions. A failure to comply with the covenants and other provisions of our
debt instruments, including any failure to make a payment when required, would
generally result in events of default under such instruments, which could permit
acceleration of a substantial portion of such indebtedness. If such indebtedness
is accelerated, it would generally also constitute an event of default under our
other outstanding indebtedness, permitting acceleration of a substantial portion
of such other outstanding indebtedness. At December 31, 2019 , we failed to meet
certain covenants under several credit arrangements, including those associated
with cross-default provisions, minimum liquidity and minimum asset coverage
requirements. Further, at March 31, 2020 , we failed to meet certain covenants
and provisions under several credit arrangements, including those associated
with cross-default provisions (as discussed below). In March 2020 and again in
May 2020 , these lenders provided permanent waivers to us for breaches of all
past covenant violations and cross-default payment failures through May 8, 2020
under the respective credit agreements (discussed below). As of March 31, 2020 ,
we were in compliance with the minimum liquidity and minimum asset coverage
requirements under these credit agreements.
Between March 31, 2020 and April 30, 2020 , we failed to pay (i) Total Raffinage
Chimie (Total), Nikko Chemicals Co. Ltd (Nikko) and certain affiliates of the
Schottenfeld Group LLC (Schottenfeld) an aggregate of $17.6 million of maturing
promissory notes, (ii) failed to pay Ginkgo $7.2 million of past due interest,
waiver fees and partnership payments and (iii) failed to make interest payments
to all of our lenders totaling $2.8 million . These payment failures resulted in
an event of default under the respective agreements and triggered cross-defaults
under other debt instruments that permitted each of the affected debt holders
(the Cross-Default Lenders) to accelerate the amounts owing under such
cross-defaulted instruments. In May 2020 , we obtained waivers from Ginkgo and
the other lenders to extended the due date for all payments due under the
respective agreements to the earlier of the day we receive cash proceeds from
any private placement of our equity and/or equity-linked securities, and May 31,
2020 ; and amended the credit arrangements with Total and Nikko to extend the
maturity dates of the original respective promissory notes to the earlier of the
day we receive cash proceeds from any private placement of our equity and/or
equity-linked securities, and May 31, 2020 . See Note 12, "Subsequent Events" in
Part 1, Item 1 of this Form 10-Q for further information. Also, we received
waivers from each of the affected Cross-Default Lenders to waive the right to
accelerate due to the event-specific cross-defaults. As a result, the
indebtedness with respect to which we obtained such waivers continues to be
classified as long-term on our condensed consolidated balance sheet. The
indebtedness reflected by the Total and Schottenfeld notes, and certain Ginkgo
and Nikko amounts are classified as a current liability on our condensed
consolidated balance.
Although we obtained waivers or extensions to make these payments at a later
date, we currently do not have sufficient funds to repay the principal amounts
due under the Total, Nikko, Schottenfeld and Ginkgo credit arrangements and the
past due interest payments; and while we intend to seek equity or debt
financing, the proceeds of which would be used to repay most or all of these
past due amounts, there can be no assurance that we will be able to obtain such
financing on our expected timeline,
48
--------------------------------------------------------------------------------or on acceptable terms, if at all. Also, while we have been able to obtain waivers for substantially all of these defaults to date and have not had a lender accelerate our debt, we may not be able to cure or obtain a waiver for such a default promptly in the future.
Further, our cash and cash equivalents of$2.6 million as ofMarch 31, 2020 are not sufficient to fund expected future negative cash flows from operations and cash debt service obligations throughMay 2021 . These factors raise substantial doubt about our ability to continue as a going concern within one year after the date these condensed consolidated financial statements are issued. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. In addition to repaying the Total, Nikko, Schottenfeld, Ginkgo and other lenders principal and interest amounts previously described, our ability to continue as a going concern will depend, in large part, on our ability to raise additional cash proceeds through financings, eliminate or minimize the anticipated negative cash flows from operations during the 12 months from the date of this filing, and refinance or extend other existing debt maturities occurring later in 2020, all of which are uncertain and outside our control. Further, our operating plan for 2020 contemplates a significant reduction in our net operating cash outflows as compared to the year endedDecember 31, 2019 , resulting from (i) revenue growth from sales of existing and new products with positive gross margins, (ii) reduced production costs as a result of manufacturing and technical developments, (iii) reduced spending in general and administrative areas, and (iv) an increase in cash inflows from collaborations and grants. If we are unable to complete these actions, we expect to be unable to meet our operating cash flow needs and our obligations under our existing debt facilities. This could result in an acceleration of our obligation to repay all amounts outstanding under those facilities, and we may be forced to obtain additional equity or debt financing, which may not occur timely or on reasonable terms, if at all, and/or liquidate assets. In such a scenario, the value received for assets in liquidation or dissolution could be significantly lower than the value reflected in these financial statements. We have in the past, including inJuly 2019 , had certain of our debt instruments accelerated for failure to make a payment when due. If we do not achieve our planned operating results, our ability to continue as a going concern would be jeopardized and we may need to take the following actions to support our liquidity needs during the next 12 months: •Shift focus to existing products and customers with significantly reduced investment in new product and commercial development efforts; •Reduce expenditures for employees and third-party contractors, including consultants, professional advisors and other vendors; •Reduce or delay uncommitted capital expenditures, including expenditures related to the construction and commissioning of the new production facility inBrazil , non-essential facility and lab equipment, and information technology projects; and •Closely monitor our working capital position with customers and suppliers, as well as suspend operations at pilot plants and demonstration facilities. Implementing this plan could have a negative impact on our ability to continue our business as currently contemplated, including, without limitation, delays or failures in our ability to: •Achieve planned production levels; •Develop and commercialize products within planned timelines or at planned scales; and •Continue other core activities. We expect to fund operations for the foreseeable future with cash and investments currently on hand, cash inflows from collaborations, grants, product sales, licenses and royalties, and equity and debt financings, to the extent necessary. All of our research and development collaboration milestone payments are subject to risks that we may not meet milestones. Future equity and debt financings, if needed, are subject to the risk that we may not be able to secure financing in a timely manner or on reasonable terms, if at all. Our planned working capital and capital expenditure needs for the remainder of 2020 are dependent on significant inflows of cash from renewable product sales, license and royalties and existing and new collaborations, as well as additional debt financing for the construction of our new specialty ingredients fermentation facility inBrazil .
Cash Flows during the Three Months Ended
Cash Flows from Operating Activities
Our primary uses of cash from operating activities are costs related to the production and sale of our products and personnel-related expenditures, offset by cash received from renewable product sales, licenses and royalties, and grants and collaborations.
For the three months endedMarch 31, 2020 , net cash used in operating activities was$46.4 million , consisting primarily of a$87.8 million net loss, partially offset by$48.1 million of favorable non-cash adjustments that were primarily comprised of a$27.3 million loss upon extinguishment of debt, a$16.5 million loss from change in fair value of debt,$3.5 million of stock- 49 -------------------------------------------------------------------------------- based compensation and$0.7 million of amortization of right-of-use assets under operating leases. Additionally, there was a$6.6 million net increase in working capital balances. For the three months endedMarch 31, 2019 , net cash used in operating activities was$37.0 million , consisting of a$66.2 million net loss,$16.3 million of favorable non-cash adjustments and a$13.0 million net decrease in working capital. The non-cash adjustments were primarily comprised of$4.6 million of debt discount accretion,$3.5 million of stock-based compensation, and$2.8 million of amortization of right-of-use assets under operating leases.
Cash Flows from Investing Activities
For the three months endedMarch 31, 2020 andMarch 31, 2019 , net cash used in investing activities was$1.0 million , and$3.0 million , respectively, comprised of property, plant and equipment purchases.
Cash Flows from Financing Activities
For the three months ended
For the three months ended
Off-Balance Sheet Arrangements
At
Contractual Obligations
The following is a summary of our contractual obligations as of
Payable by year ending December 31,(In thousands) Total 2020 2021 2022 2023 2024 Thereafter Principal payments on debt$ 203,299 $ 61,431 $ 44,481 $ 82,633 $ 12,793 $ 307 $ 1,654 Interest payments on debt(1) 43,859 19,237 16,397 7,812 106 91 216 Financing leases 7,879 3,314 4,565 - - - - Operating leases 25,751 6,217 7,886 7,950 3,483 215 - Manufacturing reservation fee 6,893 6,893 - - - - - Partnership payment obligation 11,112 7,381 3,731 Contract termination fee 3,670 3,670 - - - - - Total$ 302,463 $ 108,143 $ 77,060 $ 98,395 $ 16,382 $ 613 $ 1,870 ____________________ (1)Fixed and variable interest rates are described in Note 4, "Debt" in Part II, Item 8 of the 2019 Form 10-K. Future interest payments shown above for variable-rate debt instruments are measured on the basis of interest rates for such instruments as ofMarch 31, 2020 . The fixed interest rates are more fully described in Note 4, "Debt" in Part II, Item 8 of the 2019 Form 10-K. 50
--------------------------------------------------------------------------------
© Edgar Online, source
