10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2021

Or

[  ] 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: 001-36030

Marrone Bio Innovations, Inc.

(Exact name of registrant as specified in its charter)

Delaware	20-5137161
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1540 Drew Avenue, Davis, CA 95618

(Address of principal executive offices and zip code)

(530) 750-2800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00001 par value	MBII	Nasdaq Capital 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 [X] 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an Emerging Growth Company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “Emerging Growth Company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[X]	Smaller reporting company	[X]
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 [X]

Class	Shares Outstanding at May 7, 2021
Common Stock, $0.00001 par value	175,307,333

TABLE OF CONTENTS

	PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets as of March 31, 2021 (Unaudited) and December 31, 2020	3
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020 (Unaudited)	4
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2021 and 2020 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020 (Unaudited)	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosures About Market Risk	29
Item 4. Controls and Procedures	30
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	31
Item 1A. Risk Factors	31
Item 6. Exhibits	31
SIGNATURES	32

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

MARRONE BIO INNOVATIONS, INC.

Condensed Consolidated Balance Sheets

(In Thousands, Except Par Value)

	MARCH 31,			DECEMBER 31,
	2021			2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	18,923		$	15,841
Accounts receivable		13,533			10,113
Inventories		6,414			6,618
Prepaid expenses and other current assets		1,350			1,688
Total current assets		40,220			34,260
Property, plant and equipment, net		12,439			12,565
Right of use assets, net		3,798			3,760
Intangible assets, net		20,797			21,383
Goodwill		6,740			6,740
Restricted cash		1,560			1,560
Other assets		911			929
Total assets	$	86,465		$	81,197
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,190		$	1,895
Accrued liabilities		10,155			11,650
Deferred revenue, current portion		439			374
Lease liability, current portion		1,164			1,008
Debt, current portion, net		12,085			9,301
Total current liabilities		26,033			24,228
Deferred revenue, less current portion		1,528			1,628
Lease liability, less current portion		2,922			3,050
Debt, less current portion, net		11,380			11,479
Debt due to related parties		7,300			7,300
Other liabilities		1,950			2,102
Total liabilities		51,113			49,787
Commitments and contingencies
Stockholders’ equity:
Preferred stock: $0.00001 par value; 20,000 shares authorized and no shares issued or outstanding at March 31, 2021 and December 31, 2020		-			-
Common stock: $0.00001 par value; 250,000 shares authorized, 175,274 and 167,478 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		1			1
Additional paid in capital		379,429			372,226
Accumulated deficit		(344,078	)		(340,817	)
Total stockholders’ equity		35,352			31,410
Total liabilities and stockholders’ equity	$	86,465		$	81,197

See accompanying notes.

3

MARRONE BIO INNOVATIONS, INC.

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)

	THREE MONTHS ENDED MARCH 31,
	2021			2020
Revenues:
Product	$	10,904		$	9,535
License		134			115
Total revenues		11,038			9,650
Cost of product revenues		4,069			4,081
Gross profit		6,969			5,569
Operating Expenses:
Research, development and patent		2,512			3,234
Selling, general and administrative		7,483			7,993
Total operating expenses		9,995			11,227
Loss from operations		(3,026	)		(5,658	)
Other income (expense):
Interest expense		(393	)		(337	)
Loss on issuance of new warrants		—			(1,391	)
Change in fair value of contingent consideration		134			237
Other income, net		65			159
Total other expense, net		(194	)		(1,332	)
Net loss before Income Taxes		(3,220	)		(6,990	)
Income Tax Expense		(41	)		(34	)
Net Loss	$	(3,261	)	$	(7,024	)
Basic and diluted net loss per common share:	$	(0.02	)	$	(0.05	)
Weighted-average shares outstanding used in computing basic and diluted net loss per common share:		168,938			141,572

See accompanying notes.

4

MARRONE BIO INNOVATIONS, INC.

Condensed Consolidated Statements of Stockholder’s Equity

For the Three Months Ended March 31, 2021 and 2020

(In Thousands)

(Unaudited)

					ADDITIONAL					TOTAL
	COMMON STOCK				PAID IN		ACCUMULATED			STOCKHOLDERS’
	SHARES		AMOUNT		CAPITAL		DEFICIT			EQUITY
Balance at January 1, 2021		167,478	$	1		372,226	$	(340,817	)	$	31,410
Net loss		—		—		—		(3,261	)		(3,261	)
Net settlement of options		21		—		27		—			27
Share-based compensation		—		—		915		—			915
Employee stock purchase plan		—		—		86		—			86
Settlement of restricted stock units		88		—		—		—			—
Exercise of warrants		7,687		—		6,175		—			6,175
Balance at March 31, 2021		175,274	$	1	$	379,429	$	(344,078	)	$	35,352

					ADDITIONAL						TOTAL
	COMMON STOCK				PAID IN			ACCUMULATED			STOCKHOLDERS’
	SHARES		AMOUNT		CAPITAL			DEFICIT			EQUITY
Balance at January 1, 2020		139,526	$	1	$	344,206		$	(320,649	)	$	23,558
Net loss		—		—		—			(7,024	)		(7,024	)
Net settlement of options		15		—		12			—			12
Share-based compensation		—		—		907			—			907
Employee stock purchase plan		—		—		84			—			84
Financing costs		—		—		(64	)		—			(64	)
Issuance of common stock in connection with call to exercise warrants		6,000		—		6,000			—			6,000
Issuance of new warrants in connection with call to exercise warrants		—		—		1,391			—			1,391
Balance at March 31, 2020		145,541	$	1	$	352,536		$	(327,673	)	$	24,864

See accompanying notes

5

MARRONE BIO INNOVATIONS, INC.

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

	THREE MONTHS ENDED MARCH 31,
	2021			2020
Cash flows from operating activities
Net loss	$	(3,261	)	$	(7,024	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		874			891
Gain on disposal of equipment		—			(9	)
Change in inventory reserves		(75	)		72
Right of use assets amortization		215			206
Share-based compensation		915			907
Non-cash interest expense		48			61
Loss on issuance of new warrants		—			1,391
Change in fair value of contingent consideration		(134	)		(237	)
Net changes in operating assets and liabilities:
Accounts receivable		(3,420	)		(4,492	)
Inventories		279			1,000
Prepaid Expenses and other assets		356			(281	)
Accounts payable		252			3,068
Accrued and other liabilities		(763	)		(1,500	)
Lease Liability		(225	)		(208	)
Deferred revenue		(78	)		(137	)
Net cash used in operating activities		(5,017	)		(6,292	)
Cash flows from investing activities
Payment of consideration in connection with previous asset purchase		(750	)		(540	)
Purchases of property, plant and equipment		(119	)		(135	)
Proceeds from sale of equipment		—			2
Net cash used in investing activities		(869	)		(673	)
Cash flows from financing activities
Proceeds from secured borrowings		11,504			11,319
Repayment in secured borrowings		(8,725	)		(6,322	)
Repayment of debt		(99	)		(196	)
Equity offering costs		—			(64	)
Net settlement of options		27			12
Proceeds from employee stock purchase plan		86			84
Exercise of warrants		6,175			6,000
Net cash provided by financing activities		8,968			10,833
Net increase in cash and cash equivalents and restricted cash		3,082			3,868
Cash and cash equivalents and restricted cash, beginning of period		17,401			7,812
Cash and cash equivalents and restricted cash, end of period	$	20,483		$	11,680
Supplemental disclosure of cash flow information
Cash paid for interest	$	339		$	269
Supplemental disclosure of non-cash investing and financing activities
Property, plant and equipment included in accounts payable and accrued liabilities	$	43		$	93
Right of use assets (non-cash) acquired	$	253		$	—

See accompanying notes.

6

MARRONE BIO INNOVATIONS, INC.

Notes to Condensed Consolidated Financial Statements

March 31, 2021

(Unaudited)

1. Summary of Business, Basis of Presentation

Marrone Bio Innovations, Inc. (the “Company”), was incorporated under the laws of the State of Delaware on June 15, 2006, and is located in Davis, California. In July 2012, the Company formed a wholly-owned subsidiary, Marrone Michigan Manufacturing LLC (“MMM LLC”), which holds the assets of a manufacturing plant the Company purchased in July 2012. In September 2019 the Company closed its acquisition of Pro Farm Technologies OY, a Finnish limited company, which consisted of Pro Farm Technologies OY and its five subsidiaries Pro Farm International Oy (Finland), Pro Farm OU (Estonia), Pro Farm Technologies Comercio de Insumos Agricolas do Brasil ltda. (Brazil – 99% controlling interest), Pro Farm Inc. (Delaware), and Glinatur SA (Uruguay) (collectively “Pro Farm”). As a result of the acquisition, Pro Farm became a wholly-owned subsidiary of the Company. In December 2019, the Company created its subsidiary Pro Farm Russia, LLC (Russia). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and substantially owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The accompanying condensed consolidated financial information as of March 31, 2021, and for the three months ended March 31, 2021 and 2020, has been prepared by the Company, without audit, in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations and accounting principles applicable for interim periods. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The information included in this Quarterly Report on Form 10-Q should be read in connection with the consolidated financial statements and accompanying notes included in the Company’s Annual Report filed on Form 10-K for the fiscal year ended December 31, 2020.

In the opinion of management, the condensed consolidated financial statements as of March 31, 2021, and for the three months ended March 31, 2021 and 2020, reflect all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results for the full fiscal year or any future periods.

The Company is a growth-oriented agricultural company that supports environmentally sustainable farming practices through the discovery, development and sale of innovative biological products for crop protection, crop health and crop nutrition. The Company’s products are sold through distributors and other commercial partners to growers around the world for use in integrated pest management systems that improve efficacy and increase yields while protecting the environment. The Company’s products are often used in conjunction with or as an alternative to other agricultural solutions to control pests and enhance plant nutrition and health.

The Company’s portfolio of 15 products helps customers operate more sustainably while increasing their return on investment. The Company’s products are used globally and can be applied as foliar treatments or as seed-and-soil treatments, either on their own or in combination with other agricultural products. The Company targets the major markets that use conventional chemical pesticides and fertilizers where the Company’s biological products are used as alternatives or mixed with, conventional chemical products. The Company also targets new markets for which there are no available conventional chemical products or for which the use of conventional chemical products may not be desirable (including for organically certified crops) or permissible, either because of health and environmental concerns or because the development of pest resistance has reduced the efficacy of conventional chemical pesticides. The Company sell its products through distributors and other commercial partners to growers who use the Company’s bioprotection products to manage pests and plant diseases, the Company’s plant health products to reduce crop stress and both the Company’s plant health and bionutrition products to increase yields and quality.

7

Liquidity

The Company funds operations primarily with the proceeds from the sale of its products, promissory notes and term loans, and net proceeds from issuance and exercise of equity instruments. The Company will need to generate significant revenue growth to achieve and maintain profitability. As of March 31, 2021, the Company had a working capital surplus of $14,187,000, including cash and cash equivalents of $18,923,000. In addition, as of March 31, 2021, the Company had debt and debt due to related parties of $23,465,000 and $7,300,000, respectively, for which the underlying debt agreements contain various financial and non-financial covenants, as well as certain material adverse change clauses. As of March 31, 2021, the Company had a total of $1,560,000 of restricted cash relating to these debt agreements. (Refer to Notes 6 of these condensed consolidated financial statements)

In April 2020, the Company entered into a Warrant Exchange Agreement (the “Warrant Exchange Agreement”) with a group of historical investors (the “Investors”) pursuant to which the Company issued new warrants to the Investors (“April 2020 Warrants”) in exchange for cancellation of all of their outstanding warrants. The April 2020 Warrants all have an exercise price of $0.75 per share, and expire in five tranches. As of March 31, 2021 approximately 24,995,000 shares under the April 2020 Warrants were exercised prior to each of the four tranche expiration dates, leaving only the fifth tranche with an expiration date of December 15, 2021 with respect to 4,885,317 of the April 2020 Warrants remaining. (Refer to Note 7 of these condensed consolidated financial statements).

In December 2020, the Company also entered into an amendment (the “Warrant Amendment” to a previously outstanding warrant (the “Amended Warrant”) to purchase 5,333,333 shares of the Company’s common stock issued to a historical warrant holder (the “Amended Warrant Holder”) on February 5, 2018. As of March 31, 2021, 3,555,556 shares under the Amended Warrant were exercised, leaving 1,777,777 of the Amended Warrants remaining with an expiration date of December 15, 2021. (Refer to Note 7 of these condensed consolidated financial statements).

There can be no assurance that the Investors or the Amended Warrant Holder will exercise the remaining April 2020 Warrants and the Amended Warrant prior to their respective expiration date. (Refer to Note 7 of these condensed consolidated financial statements).

The Company could breach covenants contained within its debt agreements or if the material adverse change clauses are triggered, the entire unpaid principal and interest balances would be due and payable upon demand. Without entering into a continuation of its current waiver, which expires May 31, 2022, entering into strategic agreements that include significant cash payments upfront, significantly increasing revenues from sales or raising additional capital through the issuance of equity, the Company expects it will exceed its maximum debt-to-worth requirement under the June 2014 Secured Promissory Note with Five Star Bank. Further, a violation of a covenant in one debt agreement will cause the Company to be in violation of certain covenants under each of its other debt agreements. Breach of covenants included in the Company’s debt agreements, which could result in the lenders demanding payment of the unpaid principal and interest balances, will have a material adverse effect upon the Company and would likely require the Company to seek to renegotiate these debt arrangements with the lenders. If such negotiations are unsuccessful, the Company may be required to seek protection from creditors through bankruptcy proceedings. The Company’s inability to maintain compliance with its debt covenants could have a negative impact on the Company’s financial condition and ability to continue as a going concern.

The Company’s historical operating results, including prior periods of significant losses and negative use of operating cash flows, may indicate probable substantial doubt exists related to the Company’s ability to continue as a going concern for the next 12 months from the date of issuance of these condensed consolidated financial statements. The Company believes that its existing cash and cash equivalents at March 31, 2021, together with expected revenues, cost management, will be sufficient to fund operations as currently planned through one year from the date of the issuance of these condensed consolidated financial statements and therefore has alleviated doubts related to the Company’s ability to continue as a going concern.

8

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company used significant estimates in accounting for assumptions and estimates associated with revenue recognition, including assumptions and estimates used in determining the timing and amount of revenue to recognize for those transactions with variable considerations, reserves for inventory obsolescence, fair value of stock-based compensation, and forecasted estimates and assumptions related to impairment analysis for long lived assets, intangibles, and goodwill and contingent considerations related to Pro Farm, assumptions and estimates associated with the fair value of warrants and in its going concern analysis.

Concentrations of Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, accounts receivable and debt. The Company deposits its cash and cash equivalents with high credit quality domestic financial institutions with locations in the U.S. and internationally. Such deposits may exceed federal or national deposit insurance limits. The Company believes the financial risks associated with these financial instruments are minimal.

The Company’s customer base is dispersed across many different geographic areas, and currently most customers are pest management distributors in the U.S. Generally, receivables are due up to 120 days from the invoice date and are considered past due after this date, although the Company may offer extended terms from time to time. The Company has provided extended payment terms on a case-by-case basis with a certain customer as a result of COVID-19.

The Company’s principal sources of revenues are its Regalia, Grandevo, Venerate and UPB-110 ST product lines. These four product lines accounted for 89% of the Company’s total revenues for each of the three months ended March 31, 2021 and 2020.

Revenues generated from international customers were 7% and 14% for the three months ended March 31, 2021 and 2020, respectively. For both the three months ended March 31, 2021 and 2020, international customers were primarily concentrated in the European Union.

Customers to which 10% or more of the Company’s total revenues are attributable for the three months ended March 31, 2021 and 2020 consist of the following:

	CUSTOMER
MARCH 31,	A			B			C			D
2021		30	%		16	%		11	%		8	%
2020		17	%		23	%		16	%		13	%

Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either March 31, 2021 or December 31, 2020, which may or may not correspond with any of the customers above, consist of the following:

	CUSTOMER
	A			B			C			D
March 31, 2021		32	%		13	%		11	%		9	%
December 31, 2020		2	%		49	%		14	%		14	%

9

Concentrations of Supplier Dependence

The active ingredient in the Company’s Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company currently relies on one supplier for this plant. Such single supplier acquires raw knotweed from numerous regional sources and performs an extraction process on this plant, creating a dried extract that is shipped to the Company’s manufacturing plant. While the Company does not have a long-term supply contract with this supplier, the Company does have a long-term business relationship with this supplier. The Company endeavors to keep 10 months of knotweed extract on hand at any given time, but an unexpected disruption in supply including disruptions resulting from the COVID-19 pandemic, could have an effect on Regalia supply and revenues. Although the Company has identified additional sources of raw knotweed, there can be no assurance that the Company will continue to be able to obtain dried extract from China at a competitive price.

The Company continues to rely on third parties to formulate Grandevo into spray-dried powders, for all of its production of Venerate, Majestene/Zelto, Stargus and Haven, and from time to time, third-party manufacturers for supplemental production capacity to meet excess seasonal demand and for packaging. The Company’s products have been produced in quantities, and on timelines, sufficient to meet commercial demand and for the Company to satisfy its delivery schedules. However, the Company’s dependence upon others for the production of a portion of its products, or for a portion of the manufacturing process, particularly for drying and for all of its production of Venerate, may adversely affect its ability to satisfy demand and meet delivery obligations, as well as to develop and commercialize new products, on a timely and competitive basis. The Company has not entered into any long-term manufacturing or supply agreements for any of its products, and it may need to enter into additional agreements for the commercial development, manufacturing and sale of its products. There can be no assurance that it can do so on favorable terms, if at all.

Products produced by the Company’s Pro Farm subsidiary, including UBP and Foramin, are partially sourced by suppliers from a manufacturing plant in Russia, in which the Company owns a 12% interest. The Company plans for enough inventory on hand to fill its revenue forecasts for 12 months at any given time, but an unexpected disruption in supply could have an adverse effect on the supply and revenues related to the subsidiary. Although the Company has identified additional manufacturers who are capable suppling the products, there can be no assurance that the Company will continue to be able to obtain products at a competitive price.

Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the condensed consolidated statements of cash flows (in thousands):

	MARCH 31,		DECEMBER 31,
	2021		2020
Cash and cash equivalents	$	18,923	$	15,841
Restricted cash, less current portion		1,560		1,560
Total cash, cash equivalents and restricted cash	$	20,483	$	17,401

Restricted Cash

The Company’s restricted cash consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its June 2014 Secured Promissory Note. (Refer to Note 6 of these condensed consolidated financial statements.)

Intangible Assets

The Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company’s intangible assets include customer relationships, patents, trademarks, and in process research and development acquired in 2019 in connection with its asset acquisition of the Jet-Ag and Jet-Oxide product lines and the Company’s acquisition of Pro Farm.

10

Long-Lived Assets

Impairment losses related to long-lived assets are recognized in the event the net carrying value of such assets is not recoverable and exceeds fair value. The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). If the carrying amount of a long-lived asset (asset group) is considered not recoverable, the impairment loss is measured as the amount by which the carrying value of the asset or asset group exceeds its estimated fair value.

Goodwill

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Goodwill is reviewed for impairment on an annual basis as of the first day of the Company’s fiscal fourth quarter or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. The Company’s goodwill was recognized in connection with its acquisition of Pro Farm.

Fair Value

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements (“ASC 820”), clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

ASC 820 requires that the valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 establishes a three-tier value hierarchy, which prioritizes inputs that may be used to measure fair value as follows:

● Level 1—Quoted prices in active markets for identical assets or liabilities.

● Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Deferred Revenue

When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring control of goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability. The Company recognizes deferred revenue as net sales after the Company has transferred control of the goods or services to the customer and all revenue recognition criteria are met. The Company’s deferred revenue is broken out as follows (in thousands):

	MARCH 31,			DECEMBER 31,
	2021			2020
Product revenues	$	235		$	189
Financing costs		568			581
License revenues		1,164			1,232
Total deferred revenues		1,967			2,002
Less current portion		(439	)		(374	)
Long term portion	$	1,528		$	1,628

Research, Development and Patent Expenses

Research and development expenses include payroll-related expenses, field trial costs, toxicology costs, regulatory costs, consulting costs and lab costs. Patent expenses include legal costs relating to the patents and patent filing costs. These costs are expensed to operations as incurred. For the three months ended March 31, 2021 and 2020, research and development expenses totaled $2,295,000 and $2,880,000, respectively, and patent expenses totaled $217,000 and $354,000, respectively.

11

Shipping and Handling Costs

Amounts billed for shipping and handling are included as a component of product revenues. Related costs for shipping and handling have been included as a component of cost of product revenues. Shipping and handling costs for the three months ended March 31, 2021 and 2020 were $345,000 and $302,000, respectively.

Advertising

The Company expenses advertising costs as incurred and has included these expenses as a component of selling, general and administrative costs. Advertising costs for the three months ended March 31, 2021 and 2020 were $111,000 and $150,000, respectively.

Depreciation and Amortization

The Company depreciates and amortizes its capitalized property, plant, and equipment and intangible assets over the useful life of each asset utilizing a straight-line method of expensing. All depreciation and amortization expenses are included in the “Selling, general, and administrative” caption in the condensed consolidated statement of operations.

For the three months ended March 31, 2021 and 2020, the total amount of depreciation expense was $288,000 and $304,000, respectively. For the three months ended March 31, 2021 and 2020, the total amount of amortization expense was $586,000 and $587,000, respectively.

Segment Information

The Company is organized as a single operating segment, whereby its chief operating decision maker assesses the performance of and allocates resources to the business as a whole.

Net Loss Per Share

Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period. The calculation of basic and diluted net loss per share is the same for all periods presented as the effect of certain potential common stock equivalents, which consist of stock options and warrants to purchase common stock and restricted stock units, and contingent shares to be issued in the future are anti-dilutive due to the Company’s net loss position. Anti-dilutive common stock equivalents are excluded from diluted net loss per share. The following table sets forth the potential shares of common stock as of the end of each period presented that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive (in thousands):

	MARCH 31,		MARCH 31,
	2021		2020
Stock options outstanding		13,572		11,529
Warrants to purchase common stock		6,814		52,647
Restricted stock units outstanding		4,772		2,466
Common shares to be issued in lieu of agent fees		498		498
Employee stock purchase plan		84		124
Maximum contingent consideration shares to be issued		5,972		5,972
		31,712		73,236

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Recently Issued Accounting Pronouncements

In May 2021, the FASB issued Accounting Standards Update No. 2021-04, “Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Based Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU No. 2021-04”), which clarified an issuer’s accounting for modification or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The provisions of ASU No. 2021-04 are effective for annual reporting periods beginning after December 15, 2021, and interim reporting periods within those annual periods, with early adoption permitted, including adoption in any interim period for public business entities for periods for which consolidated financial statements have not yet been issued or made available for issuance. This ASU shall be applied on a prospective basis. The Company has not yet determined the impact of implementing this new standard on the condensed consolidated financial statements.

3. Inventory

Inventories, net consist of the following (in thousands):

	MARCH 31,		DECEMBER 31,
	2021		2020
Raw materials	$	2,735	$	2,487
Work in progress		804		987
Finished goods		2,875		3,144
	$	6,414	$	6,618

As of March 31, 2021 and December 31, 2020, the Company had $462,000 and $387,000, respectively, in reserves against its inventories. For the three months ended March 31, 2021 and 2020, the Company recorded an adjustment of $228,000 and $243,000, respectively, as a result of actual utilization of the Company’s manufacturing plant being less than what is considered normal capacity.

4. Right-Of-Use of Assets and Lease Liability

On March 31, 2021 the Company entered into a lease agreement for approximately 415 square meters of office and laboratory space located in Helsinki, Finland. The initial term of the lease is for a period of 24 months and requires a 6-month notice prior to termination. The minimum monthly rent is €9,462 per month, subject to increase based on the consumer price index increase on January 1 of each fiscal year if applicable.

The components of lease expense were as follows for each of the comparative three months ended March 31, 2021 and 2020 (in thousands):

	MARCH 31,		MARCH 31,
	2021		2020
Operating lease cost	$	290	$	285
Short-term lease cost		41		39
Sublease income		-		(10	)
Total operating lease costs:	$	331	$	314

Maturities of lease liabilities for each future calendar year as of March 31, 2021 are as follows (in thousands):

	OPERATING
	LEASES
2021	$	1,047
2022		1,380
2023		1,321
2024		867
Total lease payments		4,615
Less: imputed interest		529
Total lease obligation		4,086
Less lease obligation, current portion		1,164
Lease obligation, non-current portion	$	2,922

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5. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	MARCH 31,		DECEMBER 31,
	2021		2020
Accrued compensation	$	3,267	$	3,495
Accrued warranty costs		484		475
Accrued customer incentives		3,224		4,288
Accrued liabilities, acquisition related		744		1,463
Accrued liabilities, other		2,436		1,929
Accrued Liabilities	$	10,155	$	11,650

Contingent Consideration

As of March 31, 2021, the contingent consideration in connection with the Company’s acquisition of Pro Farm was recorded at its fair value. The following table provides a reconciliation of the activity for the contingent consideration measured between the most recent reporting period and as of the balance sheet date based on the fair value using significant inputs including the unobservable inputs (Level 3) (in thousands):

	CONTINGENT CONSIDERATION LIABILITY
Fair value at December 31, 2020	$	2,182
Change in estimated fair value recorded of contingent consideration		(134	)
Fair value at March 31, 2021	$	2,048

The change in fair value for the reporting period was driven by the result of the unobservable fair value model, a Monte Carlo simulation in a risk-neutral framework assuming Geometric Browning Motion. The most significant input to the model was the estimated results of the Pro Farm subsidiary for the periods specified in the share purchase agreement of 2021 – 2023. The following represents other inputs used in determining the fair value of the contingent consideration liability:

	MARCH 31,			DECEMBER 31,
	2021			2020
Discount rate		16.0	%		15.5	%
Volatility		49.2	%		45.8	%
Credit spread		8.9	%		9.0	%
Risk-free rate		0.4	%		0.2	%

Discount Rate. Discount rate is based on an adjusted weighted cost of capital contribution considering an estimated operational leverage ratio and a risk-free rate, each (other than the risk-free rate) determined by publicly traded peer group median.

Estimated Volatility Factor. Volatility factor is based on the adjusted weighted cost of capital, operating asset volatility, operating leverage ratio and risk-free interest rate, each (other than the risk-free rate) determined by publicly traded peer group median.

Credit Spread. Credit spread based on the Company’s financial ratio in comparison with those of publicly traded peer group.

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Interest Rate. Interest rate based on US Constant Maturity Treasury rates for the same period as the period of performance of 2021 to 2023.

The change in the fair value estimate is recognized in the Company’s condensed consolidated statement of operations in Other Income (expense) under caption Change in fair value of contingent consideration. The contingent consideration will be determined at each reporting period and will be settled with the issuance of the Company’s common shares. As of March 31, 2021, the Company recorded $719,000 and $1,329,000, respectively, in accrued liabilities and other liabilities in the Company’s condensed consolidated balance sheets.

6. Debt

Debt, including debt due to related parties, consists of the following (in thousands):

	MARCH 31,			DECEMBER 31,
	2021			2020
Secured promissory notes (“October 2012 and April 2013 Secured Promissory Notes”) bearing interest at 8.00% per annum, interest and principal due at maturity (December 31, 2022), collateralized by substantially all of the Company’s assets.	$	3,425		$	3,425
Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (5.25% as of March 31, 2021) per annum, payable monthly through June 2036, collateralized by certain of the Company’s deposit accounts and MMM LLC’s inventories, chattel paper, accounts, equipment and general intangibles, net of unamortized debt discount as of March 31, 2021 and December 31, 2020 of $161 and $166.		8,024			8,106
Secured revolving borrowing (“LSQ Financing”) bearing interest at (12.80% annually) payable through the lenders direct collection of certain accounts receivable through May 2021, collateralized by substantially all of the Company’s personal property.		11,745			8,966
Senior secured promissory notes due to related parties (“August 2015 Senior Secured Promissory Notes”) bearing interest at 8% per annum, interest and principal payable at maturity (December 31, 2022), collateralized by Substantially all of the Company’s assets.		7,300			7,300
Research loan facility (“2018 Research Facility”) bearing interest at 1.00% per annum, interest payments are due annually on the anniversary date of the facility with principal payable in 25% increments on the anniversary date of the facility beginning on the fourth anniversary of the loan (September 2022), net of imputed interest as of March 31, 2021 and December 31, 2020 of $39K and $41K, respectively.		271			283
Debt, including debt due to related parties	$	30,765		$	28,080
Less debt due to related parties, non-current		(7,300	)		(7,300	)
Less current portion		(12,085	)		(9,301	)
Debt, non-current	$	11,380		$	11,479

As of March 31, 2021, aggregate contractual future principal payments on the Company’s debt, including debt due to related parties for each calendar year, are due as follows (in thousands):

PERIOD ENDING DECEMBER 31,	DEBT		DEBT TO RELATED PARTY
2021	$	12,010		-
2022		2,900		5,000
2023		471		-
2024		491		-
2025		515		-
Thereafter		6,305		-
Total future principal payments		22,690		5,000
Interest payments included in debt balance (1)		975		2,300
Total future debt payments	$	23,665		7,300

(1) Due to the debt extinguishment requirements, the Company has included both accrued interest and future interest in the debt balance for certain outstanding debt.

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October 2012 and April 2013 Secured Promissory Notes

As of March 31, 2021, there have been no changes to the previously reported total principal amount outstanding under the October 2012 and April 2013 Secured Promissory Note, which continues to be $2,450,000. Due to the historical accounting for the promissory note the amount recorded on the condensed consolidated balance sheet of $3,425,000 includes $975,000 in accrued interest, of which as of March 31, 2021 and 2020, a total of $631,000 and $435,000, respectively, had been incurred.

As of March 31, 2021, the Company is in compliance with all financial covenants, or has received an appropriate waiver of these covenants.

June 2014 Secured Promissory Note

In June 2014, the Company borrowed $10,000,000 pursuant to a business loan agreement and promissory note (“June 2014 Secured Promissory Note”) with Five Star Bank that bears an interest of 5.25% (per annum) as of March 31, 2021. The interest rate is subject to change and is based on the prime rate plus 2.00% per annum. The Company is required to maintain a deposit balance with the Five Star Bank of $1,560,000, which is recorded as restricted cash included in non-current assets.

Under this note the Company is required to maintain a current ratio of not less than 1.25-to-1.0, a debt-to-worth ratio of no greater than 4.0-to-1.0 and a loan-to-value ratio of no greater than 70% as determined by Five Star Bank. In the event of default on the debt, Five Star Bank may declare the entire unpaid principal and interest immediately due and payable. As of March 31, 2020, the Company was in compliance with the “loan to value ratio” covenant, the “current ratio”, and the “debt to worth ratio”, however, the Company has obtained a waiver from the lender for any non-compliance through May 31, 2022.

The following table reflects the activity under this note (in thousands):

	2021			2020
Principal balance, net at December 31, preceding year	$	8,106		$	8,404
Principal payments		(196	)		(217	)
Interest		109			146
Debt discount amortization		5			5
Principal balance, net at March 31,	$	8,024		$	8,338

LSQ Financing

In January 2020, the Company entered into a Second Amendment to the Company’s Invoice Purchase Agreement with LSQ. The amendment, among other things, (i) increased the amount of eligible customer invoices which LSQ may elect to purchase from the Company to up to $20,000,000 of eligible customer invoices from the Company from $7,000,000; (ii) increased the advance rate to 90% from 85% and 70% from 60%, respectively, of the face value of domestic and international receivables being sold; (iii) decreased the invoice purchase fee rate from 0.40% to 0.25%; (iv) increased the funds usage fee from 0.020% to 0.025%; (v) extended the 0% aging and collection fee percentage charged at the time when the purchased invoice is collected from 90 days to 120 days, and increased the fee percentage charged thereafter from 0.35% to 0.75%; and (vi) decreased the early termination fee from 0.75% to 0.50%.

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In addition to the Amendment, the Company simultaneously entered into an Amended Inventory Financing Addendum (the “Addendum”) with LSQ. The Addendum allows the Company to request an advance up to the lesser of (i) 100% of the Company’s unpaid finished goods inventory; (ii) 65% of the appraised value of the Company’s inventory performed on or on behalf of LSQ; or (iii) $3,000,000. Funds advance under the Addendum are subject to a monthly inventory management fee of 0.5% on the average monthly inventory funds available and a daily interest rate of 0.025%.

as of March 31, 2021, the Company is in compliance with all financial covenants of the agreement. For the three months ended March 31, 2021 and 2020, the Company recorded interest expense of approximately $232,000 and $124,000, respectively, in connection with the LSQ arrangement. As of March 31, 2021, $10,286,000 was outstanding under the LSQ Financing.

7. Warrants

On April 29, 2020, the Company entered into a warrant exchange agreement (“Warrant Exchange Agreement”) with certain holders of warrants issued under the August 2015 Senior Secured Promissory Notes, the Securities Purchase Agreement and the Amendment and Plan of Reorganization agreements. Pursuant to the Warrant Exchange Agreement, the Company agreed to exchange an aggregate of 45,977,809 previously outstanding warrants for 29,881,855 new warrants (“April 2020 Warrants”).

The April 2020 Warrants have terms expiring (i) for a total of 3,392,581 shares on May 1, 2020, (ii) for a total of 2,714,065 shares on September 15, 2020 (iii) for a total of 13,027,512 shares on December 15, 2020, (iv) for a total of 5,862,380 shares on March 15, 2021 and (v) for a total of 4,885,317 Warrant Shares on December 15, 2021. All April 2020 Warrants have an exercise price of $0.75 per share. As of March 31, 2021, approximately 24,995,000 shares under the April 2020 Warrants were exercised prior to each of the four tranche expiration dates, leaving only the fifth tranche with an expiration date of December 15, 2021 with respect to 4,885,317 of the April 2020 Warrants remaining.

In December 2020, the Company also entered into an amendment (the “Warrant Amendment”) to a previously outstanding warrant (the “Amended Warrant”) to purchase 5,333,333 shares of the Company’s common stock issued to a historical warrant holder (the “Amended Warrant Holder”) on February 5, 2018. Pursuant to the Warrant Amendment, in exchange for the Holder’s exercise of the Amended Warrant on December 29, 2020 with respect to 1,777,778 shares at the then-applicable exercise price of $0.96 per share the warrant’s expiration date was partially extended and allows the Amended Warrant Holder to purchase (i) 1,777,778 shares under the Amended Warrant at $1.00 per share by March 25, 2021, and (ii) 1,777,777 shares under the Amended Warrant at $1.04 share by December 15, 2021. As of March 31, 2021, 3,555,556 shares under the April 2020 Warrants were exercised, leaving 1,777,777 of the Amended Warrants remaining with an expiration date of December 15, 2021.

The following table summarizes the Company’s common stock warrants outstanding as of March 31, 2021 (in thousands, except exercise price data):

							THREE MONTHS
					SHARES		ENDED			SHARES
					SUBJECT TO		NUMBER OF			SUBJECT TO
	ISSUE	EXPIRATION			WARRANTS		WARRNTS			WARRANTS
	DATE	DATE	EXERCISE		OUTSTANDING		EXERCISED			OUTSANDING
DESCRIPTION	MM/YY	MM/YY	PRICE		12/31/2020		3/31/2021			3/31/2021
June 2013 Warrants	06/13	06/23	$	8.40		27		-			27
November 2016 Warrants	11/16	11/26	$	2.38		125		-			125
November 2017 Warrants	06/17	06/27	$	1.10		80		(80	)		-
April 2020 Warrants, Tranche 4	04/20	03/21	$	0.75		5,862		(5,862	)		-
April 2020 Warrants, Tranche 5	04/20	12/21	$	0.75		4,885		-			4,885
December 2020 Warrants, Tranche 2	12/20	03/21	$	1.00		1,778		(1,778	)		-
December 2020 Warrants, Tranche 3	12/20	12/21	$	1.04		1,777		-			1,777
				TOTALS:		14,534		(7,720	)		6,814

The weighted average remaining contractual life and exercise price for these warrants is 0.81 years and $0.89, respectively.

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8. Share-Based Plans

As of March 31, 2021, there were options to purchase 13,572,000 shares of common stock outstanding, 4,772,000 restricted stock units outstanding and 9,787,000 share-based awards available for grant under the outstanding equity incentive plans.

For the three months ended March 31, 2021 and 2020, the Company recognized share-based compensation of $915,000 and $907,000, respectively.

In February 2021, in connection with the appointment of a new chief financial officer, the Company granted 400,000 options to purchase common stock at an exercise price of $2.60 and with a fair value of $567,000 to its new chief financial officer. The Company’s fair value of these grants was estimated utilizing a Black Scholes option pricing model based on assumptions which have determined consistent with the Company’s historical methodology.

The following table summarizes the activity of stock options from December 31, 2020 to March 31, 2021 (in thousands, except weighted average exercise price):

				WEIGHTED-
				AVERAGE
	SHARES			EXERCISE
	OUTSTANDING			PRICE
Balances at December 31, 2020		13,380		$	2.32
Options granted		438		$	1.69
Options exercised		(21	)	$	1.31
Options cancelled		(225	)	$	3.62
Balances at March 31, 2021		13,572		$	2.28

In February 2021, in connection with the Company’s separation and consulting arrangement with its former chief financial officer, the Company granted 200,000 restricted stock units to its former chief financial officer. The restricted stock units will vest and settle monthly for a period of 12 months.

The following table summarizes the activity of restricted stock units from December 31, 2020 to March 31, 2021 (in thousands, except weighted average grant date fair value):

				WEIGHTED
				AVERAGE
				GRANT
	SHARES			DATE FAIR
	OUTSTANDING			VALUE
Outstanding at December 31, 2020		4,588		$	1.14
Granted		272			1.77
Settled		(88	)		1.62
Forfeited		-			-
Outstanding at March 31, 2021		4,772		$	1.16

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The following table summarizes the activity of non-vested restricted stock units from December 31, 2020 to March 31, 2021 (in thousands, except weighted average grant date fair value):

				WEIGHTED
				AVERAGE
				GRANT
	SHARES			DATE FAIR
	OUTSTANDING			VALUE
Nonvested at December 31, 2020		1,437		$	1.16
Granted		272			1.77
Vested		(97	)		1.99
Forfeited		-			-
Nonvested at March 31, 2021		1,612		$	1.22

In April 2021 the Company also granted restricted stock units to certain executives and employees in lieu of cash bonuses for performance related to the fiscal year ended December 31, 2020. The total number of restricted stock units granted to these employees was 237,000 at an exercise price of $1.95 and will settle on May 20, 2021.

9. Related Party Transactions

Warrant Exercises

Ospraie, Ivy Science & Technology Fund (“IS&T”), Ivy VIP Science & Technology (“Ivy VIP” and, together with IS&T, the “Waddell Investors”, and Ardsley, are each beneficial owners of more than 10% of the Company’s common stock, holding 40.4%, 15.9%, and 9.9%, respectively, of the Company’s total outstanding common stock as of March 31, 2020. In March 2021, 4,264,299, 666,472 and 741,617, of the April 2020 Warrants were exercised by each of them, respectively, in accordance with the terms of the Warrant Exchange Agreement. (Refer to Note 7 of these condensed consolidated financial statements.)

August 2015 Senior Secured Promissory Notes

As of March 31, 2020, there have been no changes to the previously reported total principal amount outstanding under the August 2015 Senior Secured Promissory Notes, which continues to be $5,000,000. Due to the historical accounting for the promissory note the amount recorded on the condensed consolidated balance sheet of $7,300,000 includes $2,300,000 in accrued interest, of which as of March 31, 2021 and 2020, a total of $1,600,000 and $1,199,000, respectively, had been incurred.

The August 2015 Senior Secured Promissory Notes provide for various events of default, including, among others, default in payment of principal or interest, breach of any representation or warranty by the Company or any subsidiary under any agreement or document delivered in connection with the notes, a continued breach of any other condition or obligation under any loan document, certain bankruptcy, liquidation, reorganization or change of control events, the acquisition by any person or persons acting as group, other than the lenders, of beneficial ownership of 40% or more of the outstanding voting stock of the Company. Upon an event of default, the entire principal and interest may be declared immediately due and payable. As of March 31, 2021, the Company was in compliance with its covenants under the August 2015 Senior Secured Promissory Notes.

10. Subsequent Events

The Company has evaluated its subsequent events from March 31, 2021 through the date these condensed consolidated financial statements were issued, and has determined that there are no additional subsequent events required to be disclosed.

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

You should read the following discussion of our financial condition and results of operations in connection with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission (the “Annual Report”) on March 23, 2021. Additional information regarding the Company is also available in our other reports filed with the Securities and Exchange Commission, which are also available on our investor relations website, investors.marronebio.com, which we also use, together with our corporate Twitter account, @Marronebio, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. We encourage our investors to monitor and review the information we make public in these locations. The information contained in the foregoing locations are not incorporated by reference into this filing, and the Company’s references to website URLs are intended to be inactive textual references only.

In addition to historical condensed consolidated financial information, this Quarterly Report on Form 10-Q contains forward-looking statements that reflect our plans, estimates and beliefs. Forward-looking statements are identified by words such as “would”, “could”, “will”, “may”, “expect”, “believe”, “should”, “anticipate”, “outlook”, “if”, “future”, “intend”, “plan”, “estimate”, “predict”, “potential”, “targets”, “seek” or “continue” or and similar words and phrases, including negatives of these terms or similar words, phases, expressions, or other variations of these terms, that denote future events. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other “forward-looking” information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. For example, forward-looking statements include any statements regarding the strategies, prospects, plans, expectations or objectives of management for future operations, including our plans to expand our business through diversification of our portfolio and strategic acquisition or partnerships and to expand our manufacturing plant, the progress, scope or duration of the development of product candidates or programs, commercialization plans, timelines and potential results, the benefits that may be derived from product candidates or the commercial or market opportunity in any target indication, our anticipated operations, financial position, revenues, costs or expenses, statements regarding future economic conditions or performance, the impact of COVID-19 on our operations and revenues, the potential exercise of Company warrants, statements of belief and any statement of assumptions underlying any of the foregoing. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere, including Part II, Item 1A— “Risk Factors,” in this Quarterly Report on Form 10-Q, and in Part I—Item 1A—”Risk Factors” of our Annual Report. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. These statements, like all statements in this report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments. We caution investors that our business and financial performance are subject to substantial risks and uncertainties.

Overview

We are a growth-oriented agricultural company that supports environmentally sustainable farming practices through the discovery, development and sale of innovative biological products for crop protection, crop health and crop nutrition. Our products are sold through distributors and other commercial partners to growers around the world for use in integrated pest management systems that improve efficacy and increase yields while protecting the environment. Our products are often used in conjunction with or as an alternative to other agricultural solutions to control pests and enhance plant nutrition and health.

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Our portfolio of 15 products helps customers operate more sustainably while increasing their return on investment. Our products are used globally, and can be applied as foliar treatments or as seed-and-soil treatments, either on their own or in combination with other agricultural products. We target the major markets that use conventional chemical pesticides and fertilizers where our biological products are used as alternatives for, or mixed with, conventional chemical products. We also target new markets for which there are no available conventional chemical products or, the use of conventional chemical products may not be desirable (including for organically certified crops) or permissible either because of health and environmental concerns or because the development of pest resistance has reduced the efficacy of conventional chemical pesticides. We sell our products through distributors and other commercial partners to growers who use our bioprotection products to manage pests and plant diseases, our plant health products to reduce crop stress and both our plant health and bionutrition products to increase yields and quality.

Business Strategy

We have built a full-service biologicals organization with scope and capabilities across the spectrum of biological products in the market today. Our strategic objective is to capitalize on that position and emerge as the clear leader in the biologicals space with the financial and operational wherewithal to accelerate our path to profitability.

As we look forward, our goal is to leverage our base business, while accelerating our expansion plans and broadening our global reach. We are committed to launching the brand extensions and pipeline products that offer the greatest return on investment for our channel partners and grower customers. We anticipate that synergistic, value-creating acquisitions and partnerships will be part of our strategy. We believe we can continue to tuck in additional product lines as we build a larger commercial presence with a scalable platform.

Our strategy for the current long-term period includes the diversification of our portfolio which includes expanding our reach globally, moving away from having sales concentrated in the United States, ongoing research and development efforts to accelerate the time to market and revenue contributions of our pipeline products, and continued focus on our current operations to continue our growth, profitability and enhance stockholder value.

First Quarter 2021 Highlights

During the first quarter of 2021, we, like all businesses domestically and globally, continued to be impacted by the COVID-19 pandemic but are optimistic at the collectively global efforts to reopen fully in 2021. We are pleased to have continued to service the agricultural industry during this unprecedented environment through our product portfolio offerings. At the same time, we are conserving cash through prudent expense control while serving customers and working to ensure the safety of our employees, customers and partners.

The following are the more significant financial results for the three months ended March 31, 2021:

● Revenues increased approximately 14.4% year over year to $11.0 million, from $9.7 million for the same period in 2020;

● Gross profits increased approximately 25.1% year over year to $7.0 million, from $5.6 million for the same period in 2020, and gross margins increased to 63.1% from 57.7% for the same period in the prior year;

● Operating expenses were $10.0 million in the first quarter of 2021, compared with $11.2 million in the first quarter of 2020; and

● Net loss in the first quarter of 2021 was $3.3 million, compared with a net loss of $7.0 million in first quarter of 2020.

Other significant developments for our business during the three months ended March 31, 2021 include the hire of Suping (Sue) Cheung as our Chief Financial Officer, the filing and effectiveness of our $90 million universal shelf registration statement, Grandevo WDG Bioinsecticide being approved for use in New Zealand, and our joining the United Nations Global Compact.

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Critical Accounting Policies and Estimates

Our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net revenue, costs and expenses, and any related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Changes in accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and our actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

We believe that the assumptions and estimates associated with estimating revenue recognition, including assumptions and estimates used in determining the timing and amount of revenue to recognize, forecast estimated utilized in identifying impairment indicators of long-lived asset, intangibles and goodwill, contingent consideration liabilities and our going concern assessment, have the greatest potential impact on our condensed consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.

Key Components of Our Results of Operations

Revenues

Our total revenues were $11.0 million and $9.7 million for the three months ended March 31, 2021 and 2020, respectively. We generate our revenues primarily from product sales, which are principally attributable to sales of our Grandevo, Regalia, UPB-110 ST, and Venerate product lines, but also included sales of out other product families. We believe our revenues may largely be impacted by weather, trade tariffs and other factors that affect commodity prices, natural disasters, infectious diseases and other factors affecting planting and growing seasons and incidence of pests and plant disease, and, accordingly, the decisions by our distributors, direct customers and end users about the types and amounts of pest management and plant health products to purchase and the timing of use of such products. Despite the continued impact of COVID-19, we presently expect revenues to continue to increase year-over-year for the remainder of 2021 in line with historic growth trends, in part due to our expanded seed treatment offerings.

Product Revenues

Product revenues consist of revenues generated primarily from sales to customers, net of rebates and cash discounts. Product revenues constituted 99% of our total revenues for each of the three months ended March 31, 2021 and 2020, respectively. Product revenues in the United States constituted 94% and 86% of our total revenues for the three months ended March 31, 2021 and 2020, respectively. While our first quarter results, reflect our historical trend, primarily driven by product revenues in the U.S. market, in 2021, we expect a larger portion of our business to be driven by international markets with our Pro Farm products and our continued focus on commercialization progress of our products in new countries. Latin America represents one of the geographies we have targeted for international expansion. While we cannot be certain as to the results at this time, with the recent fluctuations in COVID-19 cases in and around that region, our expected product revenues could be negatively impacted.

We currently rely, and expect to continue to rely, on a limited number of customers for a significant portion of our revenues since we sell to highly concentrated, traditional distributor-type customers. While we expect product sales to a limited number of customers to continue to be our primary source of revenues, as we continue to develop our pipeline and introduce new products to the marketplace, we anticipate that our revenue stream will be diversified over a broader product portfolio and customer base, including as a result of our Pro Farm product offerings.

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License Revenues

License revenues generally consist of revenues recognized under our strategic collaboration and distribution agreements for exclusive distribution rights for our commercial product offerings, or for our broader pipeline of products, for certain geographic markets or for market segments that we do not address directly through our internal sales force. Our strategic collaboration and distribution agreements generally outline overall business plans and include payments we receive at signing and for the achievement of certain testing validation, regulatory progress and commercialization events. As these activities and payments are associated with exclusive rights that we provide over the term of the strategic collaboration and distribution agreements, revenues related to the payments received are deferred and recognized as revenues over the term of the exclusive period of the respective agreements. For each of the three months ended March 31, 2021 and 2020, license revenues constituted 1% of total revenues, respectively. As of March 31, 2021, an additional $0.8 million in payments under these agreements can potentially be received if the testing validation, regulatory progress and commercialization events occur.

Cost of Product Revenues and Gross Profit

Cost of product revenues consists principally of the cost of raw materials, including inventory costs and third-party services related to procuring, processing, formulating, packaging and shipping our products. As we have used our Bangor, Michigan manufacturing plant to produce certain of our products, cost of product revenues includes an allocation of operating costs including direct and indirect labor, production supplies, repairs and maintenance, depreciation, utilities and property taxes. The amount of indirect labor and overhead allocated to finished goods is determined on a basis presuming normal capacity utilization. Operating costs incurred in excess of production allocations, considered idle capacity, are expensed to cost of product revenues in the period incurred rather than added to the cost of the finished goods produced. Cost of product revenues may also include charges due to inventory adjustments and reserves. In addition, costs associated with license revenues have been included in cost of product revenues as they have not been significant. Gross profit is the difference between total revenues and cost of product revenues. Gross margin is gross profit expressed as a percentage of total revenues.

We expect to see increases in gross profit over the life cycle of each of our products as gross margins are expected to increase over time as production processes improve, including plans to expand our manufacturing plant, and as we gain efficiencies and increase product yields. While we expect margins to improve on a product-by-product basis, and target annual gross margins in the mid-50% range, our overall gross margins may vary as we introduce new products. In particular, we may experience downward pressure on overall gross margins as we continue to expand sales of our more recent commercially available products including Haven, Stargus, our Jet and Pro Farm products. Gross margin has been and will continue to be affected by a variety of factors, including plant utilization, product manufacturing yields, changes in production processes, new product introductions, product sales mix, sales incentives such as discounts and rebates and average selling prices.

Research, Development and Patent Expenses

Research, development and patent expenses include personnel costs, including salaries, wages, benefits and share-based compensation, related to our research, development and patent and regulatory staff in support of product discovery, development, and support for manufacturing, quality, and regulatory activities. Research, development and patent expenses also include costs incurred for laboratory supplies, field trials and toxicology tests, quality control assessment, consultants and facility and related overhead costs. Our research, development and patent expenses have historically comprised a significant portion of our operating expenses, amounting to $2.5 million and $3.2 million for the three months ended March 31, 2021 and 2020, respectively. We are also seeking collaborations with third parties to develop and commercialize more early stage candidates, on which we have elected not to expend significant resources given our near-term strategic priorities. Since some of our key research, development and patent resource employees are working remotely as a result of COVID-19, and due to some reliance on external suppliers who are also impacted by COVID-19, our expenses may not be at the level they otherwise would be during this period.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of personnel costs, including salaries, wages, benefits and share-based compensation, related to our executive, sales, marketing, finance and human resources personnel, as well as professional fees, including legal and accounting fees, and other selling costs incurred related to business development and to building product and brand awareness. We create brand awareness through programs such as speaking at industry events, trade show displays and hosting local-level grower and distributor meetings. In addition, we dedicate significant resources to technical marketing literature, targeted advertising in print and online media, webinars and radio advertising. Costs related to these activities, including travel, are included in selling expenses.

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Outside of operating expenses resulting from our Pro Farm subsidiaries, we generally expect selling, general, and administrative expenses to remain approximately flat in most departments. We continue to build a sales and marketing organization that provides us with a better ability to educate and support customers and for our product development staff to undertake responsibility for technical sales support, field trials and demonstrations to promote sales growth. However, as a result of COVID-19, such efforts have slowed including due to travel restrictions put in place by the Company, current and potential customers, and governmental authorities, which has impacted our ability to engage in sales and marketing efforts physically or perform in person demonstrations. We expect to continue to increase our marketing communications campaigns and put more “boots on the ground”, which we believe should increase grower demand, or pull-through, and develop new customers, as well as expand business with existing customers.

Interest Expense

Interest expenses are primarily driven by outstanding debt financing arrangements however not all of our current debt instruments are currently generating interest expenses. See Note 6 and 9 to our condensed consolidated financial statements.

Income Tax Provision

As of the three months ended March 31, 2021 and 2020 the Company recognized $41,000 and $34,000 in income tax provisions for foreign tax purposes, respectively. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income) for the three months ended March 31, 2021 and 2020 was 1.24% and .46%, respectively. The Company does not recognize benefits from tax losses in the United States or for certain Pro Farm subsidiaries.

Results of Operations

The following table sets forth certain statements of operations data as a percentage of total revenues:

	THREE MONTHS ENDED MARCH 31,
	2021			2020
Revenues:
Product		99	%		99	%
License		1			1
Total revenues		100			100
Cost of product revenues		37			42
Gross profit		63			58
Operating Expenses:
Research, development and patent		23			34
Selling, general and administrative		68			83
Total operating expenses		91			116
Loss from operations		(28	)		(59	)
Other income (expense):
Interest expense		(4	)		(3	)
Loss on issuance of new warrants		—			(14	)
Change in fair value of contingent consideration		1			2
Other income (expense), net		1			2
Total other expense, net		(2	)		(14	)
Loss before income taxes		(30	)		(72	)
Income tax expense		—			—
Net loss		(30	)%		(73	)%

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Comparison of Three Months Ended March 31, 2021 and 2020

	THREE MONTHS ENDED MARCH 31,
	2021			2020
	(Dollars in thousands)
Product revenues	$	10,904		$	9,535
% of total revenues		99	%		99	%

Product revenues during the three months ended March 31, 2021 and 2020 increased by approximately $1.4 million, or 14.4% to the comparative period in 2020, as a result of higher demand for and sales of our legacy product families, Grandevo, Regalia, and Venerate, each experiencing year over year increases greater than 10%. During the three months ended March 31, 2021, we continued to see greater diversity in sales of our other product offerings and we expect to continue to see overall revenue growth and diversified sales mix as we continue to invest in our sales and marketing efforts, including during periods impacted by COVID-19.

License Revenues

	THREE MONTHS ENDED MARCH 31,
	2021			2020
	(Dollars in thousands)
License revenues	$	134		$	115
% of total revenues		1	%		1	%

License revenues remained consistent for each of the three months ended March 31, 2021 and 2020, in line with our expectations. Future periods may be impacted positively upon us entering into new or amended collaborative agreements or by up to $0.8 million upon the completion of milestones from previous agreements.

Cost of Product Revenues and Gross Profit

	THREE MONTHS ENDED MARCH 31,
	2021			2020
	(Dollars in thousands)
Cost of product revenues	$	4,069		$	4,081
% of total revenues		37	%		42	%
Gross profit		6,969			5,569
		63.1	%		57.7	%

For the three months ended March 31, 2021, cost of product revenues was flat and gross profit increased to 63.1% from 57.7% from the prior comparative period. The primary driver of the margin increase is attributed to overall volume in sales.

Research, Development and Patent Expenses

	THREE MONTHS ENDED MARCH 31,
	2021			2020
	(Dollars in thousands)
Research, development and patent	$	2,512		$	3,234
% of total revenues		23	%		34	%

Research, development and patent expenses for the three months ended March 31, 2021 decreased by $0.7 million, or 22.3%. For the three months ended March 31, 2020, decreases in consulting fees of $0.2 million, toxicology test costs of $0.1 million, and field testing costs of $0.1 million primarily contributed to the aggregated year over year decrease. Due to some reliance on external suppliers who are also impacted by COVID-19, our expenses may not be at the level they otherwise would be during this period however management cannot determine the direct impact on our operating results.

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Selling, General and Administrative Expenses

	THREE MONTHS ENDED MARCH 31,
	2021			2020
	(Dollars in thousands)
Selling, general administrative expenses	$	7,483		$	7,993
% of total revenues		68	%		83	%

Selling, general and administrative expenses for the three months ended March 31, 2021 decreased by $0.5 million, or 6.4%. The decrease was primarily due to reductions of $0.1 million in accounting and tax professional services, $0.1 million in advertising and marketing expenses and $0.2 million in travel related expenses in connection with travel restrictions put into place at the start of the COVID-19 pandemic. As a result of COVID-19, our selling, general and administrative expenses may not be at the level they otherwise would be during this period however management cannot determine aside from our travel restriction, the direct impact on our operating results.

Other Expense, Net

	THREE MONTHS ENDED MARCH 31,
	2021			2020
	(Dollars in thousands)
Interest expense		(393	)		(337	)
Loss on issuance of new warrants		—			(1,391	)
Change in fair value of contingent consideration		134			237
Other income (expense) net		65			159
	$	(194	)	$	(1,332	)

For the three months ended March 31, 2021 and 2020, respectively, other expense, net, decreased by $1.1 million as compared to the same period in 2020, primarily due to the prior period’s losses incurred as a result of our call of outstanding warrants resulting in a 1-for-1 issuance of replacement warrants, offset by the current period change in the fair value of our contingent consideration obligations.

Seasonality and Quarterly Results

The second half of the year is typically a transition period in the agricultural industry, with the harvest of crops completing in certain areas and planting beginning in others. Accordingly, we have increasingly had higher sales during the first half of the year than the second half, and believe this trend will continue. However, the level of seasonality in our business may change due to a number of factors, such as our expansion into new geographical territories, the introduction of new products, the timing of introductions of new products, and the impact of weather and climate change. Further, we expect substantial fluctuation in sales year over year and quarter over quarter as a result of the number of variables on which sales of our products are dependent. Weather conditions, new trade tariffs, natural disasters, outbreaks of infectious diseases (including the current COVID-19 pandemic) and other factors affect planting and growing seasons and incidence of pests and plant disease, and may, accordingly affect decisions by our distributors, direct customers and end users about the types and amounts of pest management and plant health products to purchase and the timing of use of such products. In addition, disruptions that cause delays by growers in harvesting or planting can result in the movement of orders to a future quarter, which would negatively affect the quarter and cause fluctuations in our operating results. Customers also may purchase large quantities of our products in a particular quarter to store and use over long periods of time or time their purchases to manage their inventories, which may cause significant fluctuations in our operating results for a particular quarter or year, and low commodity prices may discourage growers from purchasing our products in an effort to reduce their costs and increase their margins for a growing season.

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Our expense levels are based in part on our expectations regarding future sales. As a result, any shortfall in sales relative to our expectations could cause significant fluctuations in our operating results from quarter to quarter, which could result in uncertainty surrounding our level of earnings and possibly a decrease in our stock price.

Liquidity and Capital Resources

Since our inception, our operations have been financed primarily by net proceeds from public offerings of common stock and private placements of convertible preferred stock, convertible notes and promissory notes, exercise of warrants, and term loans, as well as proceeds from the sale of our products and payments under strategic collaboration and distribution agreements and government grants. As of March 31, 2021, our cash and cash equivalents totaled $18.9 million, and we had an additional $1.6 million of restricted cash that we are contractually obligated to maintain in accordance with a debt agreement with Five Star Bank.

In March 2017, we entered into an invoice purchase agreement with LSQ. Our obligations under the LSQ financing are secured by a lien on substantially all of the Company’s personal property; such lien is first priority with respect to our accounts receivable, inventory, and related property. In January 2020, we entered into a second amendment to the invoice purchase agreement, the terms of which included among other terms an increase to $20.0 million of eligible customer invoices to be purchased and simultaneously entered into an addendum to allow us to request that LSQ advance a maximum of $3.0 million of our finished goods inventory. As of March 31, 2021, we had an outstanding balance of $11.7 million in secured borrowings.

In April 2020, we entered into a warrant exchange agreement (the “Warrant Exchange Agreement”) with a group of historical investors (the “Investors”). Pursuant to the Warrant Exchange Agreement, the Investors have exchanged certain previously issued and outstanding warrants to purchase an aggregate of up to 45,977,809 shares of our common stock, for new warrants (the “April 2020 Warrants”) to purchase an aggregate of up to 29,881,855 shares of our common stock (the “Warrant Shares”).

The April 2020 Warrants all have an exercise price of $0.75 per share, and expire in five tranches. As of March 31, 2021, a total of 24,995,845 Warrant Shares were exercised prior to their expiration dates. The next warrant expiration date is December 15, 2021 with respect to the remaining 4,885,317 Warrant Shares. The total aggregate exercise price of all future April 2020 Warrants is approximately $3.7 million. There can be no assurance that the Investors will exercise the remainder of the April 2020 Warrants prior to their expiration. (Refer to Note 7 of our condensed consolidated financial statements).

In December 2020, we entered into an amendment (the “Warrant Amendment”) to a previously outstanding warrant to purchase 5,333,333 shares of our common stock issued to a historical warrant holder on February 5, 2018. Pursuant to the Warrant Amendment, in exchange for the holder’s agreement to exercise the warrant on December 29, 2020 with respect to 1,777,778 shares at the warrant’s then-applicable exercise price of $0.96 per share we agreed to partially extend the warrant’s expiration date by allowing the holder to exercise (i) 1,777,778 of the subject shares at $1.00 per share by March 25, 2021, and (ii) the remaining 1,777,777 shares at $1.04 per share by December 15, 2021. As of March 31, 2021, 3,555,556 shares under the Amended Warrant were exercised, leaving 1,777,777 of the Amended Warrants remaining with an expiration date of December 15, 2021. The total aggregate exercise price of the remaining tranche is approximately $1.8 million. There can be no assurance that the holder will exercise the remainder of the warrants prior to its expiration date. (Refer to Note 7 of our condensed consolidated financial statements)

On February 8, 2021, we filed a universal “shelf” registration statement on Form S-3 with the U.S. Securities and Exchange Commission (“SEC”) which has since been declared effective by the SEC. Under the shelf registration statement, we may offer and sell, from time to time over a three-year period, various securities in an aggregate amount of up to $90 million.

As of March 31, 2021 debt outstanding includes $3.4 million and $7.3 million due to related parties, in principal and accrued interest with a maturity date of December 31, 2022. To the extent that debt is not restructured, extended, converted or otherwise amended, we will be required to repay these debts along with our general operating expenses in that period.

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As of March 31, 2021, we were out of compliance with certain covenant requirements under our June 2014 Secured Promissory Note. However, the lender, Five Star Bank, has waived its right to deem recurring losses, liquidity, going concern, and financial condition as material adverse changes through May 31, 2022. Thereafter, unless the lender further extends its waiver a material adverse change clause could be triggered and the entire unpaid principal and interest balances would be due and payable upon demand as well as trigger certain covenants under each of our other debt agreements (Refer to Note 6 of our condensed consolidated financial statements).

Since our inception, we have incurred significant net losses, and we expect to incur additional losses related to the continued development and expansion of our business. However, we believe that our existing cash and cash equivalents of $18.9 million as of March 31, 2021, expected revenues, and cost management as well as cost reductions will be sufficient to fund operations as currently planned through one year from the date of the issuance of our accompanying condensed consolidated financial statements. Changes in our current plans, or slower than expected adoption of our products may require that we secure additional sources through equity and/or debt financings, or through other sources of financing, which we cannot predict, with certainty, will be based on terms acceptable to us or at all. We may also require additional sources of cash for general corporate purposes, which may include operating expenses, working capital to improve and promote our commercially available products, advance product candidates, expand international presence and commercialization, general capital expenditures and satisfaction of debt obligations which are not currently planned.

We had the following debt arrangements in place as of March 31, 2021 (dollars in thousands):

	STATED ANNUAL			BALANCE (INCLUDING ACCRUED
DESCRIPTION	INTEREST RATE			INTEREST)		PAYMENT/MATURITY
Promissory Notes (1)		8.00	%	$	3,081	Due December 31, 2022 (5)
Promissory Note (2)		5.25	%		7,322	Monthly/June 2036
Promissory Notes (3)		8.00	%		6,599	Due December 31, 2022(5)
Secured Borrowing (4)		12.78	%		576	Varies(6)/May 2021
Loan Facility		1.00	%		271	Proportionately each September 2022, 2023, 2024, 2025

See Notes 6 and 9 of the condensed consolidated financial statements for each of the following debt arrangements:

(1) “—October 2012 and April 2013 Secured Promissory Notes.”

(2) “—June 2014 Secured Promissory Note.”

(3) “—August 2015 Senior Secured Promissory Notes.”

(4) “—LSQ Financing.”

(5) In February 2018, the maturity date and all interest payments were extended to December 2022

(6) Payable through the lender’s direct collection of certain accounts receivable through May 2021.

We may continue to require additional sources of cash for general corporate purposes, which may include operating expenses, working capital to improve and promote its commercially available products, advance product candidates, expand international presence and commercialization, general capital expenditures and satisfaction of debt obligations. We may seek additional capital through debt financings, collaborative or other funding arrangements with partners, or through other sources of financing. If we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to scale back or to discontinue the promotion of currently available products, scale back or discontinue the advancement of product candidates, reduce headcount, file for bankruptcy, reorganize, merge with another entity, or cease operations.

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The following table sets forth a summary of our cash flows for the periods indicated (in thousands):

	MARCH 31,			MARCH 31,
	2021			2020
Net cash used in operating activities	$	(5,017	)	$	(6,292	)
Net cash used in investing activities		(869	)		(673	)
Net cash provided in financing activities		8,968			10,833
Net increase in cash, cash equivalents, and restricted cash		3,082			3,868

Cash Flows from Operating Activities

Net cash used in operating activities of $5.0 million during the three months ended March 31, 2021 primarily resulted from our net loss of $3.3 million and cash used in operating assets and liabilities of $3.6 million. This use was partially offset by non-cash charges of $1.8 million consisting of $0.9 million of depreciation and amortization, $0.9 million of share-based compensation expense, $0.2 million of amortization of right of use assets, and $0.1 million in changes to the Company’s contingent consideration in connection with the Pro Farm acquisition.

Net cash used in operating activities of $6.3 million during the three months ended March 31, 2020 primarily resulted from our net loss of $7.1 million and cash used in operating assets and liabilities of $2.5 million. This use was partially offset by non-cash charges of $3.2 million consisting of $1.4 million related to loss on issuance of new warrant in connection with our call of the exercise of 6,000,000 shares under outstanding warrants, $0.9 million of depreciation and amortization, $0.9 million of share-based compensation expense, and $0.2 million of amortization of right-of-use assets, offset by $0.2 million in changes to the Company’s contingent consideration in connection with the Pro Farm acquisition.

Cash Flows from Investing Activities

Net cash used in investing activities were $0.9 million during the three months ended March 31, 2021. Cash flow from investing included $0.8 million consideration payments in connection with the purchase of the Jet-Ag and Jet-Oxide product lines with the remainder a result of purchases of property, plant and equipment to support our operations.

Other than as a result of purchases of property, plant and equipment to support our operations, the company made the first of a number of contingent payments in the amount of $0.5 million in connection with the purchase of the Jet-Ag product lines for the three-month period ended March 31, 2020.

Cash Flows from Financing Activities

Net cash provided in financing activities of $9.0 million during the three months ended March 31, 2021 consisted primarily of $2.7 million in net proceeds from of secured borrowing and debt, $6.2 million related to the exercise of warrants and $0.1 million in proceeds from employee equity related instruments. (Refer to Note 7 of our condensed consolidated financial statements)

Net cash provided in financing activities of $10.8 million during the three months ended March 31, 2020 consisted primarily of $5 million in net reductions and repayment of debt, $5.9 million related to the exercise of previously outstanding warrants, net of registration costs and $0.1 million in proceeds from employee equity related instruments.

Recently Issued Accounting Pronouncements

See Note 2 of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q in Part I—Item 1— “Financial Information.”

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We currently have minimal exposure to the effect of interest rate changes, foreign currency fluctuations and changes in commodity prices. We are exposed to changes in the general economic conditions in the countries where we conduct business, which currently is substantially all in the United States. Our current investment strategy is to invest in financial instruments that are highly liquid, readily convertible into cash and which mature within twelve months from the date of purchase. To date, we have not used derivative financial instruments to manage any of our market risks or entered into transactions using derivative financial instruments for trading purposes.

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We do not believe our cash equivalents have significant risk of default or illiquidity. While we believe our cash equivalents do not contain excessive risk, we cannot provide absolute assurance that in the future our investments will not be subject to adverse changes in market value.

Commodity Risk

Our exposure to market risk for changes in commodity prices currently is minimal. As our commercial operations grow, our exposure will relate mostly to the demand side as our end users are exposed to fluctuations in prices of agricultural commodities. Recent tariffs have contributed to depressed prices of some commodities.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures in ensuring that material information required to be disclosed in our reports filed or submitted under the Exchange Act has been made known to them in a timely fashion. Based on this evaluation, our CEO and CFO each concluded that our disclosure controls and procedures were effective as of March 31, 2021.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) of the Exchange Act. Our management assessed, with the oversight of the board of directors, the effectiveness of our internal control over financial reporting as of March 31, 2021. In making this assessment, management used the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management has concluded that our internal control over financial reporting was effective as of March 31, 2021.

Changes in Internal Control

For the three months ended March 31, 2021, the Company has designed and implemented internal controls over its significant acquired Pro Farm subsidiary locations, otherwise there have been no changes to our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Because of the inherent limitations in internal control over financial reporting, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

We have not identified any material changes to the risk factors previously disclosed in Part I—Item 1A—”Risk Factors” in our Annual Report filed on Form 10-K for the fiscal year ended December 31, 2020. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Annual Report, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price. You should carefully consider the risks and uncertainties described in our Annual Report filed on Form 10-K for the fiscal year ended December 31, 2020, together with all of the other information in this Quarterly Report on Form 10-Q, including in “Part I—Item 2—”Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the condensed consolidated financial statements and related notes.

ITEM 6. EXHIBITS

The following documents are filed, or furnished, as applicable, as part of this report on Form 10-Q:

INDEX TO EXHIBITS

EXHIBIT NUMBER	EXHIBIT DESCRIPTION
10.1#	Offer letter, effective January 25, 2021, by and between Marrone Bio Innovations, Inc. and Suping Liu Cheung (incorporated by reference to Exhibit 10.1 of the registrants Current Report on Form 8-K filed January 29, 2021).
10.2#	Change in Control Agreement, dated as of January 26, 2021, by and between Marrone Bio Innovations, Inc. and Suping Liu Cheung (incorporated by reference to Exhibit 10.2 of the registrants Current Report on Form 8-K filed January 29, 2021).
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
101	Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020, (ii) Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2021 and 2020, (iii) Condensed Consolidated Statements of Stockholders’ Equity for the Three Months ended March 31, 2021 and 2020, (iv) Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2021 and 2020 and (v) Notes to Condensed Consolidated Financial Statements
104	XBRL for cover page of the Company’s Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set

# Indicates management compensatory agreement.

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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, in the City of Davis, State of California, on May 13, 2021.

MARRONE BIO INNOVATIONS, INC.

/s/Kevin Helash

Kevin Helash

Chief Executive Officer

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EX-31.1

Exhibit 31.1

I, Kevin Helash, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Marrone Bio Innovations, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 13, 2021

/s/ Kevin Helash

Kevin Helash

Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Suping (Sue) Cheung, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Marrone Bio Innovations, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 13, 2021

/s/ Suping (Sue) Cheung

Suping (Sue) Cheung

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Kevin Helash, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Marrone Bio Innovations, Inc. on Form 10-Q for the fiscal quarter ended March 31, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Marrone Bio Innovations, Inc.

Date: May 13, 2021

By:	/s/ Kevin Helash
Name:	Kevin Helash
Title:	Chief Executive Officer

I, Suping (Sue) Cheung, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Marrone Bio Innovations, Inc. on Form 10-Q for the fiscal quarter ended March 31, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Marrone Bio Innovations, Inc.

Date: May 13, 2021

By:	/s/ Suping (Sue) Cheung
Name:	Suping (Sue) Cheung
Title:	Chief Financial Officer

This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 07, 2021
Cover [Abstract]
Entity Registrant Name	MARRONE BIO INNOVATIONS INC
Entity Central Index Key	0001441693
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		175,307,333
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2021

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 18,923	$ 15,841
Accounts receivable	13,533	10,113
Inventories	6,414	6,618
Prepaid expenses and other current assets	1,350	1,688
Total current assets	40,220	34,260
Property, plant and equipment, net	12,439	12,565
Right of use assets, net	3,798	3,760
Intangible assets, net	20,797	21,383
Goodwill	6,740	6,740
Restricted cash	1,560	1,560
Other assets	911	929
Total assets	86,465	81,197
Current liabilities:
Accounts payable	2,190	1,895
Accrued liabilities	10,155	11,650
Deferred revenue, current portion	439	374
Lease liability, current portion	1,164	1,008
Debt, current portion, net	12,085	9,301
Total current liabilities	26,033	24,228
Deferred revenue, less current portion	1,528	1,628
Lease liability, less current portion	2,922	3,050
Debt, less current portion, net	11,380	11,479
Debt due to related parties	7,300	7,300
Other liabilities	1,950	2,102
Total liabilities	51,113	49,787
Commitments and contingencies
Stockholders' equity:
Preferred stock: $0.00001 par value; 20,000 shares authorized and no shares issued or outstanding at March 31, 2021 and December 31, 2020
Common stock: $0.00001 par value; 250,000 shares authorized, 175,274 and 167,478 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	1	1
Additional paid in capital	379,429	372,226
Accumulated deficit	(344,078)	(340,817)
Total stockholders' equity	35,352	31,410
Total liabilities and stockholders' equity	$ 86,465	$ 81,197

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	175,274,000	167,478,000
Common stock, shares outstanding	175,274,000	167,478,000

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues:
Total revenues	$ 11,038	$ 9,650
Cost of product revenues	4,069	4,081
Gross profit	6,969	5,569
Operating Expenses:
Research, development and patent	2,512	3,234
Selling, general and administrative	7,483	7,993
Total operating expenses	9,995	11,227
Loss from operations	(3,026)	(5,658)
Other income (expense):
Interest expense	(393)	(337)
Loss on issuance of new warrants		(1,391)
Change in fair value of contingent consideration	134	237
Other income, net	65	159
Total other expense, net	(194)	(1,332)
Net loss before income taxes	(3,220)	(6,990)
Income tax expense	(41)	(34)
Net Loss	$ (3,261)	$ (7,024)
Basic and diluted net loss per common share:	$ (0.02)	$ (0.05)
Weighted-average shares outstanding used in computing basic and diluted net loss per common share:	168,938,000	141,572,000
Product [Member]
Revenues:
Total revenues	$ 10,904	$ 9,535
License [Member]
Revenues:
Total revenues	$ 134	$ 115

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Condensed Consolidated Statements of Stockholder's Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Beginning balance at Dec. 31, 2019	$ 1	$ 344,206	$ (320,649)	$ 23,558
Beginning balance, shares at Dec. 31, 2019	139,526,000
Net loss			(7,024)	(7,024)
Net settlement of options		12		12
Net settlement of options, shares	15,000
Share-based compensation		907		907
Employee stock purchase plan		84		84
Employee stock purchase plan, shares
Financing costs		(64)		(64)
Issuance of common stock in connection with call to exercise warrants		6,000		6,000
Issuance of common stock in connection with call to exercise warrants, shares	6,000,000
Issuance of new warrants in connection with call to exercise warrants		1,391		1,391
Ending balance at Mar. 31, 2020	$ 1	352,536	(327,673)	24,864
Ending balance, shares at Mar. 31, 2020	145,541,000
Beginning balance at Dec. 31, 2020	$ 1	372,226	(340,817)	31,410
Beginning balance, shares at Dec. 31, 2020	167,478,000
Net loss			(3,261)	(3,261)
Net settlement of options		27		27
Net settlement of options, shares	21,000
Share-based compensation		915		915
Employee stock purchase plan		86		86
Employee stock purchase plan, shares
Settlement of restricted stock units
Settlement of restricted stock units, shares	88,000
Exercise of warrants		6,175		6,175
Exercise of warrants, shares	7,687,000
Ending balance at Mar. 31, 2021	$ 1	$ 379,429	$ (344,078)	$ 35,352
Ending balance, shares at Mar. 31, 2021	175,274,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities
Net loss	$ (3,261)	$ (7,024)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	874	891
Gain on disposal of equipment		(9)
Change in inventory reserves	(75)	72
Right of use assets amortization	215	206
Share-based compensation	915	907
Non-cash interest expense	48	61
Loss on issuance of new warrants		1,391
Change in fair value of contingent consideration	(134)	(237)
Net changes in operating assets and liabilities:
Accounts receivable	(3,420)	(4,492)
Inventories	279	1,000
Prepaid Expenses and other assets	356	(281)
Accounts payable	252	3,068
Accrued and other liabilities	(763)	(1,500)
Lease Liability	(225)	(208)
Deferred revenue	(78)	(137)
Net cash used in operating activities	(5,017)	(6,292)
Cash flows from investing activities
Payment of consideration in connection with previous asset purchase	(750)	(540)
Purchases of property, plant and equipment	(119)	(135)
Proceeds from sale of equipment		2
Net cash used in investing activities	(869)	(673)
Cash flows from financing activities
Proceeds from secured borrowings	11,504	11,319
Repayment in secured borrowings	(8,725)	(6,322)
Repayment of debt	(99)	(196)
Equity offering costs		(64)
Net settlement of options	27	12
Proceeds from employee stock purchase plan	86	84
Exercise of warrants	6,175	6,000
Net cash provided by financing activities	8,968	10,833
Net increase in cash and cash equivalents and restricted cash	3,082	3,868
Cash and cash equivalents and restricted cash, beginning of period	17,401	7,812
Cash and cash equivalents and restricted cash, end of period	20,483	11,680
Supplemental disclosure of cash flow information
Cash paid for interest	339	269
Supplemental disclosure of non-cash investing and financing activities
Property, plant and equipment included in accounts payable and accrued liabilities	43	93
Right of use assets (non-cash) acquired	$ 253

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Summary of Business, Basis of Presentation

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Summary of Business, Basis of Presentation

1. Summary of Business, Basis of Presentation

Marrone Bio Innovations, Inc. (the “Company”), was incorporated under the laws of the State of Delaware on June 15, 2006, and is located in Davis, California. In July 2012, the Company formed a wholly-owned subsidiary, Marrone Michigan Manufacturing LLC (“MMM LLC”), which holds the assets of a manufacturing plant the Company purchased in July 2012. In September 2019 the Company closed its acquisition of Pro Farm Technologies OY, a Finnish limited company, which consisted of Pro Farm Technologies OY and its five subsidiaries Pro Farm International Oy (Finland), Pro Farm OU (Estonia), Pro Farm Technologies Comercio de Insumos Agricolas do Brasil ltda. (Brazil – 99% controlling interest), Pro Farm Inc. (Delaware), and Glinatur SA (Uruguay) (collectively “Pro Farm”). As a result of the acquisition, Pro Farm became a wholly-owned subsidiary of the Company. In December 2019, the Company created its subsidiary Pro Farm Russia, LLC (Russia). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and substantially owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The accompanying condensed consolidated financial information as of March 31, 2021, and for the three months ended March 31, 2021 and 2020, has been prepared by the Company, without audit, in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations and accounting principles applicable for interim periods. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The information included in this Quarterly Report on Form 10-Q should be read in connection with the consolidated financial statements and accompanying notes included in the Company’s Annual Report filed on Form 10-K for the fiscal year ended December 31, 2020.

In the opinion of management, the condensed consolidated financial statements as of March 31, 2021, and for the three months ended March 31, 2021 and 2020, reflect all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results for the full fiscal year or any future periods.

The Company is a growth-oriented agricultural company that supports environmentally sustainable farming practices through the discovery, development and sale of innovative biological products for crop protection, crop health and crop nutrition. The Company’s products are sold through distributors and other commercial partners to growers around the world for use in integrated pest management systems that improve efficacy and increase yields while protecting the environment. The Company’s products are often used in conjunction with or as an alternative to other agricultural solutions to control pests and enhance plant nutrition and health.

The Company’s portfolio of 15 products helps customers operate more sustainably while increasing their return on investment. The Company’s products are used globally and can be applied as foliar treatments or as seed-and-soil treatments, either on their own or in combination with other agricultural products. The Company targets the major markets that use conventional chemical pesticides and fertilizers where the Company’s biological products are used as alternatives or mixed with, conventional chemical products. The Company also targets new markets for which there are no available conventional chemical products or for which the use of conventional chemical products may not be desirable (including for organically certified crops) or permissible, either because of health and environmental concerns or because the development of pest resistance has reduced the efficacy of conventional chemical pesticides. The Company sell its products through distributors and other commercial partners to growers who use the Company’s bioprotection products to manage pests and plant diseases, the Company’s plant health products to reduce crop stress and both the Company’s plant health and bionutrition products to increase yields and quality.

Liquidity

The Company funds operations primarily with the proceeds from the sale of its products, promissory notes and term loans, and net proceeds from issuance and exercise of equity instruments. The Company will need to generate significant revenue growth to achieve and maintain profitability. As of March 31, 2021, the Company had a working capital surplus of $14,187,000, including cash and cash equivalents of $18,923,000. In addition, as of March 31, 2021, the Company had debt and debt due to related parties of $23,465,000 and $7,300,000, respectively, for which the underlying debt agreements contain various financial and non-financial covenants, as well as certain material adverse change clauses. As of March 31, 2021, the Company had a total of $1,560,000 of restricted cash relating to these debt agreements. (Refer to Notes 6 of these condensed consolidated financial statements)

In April 2020, the Company entered into a Warrant Exchange Agreement (the “Warrant Exchange Agreement”) with a group of historical investors (the “Investors”) pursuant to which the Company issued new warrants to the Investors (“April 2020 Warrants”) in exchange for cancellation of all of their outstanding warrants. The April 2020 Warrants all have an exercise price of $0.75 per share, and expire in five tranches. As of March 31, 2021 approximately 24,995,000 shares under the April 2020 Warrants were exercised prior to each of the four tranche expiration dates, leaving only the fifth tranche with an expiration date of December 15, 2021 with respect to 4,885,317 of the April 2020 Warrants remaining. (Refer to Note 7 of these condensed consolidated financial statements).

In December 2020, the Company also entered into an amendment (the “Warrant Amendment” to a previously outstanding warrant (the “Amended Warrant”) to purchase 5,333,333 shares of the Company’s common stock issued to a historical warrant holder (the “Amended Warrant Holder”) on February 5, 2018. As of March 31, 2021, 3,555,556 shares under the Amended Warrant were exercised, leaving 1,777,777 of the Amended Warrants remaining with an expiration date of December 15, 2021. (Refer to Note 7 of these condensed consolidated financial statements).

There can be no assurance that the Investors or the Amended Warrant Holder will exercise the remaining April 2020 Warrants and the Amended Warrant prior to their respective expiration date. (Refer to Note 7 of these condensed consolidated financial statements).

The Company could breach covenants contained within its debt agreements or if the material adverse change clauses are triggered, the entire unpaid principal and interest balances would be due and payable upon demand. Without entering into a continuation of its current waiver, which expires May 31, 2022, entering into strategic agreements that include significant cash payments upfront, significantly increasing revenues from sales or raising additional capital through the issuance of equity, the Company expects it will exceed its maximum debt-to-worth requirement under the June 2014 Secured Promissory Note with Five Star Bank. Further, a violation of a covenant in one debt agreement will cause the Company to be in violation of certain covenants under each of its other debt agreements. Breach of covenants included in the Company’s debt agreements, which could result in the lenders demanding payment of the unpaid principal and interest balances, will have a material adverse effect upon the Company and would likely require the Company to seek to renegotiate these debt arrangements with the lenders. If such negotiations are unsuccessful, the Company may be required to seek protection from creditors through bankruptcy proceedings. The Company’s inability to maintain compliance with its debt covenants could have a negative impact on the Company’s financial condition and ability to continue as a going concern.

The Company’s historical operating results, including prior periods of significant losses and negative use of operating cash flows, may indicate probable substantial doubt exists related to the Company’s ability to continue as a going concern for the next 12 months from the date of issuance of these condensed consolidated financial statements. The Company believes that its existing cash and cash equivalents at March 31, 2021, together with expected revenues, cost management, will be sufficient to fund operations as currently planned through one year from the date of the issuance of these condensed consolidated financial statements and therefore has alleviated doubts related to the Company’s ability to continue as a going concern.

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company used significant estimates in accounting for assumptions and estimates associated with revenue recognition, including assumptions and estimates used in determining the timing and amount of revenue to recognize for those transactions with variable considerations, reserves for inventory obsolescence, fair value of stock-based compensation, and forecasted estimates and assumptions related to impairment analysis for long lived assets, intangibles, and goodwill and contingent considerations related to Pro Farm, assumptions and estimates associated with the fair value of warrants and in its going concern analysis.

Concentrations of Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, accounts receivable and debt. The Company deposits its cash and cash equivalents with high credit quality domestic financial institutions with locations in the U.S. and internationally. Such deposits may exceed federal or national deposit insurance limits. The Company believes the financial risks associated with these financial instruments are minimal.

The Company’s customer base is dispersed across many different geographic areas, and currently most customers are pest management distributors in the U.S. Generally, receivables are due up to 120 days from the invoice date and are considered past due after this date, although the Company may offer extended terms from time to time. The Company has provided extended payment terms on a case-by-case basis with a certain customer as a result of COVID-19.

The Company’s principal sources of revenues are its Regalia, Grandevo, Venerate and UPB-110 ST product lines. These four product lines accounted for 89% of the Company’s total revenues for each of the three months ended March 31, 2021 and 2020.

Revenues generated from international customers were 7% and 14% for the three months ended March 31, 2021 and 2020, respectively. For both the three months ended March 31, 2021 and 2020, international customers were primarily concentrated in the European Union.

Customers to which 10% or more of the Company’s total revenues are attributable for the three months ended March 31, 2021 and 2020 consist of the following:

	CUSTOMER
MARCH 31,	A			B			C			D
2021		30	%		16	%		11	%		8	%
2020		17	%		23	%		16	%		13	%

Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either March 31, 2021 or December 31, 2020, which may or may not correspond with any of the customers above, consist of the following:

	CUSTOMER
	A			B			C			D
March 31, 2021		32	%		13	%		11	%		9	%
December 31, 2020		2	%		49	%		14	%		14	%

Concentrations of Supplier Dependence

The active ingredient in the Company’s Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company currently relies on one supplier for this plant. Such single supplier acquires raw knotweed from numerous regional sources and performs an extraction process on this plant, creating a dried extract that is shipped to the Company’s manufacturing plant. While the Company does not have a long-term supply contract with this supplier, the Company does have a long-term business relationship with this supplier. The Company endeavors to keep 10 months of knotweed extract on hand at any given time, but an unexpected disruption in supply including disruptions resulting from the COVID-19 pandemic, could have an effect on Regalia supply and revenues. Although the Company has identified additional sources of raw knotweed, there can be no assurance that the Company will continue to be able to obtain dried extract from China at a competitive price.

The Company continues to rely on third parties to formulate Grandevo into spray-dried powders, for all of its production of Venerate, Majestene/Zelto, Stargus and Haven, and from time to time, third-party manufacturers for supplemental production capacity to meet excess seasonal demand and for packaging. The Company’s products have been produced in quantities, and on timelines, sufficient to meet commercial demand and for the Company to satisfy its delivery schedules. However, the Company’s dependence upon others for the production of a portion of its products, or for a portion of the manufacturing process, particularly for drying and for all of its production of Venerate, may adversely affect its ability to satisfy demand and meet delivery obligations, as well as to develop and commercialize new products, on a timely and competitive basis. The Company has not entered into any long-term manufacturing or supply agreements for any of its products, and it may need to enter into additional agreements for the commercial development, manufacturing and sale of its products. There can be no assurance that it can do so on favorable terms, if at all.

Products produced by the Company’s Pro Farm subsidiary, including UBP and Foramin, are partially sourced by suppliers from a manufacturing plant in Russia, in which the Company owns a 12% interest. The Company plans for enough inventory on hand to fill its revenue forecasts for 12 months at any given time, but an unexpected disruption in supply could have an adverse effect on the supply and revenues related to the subsidiary. Although the Company has identified additional manufacturers who are capable suppling the products, there can be no assurance that the Company will continue to be able to obtain products at a competitive price.

Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the condensed consolidated statements of cash flows (in thousands):

	MARCH 31,		DECEMBER 31,
	2021		2020
Cash and cash equivalents	$	18,923	$	15,841
Restricted cash, less current portion		1,560		1,560
Total cash, cash equivalents and restricted cash	$	20,483	$	17,401

Restricted Cash

The Company’s restricted cash consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its June 2014 Secured Promissory Note. (Refer to Note 6 of these condensed consolidated financial statements.)

Intangible Assets

The Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company’s intangible assets include customer relationships, patents, trademarks, and in process research and development acquired in 2019 in connection with its asset acquisition of the Jet-Ag and Jet-Oxide product lines and the Company’s acquisition of Pro Farm.

Long-Lived Assets

Impairment losses related to long-lived assets are recognized in the event the net carrying value of such assets is not recoverable and exceeds fair value. The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). If the carrying amount of a long-lived asset (asset group) is considered not recoverable, the impairment loss is measured as the amount by which the carrying value of the asset or asset group exceeds its estimated fair value.

Goodwill

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Goodwill is reviewed for impairment on an annual basis as of the first day of the Company’s fiscal fourth quarter or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. The Company’s goodwill was recognized in connection with its acquisition of Pro Farm.

Fair Value

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements (“ASC 820”), clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

ASC 820 requires that the valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 establishes a three-tier value hierarchy, which prioritizes inputs that may be used to measure fair value as follows:

● Level 1—Quoted prices in active markets for identical assets or liabilities.

● Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Deferred Revenue

When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring control of goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability. The Company recognizes deferred revenue as net sales after the Company has transferred control of the goods or services to the customer and all revenue recognition criteria are met. The Company’s deferred revenue is broken out as follows (in thousands):

	MARCH 31,			DECEMBER 31,
	2021			2020
Product revenues	$	235		$	189
Financing costs		568			581
License revenues		1,164			1,232
Total deferred revenues		1,967			2,002
Less current portion		(439	)		(374	)
Long term portion	$	1,528		$	1,628

Research, Development and Patent Expenses

Research and development expenses include payroll-related expenses, field trial costs, toxicology costs, regulatory costs, consulting costs and lab costs. Patent expenses include legal costs relating to the patents and patent filing costs. These costs are expensed to operations as incurred. For the three months ended March 31, 2021 and 2020, research and development expenses totaled $2,295,000 and $2,880,000, respectively, and patent expenses totaled $217,000 and $354,000, respectively.

Shipping and Handling Costs

Amounts billed for shipping and handling are included as a component of product revenues. Related costs for shipping and handling have been included as a component of cost of product revenues. Shipping and handling costs for the three months ended March 31, 2021 and 2020 were $345,000 and $302,000, respectively.

Advertising

The Company expenses advertising costs as incurred and has included these expenses as a component of selling, general and administrative costs. Advertising costs for the three months ended March 31, 2021 and 2020 were $111,000 and $150,000, respectively.

Depreciation and Amortization

The Company depreciates and amortizes its capitalized property, plant, and equipment and intangible assets over the useful life of each asset utilizing a straight-line method of expensing. All depreciation and amortization expenses are included in the “Selling, general, and administrative” caption in the condensed consolidated statement of operations.

For the three months ended March 31, 2021 and 2020, the total amount of depreciation expense was $288,000 and $304,000, respectively. For the three months ended March 31, 2021 and 2020, the total amount of amortization expense was $586,000 and $587,000, respectively.

Segment Information

The Company is organized as a single operating segment, whereby its chief operating decision maker assesses the performance of and allocates resources to the business as a whole.

Net Loss Per Share

Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period. The calculation of basic and diluted net loss per share is the same for all periods presented as the effect of certain potential common stock equivalents, which consist of stock options and warrants to purchase common stock and restricted stock units, and contingent shares to be issued in the future are anti-dilutive due to the Company’s net loss position. Anti-dilutive common stock equivalents are excluded from diluted net loss per share. The following table sets forth the potential shares of common stock as of the end of each period presented that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive (in thousands):

	MARCH 31,		MARCH 31,
	2021		2020
Stock options outstanding		13,572		11,529
Warrants to purchase common stock		6,814		52,647
Restricted stock units outstanding		4,772		2,466
Common shares to be issued in lieu of agent fees		498		498
Employee stock purchase plan		84		124
Maximum contingent consideration shares to be issued		5,972		5,972
		31,712		73,236

Recently Issued Accounting Pronouncements

In May 2021, the FASB issued Accounting Standards Update No. 2021-04, “Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Based Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU No. 2021-04”), which clarified an issuer’s accounting for modification or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The provisions of ASU No. 2021-04 are effective for annual reporting periods beginning after December 15, 2021, and interim reporting periods within those annual periods, with early adoption permitted, including adoption in any interim period for public business entities for periods for which consolidated financial statements have not yet been issued or made available for issuance. This ASU shall be applied on a prospective basis. The Company has not yet determined the impact of implementing this new standard on the condensed consolidated financial statements.

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Inventory

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Inventory

3. Inventory

Inventories, net consist of the following (in thousands):

	MARCH 31,		DECEMBER 31,
	2021		2020
Raw materials	$	2,735	$	2,487
Work in progress		804		987
Finished goods		2,875		3,144
	$	6,414	$	6,618

As of March 31, 2021 and December 31, 2020, the Company had $462,000 and $387,000, respectively, in reserves against its inventories. For the three months ended March 31, 2021 and 2020, the Company recorded an adjustment of $228,000 and $243,000, respectively, as a result of actual utilization of the Company’s manufacturing plant being less than what is considered normal capacity.

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Right-of-Use of Assets and Lease Liability

3 Months Ended

Mar. 31, 2021

Disclosure Rightofuse Of Assets And Lease Liability Abstract

Right-of-Use of Assets and Lease Liability

4. Right-Of-Use of Assets and Lease Liability

On March 31, 2021 the Company entered into a lease agreement for approximately 415 square meters of office and laboratory space located in Helsinki, Finland. The initial term of the lease is for a period of 24 months and requires a 6-month notice prior to termination. The minimum monthly rent is €9,462 per month, subject to increase based on the consumer price index increase on January 1 of each fiscal year if applicable.

The components of lease expense were as follows for each of the comparative three months ended March 31, 2021 and 2020 (in thousands):

	MARCH 31,		MARCH 31,
	2021		2020
Operating lease cost	$	290	$	285
Short-term lease cost		41		39
Sublease income		-		(10	)
Total operating lease costs:	$	331	$	314

Maturities of lease liabilities for each future calendar year as of March 31, 2021 are as follows (in thousands):

	OPERATING
	LEASES
2021	$	1,047
2022		1,380
2023		1,321
2024		867
Total lease payments		4,615
Less: imputed interest		529
Total lease obligation		4,086
Less lease obligation, current portion		1,164
Lease obligation, non-current portion	$	2,922

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Accrued Liabilities

3 Months Ended

Mar. 31, 2021

Payables and Accruals [Abstract]

Accrued Liabilities

5. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	MARCH 31,		DECEMBER 31,
	2021		2020
Accrued compensation	$	3,267	$	3,495
Accrued warranty costs		484		475
Accrued customer incentives		3,224		4,288
Accrued liabilities, acquisition related		744		1,463
Accrued liabilities, other		2,436		1,929
Accrued Liabilities	$	10,155	$	11,650

Contingent Consideration

As of March 31, 2021, the contingent consideration in connection with the Company’s acquisition of Pro Farm was recorded at its fair value. The following table provides a reconciliation of the activity for the contingent consideration measured between the most recent reporting period and as of the balance sheet date based on the fair value using significant inputs including the unobservable inputs (Level 3) (in thousands):

	CONTINGENT CONSIDERATION LIABILITY
Fair value at December 31, 2020	$	2,182
Change in estimated fair value recorded of contingent consideration		(134	)
Fair value at March 31, 2021	$	2,048

The change in fair value for the reporting period was driven by the result of the unobservable fair value model, a Monte Carlo simulation in a risk-neutral framework assuming Geometric Browning Motion. The most significant input to the model was the estimated results of the Pro Farm subsidiary for the periods specified in the share purchase agreement of 2021 – 2023. The following represents other inputs used in determining the fair value of the contingent consideration liability:

	MARCH 31,			DECEMBER 31,
	2021			2020
Discount rate		16.0	%		15.5	%
Volatility		49.2	%		45.8	%
Credit spread		8.9	%		9.0	%
Risk-free rate		0.4	%		0.2	%

Discount Rate. Discount rate is based on an adjusted weighted cost of capital contribution considering an estimated operational leverage ratio and a risk-free rate, each (other than the risk-free rate) determined by publicly traded peer group median.

Estimated Volatility Factor. Volatility factor is based on the adjusted weighted cost of capital, operating asset volatility, operating leverage ratio and risk-free interest rate, each (other than the risk-free rate) determined by publicly traded peer group median.

Credit Spread. Credit spread based on the Company’s financial ratio in comparison with those of publicly traded peer group.

Interest Rate. Interest rate based on US Constant Maturity Treasury rates for the same period as the period of performance of 2021 to 2023.

The change in the fair value estimate is recognized in the Company’s condensed consolidated statement of operations in Other Income (expense) under caption Change in fair value of contingent consideration. The contingent consideration will be determined at each reporting period and will be settled with the issuance of the Company’s common shares. As of March 31, 2021, the Company recorded $719,000 and $1,329,000, respectively, in accrued liabilities and other liabilities in the Company’s condensed consolidated balance sheets.

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Debt

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Debt

6. Debt

Debt, including debt due to related parties, consists of the following (in thousands):

	MARCH 31,			DECEMBER 31,
	2021			2020
Secured promissory notes (“October 2012 and April 2013 Secured Promissory Notes”) bearing interest at 8.00% per annum, interest and principal due at maturity (December 31, 2022), collateralized by substantially all of the Company’s assets.	$	3,425		$	3,425
Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (5.25% as of March 31, 2021) per annum, payable monthly through June 2036, collateralized by certain of the Company’s deposit accounts and MMM LLC’s inventories, chattel paper, accounts, equipment and general intangibles, net of unamortized debt discount as of March 31, 2021 and December 31, 2020 of $161 and $166.		8,024			8,106
Secured revolving borrowing (“LSQ Financing”) bearing interest at (12.80% annually) payable through the lenders direct collection of certain accounts receivable through May 2021, collateralized by substantially all of the Company’s personal property.		11,745			8,966
Senior secured promissory notes due to related parties (“August 2015 Senior Secured Promissory Notes”) bearing interest at 8% per annum, interest and principal payable at maturity (December 31, 2022), collateralized by Substantially all of the Company’s assets.		7,300			7,300
Research loan facility (“2018 Research Facility”) bearing interest at 1.00% per annum, interest payments are due annually on the anniversary date of the facility with principal payable in 25% increments on the anniversary date of the facility beginning on the fourth anniversary of the loan (September 2022), net of imputed interest as of March 31, 2021 and December 31, 2020 of $39K and $41K, respectively.		271			283
Debt, including debt due to related parties	$	30,765		$	28,080
Less debt due to related parties, non-current		(7,300	)		(7,300	)
Less current portion		(12,085	)		(9,301	)
Debt, non-current	$	11,380		$	11,479

As of March 31, 2021, aggregate contractual future principal payments on the Company’s debt, including debt due to related parties for each calendar year, are due as follows (in thousands):

PERIOD ENDING DECEMBER 31,	DEBT		DEBT TO RELATED PARTY
2021	$	12,010		-
2022		2,900		5,000
2023		471		-
2024		491		-
2025		515		-
Thereafter		6,305		-
Total future principal payments		22,690		5,000
Interest payments included in debt balance (1)		975		2,300
Total future debt payments	$	23,665		7,300

(1) Due to the debt extinguishment requirements, the Company has included both accrued interest and future interest in the debt balance for certain outstanding debt.

October 2012 and April 2013 Secured Promissory Notes

As of March 31, 2021, there have been no changes to the previously reported total principal amount outstanding under the October 2012 and April 2013 Secured Promissory Note, which continues to be $2,450,000. Due to the historical accounting for the promissory note the amount recorded on the condensed consolidated balance sheet of $3,425,000 includes $975,000 in accrued interest, of which as of March 31, 2021 and 2020, a total of $631,000 and $435,000, respectively, had been incurred.

As of March 31, 2021, the Company is in compliance with all financial covenants, or has received an appropriate waiver of these covenants.

June 2014 Secured Promissory Note

In June 2014, the Company borrowed $10,000,000 pursuant to a business loan agreement and promissory note (“June 2014 Secured Promissory Note”) with Five Star Bank that bears an interest of 5.25% (per annum) as of March 31, 2021. The interest rate is subject to change and is based on the prime rate plus 2.00% per annum. The Company is required to maintain a deposit balance with the Five Star Bank of $1,560,000, which is recorded as restricted cash included in non-current assets.

Under this note the Company is required to maintain a current ratio of not less than 1.25-to-1.0, a debt-to-worth ratio of no greater than 4.0-to-1.0 and a loan-to-value ratio of no greater than 70% as determined by Five Star Bank. In the event of default on the debt, Five Star Bank may declare the entire unpaid principal and interest immediately due and payable. As of March 31, 2020, the Company was in compliance with the “loan to value ratio” covenant, the “current ratio”, and the “debt to worth ratio”, however, the Company has obtained a waiver from the lender for any non-compliance through May 31, 2022.

The following table reflects the activity under this note (in thousands):

	2021			2020
Principal balance, net at December 31, preceding year	$	8,106		$	8,404
Principal payments		(196	)		(217	)
Interest		109			146
Debt discount amortization		5			5
Principal balance, net at March 31,	$	8,024		$	8,338

LSQ Financing

In January 2020, the Company entered into a Second Amendment to the Company’s Invoice Purchase Agreement with LSQ. The amendment, among other things, (i) increased the amount of eligible customer invoices which LSQ may elect to purchase from the Company to up to $20,000,000 of eligible customer invoices from the Company from $7,000,000; (ii) increased the advance rate to 90% from 85% and 70% from 60%, respectively, of the face value of domestic and international receivables being sold; (iii) decreased the invoice purchase fee rate from 0.40% to 0.25%; (iv) increased the funds usage fee from 0.020% to 0.025%; (v) extended the 0% aging and collection fee percentage charged at the time when the purchased invoice is collected from 90 days to 120 days, and increased the fee percentage charged thereafter from 0.35% to 0.75%; and (vi) decreased the early termination fee from 0.75% to 0.50%.

In addition to the Amendment, the Company simultaneously entered into an Amended Inventory Financing Addendum (the “Addendum”) with LSQ. The Addendum allows the Company to request an advance up to the lesser of (i) 100% of the Company’s unpaid finished goods inventory; (ii) 65% of the appraised value of the Company’s inventory performed on or on behalf of LSQ; or (iii) $3,000,000. Funds advance under the Addendum are subject to a monthly inventory management fee of 0.5% on the average monthly inventory funds available and a daily interest rate of 0.025%.

as of March 31, 2021, the Company is in compliance with all financial covenants of the agreement. For the three months ended March 31, 2021 and 2020, the Company recorded interest expense of approximately $232,000 and $124,000, respectively, in connection with the LSQ arrangement. As of March 31, 2021, $10,286,000 was outstanding under the LSQ Financing.

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Warrants

3 Months Ended

Mar. 31, 2021

Disclosure Warrants Abstract

Warrants

7. Warrants

On April 29, 2020, the Company entered into a warrant exchange agreement (“Warrant Exchange Agreement”) with certain holders of warrants issued under the August 2015 Senior Secured Promissory Notes, the Securities Purchase Agreement and the Amendment and Plan of Reorganization agreements. Pursuant to the Warrant Exchange Agreement, the Company agreed to exchange an aggregate of 45,977,809 previously outstanding warrants for 29,881,855 new warrants (“April 2020 Warrants”).

The April 2020 Warrants have terms expiring (i) for a total of 3,392,581 shares on May 1, 2020, (ii) for a total of 2,714,065 shares on September 15, 2020 (iii) for a total of 13,027,512 shares on December 15, 2020, (iv) for a total of 5,862,380 shares on March 15, 2021 and (v) for a total of 4,885,317 Warrant Shares on December 15, 2021. All April 2020 Warrants have an exercise price of $0.75 per share. As of March 31, 2021, approximately 24,995,000 shares under the April 2020 Warrants were exercised prior to each of the four tranche expiration dates, leaving only the fifth tranche with an expiration date of December 15, 2021 with respect to 4,885,317 of the April 2020 Warrants remaining.

In December 2020, the Company also entered into an amendment (the “Warrant Amendment”) to a previously outstanding warrant (the “Amended Warrant”) to purchase 5,333,333 shares of the Company’s common stock issued to a historical warrant holder (the “Amended Warrant Holder”) on February 5, 2018. Pursuant to the Warrant Amendment, in exchange for the Holder’s exercise of the Amended Warrant on December 29, 2020 with respect to 1,777,778 shares at the then-applicable exercise price of $0.96 per share the warrant’s expiration date was partially extended and allows the Amended Warrant Holder to purchase (i) 1,777,778 shares under the Amended Warrant at $1.00 per share by March 25, 2021, and (ii) 1,777,777 shares under the Amended Warrant at $1.04 share by December 15, 2021. As of March 31, 2021, 3,555,556 shares under the April 2020 Warrants were exercised, leaving 1,777,777 of the Amended Warrants remaining with an expiration date of December 15, 2021.

The following table summarizes the Company’s common stock warrants outstanding as of March 31, 2021 (in thousands, except exercise price data):

							THREE MONTHS
					SHARES		ENDED			SHARES
					SUBJECT TO		NUMBER OF			SUBJECT TO
	ISSUE	EXPIRATION			WARRANTS		WARRNTS			WARRANTS
	DATE	DATE	EXERCISE		OUTSTANDING		EXERCISED			OUTSANDING
DESCRIPTION	MM/YY	MM/YY	PRICE		12/31/2020		3/31/2021			3/31/2021
June 2013 Warrants	06/13	06/23	$	8.40		27		-			27
November 2016 Warrants	11/16	11/26	$	2.38		125		-			125
November 2017 Warrants	06/17	06/27	$	1.10		80		(80	)		-
April 2020 Warrants, Tranche 4	04/20	03/21	$	0.75		5,862		(5,862	)		-
April 2020 Warrants, Tranche 5	04/20	12/21	$	0.75		4,885		-			4,885
December 2020 Warrants, Tranche 2	12/20	03/21	$	1.00		1,778		(1,778	)		-
December 2020 Warrants, Tranche 3	12/20	12/21	$	1.04		1,777		-			1,777
				TOTALS:		14,534		(7,720	)		6,814

The weighted average remaining contractual life and exercise price for these warrants is 0.81 years and $0.89, respectively.

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Share-Based Plans

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-Based Plans

8. Share-Based Plans

As of March 31, 2021, there were options to purchase 13,572,000 shares of common stock outstanding, 4,772,000 restricted stock units outstanding and 9,787,000 share-based awards available for grant under the outstanding equity incentive plans.

For the three months ended March 31, 2021 and 2020, the Company recognized share-based compensation of $915,000 and $907,000, respectively.

In February 2021, in connection with the appointment of a new chief financial officer, the Company granted 400,000 options to purchase common stock at an exercise price of $2.60 and with a fair value of $567,000 to its new chief financial officer. The Company’s fair value of these grants was estimated utilizing a Black Scholes option pricing model based on assumptions which have determined consistent with the Company’s historical methodology.

The following table summarizes the activity of stock options from December 31, 2020 to March 31, 2021 (in thousands, except weighted average exercise price):

				WEIGHTED-
				AVERAGE
	SHARES			EXERCISE
	OUTSTANDING			PRICE
Balances at December 31, 2020		13,380		$	2.32
Options granted		438		$	1.69
Options exercised		(21	)	$	1.31
Options cancelled		(225	)	$	3.62
Balances at March 31, 2021		13,572		$	2.28

In February 2021, in connection with the Company’s separation and consulting arrangement with its former chief financial officer, the Company granted 200,000 restricted stock units to its former chief financial officer. The restricted stock units will vest and settle monthly for a period of 12 months.

The following table summarizes the activity of restricted stock units from December 31, 2020 to March 31, 2021 (in thousands, except weighted average grant date fair value):

				WEIGHTED
				AVERAGE
				GRANT
	SHARES			DATE FAIR
	OUTSTANDING			VALUE
Outstanding at December 31, 2020		4,588		$	1.14
Granted		272			1.77
Settled		(88	)		1.62
Forfeited		-			-
Outstanding at March 31, 2021		4,772		$	1.16

The following table summarizes the activity of non-vested restricted stock units from December 31, 2020 to March 31, 2021 (in thousands, except weighted average grant date fair value):

				WEIGHTED
				AVERAGE
				GRANT
	SHARES			DATE FAIR
	OUTSTANDING			VALUE
Nonvested at December 31, 2020		1,437		$	1.16
Granted		272			1.77
Vested		(97	)		1.99
Forfeited		-			-
Nonvested at March 31, 2021		1,612		$	1.22

In April 2021 the Company also granted restricted stock units to certain executives and employees in lieu of cash bonuses for performance related to the fiscal year ended December 31, 2020. The total number of restricted stock units granted to these employees was 237,000 at an exercise price of $1.95 and will settle on May 20, 2021.

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Related Party Transactions

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

9. Related Party Transactions

Warrant Exercises

Ospraie, Ivy Science & Technology Fund (“IS&T”), Ivy VIP Science & Technology (“Ivy VIP” and, together with IS&T, the “Waddell Investors”, and Ardsley, are each beneficial owners of more than 10% of the Company’s common stock, holding 40.4%, 15.9%, and 9.9%, respectively, of the Company’s total outstanding common stock as of March 31, 2020. In March 2021, 4,264,299, 666,472 and 741,617, of the April 2020 Warrants were exercised by each of them, respectively, in accordance with the terms of the Warrant Exchange Agreement. (Refer to Note 7 of these condensed consolidated financial statements.)

August 2015 Senior Secured Promissory Notes

As of March 31, 2020, there have been no changes to the previously reported total principal amount outstanding under the August 2015 Senior Secured Promissory Notes, which continues to be $5,000,000. Due to the historical accounting for the promissory note the amount recorded on the condensed consolidated balance sheet of $7,300,000 includes $2,300,000 in accrued interest, of which as of March 31, 2021 and 2020, a total of $1,600,000 and $1,199,000, respectively, had been incurred.

The August 2015 Senior Secured Promissory Notes provide for various events of default, including, among others, default in payment of principal or interest, breach of any representation or warranty by the Company or any subsidiary under any agreement or document delivered in connection with the notes, a continued breach of any other condition or obligation under any loan document, certain bankruptcy, liquidation, reorganization or change of control events, the acquisition by any person or persons acting as group, other than the lenders, of beneficial ownership of 40% or more of the outstanding voting stock of the Company. Upon an event of default, the entire principal and interest may be declared immediately due and payable. As of March 31, 2021, the Company was in compliance with its covenants under the August 2015 Senior Secured Promissory Notes.

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Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

10. Subsequent Events

The Company has evaluated its subsequent events from March 31, 2021 through the date these condensed consolidated financial statements were issued, and has determined that there are no additional subsequent events required to be disclosed.

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company used significant estimates in accounting for assumptions and estimates associated with revenue recognition, including assumptions and estimates used in determining the timing and amount of revenue to recognize for those transactions with variable considerations, reserves for inventory obsolescence, fair value of stock-based compensation, and forecasted estimates and assumptions related to impairment analysis for long lived assets, intangibles, and goodwill and contingent considerations related to Pro Farm, assumptions and estimates associated with the fair value of warrants and in its going concern analysis.

Concentrations of Credit Risks

Concentrations of Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, accounts receivable and debt. The Company deposits its cash and cash equivalents with high credit quality domestic financial institutions with locations in the U.S. and internationally. Such deposits may exceed federal or national deposit insurance limits. The Company believes the financial risks associated with these financial instruments are minimal.

The Company’s customer base is dispersed across many different geographic areas, and currently most customers are pest management distributors in the U.S. Generally, receivables are due up to 120 days from the invoice date and are considered past due after this date, although the Company may offer extended terms from time to time. The Company has provided extended payment terms on a case-by-case basis with a certain customer as a result of COVID-19.

The Company’s principal sources of revenues are its Regalia, Grandevo, Venerate and UPB-110 ST product lines. These four product lines accounted for 89% of the Company’s total revenues for each of the three months ended March 31, 2021 and 2020.

Revenues generated from international customers were 7% and 14% for the three months ended March 31, 2021 and 2020, respectively. For both the three months ended March 31, 2021 and 2020, international customers were primarily concentrated in the European Union.

Customers to which 10% or more of the Company’s total revenues are attributable for the three months ended March 31, 2021 and 2020 consist of the following:

	CUSTOMER
MARCH 31,	A			B			C			D
2021		30	%		16	%		11	%		8	%
2020		17	%		23	%		16	%		13	%

Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either March 31, 2021 or December 31, 2020, which may or may not correspond with any of the customers above, consist of the following:

	CUSTOMER
	A			B			C			D
March 31, 2021		32	%		13	%		11	%		9	%
December 31, 2020		2	%		49	%		14	%		14	%

Concentrations of Supplier Dependence

Concentrations of Supplier Dependence

The active ingredient in the Company’s Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company currently relies on one supplier for this plant. Such single supplier acquires raw knotweed from numerous regional sources and performs an extraction process on this plant, creating a dried extract that is shipped to the Company’s manufacturing plant. While the Company does not have a long-term supply contract with this supplier, the Company does have a long-term business relationship with this supplier. The Company endeavors to keep 10 months of knotweed extract on hand at any given time, but an unexpected disruption in supply including disruptions resulting from the COVID-19 pandemic, could have an effect on Regalia supply and revenues. Although the Company has identified additional sources of raw knotweed, there can be no assurance that the Company will continue to be able to obtain dried extract from China at a competitive price.

The Company continues to rely on third parties to formulate Grandevo into spray-dried powders, for all of its production of Venerate, Majestene/Zelto, Stargus and Haven, and from time to time, third-party manufacturers for supplemental production capacity to meet excess seasonal demand and for packaging. The Company’s products have been produced in quantities, and on timelines, sufficient to meet commercial demand and for the Company to satisfy its delivery schedules. However, the Company’s dependence upon others for the production of a portion of its products, or for a portion of the manufacturing process, particularly for drying and for all of its production of Venerate, may adversely affect its ability to satisfy demand and meet delivery obligations, as well as to develop and commercialize new products, on a timely and competitive basis. The Company has not entered into any long-term manufacturing or supply agreements for any of its products, and it may need to enter into additional agreements for the commercial development, manufacturing and sale of its products. There can be no assurance that it can do so on favorable terms, if at all.

Products produced by the Company’s Pro Farm subsidiary, including UBP and Foramin, are partially sourced by suppliers from a manufacturing plant in Russia, in which the Company owns a 12% interest. The Company plans for enough inventory on hand to fill its revenue forecasts for 12 months at any given time, but an unexpected disruption in supply could have an adverse effect on the supply and revenues related to the subsidiary. Although the Company has identified additional manufacturers who are capable suppling the products, there can be no assurance that the Company will continue to be able to obtain products at a competitive price.

Cash and Cash Equivalents

Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the condensed consolidated statements of cash flows (in thousands):

	MARCH 31,		DECEMBER 31,
	2021		2020
Cash and cash equivalents	$	18,923	$	15,841
Restricted cash, less current portion		1,560		1,560
Total cash, cash equivalents and restricted cash	$	20,483	$	17,401

Restricted Cash

Restricted Cash

The Company’s restricted cash consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its June 2014 Secured Promissory Note. (Refer to Note 6 of these condensed consolidated financial statements.)

Intangible Assets

Intangible Assets

The Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company’s intangible assets include customer relationships, patents, trademarks, and in process research and development acquired in 2019 in connection with its asset acquisition of the Jet-Ag and Jet-Oxide product lines and the Company’s acquisition of Pro Farm.

Long-Lived Assets

Long-Lived Assets

Impairment losses related to long-lived assets are recognized in the event the net carrying value of such assets is not recoverable and exceeds fair value. The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). If the carrying amount of a long-lived asset (asset group) is considered not recoverable, the impairment loss is measured as the amount by which the carrying value of the asset or asset group exceeds its estimated fair value.

Goodwill

Goodwill

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. Goodwill is reviewed for impairment on an annual basis as of the first day of the Company’s fiscal fourth quarter or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. The Company’s goodwill was recognized in connection with its acquisition of Pro Farm.

Fair Value

Fair Value

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements (“ASC 820”), clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

ASC 820 requires that the valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 establishes a three-tier value hierarchy, which prioritizes inputs that may be used to measure fair value as follows:

● Level 1—Quoted prices in active markets for identical assets or liabilities.

● Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Deferred Revenue

Deferred Revenue

When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring control of goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability. The Company recognizes deferred revenue as net sales after the Company has transferred control of the goods or services to the customer and all revenue recognition criteria are met. The Company’s deferred revenue is broken out as follows (in thousands):

	MARCH 31,			DECEMBER 31,
	2021			2020
Product revenues	$	235		$	189
Financing costs		568			581
License revenues		1,164			1,232
Total deferred revenues		1,967			2,002
Less current portion		(439	)		(374	)
Long term portion	$	1,528		$	1,628

Research, Development and Patent Expenses

Research, Development and Patent Expenses

Research and development expenses include payroll-related expenses, field trial costs, toxicology costs, regulatory costs, consulting costs and lab costs. Patent expenses include legal costs relating to the patents and patent filing costs. These costs are expensed to operations as incurred. For the three months ended March 31, 2021 and 2020, research and development expenses totaled $2,295,000 and $2,880,000, respectively, and patent expenses totaled $217,000 and $354,000, respectively.

Shipping and Handling Costs

Shipping and Handling Costs

Amounts billed for shipping and handling are included as a component of product revenues. Related costs for shipping and handling have been included as a component of cost of product revenues. Shipping and handling costs for the three months ended March 31, 2021 and 2020 were $345,000 and $302,000, respectively.

Advertising

Advertising

The Company expenses advertising costs as incurred and has included these expenses as a component of selling, general and administrative costs. Advertising costs for the three months ended March 31, 2021 and 2020 were $111,000 and $150,000, respectively.

Depreciation and Amortization

Depreciation and Amortization

The Company depreciates and amortizes its capitalized property, plant, and equipment and intangible assets over the useful life of each asset utilizing a straight-line method of expensing. All depreciation and amortization expenses are included in the “Selling, general, and administrative” caption in the condensed consolidated statement of operations.

For the three months ended March 31, 2021 and 2020, the total amount of depreciation expense was $288,000 and $304,000, respectively. For the three months ended March 31, 2021 and 2020, the total amount of amortization expense was $586,000 and $587,000, respectively.

Segment Information

Segment Information

The Company is organized as a single operating segment, whereby its chief operating decision maker assesses the performance of and allocates resources to the business as a whole.

Net Loss Per Share

Net Loss Per Share

Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period. The calculation of basic and diluted net loss per share is the same for all periods presented as the effect of certain potential common stock equivalents, which consist of stock options and warrants to purchase common stock and restricted stock units, and contingent shares to be issued in the future are anti-dilutive due to the Company’s net loss position. Anti-dilutive common stock equivalents are excluded from diluted net loss per share. The following table sets forth the potential shares of common stock as of the end of each period presented that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive (in thousands):

	MARCH 31,		MARCH 31,
	2021		2020
Stock options outstanding		13,572		11,529
Warrants to purchase common stock		6,814		52,647
Restricted stock units outstanding		4,772		2,466
Common shares to be issued in lieu of agent fees		498		498
Employee stock purchase plan		84		124
Maximum contingent consideration shares to be issued		5,972		5,972
		31,712		73,236

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2021, the FASB issued Accounting Standards Update No. 2021-04, “Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Based Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU No. 2021-04”), which clarified an issuer’s accounting for modification or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The provisions of ASU No. 2021-04 are effective for annual reporting periods beginning after December 15, 2021, and interim reporting periods within those annual periods, with early adoption permitted, including adoption in any interim period for public business entities for periods for which consolidated financial statements have not yet been issued or made available for issuance. This ASU shall be applied on a prospective basis. The Company has not yet determined the impact of implementing this new standard on the condensed consolidated financial statements.

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Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Schedule of Significant Customer's Revenues and Account Receivable Percentage

Customers to which 10% or more of the Company’s total revenues are attributable for the three months ended March 31, 2021 and 2020 consist of the following:

	CUSTOMER
MARCH 31,	A			B			C			D
2021		30	%		16	%		11	%		8	%
2020		17	%		23	%		16	%		13	%

Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either March 31, 2021 or December 31, 2020, which may or may not correspond with any of the customers above, consist of the following:

	CUSTOMER
	A			B			C			D
March 31, 2021		32	%		13	%		11	%		9	%
December 31, 2020		2	%		49	%		14	%		14	%

Schedule of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the condensed consolidated statements of cash flows (in thousands):

	MARCH 31,		DECEMBER 31,
	2021		2020
Cash and cash equivalents	$	18,923	$	15,841
Restricted cash, less current portion		1,560		1,560
Total cash, cash equivalents and restricted cash	$	20,483	$	17,401

Schedule of Deferred Revenue

The Company’s deferred revenue is broken out as follows (in thousands):

	MARCH 31,			DECEMBER 31,
	2021			2020
Product revenues	$	235		$	189
Financing costs		568			581
License revenues		1,164			1,232
Total deferred revenues		1,967			2,002
Less current portion		(439	)		(374	)
Long term portion	$	1,528		$	1,628

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following table sets forth the potential shares of common stock as of the end of each period presented that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive (in thousands):

	MARCH 31,		MARCH 31,
	2021		2020
Stock options outstanding		13,572		11,529
Warrants to purchase common stock		6,814		52,647
Restricted stock units outstanding		4,772		2,466
Common shares to be issued in lieu of agent fees		498		498
Employee stock purchase plan		84		124
Maximum contingent consideration shares to be issued		5,972		5,972
		31,712		73,236

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Inventory (Tables)

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventories, net consist of the following (in thousands):

	MARCH 31,		DECEMBER 31,
	2021		2020
Raw materials	$	2,735	$	2,487
Work in progress		804		987
Finished goods		2,875		3,144
	$	6,414	$	6,618

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Right-of-Use of Assets and Lease Liability (Tables)

3 Months Ended

Mar. 31, 2021

Disclosure Rightofuse Of Assets And Lease Liability Abstract

Schedule of Components of Lease Expense

The components of lease expense were as follows for each of the comparative three months ended March 31, 2021 and 2020 (in thousands):

	MARCH 31,		MARCH 31,
	2021		2020
Operating lease cost	$	290	$	285
Short-term lease cost		41		39
Sublease income		-		(10	)
Total operating lease costs:	$	331	$	314

Schedule of Maturities of Lease Liabilities

Maturities of lease liabilities for each future calendar year as of March 31, 2021 are as follows (in thousands):

	OPERATING
	LEASES
2021	$	1,047
2022		1,380
2023		1,321
2024		867
Total lease payments		4,615
Less: imputed interest		529
Total lease obligation		4,086
Less lease obligation, current portion		1,164
Lease obligation, non-current portion	$	2,922

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Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2021

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	MARCH 31,		DECEMBER 31,
	2021		2020
Accrued compensation	$	3,267	$	3,495
Accrued warranty costs		484		475
Accrued customer incentives		3,224		4,288
Accrued liabilities, acquisition related		744		1,463
Accrued liabilities, other		2,436		1,929
Accrued Liabilities	$	10,155	$	11,650

Schedule of Derivative Liability Measured at Fair Value Using Unobservable Inputs

The following table provides a reconciliation of the activity for the contingent consideration measured between the most recent reporting period and as of the balance sheet date based on the fair value using significant inputs including the unobservable inputs (Level 3) (in thousands):

	CONTINGENT CONSIDERATION LIABILITY
Fair value at December 31, 2020	$	2,182
Change in estimated fair value recorded of contingent consideration		(134	)
Fair value at March 31, 2021	$	2,048

Schedule of Fair Value of Derivative Liability

The following represents other inputs used in determining the fair value of the contingent consideration liability:

	MARCH 31,			DECEMBER 31,
	2021			2020
Discount rate		16.0	%		15.5	%
Volatility		49.2	%		45.8	%
Credit spread		8.9	%		9.0	%
Risk-free rate		0.4	%		0.2	%

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Debt (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Debt Including Debt to Related Parties

Debt, including debt due to related parties, consists of the following (in thousands):

	MARCH 31,			DECEMBER 31,
	2021			2020
Secured promissory notes (“October 2012 and April 2013 Secured Promissory Notes”) bearing interest at 8.00% per annum, interest and principal due at maturity (December 31, 2022), collateralized by substantially all of the Company’s assets.	$	3,425		$	3,425
Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (5.25% as of March 31, 2021) per annum, payable monthly through June 2036, collateralized by certain of the Company’s deposit accounts and MMM LLC’s inventories, chattel paper, accounts, equipment and general intangibles, net of unamortized debt discount as of March 31, 2021 and December 31, 2020 of $161 and $166.		8,024			8,106
Secured revolving borrowing (“LSQ Financing”) bearing interest at (12.80% annually) payable through the lenders direct collection of certain accounts receivable through May 2021, collateralized by substantially all of the Company’s personal property.		11,745			8,966
Senior secured promissory notes due to related parties (“August 2015 Senior Secured Promissory Notes”) bearing interest at 8% per annum, interest and principal payable at maturity (December 31, 2022), collateralized by Substantially all of the Company’s assets.		7,300			7,300
Research loan facility (“2018 Research Facility”) bearing interest at 1.00% per annum, interest payments are due annually on the anniversary date of the facility with principal payable in 25% increments on the anniversary date of the facility beginning on the fourth anniversary of the loan (September 2022), net of imputed interest as of March 31, 2021 and December 31, 2020 of $39K and $41K, respectively.		271			283
Debt, including debt due to related parties	$	30,765		$	28,080
Less debt due to related parties, non-current		(7,300	)		(7,300	)
Less current portion		(12,085	)		(9,301	)
Debt, non-current	$	11,380		$	11,479

Schedule of Contractual Future Principal Payments

As of March 31, 2021, aggregate contractual future principal payments on the Company’s debt, including debt due to related parties for each calendar year, are due as follows (in thousands):

PERIOD ENDING DECEMBER 31,	DEBT		DEBT TO RELATED PARTY
2021	$	12,010		-
2022		2,900		5,000
2023		471		-
2024		491		-
2025		515		-
Thereafter		6,305		-
Total future principal payments		22,690		5,000
Interest payments included in debt balance (1)		975		2,300
Total future debt payments	$	23,665		7,300

(1) Due to the debt extinguishment requirements, the Company has included both accrued interest and future interest in the debt balance for certain outstanding debt.

Schedule of Debt Activity

The following table reflects the activity under this note (in thousands):

	2021			2020
Principal balance, net at December 31, preceding year	$	8,106		$	8,404
Principal payments		(196	)		(217	)
Interest		109			146
Debt discount amortization		5			5
Principal balance, net at March 31,	$	8,024		$	8,338

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Warrants (Tables)

3 Months Ended

Mar. 31, 2021

Disclosure Warrants Abstract

Summary of Information About Common Stock Warrants Outstanding

The following table summarizes the Company’s common stock warrants outstanding as of March 31, 2021 (in thousands, except exercise price data):

							THREE MONTHS
					SHARES		ENDED			SHARES
					SUBJECT TO		NUMBER OF			SUBJECT TO
	ISSUE	EXPIRATION			WARRANTS		WARRNTS			WARRANTS
	DATE	DATE	EXERCISE		OUTSTANDING		EXERCISED			OUTSANDING
DESCRIPTION	MM/YY	MM/YY	PRICE		12/31/2020		3/31/2021			3/31/2021
June 2013 Warrants	06/13	06/23	$	8.40		27		-			27
November 2016 Warrants	11/16	11/26	$	2.38		125		-			125
November 2017 Warrants	06/17	06/27	$	1.10		80		(80	)		-
April 2020 Warrants, Tranche 4	04/20	03/21	$	0.75		5,862		(5,862	)		-
April 2020 Warrants, Tranche 5	04/20	12/21	$	0.75		4,885		-			4,885
December 2020 Warrants, Tranche 2	12/20	03/21	$	1.00		1,778		(1,778	)		-
December 2020 Warrants, Tranche 3	12/20	12/21	$	1.04		1,777		-			1,777
				TOTALS:		14,534		(7,720	)		6,814

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Share-Based Plans (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Summary of Stock Options Activity

The following table summarizes the activity of stock options from December 31, 2020 to March 31, 2021 (in thousands, except weighted average exercise price):

				WEIGHTED-
				AVERAGE
	SHARES			EXERCISE
	OUTSTANDING			PRICE
Balances at December 31, 2020		13,380		$	2.32
Options granted		438		$	1.69
Options exercised		(21	)	$	1.31
Options cancelled		(225	)	$	3.62
Balances at March 31, 2021		13,572		$	2.28

Summary of Restricted Stock Units Activity

The following table summarizes the activity of restricted stock units from December 31, 2020 to March 31, 2021 (in thousands, except weighted average grant date fair value):

				WEIGHTED
				AVERAGE
				GRANT
	SHARES			DATE FAIR
	OUTSTANDING			VALUE
Outstanding at December 31, 2020		4,588		$	1.14
Granted		272			1.77
Settled		(88	)		1.62
Forfeited		-			-
Outstanding at March 31, 2021		4,772		$	1.16

Summary of Non-vested Restricted Stock Units Activity

The following table summarizes the activity of non-vested restricted stock units from December 31, 2020 to March 31, 2021 (in thousands, except weighted average grant date fair value):

				WEIGHTED
				AVERAGE
				GRANT
	SHARES			DATE FAIR
	OUTSTANDING			VALUE
Nonvested at December 31, 2020		1,437		$	1.16
Granted		272			1.77
Vested		(97	)		1.99
Forfeited		-			-
Nonvested at March 31, 2021		1,612		$	1.22

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Summary of Business, Basis of Presentation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 15, 2021	Mar. 25, 2021	Dec. 31, 2020	Dec. 30, 2020	Apr. 30, 2020	Apr. 29, 2020
SummaryofBusinessBasisofPresentationLineItems [Line Items]
Date of incorporation	Jun. 15, 2006
Working capital surplus	$ 14,187
Cash and Cash Equivalents, at Carrying Value	18,923			$ 15,841
Debt excluding related parties	23,465
Debt due to related parties	7,300			$ 7,300
Restricted cash	$ 1,560
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.75
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	6,814,000			14,534,000
Warrant Exchange Agreement [Member]
SummaryofBusinessBasisofPresentationLineItems [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights							45,977,809
Warrant Exchange Agreement [Member] | New Warrants [Member]
SummaryofBusinessBasisofPresentationLineItems [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	24,995,000
Warrant Exchange Agreement [Member] | New Warrants [Member] | Forecast [Member]
SummaryofBusinessBasisofPresentationLineItems [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		4,885,317
Warrant Exchange Agreement [Member] | New Warrants [Member] | Five Tranches [Member]
SummaryofBusinessBasisofPresentationLineItems [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights						$ 0.75
Warrant Amendment [Member]
SummaryofBusinessBasisofPresentationLineItems [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights					$ 0.96
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	3,555,556				1,777,778
Number of warrants outstanding	1,777,777
Warrant expiration date	Dec. 15, 2021
Warrant Amendment [Member] | Warrant Holder [Member]
SummaryofBusinessBasisofPresentationLineItems [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 1.00
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			1,777,778
Warrant Amendment [Member] | Forecast [Member] | Warrant Holder [Member]
SummaryofBusinessBasisofPresentationLineItems [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 1.04
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		1,777,777
Warrant Amendment [Member] | Common Stock [Member] | Warrant Holder [Member]
SummaryofBusinessBasisofPresentationLineItems [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights				5,333,333
Pro Farm Technogies Comercio de Insumos Agricolas do Brasil ltda [Member]
SummaryofBusinessBasisofPresentationLineItems [Line Items]
Ownership controlling interest percentage	99.00%

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Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Product Information [Line Items]
Concentration risk, supplier	The active ingredient in the Company's Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company currently relies on one supplier for this plant. Such single supplier acquires raw knotweed from numerous regional sources and performs an extraction process on this plant, creating a dried extract that is shipped to the Company's manufacturing plant.
Ownership in an indirect vendor/supplier relationship percentage	12.00%
Research and Development Expense	$ 2,295	$ 2,880
Patent Expenses	217	354
Shipping and handling costs	345	302
Advertising costs	111	150
Depreciation expense	288	304
Amortization expense	$ 586	$ 587
Revenue Benchmark [Member] | International [Member]
Product Information [Line Items]
Customers accounted for percentage of company's total revenues	7.00%	14.00%
Revenue Benchmark [Member] | Four Product [Member] | International [Member]
Product Information [Line Items]
Customers accounted for percentage of company's total revenues	89.00%	89.00%
Maximum [Member]
Product Information [Line Items]
Receivables due period	120 days

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Significant Accounting Policies - Schedule of Significant Customer's Revenues and Account Receivable Percentage (Details) - Customer Concentration Risk [Member]	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Customer A [Member] | Revenue Benchmark [Member]
Product Information [Line Items]
Customers accounted for percentage of company's total revenues and accounts receivable	30.00%	17.00%
Customer A [Member] | Accounts Receivable [Member]
Product Information [Line Items]
Customers accounted for percentage of company's total revenues and accounts receivable	32.00%		2.00%
Customer B [Member] | Revenue Benchmark [Member]
Product Information [Line Items]
Customers accounted for percentage of company's total revenues and accounts receivable	16.00%	23.00%
Customer B [Member] | Accounts Receivable [Member]
Product Information [Line Items]
Customers accounted for percentage of company's total revenues and accounts receivable	13.00%		49.00%
Customer C [Member] | Revenue Benchmark [Member]
Product Information [Line Items]
Customers accounted for percentage of company's total revenues and accounts receivable	11.00%	16.00%
Customer C [Member] | Accounts Receivable [Member]
Product Information [Line Items]
Customers accounted for percentage of company's total revenues and accounts receivable	11.00%		14.00%
Customer D [Member] | Revenue Benchmark [Member]
Product Information [Line Items]
Customers accounted for percentage of company's total revenues and accounts receivable	8.00%	13.00%
Customer D [Member] | Accounts Receivable [Member]
Product Information [Line Items]
Customers accounted for percentage of company's total revenues and accounts receivable	9.00%		14.00%

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Significant Accounting Policies - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Cash and cash equivalents	$ 18,923	$ 15,841
Restricted cash, less current portion	1,560	1,560
Total cash, cash equivalents and restricted cash	$ 20,483	$ 17,401	$ 11,680	$ 7,812

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Significant Accounting Policies - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Product revenues	$ 235	$ 189
Financing costs	568	581
License revenues	1,164	1,232
Total deferred revenues	1,967	2,002
Less current portion	(439)	(374)
Long term portion	$ 1,528	$ 1,628

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Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Anti-dilutive securities excluded from computation of earning per share	31,712,000	73,236,000
Stock Options Outstanding [Member]
Anti-dilutive securities excluded from computation of earning per share	13,572,000	11,529,000
Warrants to Purchase Common Stock [Member]
Anti-dilutive securities excluded from computation of earning per share	6,814,000	52,647,000
Restricted Stock Units Outstanding [Member]
Anti-dilutive securities excluded from computation of earning per share	4,772,000	2,466,000
Common Shares to be Issued in Lieu of Agent Fees [Member]
Anti-dilutive securities excluded from computation of earning per share	498,000	498,000
Employee Stock Purchase Plan [Member]
Anti-dilutive securities excluded from computation of earning per share	84,000	124,000
Maximum Ccontingent Consideration Shares to be Issued [Member]
Anti-dilutive securities excluded from computation of earning per share	5,972,000	5,972,000

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Inventory (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Reserves against inventories	$ 462	$ 387
Inventory adjustments recorded	$ 228	$ 243

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Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 2,735	$ 2,487
Work in progress	804	987
Finished goods	2,875	3,144
Inventories, net	$ 6,414	$ 6,618

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Right-of-Use of Assets and Lease Liability (Details Narrative) - Lease Agreement [Member]	3 Months Ended
	Mar. 31, 2021 EUR (€) ft²
Area of land | ft²	415
Lease term description	The initial term of the lease is for a period of 24 months and requires a 6-month notice prior to termination. The minimum monthly rent is 9,462€ per month, subject to increase based on the consumer price index increase on January 1 of each fiscal year if applicable.
EURO [Member]
Payments for rent | €	€ 9,462

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Right-of-Use of Assets and Lease Liability - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disclosure Rightofuse Of Assets And Lease Liability Abstract
Operating lease cost	$ 290	$ 285
Short-term lease cost	41	39
Sublease income		(10)
Total operating lease costs	$ 331	$ 314

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Right-of-Use of Assets and Lease Liability - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Disclosure Rightofuse Of Assets And Lease Liability Abstract
2021	$ 1,047
2022	1,380
2023	1,321
2024	867
Total lease payments	4,615
Less: imputed interest	529
Total lease obligation	4,086
Less lease obligation, current portion	1,164	$ 1,008
Lease obligation, non-current portion	$ 2,922	$ 3,050

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Accrued Liabilities (Details Narrative) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
Accrued liabilities and other liabilities	$ 719,000	$ 1,329,000

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Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
Accrued compensation	$ 3,267	$ 3,495
Accrued warranty costs	484	475
Accrued customer incentives	3,224	4,288
Accrued liabilities, acquisition related	744	1,463
Accrued liabilities, other	2,436	1,929
Accrued Liabilities	$ 10,155	$ 11,650

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Accrued Liabilities - Schedule of Derivative Liability Measured at Fair Value Using Unobservable Inputs (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Payables and Accruals [Abstract]
Fair value at December 31, 2020	$ 2,182
Change in estimated fair value recorded of contingent consideration	(134)
Fair value at March 31, 2021	$ 2,048

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Accrued Liabilities - Schedule of Fair Value of Derivative Liability (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
Discount rate	16.00%	15.50%
Volatility	49.20%	45.80%
Credit spread	8.90%	9.00%
Risk-free rate	0.40%	0.20%

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Debt (Details Narrative) - USD ($)			1 Months Ended	3 Months Ended
	Jan. 31, 2020	Jan. 30, 2020	Jun. 30, 2014	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Debt Instrument [Line Items]
Required deposit balance				$ 1,560,000		$ 1,560,000
Interest expense				393,000	$ 337,000
L S Q Funding Group L C [Member]
Debt Instrument [Line Items]
Outstanding principal amount				10,286,000
Sale of certain accounts receivable to third-party	$ 20,000,000	$ 7,000,000
Interest expense				$ 232,000	124,000
Secured Debt [Member]
Debt Instrument [Line Items]
Debt instrument description				Under this note the Company is required to maintain a current ratio of not less than 1.25-to-1.0, a debt-to-worth ratio of no greater than 4.0-to-1.0 and a loan-to-value ratio of no greater than 70% as determined by Five Star Bank.
Invoice Purchase Agreement [Member] | L S Q Funding Group L C [Member]
Debt Instrument [Line Items]
Debt instrument description	In January 2020, the Company entered into a Second Amendment to the Company's Invoice Purchase Agreement with LSQ. The amendment, among other things, (i) increased the amount of eligible customer invoices which LSQ may elect to purchase from the Company to up to $20,000,000 of eligible customer invoices from the Company from $7,000,000; (ii) increased the advance rate to 90% from 85% and 70% from 60%, respectively, of the face value of domestic and international receivables being sold; (iii) decreased the invoice purchase fee rate from 0.40% to 0.25%; (iv) increased the funds usage fee from 0.020% to 0.025%; (v) extended the 0% aging and collection fee percentage charged at the time when the purchased invoice is collected from 90 days to 120 days, and increased the fee percentage charged thereafter from 0.35% to 0.75%; and (vi) decreased the early termination fee from 0.75% to 0.50%
Percentage Of Common Stock Outstanding To Increase Shares Reserved For Issuance | L S Q Funding Group L C [Member]
Debt Instrument [Line Items]
Invoice purchase fee percentage	90.00%	85.00%
International Receivables [Member] | L S Q Funding Group L C [Member]
Debt Instrument [Line Items]
Invoice purchase fee percentage	70.00%	60.00%
Amended Inventory Financing Addendum [Member] | L S Q Funding Group L C [Member]
Debt Instrument [Line Items]
Debt instrument description	In addition to the Amendment, the Company simultaneously entered into an Amended Inventory Financing Addendum (the "Addendum") with LSQ. The Addendum allows the Company to request an advance up to the lesser of (i) 100% of the Company’s unpaid finished goods inventory; (ii) 65% of the appraised value of the Company’s inventory performed on or on behalf of LSQ; or (iii) $3,000,000. Funds advance under the Addendum are subject to a monthly inventory management fee of 0.5% on the average monthly inventory funds available and a daily interest rate of 0.025%
October 2012 and April 2013 Secured Promissory Notes [Member]
Debt Instrument [Line Items]
Outstanding principal amount				$ 2,450,000
Secured promissory notes				3,425,000
Accrued interest				975,000
Expenses incurred				$ 631,000	$ 435,000
October 2012 and April 2013 Secured Promissory Notes [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate				8.00%		8.00%
June 2014 Secured Promissory Note [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate				5.25%		5.25%
June 2014 Secured Promissory Note [Member] | Office And Laboratory Space One [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Debt instrument borrowing amount			$ 10,000,000
Debt instrument, interest rate				5.25%
Required deposit balance				$ 1,560,000
June 2014 Secured Promissory Note [Member] | Office And Laboratory Space One [Member] | Secured Debt [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate				2.00%

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Debt - Schedule of Debt Including Debt to Related Parties (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Debt, including debt due to related parties	$ 23,665
Less debt due to related parties, non-current	(7,300)	$ (7,300)
Debt, non-current	11,380	11,479
Secured Debt [Member]
Debt, including debt due to related parties	30,765	28,080
Less debt due to related parties, non-current	(7,300)	(7,300)
Less current portion	(12,085)	(9,301)
Debt, non-current	11,380	11,479
October 2012 Secured Promissory Notes and April 2013 Secured Promissory Notes [Member] | Secured Debt [Member]
Debt, including debt due to related parties	3,425	3,425
June 2014 Secured Promissory Note [Member] | Secured Debt [Member]
Debt, including debt due to related parties	8,024	8,106
Secured Revolving Borrowing Interest Rate at 12.80% Through March 2021 [Member] | Secured Debt [Member]
Debt, including debt due to related parties	11,745	8,966
August 2015 Senior Secured Promissory Notes [Member] | Secured Debt [Member]
Debt, including debt due to related parties	7,300	7,300
Research Loan Facility Interest Rate at 1.00% [Member] | Secured Debt [Member]
Debt, including debt due to related parties	$ 271	$ 283

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Debt - Schedule of Debt Including Debt to Related Parties (Details) (Parenthetical) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
October 2012 and April 2013 Secured Promissory Notes [Member]
Debt Instrument [Line Items]
Imputed interest, net	$ 2,450,000
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	8.00%	8.00%
Debt instrument, maturity date	Dec. 31, 2022	Dec. 31, 2022
Secured Debt [Member] | June 2014 Secured Promissory Note [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	5.25%	5.25%
Debt instrument, prime rate	2.00%
Debt instrument, payment terms	Payable monthly through June 2036	Payable monthly through June 2036
Unamortized debt discount	$ 161,000	$ 166,000
Secured Debt [Member] | Secured Revolving Borrowing Interest Rate at 12.80% Through March 2021 [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	12.80%	12.80%
Debt instrument, payment terms	Through May 2021	Through May 2021
Secured Debt [Member] | Senior Secured Promissory Note Interest Rate at 8% [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	8.00%	8.00%
Debt instrument, maturity date	Dec. 31, 2022	Dec. 31, 2022
Secured Debt [Member] | Research Loan Facility Interest Rate at 1.00% [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	1.00%	1.00%
Debt instrument, maturity date	Sep. 30, 2022	Sep. 30, 2022
Imputed interest, net	$ 39,000	$ 41,000
Debt instrument interest rate principal payment	25.00%	25.00%

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Debt - Schedule of Contractual Future Principal Payments (Details) $ in Thousands	Mar. 31, 2021 USD ($)
2021	$ 12,010
2022	2,900
2023	471
2024	491
2025	515
Thereafter	6,305
Total future principal payments	22,690
Interest payments included in debt balance	975	[1]
Total future debt payments	23,665
Related Party [Member]
2021
2022	5,000
2023
2024
2025
Thereafter
Total future principal payments	5,000
Interest payments included in debt balance	2,300	[1]
Total future debt payments	$ 7,300

[1] Due to the debt extinguishment requirements, the Company has included both accrued interest and future interest in the debt balance for certain outstanding debt.

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Debt - Schedule of Debt Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Short-term Debt [Line Items]
Principal balance, net at March 31,	$ 23,665
June 2014 Secured Promissory Note [Member]
Short-term Debt [Line Items]
Principal balance, net at December 31, preceding year	8,106	$ 8,404
Principal payments	(196)	(217)
Interest	109	146
Debt discount amortization	5	5
Principal balance, net at March 31,	$ 8,024	$ 8,338

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Warrants (Details Narrative) - $ / shares	3 Months Ended
	Mar. 31, 2021	Dec. 15, 2021	Mar. 25, 2021	Mar. 15, 2021	Dec. 31, 2020	Dec. 30, 2020	Dec. 15, 2020	Sep. 15, 2020	May 01, 2020	Apr. 29, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of warrant shares exercised	6,814,000				14,534,000
Warrant exercise price	$ 0.75
April 2020 Warrants [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of warrant shares exercised	24,995,000			5,862,380			13,027,512	2,714,065	3,392,581
Warrant exercise price	$ 0.75
Warrant weighted average remaining contractual life	9 months 22 days
Warrant weighted average exercise price	$ 0.89
April 2020 Warrants [Member] | Forecast [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of warrant shares exercised		4,885,317
Warrant Exchange Agreement [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of warrant shares exercised										45,977,809
Warrant Exchange Agreement [Member] | April 2020 Warrants [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of warrant shares exercised										29,881,855
Warrant Amendment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of warrant shares exercised	3,555,556					1,777,778
Warrant exercise price						$ 0.96
Number of warrants outstanding	1,777,777
Warrant expiration date	Dec. 15, 2021
Warrant Amendment [Member] | Warrant Holder [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of warrant shares exercised			1,777,778
Warrant exercise price			$ 1.00
Warrant Amendment [Member] | Forecast [Member] | Warrant Holder [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of warrant shares exercised		1,777,777
Warrant exercise price		$ 1.04
Warrant Amendment [Member] | Common Stock [Member] | Warrant Holder [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of warrant shares exercised					5,333,333

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Summary of Information About Common Stock Warrants Outstanding (Details) - $ / shares	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Class of Warrant or Right [Line Items]
Exercise price	$ 0.75
Number of shares subject to warrants outstanding	6,814,000	14,534,000
Number of Warrants Excercised	(7,720,000)
June 2013 Warrant [Member]
Class of Warrant or Right [Line Items]
Issue date	2013-06
Expiration date	2023-06
Exercise price	$ 8.40
Number of shares subject to warrants outstanding	27,000	27,000
Number of Warrants Excercised
November 2016 Warrant [Member]
Class of Warrant or Right [Line Items]
Issue date	2016-11
Expiration date	2026-11
Exercise price	$ 2.38
Number of shares subject to warrants outstanding	125,000	125,000
Number of Warrants Excercised
November 2017 Warrants [Member]
Class of Warrant or Right [Line Items]
Issue date	2017-06
Expiration date	2027-06
Exercise price	$ 1.10
Number of shares subject to warrants outstanding		80,000
Number of Warrants Excercised	(80,000)
April 2020 Warrants Tranche Four [Member]
Class of Warrant or Right [Line Items]
Issue date	2020-04
Expiration date	2021-03
Exercise price	$ 0.75
Number of shares subject to warrants outstanding		5,862,000
Number of Warrants Excercised	(5,862,000)
April 2020 Warrants Tranche Five [Member]
Class of Warrant or Right [Line Items]
Issue date	2020-04
Expiration date	2021-12
Exercise price	$ 0.75
Number of shares subject to warrants outstanding	4,885,000	4,885,000
Number of Warrants Excercised
December 2020 Warrants, Tranche Two [Member]
Class of Warrant or Right [Line Items]
Issue date	2020-12
Expiration date	2021-03
Exercise price	$ 1.00
Number of shares subject to warrants outstanding		1,778,000
Number of Warrants Excercised	(1,778,000)
December 2020 Warrants Tranche Three [Member]
Class of Warrant or Right [Line Items]
Issue date	2020-12
Expiration date	2021-12
Exercise price	$ 1.04
Number of shares subject to warrants outstanding	1,777,000	1,777,000
Number of Warrants Excercised

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Share-Based Plans (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended
	Apr. 30, 2021	Feb. 28, 2021	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding			13,572,000		13,380,000
Number of restricted stock units outstanding			4,772,000
Number of shares available for grant			9,787,000
Stock based compensation expense			$ 915	$ 907
Number of option granted to purchase common stock			438,000
Number of options weighted-average exercise price granted			$ 1.69
Chief Financial Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option granted to purchase common stock		400,000
Number of options weighted-average exercise price granted		$ 2.60
Fair value of options granted		$ 567,000
Former Chief Financial Officer [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option granted to purchase common stock		200,000
Employees [Member] | Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option granted to purchase common stock	237,000
Number of options weighted-average exercise price granted	$ 1.95

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Share-Based Plans - Summary of Stock Options Activity (Details)	3 Months Ended
	Mar. 31, 2021 $ / shares shares
Share-based Payment Arrangement [Abstract]
Shares Outstanding, Beginning balance | shares	13,380,000
Shares Outstanding, Options granted | shares	438,000
Shares Outstanding, Options exercised | shares	(21,000)
Shares Outstanding, Options cancelled | shares	(225,000)
Shares Outstanding, Ending balance | shares	13,572,000
Weighted Average Exercise Price, Beginning balance | $ / shares	$ 2.32
Weighted Average Exercise Price, Options granted | $ / shares	1.69
Weighted Average Exercise Price, Options exercised | $ / shares	1.31
Weighted Average Exercise Price, Options cancelled | $ / shares	3.62
Weighted Average Exercise Price, Ending balance | $ / shares	$ 2.28

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Share-Based Plans - Summary of Restricted Stock Units Activity (Details)	3 Months Ended
	Mar. 31, 2021 $ / shares shares
Share-based Payment Arrangement [Abstract]
Restricted stock units, Beginning Balance | shares	4,588,000
Restricted stock units, Granted | shares	272,000
Restricted stock units, Settled | shares	(88,000)
Restricted stock units, Forfeited | shares
Restricted stock units, Ending Balance | shares	4,772,000
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 1.14
Weighted Average Grant Date Fair Value, Granted | $ / shares	1.77
Weighted Average Grant Date Fair Value, Settled | $ / shares	1.62
Weighted Average Grant Date Fair Value, Forfeited | $ / shares
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 1.16

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Share-Based Plans - Summary of Non-vested Restricted Stock Units Activity (Details)	3 Months Ended
	Mar. 31, 2021 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units, Granted | shares	272,000
Restricted stock units, Vested | shares	(88,000)
Restricted stock units, Forfeited | shares
Weighted Average Grant Date Fair Value, Granted | $ / shares	$ 1.77
Weighted Average Grant Date Fair Value, Vested | $ / shares	1.62
Weighted Average Grant Date Fair Value, Forfeited | $ / shares
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units, Ending Balance | shares	1,437,000
Restricted stock units, Granted | shares	272,000
Restricted stock units, Vested | shares	(97,000)
Restricted stock units, Forfeited | shares
Restricted stock units, Ending Balance | shares	1,612,000
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 1.16
Weighted Average Grant Date Fair Value, Granted | $ / shares	1.77
Weighted Average Grant Date Fair Value, Vested | $ / shares	1.99
Weighted Average Grant Date Fair Value, Forfeited | $ / shares
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 1.22

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Related Party Transactions (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 15, 2021	Dec. 31, 2020	Dec. 15, 2020	Sep. 15, 2020	May 01, 2020	Apr. 29, 2020
Number of warrant shares exercised	6,814,000			14,534,000
April 2020 Warrants [Member]
Number of warrant shares exercised	24,995,000		5,862,380		13,027,512	2,714,065	3,392,581
August 2015 Senior Secured Promissory Note [Member]
Beneficial ownership interest percentage		40.00%
Outstanding principal amount		$ 5,000
Secured Promissory Note		7,300
Accrued interest		2,300
Expenses incurred	$ 1,600	$ 1,199
Warrant Exchange Agreement [Member]
Number of warrant shares exercised								45,977,809
Warrant Exchange Agreement [Member] | April 2020 Warrants [Member]
Number of warrant shares exercised								29,881,855
Warrant Exchange Agreement [Member] | Ospraie [Member]
Beneficial ownership interest percentage	40.40%
Warrant Exchange Agreement [Member] | Ospraie [Member] | April 2020 Warrants [Member]
Number of warrant shares exercised	4,264,299
Warrant Exchange Agreement [Member] | Waddell [Member]
Beneficial ownership interest percentage	15.90%
Warrant Exchange Agreement [Member] | Waddell [Member] | April 2020 Warrants [Member]
Number of warrant shares exercised	666,472
Warrant Exchange Agreement [Member] | Ardsley [Member]
Beneficial ownership interest percentage	990.00%
Warrant Exchange Agreement [Member] | Ardsley [Member] | April 2020 Warrants [Member]
Number of warrant shares exercised	741,617