CODEXIS, INC.

Codexis Inc.

Notes to Condensed Consolidated Financial Statements

Note 1. Description of Business

In these notes to the unaudited condensed consolidated financial statements, the “Company,” “we,” “us,” and “our” refers to Codexis, Inc. and its subsidiaries on a consolidated basis.

We discover, develop, enhance, and commercialize novel, high performance enzymes and other classes of proteins leveraging our proprietary CodeEvolver directed evolution technology platform.

The Company's operations are managed and reported to the Chief Executive Officer (“CEO”), our chief operating decision maker (“CODM”), on a consolidated basis asone reportable segment.

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information but does not include all the information and notes required by GAAP for complete financial statements. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2024. The condensed consolidated balance sheet at December 31, 2024 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024, are consistent with those discussed in Note 2 to the audited consolidated financial statements in the Company’s 2024 Annual Report on Form 10-K. There have been no significant changes in our significant accounting policies or critical accounting estimates since December 31, 2024.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly our financial position as of September 30, 2025 and results of operations for the interim periods presented. The interim results are not necessarily indicative of the results for any future interim period or for the entire year.

The unaudited condensed consolidated financial statements include the accounts of Codexis, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. We regularly assess these estimates which primarily affect revenue recognition, deferred revenue, inventories, valuation of equity investments, goodwill arising out of business acquisitions, accrued liabilities, stock awards, and the valuation allowances associated with deferred tax assets. Actual results could differ from those estimates and such differences may be material to the condensed consolidated financial statements.

Accounting Pronouncements

Recently adopted accounting pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in the ASU require public companies, on an annual basis, to provide disclosures of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. The standard was adopted beginning January 1, 2025 on a prospective basis. ASU No. 2023-09 will become effective in the Company’s Annual Report on Form 10-K for the year ending December 31, 2025 and we are continuing to evaluate whether adoption of this standard will have a material impact on our consolidated financial statements and related disclosures.

Aside from the recently adopted accounting pronouncement described above and recently issued accounting pronouncements not yet adopted and described below, there were no recent accounting pronouncements or changes in accounting pronouncements during the three and nine months ended September 30, 2025, that are of significance or potential significance to us.

Recently issued accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendment in the ASU will require additional disclosures and disaggregation of certain costs and expenses presented on the face of the income statement to provide greater transparency into the nature of expense components. In January 2025, the FASB issued ASU 2025-01, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) - Clarifying the Effective Date” to clarify the effective date for non-calendar year-end entities. As clarified, this guidance is effective for public business entities for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the effects of the standard on our consolidated financial statements and related disclosures.

In October 2023, FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in the ASU are intended to amend certain disclosure and presentation requirements for a variety of topics within the ASC. These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, as announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. We are currently monitoring SEC rulemaking activity and evaluating the potential effects of this standard on our consolidated financial statements and related disclosures.

Note 3. Revenue Recognition

Disaggregation of Revenue

The following table provides information about disaggregated revenue from contracts with customers by geographic regions. The geographic regions that are tracked are the Americas (United States, Canada, and Latin America), EMEA (Europe, Middle East, and Africa), and APAC (Australia, New Zealand, Southeast Asia, and China).

Disaggregated information is as follows (in thousands):

Contract Balances

The following table presents balances of unbilled receivables, contract assets, and contract liabilities (in thousands):

We hadno asset impairment charges related to financial assets in the three and nine months ended September 30, 2025 and 2024.

The decrease in unbilled receivables was primarily due to the timing of billings. The decrease in contract assets was primarily due to decreases in product revenue from contracts subject to over time revenue recognition. The decrease in deferred revenue was primarily due to the timing of recognition of revenue.

As of September 30, 2025, we have$1.6 million of short-term unbilled receivables presented as unbilled receivables within current assets and$0.4 million of long-term unbilled receivables that is included within the other non-current assets line item in the condensed consolidated balance sheets. As of December 31, 2024, we had$2.8 million of short-term unbilled receivables presented as unbilled receivables within current assets and$0.5 million of long-term unbilled receivables that is included within the other non-current assets line item in the condensed consolidated balance sheets.

We recognized the following revenues (in thousands):

Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting periods. The estimated revenue does not include contracts with original durations of one year or less, amounts of variable consideration attributable to royalties, or contract renewals that are unexercised as of September 30, 2025.

The balances in the table below are partially based on judgments involved in estimating future orders from customers subject to the exercise of material rights pursuant to respective contracts as of September 30, 2025 (in thousands):

Note 4. Net Loss per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding, less restricted stock awards (“RSAs”) subject to forfeiture. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock shares outstanding, less RSAs subject to forfeiture, plus all additional common shares that would have been outstanding, assuming dilutive potential common stock shares had been issued for other dilutive securities. For all periods presented, diluted and basic net loss per share are identical since potential common stock shares are excluded from the calculation, as their effect was anti-dilutive.

Anti-Dilutive Securities

In periods of net loss, the weighted average number of shares outstanding, prior to the application of the treasury stock method, excludes potentially dilutive securities from the computation of diluted net loss per common share because including such shares would have an anti-dilutive effect.

The following shares were not considered in the computation of diluted net loss per share because their effect was anti-dilutive (in thousands):

(1) Included anti-dilutive potential common shares from ESPP of 688,219 and 604,997 for the three and nine months ended September 30, 2025 and 2024, respectively.

(2) Pertains to the warrants issued in connection with the Innovatus Loan. For additional information, see Note 11, “Debt.”

Note 5. Investments in Non-Marketable Securities

Non-Marketable Equity Securities

Our non-marketable equity securities are investments in privately held companies without readily determinable market value and primarily relate to our investments in seqWell Inc. (“seqWell”) and other investments in non-marketable equity securities. These investments are accounted for under the measurement alternative and are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes for identical or similar securities of the same issuer. Non-marketable equity securities are measured at fair value on a non-recurring basis and classified within Level 2 in the fair value hierarchy when we estimate the fair value of these investments using the observable transaction price paid by third party investors for the same or similar security of the same issuers. The fair value of non-marketable equity securities are classified within Level 3 when we estimate fair value using unobservable inputs such as when we remeasure due to impairment and we use discount rates, market data of comparable companies, and rights and obligations of the securities the Company holds, among others. We adjust the carrying value of non-marketable equity securities which have been remeasured during the period and recognize resulting gains or losses as a component of interest and other expense, net in the unaudited condensed consolidated statements of operations.

There was no remeasurement event for our investments in non-marketable equity securities that occurred during thethree and nine months ended September 30, 2025. For the three and nine months ended September 30, 2024, we recognized an impairment charge of $3.9 million which is presented within interest and other expense, net in the condensed consolidated statements of operations. This adjustment is related to the write-down of our investment in Molecular Assemblies, Inc. (“MAI”) to its related fair value as determined based on valuation methods using the latest observed transaction price of MAI’s preferred stock securities to be issued during the fourth quarter of 2024 and adjusted for the rights and obligations of the preferred stock securities the Company holds. There was no remeasurement event for our other investments in non-marketable equity securities that occurred during the three and nine months ended September 30, 2024.

We recognizedno realized gains or losses during the three and nine months ended September 30, 2025 and 2024.

The following table presents the carrying value of our non-marketable equity securities (in thousands):

Note 6. Fair Value Measurements

The following tables show the Company’s cash, cash equivalents, and short-term investments by significant investment category as of September 30, 2025 and December 31, 2024 (in thousands):

(1) The valuation techniques used to measure the fair values of the Company’s Level 2 financial instruments uses inputs that are either directly or indirectly observable for the asset through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

We limit the credit risk associated with our cash equivalents and short-term investments by placing them with banks and institutions we believe are highly credit-worthy and investing in highly-rated investments. As of September 30, 2025 and December 31, 2024, the contractual maturity of all investments held was less than one year.

During the three and nine months ended September 30, 2025 and 2024, we didnot recognize any significant credit lossesnor other-than-temporary impairment losses on our short-term investments.

Note 7. Balance Sheet Details

Inventories

Inventories consisted of the following (in thousands):

Prepaid expenses and other current assets

As of September 30, 2025, prepaid expenses and other current assets consisted of prepaid expenses of $4.8 million and other current assets of $0.5 million. As of December 31, 2024, prepaid expenses and other current assets consisted of prepaid expenses of $3.7 million and other current assets of $0.5 million.

Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

Depreciation expense included in both research and development expenses and selling, general and administrative expenses in the unaudited condensed consolidated statements of operations was as follows (in thousands):

Other Accrued Liabilities

Other accrued liabilities consisted of the following (in thousands):

Note 8. Stock-based Compensation

Equity Incentive Plans

In April 2025, our Board of Directors (the “Board”) approved the second amendment to the Codexis Inc. 2019 Incentive Award Plan, as amended (the “2019 Plan”) which amendment became effective upon stockholders' approval at the Annual Meeting of the Company’s stockholders in June 2025. The second amendment provided for an increase in the number of shares authorized and available for issuance under the 2019 Plan by 8,000,000 shares, resulting in an increase to the total shares authorized and available for issuance under the 2019 Plan from 15,897,144 shares to 23,897,144 shares.

Employee Stock Purchase Plan

In April 2023, our Board approved an employee stock purchase plan (as may be amended from time to time, the “ESPP”) which became effective upon approval at the 2023 Annual Meeting. The ESPP allows eligible employees of the Company to purchase shares of our common stock through payroll deductions. Offering periods are generally over a 24-month period and begin in May and November of each year. The per share purchase price will be the lower of 85% of the closing trading price per share of our common stock on the first trading date of an offering period in which a participant is enrolled or 85% of the closing trading price per share on the purchase date. Participant purchases are limited to a maximum of $25,000 of fair value of our stock per calendar year. The Company is authorized to grant up to 2,000,000 shares of common stock under the ESPP. The first offering period of the ESPP commenced in December 2023.

During the three months ended September 30, 2025 and 2024, no shares of our common stock were purchased under the ESPP. For the nine months ended September 30, 2025 and 2024,151,490 and 123,889 shares of our common stock were purchased under the ESPP, respectively. As of September 30, 2025,1,585,353 shares of common stock were available for future issuance under the ESPP. We recognized $0.1 million and $0.3 million of stock-based compensation expenses related to the ESPP for the three and nine months ended September 30, 2025, respectively, and $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, the total unrecognized stock-based compensation expense, net of expected forfeitures, related to the ESPP was $0.7 million and is expected to be recognized over the remaining offering period.

Stock-Based Compensation Expense

Stock-based compensation expense is included in the unaudited condensed consolidated statements of operations as follows (in thousands):

The following table presents total stock-based compensation expense by security type included in the unaudited condensed consolidated statements of operations (in thousands):

On June 29, 2024, we entered into an Advisory Services Agreement with a former executive of the Company. Pursuant to the advisory agreement, which expired in August 2025, the exercise period for the former executive’s vested stock options and performance-based options was also extended. The modification resulted in a stock-based compensation expense of $2.0 million recognized in selling, general and administrative expenses during the nine months ended September 30, 2024.

As of September 30, 2025, unrecognized stock-based compensation expense, net of expected forfeitures, was $9.7 million related to unvested stock options, and $4.5 million related to unvested RSUs and RSAs. Stock-based compensation expense for these awards will be recognized through 2029.

Note 9. Capital Stock

Exercise of Options

For the nine months ended September 30, 2025 and 2024, we issued 339,142 and 72,856 shares, respectively, upon option exercises at a weighted-average exercise price of $3.09 and $1.97 per share, respectively, with net cash proceeds of $1.0 million and $0.1 million, respectively.

Sales Agreements

In May 2021, we filed a Registration Statement on Form S-3 with the SEC (the “2021 Registration Statement”), that automatically became effective upon its filing, under which we were permitted to sell common stock, preferred stock, debt securities, warrants, purchase contracts, and units from time to time in one or more offerings. On February 27, 2023, we filed a post-effective amendment to the 2021 Registration Statement. Pursuant to that post-effective amendment, we registered an aggregate $200.0 million of securities. In May 2021, we entered into an Equity Distribution Agreement (“EDA”) with Piper Sandler & Co (“PSC”), under which PSC, as our exclusive agent, at our discretion and at such times that we determined from time to time, may have sold over athree-year period from the execution of the EDA up to a maximum of $50.0 million of shares of our common stock. Under the terms of the EDA, PSC was permitted to sell the shares at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).

We were not required to sell any shares at any time during the term of the EDA. On April 24, 2024, we terminated the EDA. No shares of our common stock were issued and sold pursuant to the EDA during thethree and nine months ended September 30, 2024.

On May 2, 2024, we entered into a Controlled Equity Offering℠ Sales Agreement (the “Cantor Sales Agreement”) with Cantor Fitzgerald & Co., as sales agent (“Cantor”), under which Cantor, at our discretion and at such times that we may determine from time to time, may sell up to a maximum of $75.0 million of shares of our common stock. Under the terms of the Cantor Sales Agreement, Cantor may sell the shares at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act. On May 2, 2024, we filed a registration statement on Form S-3 registering the offer and sale of these shares under the Securities Act which became effective on May 14, 2024. We will pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the Cantor Sales Agreement. In 2024,10,440,000 shares of our common stock were issued and sold pursuant to the Cantor Sales Agreement, all during the third quarter of 2024, and we received net proceeds of $29.7 million after Cantors’ commissions and direct offering expenses.

During the nine months ended September 30, 2025,7,244,966 shares of our common stock were issued and sold pursuant to the Cantor Sales Agreement, all during the second quarter of 2025, and we received gross proceeds of $17.3 million, or $16.4 million in net proceeds after the Cantors’ commissions and direct offering expenses of $0.8 million. As of September 30, 2025, $26.4 million remained available for sale under the Cantor Sales Agreement.

Note 10. Commitments and Contingencies

Lease and other information

The Company has entered into operating leases primarily for office and laboratory space. Lease cost amounts included in the measurement of lease obligations and other information related to non-cancellable operating leases were as follows (in thousands):

(1) The Company hadno variable lease costs.

As of September 30, 2025, our maturity analysis of annual undiscounted cash flows of the non-cancellable operating leases are as follows (in thousands):

Legal Proceedings

We may be involved in legal actions in the ordinary course of business, including inquiries and proceedings concerning business practices and intellectual property infringement, employee relations and other claims. We will recognize a loss contingency in the consolidated financial statements when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. We will disclose any loss contingencies that do not meet both conditions if there is a reasonable possibility that a material loss may have been incurred. Gain contingencies are not recorded until they are realized.

We are currently not a party to any material pending litigation or other material legal proceedings that management believes could have a material adverse effect on our financial statements.

Indemnifications

We are required to recognize a liability for the fair value of any obligations we assume upon the issuance of a guarantee. We have certain agreements with licensors, licensees and collaborators that contain indemnification provisions. In such provisions, we typically agree to indemnify the licensor, licensee and collaborator against certain types of third-party claims. The maximum amount of the indemnifications is not limited. We accrue for known indemnification issues when a loss is probable and can be reasonably estimated. There wereno accruals for expenses related to indemnification issues for any periods presented.

Note 11. Debt

Innovatus Loan Agreement

On February 13, 2024 (the “Closing Date”), we entered into afive-year term loan and security agreement (the “Loan Agreement”) with Innovatus Life Sciences Lending Fund I, LP (“Innovatus”), an affiliate of Innovatus Capital Partners, LLC, for an aggregate principal amount of up to$40.0 million funded intwo tranches with a maturity date of February 13, 2029 (the “Innovatus Loan”). The first tranche of$30.0 million was funded on February 13, 2024 and the second tranche of$10.0 million was funded on June 27, 2025 upon achievement of certain milestones including certain pre-specified revenue thresholds. Both tranches were subject to a payment of a facility fee equal to 1.00% of the amount of such term loan.

The floating per annum interest rate of the Innovatus Loan is equal tothe sum of (a) the greater of (i) prime rate published in the Money Rates section of the Wall Street Journal and (ii)7.50%, plus (b)3.25%; provided that, at the election of the Company, up to 2.0% of such rate shall be payable in-kind until the third anniversary of the Closing Date. The Company is required to make monthly interest-only payments through February 1, 2027, with the ability to extend the interest-only period through February 1, 2028 upon the achievement of certain pre-specified financial milestones. Following the interest-only period, the Company is required to make monthly amortizing payments, with the remaining balance of the principal plus accrued and unpaid interest due at maturity. For the first three years of the term,2.0% of the interest is payable in-kind by increasing the principal balance. Prepayments of the loan, in whole or in part, will be subject to an early prepayment fee which ranges between 3.0% and 1.0% and declines each year until the third anniversary date of the Closing Date, after which no prepayment fee is required. The Company is also required to pay an exit fee upon any payment or prepayment equal to 3.0% of the aggregate principal amount of the tranches funded under the Innovatus Loan.

The Innovatus Loan contains customary representations and warranties and covenants, subject to customary carve outs, and includes financial covenants related to liquidity and net product revenue, with the latter beginning with the period ended September 30, 2024. The Innovatus Loan is secured by perfected first priority liens on the Company's assets, and the Loan Agreement includes a negative pledge by the Company which prohibits the Company from permitting liens to be placed upon the Company's intellectual property in favor of any party other than Innovatus.

In connection with the funding of the first tranche of the Innovatus Loan in February 2024, we recorded a debt discount of$1.3 million and capitalized debt issuance costs of$0.6 million during the first quarter of 2024. Additionally, in connection with the funding of the second tranche of the Innovatus Loan in June 2025, we recorded a debt discount of$0.1 million during thesecond quarter of 2025. The discount and issuance costs will be amortized over the life of the Innovatus Loan. Interest expense for the Innovatus Loan for thethree and nine months ended September 30, 2025 was$1.3 million and $3.2 million, respectively, and for the three and nine months ended September 30, 2024 was $1.0 million and $2.5 million, respectively. This is inclusive of non-cash amortization of the debt discount, debt issuance costs, payable in-kind interest, and accretion of final payment. The carrying amount of the Innovatus Loan approximates fair value given the interest rate is based on the current prime rate. The effective interest rate for the Innovatus Loan was 12.7% as of September 30, 2025.

Additionally, in connection with entering into the Innovatus Loan, we entered into a Warrant Agreement with Innovatus on February 13, 2024 and issued to Innovatus a warrant to purchase an aggregate of 424,028 shares of the Company’s common stock at an exercise price of$2.83 per share. The warrants may be exercised on a cashless basis, and are immediately exercisable through the 10th anniversary of the issuance date. At the time of issuance, the Company determined the estimated fair value of the warrants of$0.9 million using the Black-Scholes model. As the warrants represent a freestanding equity instrument, the Company recorded the fair value of the warrants in additional paid-in capital during the first quarter of 2024.

The Company accounts for the amortization of the debt discount and issuance costs utilizing the effective interest method. Long-term debt consisted of the following at September 30, 2025 (in thousands):

The future principal payments under the Innovatus Loan are as follows (in thousands):

Note 12. Segment, Geographical and Other Revenue Information

Segment Information

We manage our business asone reportable segment. The Company's operations are managed and reported to the CODM on a consolidated basis. The CODM uses consolidated income (loss) from operations and net income (loss) to assess financial performance and make resource allocation decisions. These financial measures are used by the CODM to balance short-term financial results with long-term strategic goals, guiding the allocation of budget between product costs, research and development expenses, and general, selling and administrative expenses.

Significant Customers

Customers that each accounted for 10% or more of our total revenues were as follows:

Customers that each accounted for 10% or more of accounts receivable balances as of the periods presented as follows:

Identifiable long-lived assets by location was as follows (in thousands):

Note 13. Subsequent Events

In October 2025, we entered into an enzyme supply assurance agreement with Merck Sharp & Dohme LLC (“Merck”) for enzymes used by Merck for pharmaceutical manufacturing. Pursuant to the terms of the agreement, we are entitled to receive a one-time non-refundable and non-creditable payment of $37.8 million, which is expected to be received during the fourth quarter of 2025.

On November 6, 2025, in alignment with our enhanced strategic focus, we publicly announced that we are implementing a workforce reduction of approximately 24%. This measure was implemented in support of the Company’s organizational streamlining to focus on our ECO Synthesis platform. We expect that the payment of post-employment benefits to impacted employees, as well as the payment of other expenses such as related tax costs, will result in the recognition of an additional expense of approximately $3.5 million. We anticipate this expense will be recognized in the fourth quarter of 2025 and paid primarily during the same period. We expect the workforce reduction to be substantially completed by January 2026. These charges that we expect to incur are subject to a number of assumptions, including legal requirements in applicable jurisdictions, and actual expenses may differ materially from the estimates disclosed above.