Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 14: SEGMENT REPORTING

The Company has determined that the Chief Executive Officer (“CEO”) is the Company’s chief operating decision maker (“CODM”) as the CEO makes decisions as it relates to allocation of resources and key market strategies. Prior to the Elo Transaction, the CODM reviewed financial results disaggregated by our therapeutics and food businesses. As such, prior to December 18, 2021, the Company operated in two reportable segments: Therapeutics and Food. The legacy Therapeutics segment included our development of products in the field of immuno-oncology and of novel products outside immuno-oncology to treat human diseases. The legacy Food segment focused on applying ARCUS to develop food and nutrition products through collaboration agreements with consumer-facing companies.

Following the Elo Transaction on December 17, 2021, in which the Company contributed substantially all of the assets of the Food segment to a newly formed entity, the CODM now reviews financial information presented on a consolidated basis and resource allocation and key market strategy decisions are made by the CODM based on consolidated results.

As such, the Company has concluded that following the Elo Transaction on December 17, 2021, the Company now operates as one segment. Given the Company was managed under the legacy segment structure of Therapeutics and Food for the majority of the year ended December 31, 2021, segment results for both Therapeutics and Food have been presented in this Annual Report on Form 10-K.  

Segment operating income (loss) is derived by deducting operational cash expenditures, net, from GAAP revenue. Operational cash expenditures are cash disbursements made that are directly attributable to the reportable segment (including directly attributable research and development and property, equipment, and software expenditures). The reportable segment operational cash expenditures

include cash disbursements for compensation, laboratory supplies, purchases of property, equipment and software and procuring services from CROs, CMOs and research organizations.

Certain cost items are not allocated to the Company’s reportable segments. These cost items primarily consist of compensation and general operational expenses associated with the Company’s executive, business development, finance, operations, human resources and legal functions. The Company does not allocate non-cash income statement amounts to its reportable segments, such as share based compensation, depreciation and amortization, intangible asset impairment charges, non-cash interest expense and losses on the disposal of assets. When reconciling segment operating loss to consolidated loss from operations, the Company makes an adjustment to convert the cash expenditures to the accrual basis to reflect GAAP.

All segment revenue is earned in the United States and there are no intersegment revenues. Additionally, the Company reports assets on a consolidated basis and does not allocate assets to its reportable segments for purposes of assessing segment performance or allocating resources.

Presented below is the financial information with respect to the Company’s reportable segments:

	For the Years Ended December 31,
(in thousands)	2021			2020
Revenue:
Therapeutics	$	111,723		$	21,863
Food		3,806			2,422
Total segment revenue		115,529			24,285
Segment operational cash expenditures:
Therapeutics	$	79,746		$	71,841
Food		7,635			7,587
Total segment operational cash expenditures		87,381			79,428
Segment operating income (loss):
Therapeutics	$	31,977		$	(49,978	)
Food		(3,829	)		(5,165	)
Total segment operating income (loss)	$	28,148		$	(55,143	)
Adjustments to reconcile segment operating loss to consolidated loss from operations
Corporate general and administrative cash expenditures	$	(33,096	)	$	(30,090	)
Interest income received included in segment operating loss		(186	)		(822	)
Depreciation and amortization		(8,981	)		(8,777	)
Share-based compensation		(16,514	)		(13,786	)
Loss on disposal of assets		(26	)		35
Non-cash interest expense		(59	)		-
Amortization of right-of-use assets		(1,216	)		(1,036	)
Adjustments to reconcile cash expenditures to GAAP expenses		(7,472	)		(209	)
Total consolidated loss from operations	$	(39,402	)	$	(109,828	)