Woburn, Massachusetts, USA
March 9, 2022
Near-term commercial focus on the Renewable Diesel market
Yield10 Bioscience, Inc. (Nasdaq:YTEN) ("Yield10" or the "Company"), an agricultural bioscience company, today reported financial results for the three and twelve months ended December 31, 2021.
"In 2021 we executed against our strategic plan to position Camelina as a commercial platform crop for the production of low-carbon petroleum replacements and food products," said Oliver Peoples, Ph.D., Chief Executive Officer of Yield10 Bioscience. "We made solid progress as we focused on activities to position Yield10 to be able to launch and commercialize Camelina as a platform crop to supply low-carbon feedstock oil for the renewable diesel market. In addition, we advanced development of PHA bioplastics in Camelina. These products are aligned with decarbonizing transportation fuels and achieving zero plastic waste. Progress was also made on expanding the patent position and mapping out the regulatory strategy for the Camelina omega-3 (DHA+EPA) nutritional oil. This sustainable fish oil replacement product together with the high protein meal co-product from Camelina seed processing represent significant additional market opportunities aligned with global trends in sustainability, health and wellness, and food security.
"Yield10 achieved significant momentum in early 2022 that we anticipate continuing through the course of the year. Our commercial team is engaging with potential supply chain participants in the renewable diesel market while starting outreach to growers to produce Camelina seed and oil under contract. Together, these activities will enable our vision of establishing a 'capital light' low-carbon Camelina feedstock oil business.
"Furthermore, our research and development team continues to be highly productive advancing the discovery and development of novel seed yield and oil content performance traits, as well as deploying well-established herbicide tolerance traits and pest resistance traits into our Elite Camelina germplasm. Our goal is to develop and launch our differentiated Elite Camelina varieties which demonstrate economic value and attract grower interest to access increasing acreage over time," said Peoples.
Recent Accomplishments
- Establishing commercial capabilities: Yield10 named Darren Greenfield as senior director of seed operations in early 2022. He joined the Company from BASF Canada and brings more than 25 years of experience with major agriculture companies managing the development and commercial production of proprietary canola plant varieties.
- Highlights of 2021 spring field test program: Yield10 recently announced field test results showing that C3020 tested in Camelina and C3007 tested in canola produce increases in seed oil content of up to 9 percent and 5 percent, respectively. Camelina line E3902 showed a consistent 5 percent increase in oil content as a percentage of seed weight over control plants and seed scale up activities are continuing over winter 2021/2022. Yield10 also reported that PHA C3015 Camelina lines produced PHA at 6 percent of the total seed weight. Yield10 also collected performance data on more than 20 base germplasm varieties, and confirmed herbicide tolerance in a Camelina line sourced from a third party.
- Advancing 2021/2022 winter season field testing and seed scale up: Yield10 is performing seed scale up for Camelina line E3902 as well as two winter Camelina lines to enable larger acreage planting. Yield10's DH12 spring variety as well as Camelina line E3902 were planted to determine if winter planting in certain areas of the U.S. could be viable for these spring lines. The harvest of seed from sites in the U.S. and Canada is expected in second quarter 2022.
- Planning for 2022 field test program and seed scale up underway: Yield10 plans to continue scaling up spring and winter varieties of Camelina suitable to produce low-carbon feedstock oil for renewable diesel. The Company also plans to test several performance traits, conduct initial testing of a herbicide tolerance trait in Camelina line E3902, and to scale up our prototype Camelina PHA line for process development and product sampling.
COVID-19 Impact on Operations. The Company has implemented business continuity plans to address the COVID-19 pandemic and minimize disruptions to ongoing operations. To date, despite the pandemic, Yield10 was able to move forward with the operational steps required to execute its 2021-2022 winter field trials in Canada and the United States. However, it is possible that any potential future closures of research facilities, should they continue for an extended time, or delays in receiving supplies and materials needed to conduct field trials and research, or economic repercussions of the pandemic or other geopolitical uncertainty, such as the ongoing conflict between Ukraine and Russia, could adversely impact the Company's anticipated time frames for evaluating and/or reporting data from our field trials and other work we plan to accomplish during 2022 and beyond.
FULL YEAR AND FOURTH QUARTER 2021 FINANCIAL OVERVIEW
Cash Position
Yield10 Bioscience is managed with an emphasis on cash flow and deploys its financial resources in a disciplined manner to achieve its key strategic objectives.
The Company used $9.3 million in cash for its operating activities during the year ended December 31, 2021 in comparison to $8.7 million used for operating activities during the year ended December 31, 2020. During early 2021, Yield10 raised $12.7 million, before issuance costs of $0.7 million, in an underwritten public securities offering of 1,040,000 shares of common stock and received additional cash of $3.9 million from investors who exercised 481,973 warrants issued in the Company's November 2019 securities offering. As a result, the Company ended 2021 with $16.0 million in unrestricted cash and cash equivalents in comparison to a balance in unrestricted cash and cash equivalents of $9.7 million as of December 31, 2020. The Company anticipates total net cash usage during the year ended December 31, 2022 in a range of $12.0 - $12.5 million as it continues its controlled growth to support initial Camelina commercialization activities. Yield10's present capital resources are expected to fund its planned operations and to meet its contractual obligations into the first quarter of 2023.
Operating Results
Research grant revenue for the year ended December 31, 2021 was $0.6 million in comparison to grant revenue of $0.8 million recorded in the previous year. Research and development expense was $6.2 million during the year ended December 31, 2021 compared to $5.4 million recorded for the year ended December 31, 2020. General and administrative expenses were $6.1 million and $5.0 million for the years ended December 31, 2021 and 2020, respectively.
Yield10 reported a loss from operations of $11.7 million for the full year 2021 as compared to a loss from operations of $9.6 million in 2020. For the year ended December 31, 2021, the Company reported a net loss after taxes of $11.0 million, or $2.33 per share, in comparison to a net loss after taxes of $10.2 million, or $4.30 per share, during the year ended December 31, 2020.
Research grant revenues were $0.2 million for each of the fourth quarters of 2021 and 2020. Research and development expense increased by $0.2 million from $1.4 million in the fourth quarter of 2020 to $1.6 million in the fourth quarter of 2021. General and administrative expenses also increased during the fourth quarter of 2021 by $0.1 million to $1.5 million in comparison to the fourth quarter of 2020.
Yield10 reported a loss after taxes of $3.0 million for the fourth quarter of 2021, or $0.61 per share, compared to a loss after taxes of $2.6 million, or $0.79 per share, in the fourth quarter of 2020.
Other Income (Expense)
Included within other income (expense) during the Company's year ended December 31, 2021 is an investment gain of $0.7 million from the surrender of its preferred shares in Tepha, Inc., a related party, as a result of Tepha's merger with Becton Dickinson. During the year ended December 31, 2020, other income (expense) included a non-cash charge of $1.0 million resulting from a change in the fair value of its warrant liability and the receipt of $0.3 million in loan proceeds received in connection with a Paycheck Protection Act Loan issued and forgiven under the Coronavirus Aid, Relief and Economic Security Act.
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