Woburn, Massachusetts, USA
May 10, 2023
- Executing commercial strategy for elite Camelina in the biofuels market
- Met target for 2023 contracted spring Camelina acres
- Permitting complete, planting underway for spring seed scale-up and field testing program
- Management will host a conference call today at 4:30 pm (ET) to review financial results and provide a corporate update
WOBURN, Mass., May 10, 2023 (GLOBE NEWSWIRE) -- Yield10 Bioscience, Inc. (Nasdaq:YTEN) ("Yield10" or the "Company"), an agricultural bioscience company, today reported financial results for the first quarter ended March 31, 2023.
"We remain focused on executing our commercial strategy with an emphasis on positioning elite Camelina as a source of low-carbon intensity feedstock oil for the biofuels market," said Oliver Peoples, Ph.D., President and Chief Executive Officer of Yield10 Bioscience. "I am pleased to report that we have met our target for 2023 contracted spring Camelina acres with growers in the U.S. and Canada. Our contracted 2022/2023 winter Camelina crop showed excellent cold tolerance over the season and is resuming its growth cycle driven by the arrival of warm weather. We expect harvest of both crops during the third quarter of 2023, and are committed to matching our grower contracts with Camelina grain offtake contracts. We anticipate the first grain revenue from our Camelina products business in the fourth quarter of 2023.
"There is considerable interest in Camelina as a feedstock oil for biofuels and we continue to engage with interested parties. Our plan is to build a network of alliances across the value chain to enable the production of Camelina feedstock oil for the biofuel market. We recently signed a non-binding Letter of Intent ("LOI") with Marathon Petroleum ("MPC") for an investment and offtake agreement and discussions around terms for definitive agreements are in progress. Earlier this year we signed Memorandum of Understanding agreements ("MOUs") with Mitsubishi and American Airlines driven by their respective interest in Camelina feedstock oil for use in sustainable aviation fuel. In addition, earlier this year we signed an agreement with a third party crusher/refiner as a regional customer for Camelina grain offtake.
"We are rapidly advancing the next generation of elite Camelina varieties engineered for herbicide tolerance to provide farmers with weed control while seamlessly integrating with their crop rotations. Our efforts also extend to seed scale-up activities for spring E3902-HT Camelina. Currently, we are conducting field tests at 13 sites for several traits including broad leaf herbicide tolerance, stacked herbicide tolerance (broad leaf and soil residual), as well as performance traits for seed yield and oil content. We will conduct our first field testing and seed scale-up of EPA omega-3 Camelina to enable larger-scale planting.
"We are making demonstrable progress on the commercial front engaging with growers and biofuel industry players. We are also rapidly advancing the development of elite herbicide tolerant Camelina varieties that will enable new revenue-generating options for farmers. We look forward to continuing to build value and report on our progress across our Camelina products business in 2023," concluded Dr. Peoples.
Recent Accomplishments
Recent progress by Yield10 is underscored by several key milestones achieved since the start of 2023.
- Signing grower contracts for Camelina: Yield10 has met its internal target for contracted spring Camelina acres based on good interest from growers in a variety of locations in the U.S. and Canada. These farmers will be growing Camelina on a scale of 45 to 200+ acres. Recent visits to farms participating in our winter 2022/2023 grower contracts indicate that the crop demonstrated impressive cold tolerance during the winter season, even in areas with little to no persistent snow cover. Harvest of Camelina grain under these contracts is expected in the third quarter of 2023. Yield10 continues to build awareness for the benefits of growing Camelina and to identify growers for the 2023/2024 winter Camelina contracts.
- Building the supply chain for biofuels: Yield10 continues to conduct discussions with industry players across the biofuel supply chain. In May, Yield10 announced signing a non-binding LOI with MPC for a potential investment and offtake agreement for low-carbon intensity Camelina feedstock oil for use in renewable fuel production. In connection with the execution of the LOI, Yield10 issued to MPC Investment, LLC, an affiliate of MPC, a senior unsecured promissory note in the original principal amount of $1.0 million.
- Controlling weeds is critical to large-scale production of Camelina: Yield10 researchers are executing a program to deploy herbicide tolerance ("HT") technology in Camelina to enable robust broad-leaf weed control and to tolerate the effects of other herbicide residues sometimes present in soil. In the first quarter of 2023, filings were made with U.S. regulatory authorities for herbicide tolerant Camelina. Yield10 filed Request for Status Review packages under the SECURE Rule with USDA-APHIS for stacked herbicide tolerance traits in Camelina. Yield10 also supported the filing of a label amendment with the U.S. Environmental Protection Agency ("EPA") to expand the label of a broad leaf herbicide to include usage in Camelina.
- Producing omega-3 oil in Camelina represents a significant market opportunity: Camelina is an excellent platform for producing omega-3 oils as a sustainable alternative to the stagnating harvest of ocean fish. Yield10 is advancing development of Camelina lines to produce the EPA component of omega-3, conducting field trials and seed scale-up activities, and expects to engage in commercial discussions with potential customers for this high-value specialty oil in 2023.
FIRST QUARTER 2023 FINANCIAL OVERVIEW
Cash Position
Yield10 is managed with an emphasis on cash flow and deploys its financial resources in a disciplined manner to achieve its key strategic objectives.
Yield10 ended the first quarter of 2023 with $1.8 million in unrestricted cash and cash equivalents; a net decrease of $2.5 million from unrestricted cash, cash equivalents and investments of $4.3 million reported as of December 31, 2022. The Company used $2.7 million in cash for its operating activities during the three months ended March 31, 2023, in comparison to $3.1 million used for operating activities during the first three months of 2022, the decrease reflecting efforts by the Company to carefully manage its cash resources. The Company reduced its total net cash usage guidance for the year ended December 31, 2023 to a range of $12.5 - $13.0 million, as it better aligns resources to its efforts to further develop and commercialize its Camelina plant varieties for the biofuel, omega-3 food and feed, and PHA bioplastic markets. Cash usage for operating activities will support seed scale-up and other pre-commercial Camelina production activities, employee compensation and benefits, and further expansion of the Company's crop trial programs.
In connection with the MPC LOI, the Company sold and issued to an affiliate of MPC a senior unsecured convertible note in the principal amount of $1.0 million, the funds of which have been received. Also during early May, the Company closed on a $3.0 million offering of its common stock (or prefunded warrants in lieu thereof), in a registered direct offering and concurrent private placement, receiving $2.7 million in cash proceeds after issuance costs.
Operating Results
Research grant revenue was consistent at $0.1 million for the three months ended March 31, 2023 and March 31, 2022. As of March 31, 2023, the Company's five-year sub-award with Michigan State University in support of a U.S. Department of Energy funded grant was completed with no further grant revenue to be recognized. Research and development expenses were $2.2 million during the first three months of 2023 compared to $1.8 million during the first three months of 2022. General and administrative expenses remained at $1.7 million during both the three months ended March 31, 2023 and March 31, 2022.
Yield10 reported a net loss after taxes of $3.8 million for the quarter ended March 31, 2023, or $0.76 per share, as compared to a net loss after taxes of $3.3 million, or $0.68 per share, for the quarter ended March 31, 2022.
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