Camelina firm Yield10 Bioscience reports net loss of $7.5 million for 1st half of 2023

Yield10 Bioscience Inc. reported financial results Aug. 14 for the three and six months ended June 30.

“The first half of 2023 was productive for Yield10 as we demonstrated significant progress toward building our value chain for broadly commercializing camelina as a platform crop to produce low carbon-intensity feedstock oil for the biofuel market,” said Oliver Peoples, president and CEO of Yield10. “We continue to engage with potential supply-chain and customer prospects in the biofuel space, including ongoing discussions with Marathon Petroleum and Mitsubishi with the goal of finalizing camelina-oil offtake and investment agreements.

“We have supported our camelina growers throughout the season and anticipate harvesting all contracted acres across the U.S. and Canada over the coming weeks. I am pleased to report that we are seeing a building momentum in new interest, as well as repeat interest, among growers for participation in our upcoming 2023-’24 winter-camelina grower-contracting program.

“Our research team recently reported positive results in the first field test of stacked herbicide-tolerance traits in spring camelina, setting the stage for broad adoption of the crop for production of biofuels. In the second quarter, we filed a request for regulatory-status review under USDA-APHIS’s SECURE rule covering stacked herbicide-tolerance traits in camelina. With the achievement of these key milestones, we remain firmly on track to develop and commercialize stacked herbicide-tolerant spring and winter camelina varieties. We anticipate the launch of our first commercial herbicide-tolerant spring camelina variety in 2025 with stacked herbicide-tolerant camelina varieties following soon after.

“In the second quarter, we filed a regulatory status review covering camelina designed to produce the eicosapentaenoic acid component of omega-3 oil. This spring, we planted omega-3 camelina at acre-scale in the U.S. to enable us to ramp-up our seed inventory for future planting as well as produce oil samples to support business-development activities. Producing omega-3 oils sustainably in camelina could address a significant market opportunity in animal feed and human nutrition.

“In the second half of 2023, our focus will remain on securing offtake agreements for the biofuel market, engaging growers to sign winter grower contracts, advancing our herbicide-tolerant and omega-3 camelina varieties toward launch, innovating to introduce high-value traits into camelina, and building shareholder value.”

Recent accomplishments

Executing on commercial camelina grower contracts for production of grain for the biofuel market:

• 2022-’23 winter—The harvest of winter camelina under grower contracts is well underway. The first delivery of camelina grain to a biofuel customer has been completed. This milestone is expected to produce Yield10’s first grain-product revenue and demonstrates the steps in its biofuel value chain spanning seed multiplication and planting, grain harvest and ultimately delivery of grain to a biofuel crusher/refiner customer.

• 2023 spring—The harvest of spring camelina under grower contracts is expected to take place through the end of August. Yield10 anticipates selling some of the grain for biofuel-feedstock oil and using some for the production for customer samples.

• 2023-’24 winter—Yield10 is engaging with growers in the U.S. and Canada who are interested in planting winter camelina for the 2023-’24 season. The company anticipates that contracts will be signed with growers and that winter seed will be planted by the end of the third quarter of this year.

Building the value chain for camelina offtake in biofuels: Yield10 continues discussions with Marathon Petroleum and Mitsubishi for potential investment and offtake agreements for low carbon-intensity camelina-feedstock oil for use in renewable fuel production.

Obtained positive field-test results for stacked herbicide-tolerant camelina to enable planting on large acreage: In the second quarter, Yield10 researchers initiated the first field tests of candidate E3902 spring camelina lines deployed with stacked herbicide-tolerance traits. These traits are intended to provide the plants with tolerance to the application of an over-the-top broadleaf herbicide for weed control as well as tolerance to soil residues of group 2 herbicides, specifically including tolerance to both imidazolinones and sulfonylureas. Group 2 herbicides are commonly used to manage weeds in cereal and other crop rotations and can persist in the soil for months following use. The initial field-test results show promising tolerance to both target-herbicide chemistries. Yield10 intends to harvest the plants and collect seed-yield and oil-yield data in the weeks ahead with the goal of selecting lead and back-up stacked herbicide-tolerant spring E3902 camelina lines for commercial development and seed scale up. Field tests for the first winter stacked herbicide-tolerant camelina lines are planned in the upcoming winter season.

Yield10 achieved a key regulatory milestone in the omega-3 program: In July, the company announced the filing of a request for a regulatory-status review with USDA-APHIS Biotechnology Regulatory Services under the SECURE Rule for proprietary elite camelina varieties containing genes enabling the plant to produce the eicosapentaenoic-acid component of omega-3 oil. In addition, in the second quarter, Yield10 planted omega-3 camelina at acre-scale in the U.S. to begin the ramp up of seed inventory for future planting as well as to produce oil for use in business development activities.

Strengthened the balance sheet with recent capital raise: On Aug. 11, the company priced a $3.7 million public offering of units consisting of one share of common stock and one warrant to purchase one share of common stock*.

Q2 financial overview

Cash position: Yield10 Bioscience said the company 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 second quarter with $2.3 million in unrestricted cash and cash equivalents; a net increase of $500,000 from unrestricted cash and cash equivalents of $1.8 million reported as of March 31. The increase in the company’s cash balance as of the end of the second quarter was the result of completing a registered direct offering of common stock and warrants that resulted in net proceeds of $2.7 million after issuance costs. Also during the quarter ended June 30 the company sold and issued a senior unsecured convertible note in the original principal amount of $1 million to a subsidiary of Marathon Petroleum.

Net cash used by operating activities during the second quarter was $3.1 million compared to $2.5 million used in the second quarter of 2022. The company continues to estimate total net-cash usage for the full year ended Dec. 31, 2022, in a range of $12.5 to $13 million as it better aligns resources 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 precommercial camelina-production activities, employee compensation and benefits, and further expansion of the company’s crop-trial programs.

Yield10’s present capital resources, including net funds to be received from its public offering that closed Aug. 15 are expected to fund the company’s planned operations into the fourth quarter. The company’s ability to continue operations after its current cash resources are exhausted is dependent upon its ability to obtain additional financing, including public or private equity financing, secured or unsecured debt financing, receipt of additional government research grants, as well as licensing or other collaborative arrangements.

Operating results: Yield10 did not record grant revenue during the three months ended June 30. As of March 31, the company’s work in support of its DOE sub-award with Michigan State University was completed with no further revenue to be recognized from the grant. Grant revenue for the second quarter of 2022 was $0.1 million. Research and development expenses remained consistent at $2 million during the three months ended June 30, 2023, and three months ended June 30, 2022. However, the company’s crop-trial expenses increased by $0.3 million during the second quarter, primarily as a result of fieldwork conducted to develop herbicide-tolerant camelina plant varieties. This increase in crop-trial expense was offset by a reduction in camelina-seed production costs of $0.3 million during the period. General and administrative expenses were $1.7 million and $1.5 million for the quarters ended June 30, 2023, and June 30, 2022, respectively. The increase of $0.2 million was the result of increases in professional legal and accounting fees and an increase in travel expense related to business development and camelina-commercialization activities.

Yield10 reported a net loss of $3.7 million for the quarter ended June 30, or 64 cents per share, as compared to a net loss of $3.4 million, or 70 cents per share, for the quarter ended June 30, 2022.

For the six months ended June 30, 2023, the company reported a net loss of $7.5 million, or $1.39 per share, compared to a net loss of $6.8 million, or $1.38 per share, during the six months ended June 30, 2022. Year-to-date grant revenue earned on the completed DOE sub-award with MSU totaled $0.1 million during the six months ended June 30, 2023, and $0.3 million during the six months ended June 30, 2022. Research and development expenses were $4.2 million and $3.8 million during the six months ended June 30, 2023, and June 30, 2022, respectively. General and administrative expenses were $3.4 million and $3.2 million during the six months ended June 30, 2023, and June 30, 2022, respectively.

*Editor’s Note: Yield10 announced Aug. 15 the closing of the $3.7 million public offering.