Cibus, Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Calyxt's second quarter 2020 results conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. If you have a question, please press the star key followed by the one on your touchtone phone. If you would like to withdraw your question, please press the star key followed by the two. Thank you and good morning. I'd like to thank

Thank you all for taking time to join us for Calyxt's second quarter 2020 business update and results conference call. Your hosts today are Jim Bloom, Chief Executive Officer, Bill Koschak, Chief Financial Officer, and Travis Fry, Chief Technology Officer. A press release detailing these results crossed the wires after the market closed yesterday and is available on the company's website, Calyxt.com. Before we begin the formal presentation, I'd like to remind everyone that statements made on the call and webcast Thank you for joining us today. each of which is posted on the Calyxt website at Calyxt.com. You will find additional disclosure regarding these non-GAAP measures. Reference to these non-GAAP financial measures should be considered in addition to GAAP financial measures and should not be considered a substitute for results that are presented in accordance with GAAP. Finally, this conference call is being webcast. The webcast link is in the investor relations section of our website at Calyxt.com. At this time, I would like to turn the call over to Calyxt Chief Executive Officer Jim Bloom. Jim, the floor is yours.

Thank you, Chris, and thank you for joining us today for CAELIC's second quarter 2020 results conference call. Before I address the second quarter and the exciting advancement of our soybean products to a streamlined business model, I would first like to acknowledge our response to the COVID-19 pandemic. We have a dedicated and resilient team that will continue to progress all our key projects through their development cycles throughout the second quarter, despite the impact of the pandemic. We have taken several actions to ensure the safety of our employees and our business, and I appreciate everything our team is doing to help ensure we stay safe and our projects remain on track. Calyxt was created with a mission to deliver disruptive plant-based innovations with an initial focus on food and agriculture. With our hyaluronic soybean product, we were the first company to successfully deliver a proof of concept for food developed with gene editing technology. The success we achieved with this product has been amazing and represents a key milestone achievement for everyone at K-List. We quickly scaled up, and within 15 months of our early 2019 launch, are supplying some of the world's largest companies in their respective industries. Having achieved proof of concept and pioneering regulatory success, we are advancing our go-to-market strategy for these products into a new commercialization program seeking to supply Calyxt's first product to large grain processors for their own soybean processing businesses. The first step in this new program is a sale of 300,000 bushels of soybeans to one of the world's largest processors. With this sale, the processor purchased our grain and we will market the meal. Moving upstream in this business enables us to capture greater value from our soybean product line sooner as we intend to partner with processors on the sale of seed and for the launch of future soybean product candidates. Finally, this transition focuses my management team on developing and capturing greater value from high-value innovations and plant-based solutions with substantial disruption potential. Our soybean product line is important to the success of Calyxt. It enabled much of what we are working on today that Travis will comment on later. A quick recap of the status of the soybean product line is as follows. Final 2020 planted acres were nearly 72,000 acres, representing a doubling of acres from the total planted in 2019. We have doubled acres three years in a row, demonstrating there is demand for products generated from our soybeans. In 2021, we intend to target seed sales to large grain processors, representing at least $3 million to $4 million in expected revenue, as seed transactions will be revenue generating under the new go-to-market strategy. One of the world's largest processors has purchased 300,000 bushels of calyx soybeans which represents a significant portion of the June 30, 2020 inventory, and the processor will retain the rights to process and sell the resulting soybean oil, while Calyxt will purchase and market the resulting soybean meal. We similarly aim to sell our remaining grain inventories and the grain that we are contracted to purchase from the 2020 crop year to large processors. Additionally, the talent mix for the next stage of our business must be adjusted, and positions related to soybean processing and product sales are being eliminated. I would like to thank the Calyxt employees we separated yesterday. All of them helped us build a first-of-its-kind business in the United States. Their contributions are valued, and I wish them well in their future endeavors. We expect upfront aggregate cash charges of approximately $0.6 million for severance and other related payments, and we expect to record a $0.9 million recapture of non-cash stock compensation expense from forfeitures of unvested awards. We also expect to incur $0.5 million of additional cash charges over the next 12 months as we exit processing and transportation contracts. Most of the transition expenses will be recorded in the third and fourth quarters of 2020. The effective execution of our go-to-market soybean strategy decreases cash used by our soybean product line by over $45 million through 2022 and extends our cash runway into 2022. From our original focus on food and agriculture, Today our innovations have applications across the broad spectrum of industries. To drive value for our talent technology platform, our strategic focus is on traits with higher margin downstream benefits for end users, differentiating us from others who are focused on traits developed to provide distinct benefits to the farmer. However, I do expect the scientific advisory board announced today will offer ideas that could benefit growers and consumers over time. We will evaluate those along with other potential projects and prioritize those with the most attractive returns. Our commercial proof of concept, our strong intellectual property portfolio, and our position as a leader in gene editing has led us to extensive talks with top companies across several industries, including food, pharmaceutical, Thank you. Thank you. Thank you. By leveraging our partners' commercialization capabilities, this model will reduce our cash needs and enable efficient market penetration of calyx traits. We are well positioned to establish licensing arrangements based on our talent technology, expertise in trait development, and leading know-how in gene editing field. Strategic licensing arrangements provide an opportunity for broad market penetration of our technology while we can achieve milestone or royalty payments through our licensees commercialization efforts. For product development activities, our specific entry point into the value chain may vary by crop depending on several factors. In crops like soybeans and wheat, we expect that the sale of seed to processors or other supply chain participants will provide the highest available margins and best path to delivering positive cash flow. For certain traits, we expect licensing arrangements to provide an efficient path to non-dilutive financing and potential revenue generation. With this, I would like to hand the call over to Travis Fry, our Chief Technology Officer, for an update on our commercial pipeline. Thank you, Jim.