Yield10 Bioscience, Inc.

Welcome to the third quarter 2020 Financial Results and Business Update conference call for YIELD 10 Bioscience. During the call, participants will be in listen-only mode. The presenters will address questions from analysts today. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to your host, YIELD 10 Vice President of Planning and Corporate Communications, Lynn Brum.

Thank you, Jesse, and good afternoon, everyone. Welcome to the YIELD 10 Bioscience third quarter conference call. Joining me on the call today are President and CEO, Dr. Oliver Peoples, Vice President of Research and Chief Science Officer, Dr. Christy Snell, and Chief Accounting Officer, Chuck Hazzor. Earlier this afternoon, YIELD 10 issued our third quarter 2020 financial results press release. We also issued a press release announcing our collaboration with Rothamsted Research on omega-3 oils. These press releases, as well as slides that accompany today's presentation, are available on the investor relations events section of our website at EL10bio.com. Let's now turn to slide two. Please note, as part of our discussion today, management will be making forward-looking statements. These statements are not guarantees of future performance, and therefore, you should not place undue reliance on them. Investors are cautioned that statements that are not strictly historical constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause the actual results to differ materially from those anticipated. These risks include risks and uncertainties detailed in Yield 10's filings with the SEC, including the company's most recent 10-K. The company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this conference call. I'll turn the call over to Ali.

Thanks, Lynn. Good afternoon, everyone, and thanks for joining our call. Today, we will provide an update on the strong progress we have made toward achieving our 2020 R&D and business objectives, including our collaboration with Rothenstead Research for Technology enabling production of DHA, EPA, omega-3 oils for use in agriculture. Christy will then highlight our recent R&D activities. I'll then review the financials and summarize our key milestones for 2020 and beyond. We will then open the call to questions from analysts. Now let's turn to slide three, our business profile. U10 is an agricultural bioscience company focused on developing innovations for sustainable food security. We bring a new approach to trade discovery, Our platform, the Trait Factory, leverages 30 years of investment and innovation in advanced synthetic biology to enable efficient identification and validation of genetic changes referred to as traits to increase performance and productivity of crops. We have four world leaders in major crops developing their traits and their seeds and at their cost and risk under research license agreements. Our Carolina oilseed program is not only core to our trait gene discovery process, but a crop with high potential in its own right. We are developing commercial camelina varieties as a platform crop for our specialty products business focused on nutritional oils and PHA biomaterials. We also continue to increase our patent position. We have a strong leadership team and have operations in Woburn, Massachusetts and Saskatoon, Canada. Now let's turn to slide four, our market opportunity. We see a compelling market opportunity for our business based on our focus on crop traits driven by four key global trends. These are global food security, with increasing overall demand and the rise in protein consumption, health and wellness, where consumers are seeking improved nutritional profiles, aquaculture as an increasingly important source of protein and essential omega-3 oils, and sustainable growth metrics, where value chain security and climate change impact are key, and which we believe can be monetized with cost-competitive products. Each of these trends are addressed by Yield 10 to position the company for growth and success. Now let's turn to slide five, our recent accomplishments. We've made considerable progress since our call in August. We strengthened our balance sheet with the raise of $5.7 million in gross proceeds in a public offering and concurrent private placement of common stock. We completed harvest of all sites in our 2020 field testing program. We are progressing our traits in corn and canola, building a package of data as a basis to seek research license partners for each. We also took additional steps to advance the camelina business plan. We completed harvest of 50 acres of wild-taught camelina in Montana. We began a field test of our winter camelina varieties in the US and Canada for the 2020-2021 winter season. And we signed a collaboration agreement with Rothamsted Research for the development of DHA and EPA omega-3 oil technology in camelina. Now let's turn to slide six for more detail on Rothamsted. Rothenstead is a world-leading nonprofit and is the premier longest-running agricultural research institute in the world. They are based in the UK, and they have made numerous contributions to modern agriculture. They're also home to a world-leading late-stage research program for producing omega-3 oils containing the fatty acids DHA and EPA sustainably in Camelina sativa, research championed by Professor Jonathan Napier. We have signed an exclusive research collaboration and a two-year option to a commercial license to this important technology. The collaboration will support ongoing research at Rothenstead. Yield 10 will continue to focus on development of elite camelida germplasm as a foundation for future potential oligotrie oils and PHA biomaterial commercial lines. We anticipate their work will include the continued improvement of oligotrie oil composition, field testing, and feeding studies in salmon. The key objective is to support Rothamsted's research as they continue to advance the DHA EPA omega-3 trait, optimized as a drop-in replacement for suburban hemisphere fish oil. This is a competitive space, so it's no surprise that the pattern of landscape and fish oil replacements from oilseeds is complex in North America. Going forward, we will provide more details on the competitive landscape, even as we reach out to other parties in the space. In our communications going forward, we will provide more detail on the competitive landscape. Rothenstead recently published a review of the growing need and potential of this opportunity. In the near term, we will focus our business developments in South America. The DHEA and EPA Omega-3 technology developed at Rothenstead based on advanced metabolic engineering and synthetic biology matches our R&D expertise and our Camelina business plan. I'm going to look forward to having a productive and successful collaboration and bringing forward land-based sustainable production of DHA, EPA, omega-3 oils for use in agriculture. Now let's turn to slide seven, and the market opportunities for DHA, EPA, omega-3s in farmed salmon. The Rotherstad technology could play a significant role in salmon farming as a sustainable source of DHA, EPA, omega-3 oil. The chart on the left shows the growth of harvest-free salmon over the last decade. In the most recent years, farmed salmon represents about two-thirds of the harvest, Overall, salmon represents about 2% of global protein consumption, and it's a key source of DHA, EPA, omega-3s, and essential human nutrients. Salmon production and consumption is poised to grow considerably in years to come. One reason for this, as you can see in the chart on the right, salmon has good feed conversion efficiency, that is, pounds of feed needed to produce a pound of meat. This will be a key driver as the need for protein sources rises with increasing global demand. Another driver is that the industry has acknowledged that harvesting small fish in the ocean as a source of fish oil omega-3s is unsustainable, and overfishing is already a problem. Therefore, developing land-based, plant-based sources of DHA, EPA, omega-3s is a critical need, and camelina is very well suited as a platform crop for the production of this oil. One of our near-term market opportunities for camelina oil, based on the high level of the omega-3 fatty acid ALA, is as a supplement for fish oil and aquafeed. YOTEN is developing this as a basis for establishing commercial operations, basically phase one for building our Camelina business, and a useful interim solution with a drop in replacement fish oil being phase two. Now let's turn to slide eight, a timeline of the Rothamsted Omega-3 program. Over the last several years, the Rothamsted team has advanced the DEHEA EPA Omega-3 program to a high technology readiness level. From 2017 to 2019, based on genetic work started in 2012, the team field tested numerous events deployed in Camelina in good-sized pilot trials and demonstrated production of DHA and EPA omega-3s in the seed oil. Further, the team tested the oil in several feeding studies, including salmon, sea bass, and trout, to demonstrate that the metabolism of plant-produced oil product closely mimics harvested fish oil. This work was conducted and, in some cases, published with academic collaborators having links to the agriculture industry. In 2020, Rothenstead conducted additional field tests of DHA, EPA, Omega-3, Camelina wine, which have been harvested and data is currently being evaluated. The team plan to conduct feeding trials on salmon and trout this year, but the start of the studies has been postponed due to COVID. This foundational work has positioned the program in the late stage of research, and the activities planned under the collaboration with yield time are intended to position it for commercial development. Here, the objective will be to further optimize the omega-3 oil composition to achieve DHA, EPA, fatty acid levels to mimic southern hemisphere fish oil for future commercialization, including obtaining regulatory approval for the plant and the plant product. Now, let's turn to slide nine on the sequential launch of the Catalina products business. The DHA EPA Omega-3 technology fits neatly into our camelina business plan. We're developing camelina as a platform crop, developing advanced camelina traits, and elite camelina germplasm. The general business is focused on natural camelina oil for a range of uses, edible oil, agriculture, and animal feed. The DHA EPA Omega-3 technology opens up the market opportunity for a sustainable, highly differentiated product for growers and feed producers. We are leveraging all of this technology as we work on technology development for producing PHA, bio-materials, and cavalier. Taken together, we see a progression of the technology with the market opportunities. Now let's turn to slide 10, trade progression in major crops. The best way for Yield10 to capture value from our trades in the large acre of commercial crops like soybean, corn, and canola is through licensing to leading seed companies who dominate the space. YIELD-10 has executed four non-exclusive research license agreements with ag majors to progress their trade to specific crops, with the option to negotiate a commercial license. The arrows in this slide indicate the term of the research license agreement. We highlighted the new license of GDM in our August call. The work is underway to deploy our trade to NIRN germplasm, and ongoing work is progressing by Bayer, Forrest, Genetics, and Simplot. We are currently progressing key trades in corn and canola, But we plan to identify partners for these important North American commercial crops as we focus our internal resources in trait discovery and camelida development. I'll now turn the call over to Christy.