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spk08: Welcome to the third quarter 2021 financial results and business update conference call for Yield 10 Bioscience. During the call, all participants are in a 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 is being recorded. I would now like to turn the conference over to your host, Yield 10 Vice President of Planning and Corporate Communications, Lynn Frum.
spk06: Thank you, Devin, and good afternoon, everyone. Welcome to the YIELD 10 Bioscience Third Quarter 2021 Conference Call. Joining me on the call today are President and CEO, Dr. Ollie Peoples, Vice President of Research and Chief Science Officer, Dr. Christy Snell, and Chief Accounting Officer, Chuck Hazzard. Earlier this afternoon, YIELD 10 issued our Third Quarter 2021 financial results. This press release, as well as slides that accompany today's presentation, are available on the Investor Relations Event website at yield10bio.com. Let's now turn to slide two. Please note that 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 also cautioned that statements that are not strictly historical constitute forward-looking statements, and 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 certainties detailed in YieldTen's filings with the SEC. The company undertakes no obligation to update any forelooking 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 Ollie.
spk01: Thanks, Lynn. Good afternoon, everyone, and thanks for joining our call. We've made strong progress during 2021 advancing YieldTen's business. Today, we'll provide an update on our recent accomplishments, review our target markets with an emphasis on biofuel feedstock oil, present the third quarter financials, and summarize key milestones. We will then open the call to questions. Now let's turn to slide three. Our innovation platform is centered around the oilseed camelina. We use our trade factory approach, applying the principles of synthetic biology to improve the performance of the crop. This includes taking more CO2 from the air to increase seed yield and oil content in the near term, and producing high-value proprietary seed products in the future. We believe that some of our varieties may also have the potential to sequester more carbon in the soil, as shown in the slide. Let's now turn to slide four. During this quarter, we continue to develop an Executor of Camelina business strategy, including outreach to potential partners in the areas of biofuel, food, and bioplastic to explore ways of working together to bring forward products produced in Camelina. We executed on our 2021 field test and stage scale-up activities and completed the harvest in the U.S. and Canada in third quarter. We're pleased to report that overall our plantings of camelina should show tolerance to heat in areas that experience weather challenges and that the trials were harvested for evaluation. As part of this program, we began scale-up of our two best camelina PHA lines. Because we prioritized seed analysis of these lines first, We are also pleased to report seed PHA levels consistent with the findings from our small scale planting last year. Successful completion of this seed scale up in 2021 enables acre scale planting in spring 2022. The data analysis from all of our other harvesting trials is still in progress and we expect to report additional findings in our plants for spring 2022 in the first quarter. As many of you know, we have also been developing winter varieties of camelina. We had a successful program last winter with good yields, and we have substantially completed planting for our 2021-2022 winter field testing and seed scale-up program in the U.S. and Canada. In our transition to an early commercial focus, we continued to add key hires, in particular to lead our seed operations and build out our commercial teams. In a quick recap of prior accomplishments this year, we expanded our trade portfolio with four new oil content trades using our grain platform, strengthened our balance sheet to extend our cash runway to achieve value building milestones into 2023, and extended our IP portfolio with four new patents awarded. Now let's turn to slide five. Although our technology development focus is on our camelina business, We'll try the results from our trades in camelina, not only adds value to camelina as a crop, but in addition allows us to create option value for our trades in other crops through trade licensing to major seed companies. Today, I'd like to focus on key accomplishments against the strategic goal to use camelina as a platform crop to produce feedstock oils in the near term, and I will provide an update on our EPA DHA omega-3 oils for food, as well as PHA bioplastics. Combined, we estimate a potential seed product revenue of over $4 billion by 2030. Let's turn to slide six. Our largest near-term opportunity is for supplying chamomile seed or oil into the growing renewable diesel market. Interest in renewable diesel or biodiesel remains high, as indicated by the large investment energy companies are making due to low carbon fuel regulations and the pressure to invest in cleaner technologies and reduce their carbon footprint due to climate concerns. Investments into biofuel production are creating a massive demand for vegetable oil feedstock, as shown on the chart. Renewable diesel biofuel production capacity is projected to grow to 5 billion gallons annually from an estimated 1 billion gallons this year. We believe Camelina represents a great solution to expand feedstock oil production in North America to support this demand. Let's turn to slide 7. Our commercial strategy in Elite Camelina is capital-like, one using contract farming, seed crushing, and customer offtake agreements. To establish a leadership position in Camelina, in the near term, we are prioritizing the development of Camelina lines with herbicide tolerance and disease resistance to enable large-scale acreage. Our performance traits for yield and oil will be stacked into these in the future. Developing Camelina for making pre-stocked oil for biofuel represents our best near-term commercial opportunity. I'll now turn it over to Christy to provide an update on our technical progress.
spk07: Thanks, Ali. Let's turn to slide eight. We are utilizing spring and winter varieties developed by our team in field testing and seed scale-up, and we believe these lines can be put into limited pre-commercial production for producing oil and meals for sampling. Our team has identified and in many cases tested more than 15 performance traits for camelina. The key to accessing and expanding acres for commercial production of oil and meal with these traits is deployment of herbicide tolerance. Growers will demand it, and controlling weeds is needed to meet expectations for agronomy and yield. In 2021, we began our herbicide tolerance program and continue to make good progress as we focus on our goal of stably deploying and verifying herbicide tolerance in our high oil E3902 Camelina and in our new winter varieties in 2023. When this is accomplished, we will be positioned to advance into pre-commercial seed scale-up. At the same time, we plan to make regulatory filings as we scale up seed production up to 1,000 plus acres. Our progression into commercial launch will be predicated on signing offtake agreements for oil. Launching both spring and winter varieties would enable revenue streams from two harvests per year in North America. Now let's turn to slide nine. Another way to increase the oil supply is to relay the winter camelina crop with soybeans, as illustrated on this slide. This has the potential to double the feedstock oil supply without impacting food production. It also provides sustainability benefits and then it provides protection for the soil. Now let's turn to slide 10. The main objectives of the program we are executing this winter are to continue seed scale up of line E3902 and our winter lines and to determine if winter planting in additional areas of the U.S. can be viable for camelina. E3902 is a CRISPR edited for oil content and produces a seed with a different color as compared to typical plants. You can see it on the slide. The seed color is more yellow than brown. Last year, E3902 showed a 5% increase in oil content in the field. We are still evaluating oil yield from our 2021 test, but we do know that the plants display good heat tolerance. Given the expected performance of E3902, We are moving ahead with contra-season scale-up in California, as well as testing small plots of E3902 in our DH12 spring line in five additional states, including Georgia and Texas. We have developed two winter lines, WDH2, which has shown good tolerance to cold, and WDH3, which is early maturing. These lines are undergoing seed scale-up in Saskatchewan and Idaho, respectively. If this program is successful, we will harvest seed to enable larger planning, verify expected yields with another season of data, as well as determine if the geographical reach of our winter and spring lines can be expanded into more southern and central regions of the U.S. during the contrast season. Ali, back to you.
spk01: Thanks, Christy. Let's now turn to slide 11. There's a large opportunity in the omega-3 fish oil market driven by reduced supply of oil from harvesting fish and growing demand in aquaculture feed and nutraceutical markets. We believe the land-based production of omega-3s is an important potential solution for this market. A year ago, we secured commercialization rights to the omega-3 camelina technology from the Rothamsted Institute in the UK. This technology was quite advanced in Camelina with multiple research field trials, as well as aqua feed and human clinical trial data generated using oil produced in those studies. As shown in the table, Camelina EPA DHA omega-3 product has clear potential to be the best in class across quality and composition, with around 20% combined DHA and EPA omega-3s plus a third omega-3 ALA. and represents a sustainable way to meet the international growth anticipated in this attractive market. Throughout 2021, we have worked with Professor Jonathan Napier to support his activities, as well as working internally on regulatory strategy and business development, with a focus in Argentina and in Chile, which produces around 30% of global farmed salmon. We continue to work on analysis of the genetics of the lead omega-3 lines from Rothamsted, to enable the development of a regulatory strategy, while fuel tests of our current lines are ongoing in Argentina. Pending priority on the regulatory path of the Rothamsted omega-3 trait, in the future, this will be stacked onto the elite tamburina currently under development for feedstock oils. We look forward to updating you on this program in first quarter next year. Now let's turn to slide 12. Petroleum plastics are, in every way, an innovation of the 20th century. the functional benefits of plastics changed almost every area of daily life. But if it wasn't obvious early in the life cycle, it is now. Plastics are a huge source of pollution on land and in water worldwide. Whether it's the plastic waste or the contribution to carbon emissions during production, petroleum-based plastics are a problem. Petroleum-based plastics, as you see in the chart, gain such broad use because they are very low cost to produce. This has presented a large barrier to entry for the broad introduction of biobased and biodegradable plastics, except at instances where the brand owner is strongly committed to sustainability. Even so, more recent pressure on brand owners has resulted in increasing demand for materials like PLA, which is compostable in industrial systems, but not biodegradable in the environment. As a result, major capital investments in additional PLA production capacity are underway. We believe PLA is an interim solution and PHA bioplastics, which in addition to being broadly useful in plastics markets, are natural materials and fully biodegradable in the environment, therefore a better solution. The caveat, of course, is the need for a disruptive production technology to reduce cost and enable capital-efficient large-scale production. Our mission is to achieve this by producing the PHA bioplastic as a third seed component in camelina seed along with protein and meal and oil. This will eliminate the inefficient conversion of sugar or oil feedstock and the prohibitive capital and operating costs of fermentation. Direct production as a third seed product in Camelina will directly link PHA bioplastic production to low-cost, large-scale agriculture with the potential to produce its costs in the range of feedstock oils. From a carbon perspective, taking CO2 directly from the air and directing it to PHA bioplastic in seed is compelling, but this platform will still take time to develop. Now let's turn to slide 13. Redesigning a plant to make PHA is difficult. In 2019, we reported proof of concept in greenhouse-grown plants, and in 2020, indicated 6% yield of PHA in seed grown in the field. Having prioritized evaluation of our pH samples, we are pleased to report that our two best PHA camelina lines planted this spring showed the same result as last year, up to 6% PHA by weight and seed. In 2022, we plan to continue along the path of seed scale up at the acre scale, enabling larger scale in 2023 and initial seed processing to produce PHA for product samples and prototyping. At the same time, the team is proceeding on parallel paths to develop second-generation lines with PHA in the range of 10% to 20%. Once available, the new PHA trait will be stacked onto the elite camelina currently being developed for feedstock oils. We believe that this is a very attractive market, and biodegradable PHA produced from plants may represent an excellent solution for compounders, brand owners, and consumers, as well as the environment. Now, let's turn to slide 14. Currently, we have non-exclusive research license agreements in place with Bayer, GDM, Forage Genetics, and Simplot to test some of our traits in different crops. Each company is evaluating their traits in their character crop with the option to negotiate a commercial license. In third quarter, we work with Forage Genetics to extend the research license for an additional 12 months and enable them to complete their R&D activities. The arrows on the slide indicate the duration of the agreements currently in place. Now let's turn to slide 15. Our net operating cash usage was $2 million for the third quarter of 2021, ending the quarter with $18.5 million in cash, cash equivalents, and investments. We expect that our cash on hand, together with the expected revenue from our current government grant, will support our options into second quarter 2023. We have no debt on our balance sheet. We are updating our estimate for net operating cash usage for the full year 2021, and now we believe it will be within the range of 10 to 10.5 million. This includes estimates for our contracted and planned seed scale of activities, as well as plan hires and other support in business development, regulatory affairs, and seed operations, all directed towards executing our commercial plan. Let's now review the third quarter 2021 operating results. The company reported a net loss after taxes of 2.4 million for the third quarter of 2021, compared to a net loss after taxes of 2.2 million for the third quarter of 2020. Total research grant revenues in the third quarter of 2021 were 92,000 versus 204,000 in third quarter 2020. The decrease in the quarter reflects our internal assignment of internal resources to near-term commercial goals. In the third quarter of 2021, R&D expenses were 1.6 million compared to 1.3 million in the third quarter of 2020. G&A expenses were 1.5 million in the third quarter of 2021 as compared to 1.1 million in the third quarter of 2020. For the nine months ending September 30, 2021, our net loss after taxes was 8.1 million for $1.72 per share as compared to $7.6 million or $3.69 per share in 2020. For more details on our financial results, please refer to the earnings release. Let's now turn to slide 16. As we move into 2022, we will continue to focus on the following milestones. Completing data analysis of our 2021 field test program, and reporting, and we expect to report additional results in first quarter 2022, and this will help inform our 2022 field testing and seed scale-up priorities. We continue to expand our elite camelina germplasm collection with internal work as well as acquiring rights to lines with desired performance profiles. We are making field test-ready herbicide pollen E3902 in winter varieties. We're also working to create second-generation stack traits. Progressing in the business plan for our Camelina products, where we are seeing a high-level interest in Camelina for producing feedstock oil for biofuel, and we are working to identify a commercial partner. We're advancing the commercial launch plan for Camelina Omega-3 oils in South America, where we are on track to complete the regulatory analysis for Omega-3 lines and finalize the strategy. We continue to broaden our commercial capabilities, particularly in seed operations, to complement our recent hires in regulatory affairs and business development. As we increase the focus on the Camelina products, we're still seeing more opportunities to secure strategic industry collaborations from value chain partners, in addition to Biofuel. Also based on industry feedback, we believe there'll be an increasing demand for trait gene target identification tools, like our unique grain platform, as well as novel traits for genome editing in crops. We are continuing to work to secure revenue based on generating commercial licenses from our traits, going forward and expanding our intellectual property portfolio. And with that, I'd like to turn the call back over to Lynn for questions.
spk06: Hey, thanks, Ollie. And Devin, we're ready to poll for questions.
spk08: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Anthony Vendetti with Maxim. Please proceed with your question.
spk02: Hi, good afternoon. This is actually Jeremy Perlman on the line for Anthony. So I have a quick question. On slide seven of your presentation, you say on the bottom there's a note that the elite camelino varieties developed for the feedstock oil will then be used for the omega-3 and PHA bioplastic. I just want to make sure I have that clear, that your plan is in the end to have one camelina variety that will have all these traits stacked upon each other that will then be able to... No, actually, this is very typical.
spk01: So basically what we will have to do is we'll have the trait developed separately for both omega-3 and PHA bioplastic. But in order to get all the performance features of the elite... Camelina producing those products, we'll actually cross that trait into the elite lines, and that will give us elite omega-3 and elite PHA bioplastic lines. So we'll see three separate lines and three separate businesses.
spk02: Okay, it'll be three step lines. Okay, I just want to make that clear. Okay, got that. And then also, I don't know if you could talk. I know there's ongoing talks with potential commercial partners Can you maybe talk a little bit more to that, where you think they are in this talk? Are you getting more traction as you keep, you know, you're proving yourself more every planting season, you're increasing your speed, you're increasing your acreage. Do you see any more traction, any more interest in your talks with potential commercial partners?
spk01: I would say yes, definitely. And I think the issue, of course, always is they're looking at, The issue for these large energy companies is that they are basically used to owning and controlling the well, the source of the feedstock for the refineries. This is kind of different for them, and they're really doing it because of low-carbon fuel standards. So they are converting facilities. Many of those facilities are actually in areas of the country, both here and Canada, that are very suitable for using camelino oil as a feedstock. And so... Once we recruited our business development person, there's been extensive outreach to these folks. I would say all of the folks in the biofuel space, at least in North America, seem to be very concerned about feedstock security. In other words, guaranteeing that once these investments were in place, that supplies are available to keep those facilities running and operating. So that's really the driver behind this. To be perfectly honest, we hadn't really been focused on this. But given that as part of our push to produce omega-3 oils and PHA bioplastics, we have been developing elite camelina to not only increase oil, but also for herbicide and disease resistance. Then we find there's a really interesting intersection and overlap by our interest in the near term and their strategic goal to secure feedstock. So we have discussions ongoing. But as you know, discussions can take a while, and there's no guaranteed outcomes.
spk02: Okay. All right. Thank you very much. I'll hop back into queue.
spk04: Thank you. Thanks for that.
spk08: Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad.
spk06: You know what, Devin, I think I'd like to now turn the call over to Ollie for his closing remarks. Ollie, go ahead.
spk01: I'd like to personally thank all of you for joining us on the call tonight, and especially our shareholders for your continued support. We're very excited about opportunities ahead of us as we build our business. In the near term, we are focused on the promising market opportunities for oil and meal from our elite Amelina, as well as on progressing commercialization of the EPA and DHA Omega-3 oil products. I want to thank everyone at Yield 10 for keeping us on track to reach our goals in 2021. And I'd like to wish you all a nice evening. Thank you.
spk08: Thank you, everyone. This concludes today's teleconference. You may now disconnect your lines. Thank you for your participation and have a wonderful day. Thank you. Thank you. I'm sorry. Thank you. you Welcome to the third quarter 2021 financial results and business update conference call for Yield 10 Bioscience. During the call, all participants are in a 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 is being recorded. I would now like to turn the conference over to your host, Yield 10 Vice President of Planning and Corporate Communications, Lynn Frum.
spk06: Thank you, Devon, and good afternoon, everyone. Welcome to the Yield 10 Bioscience Third Quarter 2021 Conference Call. Joining me on the call today are President and CEO, Dr. Ollie Peoples, Vice President of Research and Chief Science Officer, Dr. Christy Snell, and Chief Accounting Officer, Chuck Hazzard. Earlier this afternoon, Yield 10 issued our Third Quarter 2021 financial results. This press release, as well as slides that accompany today's presentation, are available on the Investor Relations Event website at yield10bio.com. Let's now turn to slide two. Please note that 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 also cautioned that statements that are not strictly historical constitute forward-looking statements, and 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 certainties detailed in YieldTen's filings with the SEC. The company undertakes no obligation to update any forelooking 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 Ollie.
spk01: Thanks, Lynn. Good afternoon, everyone, and thanks for joining our call. We've made strong progress during 2021 advancing YieldTen's business. Today, we'll provide an update on our recent accomplishments, review our target markets with an emphasis on biofuel feedstock oil, present the third quarter financials, and summarize key milestones. We will then open the call to questions. Now let's turn to slide three. Our innovation platform is centered around the oilseed camelina. We use our trade factory approach, applying the principles of synthetic biology to improve the performance of the crop. This includes fixing more CO2 from the air to increase seed yield and oil content in the near term, and producing high-value proprietary seed products in the future. We believe that some of our varieties may also have the potential to sequester more carbon in the soil, as shown in the slide. Let's now turn to slide four. During this quarter, we continue to develop an Executor of Camelina business strategy, including outreach to potential partners in the areas of biofuel, food, and bioplastic to explore ways of working together to bring forward products produced in Camelina. We executed on our 2021 field test and seed scale-up activities and completed the harvest in the U.S. and Canada in third quarter. We're pleased to report that overall, our plantings of camelina should show tolerance to heat in areas that experience weather challenges and that the trials were harvested for evaluation. As part of this program, we began scale-up of our two best camelina PHA lines, and because we prioritized seed analysis of these lines first, We are also pleased to report seed PHA levels consistent with the findings from our small scale planting last year. Successful completion of this seed scale up in 2021 enables acre scale planting in spring 2022. The data analysis from all of our other harvesting trials is still in progress and we expect to report additional findings and our plans for spring 2022 in the first quarter. As many of you know, we have also been developing winter varieties of camelina. We had a successful program last winter with good yields, and we have substantially completed planting for our 2021-2022 winter field testing and seed scale-up program in the U.S. and Canada. In our transition to an early commercial focus, we continued to add key hires, in particular to lead our seed operations and build out our commercial teams. In a quick recap of prior accomplishments this year, we expanded our trade portfolio with four new oil content trades using our grain platform, strengthened our balance sheet to extend our cash runway to achieve value building milestones into 2023, and extended our IP portfolio with four new patents awarded. Now let's turn to slide five. Although our technology development focus is on our camelina business, Field trial results from our trades in camelina not only adds value to camelina as a crop, but in addition allows us to create option value for our trades in other crops through trade licensing to major seed companies. Today, I'd like to focus on key accomplishments against the strategic goal to use camelina as a platform crop to produce feedstock oils in the near term, and I will provide an update on our EPA DHA omega-3 oils for food, as well as PHA bioplastics. Combined, we estimate the potential seed product revenue of over 4 billion by 2030. Let's turn to slide six. Our largest near-term opportunity is for supplying chamomile seed or oil into the growing renewable diesel market. Interest in renewable diesel or biodiesel remains high, as indicated by the large investments energy companies are making due to low carbon fuel regulations and the pressure to invest in cleaner technologies and reduce their carbon footprint due to climate concerns. Investments into biofuel production are creating a massive demand for vegetable oil feedstock, as shown on the chart. Renewable diesel biofuel production capacity is projected to grow to 5 billion gallons annually from an estimated 1 billion gallons this year. We believe Camelina represents a great solution to expand feedstock oil production in North America to support this demand. Let's turn to slide 7. Our commercial strategy in Elite Camelina is capital light, one using contract farming, seed crushing, and customer offtake agreement. To establish a leadership position in Camelina, in the near term, we are prioritizing the development of Camelina lines with herbicide tolerance and disease resistance to enable large-scale acreage. Our performance traits for yield and oil will be stacked into these in the future. Developing Camelina for making feedstock oil for biofuel represents our best near-term commercial opportunity. I'll now turn it over to Christy to provide an update on our technical progress.
spk07: Thanks, Ali. Let's turn to slide eight. We are utilizing spring and winter varieties developed by our team in field testing and feed scale-up, and we believe these lines can be put into limited pre-commercial production for producing oil and meals for sampling. Our team has identified and in many cases tested more than 15 performance traits for camelina. The key to accessing and expanding acres for commercial production of oil and meal with these traits is deployment of herbicide tolerance. Growers will demand it, and controlling weeds is needed to meet expectations for agronomy and yield. In 2021, we began our herbicide tolerance program and continue to make good progress as we focus on our goal of stably deploying and verifying herbicide tolerance in our high-oil E3902 camelina and in our new winter varieties in 2023. When this is accomplished, we will be positioned to advance into pre-commercial seed scale-up. At the same time, we plan to make regulatory filings as we scale up seed production up to 1,000 plus acres. Our progression into commercial launch will be predicated on signing offtake agreements for oil. Launching both spring and winter varieties would enable revenue streams from two harvests per year in North America. Now let's turn to slide nine. Another way to increase the oil supply is to relay the winter camelina crop with soybeans, as illustrated on this slide. This has the potential to double the feedstock oil supply without impacting food production. It also provides sustainability benefits and then it provides protection for the soil. Now let's turn to slide 10. The main objectives of the program we are executing this winter are to continue seed scale up of line E3902 and our winter lines and to determine if winter planting in additional areas of the U.S. can be viable for camelina. E3902 is a CRISPR edited for oil content and produces a seed with a different color as compared to typical plants. You can see it on the slide. The seed color is more yellow than brown. Last year, E3902 showed a 5% increase in oil content in the field. We are still evaluating oil yield from our 2021 test, but we do know that the plants display good heat tolerance. Given the expected performance of E3902, We are moving ahead with contra-season scale-up in California, as well as testing small plots of E3902 in our DH12 spring line in five additional states, including Georgia and Texas. We have developed two winter lines, WDH2, which has shown good tolerance to cold, and WDH3, which is early maturing. These lines are undergoing seed scale-up in Saskatchewan and Idaho, respectively. If this program is successful, we will harvest seed to enable larger planning, verify expected yields with another season of data, as well as determine if the geographical reach of our winter and spring lines can be expanded into more southern and central regions of the U.S. during the contrast season. Ali, back to you.
spk01: Thanks, Christy. Let's now turn to slide 11. There's a large opportunity in the omega-3 fish oil market, driven by reduced supply of oil from harvesting fish and growing demand in aquaculture feed and nutraceutical markets. We believe the land-based production of omega-3s is an important potential solution for this market. A year ago, we secured commercialization rights to the omega-3 camelina technology from the Rothamsted Institute in the UK. This technology was quite advanced in Camelina with multiple research field trials as well as aqua feed and human clinical trial data generated using oil produced in those studies. As shown in the table, Camelina EPA DHA omega-3 product has clear potential to be the best in class across quality and composition with around 20% combined DHA and EPA omega-3s plus a third omega-3 ALA. and represents a sustainable way to meet the international growth anticipated in this attractive market. Throughout 2021, we have worked with Professor Jonathan Napier to support his activities, as well as working internally on regulatory strategy and business development with a focus in Argentina and in Chile, which produces around 30% of global farm salmon. We continue to work on analysis of the genetics of the lead omega-3 lines from Rothamsted to enable the development of a regulatory strategy while fuel tests of our current lines are ongoing in Argentina. And in clarity on the regulatory path of the Rothamsted omega-3 trait, in the future, this will be stacked onto the elite Camelina currently under development for feedstock oils. We look forward to updating you on this program in first quarter next year. Now let's turn to slide 12. Petroleum plastics are in every way an innovation of the 20th century. the functional benefits of plastics changed almost every area of daily life. But if it wasn't obvious early in the life cycle, it is now. Plastics are a huge source of pollution on land and in water worldwide. Whether it's the plastic waste or the contribution to carbon emissions during production, petroleum-based plastics are a problem. Petroleum-based plastics, as you see in the chart, gain such broad use because they are very low cost to produce. This has presented a large barrier to entry for the broad introduction of bio-based and biodegradable plastics, except at instances where the brand owner is strongly committed to sustainability. Even so, more recent pressure on brand owners has resulted in increasing demand for materials like PLA, which is compostable in industrial systems, but not biodegradable in the environment. As a result, major capital investments in additional PLA production capacity are underway. We believe PLA is an interim solution and PHA bioplastics, which in addition to being broadly useful in plastics markets, are natural materials and fully biodegradable in the environment, therefore a better solution. The caveat, of course, is the need for a disruptive production technology to reduce cost and enable capital-efficient large-scale production. Our mission is to achieve this by producing the PHA bioplastic as a third seed component in camelina seed, along with protein and meal and oil. This will eliminate the inefficient conversion of sugar or oil feedstocks and the prohibitive capital and operating costs of fermentation. Direct production as a third seed product in Campbellina will directly link PHA bioplastic production to low-cost, large-scale agriculture with the potential to produce its costs in the range of feedstock oils. From a carbon perspective, taking CO2 directly from the air and directing it to PHA bioplastic in seed is compelling, but this platform will still take time to develop. Now let's turn to slide 13. Redesigning a plant to make PHA is difficult. In 2019, we reported proof of concept in greenhouse-grown plants, and in 2020, indicated 6% yield of PHA in seed grown in the field. Having prioritized evaluation of our pH samples, we are pleased to report that our two best PHA camelina lines planted this spring showed the same result as last year, up to 6% PHA by weight and seed. In 2022, we plan to continue along the path of seed scale up at the acre scale, enabling larger scale in 2023 and initial seed processing to produce PHA for product samples and prototyping. At the same time, the team is proceeding on parallel paths to develop second-generation lines with PHA in the range of 10% to 20%. Once available, the new PHA trade will be stacked onto the elite Camelina currently being developed for feedstock oils. We believe that this is a very attractive market, and biodegradable PHA produced from plants may represent an excellent solution for compounders, brand owners, and consumers, as well as the environment. Now let's turn to slide 14. Currently, we have non-exclusive research license agreements in place with Bayer, GDM, Forage Genetics, and Simplot to test some of our traits in different crops. Each company is evaluating their traits in their target crop with the option to negotiate a commercial license. In third quarter, we work with Forage Genetics to extend the research license for an additional 12 months and enable them to complete their R&D activities. The arrows on the slide indicate the duration of the agreements currently in place. Now let's turn to slide 15. Our net operating cash usage was $2 million for the third quarter of 2021, ending the quarter with $18.5 million in cash, cash equivalents, and investments. We expect that our cash on hand, together with the expected revenue from our current government grant, will support our options into second quarter 2023. We have no debt on our balance sheet. We are updating our estimate for net operating cash usage for the full year 2021, and now we believe it will be within the range of 10 to 10.5 million. This includes estimates for our contracted and planned seed scale of activities, as well as plan hires and other support in business development, regulatory affairs, and seed operations, all directed towards executing our commercial plan. Let's now review the third quarter 2021 operating results. The company reported a net loss after taxes of 2.4 million for the third quarter of 2021, compared to a net loss after taxes of 2.2 million for the third quarter of 2020. Total research grant revenues in the third quarter of 2021 were 92,000 versus 204,000 in third quarter 2020. The decrease in the quarter reflects our internal assignment of internal resources to near-term commercial goals. In the third quarter of 2021, R&D expenses were 1.6 million compared to 1.3 million in the third quarter of 2020. G&A expenses were 1.5 million in the third quarter of 2021 as compared to 1.1 million in the third quarter of 2020. For the nine months ending September 30, 2021, our net loss after taxes was 8.1 million for $1.72 per share as compared to 7.6 million or $3.69 per share in 2020. For more details on our financial results, please refer to the earnings release. Let's now turn to slide 16. As we move into 2022, we will continue to focus on the following milestones. Completing data analysis of our 2021 field test program, and reporting, and we expect to report additional results in first quarter 2022, and this will help inform our 2022 field testing and seed scale-up priorities. We continue to expand our elite camelina germplasm collection with internal work as well as acquiring rights to lines with desired performance profiles. We are making field test-ready herbicide pollen E3902 in winter varieties. We're also working to create second-generation stack traits. Progressing in the business plan for our Camelina products, where we are seeing a high-level interest in Camelina for producing feedstock oil for biofuel, and we are working to identify a commercial partner. We're advancing the commercial launch plan for Camelina Omega-3 oils in South America, where we are on track to complete the regulatory analysis for Omega-3 lines and finalize the strategy. We continue to broaden our commercial capabilities, particularly in seed operations, to complement our recent hires in regulatory affairs and business development. As we increase the focus on the Camelina products, we're still seeing more opportunities to secure strategic industry collaborations from value chain partners, in addition to Biofuel. Also based on industry feedback, we believe there'll be an increasing demand for trait gene target identification tools, like our unique grain platform, as well as novel traits for genome editing in crops. We are continuing to work to secure revenue based on generating commercial licenses from our traits, going forward and expanding our intellectual property portfolio. And with that, I'd like to turn the call back over to Lynn for questions.
spk06: Hey, thanks, Ollie. And Devin, we're ready to poll for questions.
spk08: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Anthony Vendetti with Maxim. Please proceed with your question.
spk02: Hi, good afternoon. This is actually Jeremy Perlman on the line for Anthony. So I have a quick question. On slide seven of your presentation, you say on the bottom there's a note that the elite camelino varieties developed for the feedstock oil will then be used for the omega-3 and pha bioplastic that's what i think i make sure i have that clear that you have you're going to your plan is in the end to have one camelina variety that will have all these traits that are stacked upon each other that will then be able to no actually the way this is very typical so basically what we will have to do is we'll have the trait developed separately for both omega-3 pha bioplastics
spk01: But in order to get all the performance features of the elite, Camelina producing those products, we'll actually cross that trait into the elite lines, and that will give us elite omega-3 and elite PHA bioplastic lines. So we see three separate lines and three separate businesses.
spk02: Okay, it'll be three step lines. Okay, I just want to make that clear. Okay, got that. And then also, I don't know if you could talk. I know there's ongoing talks with, potential commercial partners, can you maybe talk a little bit more to that, where you think they are in this talk? Are you getting more traction as you keep, you know, you're proving yourself more every planting season, you're increasing your speed, you're increasing your acreage, is there any, do you see any more traction, any more interest in your talks with potential commercial partners?
spk01: I would say yes, I mean, definitely, and I think the issue, of course, always is They are looking at, you know, the issue for these large energy companies is that they are basically used to owning and controlling the well, the source of the feedstock for the refineries. This is kind of different for them, and they're really doing it because of low-carbon fuel standards. So they are converting facilities. Many of those facilities are actually in areas of the country, both here and Canada, that are very suitable for using camelino oil as a feedstock. And so once we recruited our business development person, there's been extensive outreach to these folks. I would say all of the folks in the biofuel space, at least in North America, seem to be very concerned about feedstock security. In other words, guaranteeing that once these investments were in place, that supplies are available to keep those facilities running and operating. That's really the driver behind this. To be perfectly honest, we hadn't really been focused on this. But given that as part of our push to produce omega-3 oils and PHA bioplastics, we have been developing the camelina to not only increase oil, but also for herbicide and disease resistance. Then we find there's a really interesting intersection, an overlap by our interest in the near term, and their strategic goal to secure feedstock. So we have discussions ongoing, but as you know, discussions can take a while and there's no guaranteed outcomes.
spk02: Okay. All right. Thank you very much. I'll hop back in the queue.
spk04: Thank you. Thanks for that.
spk08: Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad.
spk06: You know, Devin, I think I'd like to now turn the call over to Ollie for his closing remarks. Ollie, go ahead.
spk01: I'd like to personally thank all of you for joining us on the call tonight, and especially our shareholders for your continued support. We're very excited about opportunities ahead of us as we build our business. In the near term, we are focused on the promising market opportunities for oil and meal from our elite tamalina, as well as on progressing commercialization of the EPA and DHA omega-3 oil products. I want to thank everyone at Yield for keeping us on track to reach our goals in 2021. And I'd like to wish you all a nice evening. Thank you.
spk08: Thank you, everyone. This concludes today's teleconference. You may now disconnect your lines. Thank you for your participation and have a wonderful day.
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