This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk05: Welcome to the first quarter 2022 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, YILTEN Vice President of Planning and Corporate Communications, Lynn Brum.
spk06: Thank you, Stacey, and good afternoon, everyone. Welcome to YILTEN Bioscience First Quarter 2022 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 Hazzor. Earlier this afternoon, Yield 10 issued our first quarter 2022 financial results. This press release, as well as slides that accompany today's presentation, are available on the investor relations events section of our website at yield10bio.com. Let's 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 these statements are not 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 uncertainties detailed in yield tense filings with the SEC. 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 Oli.
spk02: Thanks, Lynn. Good afternoon, everyone, and thanks for joining our call. With near-term commercial focus on the renewable diesel biofuel market and a robust R&D pipeline, Camelina R&D pipeline, we have significant momentum as we progress in 2022. Today, we'll provide an update on the recent accomplishments, including the kickoff of our 2022 Spring Fuel Program, review our target markets with an emphasis on biofuel-free stock oil, present the first quarter financials, and summarize key milestones. We will then open the call to questions. Now let's turn to slide three, our crop innovation platform. Our innovation platform, the Trades Factory, is centered around the oilseed camelina, the crop we plan to establish as a platform crop to produce low-carbon petroleum replacements and food products. Let's turn to slide four. Our business model is to provide farmers with a new growing opportunity by building elite camelina varieties to produce seed products for new markets. Essentially, we'll use our elite camelina seed varieties to contract production of camelina grain with farmers under offtake agreements to supply customers in the renewables and food space. Depending on the product and the customer, we will also contract seed processing to produce these products. With our current elite varieties progressing towards commercialization, and two proprietary value-added Camelina seed products in development, we are positioned to establish and grow a large seed products business. Lead product in the near term is low-carbon feedstock oil to meet increased demand for the biofuel sector. Here we are at the early commercial stage and working on partner outreach to secure offtake agreements. We believe this will be followed by the launch of Omega-3 Camelina to produce Omega-3 oils for the nutrition and aqua feed markets, And then the PHA bioplastic camelina currently in development to supply the growing demand for biodegradable zero waste plastic packaging. Combined, these products represent a very large revenue opportunity. Let's now turn to slide five, advancing the business. With significant momentum entering 2022, we are operationalizing the commercial plan to launch our camelina seed products business. Our commercial team is engaging with potential supply chain partners to form alliances that will support our Capital Light business model. We welcomed Darren Greenfield to our team to lead seed operations in January. Darren has more than 25 years' experience in canola with companies including BSF, AgScience, and CBIS. He is leading efforts by our commercial team to reach out to growers for contract planting as we work on securing supply chain partners. In support of this plan, we are using our lead spring and winter chameleon varieties for initial commercialization in the North American biofuels market. In April, we named Willie Lowe as a special commercial and technical advisor. Willie previously served as VP Market Development, Global Edible Oils Division at Cargill. He has extensive knowledge of the commercial landscape for commodity and specialty oils, including omega-3 oils, and we welcome Willie to our team. As we build our business around camelina, a research team has done an outstanding job developing elite camelina lines to launch the business and a pipeline of novel gene traits. In March, we reported supportive and encouraging data generated in our 2021 spring field program. Our winter field program is progressing on track and is expected to provide us with important data on winter and spring varieties grown in a variety of geographies. Christy will provide an update on our winter and spring programs. As we continue to build our patent portfolio, I am pleased to report that in early 2022, two new patents have issued. A patent was granted in Australia for C-3007, a promising oil content boosting trait, and a patent was granted in Canada on advanced technology for producing omega-3 oils in camelion. I will now pass the call over to Christy.
spk07: Thanks, Ollie, and good afternoon, everyone. On our March call, we described the results of our 2021 spring field testing, and today I will provide an update on our ongoing winter program, as well as describe the scope of our 2022 spring field program. Let's turn to slide six. Winter camelina can be grown as a winter cover crop off-cycle from food production, providing greater access to acreage. Paired with the summer season crops such as soybean, winter camelina can provide water and cover on farmland while nurturing soil, reducing nutrient runoff, and preventing soil erosion. In fall of 2021, we planned multiple sites with winter camelina to harvest in the late spring or early summer of 2022. These sites included 17 acres of our cold-tolerant winter camelina line in Saskatchewan, Canada, and 0.2 acres of an early maturing line in Idaho. We expect these activities will produce seed for further scale-up in fall of 2022 to begin to produce seed to get into farmers' hands for commercial planning. We also perform small plot field evaluations of Yield 10's winter camelina lines, as well as germplasm accessions that Yield 10 obtained from third parties at sites in Idaho, Kansas, Minnesota, Iowa, Illinois, and Georgia. These field evaluations will allow us to determine the range of suitable areas for growth of winter camelina and identify differences in the germplasm varieties in different climates. The trials are in different stages of growth depending on location and range from completion of seed harvest at sites in Georgia to plants that have recently emerged from snow in Saskatchewan, Canada. We expect to obtain agronomic data from these trials. Let's turn to slide seven. We are continuing to progress our elite camelina germplasm development. Our spring program will include more than 25 trials at 11 sites located in the US and Canada. Permitting for this spring program is substantially complete, and in certain geographies planting has begun. We expect planting at all fields to be completed in the weeks ahead and for harvest to be completed by the end of the third quarter. We have made good progress against our goal of producing proprietary camelina varieties with herbicide tolerance and pest resistance. In our 2022 field test program, we will evaluate candidate camelina lines for herbicide tolerance to identify lead and backup lines for commercial development and regulatory approval. Once these lines are identified, we plan to accelerate these candidates into seed scale-up and put them on the path to regulatory approval. Events of camelina E3902 possessing herbicide tolerance will be evaluated in the program as we continue to develop this leading elite germplasm. We will also test camelina lines for downy mildew resistance on fields known to harbor this fungal disease. As part of the program, we will continue seed scale-up activities for our prototype camelina C3015 trait, which produces PHA. This work will be conducted at acre scale. We plan to extract PHA from the seeds to support our business development activities. Meanwhile, in R&D, we are working to optimize the PHA bioplastic trait to produce 10 to 20% PHA bioplastic in the seed and to demonstrate PHA bioplastic copolymer production in cannelina. We will also continue to progress our proprietary gene traits to boost seed oil content and seed yield, including more work with C3020. We will also test canola C3007 lines to collect seed oil content and yield data for this promising trait. Let's turn to slide eight. The chart on this slide illustrates our camelina pipeline as well as our plan to launch sequence. At the top of the chart, we start out with camelina line E3902 launched into the biofuel market. This will be followed with tolerance to broadleaf herbicides and residual soil herbicides. We then plan to stack the trait for downy mildew resistance to produce a robust package of traits to enable growers to embrace planting camelina as a spring or winter crop. We have plans and testing for each of these traits and plan to be in position to stack or combine the traits in camelina to meet grower needs. Our camelina platform will also enable us to stack on new performance traits as we identify them as well as PHA and omega-3 product traits as our programs progress. Based on preliminary discussions with regulators, we believe that the regulatory path for our trait development may be supported by the USDA APHIS's secure rule in the U.S., as well as the updated emerging CFIA regulations in Canada. With over 25 years of safety experience with biotech crops in the U.S., the science-based approach codified in the SECURE Rule enables the evaluation and confirmation of the regulatory status of well-studied traits deployed into new crops. This framework also enables clarity around the regulatory path early in the development of new traits, enabling close alignment of the confirmation of regulatory status and timelines, seed production ramp-up, and commercial launch planning. With that, I'll hand the call back over to Ollie.
spk02: Thanks, Christy. And congrats to the team for their accomplishments around executing the winter program and starting up the spring field testing program, which we expect will generate a broad range of data, including confirming herbicide tolerance in camelina lines. Our strategy to build shareholder value is to commercialize camelina as a platform crop to produce renewable products, including feedstock oils for renewable diesel in the near term, and to leverage our advances in crop development to launch Elite Omega-3 Camelina and PHA Camelina varieties for PHA bioplastics in the future. Let's turn to slide nine, renewable diesel and establishing the Camelina value chain. Based on announced fuel industry investments, the production of renewable diesel alone is projected to go to 5 billion gallons annually from an estimated 1 billion gallons in 2021. These investments are necessary to meet regulations such as the California Low Carbon Fuel Standard LCFS, and similar standards extended to other states in Canada. Selling diesel fuel in California requires producers to meet a carbon standard either by adding lower carbon renewable diesel, petroleum diesel, or purchasing carbon credits. Increasing energy prices due to the crisis in Ukraine is another potential tailwind for biofuel demand. This new demand will have to be met mostly from increased use of vegetable oil. This, in turn, is placing further pressure on vegetable oil prices, resulting in opportunities for new crops like camelina to expand production. Our commercial strategy for camelina is capital light, one using contract farming, seed crushing, and customer offtake agreements to manage costs and inventory risk in the early years of the business. To establish a leadership position in the near term, we are prioritizing the development of camelina lines with herbicide tolerance and disease resistance to enable large acreage production. Our performance rates for yield and oil will be stacked into these lines as we progress. In 2022 to 2023, we plan to execute seed scale-up activities to enable planting in the range of 1,000 to 20,000 acres. We are moving forward with our current non-regulated varieties and will progress the regulatory path for new varieties as needed. In addition to our R&D and early commercial activities, we have ongoing business discussions with the key players in the value chain, including seed processors and biofuel companies where, as stated, our goal is to secure off-take agreements. Now let's turn to slide 10, biorefineries and feedstock production locations. This slide illustrates where in North America biorefinery expansion investments have either been made or are planned. We have circled areas where we see the potential for camelina production and indicated the likely direction of camelina product flow to the primary market for low-carbon biofuels in California. Some of the production areas, like the Pacific Northwest, also have biorefineries, so products transported from growing regions could be in the form of grain, feedstock oil, or finished biofuel. Earlier in this call, Christy presented a map and summary of our winter appeal trials, and the current chart indicates how our development and commercial strategy links up with the production and market opportunity. Let's turn to slide 11 for an update on PHA bioplastic and omega-3 programs. In the PHA bioplastic area, our efforts are focused on optimizing the PHA trait to enable PHA bioplastic production in camelina seeds. Our business model is the same as for biofuel feedstocks. We use contract growers to produce elite camelina varieties, which can be processed to produce three products, PHA bioplastic, biofuel feedstock oil, and protein meal. This will integrate PHA bioplastic production into large-scale, low-cost agriculture with the potential for costs in the range of feedstock oils. As Christy indicated, our prototype camelina line, PHA camelina line 3C-2015, is being planted at acre scale this year to produce PHA for process development and business development use. The R&D team is continuing activities related to trade optimization. We are pursuing collaborations with industry as PHA bioplastics have traction with brand owners interested in biodegradable materials as a zero-waste, end-of-life solution for their products and packaging. DHA Camelina represents a potentially disruptive technology, so we look forward to updating you on our progress throughout this year. I now turn to the fish oil and omega-3 markets. Camelina has proven to be an excellent platform for producing DHA plus EPA omega-3 oils, and there's a large opportunity in the omega-3 fish oil market driven by reduced supply of oil from harvesting ocean fish and growing demand in aquaculture feed and nutrition markets. We believe the land-based production of omega-3s is an important potential solution for this market. In 2022, we plan to continue our work with Rothamsted to progress the omega-3 traits and to progress third-party business discussions. Let's start to slide 12 for an update on licensing opportunities. We have non-exclusive research license agreements in place with Bayer, GDM, Forge Genetics, and Simplot to test their traits in various commercial crops. Each company is evaluating their traits in their target crop with the option to negotiate a commercial license. The arrows in the slide indicate the duration of these agreements. We are following up on industry interest in oil content traits, including C3007 for soybean and canola, and we are seeking partners to test their traits in corn. The grain platform also represents a unique collaborative opportunity driven by interest in identifying novel performance traits. I will now turn the call over to Chuck to discuss the first quarter results.
spk03: Thanks, Holly, and good afternoon, everyone. Let's move to slide 13. We ended the first quarter with $12.7 million in cash, cash equivalents and investments, and we expect that our cash on hand, together with expected revenue from our current government grant, will support our operations into the first quarter of 2023. We continue to have no debt on our balance sheet. Our net operating cash usage was $3.1 million for the first quarter of 2022, as compared to $2.6 million for the first quarter of 2021. And for the full year of 2022, we're estimating a net total cash usage of $12 to $12.5 million. The increase over 2021 spending is to support our transition to commercial activities, including seed operations, as well as our accelerated goal achievement in R&D. Let's now review the first quarter of 2022 operating results. For the first quarter of 2022, the company reported a net loss after taxes of $3.3 million as compared to a net loss after taxes of $2.6 million for the first quarter of last year. Total research grant revenues in the first quarter of 2022 were $149,000 versus $196,000 in the first quarter of 2021, and the decrease stems from our receipt and recognition of a small Canadian grant of $39,000 during the first quarter of last year. In the first quarter of 2022, R&D expenses were 1.8 million compared to 1.3 million in the first quarter of 2021. And G&A expenses were 1.7 million in the first quarter of this year in comparison to 1.4 million in the first quarter of last year. For more details on the financial results, please refer to the earnings release.
spk02: Thanks, Chuck. And let's turn the slide, start to slide 14, upcoming milestones. Sorry, upcoming milestones. In 2022, we will continue to focus on the following milestones, expanding our commercial activities, targeting the renewable diesel market, continue to build our differentiated elite camelina germplasm collection, executing on our 2022 field testing and seed scale-up program, advancing the optimization of our PHA bioplastic trait, and progressing the commercial launch for camelina DHA plus EPA omega-3 oils. We also plan to secure revenue-generating strategic industry collaborations and expand our intellectual property portfolio. With that, I'd like to turn the call over to Lynn for questions.
spk06: Thanks, Ollie. Stacy, we're ready for questions.
spk05: 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. Your first question comes from Ben Cleavey with Lake Street. Please go ahead.
spk00: All right. Thanks for taking my questions. First question, Ollie, you mentioned in your prepared comments efforts to scale up seed inventory to be in the 1,000 to 20,000 acre range, kind of during 22 and 23. So is your expectation here that you're going to be at that level of inventory after the harvest in the fall of 23? Is that correct?
spk02: I would say, you know, the plan is to, I mean, obviously there's a lot going on currently in agriculture, but basically what we'd like to do is be in a position to be able to plant, you know, fairly large acreage. As we move from 23 into 24 as well and the way this works with camelina is the seed multiplier effect is you know one acre of Production seed will allow you to plant up to 200 acres of grain if you like And so, you know, that's a very nice multiplier that camelina has and so as we move into this year and start to scale up the goal is to be able to get the you know, obviously thousands of acres and Tens of thousands and hundreds of thousands as we move forward here. One piece of information I would say is, you know, I think we've been clear that we feel that herbicide tolerance is going to be pretty important as we get particularly to that 50,000, 100,000, 500,000 acres. And obviously that's a key goal for us going forward is to get that in place.
spk00: Got it. Okay. And then on a related note to kind of seed scale up activities, As you speak with these potential offtake partners and the biofuel end market, do you sense that there's a kind of minimum level of scale that those partners are requiring before being able to formalize an agreement with you?
spk02: It's a real mixture. I think when you look at where Yoltan is at today, there's really two There's two quite different challenges. And I kind of like to break them down into anything up to 25,000 tons of seed production and then 25,000 tons and beyond. And a large part of the reason for that is most of the larger scale production, I would say seed crushing production, Opportunities for camelina are really in what they call switch plants. These are plants that are designed to be flexible on the seed that they crush. Usually things like, you know, camelina, sunflower, canola, for example. She's a dedicated Midwest soybean crusher. And so when you get into switch plants, you know, the equipment has to be reset. And there seems to be a sort of a minimum volume that you need to get that to make it worthwhile making those changes. So although there are switch plans out there, I think somewhere around 25,000 tons is probably a grain going in. It's probably that kind of ballpark number you need. And that's really based on conversations we've had with some of the major crushers. So there is this kind of gap between here and there. And obviously, one of the things we're working on is identifying players who can crush smaller volumes faster. or who are willing to enter into agreements that would result in them crushing those smaller volumes while we build up the acreage. So those discussions are ongoing. I will say that there's other folks in that space where what they really want is they want you to start delivering so many train cars of oil pretty much next week. So it's a wide range of sort of interests. Everyone knows, I think, in the space that really securing long-term supply of feedstock oil is going to be pretty important for their business. And certainly, we're talking to folks that are sort of everywhere from needed today to looking to secure, you know, hundreds of thousands of acres of supply, you know, three, four, five years out. So, there's just a wide range of potential partnering options here. As we go forward as yield turn, and obviously, we brought someone on to head up seed operations. And the reason for that is, is when you start, you know, for Yotan as it was, you know, prior to 2021, really focused on the R&D side, you know, that you can pretty much manage with an R&D team. But when you start to think about planting seed on, you know, thousands and tens of thousands, hundreds of thousands of acres, then you really want to be planting high quality, ultimately pedigreed seed. And so there's a whole seed scale up and production train has to go along with that. And obviously Darren is the guy who's heading all that up. So we are kind of having to do both at the moment as we get ourselves in a position to transition over to what would be a more normal sort of set of operating routines. And so we have a lot going on. We are scaling up this year. We have plans to scale up this year, both spring and winter varieties. And then, of course, we'll provide a lot more color and wear on this as things come into place and as agreements come into place.
spk00: Got it. Yeah, you certainly do have plenty going on. I did not appreciate how extensive your trials were. I was pleasantly surprised to see really how robust that activity is this year. So, yeah, I know you've got plenty going on. Best of luck navigating all that. Next question on the offtake agreements or with potential partners for offtake agreements. Do you sense that either on the crush or on the biofuel side that these potential partners have a bias towards camelina as a summer or a cover crop? I mean, do they think that the kind of secondary benefits of camelina as a cover crop are important to them or are they pretty indifferent and they just want the oil?
spk02: Yeah, so I think, so that's kind of a double-edged sword there, Ben. You know, in the first case, I think what they want, you know, the crushers want to just crush and get the oil margin. The biofuel players, however, want access to that carbon intensity score. And obviously, I think we and I think some of the players in the biofuel space really feel that the winter varieties in particular, where you're really, you know, reusing the land as well as getting the environmental benefits of cover cropping you know, that may have a better score. This is something that we obviously have to measure and determine. But clearly, you know, when you look at the value of the biofuel, the carbon intensity of the feedstock is a key driver of that value. And obviously, as you can imagine, there's all kinds of positioning, posturing, and negotiating around who captures that value. And certainly, Yield 10 would like to get a piece of it.
spk00: Got it. Got it. Okay, perfect. And one more for me, and then I'll get back in queue. You know, you mentioned that Darren has been going out to farmers to try to, you know, kind of secure growers here for this spring, especially in the context of that really wide-ranging map. I mean, can you talk about, you know, successes and, you know, challenges that he's had in doing so? Because it's a big operation for him.
spk02: Yeah, let's not get too far over skis on that. I mean, Darren came on board basically back in January and, you know, really is getting used to, you know, what we have available in Camelina. And obviously we've got a lot more scale up work to do before we have a, what we call a professional, you know, seat operation underway. So, you know, he's really, I would say, you know, getting the learning under his belt as to regards to the line that we have. where they fit, where the growers' interests are. I can say quite openly right now, primarily because of the problems last year in canola in particular, I would say there's a lot more interest in winter camelina than there was in spring. And certainly, you know, obviously we are scaling up the WDH2 and WDH3 lines accordingly. I think that's a trend that over the long term is likely to remain. I just think that there's less competition for land at that time of the year, and that's really where camelina just has a very unique fit. Now, I will say that doesn't mean that there's not a lot of interest in spring camelina. There is. It's just that farmers are typically making their planting decisions sort of in the sort of October, November area. And so, you know, as we get this year under our belt, get that positioned, we expect to ultimately be planting spring and winter at scale.
spk05: Next question comes from Anthony Vandetti with Maxim Group. Please go ahead.
spk01: Thanks. Yes, hi, Ali. So just to follow up on the spring planting, so see 30-20 and see... produced increases in seed oil content. I know you were supposed to do additional field testing in spring of 2022. Are you saying that – is that being pushed out a little bit, or can you give us an update on where those two are?
spk07: Yeah, so we saw in 2021 trials, we saw increases in oil for both – C3020 in Camelina and C3007 in Canola. And so we're replicating those results this year. We're doing extensive testing at multiple sites to, again, try this trade out at multiple sites under different conditions. But so far, we're very pleased with both trades.
spk02: Yeah, so there's not been any stepping back on that. Those are being pushed forward. I mean, I think we had originally meant to defer doing further work in canola, but obviously we liked what we saw. And when you look at this, I would say demand for biofuel, obviously traits that can impact, you know, oil seed yields, whether it's canola, camelina, or soybean, or seed oil content, really, you know, there's a potential for some value capture there. We are well aware of this, and so we are testing canola C3007 again this year. And obviously we're looking for opportunities to license those things.
spk01: Right. Okay, good. So that's moving according to plan. Okay, that's good to hear. And then you completed also in 21 the field work to begin the scale up for the prototype PHA spring camelina lines. Are those moving along at acre scale in 22 as well?
spk07: Yes, we do have a scale up this year, about three acres that we're planting. So we're very excited about that activity.
spk02: I'm very much looking forward to standing in that field. I've waited a really long time to stand in that field. I'm very much looking forward to that. And obviously, credit to the team that they're getting all these trials done, as Ben said, over the winter. I mean, that's a remarkable job by that group. And obviously, as we continue to grow the organization, We look forward to doing more of that. But, you know, we will ultimately focus on key areas, particularly as we secure offtake arrangements. We will try to map the activity of the offtake agreements to really to optimize, you know, the value of what we do. And that, of course, is driven in part by the carbon intensity of the oil.
spk01: Okay, great. And just lastly, just, you know, I know you're having lots of negotiations and lots of discussions. about potential partners, contracts, and so forth. Is that continuing to progress on multiple fronts? Any color on that would be helpful. Thank you.
spk02: Yeah, so I would say in general, I would say across the board, yes. But I would say, if anything, there's an optic in the biofuel space. I mean, it's not surprising. You know, if you look at some of these players out there who are making investments and if you look at, you know, Chevron recently just who has been in Chevron and basically just signed up with Bungie who's tied up with Covercrest, which is an alternative oil seed for cover cropping as a source of oil to be essentially the processor of everything they produce. And then, of course, Global Clean Energy Holdings in California who's tied up with Exxon. We also invested in sustainable oils, which is owned by Global Clean Energy, also trying to secure new crops that can deliver feedstock oils for the refineries. So I think these partnerships are all, and I think there's another one with New Seed and BP focused in the southern states. So we're well positioned. We are having a lot of conversations. I would say there's more conversations on the biofuel space. than anything else. Not surprising given the demand and the investments they're doing in. So obviously it's up to us to get one of those secured or more. And so that's what we're working on.
spk01: Okay, appreciate it. I'll jump back in the queue. Thank you.
spk05: Thanks, Anthony. Next question, Michael Irwin with Univest Securities. Please go ahead.
spk04: Hi. So my first question is in regards to the ongoing situation in Ukraine, causing some logistical issues that are hard to anticipate at the time. And so there isn't any kind of long-term risk to the situation, but for the short term, because of logistical issues, have you had any I guess, inbound calls and just the partnerships because of this issue that was raised from this situation?
spk02: No, I wouldn't say, you know, we haven't had any calls directly related to Ukraine. I think one of the things that I think, you know, we all need to keep in mind is, you know, I think Ukraine produces about one-eighth of the world's grain. It's a very large wheat producer, maybe a quarter of a wheat. It's also a major producer of sunflower, for sunflower oil, which goes into food. So obviously that's going to further tighten markets for some of these commodities. And we do believe it's going to impact planting decisions made by growers, particularly for spring varieties. And so there are definitely going to be knock-on effects into the agricultural markets from that. One of the big unknowns, of course, is Belarus with the other half of the world's potash production. And obviously they're not in that situation yet, but that's not clear that they're not going to be. So, you know, there's a lot of uncertainty around agriculture in those areas. If anything, I think what it's doing is it's probably stimulating more interest in securing supply from North America and South America.
spk04: Okay. And there's been some ongoing interest within the UK government about introducing some new regulations regarding GMO foods, and in particular, gene-edited foods that do not introduce any foreign genes into the plants. And so I guess that's just kind of also, I guess, increased the partnership ideas from UK for what they're doing, since you guys do not do anything introducing any foreign genes into plants.
spk02: Yeah, those regulations are initially focused on, you know, defining gene editing as essentially just, you know, it's just a more tailored, directed, scientific method of doing essentially readings. That's what it is. And so they're definitely moving to sort of deregulate that. And obviously that's of interest to us. We do work with the Rothamsted Institute in the U.K., And the Rothenstein Institute is the oldest agricultural institute in the world, founded by one of the inventors of a thing called fertilizer. Strangely enough, obviously is working primarily on the omega-3 oils, but obviously they have a lot of land there, they have a lot of capability, we've had a good working relationship with them. And as these rules in the UK continue to evolve, we'll be pretty open to finding ways to leverage that. You know, I think that's generally a trend. I would say something else. I was in Starbucks the other day, and I noticed they have the Impossible Breakfast Sandwich. And I think it would definitely be impossible to get me to eat it, but that Impossible Breakfast Sandwich contains a GMO product, and that GMO product is also launched in the UK in Burger King. And so I think, you know, there's been a major shift in the perception of how important gene technology is to society, a large part that's driven by essentially the whole, you know, I would say COVID situation. And I think the incredible success of these, you know, I would say gene-based vaccines. And so, you know, I think there is a shift. Now, mainland Europe, I wouldn't bet on that. I mean, I just, I don't know how to explain Europe other than, you know, it's just protectionism. And so I see tremendous opportunities for this, but it's really good to see the UK moving in that direction. The Canadians have indicated that they're going to do something along the same lines as the new US secure role, but they haven't actually released that information yet as to how they're going to do that. And then I think what you're seeing is a lot more sort of approval of GM products in China. So I think you're going to see a lot more GM in products in China, India, other parts of the world. I think the UK is going to be the same. Germany and France, well, I'll leave that to you to figure out. You're way smarter than me.
spk04: Okay. I also heard you had some news about the field growing in North America, but I also understand that you're working with some big players in South America and Australia, so I was just wondering if there's any updates in that area. Yeah.
spk02: Yeah, so we continue to do work in South America. I mean, we haven't spoken specifically about it. We still have work ongoing down there, and obviously we're looking at other parts of the world as well. South America is pretty attractive. I think Western Australia looks pretty attractive or something. So, you know, we are looking fairly globally with this. You know, one of the cool things about that map of where we're doing trials that Christy showed you was, I mean, that's pretty much from northern Saskatchewan all the way down to the top of Florida. And Camelina seems to have, I would say, capability across that range, obviously in the winter season. And so it's a pretty robust plant. And it's obviously, we believe it has a very high upside potential.
spk04: And for the PHA, is there kind of a timeline we can expect to, I guess, get since we currently have it at 2025? Is there any kind of way that can be pushed up and is there any reason for it?
spk02: Yeah. So, you know, right now we are sort of focusing, I would say in terms of commercialization of PHA, it's really more focused on that. The commercialization activities is really focused on partner outreach, but we are a pretty small company and we have a very full plate dealing with potential partner prospects currently in the sort of biofuel space. And so, you know, our bandwidth is pretty limited to work on other things. However, again, Christy and our team You know, we do have the first acre scale PHA trials out there this year. We expect to be planting those soon. We're very much looking forward to that. That will give us, you know, thousands of pounds of seed to begin doing some process work. And I was up in the lab the other day and they're crushing Campbellina in our new small scale crusher. So obviously it was nice to see actual oil coming out of that. Now they did overheat the damn thing. and start burning it. But the point is, I think, we're really looking forward to getting real quantities of PHA camelina seed in hand to begin looking at the processing to recover that product. And one of the things that's really neat about a three-product seed is the added value you get on the oil component because of the ability to use the carbon-negative PHA bioplastic as a way to further reduce the carbon intensity of the oil so you know we've put out a white paper on that it's on our website uh it's a really interesting uh set of synergies between those those two products and then of course you still get protein meal which is pretty important for food okay my last question is has there been any testing for the level of emissions uh comparing your renewable diesel to the carbon diesel Yeah, so the way that works in terms of how that goes, if you look at petroleum diesel, I mean, it's got a carbon intensity of around 100. I think if you use soybean oil-based biofuel or canola-based oil biofuel, you've got a carbon intensity of around 50. And then I think what we've seen so far, and again, we are still early days, but others in this space, like Global Clean Energy, have indicated a carbon intensity of around somewhere between 18 and 25 for camelino oil. Now, obviously, as you further improve the productivity of the crop, as you further improve the seed oil content, then I think there's definitely opportunities to improve that. And then, of course, it remains to be defined, but I think we're pretty optimistic about the potential of having an even lower carbon intensity score with the winter types, but that remains to be measured. And then, as I said, when you get into the future, what we see is the future of the the petroleum replacement market camelina will be the PHA camelina producing oil, which will have a very low, potentially negative carbon intensity, the bioplastic, and then, of course, the protein meal for feed and food.
spk05: Michael, was that your last question?
spk02: Yeah, that was my last question. Thanks, Michael. It was great to meet you.
spk05: I will now hand the call back to Lynn.
spk06: Yeah, thanks, Stacey, and I'll turn the call back to Ollie for closing remarks.
spk02: So I would like to thank everyone for joining us on the call tonight, and especially our shareholders for your continued support. This is an exciting time for Yieldtown as we focus on the opportunities ahead in 2022 and beyond. In the near term, we are focused on preparing for the launch of Camelina for renewable diesel, as well as on advancing our activities on PHA bioplastic and omega oil products in development. I want to thank everyone at Yield 10 for keeping us on track to reach our goals in 2022. Have a nice evening.
spk05: Thanks, everyone. You may now disconnect.
Disclaimer