Yield10 Bioscience, Inc.

Greetings and welcome to the fourth quarter 2022 Financial Results and Business Upgrade conference call for YIELD 10 Bioscience. During the call, participants will be 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 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, Doug. Good afternoon, everyone. Welcome to the Yield 10 Bioscience fourth quarter and full year 2022 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 Hazzard. Earlier this afternoon, Yield10 issued our fourth 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 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. 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 filing with the SEC, including today's 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 now turn the call over to Ollie. Thanks, Lynn.

Good afternoon, everyone, and thanks for joining our call. In 2022, we made solid progress on our commercial plan to launch Camelina as a platform crop with a near-term focus on the biofuel free stock market. Today, we'll provide an update on our business, including recent accomplishments, the market opportunity in the biofuel market, our progress towards developing herbicide-tolerant Camelina varieties, Our plan to begin scale-up of omega-3 camelina, present 2022 financials, and summarize key milestones. We will then open the call to questions. Let's turn to slide three. Our business model is to develop elite camelina varieties, contract production of camelina grain with farmers, and supply customers with renewable and food space under off-take agreements. With our current elite varieties in early commercialization and our two proprietary value-added camelina seed products in development, We are positioned to establish and grow a large seed products business. Our lead product is low carbon feedstock oil to meet the increased demand from the biofuel sector. We are expanding the camelina seed available for growers, working to execute additional production contracts and continue to progress partner outreach to secure partnerships and offtake agreements to carve out a commercial footprint in this market. We believe this will be followed by the launch of omega-3 camelina to produce high value omega-3 oils for the pharmaceutical, nutrition and feed markets, And longer term, we are developing PHA bioplastic camelinas to supply the growing demand for biodegradable zero-waste plastic packaging. Together, these products represent a significant revenue opportunity for Yield 10. Let's now turn to slide four. We're making solid progress executing our plan to establish our camelina seed products business targeting biofuels. On the business development side, our team has been engaging with potential supply chain partners, supporting our vision for a capital light business model. In January, we announced the signing of an MOU with Mitsubishi to establish a partnership for supply, offtake, and marketing of Camelina Oil as a pre-stock oil for biofuels, where their interest is focused on new feedstock supply for sustainable aviation fuel, or SAF. In February, we announced the signing of an MOU with American Airlines to collaborate to develop the value chain for Camelina for SAF. American Airlines represents a potential offtake customer that is committed to sustainability. and we're looking forward to working with both Mitsubishi and American in the months ahead. In addition, we are announcing today that we have signed an agreement with a privately owned integrated crusher biorefiner customer for offtake of camelina grain in the key target growing region. This new relationship is important for both parties to establish a regional camelina supply chain from Y10 seed through to sale of biofuel. Another benefit is that this business is located in a key growing region And it's helped us to expand relationships with growers and will allow us to have a location to crush chamomile grain at small scale. We view this as important to ensure grain is removed from farms and growers are paid in a timely manner. This partner prefers that we don't mention them by name at this time, and we've agreed to respect that request. As 2023 progresses, we expect to continue discussions with multiple additional entities in the biofuel value chain. which will enable UO10 to establish a network of alliances to supply chamomile feedstock oil to biofuels. In our role as a grain originator and performance trait developer, we'll continue to scale up seed to enable contract growing in thousands of acres in the near term, with the ramp up of acres accelerating with the introduction of herbicide tolerant chamomile varieties. We believe this will lead to hundreds of thousands and then the first million acres of annual production. In the fall of 2022, We secured multiple grower contracts for contract planting of winter camelina for grain and seed production primarily in the areas of southern Canada and Idaho. And in the first quarter, we kicked off our campaign to recruit growers in our target regions for camelina spring and fall planting. Our goal is to supply the most sought after camelina varieties in industry based on their seed traits, bringing differentiation to those varieties. Ease of crop integration to crop rotations, yield and economic return the primary drivers for grower adoption and our focus on herbicide and disease tolerance as well as novel performance traits is intended to deliver a robust versatile high yielding camelina crop on the top right side of the slide you can see a photo taken a few weeks ago of seed scale spring ether to e392 herbicide tolerant camelina the progress we're making with seed scale up as well as the steps we're taking to deregulate the trait with usd avis And to obtain label amendments will enable us to be able to participate in the launch of this new variety. Christy will describe in more detail our advances in the Camelina product development. Let's now turn to slide five. And as you can see in this slide, yield 10 has a very strong focus on biofuel-free stock oil in the near term. There have been several tailwinds for increasing vegetable oil production to produce decarbonizing biofuels. Let's turn to slide six, the feedstock demand. Investments to convert refineries from petroleum to biofuels in the U.S. alone has created demand for an additional 6 billion gallons of feedstock oil in the near term, even before we consider demand in other regions. This new demand will have to be met mostly from increased use of vegetable oil. These investments are necessary to meet regulations such as the California Low Carbon Fuel Standards, LCFS, and similar standards extended to other states and Canada. The feedstock oil created by these new refineries has also resulted in investments in expanded oilseed crushing. Production of soybean and canola alone cannot meet this growing demand for biofuel and still support food production. And this in turn has created the market pool for new oilseed crops and particular oilseed cover crops. Based on this, we see the potential for at least 4 to 5 million acres of camelina production. Turn to slide seven. We believe camelina represents an ideal option for the biofuel market. Camelina can utilize the same farming, storage, and processing assets as other oilseed crops. It is a good combination of seed oil levels that produces a high quality protein meal. We have both spring and winter varieties to enable new crops rotations to use acres, which are less productive for soybean and canola, and double cropping to use land that would otherwise lie fallow. Furthermore, the camelina plant is amenable to biotech tools Therefore, we can use it as a platform to crop to increase its productivity and for producing high-value products, all of which provides a good value proposition for the farmer. Let's turn to slide eight. The key to making Camelina a meaningful source of new feedstock oil for the biofuel market is largely driven by grower adoption of Camelina as an integral part of their crop rotations. As seen on this slide, we, like others in the oilseed cover cropping space, place a strong emphasis on building partnerships with growers. grower adoption will be largely driven by the ease of integration into their existing crop and wheat control cycle. Adoption will also be driven by their revenue, and here we have a strong emphasis on increasing the harvest value of the crop, and growers also want to know there will be opportunities for further continuous improvement, hence our emphasis on the technology pipeline. Finally, growers want to see that the value chain is in place to ensure the Camdena grain has a clear path to market. In a nutshell, We plan to make it straightforward and profitable for our growers to produce camelina grain for yield 10. Let's start to slide 9. There are three components of the biofuel value chain for camelina. The first is high-quality camelina seed for contract farming, and this is where yield 10 has capabilities to build unique differentiation. The second component is logistics and seed crushing, and the third is refining to produce renewable diesel or SAF. Of course, fuel customers also play a role as they commit to the use of sustainable fuels, producing demand for the product. Our vision for the business is to contract with growers for large-scale production and build a network of alliances for contracted offtake of the grain for biofuels and meal for animal feed. Our MOUs with Mitsubishi and American Airlines demonstrate the potential for establishing downstream alliances, committed to accelerate the ramp-up of Cameroonian acres to supply the biofuel market. A low-lear, lower key. It is significant, in fact very significant, that we have signed an offtake agreement with a privately owned crusher by a refiner in a key target region, as this provides us with a customer for handling a grain offtake. With this agreement in place, we can avoid some of the challenges of scaling the grain origination business and line contract production with the offtake. When we contract with growers, they want to be assured that the grain can be moved off their farms quickly after harvest. Please turn to slide 10. Not surprising, given the global demand for new sources of feedstock oils over the past several years, this has been a meaningful investment in the development of new oilseed crops targeting the biofuel market. The new crops in commercialization for this market are pennycress, cabernet, and camelina. As the development of these crops has progressed, they have attracted the attention and investment of seed companies, oil crushers, and energy companies. For the most part, we view these new oilseed crops and players as fellow travelers. to address this very high and growing demand for feedstock oils. But uniquely among them, however, Yield 10 elected early on to use all of the tools in the crop development toolbox to enhance the value of camelina as a preferred crop for farmers. And to our knowledge, we are furthest ahead with advanced weed control technology. Among the players commercializing camelina, we believe we are well positioned due to our technology platform, which enable us to make significant improvements to the integration of camelina into crop rotations. increased yield, grain value, and grower revenue over time. I will now pass the call over to Christy.