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spk05: Hello and welcome to the third quarter 2023 financial results and business update conference call for YIELD 10 Bioscience. During the call, participants will be in listen-only mode. The presenters will address questions from analysts today. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to your host, YIELD 10 Vice President of Planning and Corporate Communications, Lynn Brum. Please go ahead.
spk04: Thank you, Sarah, and good afternoon, everyone. Welcome to the YIELD 10 Bioscience third quarter 2023 conference call. Joining me on the call today are President and CEO, Dr. Oliver Peoples, Vice President of Research and Chief Science Officer, Dr. Christy Snell, and Chief Accounting Officer, Chuck Hazzor. Earlier this afternoon, YIELD 10 issued our third quarter 2023 financial results. This press release as well as slides of today's presentation are available on the investor relations events section of our website at yale10bio.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 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 risk to differ materially from those anticipated. These risks include risks and uncertainties detailed in Yield 10's filings with the SEC. The company makes, 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. And I'll turn the call over to Ali.
spk06: Thanks, Lynn. Good afternoon, everyone, and thanks for joining our call. Let's now turn to slide three. We're making solid progress in our technology and business plans to launch Camelina as a platform crop with a focus on the biofuel feedstock market and the high-value market for omega-3 oils. Using different Camelina varieties, both products can be produced in a closed-loop value chain, which encompasses contracting with growers and oilseed crushers and securing off-take agreements with end users for the different oils. Today, we'll provide an update on recent accomplishments in our camelina seed genetics to biofuel platform, our progress developing herbicide-tolerant camelina varieties, provide an update on our omega-3 camelina program, present third quarter financials, and rise key milestones. We will then open the call to questions. Let's now turn to slide four, progress on key 2023 business goals. Over the course of 2023, we've achieved numerous milestones on the path towards commercializing camelina as a platform crop for biofuels, deploying herbicide tolerance and producing high-value omega-3 fatty acids in camelina. In biofuels, our key commercial goal in 2023 has been to demonstrate the value chain from yield 10 camelina seed to commercial offtake of camelina grain to a customer. An important goal has been achieved. as we have generated cash proceeds from seed shipments to growers and from grain shipments to a biofuel player. In 2024, we intend to continue to deliver grain for use in biofuel based on the winter camelina core contracts we signed this fall. As this is a key area for partnership, we are continuing to progress discussions to form additional partnerships in biofuels. A year ago, we signed a one-year extension of our research and option agreement with Rothamsted to complete the omega-3 camelina program which had been delayed due to COVID restrictions in the UK. We've made good progress with our Omega-3 Chiamelina platform in 2023, including developing project timelines and a launch plan for the first product, EPA Omega-3 Oil. A few weeks ago, we announced that we've exercised our option to finalize an exclusive global commercial license with Roppenstead. Shortly thereafter, we announced the signing of an LOI for a partnership with BioMar Group, one of the largest aquafeed producers in the world, And I'm pleased to let you know that we have recently initiated seed scale of activities for the Omega-3 EP8 Camelina line in Chile. The EPA line produces up to 20% EPA in the seed oil. Going into 2024, we anticipate the production of pilot quantities of the purified EPA oil for business development purposes and potentially larger scale field production of EPA Camelina to support our commercial development activities. Let's now turn to slide five. establishing camelina production. Our business plan is based on using advanced genetics to develop camelina as a platform crop for producing oil, meal, and specialty products. Today, there is a significant opportunity in the biofuels market where vegetable oil is processed into sustainable aviation fuel and renewable diesel. Significant new demand for feedstock oils is being generated as new refineries are coming online and as new environmental commitments are being made to utilize these cleaner fuels across the globe. Based on our partner discussions, we believe the biofuel sector recognizes that there is going to be a divergence of supply and demand at some point, but it's not yet clear when exactly this will happen. For 2023, we contracted approximately 2,000 acres of winter and spring camelina for production in Canada and in the U.S. In Canada, we engaged growers in southern Alberta, in northern Alberta and the Peace River region, in Saskatchewan and Manitoba. In the U.S., we contracted growers in Idaho and Montana. We were very pleased with the level of grower engagement we had. Growers shared their insights on the crop, whether on farm practices or opportunities they see for how they could use the crop in the rotations, and comparative economics. In particular, the growers had strong positive feedback on the types of herbicide-tolerant varieties yield 10 is developing and how those could significantly expand the opportunity and add value for them. We were also very pleased with the performance of our current Campbellino varieties. For example, our WDH2 winter variety is very robust in cold temperatures, and planted seed shows a built-in fail-safe mechanism whereby if seed did not germinate in the fall, it survived winter and germinated in the spring. Both our winter and spring varieties require some moisture to germinate, but then demonstrate excellent drought tolerance over the growing season. For example, we had a 160-acre field in southern Alberta that received just 1.5 inches of rain over the entire season, but over twice the yield of neighboring mustard and canola crops grown under the same drought conditions. Camelina also showed good pest resistance, in particular to flea beetles and in some areas grasshoppers, which are pests in other oilseed crops such as canola and mustard. During the third quarter of 2023, our contracted growers harvested their winter and spring camel in the fields, setting in motion the steps in the value chain from planting, harvest, grain delivery to an off-date customer. The photos in this slide illustrate the steps of the value chain we established in Western Canada. In the third quarter of 2023, we contracted with existing and new growers and planted winter acres for harvest in summer of 2024. As you can see in the photo to the right, there's already been snow cover on that crop in Canada. The same closed-loop value chain can be used with our omega-3 camelina varieties for the production of omega-3 oils in the future. I will now turn the call over to Christy for an update on the development of HT and stacked HT camelina varieties.
spk03: Thanks, Ali, and good afternoon, everyone. Let's turn to slide six. A couple of years ago, we prioritized the development of herbicide-tolerant camelina to provide farmers with a robust weed control package supporting the broad adoption of the crop in North America. We have been waiting for regulatory responses from USDAFIS and the Environmental Protection Agency to enable the use of glufosinate for control of broadleaf weeds with our engineered camelina lines. We hoped that we would receive responses from the agencies before year end, and I'm delighted this afternoon that we heard we received a positive response from USDA APHIS stating that our glufosinate-tolerant line is not considered regulated by the agency. Growers have provided us with positive feedback on the potential of using glufosinate-tolerant camelina in their rotations. Historically, incorporation of herbicide-tolerance traits, including glufosinate-tolerance, into canola helped transform it from a marginal crop to a major crop grown on millions of acres. and we believe camelina has the potential to follow a similar path. We have demonstrated tolerance to applications of glufosinate in three seasons of successful field tests of our lead spring HT camelina variety. One main objective of our 2023 field testing was to collect and analyze the data on the seed composition of the herbicide tolerant lines compared to controls. Samples have been harvested for these analyses. This is required for a data package to verify the safety of the meal for animal feed through a self-determination process. We also intend to voluntarily submit this package to FDA in 2024. With field data in hand and seed scale-up activities underway, we remain on track to launch our first herbicide-tolerant camelina variety as early as 2025. Let's now turn to slide seven. Over the course of 2023, we made good progress with the development of stacked herbicide tolerance in spring and winter camelina. Our stacked herbicide tolerant camelina exhibits tolerance to over-the-top applications of gluthosinate for broadleaf weed control, as well as tolerance to Group 2 herbicides in soil. Camelina is very sensitive to Group 2 residues. Thus, the Group 2 trait is important to provide camelina with tolerance to SU and ME herbicides that may remain in the soil from a previous season's crop. This past summer, we reported encouraging data from our Springfield trials demonstrating robust stacked herbicide tolerance in multiple events. The photos on the slide show examples of events with stacked herbicide tolerance that have survived herbicide treatments. Little to no growth of control plants was observed in plants without the stacked HT trait in plots labeled with red dots on the slides. We are currently analyzing agronomic data from the Springfield trials and are measuring seed yield and seed oil content. We expect to choose the best lead and backup lines to move forward in our pipeline. In our winter 2023 field tests, we are testing for the first time several candidates stacked HT winter Camiglina lines. Here too, we plan to choose the best lead and backup line to move forward in our pipeline based on field test results. Earlier in 2023, we filed a request for regulatory status review for RSR with USDA to determine if the stack trade is exempt from regulation. I am pleased to say that we also received a response this afternoon from USDA APHIS stating that our HT stack is not considered regulated by the agency. We believe that stacked herbicide tolerance lines will be a win-win for growers and yield 10, since the trait will allow robust weed control for farmers, potentially increasing yield and revenue, and providing tolerance to soil residues of previously applied Group 2 herbicides. This is expected to result in broad expansion of acres available for camelina planting. Let's now turn to slide eight. As shown in the figure on the right of the slide, our stacked herbicide-tolerant E3902 is a highly engineered camelina plant. The molecular stack in this plant is a result of the use of a variety of tools. The oil content trade in E3902, which improves seed oil content by 5%, was achieved by editing eight genes. We previously determined that the resulting genome-edited E3902 line is not considered a regulated article with the submission to USDA FIS under the former AMI regulated process. To incorporate stacked herbicide tolerance, we inserted a gene that confers tolerance to glufosinate-containing herbicides when expressed in a plant. We also inserted another mutated gene that, when expressed in a plant, confers tolerance to MEs and SUs, both group 2 herbicides. Modern biotech tools allow this straightforward stacking of traits, and we believe that the U.S. science-driven regulatory process is favorable for camelina with stacked traits, as evidenced by our recent positive decision from USDA, stating that our HT stack is not considered regulated by the agency. Our EPA 8 Camelina is also based on a molecular stack of genes, enabling EPA production in the oil. We are utilizing molecular stacking to deploy new traits in Camelina with the aim to deliver ongoing enhancements to crop performance, which, if achieved, would bring enhanced revenue and margin to the crop. Our strategy is to create a pipeline of highly engineered elite camelina varieties to deliver ongoing performance improvements in agronomics, yield, oil content, meal profile, and other desirable attributes. We are deploying these novel traits through genome editing, traditional genetic modifications, and breeding to create new camelina varieties. For example, we are deploying combinations of traits for additive effects where we are evaluating performance traits such as C3004, C3007, and C3020, and others to drive ongoing improvements to plant vigor, seed yield, and oil content. As we create new engineered camelina varieties, we intend to protect our camelina varieties through plant variety protection and patent filings. I'd like to acknowledge the tremendous efforts of the Yield10 technology team Their continued diligent efforts have produced the elite herbicide-tolerant camelina germplasm that forms the foundation of our commercial camelina pipeline for production of feedstock oils for biofuels. These herbicide-tolerant lines are expected to provide the elite camelina germplasm background for high-level production of omega-3 oils and, in the future, PHA bioplastics. In the months ahead, we look forward to further field testing our lead commercial quality herbicide-tolerant camelina lines, advancing the omega-3 oil technology platform, and we seek to secure favorable regulatory decisions for our lead camelina products. I'll now hand the call back to Ali.
spk06: Thanks, Christine. Let's now turn to slide nine, the omega-3 market opportunity. We secured the rights to the omega-3 camelina technology from Rothamsted in 2020 because we believe that the omega-3 oils containing EPA and DHA fatty acids represent a very significant differentiated and growing market opportunity. These omega-3 fatty acids are essential to aquaculture feed and human nutrition. As we've highlighted before, there continues to be major global supply constraints and disruptions in oil produced from ocean harvested fish. It's been reported recently that the cancellation of the first Peruvian anchovy harvest earlier this year cost the industry a billion dollars. And while the second anchovy harvest is going forward, the authorized catch is about 25% below 2022 levels, which is expected to extend the supply constraint on the industry. We are also seeing positive developments on the regulatory front with Norway, the largest producer of farmed salmon, recently approving the use of a GMO omega-3 oil from Newseed, they produce a DHA-containing oil in canola. As a result of continuing supply constraints, as well as evidence of a more receptive regulatory environment, we are seeing increased third-party interest in alternative sources like the Camelina omega-3 platform. Based on the technology developed by Rothamsted, we believe that producing omega-3 fatty acids in Camelina represents a potential game-changer for the omega-3 and salmon farming industries. by enabling a plant-based predictable supply of this high-value nutrition ingredient. Based on our successful collaboration with Professor Jonathan Napier's team at Rothamsted, we recently executed our exclusive option to an exclusive commercial license to the Omega-3 Chem winner. Reflecting industry interest in new sources of Omega-3, we also recently signed a letter of intent with Biomare Group, a global aquafeed producer and industry leader, to develop a collaboration on the production of Omega-3 for this market. Let's now turn to slide 10, with an overview of the omega-3 camelina development status. On the regulatory front, we filed an RSR with USDAFIS in third quarter for the EPA-8 camelina line, which produces oil with up to 20% EPA content. And we are preparing a second RSR filing for an omega-3 camelina line that produces both EPA and DHA at levels similar to Northern Hemisphere fish oil. Using the RSR process for regulatory approval by USD Avis under the secure rule, we see a promising path to production of omega-3 in the U.S. We recently began scaling up EPA Gamelina seed to support business development activities and potentially additional planting in 2024. The EPA-8 oil will also have use in aqua-tree formulations as it is closer to commercial production and can be blended with algal DHA oil. Rothamsted has also developed and extensively tested the omega-3 Camelina DHA-1 line, which contains 10% EPA and 10% DHA in the oil. Published results on aqua feed studies carried out in previous Rothamsted collaborations with Biomar have shown that the DHA-1 oil can serve as a drop-in replacement for fish oil. Human clinical studies also published have shown this oil to be an effective alternative to fish oil in the human diet. We look forward to completing the commercial license with Rothenstead and working to form partnerships with Biomart and others to advance Omega's V-CAM lead-up towards commercialization. Chuck, over to you.
spk07: Thanks, Ali, and good afternoon, everyone. Let's turn to slide 11, third quarter results. We ended the third quarter of 2023 with $2.8 million in cash and cash equivalents. During our third quarter of 2023, we raised $3.7 million in a public offering of units consisting of common shares and warrants. We expect that our cash on hand, including the proceeds from the offering, will support our operations into December of 2023. We are engaged in a dedicated and ongoing effort to secure additional funds in the very near term in order to continue our operations. Our net operating cash used for operating activities was 2.6 million for the third quarter of 2023, as compared to 2.7 million for the third quarter of last year. For the full year 2023, we continue to expect total net cash usage in the range of $12.5 to $13 million to fund our operations, including remaining payments to our growers for the first camelina grain harvest. Let's now review the third quarter near-to-date operating results. For the third quarter of 2023, Yiltan reported a net loss of $3.7 million, or $0.41 a share, as compared to a net loss of $3.5 million, or 71 cents per share, for the third quarter of the previous year. And as expected, due to the completion of our Department of Energy grant during our first quarter of this year, we did not report grant revenue during the third quarter of 2023. We did report $3.1 million in grant revenue in the third quarter of 2022. R&D expenses were $2.2 million during the third quarter of 2023, And during the third quarter of 2023, we recorded our first $100,000 in payments received or due to us from shipments of seeds and harvested grain to growers and offtake partners as an offset to R&D expense. R&D expenses in the third quarter of 2022 were $2.1 million. General and administrative expenses were consistent between the two years at $1.5 million for the third quarter of both 2023 and 2022. For the nine months ended September 30th, 2023, the company reported a net loss of $11.2 million, or $1.70 per share, compared to a net loss of $10.3 million, or $2.09 per share, during the first nine months of the previous year. Year-to-date grant revenue during 2023 and 2022 from the completed DOE grant were $0.1 million and $0.4 million, respectively. Research and development expenses were $6.4 million and $5.9 million during the nine months ended September 30, 2023 and September 30, 2022, respectively. And G&A expenses were $4.9 and $4.7 million during each of those periods. For more details on our financial results, I ask you to please refer to our earnings release. Ali, back to you.
spk06: Thanks, John. Let's now come to slide 12, upcoming milestones. Before getting into the upcoming milestones, I'd like to comment on the accomplishments of the Yield 10 team, including the hot off the press news we received from USDA this afternoon. Congratulations to the entire Yield 10 technology team, who under Christy's leadership have demonstrated compelling capabilities in the development and regulatory approval of advanced camelina varieties developed using genetic engineering. On the commercial side, we have set up a value chain in biofuels requiring seed production and grower engagement. and charted a path to use camelina as a platform crop to produce omega-3 fatty acids based on our collaboration with Rothensted. For the biofuel market, we are continuing partnership discussions across the biofuel value chain to support ramping up acreage of camelina to produce low-carbon feedstock oil for that market. As we work to realize our vision of leading the industry in the commercialization of differentiated camelina varieties, Our focus is on introducing HD and stacked HD camelina varieties that are well suited to farmer rotations in North America. I was thrilled to hear from Christy this afternoon that we have received regulatory clearance for HD and stacked HD camelina. This is not only a major milestone for yield 10, but also a major milestone for camelina as a new crop. These positive regulatory outcomes bode well not only for the pending review of our EPA camelina RSR, but also for the DHA1 RSR we are preparing and for the performance traits in our pipeline. We are building seed inventory over the winter in South America to support grower contracts. We believe the omega-3 products represent a wide array of commercial opportunities. These essential fatty acids are used in aquaculture feed, pet food, pharmaceuticals, nutraceuticals, and even cosmetics. We look forward to completing the commercial license with Rothamsted and working with Bioman and others to form a partnership to produce omega-3 oil for use in aqua feed. There have been some recent patent awards and notices of allowance for filings in our IP portfolio over the last few months as we continue to expand and build our intellectual property portfolio. With that, I'd like to turn the call back over to Lynn for questions.
spk04: Thanks, Ollie. And Sarah, we're ready for questions.
spk05: Thank you. If you have a question, it is star 1 on your telephone keypad. If you wish to withdraw your question, simply press star 1 again. Your first question comes from the line of Ben Clevey with Lake Street Capital Markets. Your line is open.
spk09: All right. Thanks for taking my questions. In your prepared remarks, you noted that you were continuing to progress the biofuel partnerships, but there's no mention made of Marathon Mitsubishi or American in your prepared remarks. I'm wondering, first of all, if you can give us an update on the status of these three relationships. Are they all ongoing, or have any of those parties exited discussions with you?
spk06: So I'm not going to get into too many details, but no one has exited at this point. And we have indicated that we are in extensive discussions in the biofuel space with other parties. So it's a very busy area, as you can imagine. I think the issue, of course, is a small company working with these giants to get things to the point where we mutually agree on the path forward. And that's what we're working on. So nothing has changed with those guys.
spk09: OK, well, that's good to hear. The follow up to that, to your comment right there. I mean, I'm wondering, I appreciate you're not going to get into specifics, but I'm wondering if on a high level, you can talk about, you know, kind of what the barriers, if any, have been to converting these, you know, relationships to a commercial or investment or a formal investment. You know, is there any kind of broad characterization that you can help make to give us confidence that these are going to be reaching a successful completion here soon?
spk06: No, I think we remain very optimistic that we will achieve a successful partnership. Obviously, that takes two of us to agree on the structure, the funding, and how we go about this. So, no, we can't really provide color in individual ones, but I would say overall, the interest remains very strong. There's been new players come to the table, which is great. But ultimately, it's a matter of getting the time and the decisions made within those organizations to essentially go forward on the path that we want to go forward on. So, you know, we can't really provide too much color on individual companies.
spk09: Okay. Fair enough. Last one for me, and then I'll get back in line. You called out $100,000 of Camelina grain deliveries that were recognized as an offset to R&D in the quarter. Can you talk about the level of inventories of grain you have today or, you know, grain that's expected to arrive here soon, you know, for future delivery over the next, you know, over the next quarter, over the next year. And if those are going to be recognized as revenue or as continued still as R&D offsets.
spk06: So I think, you know, obviously, you know, we're in that sort of gray zone between revenue and revenue and obviously we're working with the audit group to make sure that we stay on the right side of the fence on that. So I'm not sure we can provide much more color. We do have additional grain and or oil in hand, but we're trying to essentially, you know, use that strategically versus simply to make a quick sale. I mean, we have avenues to sell that quote unquote or get reimbursed for it if you like. But our goal is to leverage that oil for other purposes, and we have discussions ongoing regarding a more strategic use of that material.
spk07: Holly, I think we've also indicated we've completed the harvest from the first two seasons.
spk06: Yeah, we've completed the harvest, and that's basically where we are.
spk04: And I would add to that, Ben, that as we talked about seed scale-up, As well, you know, we're positioning, you know, across our portfolio of existing Camelina lines that are commercial as well as the HT and stacked HT that are coming behind it to build inventory to support those launches that we're anticipating. So that's also part of the picture to, you know, be able to have sufficient seed for grower contracts. Yep.
spk09: Yeah, no, fair enough. That's an important calculus to make at this stage, so understood on all counts. All right, well, that does it for me. Thanks for taking my questions, and I'll get back in line.
spk04: Okay, thanks, Ben.
spk05: Your next question comes from the line of Anthony Vendetti with Maxing Group. Your line is open.
spk08: Hi, thanks for taking the question. This is actually Jeremy on the line for Anthony. Just one quick question. is there any overlap between all these different segments that you're in? Meaning, is there a limit to when you grow something, you sort of have to focus on growing a camelina, let's say, for the crushers or for the herbicide tolerance, or are they separate and you could really just keep growing each segment?
spk06: Yeah, no, no, no. The way to think about it, Jeremy, is that the first generation was obviously the lines, for example, WDH2 that we started the grain contracting with. or the E3902.
spk10: Obviously, what's going to happen is those lines will be generation two, generation three.
spk06: So they'll all ultimately end up HT. It's just that it takes time to transition through this process of scale up with the non-engineered lines and ultimately replace those with the engineered lines, which have higher value, higher productivity, better integration into crop rotations. And that will be a continuous process, just like Bayer or Curtiva or any of the big seed companies does. There's a continuous improvement process in place.
spk08: Okay, understood. Thank you. And then there's one last question. You mentioned that you think you could get commercialization for the herbicide-stacked camelina, herbicide-tolerant camelina in 2025. What does that – I know it's a little early, but what does that commercialization look like to you? How does that play out?
spk06: Well, I mean, obviously, in terms of commercialization, and I'll let Christy speak to the technology because it's a pretty big accomplishment for a small company. You know, really fundamentally what it's going to come down to, we've got other steps in the regulatory process to go through. The biggest one and the most expensive one from the point of view of the development is really the USDA FIS because, obviously, if you're doing this work under permitted conditions, it's very expensive. And there's a lot of restrictions and regulations around, as there should be until they deregulate it because they believe it's safe. So I think the reality of it is that we're going to move forward with this. And I think we have a great project coming up. We know from the farmers they want this. But we need to make sure we check all the boxes in 2025. By that time, we'll also build up quite a bit of, I don't want to use the word inventory, but available seed for larger-scale planting, as well as generating the grower interest and using it. We know the grower interest is very, very strong, but obviously we've got more work to do in 2024 to get to that point.
spk03: Do you want to talk a little bit about that?
spk08: Yeah, you can talk. Yeah, I agree.
spk03: Well, I guess all I can say is that our lead event for the glufosinate tolerance is very robust in this field and, you know, it's ideal for approval for regulatory agencies. So, the team has done a great job in constructing that event and evaluating it. Okay.
spk10: All right. Thank you. I'll hop back in the queue.
spk05: Once again, ladies and gentlemen, if you have a question, it is star one. Your next question comes from the line of Noel Parks with Tuohy Brothers. Your line is open.
spk01: Hi. Good afternoon.
spk10: Hi. Hi, Noel.
spk01: Hi. Sorry. I just had a little problem with my phone options.
spk00: Just a second. Sorry.
spk04: OK.
spk00: OK. I think I'm back. I was just wondering if you were just talking about the glucosamine tolerance. But I was wondering if you could maybe just drill down a bit more into feedback from growers from the most recent harvest and looking towards the next crops. And I'm sort of thinking in terms of if any of the feedback you've gotten, say, year to date has really made any changes in terms of where you're headed in product development.
spk06: Yeah, so I can kind of give you a broad kind of sweeping overview. I think in general, obviously, there's a pretty bad drought in that area of North America this year. And so I think the number one thing was actually compared to the other crops that I'm growing in my farm, this thing looks really very good. It's obviously very robust to drought conditions. It does require water, but it's very robust. I think the other aspect of it, of course, is that as they look at the rotations, as we talked about the herbicide tolerance we're developing, that's when they get very excited about it because they see ways to leverage that herbicide tolerance just as a way to better manage the rotations. And that's another very encouraging thing. And so I think in general, you know, I would say the feedback is to remain very interested. And one thing we did see, and at least coming from our commercial team, was a lot more interest from the growers in planting spring camelina in 2024 because of some of the challenges we had with some of the other crops. So that was interesting to see. Now, at the back end of 2023, of course, you've had a drought for many months, and so the soil is very, very dry. And so we actually backed off in some of the winter planting just because of the drought conditions in some areas, recognizing that that's probably the right thing to do at this stage while we bring forward these next generations of wine and so on. strong interest. It's definitely got the attention of the growers, no question about that. The growers are also, as I said, very excited about the prospects for the glufosinate follower in camelina and in the stacked camelina, because if they're using these group twos and a significant share of their acreage, those acres are just not available for planting camelina immediately after. So they're definitely giving feedback that we're working on the right things, we're doing the right thing, Not to be negative on anybody, but one of them did tell me that if we were doing glyphosate, they'd have thrown us off the farm because of some of the weed issues they've seen. They're pretty vocal. They have strong opinions and very smart people because, of course, being a farmer is not easy. It's clear we're working on the right thing. It's clear we've got to do it right. This first step with USDA indicating the science is absolutely solid and they don't see really any risk. The next step is obviously just what we believe is getting the data on the meal and demonstrating it's safe. So I think the way I look at it going forward, it's all about two things. It's about safety and it's about science. You get the science right and get the safety right, and then make sure it's adding value for the grower. And that's the way we are focusing on developing our new products.
spk00: Great. Thanks for that detail. And then sort of heading to another part of the value chain, I wondered, As you continue talking with various parties about partnership, could you generally characterize what discussions with the integrated oil companies or the downstream refining companies are these days? I'm just – well, two things. I'm kind of curious about their attention span, and part of that is that they're – in my mind, they've been in their general sort of ESG decarbonization portfolios They've made some – some of them have made some fairly puzzling investments, I'd say, over the last couple of quarters. And also, I recognize that they can also tend to be kind of bureaucratic, which means it can take a while to get consensus on things. So anything you'd like to say about that would be great.
spk06: Yeah, so I think it's – let me just touch the position two things. So we are really pushing forward right now on two different oil products. And it's absolutely crystal clear to the entire biofuel sector that if you add 9.5 billion gallons of new vegetable oil demand by 2030, and the entire soybean and canola crop only produces around 8.5 billion gallons today, assuming we just stopped eating it, then guess what? The math tells you there's going to be a disconnect. So everybody knows this. Everybody understands that. Of course, Then you get into the challenges around very large, obviously bureaucratic organizations with really smart people. I mean, very, very smart people. But of course, they don't have the domain space in agriculture, farming, seed genetics. So of course, that is a hurdle. And then you've got the hurdle of this little, this small company in Woburn, Massachusetts, basically indicating that they're going to get, basically going to go and do what Bayer and Monsanto did. and be successful at it. And by the way, we just demonstrated we can be. And so we kind of have to show them we can do this because, of course, there is definitely an issue there. But I think when I look at the whole space, I would say the entire sector knows this is going to be a crunch. They've been pretty open in the discussions with us that they know all Canada oilseeds, particularly winter oilseeds, are going to be critical for the future of low-carbon intensity biofuel feedstocks. And then you get into the nuts and bolts of how do we make that happen? And that's where the learning experience just takes time. It just takes time. And like everyone else in the sector, they want to turn a tap. They just want to turn a valve and the pipe will pour out catalina oil. Well, it doesn't work that way. There's these pieces that have to be pressed. There's the seat, there's the power, there's the crusher. You know, and so, but they're getting the head around it. And some of these things that you've seen with Covercrest and Bungie and Bayer and obviously Chevron, I mean, that's happening. It's happening. It just takes time. And you've got to get the circumstances right. You've got to get the location right. So I think we're making phenomenal progress. We're a small company. And then if you kind of look at that and say, well, how does that compare to what's going on in Omega-3s? Well, guess what? that disconnect between supply and demand has happened to that industry in a massive way. We've heard estimates that fish oil prices, which used to be $2,000 a ton, are $9,000 a ton. Oh, and by the way, if you want to use algal systems to produce this, to make 20,000 tons, you have to invest $200 million, if you look at the Veramaris investment that went into the facility in Blair, Nebraska. So when you look at the two things, they're obviously quite different. It's the same technology, the same herbicide technology, the same camellia. The difference is the omega-3 has been further modified to make this much higher value oil. And the market demand there is literally off the charts. So very different. They're all based on the same technology, based on all of the investment we've made in new varieties, herbicide tolerance, and the partnership with Rothamsted. The difference being we announced we're executing the exclusive option, and within a few weeks we got an agreement in place with Biomar, and I can tell you that we've had a lot of interest from a number of others. So it's just a different dynamic because that industry knows the need is here, we have to solve the problem, and so they're moving faster than the biofuel guys.
spk00: Got it. Thanks. And just one last thing, kind of touches on what you were just talking about, As you look ahead to the need to build inventory to support grower contracts, I'm just thinking, does that imply any capital investment on your part down the road? And if so, is that a particular timeframe, or can you sort of use leased facilities, equipment, et cetera, to handle that?
spk06: Yeah, so in terms of that, I mean, really, you know, the issue is at some point it will be a question of working capital associated with our planting seed inventory. That's what it's going to be. But of course, the whole idea that we have with this value chain is to have offtake for the product, the oil and the meal, lined up ahead of time. So essentially, when we transfer the grain from the grower to the processing facility or to the storage facility, they get paid, and we get paid, and we pay them. So it can be done fairly seamlessly. That's what we've basically been doing with this arrangement we have in Western Canada. Ultimately, as it goes, you know, the business may likely evolve into different business models, for sure, as it gets big.
spk01: Great. Thanks a lot.
spk04: Okay, Noel, thank you for your questions tonight. They were great.
spk06: Thank you.
spk04: And I think, Ollie, I'll turn the call back to you for closing remarks.
spk06: So I'd like to personally thank all of you for joining us on the call tonight, and especially our shareholders for your continued support. And I want to thank everybody at Yield 10 for contributions that are keeping us on track to reach our commercial and product development goals. Have a nice evening.
spk05: Thank you, everyone, for joining. You may now disconnect. My apologies. Go ahead.
spk04: That's fine. Nope, that's quick. We're going to disconnect now, Noel. Thank you.
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