Yield10 Bioscience, Inc. (Nasdaq:YTEN), an agricultural bioscience
company, today reported financial results for the three and nine
months ended September 30, 2020.
"We are very pleased with our strong progress
across multiple fronts in the third quarter and beyond," said
Oliver Peoples, Ph.D., President and Chief Executive Officer of
Yield10 Bioscience. “We completed harvesting for our 2020
field test program to evaluate novel yield and compositional traits
in Camelina and canola conducted in the United States and
Canada, and look forward to reporting data in the fourth quarter of
2020 through early 2021. We plan to evaluate seed yield, oil
content, PHA content and other metrics of the traits which will
also inform our priorities for trait evaluation in 2021.”
“We are very pleased to have recently announced our
collaboration with Rothamsted Research for the advancement of
technology that enables the land-based, sustainable production of
omega-3 (DHA + EPA) oils for use in aquaculture. There is a
significant market opportunity for the development of plant-based
feeding solutions for the production of fish, particularly salmon,
for human consumption. The technology has demonstrated the DHA +
EPA omega-3 trait in Camelina and is highly complementary to our
own Camelina Platform. The key objective is to support
Rothamsted’s continued research as they further
optimize the DHA + EPA omega-3 trait as a drop-in
replacement for southern hemisphere fish oil and conduct field
tests and feeding studies. Yield10 will develop a strategic
business plan with an initial focus on South America.”
"In addition to executing our field test program
and advancing our Camelina business plan, we also shored up our
balance sheet in the third quarter with the closing of a public
offering and concurrent private placement of common stock that
raised $5.7 million in gross proceeds to Yield10. As we approach
year end 2020, we remain focused on generating proof points for our
traits in development and on advancing business discussions around
our Camelina business plan," Dr. Peoples concluded.
Recent Accomplishments Towards Achieving
2020 Milestones
Advance the Camelina Business
Plan. Yield10 recently signed exclusive
research collaboration and commercial option agreements with
Rothamsted Research to evaluate advanced technology for producing
omega-3 nutritional oils in Camelina. The Rothamsted technology
could enable the sustainable, plant-based production
of DHA+EPA omega-3 nutritional oil that closely mimics
the composition of southern hemisphere fish oil, an important
ingredient in aquaculture feed for salmon and other species.
In the third quarter, Yield10 began field tests of
internally developed double haploid varieties of winter Camelina as
part of a program to develop Camelina as a commercial crop. Yield10
also harvested 50 acres of wild-type spring Camelina to begin
building relationships with growers, developing agronomic
guidelines for successfully growing Camelina, and producing
Camelina oil and meal for sampling to potential customers.
Generate Proof Points for Novel Traits in
Camelina and Canola. Yield10 completed the harvest of the
Company's 2020 Field Tests to evaluate a series of traits in
Camelina and canola. Key studies include the evaluation of C3004 in
Camelina as well as tests of traits to boost seed yield and/or oil
content in Camelina and canola. These studies, for the first time,
include field testing of a novel trait to produce PHA in the seed
of Camelina. The purpose of this activity is to determine the
suitability of these first generation PHA Camelina lines for
scale-up and PHA product prototyping in 2021. Yield10 expects that
data from the studies will begin to become available in the fourth
quarter of 2020 and into early 2021.
Advance the Corn Development
Program. Continued to execute field work to create hybrid
corn lines for field testing including the start of a second growth
cycle in the third quarter for corn lines deployed with Yield10
traits. Yield10 plans to seek a research license partner for
corn.
Manage its Financial Profile and Strengthen
the Balance Sheet. Yield10's financial results for the
nine-month period ended September 30, 2020 are on track with
internal estimates. Yield10 strengthened its balance sheet in the
third quarter of 2020 based on raising approximately $5.7 million
in gross proceeds from the issuance of common stock in offerings
completed on August 26, 2020.
COVID-19 Impact on Operations. The
Company has implemented business continuity plans to address the
COVID-19 pandemic and minimize disruptions to ongoing operations.
To date, despite the pandemic, we have been able to move forward
with the operational steps required to execute our 2020 field
trials in Canada and the United States. It is possible, however,
that any potential future closures of our research facilities,
should they continue for an extended time period, could adversely
impact our anticipated time frames for evaluating and/or reporting
data from our field trials and other work we have planned to
accomplish during 2020 and beyond.
THIRD QUARTER 2020 FINANCIAL
OVERVIEW
Cash Position
Yield10 Bioscience is managed with an emphasis on
cash flow and deploys its financial resources in a disciplined
manner to achieve its key strategic objectives.
Net cash used by operating activities during the
third quarter of 2020 was $2.1 million compared to $1.4 million
used in the third quarter of 2019. Yield10 ended the third quarter
of 2020 with $11.8 million in unrestricted cash, cash equivalents
and short-term investments. The Company continues to estimate total
net cash usage during the full year 2020 within a range of $8.5 -
$9.0 million.
The Company's present capital resources are
expected to fund its planned operations through the end of 2021.
Yield10's ability to continue operations after its current cash
resources are exhausted depends on its ability to obtain additional
financing, including public or private equity financing, secured or
unsecured debt financing, and receipt of additional government
research grants, as well as licensing or other collaborative
arrangements.
Grant revenue for both the third quarter of 2020
and 2019 was $0.2 million, respectively. Research and development
expenses were $1.3 million and $1.2 million for the third quarters
of 2020 and 2019, respectively. General and administrative expenses
increased to $1.1 million during the third quarter of 2020 from
$1.0 million during the third quarter of 2019. The
quarter-over-quarter increases in operating expense are primarily a
result of the Company recording pro rata estimates for 2020
employee bonuses that are expected to be paid during the first
quarter of 2021. In 2019, Yield10 did not accrue for bonuses until
the fourth quarter.
Yield10 reported a loss from operations of $2.2
million for the quarter ended September 30, 2020 compared to a
loss from operations of $2.0 million for the same quarter of 2019.
The Company reported a total net loss after income tax expense of
$2.2 million, or $0.87 per share for the three months ended
September 30, 2020, in comparison to a total net loss after
income taxes of $2.0 million, or $6.33 per share, for the three
months ended September 30, 2019.
For the nine months ending September 30, 2020,
the Company reported a net operating loss after taxes of $7.6
million, or $3.69 per share compared to a net operating loss after
taxes of $6.1 million, or $20.64 per share for the nine months
ending September 30, 2019. Year to date grant revenue earned
through September 30, 2020 and September 30, 2019 was
$0.6 million and $0.7 million, respectively. Research and
development expenses were $3.9 million during the nine months ended
September 30, 2020, compared to $3.6 million for the nine
months ended September 30, 2019, and general and
administrative expenses were $3.7 million and $3.2 million during
the nine months ended September 30, 2020 and
September 30, 2019, respectively. During the nine months ended
September 30, 2020, the Company recognized $0.3 million in
loan forgiveness income related to a Paycheck Protection Program
Loan ("PPP Loan") issued to the Company under the Coronavirus Aid,
Relief and Economic Security Act ("CARES Act"). Yield10 utilized
the entire PPP Loan amount of $0.3 million for qualifying payroll
and other expenses during the second quarter of 2020 and considers
it reasonably certain that its application for loan forgiveness
under the CARES Act will be approved.
Reverse Stock Split
Yield10 completed a 1-for-40 reverse stock split of
its common stock on January 15, 2020, in order to regain compliance
with the Nasdaq Stock Market minimum bid price qualification of
$1.00 per share as required by Nasdaq Listing Rule 5550(a)(2). In
accordance with applicable accounting guidance, all share amounts,
per share data, share prices and conversion rates set forth in the
Company's condensed consolidated financial statements for the three
and nine months ending September 30, 2020 and
September 30, 2019, including those presented in this earnings
release, have been retroactively adjusted to reflect the reverse
stock split.
Conference Call Information
Yield10 Bioscience management will host a
conference call at 4:30 p.m. (ET) today to discuss the third
quarter 2020 results. The Company also will provide an update on
the business and answer questions from the investor community. A
live webcast of the call with slides can be accessed through the
Company's website at www.yield10bio.com in the investor
relations events section. To participate in the call, dial
toll-free 877-709-8150 or 201-689-8354 (international).
To listen to a telephonic replay of the conference
call, dial toll-free 877-660-6853 or 201-612-7415 (international)
and enter pass code 13711239. The replay will be available until
November 26, 2020. In addition, the webcast will be archived on the
Company's website in the investor relations events section.
About Yield10 Bioscience
Yield10 Bioscience, Inc. is an agricultural
bioscience company developing crop innovations to improve crop
yields and enhance sustainable global food security. The Company
utilizes its proprietary “GRAIN“ (Gene Ranking Artificial
Intelligence Network) gene discovery platform to identify gene
targets to improve yield performance and value in major commercial
food and feed crops. Yield10 uses its Camelina oilseed platform to
rapidly evaluate and field test new trait leads enabling the
translation of promising new traits into the major commercial
crops. As a path toward commercialization, Yield10 is pursuing a
partnering approach with agricultural companies to drive new traits
into development in crops such as canola, soybean and corn. The
Company is also developing Camelina as a platform crop for
producing nutritional oils and specialty products such as PHA
biomaterials for use in water treatment and bioplastic
applications. Yield10 is headquartered in Woburn, MA and has an
Oilseeds Center of Excellence in Saskatoon, Canada.
For more information about the company, please
visit www.yield10bio.com, or follow the Company on Twitter,
Facebook and LinkedIn. (YTEN-E)
Safe Harbor for Forward-Looking
Statements
This press release contains forward-looking
statements which are made pursuant to the safe harbor provisions of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The
forward-looking statements in this release do not constitute
guarantees of future performance. Investors are cautioned that
statements in this press release which are not strictly historical
statements, including, without limitation, expectations regarding
Yield10’s cash position, cash forecasts and runway, ability to
obtain sufficient financing to continue operating, expectations
related to research and development activities, intellectual
property, the expected regulatory path for traits, reproducibility
of data from field tests, the timing of completion of additional
greenhouse and field test studies, the timing for reporting data
from the 2020 field tests and the outcomes of those tests, the
signing of research licenses and collaborations, including whether
the objectives of those collaborations will be met, whether the
Company will be able to generate proof points for traits in
development and advance business discussions around its Camelina
business plan, the potential impact on operations of the COVID-19
pandemic, and value creation as well as the overall progress of
Yield10 Bioscience, Inc., constitute forward-looking statements.
Such forward-looking statements are subject to a number of risks
and uncertainties that could cause actual results to differ
materially from those anticipated, including the risks and
uncertainties detailed in Yield10 Bioscience’s filings with the
Securities and Exchange Commission. Yield10 Bioscience assumes no
obligation to update any forward-looking information contained in
this press release or with respect to the announcements described
herein.
Contacts:
Yield10 Bioscience:Lynne H. Brum, (617)
682-4693, LBrum@yield10bio.com
Investor Relations:Bret Shapiro, (561) 479-8566,
brets@coreir.comManaging Director, CORE IR
Media Inquiries:Eric Fischgrund,
eric@fischtankpr.comFischTank PR
(FINANCIAL TABLES FOLLOW)
YIELD10
BIOSCIENCE, INC.CONDENSED CONSOLIDATED
STATEMENTS OF
OPERATIONSUNAUDITED(In thousands,
except share and per share amounts)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant revenue |
$ |
204 |
|
|
$ |
224 |
|
|
$ |
604 |
|
|
$ |
666 |
|
Total revenue |
|
204 |
|
|
|
224 |
|
|
|
604 |
|
|
|
666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
1,300 |
|
|
|
1,232 |
|
|
|
3,939 |
|
|
|
3,646 |
|
General and administrative |
|
1,098 |
|
|
|
990 |
|
|
|
3,664 |
|
|
|
3,201 |
|
Total expenses |
|
2,398 |
|
|
|
2,222 |
|
|
|
7,603 |
|
|
|
6,847 |
|
Loss from operations |
|
(2,194 |
) |
|
|
(1,998 |
) |
|
|
(6,999 |
) |
|
|
(6,181 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrants |
|
— |
|
|
|
— |
|
|
|
(957 |
) |
|
|
— |
|
Loan forgiveness income |
|
— |
|
|
|
— |
|
|
|
333 |
|
|
|
— |
|
Other income (expense), net |
|
37 |
|
|
|
16 |
|
|
|
85 |
|
|
|
68 |
|
Total other income (expense) |
|
37 |
|
|
|
16 |
|
|
|
(539 |
) |
|
|
68 |
|
Net loss before income tax expense |
|
(2,157 |
) |
|
|
(1,982 |
) |
|
|
(7,538 |
) |
|
|
(6,113 |
) |
Income tax expense |
|
(11 |
) |
|
|
— |
|
|
|
(26 |
) |
|
|
— |
|
Net loss |
$ |
(2,168 |
) |
|
$ |
(1,982 |
) |
|
$ |
(7,564 |
) |
|
$ |
(6,113 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share |
$ |
(0.87 |
) |
|
$ |
(6.33 |
) |
|
$ |
(3.69 |
) |
|
$ |
(20.64 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares used in per share calculations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
2,492,274 |
|
|
|
312,952 |
|
|
|
2,050,726 |
|
|
|
296,139 |
|
YIELD10
BIOSCIENCE, INC.CONDENSED CONSOLIDATED
BALANCE SHEETSUNAUDITED(In
thousands, except share and per share amounts)
|
September 30, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
2,995 |
|
|
$ |
5,417 |
|
Short-term investments |
|
8,794 |
|
|
|
5,700 |
|
Accounts receivable |
|
148 |
|
|
|
72 |
|
Unbilled receivables |
|
56 |
|
|
|
20 |
|
Prepaid expenses and other current assets |
|
368 |
|
|
|
475 |
|
Total current assets |
|
12,361 |
|
|
|
11,684 |
|
Restricted cash |
|
254 |
|
|
|
332 |
|
Property and equipment, net |
|
935 |
|
|
|
1,243 |
|
Right-of-use assets |
|
2,796 |
|
|
|
3,141 |
|
Other assets |
|
300 |
|
|
|
318 |
|
Total assets |
$ |
16,646 |
|
|
$ |
16,718 |
|
|
|
|
|
|
|
|
|
Liabilities, Convertible Preferred Stock and Stockholders’
Equity (Deficit) |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
103 |
|
|
$ |
279 |
|
Accrued expenses |
|
930 |
|
|
|
1,326 |
|
Lease liabilities |
|
443 |
|
|
|
602 |
|
Total current liabilities |
|
1,476 |
|
|
|
2,207 |
|
Lease liabilities, net of current portion |
|
3,283 |
|
|
|
3,619 |
|
Warrant liability |
|
— |
|
|
|
14,977 |
|
Other long-term liabilities |
|
15 |
|
|
|
— |
|
Total liabilities |
|
4,774 |
|
|
|
20,803 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
Series B Convertible Preferred Stock ($0.01 par value per share); 0
and 5,750 shares issued and outstanding at September 30, 2020 and
December 31, 2019, respectively |
|
— |
|
|
|
— |
|
Stockholders’ Equity (Deficit): |
|
|
|
|
|
|
|
Series A Convertible Preferred Stock ($0.01 par value per share); 0
shares and 796 shares issued and outstanding at September 30, 2020
and December 31, 2019, respectively |
|
— |
|
|
|
— |
|
Common stock ($0.01 par value per share); 60,000,000 shares
authorized at September 30, 2020 and December 31, 2019; 3,330,778
and 933,423 shares issued and outstanding at September 30,
2020 and December 31, 2019, respectively |
|
33 |
|
|
|
9 |
|
Additional paid-in capital |
|
384,465 |
|
|
|
360,926 |
|
Accumulated other comprehensive loss |
|
(168 |
) |
|
|
(126 |
) |
Accumulated deficit |
|
(372,458 |
) |
|
|
(364,894 |
) |
Total stockholders’ equity (deficit) |
|
11,872 |
|
|
|
(4,085 |
) |
Total liabilities, convertible preferred stock and stockholders’
equity (deficit) |
$ |
16,646 |
|
|
$ |
16,718 |
|
YIELD10
BIOSCIENCE, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH
FLOWSUNAUDITED(In
thousands)
|
Nine Months Ended September
30, |
|
2020 |
|
2019 |
Cash flows from operating activities |
|
|
|
|
|
|
|
Net loss |
$ |
(7,564 |
) |
|
$ |
(6,113 |
) |
Adjustments to reconcile net loss to cash used in operating
activities: |
|
|
|
|
|
|
|
Depreciation |
|
137 |
|
|
|
150 |
|
Change in fair value of warrants |
|
957 |
|
|
|
— |
|
Loss on disposal of fixed assets |
|
206 |
|
|
|
— |
|
Charge for 401(k) company common stock match |
|
95 |
|
|
|
73 |
|
Stock-based compensation |
|
506 |
|
|
|
406 |
|
Non-cash lease expense |
|
345 |
|
|
|
456 |
|
Deferred income tax provision |
|
33 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
(76 |
) |
|
|
23 |
|
Unbilled receivables |
|
(36 |
) |
|
|
(17 |
) |
Prepaid expenses and other assets |
|
92 |
|
|
|
217 |
|
Accounts payable |
|
(228 |
) |
|
|
(66 |
) |
Accrued expenses |
|
(324 |
) |
|
|
48 |
|
Lease liabilities |
|
(495 |
) |
|
|
(622 |
) |
Other liabilities |
|
15 |
|
|
|
— |
|
Net cash used for operating activities |
|
(6,337 |
) |
|
|
(5,445 |
) |
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
Purchase of property and equipment |
|
(42 |
) |
|
|
(12 |
) |
Proceeds from sale of property and equipment |
|
10 |
|
|
|
— |
|
Purchase of short-term investments |
|
(6,290 |
) |
|
|
(1,000 |
) |
Proceeds from the sale and maturity of short-term investments |
|
3,197 |
|
|
|
3,746 |
|
Net cash (used for) provided by investing activities |
|
(3,125 |
) |
|
|
2,734 |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
Proceeds from warrants exercised |
|
1,658 |
|
|
|
— |
|
Proceeds from public and private offerings, net of issuance
costs |
|
5,367 |
|
|
|
2,583 |
|
Taxes paid on employees' behalf related to vesting of stock
awards |
|
(17 |
) |
|
|
(4 |
) |
Net cash provided by financing activities |
|
7,008 |
|
|
|
2,579 |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
(46 |
) |
|
|
(14 |
) |
|
|
|
|
|
|
|
|
Net decrease in cash, cash equivalents and restricted cash |
|
(2,500 |
) |
|
|
(146 |
) |
Cash, cash equivalents and restricted cash at beginning of
period |
|
5,749 |
|
|
|
3,355 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
3,249 |
|
|
$ |
3,209 |
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash
information: |
|
|
|
|
|
|
|
Offering costs remaining in accrued expenses |
$ |
63 |
|
|
$ |
41 |
|
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