Yield10 Bioscience, Inc. (Nasdaq:YTEN), an agricultural bioscience
company, today reported financial results for the three and six
months ended June 30, 2020.
"The Yield10 team has made good progress executing on our
strategic plans for 2020 and beyond," said Oliver Peoples, Ph.D.,
president and chief executive officer of Yield10 Bioscience. "Our
field tests in the U.S. and Canada are progressing on track and
will provide us with agronomic and/or performance data proof points
as well as seed for larger trials planned in 2021. As part of
our business plan to develop Camelina as a commercial crop platform
for producing nutritional oils and PHA biomaterial, we are
developing proprietary double haploid germplasm for deployment of
our performance and product traits in winter and spring varieties
to increase the acreage potential of the crop. In our first
multi-acre planting, we contracted 50 acres in Montana of wild-type
Camelina to gain experience in seed bulk-up, grower contracts,
logistics and handling of harvested seed, including toll crushing,
and to produce quantities of oil and protein meal for customer
sampling."
"We continue to see industry interest in our performance traits
as well as the capabilities enabled by our GRAIN platform. We
recently signed a non-exclusive research license with GDM for
evaluation of seed yield traits in soybean, which will provide
opportunities to explore additional Yield10 commercial crop
performance traits with a leading seed market participant and
potentially provide access to South American acreage in Argentina
and Brazil. Bayer, Forage Genetics and Simplot continue to evaluate
our traits under similar research licenses in soybean, forage
sorghum and potato, respectively. Our internal program testing
traits in corn is progressing toward the creation of hybrids for
field testing. We will continue to identify collaborative
opportunities with the goal of creating revenue generating
partnerships and paths to commercialization of our traits in key
commercial crops. We remain committed to driving the Yield10
business forward and achieving our broad-based milestones in 2020,"
said Dr. Peoples.
Recent Accomplishments Towards Achieving 2020
Milestones
Generate Proof Points for Novel Traits in Camelina and
Canola. Yield10 completed planting 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. Harvest of the test fields is
expected in the third quarter of 2020 and data from the studies
will begin to become available in the fourth quarter of 2020 and
into early 2021.
Use of CRISPR Genome-Editing to Accelerate Development
of Novel Performance Traits. In the second quarter,
Yield10 submitted an "Am I regulated?" letter of inquiry to
USDA-APHIS to confirm the use of CRIPSR genome-edited trait C3007
in canola lines developed for increased oil content does not meet
the definition of a regulated article under 7 CFR Part 340
regulations. Confirmation of the status would allow field testing
of the plants in the U.S. in 2021.
Advance its Camelina Business Plan.
During the 2019/2020 winter season, Yield10 successfully field
tested internally developed double haploid varieties of winter
Camelina as part of a program to develop Camelina as a commercial
crop. Yield10 also planted 50 acres of wild-type spring Camelina as
a means to begin building relationships with growers, developing
agronomic guidelines for successfully growing Camelina, and for
producing Camelina oil and meal for sampling to potential
customers.
Form Agriculture Industry Alliances.
Yield10 recently signed a research agreement with Gibson City,
Illinois-based GDM to evaluate novel yield traits in soybean.
Working with major agricultural companies to test Yield10 traits is
fundamental to Yield10's strategy to create option value for our
traits in key commercial crops. Yield10 and GDM also intend to
explore additional opportunities for collaboration.
Manage its Financial Profile and Strengthen the Balance
Sheet. Yield10's financial results for the six month
period ended June 30, 2020 are on track with internal estimates.
Yield10 strengthened its balance sheet in the first half of 2020
based on approximately $2 million in proceeds from a combination of
capital from warrant exercises and support obtained from sources in
the U.S. and Canada to cover certain payroll-related
expenses. Based on the outlook for spending in the second
half of 2020, the Company is lowering its estimated range of total
net cash usage for 2020, while maintaining a consistent level
of investment in research and development to achieve the Company's
objectives.
COVID-19 Impact on Operations. The Company has
implemented business continuity plans to address the COVID-19
pandemic and minimize disruptions on 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, if they
continued for an extended time period, could adversely impact our
anticipated time frames for completing field trials and other work
we have planned to accomplish during 2020.
SECOND 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 second quarter
of 2020 was $2.0 million compared to $1.8 million used in the
second quarter of 2019. Yield10 ended the second quarter of
2020 with $8.5 million in unrestricted cash, cash equivalents and
short-term investments. The Company is reducing its previous
guidance for anticipated total net cash usage during the full year
2020 from a range of $9.0 - $9.5 million to a range of $8.5 - $9.0
million, primarily as a result of expenditure reductions resulting
from the impact of the COVID-19 pandemic. We have delayed
plans to hire a small number of additional staff and have
significantly reduced our travel and certain other general business
expenses.
The Company's present capital resources are expected to fund its
planned operations into the second quarter 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.
Operating Results
Grant revenue for the second quarter of 2020 was $0.2 million,
compared to $0.3 million recorded during the second quarter of
2019. Research and development expenses were consistent at $1.2
million for both the second quarter of 2020 and the second quarter
of 2019. General and administrative expenses increased from
$1.0 million during the second quarter of 2019 to $1.2 million
during the second quarter of 2020, primarily as a result of
increased employee compensation and benefits as well as legal and
accounting expenses incurred related to the Company's securities
and financial statement filings.
Yield10 reported a loss from operations of $2.1 million for the
quarter ended June 30, 2020 as compared to a loss from
operations of $1.9 million for the same quarter of 2019. The
Company reported a total net loss after income tax expense of $1.8
million, or $0.92 per share for the three months ended
June 30, 2020, in comparison to a total net loss after income
taxes of $1.9 million, or $5.99 per share, for the second quarter
of 2019. During the three months ended June 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 and considers it reasonably certain that it will
meet all of the conditions for loan forgiveness under the CARES
Act.
For the six months ending June 30, 2020, the Company
reported a net operating loss after taxes of $5.4 million, or $2.95
per share compared to a net operating loss after taxes of $4.1
million, or $14.36 per share for the six months ending
June 30, 2019. Year to date grant revenue earned
through June 30, 2020 and June 30, 2019 was $0.4 million
for both six-month periods. Research and development expenses
were $2.6 million during the six months ended June 30,
2020, compared to $2.4 million for the six months ended
June 30, 2019, and general and administrative expenses were
$2.6 million and $2.2 million during the six months ended
June 30, 2020 and June 30, 2019, respectively.
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 six months ending June 30, 2020 and June 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 today
at 4:30 p.m. (ET) to discuss the second 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 13707134. The replay will be available until August 25,
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, collaborations, 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 signing of research licenses and
collaborations, 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.com Managing Director, CORE IR
Media Inquiries:Eric Fischgrund,
eric@fischtankpr.com FischTank PR
(FINANCIAL TABLES FOLLOW)
YIELD10
BIOSCIENCE, INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
UNAUDITED |
(In
thousands, except share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
June 30, |
June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue: |
|
|
|
|
|
|
|
Grant revenue |
$ |
221 |
|
|
$ |
318 |
|
|
$ |
400 |
|
|
$ |
442 |
|
Total revenue |
221 |
|
|
318 |
|
|
400 |
|
|
442 |
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
Research and development |
1,179 |
|
|
1,191 |
|
|
2,639 |
|
|
2,414 |
|
General and administrative |
1,179 |
|
|
1,025 |
|
|
2,566 |
|
|
2,211 |
|
Total expenses |
2,358 |
|
|
2,216 |
|
|
5,205 |
|
|
4,625 |
|
Loss from operations |
(2,137 |
) |
|
(1,898 |
) |
|
(4,805 |
) |
|
(4,183 |
) |
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
Change in fair value of warrants |
— |
|
|
— |
|
|
(957 |
) |
|
— |
|
Loan forgiveness income |
333 |
|
|
— |
|
|
333 |
|
|
— |
|
Other income (expense), net |
15 |
|
|
27 |
|
|
48 |
|
|
52 |
|
Total other income (expense) |
348 |
|
|
27 |
|
|
(576 |
) |
|
52 |
|
Net loss
from operations before income tax expense |
(1,789 |
) |
|
(1,871 |
) |
|
(5,381 |
) |
|
(4,131 |
) |
Income tax expense |
(7 |
) |
|
— |
|
|
(15 |
) |
|
— |
|
Net
loss |
$ |
(1,796 |
) |
|
$ |
(1,871 |
) |
|
$ |
(5,396 |
) |
|
$ |
(4,131 |
) |
|
|
|
|
|
|
|
|
Basic and
diluted net loss per share |
$ |
(0.92 |
) |
|
$ |
(5.99 |
) |
|
$ |
(2.95 |
) |
|
$ |
(14.36 |
) |
|
|
|
|
|
|
|
|
Number of
shares used in per share calculations: |
|
|
|
|
|
|
|
Basic and diluted |
1,957,927 |
|
|
312,342 |
|
|
1,827,526 |
|
|
287,592 |
|
YIELD10
BIOSCIENCE, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
UNAUDITED |
(In
thousands, except share and per share amounts) |
|
|
|
|
|
|
|
|
|
June
30, |
|
December
31, |
|
2020 |
2019 |
Assets |
|
|
|
Current
Assets: |
|
|
|
Cash and cash equivalents |
$ |
3,290 |
|
|
$ |
5,417 |
|
Short-term investments |
5,211 |
|
|
5,700 |
|
Accounts receivable |
13 |
|
|
72 |
|
Unbilled receivables |
59 |
|
|
20 |
|
Prepaid expenses and other current assets |
417 |
|
|
475 |
|
Total current assets |
8,990 |
|
|
11,684 |
|
Restricted
cash |
254 |
|
|
332 |
|
Property and
equipment, net |
978 |
|
|
1,243 |
|
Right-of-use
assets |
2,879 |
|
|
3,141 |
|
Other
assets |
265 |
|
|
318 |
|
Total assets |
$ |
13,366 |
|
|
$ |
16,718 |
|
|
|
|
|
Liabilities, Convertible Preferred Stock and Stockholders’
(Deficit) Equity |
|
|
|
Current
Liabilities: |
|
|
|
Accounts payable |
$ |
150 |
|
|
$ |
279 |
|
Accrued expenses |
882 |
|
|
1,326 |
|
Lease liabilities |
430 |
|
|
602 |
|
Total current liabilities |
1,462 |
|
|
2,207 |
|
Lease
liabilities, net of current portion |
3,400 |
|
|
3,619 |
|
Warrant
liability |
— |
|
|
14,977 |
|
Other
long-term liabilities |
17 |
|
|
— |
|
Total liabilities |
4,879 |
|
|
20,803 |
|
Commitments
and contingencies |
|
|
|
Series B
Convertible Preferred Stock ($0.01 par value per share): 0 shares
and 5,750 shares issued and outstanding at June 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 June 30, 2020 and
December 31, 2019, respectively |
— |
|
|
— |
|
Common stock ($0.01 par value per share); 60,000,000 shares
authorized at June 30, 2020 and December 31, 2019; 1,972,798 and
933,423 shares issued and outstanding at June 30, 2020 and
December 31, 2019, respectively |
20 |
|
|
9 |
|
Additional
paid-in capital |
378,924 |
|
|
360,926 |
|
Accumulated
other comprehensive loss |
(167 |
) |
|
(126 |
) |
Accumulated
deficit |
(370,290 |
) |
|
(364,894 |
) |
Total stockholders’ equity (deficit) |
8,487 |
|
|
(4,085 |
) |
Total liabilities, convertible preferred stock and stockholders’
equity (deficit) |
$ |
13,366 |
|
|
$ |
16,718 |
|
|
|
|
|
|
|
|
|
YIELD10
BIOSCIENCE, INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
UNAUDITED |
(In
thousands) |
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
Cash
flows from operating activities |
|
|
|
Net
loss |
$ |
(5,396 |
) |
|
$ |
(4,131 |
) |
Adjustments
to reconcile net loss to cash used in operating activities: |
|
|
|
Depreciation |
91 |
|
|
100 |
|
Change in
fair value of warrants |
957 |
|
|
— |
|
Loss on
disposal of fixed assets |
206 |
|
|
— |
|
Charge for
401(k) company common stock match |
66 |
|
|
49 |
|
Stock-based
compensation |
297 |
|
|
275 |
|
Non-cash
lease expense |
262 |
|
|
299 |
|
Deferred tax
provision |
27 |
|
|
— |
|
Changes in
operating assets and liabilities: |
|
|
|
Accounts receivables |
59 |
|
|
(54 |
) |
Unbilled receivables |
(39 |
) |
|
(37 |
) |
Prepaid expenses and other assets |
84 |
|
|
(10 |
) |
Accounts payable |
(129 |
) |
|
(62 |
) |
Accrued expenses |
(390 |
) |
|
(102 |
) |
Lease liabilities |
(391 |
) |
|
(404 |
) |
Other liabilities |
17 |
|
|
— |
|
Net cash used for operating activities |
(4,279 |
) |
|
(4,077 |
) |
|
|
|
|
Cash
flows from investing activities |
|
|
|
Purchase of
property and equipment |
(42 |
) |
|
(13 |
) |
Proceeds
from sale of property and equipment |
10 |
|
|
— |
|
Purchase of
short-term investments |
(503 |
) |
|
(998 |
) |
Proceeds
from the sale and maturity of short-term investments |
999 |
|
|
2,746 |
|
Net cash provided by investing activities |
464 |
|
|
1,735 |
|
|
|
|
|
Cash
flows from financing activities |
|
|
|
Proceeds
from warrants exercised |
1,658 |
|
|
— |
|
Proceeds
from registered direct offering, net of issuance costs |
— |
|
|
2,583 |
|
Taxes paid
on employees' behalf related to vesting of stock awards |
— |
|
|
(4 |
) |
Net cash provided by financing activities |
1,658 |
|
|
2,579 |
|
|
|
|
|
Effect of
exchange rate changes on cash, cash equivalents and restricted
cash |
(48 |
) |
|
(8 |
) |
|
|
|
|
Net
(decrease) increase in cash, cash equivalents and restricted
cash |
(2,205 |
) |
|
229 |
|
Cash, cash
equivalents and restricted cash at beginning of period |
5,749 |
|
|
3,355 |
|
Cash, cash
equivalents and restricted cash at end of period |
$ |
3,544 |
|
|
$ |
3,584 |
|
|
|
|
|
|
|
|
|
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