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YB

YIELD10 BIOSCIENCE, INC. (YTEN)·Q2 2023 Earnings Summary

Executive Summary

  • YTEN reported no revenue in Q2 2023 (grant revenue $0), net loss of $3.68M or $0.64 per share, with R&D at $2.00M and G&A at $1.67M; EPS improved versus both Q1 ($0.76) and prior year ($0.70) despite higher cash burn YoY .
  • Operationally, the company completed its first delivery of contracted winter Camelina grain to a biofuel customer (first grain product revenue expected to follow), reported positive initial field results for stacked herbicide-tolerant Camelina, and filed a USDA-APHIS RSR for omega-3 (EPA) Camelina .
  • Liquidity was tight: $2.34M cash at 6/30/23; financing included a $1.0M convertible note (MPC affiliate), $2.7M net registered direct in May, and a $3.7M public offering priced on Aug 11; management expects runway into Q4 2023 (dependent on further financing thereafter) .
  • Near-term stock catalysts: definitive offtake/investment agreements with Marathon Petroleum and Mitsubishi, first Camelina product revenue in 2H23, regulatory milestones (USDA-APHIS RSR outcomes), and progress toward HT Camelina launch targeted for 2025 .

What Went Well and What Went Wrong

What Went Well

  • First delivery of contracted winter Camelina grain to a biofuel customer—establishes the commercial value chain and sets up first grain product revenue recognized at the customer level .
  • Positive first field test results of stacked herbicide tolerance (over-the-top broadleaf and Group 2 soil residue tolerance), supporting broader acreage potential; company on track to commercialize HT spring Camelina in 2025 .
  • Regulatory progress in specialty oil: filed USDA-APHIS RSR for omega-3 (EPA) Camelina; planted omega-3 Camelina at acre-scale to build seed inventory and oil samples for BD activities .
    • Quote (CEO): “We…remain firmly on-track to develop and commercialize stacked HT spring and winter Camelina varieties. We anticipate the launch of our first commercial HT spring Camelina variety in 2025…” .

What Went Wrong

  • No revenue in Q2 (DOE grant program completed), sustaining operating losses (net loss $3.68M); operating expenses remained elevated with G&A up YoY on legal/accounting and travel .
  • Cash burn increased YoY in Q2: press release cited $3.1M net cash used in operating activities vs $2.5M in Q2’22; CFO on the call referenced $3.2M in Q2’23, underscoring the strain on liquidity .
  • Limited cash runway: management expects current resources (including August financing proceeds) to fund operations only into Q4 2023; continued operations thereafter depend on additional financing or strategic agreements .

Financial Results

Income Statement (oldest → newest)

MetricQ4 2022Q1 2023Q2 2023
Revenue ($USD Millions)$0.087 $0.060 $0.000
R&D Expense ($USD Millions)$1.888 $2.162 $1.997
G&A Expense ($USD Millions)$1.403 $1.698 $1.670
Total Expenses ($USD Millions)$3.291 $3.860 $3.667
Net Loss ($USD Millions)$(3.303) $(3.782) $(3.681)
Diluted EPS ($)$(0.67) $(0.76) $(0.64)
Shares Used (Basic/Diluted)4,943,727 4,999,606 5,729,012

Notes:

  • YoY (Q2’23 vs Q2’22): revenue declined from $0.103M to $0; EPS improved from $(0.70) to $(0.64) as mix and opex slightly shifted .
  • QoQ (Q2’23 vs Q1’23): EPS improved from $(0.76) to $(0.64); total expenses decreased from $3.86M to $3.67M .

Segment breakdown: Not applicable—no product revenue reported; only grant revenue historically and none in Q2 .

Balance Sheet and Liquidity (period-end; oldest → newest)

Metric12/31/20223/31/20236/30/2023
Cash & Cash Equivalents ($USD Millions)$2.356 $1.809 $2.336
Total Assets ($USD Millions)$8.085 $5.334 $5.870
Total Liabilities ($USD Millions)$3.685 $4.191 $5.283
Stockholders’ Equity ($USD Millions)$4.400 $1.143 $0.587
Common Shares Outstanding (Period-End)4,944,202 5,078,557 6,100,263

Cash Flow KPIs

MetricQ2 2022Q2 2023
Net Cash Used in Operating Activities ($USD Millions)$(2.5) $(3.1) (press) / $(3.2) (CFO)

Financing Events (Q2 and post-Q2 timing)

  • Senior unsecured convertible note (MPC affiliate): $1.0M original principal (Q2) .
  • Registered direct offering (May 2023): $2.7M net proceeds .
  • Public offering (priced Aug 11, 2023): $3.7M of units (common + warrant) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net cash usage (operating)FY 2023$12.5–$13.0M (reduced in Q1) $12.5–$13.0M (reiterated) Maintained
First Camelina product revenue timing2H 2023Anticipated first grain revenue in Q4 2023 Expect first Camelina product revenues in Q3–Q4 2023 Pulled forward/expanded
Cash runway2023N/AFunds operations into Q4 2023 (incl. Aug financing) New disclosure
HT spring Camelina launchCommercial timingN/ATarget first commercial launch in 2025 New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’22 and Q1’23)Current Period (Q2’23)Trend
Offtake/investment partnerships (Marathon, Mitsubishi)Q4’22: pursuing alliances; MOUs with Mitsubishi & American Airlines . Q1’23: signed non-binding LOI with Marathon; regional crusher/refiner offtake in place .Ongoing negotiations; Marathon LOI exclusivity window noted (around Aug 25); targeting investment + offtake agreements; continued discussions with Mitsubishi/ENEOS .Progressing; timelines are in focus
Herbicide-tolerant Camelina (HT/stacked HT)Q4’22: excellent early HT results; plans for seed scale-up . Q1’23: filed RSR for stacked HT; EPA label amendment support; broad testing at 13 sites .Positive initial field results for stacked HT; on track to launch HT spring Camelina in 2025 .Advancing toward commercialization
Omega-3 (EPA) CamelinaQ4’22: accelerate EPA omega-3 development . Q1’23: field testing and seed scale-up planned .Filed USDA-APHIS RSR; planted at acre-scale; business development for oil samples .Regulatory/scale-up momentum
Grower tractionQ4’22: engaging growers; winter acres planted . Q1’23: met target for 2023 contracted spring acres .First winter grain delivered; seeing new and repeat interest for 2023/24 winter contracting .Building pipeline of acres
Liquidity and cash useQ4’22: cash $4.3M; 2023 cash use $13–14M guide . Q1’23: cash $1.8M; cut 2023 cash use guide to $12.5–$13.0M; $2.7M net offering and $1.0M note .Cash $2.3M at 6/30; $2.7M net in May + $3.7M offering priced Aug 11; runway into Q4’23 .Still constrained; reliant on financings

Management Commentary

  • Strategy: “Our main goal in 2023 is to establish and demonstrate the value chain from Yield10 seed to commercial offtake products…we are right on track executing against this goal.” (CEO) .
  • Biofuels commercial progress: “The first delivery of Camelina grain to a biofuel customer has been completed…expected to produce Yield10’s first grain product revenue” .
  • HT timeline and impact: “We remain firmly on-track to develop and commercialize stacked HT spring and winter Camelina varieties. We anticipate the launch of our first commercial HT spring Camelina variety in 2025…” (CEO) ; “We are on track for 2025 commercial launch of spring Camelina with tolerance to the broadleaf herbicide.” (CSO) .
  • Omega-3 regulatory milestone: “Filed a request for a Regulatory Status Review (RSR) with USDA-APHIS…to produce the EPA component of omega-3 oil.” (CEO) ; market drivers include fish oil supply constraints and recent regulatory shifts (e.g., Norway allowing GMO omega-3 oils in aquafeed) (CEO) .
  • Liquidity and first revenues: “We expect that our cash on hand, including proceeds from these offerings, will support our operations into the fourth quarter of this year…we also expect to report our first Camelina product revenues [in Q3–Q4 2023].” (CFO) .

Q&A Highlights

  • Partnership timelines: Marathon LOI exclusivity window around Aug 25; company working toward positive conclusion; Mitsubishi/ENEOS discussions also advancing; American Airlines collaboration strategic (not an offtake) .
  • 2H23 revenues: Management reiterated expectation to begin recognizing Camelina grain revenues in Q3–Q4 2023 as offtake deliveries commence .
  • Farmer adoption/HT: Grower interest centered on weed control and tolerance to Group 2 herbicide residues; stacked HT line intended to widen eligible acres and simplify adoption .

Estimates Context

  • S&P Global (Capital IQ) consensus estimates for YTEN were unavailable; thus, no beat/miss comparison could be made for Q2 2023. Where estimates are unavailable, we default to company-reported results and management commentary [GetEstimates error – SPGI mapping unavailable].

Key Takeaways for Investors

  • Commercial proof points emerging: first Camelina grain delivered to a biofuel customer and first product revenues expected in Q3–Q4 2023—key milestones to validate the business model .
  • Strategic deal catalysts: Potential investment and offtake agreements with Marathon and Mitsubishi/ENEOS represent the most material near-term stock drivers, given funding needs and commercialization plans .
  • Technology de-risking: Positive stacked HT results and a defined 2025 HT launch target improve the adoption thesis and expand plantable acres over time .
  • Specialty oils optionality: Omega-3 (EPA) Camelina progressed to USDA-APHIS RSR with acre-scale planting, providing a higher-value diversification pathway beyond biofuels .
  • Liquidity risk remains: Cash runway only into Q4 2023 even after recent financings; continued operations beyond that depend on additional capital and/or strategic agreements .
  • Operating discipline required: Cash used in operations increased YoY in Q2 ($3.1M press; $3.2M CFO), reinforcing the need to pace hiring, trials, and seed scale-up to financing cadence .
  • Regulatory tailwinds: USDA crop insurance for Camelina and progress on regulatory pathways (RSR, EPA label amendment support) can aid grower uptake and market access .

Appendices

Additional Operating Detail (from Q2 2023 press release)

  • G&A increased by $0.2M YoY to $1.7M due to legal/accounting and travel associated with BD and commercialization .
  • Company states continued operations post-runway depend on further financing or partnerships/licenses .

Prior Two Quarters Snapshot

  • Q1 2023: Net loss $3.78M ($0.76); grant revenue $0.06M; R&D $2.16M; G&A $1.70M. Met internal target for 2023 contracted spring acres; LOI with Marathon; first grain revenue expected in Q4 2023 (at that time) .
  • Q4 2022: Net loss $3.30M ($0.67); grant revenue $0.087M; R&D $1.89M; G&A $1.40M. Building alliances (Mitsubishi, American Airlines MOUs); engaging growers; HT program advancing .