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YB

YIELD10 BIOSCIENCE, INC. (YTEN)·Q3 2023 Earnings Summary

Executive Summary

  • Q3 2023 was operationally mixed: Yield10 advanced regulatory and commercialization milestones (USDA-APHIS nonregulated determinations for glufosinate-tolerant and stacked HT Camelina; omega‑3 license option exercised; BioMar LOI), but financials remained pre-revenue with a net loss of $3.73M ($0.41/share) and a going‑concern warning as cash runway extended only into early December 2023 .
  • Cash and equivalents were $2.82M at 9/30; net cash used in operations was $2.6M in Q3. Management reiterated FY23 net cash usage of $12.5–$13.0M and disclosed “substantial doubt” about continuing as a going concern without near‑term funding .
  • Initial Camelina commercialization activity generated ~$0.1M of proceeds in Q3 from seed/grain deliveries, recorded as offsets to R&D rather than revenue; management is evaluating classification as revenue vs reimbursement with auditors .
  • Strategic news flow is a key stock driver near term: USDA-APHIS determinations (received on call day), omega‑3 commercialization steps (Rothamsted license, BioMar LOI), financing updates, and Nasdaq minimum bid deficiency notice from Sep 25, 2023 create both upside and downside catalysts .

What Went Well and What Went Wrong

What Went Well

  • USDA-APHIS decisions: Management received same‑day positive USDA-APHIS responses that the glufosinate‑tolerant line and the stacked HT Camelina are not regulated articles, a major milestone enabling progress toward a 2025 launch .
  • Omega‑3 program momentum: Yield10 exercised its option to finalize a global exclusive commercial license to Rothamsted’s omega‑3 technology and signed an LOI with BioMar; EPA8 seed scale‑up initiated in Chile with plans for pilot EPA oil in 2024 .
  • Early commercialization proof points: Completed harvest of spring/winter Camelina and delivered grain to a private biorefining customer; ~$0.1M in proceeds recognized as R&D offsets; new winter 2023/2024 grower contracts signed .

What Went Wrong

  • Financial strain and going-concern risk: Cash runway only into early December 2023, with “substantial doubt” about ability to continue without immediate funding; multiple financing/strategic options are being pursued .
  • No recognized revenue in Q3 and continued losses: Grant revenue fell to $0; net loss widened slightly YoY to $3.73M; EPS was $(0.41) (vs $(0.71) YoY on a larger share count) .
  • Nasdaq minimum bid price deficiency: Received a notice on Sep 25, 2023; must regain compliance by Mar 25, 2024 or risk delisting if remedies (e.g., reverse split) not effected .

Financial Results

Quarterly P&L progression (USD Thousands; EPS in $/share)

MetricQ1 2023Q2 2023Q3 2023
Grant Revenue$60 $0 $0
Research & Development Expense$2,162 $1,997 $2,204
General & Administrative Expense$1,698 $1,670 $1,499
Total Expenses$3,860 $3,667 $3,703
Net Loss$(3,782) $(3,681) $(3,726)
Diluted EPS$(0.76) $(0.64) $(0.41)
Shares Used (Basic & Diluted)4,999,606 5,729,012 8,987,957

YoY comparison (USD Thousands; EPS in $/share)

MetricQ3 2022Q3 2023
Grant Revenue$111 $0
R&D Expense$2,083 $2,204
G&A Expense$1,518 $1,499
Net Loss$(3,489) $(3,726)
Diluted EPS$(0.71) $(0.41)

Notes:

  • In Q3 2023, ~$0.1M of proceeds from seed/grain shipments were recorded as offsets to R&D expense, not revenue . Management confirmed ongoing auditor review regarding classification .

KPIs and Liquidity

KPIQ1 2023Q2 2023Q3 2023
Cash & Cash Equivalents (Period-end)$1,809 $2,336 $2,817
Net Cash Used in Operating Activities (Quarter)$2,667 $3,100 (management disclosure) $2,600
Convertible Note Payable (Period-end)— $971 (net) $977 (net)
Cash Runway (Management View)Into Q3 2023 Into Q4 2023 Into early Dec 2023

No segments are reported; margin metrics are not meaningful given lack of product revenue .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Cash UsageFY 2023$12.5–$13.0M (revised in Q1) $12.5–$13.0M (reiterated Q2 & Q3) Maintained
Cash RunwayNear-termInto Q4 2023 (Q2 view) Into early Dec 2023 (Q3 update) Lowered runway specificity
Revenue/ProfitabilityFY 2023Not providedNot providedN/A

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2 and Q‑1)Current Period (Q3 2023)Trend
Biofuel partnerships/offtakeLOI with Marathon; MOUs with Mitsubishi & American; crusher/refiner partner; aim to finalize agreements Discussions ongoing; no parties exited; exclusive discussions with other parties; new players engaged Continued engagement; timeline elongated
Regulatory (HT traits)Filed RSR for HT and stacked HT; EPA label amendment effort USDA-APHIS deemed glufosinate‑tolerant and stacked HT Camelina not regulated; on track for 2025 launch Positive inflection (major milestone)
Omega‑3 programFiled RSR for EPA omega‑3; planted EPA Camelina at acre scale Exercised option to finalize Rothamsted license; LOI with BioMar; EPA8 seed scale-up in Chile; pilot EPA oil planned 2024 Acceleration and partnering momentum
Grower network/agronomyMet spring acreage targets; strong winter cold tolerance Drought resilience examples; pest resistance; new winter contracts in US/Canada Validation in field; expanding contracts
Liquidity/financingCash into Q3; raised ~$2.7M (May), $1.0M note Raised ~$3.7M (Aug); cash into early Dec; going‑concern risk Deteriorated runway; urgent funding need
Listing status—Nasdaq bid-price deficiency notice (Sep 25) New headwind

Management Commentary

  • “We have received a positive response from USDA‑APHIS stating that our glufosinate‑tolerant line is not considered regulated by the agency.”
  • “We also received a response… from USDA‑APHIS stating that our HT stack is not considered regulated by the agency.”
  • “We recently… exercised our option to finalize an exclusive, global commercial license to [Rothamsted’s] omega‑3 technology… and signed a letter of intent with BioMar Group.”
  • “We ended the third quarter of 2023 with $2.8 million in cash and cash equivalents… We expect that our cash on hand… will support our operations into December of 2023.”
  • “There is substantial doubt about the Company's ability to continue as a going concern… [cash] will only fund its operations into early December 2023.”

Q&A Highlights

  • Partnerships status and timing: No partners exited; still pursuing structures/funding; interest remains strong with additional players. Formalization depends on counterparties’ internal timelines .
  • Accounting for early commercialization: ~$0.1M proceeds from seed/grain deliveries recognized as R&D offsets; revenue vs reimbursement classification under auditor review; strategic use of grain/oil inventory prioritized .
  • HT commercialization path: Targeting 2025 launch contingent on remaining regulatory steps (EPA label, feed equivalency) and seed scale-up; strong grower interest .
  • Grower feedback and agronomy: Drought resilience, pest tolerance, and enthusiasm for HT/stacked traits to improve rotations; winter planting adjusted in some areas due to dry soils .
  • Working capital needs: Seed inventory build for grower contracts may require working capital; intent is to align offtake to enable seamless payments through the chain .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2023 EPS and revenue was unavailable for YTEN at the time of analysis due to missing CIQ mapping in our S&P Global interface. As a result, we cannot present beats/misses vs consensus for this quarter. We attempted to retrieve: Q1–Q3 2023 EPS and Revenue consensus means and estimate counts, but received a mapping error (no data returned). Values from S&P Global were therefore unavailable.

Key Takeaways for Investors

  • Regulatory de‑risking: USDA‑APHIS nonregulated determinations for both glufosinate‑tolerant and stacked HT Camelina materially improve the probability of a 2025 launch and farmer adoption narrative .
  • Omega‑3 optionality: Executing the Rothamsted license option and the BioMar LOI create a second commercialization vector with potentially higher-value unit economics vs biofuel feedstock oil .
  • Liquidity overhang: With cash only into early December and a going‑concern warning, near‑term financing or strategic transactions are critical; failure would force program cuts or worse, per company disclosure .
  • Listing risk: Nasdaq minimum bid deficiency introduces technical risk and potential need for corporate actions (e.g., reverse split) if compliance is not restored by deadlines .
  • Early commercialization signals: While no GAAP revenue in Q3, initial grain/seed proceeds began (as R&D offsets). Watch for revenue recognition policy, scale of 2024 deliveries, and offtake finalizations as leading indicators .
  • Grower traction: Field performance under drought/pest pressure and grower enthusiasm for HT traits support the acreage expansion thesis post‑regulatory clearance .
  • Trading setup: Stock likely sensitive to funding updates, definitive offtake/partner announcements, further regulatory progress (EPA/feed equivalency), and any resolution of listing deficiency .

Supporting documents and data:

  • Q3 2023 8‑K press release and financials .
  • Q3 2023 earnings call transcript (prepared remarks and Q&A) -.
  • Q2 2023 8‑K press release and financials -.
  • Q1 2023 8‑K press release and financials -.
  • Nasdaq bid-price deficiency 8‑K (Sep 25, 2023) .