Lynne Brum - Vice President-Planning and Corporate Communications Oliver Peoples - President and Chief Executive Officer Kristi Snell - Vice President, Research and Chief Science Officer

Jay Albany - SeeThruEquity

Ladies and gentlemen, welcome to the Fourth Quarter and Full-Year 2017 Financial Results and Business Update Conference call for Yield10 Bioscience. During the program, participants will be in a listen-only mode. The presenter will address questions from an analyst as well as questions submitted by shareholders as part of our call today. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference call over to your host, Yield10 Vice President of Planning and Corporate Communications, Lynne Brum. Thank you. You may begin.

Thank you, Adam, and good afternoon, everyone, and welcome to the Yield10 Bioscience fourth quarter and full-year 2017 conference call. Joining me on the call today are President and CEO, Dr. Oli Peoples; Vice President of Research and Chief Science Officer, Dr. Kristi Snell; and Chief Accounting Officer, Chuck Haaser. Earlier this afternoon, we issued our fourth quarter and full-year 2017 news release. This release as well as slides to accompany our presentation today are available on the Investor Relations section of our website at yield10bio.com. Let’s turn to Slide 2. 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 results to differ materially from those anticipated. These risks include risks and uncertainties detailed in Yield10’s filings with the SEC, including the company’s most recent 10-K. The company undertakes no obligation to update forward-looking statements in order to reflect events or circumstances that may arise after the date of this conference call. I’ll now turn the call over to Oli.

Thanks, Lynne. Hello, everyone, and thanks for joining our call today. Please turn to Slide 3, and let’s cover a few financial highlights starting with the balance sheet. We ended 2017 with $14.5 million in cash in the balance sheet. In December, we reached $30.1 million net proceeds in an underwritten public offering, which significantly strengthened our cash position. Additional details on the offering and the underlying securities are available in our press release and SEC filings. Net operating cash usage for the full-year 2017 was $8.2 million, which was within our guidance range of $8 million to $8.5 million. We estimated net cash usage for the full-year 2018 will be approximately $8.5 million to $9 million, including payments in the first-half of the year of $500,000 for final restructuring costs. We have budgeted an increase in R&D spend this year just for an expanded field test program, as well as the evaluation of a greater number of potential yield traits. We expect to continue to identify ways to bring down certain infrastructure costs building on the progress made in 2017. Our cash on hand together with revenue expected under current government grants will support our operations to a number of technology proof points into mid-2019. On our P&L, let’s review the financial results that are reported as continuing operations. For the full-year 2017, we reported a net loss applicable to common shareholders from continuing operations of $10.8 million, or $3.29 per share. Full-year net loss includes a $1.4 million adjustments related to the accounting from a deemed dividend associated with the issuance of the Series A preferred shares in the December offering. For full-year 2017, we reported $900,000 in grant revenue, $4.6 million in R&D expense and $5.6 million in G&A expense. For the fourth quarter of 2017, we reported a net loss applicable to common shareholders of $4 million, or $0.99 per share, which includes a charge related to the deemed dividend. In the fourth quarter, we reported grant revenue of $100,000, $1.2 million in R&D expense and $1.4 million in G&A expense. For more details on our financial results, please refer to the earnings release. Now let’s turn to Slide 4, recent accomplishments. Yield10 is developing gene trait technologies for food and feed crops to produce higher yields with lower inputs of land, water and fertilizer. We made solid progress throughout 2017. In December, we granted a nonexclusive research license to Monsanto for the evaluation of C3003 and C3004 in soybean. This agreement has a 3.5-year term consistent with the time needed to produce test and evaluate new traits of soybean. Monsanto is a leader in commercialization of biotech traits as a world-class soybean development program and the resources to test constructs and events on a scale well beyond what Yield10 can do in-house. The goals of Monsanto program are to test C3003 alone and in combination with C3004 in their proprietary soybean lines. The highlight of the fourth quarter was the completion of our field test for C3003 in Camelina and Canola. The results were encouraging and we’re well into preparations for 2018 field test program. During our call, Kristi will present a summary of the 2017 data and outline our plans for 2018. Turning to the third accomplishment on this slide. In 2017, we assembled a series of traits to produce more oil and seeds with a focus on genome editing. In September, we received from USDA-FAS confirmation that our genome edited C3008, while trait is deemed nonregulated by the agency. More recently, we completed genome editing in Camelina of a triple combination, C3008a, C3008b and C3009. In early 2017, we took an option from University of Missouri to a trait we’ve named C3007. We plan to complete the license and in-license and related traits C3010 this year. Let’s now turn to Slide 5. Yield10 is well-positioned for 2018. We made very solid progress in 2017 which has positioned us well for 2018. Our objective is to assemble a rich pipeline of yield traits to create a compelling value proposition and market opportunity for growers and ag tiers alike. We are focused on deploying our R&D resources to generate proof points with our traits and key commercial crops through tests conducted in the field and in greenhouse studies. We also plan to make USDA-APHIS submissions to enable a cost-effective path to field test in the U.S. for genome edited traits. We believe, generating proof points in our traits based on our activities planed for 2018 will create interest and opportunities for licensees and collaborations with us. Let’s now turn to Slide 6, pipeline of trait. Here we have a summary of our traits in development. We have seed yield traits such as C3003 that will be regulated and our current focus is to deploy them in large acreage GMO crops. In 2018, we expect to generate additional proof points for the C3003 trait in Camelina, Canola and soybean. The C3004 trait gene may complement C3003 to further increase its performance. .: Let’s now turn to Slide 7, value creation model. If our gene traits can produce such change in crop yields, then there is an opportunity for significant value to accrue to the grower, the seed company and to Yield10. On this slide, we have an illustrative example of the annual revenue opportunity for Yield10, canola, soybean and corn, yield gene traits based on the 2016 North American harvest. If you look at the commodity soybean, as this model, there’s the potential of about 300 million annual revenue potential to an innovator bringing a 20% yield increase to the crop. Further as we see the market demand from nutritional oils increase, such as high yield soybean, there is a potential to deploy genome editing traits to directly increase oil content of the seed, which would further increase the economic value for crop. Let’s now turn to Slide 8, genome editing in ag. Genome editing completes the tool box for enhancing crop yield and value by enabling precision editing of gene combinations. Thus, genome editing does not introduce foreign DNA into plants, the USDA may treat – trace develop using this support just nonregulated, significantly reducing product development timelines and cost. A typical regulated GMO trait will take an average of 14 years and an average cost of $130 million for full global deregulation. Some estimate suggest that timeline is as little as three to six years for development of a new trait using genome editing with the development cost that could be as low as less than $10 million. This opens the market through the development in new traits by small ag innovators. Yield10 hasn’t had the series of novel genome editing targets, as well as the powerful gene editing discovery capability. An announcement by DuPont Pioneer and the Broad Institute that they plan to take make nonexclusive licenses for CRISPR/Cas9 IP readily available in their space is encouraging. But we’ll have to wait and see how that unfolds. We anticipate that we have race to identify Smart Editing Targets in the form of gene combinations to improve crop performance. As you’ll see in Kristi’s presentation today, we are covering many targets based on our discovery platform. Let’s now turn to Slide 9, the commercial strategy. Our traits in development provide us with multiple potential paths to revenue, driven by our yield traits and unique capabilities. Our major North American commodity crops, we think, we can accelerate development through working as soon as possible the ag majors. Our approach is to develop sufficient technical data to gain their interest and then provide a low hurdle for them to begin deploying and testing our traits in elite germplasm using their resources. Here we anticipate license agreements with milestone payments to Yield10 and participation in downstream economics. This is exactly the approach we have taken with Monsanto for C3003 and C3004 in soybean. The next path is specialty in niche crops, including specialty oils. There’s a lot of innovation going on in this area, with ag majors and with companies deploying genome edited traits to improve oil composition. We see opportunities to stack traits to improve yield and ore composition. We envisaged [ph] a nonregulated path to market and JV-type agreements with significant share of downstream economics. Here the potential number and types of partners is much larger than handful of companies in the commodity ag seed space. The third path to revenue involves our technology platforms, where we can accelerate innovation based on the ongoing integration of our two discovery platforms, predict gene combinations for crop improvements and provide access to this capability of this service to the sector. To date, we have accessed government grants and relationships with leading plant scientists and we plan to expand this by layering on R&D support for partner-funded programs. We provide – plan to provide more color on our technology platform in future investor communications. With that, I’d like to turn the call over to Kristi for an update on the R&D progress. Kristi?

Thanks, Oli, and hello, everyone. In my presentation today, I’ll provide an update on our R&D pipeline. Please turn to Slide #10. In our leading trait gene, C3003 is introduced into plants that enables plants to be more efficient in capturing carbon-free photosynthesis, resulting in higher seed yields. This activity involves a unique biological mechanism and has the potential to improve yield in a wide range of C3 crops. We have continued to study in mechanism of C3003 and believe that impacts photorespiration, a wasteful process that competes with photosynthesis. In 2017, Yield10 filed four additional patent applications on technologies related to C3003, based on new insights from our metabolic modeling work. We’ll continue to expand our understanding of C3003 at the metabolic level, including data work that our collaborator Danny Schnell, and his team are performing under their new daily grant. The Monsanto research license provides the path for C3003 to be tested in their elite soybean germplasm and eventually in combination with C3004. Let’s turn to Slide #11. The 2017 field test program is the second season of field test that we had conducted for the C3003 trait and we analyzed several generations of C3003. Please note when we talk about different generations of C3003, what this means is, we are activating the C3003 genes in the plant at different locations, times and levels to optimize performance. The main objectives of this study were: one, to test second generation for Gen 2.0, C3003 designed to receive specific expression of the gene in Camelina; two, to test first generation C3003 designed to express the gene in attitudes of canola; and three, to bulk up pure seed for use in our 2018 field testing programs. 2017 was our first field test in canola, a major commercial oilseed crop. We conducted the field test at two sites in Canada. Our 2017 field test marked the first time we have tested generation 2.0 C3003 in Camelina in the field. The 2017 field program involved testing several events in the field and selecting the best one for further study. Our seed yield results were positive, although the yield improvements vary between the two sites. The range of seed yields increase in the depth lines is between 2% to 7.7% compared to control plants depending on the site. We previously reported our 2017 field test results in a press release stated January 9, 2018. An additional parameter we investigated in the 2017 field test was harvest index. This is measured as a ratio of harvested seed to total plant biomass and it’s an indicator of the efficiency of seed production. This metric was increased in our Gen 2 C3003 plants versus controls in a majority of events tested. Another important measure in this study was individual seed weight. We observed an increase in individual seed weight in the majority of the C3003 Gen 2.0 events tested compared to control plants. To summarize, the depth events in our study of Gen 2.0 C3003 in Camelina produced improvements in seed yield, harvest index, individual seed weight and overall agronomic performances compared to control plants. During the course of our studies, we also used many cases, where the plants are isolated from insects to produce pure field grown seeds for our 2018 field tests. These plantings produced additional insights into yield performance. Although the many cage cluster are small and provide only an indication of performance, we are encouraged that the Gen 2.0, as well as some of the newer Gen 2.1 lines that have a different pattern of seed specific expression in C3003 produced higher seed yields for most lines versus control plants. As shown in the chart in the top right hand of the slide, six of nine Gen 2 lines produced an increase in seed yields versus control plants. This early filed work at lines containing the Yield10’s 2.1 promoter for C3003 seed specific expression shown in orange in the figure looks particularly promising. In summary, our work in the 2017 field test show that Gen 2 C3003 was very promising in Camelina and supports our efforts to accelerate deployment of Gen 2 C3003 constructs in canola. In 2017, we tested Gen 1 C3003 in canola for the first time in the field, and in third seed yield improvements developed to 13% in the best canola line versus control plants. I will note that we observed this result as this is capturing on site where low rainfall conditions persisted during the growing season. We also observed the decrease in individual seed weight for Gen 1 C3003 canola similar to what we saw with Gen 1 C3003 in Camelina in our field tests last year. To improve seed yields and produce typical individual weight seeds, we are deploying Gen 2.0 C3003 in canola, and these studies are currently underway in our greenhouses and are expected to be planted in field tests for 2018. Looking to our path forward in 2018 for Camelina, we plan to conduct additional field tests in 2018 with our best Gen 2.0 and 2.1 line using field grown seed and we continued research on Gen 3 construct to further boost seed yields improvement. For canola, we will retest the best Gen 1 C3003 lines using field grown seed scale up our Gen 2.0 lines in the greenhouse the intentions of doing some field tests if we can reflect enough seed and complete permitting in time. We will also develop Gen 2.1 lines of canola using the same genetic construct that showed very promising results in the Camelina and Minicage work. Let’s now turn to Slide #12. Soybean is an important target crop for C3003 and we are working with an academic collaborator in Canada on developing soybean plants transformed with Gen 1 and Gen 2.0 C3003 constructs. Soybean lines from these transformations were tested in the greenhouse in 2017. Preliminary observations suggest that the effects of C3003 translate into soybean. As with Camelina, we observed lower individual seed weights with Gen 1 C3003 in typical individual seed weights with Gen 2.0 C3003 in soybeans. Further, our preliminary greenhouse results show that there is an increase in branching in the plants for some of this events tested. This is significant, because more branching provides more sites on the soybean plant for seed pod to develop. It’s too early to draw conclusions about seed yields from these plants that our early data looks promising and seeds from our greenhouse studies maybe available for conducting pilot field tests in 2018. Additional Gen 1 and Gen 2.0 events lines are being progressed in soybeans for further study by our collaborator. As Oli mentioned earlier, we are pursuing this work independently, but we will solely put Monsanto and its activities with C3003 this year. Please turn to Slide #13. We believe there is a compelling market opportunity around specialty oils and we have devised concepts for optimizing oil biosynthesis in oil seed crops. Our objective is to identify traits accessible through genome editing to construct a more efficient path for oil biosynthesis. These traits will also have the potential to stack with other traits through changing oil composition, such as high oleic and omega fatty acid containing oils. We have identified or acquired five gene targets involved in oil biosynthesis and are focused on building IP around these targets. The illustration on the top right shows the simplified schematic of oil biosynthesis and seed tissue. Targets C3007, C3009 and C3010 may play a role in controlling fatty acid biosynthesis. The C3008 target acts downstream of oil biosynthesis and reducing its activity mainly to a reduction in oil turnover. In 2017, we filed our first submission to the USDA-APHIS MI-regulated process to determine the regulatory status for a Camelina line genome edited in the C3008a 2018 [ph]. Shortly thereafter, we received confirmation that the submitted C3008a line will not be regulated by the agency. We have also been working on lines edited for multiple traits. We recently completed genome editing, the Camelina line edited for C3008a, C3008b and C3009. Based on University of Missouri technology, our next step is to edit C3007, where we are working in both Camelina and canola and C3010. Our objective is to trait edited lines and submit them to USDA-APHIS through their MI-regulated process to enable nonregulated field test to the trait. We believe this work is promising and we’ll work to identify opportunities for licenses and collaboration. Let’s now turn to Slide #14. Last June, at the Plant Biology Conference, we reported results from our studies with expressing the global transcription factors C4001 in switchgrass, where we achieved 75% increase in the electron transport rate of photosynthesis and a 75% to 100% increase in a dry weight of above ground biomass. C4001 is clearly very interesting for increasing biomass yield. But we are also interested in how another global transcription factors, C4002 and C4003, impacts seed yields. For this reason, the study of these genes is being progressed in rice internally and in wheat through collaboration with the National Research Council in Canada. We’re also planning to test C4001, C4002, C4003 in corn. Yield10 is uniquely positioned to identify additional gene targets based on analysis of high-yielding lines, expressing our proprietary global transcription factors, C4001, C4002 and C4003. Please turn to Slide #15. Downstream transcription factors that are down regulated in our high-yielding lines are the simplest targets for genome editing. Basically, it’s technically easier to reduce the activity of the gene then to increase it with editing. We recently filed a new patent application on 24 additional transcription factor C4004 through C4027 and their combinations through genome editing to improve crop performance. The diagram on the right shows how many downstream transcription factors are down regulated by our global transcription factors, C4001, C4002 and C4003. Some of these targets are likely negative regulated to plant growth. And as such, may represent a non-GMO or genome edited growth to increase seed yields in biomass production. There is only one downstream transcription factor that is down regulated by all three global transcription factors, which we call C4004. We use the traditional GMO approach to increase the activity of C4004 in switchgrass and found that, as predicted, it is a powerful negative regulator of plant growth that produce very small plants. Editing of the C4004 gene lowers its activity now ongoing in rice to determine the effect it has on yield. In summary, our R&D scheme is positioned for very productive year in 2018. I would like to acknowledge our research teams at metabolic soil seeds and Yield10, we have worked hard to create the events and monitor the filed test in Greenhouse studies we have described today. And I look forward to updating you as our programs advance this year. Oli, back to you?

Thanks, Kristi. Let’s turn to Slide 16 milestone. Yield10 has a strong pipeline of exciting crop trait technologies, which we believe will help us build significant value in the business. In 2018, we will be conducting field tests of C3003 in Camelina and Canola at sites in Canada. We anticipate planting in the second quarter and reporting out results in fourth quarter this year. Under the research license, Monsanto is currently working with C3003 in soybean. In 2018, we will also continue independent development of C3003 in soybean, where we plan to test some events in the field this year and exceed bulk offer permitting, and we’ll continue to work with C3003 and rice. We made a lot of progress on the genome editing front in 2017. In 2018, we will continue to progress oil enhancing traits using CRISPR genome editing. We’ll also progress on C4000 series traits rice and corn Monsanto had. We believe the data we are generating across our traits and platforms, as well as our next-generation trait gene discovery platform will position us well to secure ag industry collaborations. We filed five new patent applications in 2017 and we’ll continue to file patent applications in our discoveries in 2018. We’ll continue to work we’ve been doing in our – with our academic partners in the underlying science and expect much of the work we have published and academic journals are presented in scientific conferences. We frankly, currently have submitted papers under review and expect publication in the first-half of 2018. We also plan to participate in relevant scientific and industry conferences. We’re expecting to be very productive in 2018 and beyond. So let’s now turn to Slide 17 to wrap up. 2017 was our first year of operating as Yield10. Our team made good progress, meeting our milestones and building on those accomplishments, we are well positioned for 2018. We’re also executing our focused program for C3003, advising new constructs of the yield trait and we are seeing it translate from Camelina into canola and soybean important North American oil seed crops. Our unique approach to trait discovery is led to the identification of promising genome editing targets, and we will be working to further develop these targets to improve seed yield oil content under biomass. Taking this all together, we have a clear vision for our business, defining the commercial opportunity in three areas: commodity crops, specialty oils and our R&D platform. We will continue making steady progress towards our goal to create value for our shareholders. With that, I’d to like to turn the call over to Lynne for questions.

Thanks, Oli. Adam, can you poll for questions?

Thank you. Ladies and gentlemen, at this time, we will be conducting our question-and-answer session. [Operator Instructions] And we have a question from the line of Jay Albany from SeeThruEquity. Please go ahead.

Hello, thanks for taking my question, and congratulations on the financing and on the Monsanto agreement. It seems like you guys have accomplished quite a bit this quarter. My question is on the Monsanto agreement. This clearly is a significant development for the company. Is there anything more you can share about the scope of the deal? Any upcoming milestones with Monsanto that we should be aware of?

Yes, Jay, thanks, Jay. There’s not an awful lot we can share. But what our client say is, the Monsanto arrangement really provides the validation of thoughts from leader in soybean for the approach we’re taking, particularly with C3003. Our team has provided technical information we have so far for C3003 to the Monsanto team, So they can do the transformations in the soybean lines. Just from there, it will take sometime to get to stabilize line in field test data. I don’t know what Monsanto will feel comfortable saying as the program progresses, we’ll have to see how that plays out. But in the meantime, we’re continuing to develop C3000 soybean ourselves independently, albeit at a much smaller scale, and we quite again try and get some of these events enter the field this year. If we can get enough season wrap up in property matters, we’ll update Monsanto on any new findings, as our goal is to assist them in anyway we can to make their work with C3003 as successful as possible.

Thanks very much. I notice the deal was described in your release as nonexclusive. Can we assume that other deals potentially your discussions with partners potentially in the works and is there any you can say to update us on these?

Yes, sure. Look, I think, for the last two-plus years as we’re initially formulating the thesis behind Yield10 and then launching it last year, we’ve been in conversation with most of the ag players formally about Yield10 and trait discovery platform. Two things are different going into 2018. First, I think the Monsanto arrangement helps validate our science. And second, we have a much solid concept of working with ag majors through our open innovation model. I mean this – we’re trying to make it basically easily for them to work with our traits, while preserving our rights going forward. And so, we have a pretty large pipeline of traits. We have a lot of flexibility how to engage interested parties. But overwriting all of that, I think, one thing I’m pretty sure certainly, I remember, and that is genome editing is a game changer for agriculture. And there is certainly some low-hanging fruit opportunities out there for modified seed compositions, but nutrition oils are reducing some compound that may not be as healthy. But we think there is a compelling need for smart systems like integrated technology platform we are developing to identify combinations of genes to address the yield gap. And this is an area where we bring some unique skills.

Okay, great. Thank you for taking my questions and congratulations, again.

Thank you.

Thanks, Jay. Thanks a lot. And Adam, I’ll just pose a question to Oli and Kristi with respect to some of the comments we made today with respect to our guidance for 2018. In particular as we are bumping up our net cash usage guidance for the year, bringing it just a little bit over where we were for 2017 and then at the same time, restructuring cost kind of running off. We’ve got a little bit left for this year, but as compared to last year that will be reduced. So how are you looking at using that additional capital and the Yield10 business in 2018?

.:

Yes, sure. We’ll be making targeted incremental investments in R&D in 2018 all in support of generating proof points. We made one key hire in all of 2017. And in 2018, we’ll hire a couple of physicians in Canada related to our work in the Greenhouses and supervision of our field test. Field tests itself are pretty cost perspective. But we’ll spend more on field test in 2018, because we’re going to be testing more traits, and we’re going to be working with three different crops. We’ll also be adding to our bioinformatics capability in Auburn, and we’ll be testing and developing more genome edited lines. And I think we’ll get a lot of leverage with a small number of hires we make in the additional data that we’ll generate.

Yes Kristi. Look, I think we’re pretty confident that this increase resource in R&D will serve as well in 2018, which is why we made the decision to make the increase.

Would you just wrap up the call then?

Yes. So the Yield10 team is working hard to progress traits to fill our vision to produce the change improvements to crop yield to ensure global security. I thank their employees for a job well done in 2017 and for a very productive start of 2018. Thanks also to our shareholders for your support and thanks, everyone, for joining the call to night.

Great, everyone. The call has now concluded. You may now disconnect. Thank you.