Welcome to the Fourth Quarter and Full Year 2021 Financial Results and Business Update Conference Call for Yield10 Bioscience. [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, Alex, and good afternoon, everyone. Welcome to Yield10 Bioscience Fourth Quarter and Full Year 2021 Conference Call. Joining me on the call today are President and CEO, Dr. Oliver Peoples; Vice President of Research and Chief Science Officer, Dr. Kristi Snell; and Chief Accounting Officer, Chuck Haaser. Earlier this afternoon, Yield10 issued our fourth quarter and full year 2021 financial results. This press release as well as slides accompany today's presentation are available on the Investor Relations Events 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 looking -- 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 are not strictly historical constitute forward-looking statements. And 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, and the company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this conference call. And with that, I'll now turn the call over to Oli.

Thanks, Lynne. Good afternoon, everyone, and thanks for joining our call. In 2021, we executed against our strategic plan to establish Camelina as a new platform crop for the production of low-carbon petroleum replacements and food products. We made key hires, conducted field tests and see scale-up of various Camelina lines and made other advances that create significant momentum going into 2022. Today, we'll provide an update on the recent accomplishments, including our 2021 field tests as well as review our target markets with an emphasis on biofuel feedstock oil present in the fourth quarter and year-end financials and summarize key milestones. We'll then open the call to questions. Let's turn to Slide 3. Our innovation platform, the Trait Factory, is centered around the oilseed Camelina, the cropping plan to establish as a platform crop for the production of low-carbon petroleum replacements, good products, use our Trait Factory approach, applying the principles of synthetic biology to improve the performance of the crop and produce new seed products. This includes fixing more CO2 from the air to increase seed yield and oil content in the near term and producing high-value proprietary seed products in the future. We believe that some of our varieties may also have the potential to sequester more carbon in the soil as shown on the slide. Let's turn to Slide 4. We have significant momentum entering 2022. We've transitioned by identifying the Camelina lines that will enable us to turn our focus to early commercial activities to supply low-carbon feedstock oil to the biofuel market. Our commercial team is engaging with potential supply chain partners to form alliances that will support our capital-light business model. In January, we welcomed Darren Greenfield to our team to lead seed operations. Darren has more than 25 years' experience in canola with companies including BASF, Dow AgroSciences and Cibus. Our commercial team is reaching out to growers for contract planting in 2022, establishing seed inventory and management systems to enable commercial seed supply and planning for plant variety registrations and branding to support product launch. As we build our business around Camelina, our research team has done an outstanding job developing our Elite differentiated Elite Camelina lines to launch the business and a portfolio of novel gene trades. In late 2020, we began an intensive effort to deploy well-established herbicide tolerance traits and downy mildew resistance into Camelina. Over the next year or so, the current varieties will be further enhanced by introducing these gene traits and other traits to create new varieties offering benefits to farmers and increased seed product revenue. In 2021, we continue developing and scaling up winter varieties as part of our strategy to access large acreage in the off-season when the land would lie fallow, so there will be no competition with soy and canola. We view establishing Camelina as a high-value winter cash cover crop as a key strategic goal for Yield10 for biofuels in near term and for the 2 new seed products in development, PHA Bioplastics and omega-3 oils. Given the near-term commercial focus on biofuel feedstock, we prioritized research efforts around oil content boosting and that is discovered using our GRAIN platform. And we've recently reported data generated in our 2021 spring field test and provided updates on our Camelina programs, including early commercial activities in the biofuel space and progressing the PHA bioplastic rate. For more on our 2021 field test results, I'll pass the call over to Kristi.

Thanks, Oli, and good afternoon, everyone. Our team executed an extensive spring field testing program in 2021, which has provided us with a rich data set on the performance of our Camelina and canola lines. I'll now review some of our key findings. Let's turn to Slide 5, summary of 2021 spring field test results. We evaluated our Camelina germplasm collection in 2021 and collected performance data on more than 20 spring-based germplasm lines. Some were from our internal collection and others were from university collections that we acquired. Our key internal Camelina germplasm lines were among the best overall performers in the field as determined by seed yield oil content and agronomic properties. We also evaluated our CRISPR Camelina line E3902. CRISPR Camelina line E3902 again showed that it is a consistent performer, producing about a 5% increased seed oil content in the field. Based on our work evaluating and comparing germplasm performance, we also confirm that E3902 CRISPR traits are deployed in one of our best-performing germplasm lines. Based on the oil yield and germplasm performance of Camelina line E3902, we plan to apply for plant variety registrations. Camelina C3015 for production of PHA. Our field work in 2021 also confirmed that Camelina with the C3015 trait is our best-performing prototype PHA line, which produces up to 6% PHA and seed with good seed yields. Camelina containing the C3020 oil trait. We tested the C3020 trait in Camelina for the first time during the 2021 field season. Lines produced up to a 9% increase in oil content which is comparable to the 10% increase we observed in greenhouse studies. We identified this promising trait using our GRAIN gene discovery platform, Canola containing the C3007 CRISPR trait. We also tested the C3007 trait in canola for the first time in 2021. In field tests, lines with this trait produced up to a 5% increase in oil content. In greenhouse studies, C3007 in canola produced an increase in oil in the range of 5% as well as a significant increase in seed yield. Warm weather conditions in 2021 at the site where we tested this trait produced a lot of variability in seed yield, which complicated the collection of seed yield data. The C3007 trait targets the negative regulator of a key enzyme in oil biosynthesis and our data in canola is very encouraging. I'd like to thank our team for doing such a great job managing the many complexities of our 2021 field test program as well as completing the extensive data analysis resolving from the efforts. Let's turn to Slide 6. outlook for 2022 Camelina development. In 2022, we will continue to build our Elite Camelina germplasm. This will include conducting an extensive field test program as well as seed scale-up utilizing contract growers as we continue evaluating and scaling up our leading spring and winter Camelina lines, the best of which we plan to register as new varieties. We will also continue to develop Elite Camelina with traits to boost seed oil content, seed yield, herbicide tolerance and downy mildew resistance. We've made good progress working on herbicide tolerance and we'll expand our testing for residual soil and over-the-top broadleaf weed control. We will also test candidate lines for resistance to downy mildew, a fungal disease. CRISPR Camelina line E3902. Given the performance of our genome-edited high oil line E3902, which has been confirmed is not regulated in the U.S. and Argentina, we plan for this to be registered as our first commercial Elite Camelina variety. We plan to ramp up seed production of E3902 for the feedstock oil market for renewable diesel. Seed is currently being scaled up in the 2021-2022 contract season, and we expect to use it for further seed production in 2022. We have also produced our first E3902 Camelina lines with herbicide tolerance team, and these will be tested for the first time in the field this year. Camelina C3015 trait for PHA. We are planning acre scale, seed scale-up of our prototype Camelina line containing the C3005 trait for production of PHA bioplastic for process development and product sampling purposes. In R&D, we will continue to work to optimize PHA bioplastic trait to produce 10% to 20% PHA bioplastic in seed and to demonstrate the PHA bioplastic copolymer production in Camelina. Camelina C3020 trait for oil content. For Camelina line with the C3020 trait, we will conduct field tests to collect seed oil content and seed yield data. With that, I'll hand the call back over to Oli.

Thanks, Kristi, and congrats to the team for their accomplishments advancing the program last year. Our strategy to build shareholder value is to commercialize Camelina as a platform crop to produce renewable products, including feedstock oils for renewable diesel in the near term, and to leverage our advances and crop development to launch Elite PHA Camelina varieties for PHA bioplastics in the future. In addition to these 2 areas, where Camelina can be used to replace petroleum products, we're also collaborating with Rothamsted Research to produce EPA DHA omega-3 oils for food. Let's turn to Slide 7. Based on announced fuel industry investments, production of renewable diesel alone is projected to grow to 5 billion gallons annually from an estimated 1 billion gallons in 2021. These investments are necessary to meet regulations such as the California Low Carbon Fuel Standard and selling diesel fuel in California requires producers to meet a carbon standard, either by lowering carbon renew -- by adding lower carbon renewable diesel to petroleum diesel or purchasing carbon credits. Increasing energy prices due to the crisis in Ukraine is another potential tailwind for biofuel demand. This new demand will have to be met mostly from increased vegetable oil production. Just to illustrate the scale of this challenge, adding 5 billion gallons of soybean oil would require another 60 million acres of soybean acreage that is simply not available, so this will require multiple approaches. This includes new traits for an increasing soybean and canola seed oil, [indiscernible], and new oilseed crops, which is an opportunity for Yield10. A new Camelina crop is well suited to support this growing feedstock demand using spring varieties in areas which are less productive for soybean and canola and as a winter cover crop when the land would otherwise be fallow. According to the illustration on this slide, harvesting 10 million to 15 million acres of Camelina cover crop to generate over $6 billion in revenue from oil and meal. Let's start to Slide 8. Our commercial strategy for Elite Camelina capital light while using contract farming, seed crushing and customer offtake agreements to manage costs and inventory risk in the early years of the business. To establish a leadership position in Camelina in the near term, we are prioritizing the development of Camelina lines with herbicide colors and disease resistance to enable large-scale acreage. Our performance rates were yielded oil will be stacked into these lines as we progress. In 2022 to 2023, we are planning to execute seed scale-up activities to enable planting in the range of 1,000 to 20,000 acres. We have packed forward with our current nonregulated varieties and will progress the regulatory path for new varieties, including those with herbicide tolerance as needed. In addition to our R&D activities, we have ongoing discussions with key players in the value chain including seed processors and biofuel companies, where as stated, our goal is to secure offtake agreements. Turn to Slide 9, a little discussion on PHA bioplastic. In the PA bioplastic area, our efforts are focused on optimizing the PHA trait to enable PHA bioplastic production in Camelina seed. Our business model is the same as for biofuel feedstocks, use contract growers to produce the Elite PHA Camelina, which can be processed to produce new products, PHA bioplastic, biofuel feedstock and protein meal. This will integrate PHA bioplastic production into large-scale, low-cost agriculture with the potential costs in the range of feedstock oils. From a carbon perspective, taking CO2 directly from the air and directing it to PHA bioplastic in seed, it's compelling. But this platform will take time to develop, and Kristi has already outlined the R&D activities listed here for this year. Consumer pressure and increasing petroleum prices has increased brand -- major brand owner interest in alternative materials like PLA, just compostable in Industrial Systems and the more expensive PHA bioplastics, which are highly functional in use but have the added advantage that they are fully biodegradable in the environment. We are pursuing collaborations with industry as PHA Bioplastics subtraction with brand owners interested in biodegradable materials as a 0 waste end-of-life solution for their products and packaging. We believe that this is a very attractive market, PHA bioplastics produced from plants. And I'd like to think of these plastics made by plants represents a potentially disruptive technology, so we look forward to updating you on our progress throughout this year. Let's turn to Slide 10 for an update on fish oil and Omega-3. There's a large opportunity to Omega-3 fish oil market, driven by reduced supply of oil from harvesting fish and growing demand in aquaculture feed nutraceutical markets. We believe the land-based production of omega-3 is an important potential solution for this market. As shown on the table, the Camelina EPA DHA omega-3 product has clear potential to be best-in-class across quality and composition with around 20% combined DHA and EPA omega-3s plus the third omega-3 ALA, and represents a sustainable way to meet the international growth anticipated in this attractive market. In 2022, we plan to continue our work with Rothamsted to progress to omega-3 traits, which we plan to stack into the Elite family and varieties currently under development by Yield10 for feedstock oils and to progress third-party business discussions. Now let's turn to Slide 11, licensing opportunities. We have nonexclusive research license agreements in place with Bayer, GDM, for Genetics and Simplot to test our traits in various commercial crops. Each company is evaluating our traits in their target crop with the option to negotiate a commercial license. The arrows on the slide indicate the duration of those agreements. We are also following up on industry interest in oil content traits, including C3007 for soybean and canola and we are seeking partners to test traits in corn. The GRAIN platform also represents a unique collaborative opportunity driven by interest in identifying novel performance traits. Now let's turn to Slide 12 for an update on financial results. Our net operating cash usage was $2.5 million for the fourth quarter 2021 and $9.3 million for the full year 2021. Our guidance for total net cash usage was $10.5 million for 2021 and our actual 2021 net cash usage was approximately $10.3 million. For the full year 2022, we estimate total net cash usage of $12 million to $12.5 million. The increase over 2021 spend is to support our transition to commercial activities, including seed operations as well as accelerated goal achievement in R&D. We ended the year with $16 million in cash, cash equivalents and investments. We expect our cash on hand, together with expected revenue from our current government grant, will support our operations in the first quarter of 2023. We have no debt on our balance sheet. Let's now review the full year and fourth quarter 2021 operating results. For the full year ending December 31, 2021, our net loss after taxes was $11 million or $2.33 per share as compared to $10.2 million or $4.30 per share in 2020. Total research grant revenues for the full year 2021 were $614,000 versus $799,000 for the full year 2020. For the full year 2021, R&D expenses were $6.2 million compared to $5.4 million in 2020. G&A expenses were $6.1 million for the full year 2021 as compared to $5 million in 2020. For the fourth quarter of 2021, the company reported a net loss after taxes of $3 million as compared to a net loss after taxes of $2.6 million for fourth quarter 2020. Total research grant revenues in the fourth quarter of 2021 were $152,000 versus $195,000 in the fourth quarter 2020. The decrease in the quarter reflects our assignment of internal resources and near-term commercial goals. In the fourth quarter of 2021, R&D expenses were $1.6 million compared to $1.4 million in the fourth quarter of 2020. G&A expenses were $1.5 million in the fourth quarter of 2021 as compared to $1.4 million in fourth quarter of 2020. For more details on our financial results, please refer to the earnings release. Now let's turn to Slide 13 for a list of upcoming milestones. In 2022, we will continue to focus on the following milestones: expanding our commercial activities targeting the renewable diesel market; continue to build our differentiated Elite Camelina germplasm collection; executing our 2022 field testing and seed scale-up program; advancing the optimization of our PHA bioplastic trait; and progressing the commercial launch plan for Camelina, DHA, EPA omega-3 oils. Securing grant revenue -- the revenue generating strategic industry collaborations and additional grant revenue and expanding our intellectual property portfolio. With that, I'd like to turn the call back over to Lynne for questions.

Thanks, Oli. Alex, we're ready for questions.

[Operator Instructions]. Our first question comes from the line of Anthony Vendetti with Maxim Group.

So on the supply chain side of the business and in the renewable diesel market, what -- can you talk about the nature of the conversations, your commercial team is having with the supply chain participants? And have you had any impact recently from COVID? Or do you feel like at this point, that's behind you?

Yes. So just let's take COVID off the table for the time being. And hopefully, there won't be another variant and that brings it back on. So I think we're pretty much through the COVID situation. Regarding the types of conversations we're having with biofuel companies, I mean, I would say what we've learned from the many different third-party conversations we have, obviously, their priorities are: number one, securing supply because, obviously, these facilities are being built. And quite frankly, they can't really be supplied by with soybean and oil, and there is no more fallow literally to go around. So obviously, oil seed or oil processing has to increase. The second thing we're hearing is they'd like to move away from food crops. That also fits with the Camelina story. And the third thing is they're really targeting getting to the lowest carbon intensity index score possible, which is obviously a big driver of value and actually defines how much of the renewable diesel they have to blend into their final fuel before they can sell it in California. So that's what we're hearing from the fuel players. The second thing we're hearing is that there's also a number of these fuel players that are aligning with some of the big seed processors. These are the big ABC companies, ADMs, Bunges, Cargills, and then you get into Dreyfus, Richardsons and there's a list of these. And we're also seeing, obviously, investment in new seed crushing capacity, both in the Canada and the U.S., not only among the large players, but also among many of the soybean co-ops and areas of the country that the Yield10 is focused on. So we're seeing this across the value chain. And then when you look at where Yield10 and how Yield10 would like to get started in the business in an ideal situation, we'd be in a region suitable for growing our Camelina where we already have, I would say, capabilities in place. It would be a, I would say, a biofuel player that preferably has crushing capability in place, and already has a channel to market for the fuel. So that's -- that would be sort of ideal as a launch point. But we're also seeing a lot of strategic interest from some of the bigger players. And that interest is driven, I would say, more long term because they're so busy with these capital investments, but it's really more about how do they get to the most compelling nonfood, low-carbon story, and have to be quite honest with you. One of the major attractions is the combination of biofuel feedstock and PHA bioplastics because of the negative carbon impact of the bioplastic and that seems to have some synergies. So we'll see how all those things shake out. Obviously, the size of the company dictates also the pace at which you can progress. And so we are -- we've got a lot of things ongoing, but obviously, until something is actually, I would say, codified legally then we wouldn't be able to talk about it.

Okay. But Oli, it sounds like talks are progressing. At least from your comments, it sounds like you're having more conversations. Is there anything that they're requiring whether it's more validation, more field tests, anything that they're requiring you think to get them over the hump, so to speak, in terms of, like you said, codifying or actually signing a contract? Or it's just -- especially with the larger customers, it's just a lengthy process.

Yes. It's just -- with larger players, I mean, it's obviously a lengthy process. And I think quite frankly, I mean, an example would be of how some of the largest players sees this is obviously Exxon is pretty involved in Global Clean Energy Holdings, which owns a company called Sustainable Oils that has obviously a non-GMO Camelina platform. And as part of our recent deal, they obviously sought to secure 30% of the Sustainable Oils, which is the Camelina seed business. And so they are clearly looking at this whole area strategically. One thing that Yield10 will not do is we will not trade on our intellectual property in Camelina just to work with an oil partner. We don't believe we have to do that. We believe we can essentially retain control of our intellectual property and capabilities and still work with these partners in a way that meets their needs but protects the interest -- the long-term interest of our shareholders.

Our next question comes from the line of Sameer Joshi with H.C. Wainwright.

Just digging a little bit deeper. I know it is early days on discussions on the renewable diesel and access to market. But how do you envisage this will -- as far as Yield10 is concerned, would you be interacting with the renewable diesel producers or the contract farmers or the ABCs of the world or crushing companies? Like who will be your most likely partner?

Yes. So regarding -- right now, I mean, basically, we are already in conversation with the farmers about growing contracts. And Darren, who joined us just -- he's literally drinking from a fire hose. So he's a very busy guy. And he is really, obviously, kept the ground running based on obviously the work of Kristi and our team. Basically, we're already in discussions with growers about contract production this spring and actually also planned for this winter as well. And we'll have to see how all that goes. There's obviously some real unique dynamics in the ag sector due to the Ukraine being such a big grain -- an important grain producer. So growers are really -- that would be contracts with Yield10. What we are trying to do, however, is to contract the offtake of the grain after harvest with crushers on our oil company, which require few companies that have crushing in place. So we see ourselves as being not an agent, but also, I would say, more or less the enabler for the value chain that collects our income at the farm gate basically versus who is selling seeds from the farm.

Understood. And so in one of the slides you mentioned -- I think Kristi mentioned 1,000 to 20,000 acres to be planted. Is that the E3902 variety? Or is that the E330-20 variety?

Yes. E3902, there's -- we don't have an E330-20. It's too early for C3020. I mean literally, -- so literally, the grain team literally plot C3020 out of the ether space. And Kristi and her team plugged into Camelina with obviously really very exciting results. But it's a very new development, exciting in its own right, but it will take time to bring that forward. And I do think that, obviously, the R&D team is not only looking at C3020 by itself, but obviously starting to combine these things with some of the other oil traits that we have in hand whether that's E3902 or the C3007. So I would say one thing that is clear is just as you investors are just seeking C3020, we are seeing a similar interest from some of the larger seed players. Because suddenly, oil value per acre is a huge driver in terms of the seed business itself, both for Camelina and soybean. So how well that works out, we will have to see, but we're already having conversations with some of the seed players in on those things.

Yes, E3902...

Yes. So I think, Lynne, reminded me a key point here. So E3902 is our lead spring variety and obviously, the speed scaled up. But we're also scaling up 2 winter lines. Kristi, do you want to speak to those?

Yes. We have two proprietary winter lines that we've developed in-house that are working very well, both in extreme cold and then we have one that works well in more temporary climates. And we're scaling those up right now to meet the need for renewable diesel.

Do they have a E number like 30-something?

No. We haven't decided the number yet.

It's internal number, so not external number.

Got it. Got it. So my next question is actually 3 or 4 questions and 1 and just hear me out. Question one, part 1 of that is for the 3 -- sorry, E3902, what was the control oil content and the 5% improvement over that? How does that total oil content compare to soybean or canola?

Yes. You can't really make those comparisons. Essentially, soybean has about 18% oil; canola depending on the varieties can have up to 40-plus percent oil. And then, of course, there's a wide variation across the geographies. So these are still small -- relatively small trials, I think. So the only thing we can really do is to compare it to the Camelina control. And in that case, obviously, it stands out as having 5% more oil, which is obviously beneficial in terms of our launch of the business. But obviously, we won't stop there, and that's why some of these other traits like C3020 are really interesting.

So is it fair to assume that the Camelina control was around 30% to 40% because it is closely related to canola?

It really depends where it was grown. You get higher oil content when you grow it up in Canada than you do in the Pacific Northwest U.S. states. So it's really depends where it is grown.

Yes. You can look at that way...

Yes. Yes. And then the culminating question here is, I understand that 3020 is a new development. But is it considered regulated as against E3902, which is not considered regulated and that could be due to...

We believe the regulation will be advantageous through the new secure rule, it is a Camelina gene. But we, of course, have to go through that process to see how it pans out, but we believe there will be some advantage.

Okay. And then one last question on a different topic. The licensing agreements that you have with Simplot, Forage, those -- and others are ending in 2020, what is -- should we expect to be the outcome of these? Or do you expect these to be extended further? What -- how should we look at these licensing agreements?

Yes. So I mean, I think, obviously, in an ideal situation, some of them will translate over to basically commercial licenses. That will depend on what these companies see the field trials this year and how they view that. We can't really provide any further color on it. But certainly, there's -- they're clearly progressing these, and we know they're doing field trials this year. We do have information, but we can't share that with you.

Ladies and gentlemen, we have reached the end of the question-and-answer session. I will now turn the call over to Lynne Brum for closing remarks.

Yes. Thanks, Alex, and I'll turn the call back over to Oli.

So I'd like to personally thank all of you for joining us on the call tonight, and especially our shareholders for your continued support. This is an exciting time for Yield10 as we have gained clarity and focus on the opportunities ahead in 2022 and beyond. In the near term, we are focused on preparing for the launch of Camelina for the RD space as well as in advancing our activities in PHA Bioplastics and omega-3 oil products in development. I want to thank everyone at Yield10 for keeping us on track to reach our goals in 2022. Have a nice evening, everyone.

Thanks, Alex.

Thanks, everyone. You may now disconnect.