Q3 2021 Yield10 Bioscience Inc Earnings Call
[music].
Welcome to the third quarter 2021 financial results and business update conference call for yield 10 Bioscience. During the call. All participants are in a listen only mode. The presenters will address questions from analyst today, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this call.
Is being recorded I would now like to turn the conference over to your host you'll turn President Vice President of planning and corporate communications blend for them.
Thank you Devin and good afternoon, everyone welcome to yield 10, Bioscience third quarter 2021 conference call joining.
Joining me on the call today are president and CEO, Dr. Olly peoples.
Thanks, President of research and Chief Science Officer, Dr. Kristi, Snell, and Chief Accounting Officer, Chuck Hauser.
Earlier this afternoon <unk> issued our third quarter 2021 financial results. This.
Press release as well as slides that accompany today's presentation are available on the Investor Relations events web site at yield 10, bio dot com.
Let's now turn to slide two.
Please note that as part of our discussion today management will be making forward looking statements.
Statements are not guarantees of future performance and therefore, you should not place undue reliance on them investor.
Investors are also cautioned that statements 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 yield ten's filings with the SEC.
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 I'll turn the call over to al.
Thanks, Lynn good afternoon, everyone and thanks for joining our call.
Made strong progress during 2021 advancing yield ten's business.
Today ill provide an update on our recent accomplishments with your target markets with an emphasis on biofuels feedstock oil presented the third quarter financials and summarize key milestones.
We will then open the call to questions.
Let's turn to slide three.
Our innovation platform is centered around the oilseed camelina.
We use our trait factory approach applying the principles of synthetic biology to improve the performance of the crop.
This includes placing more cotwo in the air to increase seed yield in oil content in the near term.
We're seeing high value proprietary seed products in the future.
We believe there are some other varieties may also have the potential to sequester carbon in the soil as shown on the slide.
Let's now turn to slide four.
During this quarter, we continued to develop and execute our camelina business strategy, including our reached the potential partners in areas of biofuel food and bioplastic.
Explore ways of working together to bring forward products produced in Camelina.
We executed on our 2021 field test and scale up activities.
They did the harvest in the U S and Canada in the third quarter.
We're pleased to report that overall plantings of Camelina should put short tolerance to heat and areas that experienced weather challenges that the trials were harvest each for evaluation.
As part of this program.
We began to scale up of our two best Camelina PHA lines, because we prioritize those teeth analysis.
These lines first we are also pleased to report seat phe levels consistent with findings from our small field scale planting last year.
Successful completion of the scale up.
In 2021 enables HR scale planting in spring 2022.
The data analysis from all of our Lora harvested trials are still in progress and we expect to report additional findings and our plans for spring 2022, and the first quarter.
As many of you know we have also been developing winter varieties of Camelina.
We had a successful program last winter with good yields and we have substantially completed planting for 2021 2022 which are field testing and scale up program in the U S and Canada.
In our transition to an early commercial focus we continue to add key hires in particular to lead our seed operations and build out our commercial team.
And a quick recap of prior accomplishments. This year, we expanded our trait portfolio with four new at oil content traits using a credit platform strengthened our balance sheet to extend our cash runway to achieve all your building milestones into 2023.
And extending to our IP portfolio with four new patents awarded.
Now, let's turn to slide five.
Although our technology development focus is on our Camelina business Youll trial results from our traits in Camelina not only adds value to the camelina as a crop but in addition allows us to create option value for creates other crops to trait licensing to major seed companies.
Today I'd like to focus on key accomplishments against our strategic goal to use camelina as a platform crop produce feedstock oils in the near term and I'll provide an update on an EPA DHA Omega three oils for food as well as PSA Bioplastics.
Combined we estimate a potential seed product revenue of over $4 billion by 'twenty started.
Let's turn to slide six.
Our largest near term opportunity is for supply family seed camelina seed or oil into the growing renewable diesel market.
Interest in renewable diesel or biodiesel remains high.
As indicated by the large investments energy companies are making moves to a low carbon fuel regulations and pressure to invest in technologies and reduce their carbon footprint due to climate concerns.
Investments into biofuel production are creating a massive demand perpetual oil feedstock as shown on the chart.
Reduced renewable diesel biofuel production capacity is projected to grow to 5 billion gallons annually from an estimated 1 billion gallons this year.
We believe Camelina represents a great solution to expand feedstock oil production in North America to support this demand.
Let's turn to slide seven.
Our commercial strategy and elite Camelina this capital light one using contract farming seed crushing and customer off take agreements.
To establish a leadership position in Camelina in the near term we are prioritizing the development of Camelina lines with herbicide tolerance and disease resistance to enable large scale acreage.
Our performance traits, where yields on oil will be stocked in fees in the future.
Developing camelina for making feedstock oil for biofuel represents our best near term commercial opportunity I'll now turn it over to Christine to provide an update on our technical progress.
Thanks, Kelly, let's turn to slide eight.
We are utilizing spring and winter variety developed by our team and field testing and scale up and we believe these lines can be put into limited pre commercial production producing oil and meal sampling.
Our team has identified and in many cases tested more than 15 performance traits for Camelina.
The key to assessing and expanding acres for commercial production of oil and meal with these traits it's appointment of herbicide tolerant.
Growers will demand it.
Trolling leads as needed to meet expectations for economy and yield.
In 2021, and we began our herbicide tolerance program and continuing to make big progress as we focus on our goal.
They believe deploying and verifying herbicide tolerance in our high oil between 900, Camelina and in our new winter varieties in 2023.
When this is accomplished we will be positioned to enhance into pre commercial scale up.
At the same time, we plan to make regulatory filings as we scale up production up to a thousand plus acres.
Our progression into commercial launch will be predicated on signing offtake agreements for oil.
Launching both spring and winter variety would enable revenue streams for two harvests per year in North America.
Now, let's turn to slide nine.
Another way to increase the oil supply to relay the winter camelina crop with tightening as illustrated on this slide.
This has the potential to double their feedstock oil supply without impacting food production.
It also provides sustainability benefits and then it provides protection for the soil.
Now, let's turn to slide 10.
The main objectives of the program. We are executing this winter are the continued scale up of line <unk> 902, and our winter line.
And to determine if winter planting in additional areas of the U S can be viable for camelina.
<unk> 902, as our CRISPR edited for oil content and produces a feed with a different color as compared to typical plant you can see it on this slide the same color.
Color and some more yellow and brown.
Last year <unk> nine O two showed a 5% increase in the oil content in the field.
Still evaluating oil yields from our 2021 test, we do know that the plant's displays and heat tolerant.
Given the expected performance of <unk> 902, we are moving ahead with contracting season scale up in California, as well as testing small pluses E Green I know too and our DH 12 spring line in five additional states, including Georgia and Texas.
We have developed two winter line.
Th, two which has shown good tolerance to cold and W. D. H, three which is early maturing.
These lines are undergoing speed scale up in Saskatchewan in Idaho, respectively.
This program is successful we will harvest team to enable larger planning verify expected yields with another season of data as well as determine if the geographical reach of our winter and spring line can be expanded into more southern and central regions of the U S. During the concert season.
Back to you thanks Christy.
Let's now turn to slide 11.
There's a large opportunity in the Omega three fish oil market driven by reduced supply of oil from harvesting fish and growing demand in agriculture feet under just physical markets.
I believe the lung based production of Omega threes as an important central solution for this market.
A year ago, we secured commercialization rights to the Omega three Camelina technology from the Roth Instead Institute in the U K.
This technology was quite advanced in Camelina with multiple research field trials as well as accuracy human clinical trial data generated using the oil produced in those studies.
As shown in the table Camelina EPA DHA Omega three product is clear potential to be the best in class across quality and composition.
It was around 20% combined DHA and EPA and mortgage fees plus a third Omega three P L a and.
Ah represents a sustainable way to meet the international growth disparities in this attractive market.
Your 2021, we have worked with professor Johnathan Napier to support activities as well as working internally on regulatory strategy and business development with a focus in Argentina, and in Chile, which produces around 30% of global farm salmon.
We continue to work on analysis of the genetics of the lead Omega three lines from Roth instead.
Enable the development of our regulatory strategy, while field tests of our current lines are ongoing in Argentina.
Pending clarity on the regulatory path for the Rossum said Omega three trait in the future. This will be stacked onto the elite Camelina currently under development for feedstock oils.
We look forward to updating you on this program in first quarter next year.
Now, let's turn to slide 12.
William Plastics are in every way in innovation of the 20th century.
The functional benefits of plastics changed almost every area of daily life.
But if it wasn't obvious early in the lifecycle. It is now.
Plastics are a huge source of pollution on land and water worldwide.
Although it's a plastic waste or the contribution to carbon emissions during production petroleum based plastic are a problem.
Petroleum based plastics as you'll see in the chart gained more such broad use because they're very low cost to produce.
This is present presented a large barrier to entry for the broad introduction of Biobased biodegradable plastics, except in instances, where the brand owner is strongly committed to sustainability.
Even sold more recent pressure on brand owners has resulted in an increasing demand for materials like DLA, which is possible and industrial systems, but not biodegradable and the environment.
As a result major capital investments in additional production capacity are underway.
We believe BLA as an interim solution in PHA Bioplastics, which in addition to being broadly useful and plastics markets are natural materials fully biodegradable environment, Therefore, a better solution.
The caveat of course is a need for a disruptive production technology to reduce costs and enable capital efficient large scale production.
Our mission is to achieve this by producing the PHA bioplastic as a third seat for Florida Camelina seed.
Along with protein and meal and oil.
This will eliminate inefficient conversion of sugar or oil feedstocks, and the prohibited with capital and operating costs of fermentation.
Direct production of the third seat product in Camelina will directly link PHA biopolymer production to low cost large scale agriculture with the potential to produce it cost in the range of feedstock oils.
From a carbon perspective, you can see what to directly from the air and directing it to phe bioplastic in seats is compelling.
But this platform, we will still take time to develop.
Now, let's turn to slide 13.
Redesigning our plants to make PHA is difficult and then 2019, we reported proof of concept and greenhouse growing plants.
On a 2020, indicating 6% yield of PHA and seed grown in the field.
Having prioritized evaluation of our fuel samples. We are pleased to report that our two best Phe Camelina lines planted this spring towards the same result, as last year up to 6% DSA by wait and see and.
In 2022, we plan to continue along the path of seed scale up of the acre scale, enabling larger scale in 2023, an initial seed processing to produce PHA for product samples and prototyping.
At the same time the team is proceeding on parallel paths to generate to develop second generation lines with BHG in the range of 10% to 20%.
Once available the new PHH rate will be stacked onto the elite Camelina currently being developed for feedstock oils.
I believe that this is a very attractive market and biodegradable PHA produced from plants.
Represent an excellent solution for compounds brand owners and consumers as well as the environment.
Our lifestyle to slide 14.
Currently we have non exclusive research license agreements in place with their GDN forest genetics and simpler to test some of our trait and different crops.
Each company's evaluating attrition of their cargo crop with the option to negotiate a commercial license in third quarter, we worked with forest genetics to extend the research license for an additional 12 months and enable them to complete their R&D activities.
Got it was on the slide indicate the duration of the agreements currently in place.
Let's turn to slide 15.
Our net operating cash usage was $2 million for the third quarter of 2021.
Ending the quarter with $18 5 million in cash cash equivalents and investments.
We expect that our cash on hand, together with the expected revenue from our current government grants will support our orders in the second quarter of 2023.
We have no debt on our balance sheet.
We are updating our estimates for net operating cash usage for the full year 2021, and though we believe it will be within the range of 10 to $10 $5 million.
This includes estimates for our contracted and planned C scale up activities as well as planned hires and other support and business development regulatory affairs and Cedar operations, all directed towards executing our commercial plan.
Let's now review the third quarter of 2021 operating results.
The company reported a net loss after taxes of $2 4 million for the third quarter of 2021 compared to a net loss after taxes of $2 2 million for the third quarter of 2020.
Total research Grant you have revenues in the third quarter of 2021 were 92000 versus 204000 in third quarter of 2020.
The decrease in the quarter reflects our internal assignment of internal resources, the near term commercial goals.
In the third quarter of 2021.
R&D expenses were $1 6 million compared to $1 3 million in the third quarter of 'twenty.
G&A expenses were $1 5 million in the third quarter of 2021 as compared to $1 1 million in third quarter of 2020.
For the nine months ending September September 30th on into 'twenty one.
Our net loss after taxes was $8 1 million for $1 72 per share as compared to $7 6 million or $3 69 per share in 2020.
For more details on our financial results. Please refer to the earnings release.
Let's now turn to slide 16.
As we move into 2022, we will continue to focus on the following milestones.
Completing data analysis of our 2021, Youll test program and reporting and we expect to report additional results in first quarter of 2022, and this will help inform our 2022 field testing in seed scale up priorities.
We continue to expand our elite Camelina germplasm collection with internal work as well as acquiring rights to lines with decided performance profiles.
We are making fuel test ready harp, So Paulo, and <unk> hundred 902 in which a varieties. We're also working to create second generation stacked rates.
Progressing in the business plan for Camelina products, where we are seeing a high level of interest in camelina producing feedstock oil for biofuel and we are working to identify a commercial partner.
We are advancing the commercial launch plan for Camelina Omega three oils in South America, where we are.
We're on track to complete the regulatory analysis, almost three lines and finalized the strategy.
Continue to broaden the COVID-19.
Commercial capabilities, particularly in seed operations to complement our recent hires and regulatory affairs and business development.
As we increase the focus on the Camelina products, we see we're still seeing more opportunities to secure strategic collaborations from value chain partners. In addition to biofuel.
Also based on industry feedback, we believe there'll be an increasing demand for trait gene target identification tools like our unique grid platform as well as novel traits for genome edit a genome editing in crops.
We are continuing to work to secure revenue basis revenue based on generating commercial licensees trades.
Going forward and expanding our intellectual property portfolio and with that I'd like to turn the call back over to Lynn for questions, Hey, Thanks, Olly and Devon, we're ready to poll for questions.
Thank you we will now be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is another question Kim.
May press Star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
Our first question comes from the line of Anthony Vendetti with Maxim. Please proceed with your question.
Hi, Good afternoon. This is actually Jeremy Pearlman underlying rental got it.
A quick question on slide seven of your presentation you see on the bottom is a note that the elite Camelina variety is developed for the feedstock oil will then be used for the Omega three in a bioplastic I was wondering if it makes sure I have that clear that you have you got your plan is in the end have won camelina variety that will have all these traits stacked upon each other that wouldn't be.
Right.
No actually the way it is and this is very typical so basically what we will have to do is we will have a trade developed separately for both Omega three fish bioplastic, but in order to get all the performance features of the elite camelina producing that those products will actually cross dock trait into.
And so the elite lines and that will give us elite Omega three and delete PHA bioplastic lines Dolby C. Three separate.
Lines three separate businesses.
Okay I'll just read the headlines okay. That's okay, it's gonna make that not that make that clear okay got that.
And then I don't know if you could talk I don't know if I know you I know you're always theres ongoing talks with potential commercial partners.
Could you maybe talk a little bit more to that where do you think they are in and the talk is it are you getting more traction as you keep.
You're you're proving yourself more every play.
Planting season, Youre, increasing your speed you're increasing your acreage is there any do you see any more tracks any more interest.
Your talks with potential commercial partners.
I would say yes.
Definitely I don't think the issue of course always is.
They are looking at.
The issue for these large energy companies.
Are basically used to owning and controlling the well source of the feedstock for the refineries.
This is kind of different for them and they're really doing it because of low carbon fuel standards. So they are converting facilities. Many of those facilities are actually areas. The country well here in Canada are very suitable for using camelina oil as a feedstock.
So.
Once we recruited our business development person.
There's been extensive outreach to these folks I would say.
All of the folks in the biofuel space at least in North America.
To be very concerned about feedstock security in other words guaranteeing that once these investments were in place.
Supplies are available.
To keep those facilities running and operating so.
That's really the driver behind us.
To be perfectly honest, we havent really been focused on this but given that as part of our push to produce Omega three oils in PHA Bioplastics, we have been developing elite camelina.
Increased oil, but also for herbicide and disease resistance.
We find there is a really interesting intersection.
And overlap, but our interest in New York term.
Our strategic goal to secure feedstock so.
We have discussions ongoing but as you know discussions could take a while.
And Theres no guaranteed outcomes.
Okay, Alright, thank you very much I'll hop back in the queue.
Okay.
Thank you thanks for that.
Thank you as a reminder, ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad.
No. It doesn't I think I'd like to now turn the call over to Ali for closing remarks.
Oh go ahead.
I'd like to personally thank all of you for joining us on the call Tonight, and especially our shareholders for your continued support we're very excited about opportunities ahead of us as we build our business.
In the near term, we are focused on the promising market opportunities for oil and meal from our lead camelina as well as on progressing commercialization of EPA and DHA Omega three oil product.
Everyone at yield and for keeping us on track to reach our goals in 2021.
MSA I'd like to wish you all have nice evening. Thank you.
Thank you everyone. This concludes today's teleconference. You may now disconnect. Your lines. Thank you for your participation and have a wonderful day.
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Welcome to the third quarter 2021 financial results and business update conference call for yield 10 Bioscience. During the call. All participants are in a listen only mode. The presenters will address questions from analysts today, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this conference is being record.
I would now like to turn the conference over to your host yield 10, President Vice President of planning and corporate Communications Lynne Brum.
Thank you Devin and good afternoon, everyone welcome to yield 10, Bioscience third quarter 2021 conference call.
With me on the call today are president and CEO, Dr. Olly peoples Vice.
Vice President of research and Chief Science Officer, Dr. Kristi, Snell, and Chief Accounting Officer, Chuck Hazard.
Earlier this afternoon yield 10 issued our third quarter 2021 financial results. This press.
Press release as well as slides that accompany today's presentation are available on the Investor Relations events web site at yield 10, bio dot com.
Let's now turn to slide two.
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.
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 yield ten's filings with the SEC.
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 I'll turn the call over to Ali.
Thanks, Lynn good afternoon, everyone and thanks for joining our call.
We made strong progress during 2021 advancing yield ten's business.
Today ill provide an update on our recent accomplishments with your target markets with an emphasis on biofuel feedstock oil present, the third quarter financials and summarize key milestones.
We will then open the call to questions.
Now, let's turn to slide three.
Our innovation platform is centered around the oilseed camelina.
We use our trait factory approach applying the principles of synthetic biology to improve the performance of the crop.
This includes placing more cotwo from the air to increase seed yield in oil content in the near term.
<unk> high value proprietary seed products in the future.
We believe that some other varieties may also have the potential to sequester carbon in the soil as shown on the slide.
Let's now turn to slide four.
During this quarter, we continue to develop and execute our camelina business strategy, including outreach to potential partners in areas of biofuel food and Bioplastics.
Explore ways of working together to bring forward products produced in Camelina.
We executed on our 2021 field test and scale up activities.
We did the harvest in the U S and Canada in the third quarter.
We're pleased to report that overall, our quantities of Camelina should good shortfall or is the heat in areas that experience without challenges and that the trials were harvested for evaluation.
As part of this program with.
We began scale up of our two best Camelina PHA lines, because we prioritized prior does see the analysis of these lines. First we are also pleased to report seat phe levels consistent with the findings from our small field scale planting last year.
Successful completion of the scale up in.
In 2021 enables HR scale planting in spring 2022.
The data analysis from all over our Lora harvested trials are still in progress and we expect to report additional findings on our plans for spring 2022, and the first quarter.
As many of you know we have also been developing Woodford varieties of Camelina.
We had a successful program last winter with good yields and we have substantially completed planting for 2021, 2022, which are field testing.
Seed scale up program in the U S and Canada.
In our transition to an early commercial focus we continue to add key hires in particular to lead our seed operations and build out our commercial team.
And a quick recap of prior accomplishments. This year, we expanded our trade portfolio with four new at oil content traits using a creative platform strengthened our balance sheet to extend our cash runway to achieve value building milestones into 2023.
And extended our IP portfolio with four new patents awarded.
Now, let's turn to slide five.
Although our technology development focus is on our Camelina business Youll trial results from our traits in Camelina not only adds value to camelina as a crop but in addition allows us to create option value for affiliates and other crops to trait licensing to major seed companies.
Today I'd like to focus on key accomplishments against our strategic goal to use camelina as a platform crops to produce feedstock oils in the near term and I'll provide an update on an EPA DHA Omega three oils for food as well as Phe Bioplastics.
Combined we estimate a potential seed product revenue of over $4 billion by 'twenty started.
Let's turn to slide six.
Our largest near term opportunities for supply family seed Camelina seed our oil into the growing renewable diesel market.
Interest in renewable diesel or biodiesel remains high.
As indicated by the large investments energy companies are making due to a low carbon fuel regulations and pressure to invest in cleaner technologies and reduce their carbon footprint due to climate concerns.
Investments into biofuel production are creating a massive demand for vegetable oil feedstock was shown on the chart.
Reduced renewable diesel biofuel production capacity is projected to grow to 5 billion gallons annually from an estimated 1 billion gallons this year.
We believe Camelina represents a great solution to expand feedstock oil production in North America to support this demand.
Let's turn to slide seven.
Our commercial strategy and elite Camelina this capital light one using contract farming seed crushing and customer off take agreements.
To establish a leadership position in Camelina in the near term we are prioritizing the development of Camelina lines with herbicide tolerance and disease resistance to enable large scale acreage or.
Our performance traits, where yields on oil will be stopped and fees in the future.
Developing camelina for making feedstock oil for biofuel represents our best near term commercial opportunity I will now turn it over to Christine to provide an update on our technical progress.
Thanks, Ali, let's turn to slide eight.
We are utilizing spring and winter variety developed by our team and field testing in scale up and we believe these lines can be put into limited pre commercial production producing oil and meal sampling.
Our team has identified and in many cases tested more than 15 performance traits for Camelina.
The key to accessing and expanding acres for commercial production of oil and meal with these traits as deployment of herbicide tolerant.
Growers will demand it.
Trolling leads as needed to meet expectations for economy and yield.
In 2021, we began our herbicide tolerance program and continuing to make good progress as we focus on our goal.
Hey, Billy deploying and verifying herbicide tolerance in our high oil <unk> Camelina and in our new winter varieties in 2023.
When this is accomplished we will be positioned to advance into pre commercial scale up.
At the same time, we plan to make regulatory filings as we scale up production up to 1000 plus acres.
Our progression into commercial launch will be predicated on signing off take agreements for oil.
Launching both spring and winter variety would enable revenue streams from two harvests per year in North America.
Now, let's turn to slide nine.
Another way to increase the oil supply to relay the winter camelina crop with timing as illustrated on this slide.
This has the potential to double the feedstock oil supply without impacting food production.
It also provides sustainability benefits and then it provides protection for the soil.
Now, let's turn to slide 10.
The main objective of the program. We are executing this winter are to continue to gain scale up of line <unk> hundred 902, and our winter line.
And to determine if winter planting in additional areas of the U S can be viable for camelina.
<unk> 902, as that CRISPR edited for oil content and produces athene with a different color as compared to typical plant you can see it on this slide the same color and some more yellow and brown.
Last year <unk> hundred 902 showed a 5% increase in the oil content in the field.
We are still evaluating oil yields from our 2021 tests, we do know that the plant's display and then heat tolerance.
Given the expected performance of <unk> 902, we're moving ahead with contract season scale up in California, as well as testing small plots of <unk> 902, and our <unk> spring line in five additional states, including Georgia and Texas.
We have developed Q winter line, <unk>, which has shown good tolerance and coal and <unk> III, which is early maturing.
These lines are undergoing speed scale up in Saskatchewan in Idaho, respectively.
If this program is successful we will harvest team to enable larger planning verify expected yields with another season of data as well as determine if the geographical reach of our winter and spring line can be expanded into more southern and central regions of the U S. During the conference season.
Ali and back to you. Thanks Christy.
Let's now turn to slide 11.
There's a large opportunity in the Omega three fish oil market driven by reduced supply of oil from harvesting fish and growing demand in agriculture feet under just physical markets.
I believe the lung based production of Omega threes as an important central solution for this market.
A year ago, we secured commercialization rights to the Omega three Camelina technology from the <unk> Institute in the U K.
This technology is quite advanced in Camelina with multiple research field trials as well as accuracy in human clinical trial data generated using the oil produced in those studies.
As shown in the table Camelina EPA DHA Omega three products as clear potential to be the best in class across quality and composition.
With around 20% combined DHA and EPA and mortgage fees.
Third Omega three PLE.
Ah represents a sustainable way to meet the international growth dissipated in this attractive market.
July 2021, we have worked with professor Johnathan Napier to support activities as well as working internally on regulatory strategy and business development with a focus on Argentina, and in Chile, which produces around 30% of global farm salmon.
We continue to work on analysis of the genetics of the lead Omega three lines from Roth instead to enable the development of our regulatory strategy, while field tests of our current lines are ongoing in Argentina.
Pending clarity on the regulatory path for the <unk> Omega three trait in the future. This will be stacked onto the elite Camelina currently under development for feedstock oils.
We look forward to updating you on this program and first quarter next year.
Now, let's turn to slide 12.
Petroleum plastics are in every way in innovation of the 20th century.
The functional benefits of plastics changed almost every area of daily life.
But if it wasn't obvious early in the lifecycle. It is now.
Plastics are a huge source of pollution on land and in water worldwide.
Although the simplistic waste or the contribution to carbon emissions during production petroleum based plastics are a problem.
Petroleum based plastics as you'll see in the chart gained more such broad use.
We have a very low cost to produce.
This is present presented a large barrier to entry for the broad introduction of Biobased biodegradable plastics accepted instances, where the brand owner is strongly committed to sustainability.
Even so more recent pressure on brand owners has resulted in an increasing demand for materials like DLA, which is compostable in industrial systems of not biodegradable and the environment.
As a result major capital investments in additional production capacity are underway.
We believe BLA as an interim solution in PHA Bioplastics, which in addition to being broadly useful and plastics markets are natural materials fully biodegradable and environment, Therefore, a better solution.
The caveat of course is a need for a disruptive production technology to reduce costs and enable capital efficient large scale production.
Our mission is to achieve this by producing the PHA bioplastic as a third seat for Florida in Camelina seed.
Along with protein and meal and oil.
This will eliminate the inefficient conversion of sugar or oil feedstocks, and the prohibited with capital and operating costs of fermentation.
Direct production as a third seat product in Camelina will directly linked DHA bioplastics production to low cost large scale agriculture with the potential to produce it cost in the range of feedstock oils.
From a carbon perspective, you can see our two directly from the air and directing it to phe bioplastic in seats is compelling.
But this platform will still take time to develop.
Now, let's turn to slide 13.
Redesigning our plan to make PHA is difficult in 2019, we reported proof of concept and greenhouse grown plants.
On a 2020 indicated 6% yield of PHA and seed grown in the field.
Having prioritized evaluation of our <unk> samples. We are pleased to report that our two best Phe Camelina lines planted. This spring showed the same result, as last year up to 6% DHA by weight in seed and.
In 2022, we plan to continue along the path of seed scale up at the acre scale, enabling larger scale in 2023, an initial seed processing to produce PHA for product samples and prototyping.
At the same time the team is proceeding on parallel paths to generate to develop second generation lines with BHG in the range of 10% to 20%.
Once available the new PHA trait will be stacked onto the elite Camelina currently being developed for feedstock oils.
I believe that this is a very attractive market and biodegradable PHA produced from funds.
Represent an excellent solution for compounds brand owners and consumers as well as the environment.
Our lifestyle to slide 14.
Currently we have non exclusive research license agreements in place with Bayer GBM forage genetics and simpler to test some of our trait and different crops.
Each company's evaluating arbitration of cargo crop.
With the option to negotiate a commercial license.
Third quarter, we worked with forage genetics to extend the research license for an additional 12 months on enable them to complete their R&D activities.
<unk> on the slide indicate the duration of the agreements currently in place.
Let's turn to slide 15.
Our net operating cash usage was $2 million for the third quarter of 2021, ending the quarter with $18 5 million in cash cash equivalents and investments.
We expect as our cash on hand, together with the expected revenue from our current government grants will support our opens in the second quarter of 2023.
We have no debt on our balance sheet.
We are updating our estimates for net operating cash usage for the full year 2021, and now we believe it will be within the range of 10 to $10 5 million.
This includes estimates for our contracted and planned C scale up activities as well as planned hires and other support and business development regulatory affairs and Cedar operations, all directed towards executing our commercial plan.
Let's now review the third quarter of 2021 operating results.
The company reported a net loss after taxes of $2 4 million for the third quarter of 2021 compared to a net loss after taxes of $2 2 million for the third quarter of 2020.
Total research grant revenues in the third quarter of 2021 were 92000 versus 204000 in third quarter of 2020.
The decrease in the quarter reflects our internal assignment of internal resources, the near term commercial goals.
In the third quarter of 2021.
R&D expenses were $1 6 million compared to $1 3 million in the third quarter reflected 20 <unk>.
G&A expenses were $1 5 million in the third quarter of 2021.
<unk> to $1 1 million in third quarter of 2020.
For the nine months ending September September 30th on in 'twenty one.
Our net loss after taxes was $8 1 million for $1 72 per share as compared to $7 6 million or $3 69 per share in 2020.
For more details on our financial results. Please refer to the earnings release.
Let's now turn to slide 16.
As we move into 2022, we will continue to focus on the following milestones.
<unk>, leading data analysis of our 2021 fuel test program and reporting and we expect to report additional results in first quarter of 2022, and this will help inform our 2022 field testing in seed scale up priorities.
We continue to expand our elite Camelina Germplasm collection with internal work is a wells acquiring rights to lines with desire performance profiles.
We are making field test ready harborside following <unk> hundred 902 in which a varieties. We're also working to create a second generation stacked rates.
Progressing in the business plan for Camelina products, where we are seeing a higher level of interest in camelina for producing feedstock oil for biofuel and we are working to identify a commercial partner.
We are advancing the commercial launch planned for Camelina Omega three oils in South America, where we are on track to complete the regulatory analysis, almost three lines and finalized the strategy.
To broaden the commercial capabilities, particularly in seed operations to complement our recent hires and regulatory affairs and business development.
As we increase the focus on the Camelina products, we see we're still seeing more opportunities to secure strategic interested collaborations for <unk> partners. In addition to biofuel.
Also based on industry feedback, we believe there'll be an increasing demand for trait gene target identification tools like our unique grid platform as well as novel creates from a genome edit a genome editing in crops.
We are continuing to work to secure revenue basis revenue based on generating commercial licensees trades.
Going forward and expanding our intellectual property portfolio and with that I'd like to turn the call back over to Linda for questions, Hey, Thanks, Olly and Devin we're ready to poll for questions.
Thank you we will now be conducting a question and answer session.
I'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue.
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One moment, please while we poll for questions.
Okay.
Our first question comes from the line of Anthony Vendetti with Maxim. Please proceed with your question.
Hi, Good afternoon. This is actually Jeremy Pearlman online for Anthony got it a quick question on slide seven of your presentation, you say on the bottom there is a note that the elite Camelina variety is developed for the feedstock oil will then be used for the Omega three and pitch a bioplastic I was wondering if it makes sure I have that clear that you have your plan is in the end have won camelina variety.
That will have all these trains.
Upon each other that well be able to attract.
No actually the way the.
Typical so basically what we will have to do is we will have.
<unk> developed separately for both Omega three <unk> bioplastics.
Bioplastic, but in order to get all the performance features of the elite camelina producing that those products will actually cross dock trait into.
Into the elite lines and that will give us a lead form of <unk>, III and delete PHA bioplastic lines Dolby C. Three separate.
Lines and three separate businesses.
With three separate lines okay.
I just want to get that right that makes that clear okay got that and then I don't know if you could talk I don't know I know I know youre always theres ongoing talks with potential commercial partners.
Can you maybe talk a little bit more to that where do you think they are in the talk is it are.
Are you getting more traction as you keep.
You are proving yourself more every.
Planting season, Youre, increasing your speed Youre, increasing your acreage is there any do you see any more tracks any more interest.
Your talks with potential commercial partners.
I would say yes.
Definitely I don't think the issue of course always is.
They are looking at.
The issue for these large energy companies.
They're basically used to owning and controlling the well the source of the feedstock for the refineries.
This is kind of different all of them and they are really doing it because of low carbon fuel standards. So they are converting facilities. Many of those facilities are actually areas. The country. Both here in Canada. They are very suitable for using camelina oil as a feedstock.
So.
Once we recruited our business development person there'll be.
An extensive outreach to these folks.
I would say.
All of the folks in the biofuel space at least in North America.
Seem to be very concerned about feedstock security in other words guaranteeing that once these investments were in place.
Supplies are available.
To keep those facilities running and operating so.
That's really the driver behind us.
To be perfectly honest, we havent really been focused on this but given that as part of our push to produce Omega three oils and PSA Bioplastics, we have been developing elite camelina to normally increase oil, but also for herbicide and disease resistance.
Refiners are really interesting intersection.
And overlap our interest in the near term.
Our strategic goal to secure feedstocks so.
We have discussions ongoing but as you know discussions can take a while.
And Theres no guaranteed outcomes.
Okay, Alright, thank you very much I'll hop back in the queue.
Okay.
Thank you thanks for that.
Okay.
Yes.
Thank you as a reminder, ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad.
Devin I think I'd like to now turn the call over to Ali for his closing remarks.
All right go ahead.
I would like to personally thank all of you for joining us on the call Tonight, and especially our shareholders for your continued support we're very excited about opportunities ahead of us as we build our business.
In the near term, we are focused on the promising market opportunities for oil and meal from early camelina as well as on progressing commercialization of EPA and DHA Omega three oil product.
Everyone at yield and for keeping us on track to reach our goals in 2021.
MSA I'd like to wish you all had nice evening. Thank you.
Thank you everyone. This concludes today's teleconference. You may now disconnect. Your lines. Thank you for your participation and have a wonderful day.