Yield10 Bioscience Inc. Q1 2023 Earnings Call
Speaker 1: The.
Speaker 1: The.
Speaker 2: Participants will be in a listen only.
Speaker 2: 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 recorded. I would now like to turn the conference call over to your host, Field 10 Vice President of Planning and Corporate Communication.
Speaker 3: Chief Science Officer, Dr. Christie Snail, and Chief Accounting Officer, Chuck Hazard. Earlier this afternoon, yield 10 issued our first quarter of 2023 financial results. This press release as well as slides to accompany today's presentation are available on the Investor Relations' event section of our website at yield10bio.com.
Speaker 3: Let's turn to slide two. Please note, as part of our discussion today, management will be making for-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 for-looking statements.
Speaker 3: 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.
Speaker 3: These risks include risks and certainties detailed and yield tense filings with the FCC. The company undertakes no obligation to update any four-looking statements in order to reflect events or circumstances that may arise after the date of this conference call. Now turn the call over to Ollie. Thanks, Lynn. Good afternoon, everyone, and thanks for joining our call.
Speaker 4: I am pleased to report that we are making solid progress to cost of business.
Speaker 4: as we operationalize our commercial plan to launch Camelina as a platform crop with a internal focus on the biofuel feedstock market.
Speaker 4: Today, we will provide an update on our business, including recent accomplishments, the market opportunity and trends driving the buy of your market.
Speaker 4: Our progress developing herbicide tolerant and leaner varieties.
Speaker 4: Our plan to scale up EPA omega-3 camelina, present first quarter financials and summarize key milestones.
Speaker 4: We will then open the call to questions.
Speaker 4: Let's start the slide 3 advancing business.
Speaker 4: Commercial launch where can we receive products business is under way targeting the bio fuel fish stock market.
Speaker 4: We are expecting our first grade and revenue later in 2023 from the grade, produced for our winter, 2022, 2023, and spring 2023 go-or contracts.
Speaker 4: I'm also happy to report that our team has met our target for signing up spring grower contracts.
Speaker 4: Feed delivery and planting has either been completed or completed in the next week or so.
Speaker 4: The boat on the top right side of the slide shows the planting of the grower site in Alberta.
Speaker 4: Our team reported that our Windsor, Catalina, and Auntie Last Fall has demonstrated excellent cold tolerance over the season and is resuming growth now that the warmer weather has returned.
Speaker 4: Both grants will be have received in third quarter, and we are committed to ensuring green an update to crush refined our customers.
Speaker 4: On the business development side, our team continues to engage with potential supply chain partners. Last week, we signed a letter of intent with Marathon, Prolium, for an investment and off-take agreement for Tamolina production in a specific drawing region.
Speaker 4: Discussion to finalize terms for definitive off-take and investment agreements are in place. I will read progress, sorry.
Speaker 4: In exchange for a period of exclusivity for that region, Marth and Page yield 10, 1 million on form of a cavern in the form of a conjarfeurful note. In first quarter, we announce the signing of an MOU with Mitsubishi to establish a partnership for supply of taken marketing of Timely Newell.
Speaker 4: as a feedstock oil for biofuels for sustainable aviation fuel or SAF, and we continue to progress those off-date discussions.
Speaker 4: We also announced the signing of an MOU with the American Airlines to collaborate to develop the value chain for Camelina for staff, and we are delighted with the efforts that are making to assist us.
Speaker 4: We look forward to continue to work with Martin, Mr. Bishi and American in the once ahead.
Speaker 4: Every in the year, we also sign an agreement with a privately owned integrated crusher by our final customer for off-take of gambling a grain.
Speaker 4: This business is located in the key commercial launch brewing region and provides a complete seat to buy a fuel value chain allowing us to scale with Tamolina
Speaker 4: As 2023 progresses, we plan to continue discussions with additional partner prospects, with the goal of creating the option to establish a network of alliances to supply family and a feastock oil to this market. In our role as a grain originator, we continue to scale up seats to enable contract growing thousands of acres in New Yorktown.
Speaker 4: With the ramp up of acres accelerating with the introduction of herbicide tolerant camelina varieties, our herbicide tolerant technology will provide multiple benefits to growers and we believe this will lead to hundreds of thousands and then the first million acres of annual production. Our goal is to supply the best in class camelina varieties in the industry.
Speaker 4: providing ease of crop integration with the current crop rotations and highest on farm returns. Start the slide 4, the gambling the biofuel feedstock oil focus.
Speaker 4: Investments to convert refineries from petroleum to biofuels in the US alone has created demand for an additional 6 billion gallons of feedstock oil in the near term. We believe this demand for renewable diesel as well as sap could lead to the potential for at least 45 million acres of Tamilina production in North America.
Speaker 4: Over our last few investor calls, we have mentioned growing tailwinds, an infusing vegetable oil production, or decarbonizing biofuels.
Let's now turn to slide 5 to recap two recent policy announcements that underscore the potential for Camelier for this market.
First, the European Parliament last week reached an agreement named the Refuel EU Aviation Proposal.
Disadclement and bodies are set of new rules to require aviation fuel suppliers.
To supply a minimum share of staff at EU airports, starting at 2% of overall fuel, to around 1 million gallons per day, starting in 2024, and rising to 6% in 2030, and 70% in 2050.
of the initiatives that will be the EU members, it demonstrates global momentum behind decarbonizing transportation shows, and another potential source of demand for speech of our hearts.
Last week, the Canadian regulatory body CFIA published its long-awaited guidance on genome-edited crops. CFIA indicated that it will treat most gene-edited crops as non-regulated as long as the plant does not contain any foreign DNA. The new rule does note that for any new traits for herbicide tolerance, even if producers using genetic data, will need to be submitted for CFIA review.
a staff that was anticipated by the AI community. Overall, another very positive announcement for crop innovators like yield 10. A very positive announcement for crop innovators like yield 10.
by the ad community. Overall, another very positive announcement for crop innovators like yield 10. Please start the slides six.
oil-seed cover crop development approaches. There are multiple new oil-seed crops and commercial development for the biofuel market, including penny crests, counter-nourro and camelina.
The common technology did not done by during the speed access to public journalism, line selection and breeding.
We have committed to that approach, but it will also invest significantly in developing proprietary advanced trade technologies to create a path to high performance elite family that join Plasm. In addition to herbicide tolerance or unique capabilities to identify and test new performance traits to stack traits, leveraging the improved regulatory environment in the U.S. and Canada.
provide the path to further performance, differentiation, differentiation for our eyes.
In the early days of ag biotic, a single gene trade was a large differentiator and essential to remain in the commodity road crop seed business, as evidenced by the substitute sector or sanitation.
The big five, Marzanto, DuPont, Bears, and Gentren, or Ag, then dominated the sector and for the more recent consolidation, we created the top two for T1 Bear, the Census and Gentren third and BSA becoming the leader in Canola.
Today, you'll meet journalism with multiple gene stacks of corn and soybean to provide high barriers to entry and are the key differentiators for the seed companies.
So we believe that we are uniquely positioned based on our advanced trade technologies to deliver continuous improvements, drive-core revenue and secure production acres over time. Now let's turn to slide 7.
We are uniquely positioned based on our advanced trade technologies to deliver continuous improvements, drive-pro revenue and secure production acres over time. Let's turn to slide 7. Family unit based by a few faith stocks.
The Aurora adoption of Amelina as a seamless integral part of the crop rotation is key to making Kamelina a meaningful source of Feets.io.
Increasing harvest value of the grain to dry and grow revenue is also critical. So we are placing strong emphasis in technology innovation for the growing growers that continue to improve the crop. Finally, growers want to see that the value chain is in place to ensure the family in a grain has a clear path to market.
Simply put, we plan to make it straightforward and profitable for our growers to produce camelina grain for yield 10. Let's now turn to slide 9, establishing the camelina value chain. There are three components of the biofuel value chain for camelina. The first is high quality camelina seed and contract farming. This is where yield 10 has the capabilities to build unique differentiation in our camelina seed genetics. These are governor difficulties.
The second component is logistics and seat crushing, and the third is refining to produce renewable diesel or staff.
New customers such as American Airlines can also play a role as they commit to the use of sustainable fuels.
Our vision for the businesses to contact with Goers for large-scale production and build a network of alliances for contracting off-take of the grain for biofuels to be all going in Sanable Feet.
Our L.O.I. with Martin as well as our MOUs with Mitsubishi in America.
demonstrate the potential for establishing downstream alliances committed to accelerating the ramp up of chamomile acres to supply the biofuel market and provide support to innovators like Yield 10. I will now pass the call over to Christy.
Thanks, Oli, and good afternoon, everyone. Quads turned to slide nine. We are executing on our early commercial activities in close cooperation with our growers with a focus on three Camelina varieties. These include the genome-edited Spring E3902 Camelina variety.
as well as two went through Camelina varieties, WDH2 and WDH3, which were produced by our team using a plant reading procedure.
We are also using these three core Camelina varieties as a chassis for deploying herbicide tolerance traits for weed control into spring and with your Camelina. Please turn to slide 10.
Our Winker Variety Field Testing Program includes well over 20 sites denoted with the blue pins on the map of the U.S. and Canada.
In our March call, the indicated that we obtained confirmation of the performance of our herbicide polymerins spring tamolina, the application of an over-the-top, broadly herbicide in U.S. contraception trials performed at locations indicated by the yellow pins on the spikes.
Our winter program also includes agronomy trials with Winker Camelina. One touch study involved planting Winker Camelina side by side with Winker Wheat, which is the benchmark crop for winter planting.
The cold hardiness of our winter camelina was found to be better or equivalent to winter read in this trial. As the season progresses, we'll plan to post photos of our winter camelina fields on our website.
The bold hardiness of our winter camelina was found to be better or equivalent to winter read in this trial. As the season progresses, we'll plan to post photos of our winter camelina fields on our website. Please turn to slide 11.
We are conducting our spring 2023 field testing program at 13 sites in the US and Canada. The trials include additional field testing and seed scale up of our lead spring herbicide tolerant camelina line.
In addition, we have generated candidate-stacked, herbicide-tolerant camelina events for first field testing.
We will evaluate the data from these camelina lines to enable the selection of lead and backup camelina lines for subsequent seed scale up and field testing.
We also remain encouraged by the performance of our yield traits and have included C3004 and C3007 in our 2023 field test.
We are not only interested in what these novel traits can do to increase seed yield or oil content alone, but we also plan to evaluate these traits and stacked combinations.
Let's turn to slide 12. There has been a profound change in the regulatory environment for crop innovations driven by the impact of gene editing and an appreciation for the space deployment of new traits and crops for over 30 years. The deployment of herbicide power in St. Kamalina will involve the complete-
tolerance E3902 camelina as well as for our winter herbicide tolerant lines based on WDH2 and WDH3.
For our Spring variety, we have checked the box for generating the herbicide tolerance events and have selected our lead and backup Camelina lines for seed scale-up.
We filed our RSI package for Broadleaf Herbicide Pollarance to USDA ASUS under the secure rule. A step we took last year in parallel with starting early development of herbicide tolerant Kamalina. We have followed these activities with an application to EPA to request the label amendment for a Broadleaf Herbicide to allow it to use on Kamalina.
This application was submitted to EPA by a third party manufacturer of the herbicide chemistry.
We believe these applications at USDA and EPA will be reviewed during 2023 to early 2024.
Finally, we will perform comparative analyses of seed from herbicide tolerant Camelina with those from conventional Camelina to demonstrate compositional equivalency. This is necessary to sell the high protein Camelina meal remaining after crushing the seed into the animal feed market.
Here we plan to sample and collect compositional data from seeds harvested from our 2023 Spring Trials. We plan to determine compositional equivalency of seed to allow a sale of meal first using a self-determination process and then with a voluntary submission to FDA that is reviewed by the agency.
I believe our team has a good handle on the process and the timeline to launch, which will be driven by the timing of completing regulatory reviews in conjunction with building sufficient speed inventory for launch.
Let's turn to slide 13. We know that growers want broadleaf and grassy weed controls for Camelina. As you may recall from our field trial activities, we have successfully completed two cycles of testing our Camelina for herbicide tolerance.
The service ID Polar and Event is in our Elite Prepriotary E3902 background.
We also successfully tested our camelina for tolerance to clethodim, a product used to control grassy weeds.
On the regulatory front, we filed an RISAR package to USDA for deployment of a well-studied broadleaf herbicide trade in Kamalina in 2022.
In the first quarter of 2023, we supported the submission of a label amendment to EPA by a third party company to allow the use of its broadleaf herbicide on camelina.
The response from both agencies is pending.
This spring we plan to conduct larger scale field work for product development purposes for our herbicide tolerance and Camelina and to collect data for compositional analysis of seed.
We have also developed winter lines that have demonstrated broad leaf herbicide tolerance in greenhouse tests. In winter 2023-2024, we plan to conduct our first field test of these lines.
Let's turn this slide 14. To tap into the large acreage potential of Camelina, the crop needs to have tolerance to herbicide residues that may persist in the soil from previous applications on other crops.
We continue to make solid progress on this goal. In the first quarter, we reported to wheat that we have developed multiple E3902 spring camelina lines with stacked herbicide tolerance traits and that these plants showed tolerance not only to spray application of broadleaf herbicide, but also to group 2 herbicides.
Group 2 herbicide, such as imi's and nephews, which can persist in soil for months following application, are commonly used to control weeds and cereals and other crops. The photo on the slide shows an example greenhouse test in which a stacked herbicide tolerance event.
with healthy when treated with group 2 herbicides, where the control line died with a similar treatment. Based on our proof and concept results, we are conducting our first research field tests of SACT herbicide tolerant E3902, Spring Camelina, in our Spring 2023 field test program.
Our team is also making progress deploying stack through the side tolerance traits in our winter varieties.
We anticipate our first research field test of stacked herbicide tolerant winter lines will begin in winter 2023.
With our product development efforts moving ahead at a good pace, we filed an RSR for SPAC-Turbicide Pallarance Kamlina in the first quarter of 2023 to pave the way for commercial introduction of these SPAC-Turbicide Pallarant varieties.
As I wrap up, I'd like to acknowledge the efforts of the yield 10 R&D teams to positioning yield 10 on the forefront of technology deployment in Kamalina.
In the months ahead, we look forward to field testing of our best commercial quality herbicide tolerant camelina lines, advancing omega-3 oils and securing regulatory clearances for our elite camelina products. I'll now hand the call over to Chuck. Thanks, Christy, and good afternoon everyone. Let's turn to slide 17.
We ended the first quarter of 2023 with 128 million in cash and cash equivalents. Earlier this month, we added to our cash position based on receiving a million dollars from Marathon to Trolum in connection with a NELY and we raised approximately 2.7 million debt proceeds from a registered direct offering.
We expect that our cash on hand will support our operations into the third quarter of 2023. Our net operating cash used for operating activities was $2.7 million for the first quarter of 2023 as compared to $3.1 million for the first quarter of last year.
For 2023, we expect total net cash usage in the range of 12.5 to 13 million to fund our operations.
This represents a revision from our last call based on a recent review of our plan for 2023. Also in 2023, we expect to report our first Camelina product review from Camelina grain cells to our off-take customer.
Now let's review the first quarter of 2023 operating results. For the first quarter of 2023, the company reported a net loss after taxes of $3.8 million as compared to a net loss after taxes of $3.3 million for the first quarter of 2022. Total research grant revenues in the first quarter of 2023, is $2.3 million.
million as compared to 1.8 million in the first quarter of 2022. And our G&A expenses were 1.7 million in the first quarter of this year, which was consistent with the first quarter of last year.
For more details on our financial results please refer to the earnings release. Holly, I do. Thanks, Sean. Let's note on the slide 18, upcoming milestones.
This is an exciting time for Yoltin. Over the last few months, our team has made significant progress and we have established agreements across the biovalued chain.
We're excited to work with the teams at Marathon in Mitsubishi in the months ahead on developing definitive offtake and investment agreements. We're also excited by the discussions we've had with growers, including their enthusiasm to gain access to our HD varieties as soon as they are commercially available, because they see additional benefits for their crop rotations. These factors together with the growing interest from additional value chain partner prospects, are the key to the development of the new crop rotations.
are all good reasons to be excited about the future of our business.
We've executed on the development and scale up new KMLIN or varieties for commercial production. Advanced discussions with companies committed to the biofuel space. And I've committed to our commercial path forward with on the G3 KMLIN.
We are approaching the scaling of our Camelina grade production business using our current lead varieties tactically over the next one to two years, with a strong focus in building the relationships of course and demonstrating the full value change for our partners.
We believe this will position us to accelerate the adoption of Kamalina on the hundreds of thousands of acres as their new varieties will robust with robust week to fall become available.
Essentially we plan to walk slow so we can run fast based on building a solid foundation over the next couple of years.
As 2023 progresses, we will continue to focus on executing our key milestones, including working with Marathion and Mitsubishi to finalize investment and off-take agreements, engaging with American Airlines to support Emily's value-trade for SAF.
Expanding or commercial activities target the review of old diesel and staff markets, engaging with growers to reduce the benefits of growing tamely nut and expand or grow our network, building seed inventory of current and H.T. varieties for future grow our contracts.
We will also progress to commercial launch plans for Pemalina Omega 3 oils. Continue business development without each of the prospective partners across the entire value chain with the goal of executing strategic industry collaborations and will continue to expand the rental actual property portfolio. With that, I would like to turn the call back over to Lynne for questions. Thanks, Sally. Maria, we're ready for questions.
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One moment please, will we pull for questions? Our first question comes from Ben Clive, with Lake Street Capital Markets. Please proceed with your question.
All right, thanks for taking my questions. First one around the herbicide tolerance traits. First of all, congratulations. It looks like there's been an awful lot of progress there. But I'm curious about kind of the outlook here over the next couple of years. You noted that commercial launch in 2025 for spring varieties is your expectation and Ollie, you expect that this is going to really be what allows you to scale.
Given that herbicide tolerance traits in other crops will typically launch at a pretty material scale in year one, I'm wondering if you can kind of directionally help us understand kind of the magnitude of a initial launch of herbicide tolerance varieties in camelina relative to kind of what you're expecting in 23 and 24.
and one, they tend to be launched to the reasonable scale and two, they then essentially take over the entire space. That's been the track record. Starting with Roundup Ready, Soybean, and essentially the Crayola was the same thing and I think Cotton was the same thing. So they clearly are highly valued by growers and we understand that. I think for us, as Christy is indicated.
we've got to work through this RSR, we've got to get that approved. We've got to get the EPA label amendment. We've got to generate the data to confirm for ourselves basically the meal is essentially unchanged. All of this work is ongoing and will take some time. And then we've got to scale up seed to have sufficient seed available for the growers. So.
That's why I think the guidance we provided on walking slow over 2324 based on non-HT varieties is the right path for us to take. Once we've got more clarity on these key questions that need to be resolved, I think at that time we'll be willing to talk more about what the scale could be when we launch this. Okay.
commercial partners, be admitted to BC American, marathon or anybody else. To what extent those partners...
to see this value as well. Is this something that is really appreciated in a commercial scale from these parties, or is this something that kind of agnored like you and me enjoy talking about?
Yeah, you know, it's a little bit of a ladder mainly because, you know, these, given mine, these books are used to running, either buying oil and, you know, running pipelines and refineries and, uh, and essentially getting, you know, getting fuels into the transport patient sector. It's a very different environment for that is actually one of the challenges. Um, is that the really are looking at this, this value chain, which is inherently based on seed genetics and, you know, many, many contracts with growers as a...
Without this feedstock, then the biofuel sector is going to have some real challenges.
Got it. Got it. It was very helpful. And one last one from me and I'll get back in the line. The last couple of years around this time we've talked about kind of some kind of acute issues with precipitation and some of your growing areas and they need to truck in water to certain to certain plots. Can you just kind of update us on the general conditions of your of your plots from a precipitation standpoint?
I think it's still early days, but so far I haven't heard of any negative issues that have come up, but we're still very much in the midst of planting right now. Okay, very good. I just want to add maybe one additional piece of color on that.
And this field size with one of our central partners, that's a strategic partner, looking at some of our winter camel unit lines in those areas. And they actually had no snow cover, and yet the winter lines, even a little bit very severe, you know, minus 30 weather. The winter lines were actually looking very good. So we're very pleased with this sort of robustness of the winter trait.
Thank you. I just wanted to talk about OLEB these.
what I would categorize as statement deals with Mitsubishi American and Marathon Petroleum. I know they're MOUs, but can you talk about...
what the milestones are that have to be achieved, and what the expectation is.
of getting these to definitive agreements, some type of general timeline or milestones or expectations that they're waiting for, looking for. Thanks so much. I think I've got, I mean, I think a couple of things. I think there's, you know, obviously with Mr. Bishi, you know, revealing with an international company, and then essentially, you know, managing the...
The fact that most of the folks who are dealing with are Japanese and they're just a great team to deal with. So we're just working through the details of things. Again, like other companies, their goal is to be in fact production with any of us, starting the launch of a plant sometime in 2025-26, I believe in Japan. And then obviously they probably will look at other investments in this area as well.
And so there it's a little, you know, it's more a matter of, you know, convincing them of the fact that we are able to do this, site visits, visits to the R&D facilities in Saskatoon. So, you know, they've done a lot of technical diligence, obviously, to get comfortable around this. But in general, I would say the outcomes have been very positive.
which is really a credit to the technology team, like electricity, and obviously the work that we're doing with the growth projects. So that's all going, I would say pretty much on the timelines that they've indicated initially.
Now Marathon's a little different in that Marathon has a refinery up in North Dakota. It has about a 200 million gallon per year capacity. They also have a partnership with ADM and a soybean crushing facility in North Dakota, obviously to supply feedstock for biofuels. And then we believe they're the joint venture partner with Neste in California Refinery, I think it's...
somewhere around 700 million gallons of feed stock oil. And so obviously they're really in this. They're not, they're in this now. And they're obviously not from the interacts we've had with them. They're very keen to see this scale to be seeing can we not oil made available for those facilities in the short period of time. Now we are working with them. And so we are working with them.
And we've been working with them since we announced that last week on definitive off-take agreements and we'll continue that process over the next three to four months with the goal to get it executed as soon as possible.
You know, some of these kids result in definitive agreement or marathon, particularly result in the definitive agreement before the end of the year.
Well, our goal is to get it done in the timeline I indicated. Yes, the three to four months will get you by the September timeframe. I'll let you know when that happens. Yes, okay. So that's the hope. But, okay, that's great. We're working against both companies.
Well, our goal is to get it done in the timeline I indicated. Yes, the three to four months will get you by the September time frame. Yeah, okay. So that's the hope. But okay, that's great. So that's what we're working against, both companies. Right, right.
You said there are 13 sites that have already been selected for the spring camelina growing season. 13 sites, you said in Canada and the U.S., or is it mostly Canada? Those are... It's on page... Anthony, that's on page 11, and that's the field testing program. There you go.
where their acres planted were between 45 and over 200.
you know when you look at this industry as a whole.
Obviously, there's a number of factors driving interest in nocturnal oilseed crops. One is just the sheer volume of demand for vegetable oil. The second, of course, is really getting to the lowest CI score feedstock possible. Of course, winter, spring, and winter, camelina will have potential to drive that very, very low.
oilseeds, particularly oilseeds that can be planted when the land would otherwise be lying fallow are going to play a fairly critical role in this space. So in addition to the companies we mentioned, we have indicated inbound inquiries from other partner prospects, which we've been responding to, but right now...
Our goal is to work hard with the marathon guys to get something done in the timeline we indicated and to continue the work we're doing with Mitsubishi. Those would be in six different geographies, so there's no real conflict there. And we believe that both could ultimately be done, but we can't provide firm guidelines on Mitsubishi, but we can assure you that both Marathon and Yale 10 fully understand the goal. Thanks very much.
Okay, no, that's helpful. And I guess that was a good segue in which you just touched on is you're very focused on these three, but you're still having additional discussions with other potential partners. Kayokes, thank you very much.
Again, until the deal is closed, we need to make sure that we are continuing to work on the various partner prospects we have and develop the best options for yield time, which is what we're doing. Okay, excellent. Thanks so much. I'll hop back into the queue. Appreciate it. Thanks, Anthony. Thanks, Anthony.
Our next question comes from Samir Joshi with HC Wienwright. Please proceed with your question.
Yeah, good afternoon. Thanks for taking my questions. Just a clarification on the tens of thousands of acres to be planted. Should that be expected in the 2024 spring or fall season? Can you just give us a little bit of? Yeah, so what we really said in terms of tens of, I think make me say hundreds of times.
Engage them in our program, engage them in spring and winter contracts so that we can build and transition well over time into the HT launch.
engage them in our program, engage them in spring and winter contracts so that we can build and transition well over time into the HD launch. And I think one of the...
One of the key points here, Samir, is basically we're really having a great working relationship with this private company that we've mentioned who basically is contracting the grain off take from us and processing into oil and getting the oil into biofuel. Obviously in the early years of this business when we won't be at, I would say, full commercial scale.
They're a really valuable partner for us in that we can scale to, you know, well I can't say because we haven't agreed what we can say yet. But the point is we can scale from where we are today, continue to build the Gore network, build the interest not only in what we're doing with spring and winter, but also particularly in the HD lines. And I will say the growers in the region were active.
have good meat control and therefore when they grow those crops they create increased meat pressure and something like this javelina we're developing would be a great way to A, get a valuable crop and B, actually to reduce meat pressure for the following crop in the rotation so there's multiple reasons that growers do things.
We're learning a lot about this as we work with them. What we're seeing is that we definitely made, or not so much we, Christy and the team made the right decisions on the herbicide package and the farmers are pretty excited about it. Got it. Thanks for that. Just another clarification on...
commercial launch and revenue expectations later in 2023. Are these revenues from the growers or is there another party involved from whom you will receive these revenues? So basically, because these are grain, we are basically, we are basically, we are basically, we are basically,
purchase from the grower.
acquired from the grower and senseless solid to the green crusher refiner.
So a part or any of these grain are they going to be used as seeds for the next year's crop or how does that work?
So we did plan some, we did plan scale up acres last year as well, or last fall, so the sum of this will be used for that purpose. What we have to do obviously with, we're trying to very carefully manage, I would say planting seed inventory.
and not scale the existing lines too big because obviously we want to be able to switch over very efficiently to the herbicide tolerant lines. And so we're trying to manage that 23, 24, you know, shall we say seed inventory for core contracts. And so we're not trying to produce fast quantities of this, we're trying to manage it fairly carefully.
And my last question is about costs. It's sort of three questions in one related topics. The reduction in net cash usage, is it because you are expecting some cash flows from sales? Or is it because you are rationalizing some of the costs?
And then, a corollary to that is, are there more areas of cost-resonization that you would be targeting in the future, especially given that your engagement is MOUs and LORs, and those will also need some resources. So just wanted to understand how you're managing that.
So as you know, Yield 10 has always been very judicious in cash management. I mean, that's been one of the real strengths of the company. We manage cash very carefully. Obviously in the current financing environment, and given the sort of magnitude, the level of partner interest we have, we're obviously continuing to do so. And that's part of our.
process in this last quarter we did rationalize some of the activities. We haven't paired back anything in terms of biofuels We are progressing omega-3 But we decided to wait and some potential hires for the growth of the business at this time pending essentially securing additional partnerships and then obviously financing and
The net cash usage does it involve any proceeds from the sales revenues? I mean, for the sales? Yeah, we need to anticipate sales of revenue contributed to that cash usage. Yeah, it's reflected in that estimate that we'll have some cash coming in later this year from harvesting the grain and selling it.
I don't think that was the driver of the revision though, Samir. Yeah, it wasn't the driver of the revision. It was more of taking a good look at the business, looking at budgets, and moving forward the way Ollie said. Yeah, and essentially, we recognize that the biofuel opportunity right in front of us is simply the natural**
And with the number and high quality of the partner prospects, obviously we're focusing our energies and our resources around that area and the time being. And obviously as we execute on some of those, then we'll look at, you know, reactivating some of the other activities if it's why it makes sense. I'm the third. Yeah, no, thanks for clarifying. I just wanted to make sure that...
for closing comments. Go ahead.
Thanks Maria and I'll now turn the call to Ollie for his closing remarks. Yeah so I'd like to personally thank all of you for joining us at the call tonight and especially our shareholders for your continued support. I want to thank everyone at EEL 10 for contributions that are keeping us on track to reach our commercial and product development goals. Have a nice evening everyone. Thank you. This concludes today's conference. You may disconnect.
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