Mar. 27, 2019
Yield10 Bioscience, Inc. (NASDAQ:YTEN), an agricultural bioscience company which uses its “Trait Factory” to develop high value seed traits for the agriculture and food industries, today reported financial results for the three months and full year ended December 31, 2018.
"During the fourth quarter we accomplished each of our key objectives outlined for 2018 as we completed our field testing and analysis of C3003 to improve seed yield in canola and we began our early development program for several promising traits in corn,” said Oliver Peoples, Ph.D., president and chief executive officer of Yield10 Bioscience. “In 2019, we intend to continue building upon our strong reputation as an innovator in crop yield technology by continuing to identify novel crop yield traits for development and building our growing portfolio of traits, all while focusing on activities that will allow us to generate proof points in major crops.”
“We made a key transition in 2018 to enable the evaluation of our novel yield traits broadly in the major commercial food and feed crops: canola, soybean, corn, wheat and rice. In 2019, Yield10 will focus on generating key proof points from field tests of C3003 in canola and, building on encouraging findings reported in 2018, conduct our first field test of C3004 in Camelina, a model oil seed crop. This year, we also plan to evaluate CRISPR-Cas9 genome-edited versions of C3007 in canola and C4004 in wheat and rice for the first time. Concurrently, we will continue to support Bayer Crop Science (formerly Monsanto) and Forage Genetics as they undertake the testing of our traits in soybean and forage sorghum, respectively. We plan to leverage the data generated across our studies to identify opportunities for revenue generating collaborations with leading players in the agricultural industry,” Dr. Peoples concluded.
Announced encouraging results from the 2018 Field Tests of C3003 in canola. The C3003 yield trait produced seed yield increases of up to 11% in the best lines of canola tested. Based on these results, Yield10 plans to progress C3003 in canola into the commercial development phase in 2019 including field testing in Canada and the creation of additional events for testing.
Initiated an early development program in corn to evaluate novel seed yield and drought tolerance traits. Corn is the highest value commercial row crop grown in the United States. Under Yield10’s corn program, six novel traits discovered by Yield10 will be deployed in corn by a third-party agriculture company with proven expertise introducing new traits into corn. This aspect of the development activity is expected to be completed in early 2020. Yield10 plans to engage an additional third-party to conduct field testing of the novel traits in corn to evaluate the impact on seed yield.
Appointed Sherri M. Brown, Ph.D., a former Monsanto executive as our Special Commercial and Technical Advisor. Dr. Brown possesses a wealth of experience leading teams that have successfully developed and commercialized innovative biotechnology traits globally in canola, soybean and corn. Her extensive background in plant science, the assessment of yield traits in the field, global experience and knowledge of the commercial landscape will make her an invaluable resource for the Yield10 team.
FULL YEAR AND FOURTH QUARTER 2018 FINANCIAL OVERVIEW
Yield10 Bioscience is managed with an emphasis on cash flow and deploys its financial resources in a disciplined manner to achieve its key strategic objectives.
The Company ended 2018 with $5.8 million in unrestricted cash, cash equivalents and short-term investments. On March 18, 2019, Yield10 closed on a registered direct offering of its common stock, raising $2.6 million, net of offering costs. The Company anticipates net cash usage in a range of approximately $9.0 million to $9.5 million during 2019.
The Company's present capital resources, including funds received from its March 2019 offering, will not be sufficient to fund its planned operations for a twelve-month period and, therefore, raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing, including public or private equity financing, secured or unsecured debt financing, and receipt of additional government research grants, as well as licensing or other collaborative arrangements.
The Company’s net cash used by operating activities during 2018 was $8.8 million, an increase of $0.6 million from the $8.2 million used in operating activities during 2017. The increase in net cash used for operating activities during the year ended December 31, 2018 was primarily due to the Company's payment of 2017 employee bonuses during early 2018. Bonuses were not paid during the previous year.
For the year ending December 31, 2018, the Company reported a net operating loss of $9.2 million, or $0.92 per share which compares to a net operating loss of $10.8 million, or $3.29 per share, for 2017. The 2017 loss includes a $1.4 million adjustment related to the Company's accounting for a deemed dividend from a beneficial conversion feature recorded in connection with Series A convertible preferred stock issued in its December 2017 financing.
Total research grant revenue for the full year 2018 was $0.6 million, compared to $0.9 million recorded in the previous year. Research and development expenses were $4.8 million in 2018, compared to $4.6 million for 2017. General and administrative expenses were $5.1 million and $5.6 million for the years ended December 31, 2018 and 2017, respectively.
The Company reported a net operating loss of $1.9 million, or $0.19 per share, for the fourth quarter of 2018, compared to a net operating loss applicable to common shareholders of $4.0 million, or $0.99 per share, for the fourth quarter of 2017.
Total research grant revenues in the fourth quarter of 2018 and fourth quarter of 2017 were consistent at $0.1 million.
In the fourth quarter of 2018, research and development expenses were $1.1 million and general and administrative expenses were $0.9 million compared to $1.2 million of research and development expenses and $1.4 million of general and administrative expenses in the fourth quarter of 2017.