YIELD10 BIOSCIENCE, INC. - Quarter Report: 2021 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-33133

YIELD10 BIOSCIENCE, INC.


Delaware						04-3158289
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

19 Presidential Way Woburn, MA						01801
(Address of principal executive offices)						(Zip Code)

(617) 583-1700

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	YTEN	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” "accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	ý	Smaller reporting company	ý
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The number of shares outstanding of the registrant’s common stock as of November 8, 2021 was 4,881,851.

Yield10 Bioscience, Inc.

Form 10-Q

For the Quarter Ended September 30, 2021

Table of Contents


		Page
Part I. Financial Information

Item
1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets at September 30, 2021 and December 31, 2020	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	6
	Condensed Consolidated Statements of Series B Convertible Preferred Stock and Stockholders' Equity for the three and nine months ended September 30, 2021 and 2020	7
	Notes to the Condensed Consolidated Financial Statements	9
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
3.	Quantitative and Qualitative Disclosures About Market Risk	29
4.	Controls and Procedures	30

Part II. Other Information		30

Item
1.	Legal Proceedings	30
1A.	Risk Factors	30
2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
3.	Defaults Upon Senior Securities	30
4.	Mine Safety Disclosures	30
5.	Other Information	30
6.	Exhibits	31

SIGNATURES		32

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

YIELD10 BIOSCIENCE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

(in thousands, except share and per share data)


	September 30, 2021		December 31, 2020
Assets
Current Assets:
Cash and cash equivalents	$	14,618	$	3,423
Short-term investments	3,904		6,279
Accounts receivable	24		86

Unbilled receivables	46		27
Prepaid expenses and other current assets	462		527

Total current assets	19,054		10,342

Restricted cash	264		264
Property and equipment, net	903		921
Right-of-use assets	2,447		2,712
Other assets	278		283
Total assets	$	22,946	$	14,522

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	45	$	60
Accrued expenses	1,122		1,297
Current portion of lease liabilities	499		457
Total current liabilities	1,666		1,814
Lease liabilities, net of current portion	2,783		3,163

Other long-term liabilities	9		13
Total liabilities	4,458		4,990
Commitments and contingencies (Note 10)

Stockholders’ Equity:

Preferred stock ($0.01 par value per share); 5,000,000 shares authorized; no shares issued or outstanding	—		—
Common stock ($0.01 par value per share); 60,000,000 shares authorized at September 30, 2021 and December 31, 2020; 4,877,987 and 3,334,048 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	49		33
Additional paid-in capital	401,760		384,758
Accumulated other comprehensive loss	(170)		(159)
Accumulated deficit	(383,151)		(375,100)
Total stockholders’ equity	18,488		9,532
Total liabilities and stockholders’ equity	$	22,946	$	14,522

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements

YIELD10 BIOSCIENCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED

(in thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue:

Grant revenue	$	92	$	204	$	462	$	604


Total revenue	92		204		462		604

Expenses:

Research and development	1,636		1,300		4,603		3,939
General and administrative	1,547		1,098		4,583		3,664
Total expenses	3,183		2,398		9,186		7,603
Loss from operations	(3,091)		(2,194)		(8,724)		(6,999)

Other income (expense):
Change in fair value of warrants	—		—		—		(957)
Loan forgiveness income (Note 9)	—		—		—		333
Gain on investment in related party	700		—		700		—
Other income (expense), net	(1)		37		(2)		85
Total other income (expense)	699		37		698		(539)
Net loss from operations before income taxes	(2,392)		(2,157)		(8,026)		(7,538)
Income tax provision	(6)		(11)		(25)		(26)
Net loss	$	(2,398)	$	(2,168)	$	(8,051)	$	(7,564)

Basic and diluted net loss per share	$	(0.49)	$	(0.87)	$	(1.72)	$	(3.69)

Number of shares used in per share calculations:
Basic and diluted	4,873,248		2,492,274		4,681,292		2,050,726

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements

YIELD10 BIOSCIENCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

UNAUDITED

(in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net loss:	$	(2,398)	$	(2,168)	$	(8,051)	$	(7,564)
Other comprehensive loss
Change in unrealized gain (loss) on investments	—		(6)		1		1
Change in foreign currency translation adjustment	(17)		5		(12)		(43)

Total other comprehensive loss	(17)		(1)		(11)		(42)
Comprehensive loss	$	(2,415)	$	(2,169)	$	(8,062)	$	(7,606)

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements

YIELD10 BIOSCIENCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

(in thousands)


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities
Net loss	$	(8,051)	$	(7,564)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	165		137
Change in fair value of warrants	—		957
Loan forgiveness income (Note 9)	—		(333)
Loss on disposal of fixed assets	—		206
Charge for 401(k) company common stock match	100		95
Stock-based compensation	1,175		506
Non-cash lease expense	265		345
Deferred income tax provision	24		33
Changes in operating assets and liabilities:
Accounts receivable	62		(76)

Unbilled receivables	(19)		(36)
Prepaid expenses and other assets	60		92
Accounts payable	(15)		(228)
Accrued expenses	(192)		(324)
Lease liabilities	(338)		(495)
Other liabilities	(4)		15
Net cash used for operating activities	(6,768)		(6,670)

Cash flows from investing activities
Purchase of property and equipment	(147)		(42)
Proceeds from sale of property and equipment	—		10


Purchase of investments	(3,874)		(6,290)
Proceeds from the maturity of short-term investments	6,250		3,197
Net cash provided by (used by) investing activities	2,229		(3,125)

Cash flows from financing activities
Proceeds from warrants exercised (Note 12)	3,856		1,658
Proceeds from PPP loan (Note 9)	—		333


Proceeds from public offering, net of issuance costs	11,993		5,367

Taxes paid on employees' behalf related to vesting of stock awards	(103)		(17)
Net cash provided by financing activities	15,746		7,341

Effect of exchange rate changes on cash, cash equivalents and restricted cash	(12)		(46)

Net increase (decrease) in cash, cash equivalents and restricted cash	11,195		(2,500)
Cash, cash equivalents and restricted cash at beginning of period	3,687		5,749
Cash, cash equivalents and restricted cash at end of period	$	14,882	$	3,249




Supplemental disclosure of non-cash information:


Offering costs remaining in accrued expenses	$	—	$	63

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements

YIELD10 BIOSCIENCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SERIES B CONVERTIBLE STOCK AND STOCKHOLDERS' EQUITY

UNAUDITED

(In thousands, except share amounts)


	Three Months Ended September 30, 2021
	Series B Convertible Preferred Stock			Series A Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)				Total Stockholders' Equity
	Shares	Par Value		Shares	Par Value		Shares	Par Value						Accumulated Deficit
Balance, June 30, 2021	—	$	—	—	$	—	4,868,466	$	49	$	401,319	$	(153)	$	(380,753)	$	20,462
Non-cash stock-based compensation expense	—	—		—	—		—	—		436		—		—		436
Issuance of common stock for 401(k) match	—	—		—	—		2,857	—		24		—		—		24

Issuance of common stock for restricted stock units	—	—		—	—		6,664	—		—		—		—		—
Taxes paid on employees' behalf related to vesting of stock awards	—	—		—	—		—	—		(19)		—		—		(19)

Effect of foreign currency translation and unrealized loss on investments	—	—		—	—		—	—		—		(17)		—		(17)
Net loss	—	—		—	—		—	—		—		—		(2,398)		(2,398)
Balance, September 30, 2021	—	$	—	—	$	—	4,877,987	$	49	$	401,760	$	(170)	$	(383,151)	$	18,488


	Three Months Ended September 30, 2020
	Series B Convertible Preferred Stock			Series A Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)				Total Stockholders' Equity
	Shares	Par Value		Shares	Par Value		Shares	Par Value						Accumulated Deficit
Balance, June 30, 2020	—	$	—	—	$	—	1,972,798	$	20	$	378,924	$	(167)	$	(370,290)	$	8,487
Non-cash stock-based compensation expense	—	—		—	—		—	—		243		—		—		243
Issuance of common stock for 401(k) match	—	—		—	—		3,689	—		23		—		—		23
Issuance of common stock for restricted stock units	—	—		—	—		6,006	—		—		—		—		—
Taxes paid on employees' behalf related to vesting of stock awards	—	—		—	—		—	—		(17)		—		—		(17)
Issuance of common stock for concurrent private and public offerings, net of offering costs of $425	—	—		—	—		1,348,285	13		5,292		—		—		5,305

Effect of foreign currency translation and unrealized loss on investments	—	—		—	—		—	—		—		(1)		—		(1)
Net loss	—	—		—	—		—	—		—		—		(2,168)		(2,168)
Balance, September 30, 2020	—	$	—	—	$	—	3,330,778	$	33	$	384,465	$	(168)	$	(372,458)	$	11,872

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements


	Nine Months Ended September 30, 2021
	Series B Convertible Preferred Stock			Series A Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Par Value		Shares	Par Value		Shares	Par Value
Balance, December 31, 2020	—	$	—	—	$	—	3,334,048	$	33	$	384,758	$	(159)	$	(375,100)	$	9,532
Non-cash stock-based compensation expense	—	—		—	—		—	—		1,185		—		—		1,185
Issuance of common stock for 401(k) match	—	—		—	—		9,747	—		86		—		—		86
Issuance of common stock for warrant exercise	—	—		—	—		481,973	5		3,851		—		—		3,856
Issuance of common stock for restricted stock units	—	—		—	—		12,219	—		—		—		—		—
Taxes paid on employees' behalf related to vesting of stock awards	—	—		—	—		—	—		(102)		—		—		(102)
Issuance of common stock in connection with stock offering, net of offering costs	—	—		—	—		1,040,000	11		11,982		—		—		11,993
Effect of foreign currency translation and unrealized loss on investments	—	—		—	—		—	—		—		(11)		—		(11)
Net loss	—	—		—	—		—	—		—		—		(8,051)		(8,051)
Balance, September 30, 2021	—	$	—	—	$	—	4,877,987	$	49	$	401,760	$	(170)	$	(383,151)	$	18,488


	Nine Months Ended September 30, 2020
	Series B Convertible Preferred Stock			Series A Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Par Value		Shares	Par Value		Shares	Par Value
December 31, 2019	5,750	$	—	796	$	—	933,423	$	9	$	360,926	$	(126)	$	(364,894)	$	(4,085)
Non-cash stock-based compensation expense	—	—		—	—		—	—		597		—		—		597
Issuance of common stock for 401(k) match	—	—		—	—		17,518	—		86		—		—		86
Issuance of common stock for restricted stock units	—	—		—	—		6,006	—		—		—		—		—
Taxes paid on employees' behalf related to vesting of stock awards	—	—		—	—		—	—		(17)		—		—		(17)
Issuance of common stock for warrant exercise	—	—		—	—		207,296	2		1,656		—		—		1,658
Issuance of common stock upon conversion of Series A Convertible Preferred Stock	—	—		(796)	—		99,500	2		(2)		—		—		—
Issuance of common stock upon conversion of Series B Convertible Preferred Stock	(5,750)	—		—	—		718,750	7		(7)		—		—		—
Reclassification of warrant liability to equity	—	—		—	—		—	—		15,934		—		—		15,934
Issuance of common stock for concurrent private and public offerings, net of offering costs of $425	—	—		—	—		1,348,285	13		5,292		—		—		5,305
Effect of foreign currency translation and unrealized loss on investments	—	—		—	—		—	—		—		(42)		—		(42)
Net loss	—	—		—	—		—	—		—		—		(7,564)		(7,564)
Balance, September 30, 2020	—	$	—	—	$	—	3,330,778	$	33	$	384,465	$	(168)	$	(372,458)	$	11,872

YIELD10 BIOSCIENCE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

(All dollar amounts, except share and per share amounts, are stated in thousands)

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Yield10 Bioscience, Inc. ("Yield10" or the "Company") is an agricultural bioscience company that is using its differentiated trait gene discovery platform, the "Trait Factory", to develop improved Camelina varieties to produce proprietary products, and to produce other high value genetic traits for the agriculture and food industries. Yield10 is headquartered in Woburn, Massachusetts and has an Oilseed Center of Excellence in Saskatoon, Saskatchewan, Canada. The Company's goals are to efficiently develop and commercialize a high value crop products business by developing superior varieties of Camelina for the production of feedstock oils and meal, nutritional oils, and PHA bioplastics, and to license its yield traits to major seed companies for commercialization in major row crops, including corn, soybean and canola.

The accompanying condensed consolidated financial statements are presented in U.S. dollars, are unaudited, and have been prepared by Yield10 in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements have been condensed or omitted. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The condensed consolidated financial statements, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary for fair statements of the financial position and results of operations for the interim periods ended September 30, 2021 and September 30, 2020.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for any future period or the entire fiscal year. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2020, which are contained in the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2021.

The accompanying condensed consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. With the exception of a single year, the Company has recorded losses since its initial founding, including the three and nine months ended September 30, 2021.

As of September 30, 2021, the Company held unrestricted cash, cash equivalents and investments of $18,522. The Company follows the guidance of Accounting Standards Codification ("ASC") Topic 205-40, Presentation of Financial Statements-Going Concern, in order to determine whether there is substantial doubt about its ability to continue as a going concern for one year after the date its financial statements are issued. Based on its current cash forecast, management expects that the Company's present capital resources will be sufficient to fund its planned operations for at least that period of time. This forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of expenses could vary materially and adversely as a result of a number of factors. The Company's ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing through, among other sources, public or private equity financing, secured or unsecured debt financing, equity or debt bridge financing, warrant holders' ability and willingness to exercise the Company's outstanding warrants, additional government grants or collaborative arrangements with third parties, as to which no assurance can be given. Management does not know whether additional financing will be available on terms favorable or acceptable to the Company when needed, if at all. If adequate additional funds are not available when required, management may be forced to curtail the Company's research efforts, explore strategic alternatives and/or wind down its operations and pursue options for liquidating its remaining assets, including intellectual property.

If the Company issues equity or debt securities to raise additional funds in the future, (i) the Company may incur fees associated with such issuance, (ii) its existing stockholders may experience dilution from the issuance of new equity securities, (iii) the Company may incur ongoing interest expense and be required to grant a security interest in Company assets in connection with any debt issuance, and (iv) the new equity or debt securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders. In addition, utilization of the Company’s net operating loss and research and development credit carryforwards may be subject to significant annual limitations under Section 382 of the Internal Revenue Code due to ownership changes resulting from equity financing transactions. If the Company raises additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to its potential products or proprietary technologies or grant licenses on terms that are not favorable to the Company.

The full impact of the COVID-19 pandemic continues to evolve as of the date of this report. As such, the full magnitude that the pandemic will have on the Company's financial condition, liquidity and future results of operations is uncertain. While management currently expects the impact of COVID-19 to be temporary, there is uncertainty around the duration and its broader impact on the economy and therefore the effects it will have on Yield10's financial condition, liquidity, operations, suppliers, industry, and workforce. Given the evolving nature of the COVID-19 pandemic and the global responses to it, the Company is not able to estimate the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity for future periods.

2. ACCOUNTING POLICIES

Principles of Consolidation

The Company's unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions were eliminated, including transactions with its subsidiaries, Metabolix Oilseeds, Inc. ("MOI") and Yield10 Bioscience Securities Corp.

Reverse Stock Split

On January 15, 2020, the Company effected a 1-for-40 reverse stock split of its common stock. Unless otherwise indicated, all share amounts, per share data, share prices, and conversion rates set forth in these notes and the accompanying unaudited condensed financial statements have, where applicable, been adjusted retroactively to reflect this reverse stock split.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments purchased with an original maturity date of ninety days or less at the date of purchase to be cash equivalents.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company's Unaudited Condensed Consolidated Balance Sheets included herein:


	September 30, 2021		December 31, 2020
Cash and cash equivalents	$	14,618	$	3,423
Restricted cash	264		264
Total cash, cash equivalents and restricted cash	$	14,882	$	3,687

Amounts included in restricted cash represent those required to be set aside by contractual agreement. Restricted cash of $264 at September 30, 2021 and December 31, 2020 consists primarily of funds held in connection with the Company's lease agreement for its Woburn, Massachusetts facility.

Investments

The Company classifies investments purchased with an original maturity date of more than ninety days at the date of purchase and a maturity date of one year or less at the balance sheet date to be short-term investments. The Company classifies investments with a maturity date of greater than one year from the balance sheet date as long-term investments.

Other-than-temporary impairments of equity investments are recognized in the Company's statements of operations if the Company has experienced a credit loss and has the intent to sell the investment or if it is more likely than not that the Company will be required to sell the investment before recovery of the amortized cost basis. Realized gains and losses, dividends, interest income and declines in value judged to be other-than-temporary credit losses are included in other income (expense). Any premium or discount arising at purchase is amortized and/or accreted to interest income.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of grant revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Foreign Currency Translation

The functional currency for MOI is the Canadian dollar. Foreign denominated assets and liabilities of MOI are translated into U.S. dollars at the prevailing exchange rates in effect on the balance sheet date. Revenues and expenses are translated at average exchange rates prevailing during the period. Any resulting translation gains or losses are recorded in accumulated other comprehensive income (loss) in the consolidated balance sheet. When the Company dissolves, sells all or substantially all of the assets of a consolidated foreign subsidiary, the cumulative translation gain or loss of that subsidiary is released from comprehensive income (loss) and included within its consolidated statement of operations during the fiscal period when the dissolution or sale occurs.

Comprehensive Loss

Comprehensive loss is comprised of net loss and certain changes in stockholders' equity that are excluded from net loss. The Company includes unrealized gains and losses on debt securities and foreign currency translation adjustments in other comprehensive loss.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company's tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided to reduce deferred tax assets to a level which, more likely than not, will be realized.

The Company accounts for uncertain tax positions using a "more-likely-than-not" threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The provision for income taxes includes the effects of any resulting tax reserves or unrecognized tax benefits that are considered appropriate as well as the related net interest and penalties, if any. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents and investments. The Company has historically invested its cash in highly rated money market funds, corporate debt, federal agency notes and U.S. treasury notes. Investments, when purchased, are acquired in accordance with the Company’s investment policy which establishes a concentration limit per issuer.

At September 30, 2021, 100% of the Company's accounts and unbilled receivables are due from the Company's Michigan State University ("MSU") sub-award. During the three and nine months ended September 30, 2021, revenue earned from the MSU sub-award, represented 100.0% and 91.6% of recognized government grant revenue, respectively. A research grant of $39 awarded to MOI through the Canadian Industrial Research Assistance Program ("IRAP") and earned during the first quarter of 2021, represented the remaining difference of 8.4% during nine months ended September 30, 2021. During the three and nine months ended September 30, 2020, the MSU sub-award represented 100.0% and 88.9%, respectively, of government grant revenue earned for each of the respective periods. The remaining difference of 11.1% during the nine months ended September 30, 2020 was from grant revenue recognized from an earlier Canadian research grant of $67 awarded through IRAP.

Fair Value Measurements

The carrying amounts of the Company's financial instruments as of September 30, 2021 and December 31, 2020, which include cash equivalents, accounts receivable, unbilled receivables, accounts payable, and accrued expenses, approximate their fair values due to the short-term nature of these instruments. See Note 5 for further discussion on fair value measurements.

Segment Information

The accounting guidance for segment reporting establishes standards for reporting information on operating segments in financial statements. The Company is an agricultural bioscience company operating in one segment, which is the development of improved Camelina varieties to produce proprietary products, and to produce other high value genetic traits for the agriculture and food industries. The Company's chief operating decision-maker does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company's consolidated operating results.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Repairs and maintenance are charged to operating expense as incurred. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets once they are placed in service as follows:


Asset Description						Estimated Useful Life (years)
Equipment						3
Furniture and fixtures						5
Software						3
Leasehold improvements						Shorter of useful life or term of lease

Right-of-Use Assets

The Company’s right-of-use assets consist of leased assets recognized in accordance with ASC 842, Leases, ("ASC 842") which requires lessees to recognize a lease liability and a corresponding right-of-use asset for long-term lease contracts. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company uses its incremental borrowing rate in calculating the present value of future lease payments when interest rates are not implicit in the lease. Leases with terms of 12 months or less at inception are expensed as costs are incurred and not capitalized under ASC 842.

Impairment of Long-Lived Assets

Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Accounting guidance further requires that companies recognize an impairment loss only if the carrying amount of a long-lived asset is not recoverable based on its undiscounted future cash flows and measure an impairment loss as the difference between the carrying amount and fair value of the asset.

Grant Revenue

The Company's source of continuing revenue is from its government research grants, in which it serves as either the primary contractor or as a subcontractor. These grants are considered a central operation of the Company's business. Revenue is earned as research expenses related to the grants are incurred. Revenue earned on government grants, but not yet invoiced as of the balance sheet date, are recorded as unbilled receivables in the accompanying unaudited condensed consolidated balance sheets at September 30, 2021 and December 31, 2020. Funds received from government grants in advance of work being performed, if any, are recorded as deferred revenue until earned.

Research and Development

All costs associated with internal research and development are expensed as incurred. Research and development expenses include, among others, direct costs for salaries, employee benefits, subcontractors, crop trials, regulatory activities, facility related expenses, depreciation, and stock-based compensation. Costs incurred in connection with government research grants are recorded as research and development expense.

General and Administrative Expenses

The Company's general and administrative expense includes costs for salaries, employee benefits, facilities expenses, consulting and professional service fees, travel expenses, depreciation, stock-based compensation and office related expenses incurred to support the administrative and business development operations of the Company.

Intellectual Property Costs

The Company includes all costs associated with the prosecution and maintenance of patents within general and administrative expenses in the Company's unaudited condensed consolidated statement of operations.

Stock-Based Compensation

All share-based payments to employees, members of the Board of Directors and non-employees are recognized within operating expenses based on the straight-line recognition of their grant date fair value over the period during which the recipient is required to provide service in exchange for the award. See Note 7 for a description of the types of stock-based awards granted, the compensation expense related to such awards and detail of equity-based awards outstanding.

Recent Accounting Standards

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that the Company adopts as of the specified effective date. During the three months ended September 30, 2021, the Company did not adopt any new accounting guidance.

In December 2019 the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard removes certain exceptions to the general principles in Topic 740 and simplifies certain other aspects of the accounting for income taxes. This standard became effective for us on January 1, 2021, and did not have a material impact on our consolidated financial statements and related disclosures.

The following new pronouncement is not yet effective but may impact the Company's financial statements in the future.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date as the initial pronouncement. This standard requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings and report credit losses using an expected losses model rather than the incurred losses model that was previously used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, this standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. This standard limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The guidance is effective for fiscal years beginning after December 15, 2022 for SEC filers that are eligible to be smaller reporting companies under the SEC’s definition, and interim periods within those fiscal years. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.

3. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of dilutive common shares outstanding during the period. Diluted shares outstanding is calculated by adding to the weighted shares outstanding any potential (unissued) shares of common stock from outstanding stock options and warrants based on the treasury stock method, as well as weighted shares outstanding of any potential (unissued) shares of common stock from restricted stock units and the conversion of convertible preferred stock. In periods when a net loss is reported, all common stock equivalents are excluded from the calculation because they would have an anti-dilutive effect, meaning the loss per share would be reduced. Therefore, in periods when a loss is reported, basic and dilutive loss per share are the same. Common stock equivalents include stock options, restricted stock awards, convertible preferred stock and warrants.

The following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their antidilutive effect:


	As of September 30,
		2021	2020
Options		716,619	326,881
Restricted Stock Awards		9,430	8,500


Warrants		2,361,726	2,843,699
Total		3,087,775	3,179,080

4. INVESTMENTS

Investments consist of the following at September 30, 2021 and December 31, 2020:


	Accumulated Cost at September 30, 2021		Unrealized				Market Value at September 30, 2021
			Gain		(Loss)
Short-term investments
U.S. government and agency securities	$	3,903	$	1	$	—	$	3,904
Total	$	3,903	$	1	$	—	$	3,904


	Accumulated Cost at December 31, 2020		Unrealized				Market Value at December 31, 2020
			Gain		(Loss)
Short-term investments
U.S. government and agency securities	$	6,279	$	—	$	—	$	6,279
Total	$	6,279	$	—	$	—	$	6,279

All investments are classified as available for sale as of September 30, 2021 and December 31, 2020.

5. FAIR VALUE MEASUREMENTS

The Company has certain financial assets recorded at fair value which have been classified as Level 1 and Level 2 within the fair value hierarchy as described in the accounting standards for fair value measurements. Fair value is the price that would be received from the sale of an asset or the price paid to transfer a liability in an orderly transaction between independent market participants at the measurement date. Fair values determined by Level 1 inputs utilize observable data such as quoted prices in active markets for identical instruments. Fair values determined by Level 2 inputs utilize data points other than quoted prices in active markets that are observable either directly or indirectly. Fair values determined by Level 3 inputs utilize unobservable data points in which there is little or no market data, which require the reporting entity to develop its own assumptions. The fair value hierarchy level is determined by the lowest level of significant input.

The Company’s financial assets classified as Level 2 at September 30, 2021 and December 31, 2020 were initially valued at the transaction price and subsequently valued utilizing third-party pricing services. Because the Company’s investment portfolio may include securities that do not always trade on a daily basis, the pricing services use many observable market inputs to determine value including reportable trades, benchmark yields and benchmarking of like securities. The Company validates the prices provided by the third-party pricing services by reviewing their pricing methods and obtaining market values from other pricing sources. After completing the validation procedures, the Company did not adjust or override any fair value measurements provided by these pricing services as of September 30, 2021 and December 31, 2020.

The tables below present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value.


	Fair value measurements at reporting date using
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Balance as of
Description	(Level 1)		(Level 2)		(Level 3)		September 30, 2021
Assets
Cash equivalents:
Money market funds	$	13,641	$	—	$	—	$	13,641

Short-term investments:
U.S. government and agency securities	—		3,904		—		3,904
Total assets	$	13,641	$	3,904	$	—	$	17,545


	Fair value measurements at reporting date using
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs		Balance as of
Description	(Level 1)		(Level 2)		(Level 3)		December 31, 2020
Assets
Cash equivalents:
Money market funds	$	2,873	$	—	$	—	$	2,873

Short-term investments:
U.S. government and agency securities	—		6,279		—		6,279
Total assets	$	2,873	$	6,279	$	—	$	9,152

There were no transfers of financial assets or liabilities between category levels during the three and nine months ended September 30, 2021 and the three and nine months ended September 30, 2020.

During November 2019, the Company issued Series A Warrants and Series B Warrants in two concurrent securities offerings that were considered free standing financial instruments, were legally detachable and separately exercisable from the common and preferred stock issued in the two offerings. The Company initially determined that all of the Series A Warrants and Series B Warrants should be classified as a warrant liability in accordance with ASC 480, Distinguishing Liabilities from Equity, and recognized at their inception date fair value due to the insufficiency of common shares available to permit their exercise. The warrant liability met Level 3 classification criteria for classification within the fair value hierarchy. On January 15, 2020, the Company filed an amendment to its Certificate of Incorporation with the State of Delaware to effect a 1-for-40 reverse stock split. As a result of the reverse stock split, the Company's number of authorized but unissued shares of Common Stock increased significantly and the Series A Warrants and Series B Warrants became eligible for exercise. Prior to reclassification as equity, on January 15, 2020, the Company adjusted the warrant liability to its then $15,934 fair value using the Black-Scholes valuation model, recording a loss on the adjustment to fair value of $957.

The following table shows a reconciliation of the beginning and ending balances for the Level 3 warrant liability for the nine months ending September 30, 2020.


	Nine Months Ended September 30, 2020
Warrant liability, December 31, 2019	$	14,977
Recognized loss from mark-to-market adjustment prior to reclassification of warrant liability to equity	957
Reclassification from warrant liability to equity	(15,934)
Warrant liability, September 30, 2020	$	—

6. ACCRUED EXPENSES

Accrued expenses consisted of the following at:


	September 30, 2021		December 31, 2020
Employee compensation and benefits	$	504	$	620
Leased facilities	78		188
Professional services	210		235
Field trials and related expenses	191		52
Other	139		202
Total accrued expenses	$	1,122	$	1,297

7. STOCK-BASED COMPENSATION

Expense Information for Employee and Non-Employee Stock Awards

The Company recognized stock-based compensation expense related to stock awards, including awards to non-employees and members of the Board of Directors of $436 and $1,175 for the three and nine months ended September 30, 2021 and $209 and $506 for the three and nine months ended September 30, 2020, respectively. At September 30, 2021, there was approximately $4,508 of unvested awards not yet recognized as compensation expense.

The compensation expense related to unvested stock awards is expected to be recognized over a remaining weighted average period of 3.17 years.

Stock Options

A summary of option activity for the nine months ended September 30, 2021 is as follows:


	Number of Shares	Weighted Average Exercise Price
Outstanding at December 31, 2020	339,108	$	32.39
Granted	379,057	$	10.18
Exercised	—	$	—
Forfeited	(1,509)	$	12.92
Expired	(37)	$	19,253.19
Outstanding at September 30, 2021	716,619	$	19.69

Options exercisable at September 30, 2021	168,961	$	53.07

In accordance with the terms of the Company's 2018 Stock Option and Incentive Plan ("2018 Stock Plan"), effective January 1, 2021, Yield10's Board of Directors approved the addition of 166,702 shares to the 2018 Stock Plan, which represented 5% of the Company's outstanding common stock on the day prior to the increase. At its annual meeting of stockholders on May 24, 2021, stockholders approved an amendment to the 2018 Stock Plan to add 300,000 more shares to the plan. As of September 30, 2021, 73,513 shares remain available to be awarded from the 2018 Plan.

Restricted Stock Units

The Company records stock compensation expense for restricted stock units ("RSUs") on a straight-line basis over their requisite service period, which approximates the vesting period, based on each RSU's award date market value. As RSUs vest, the Company withholds a number of shares from its employees with an aggregate fair market value equal to the minimum tax withholding amount from the common stock issuable at the vest date. During the nine months ended September 30, 2021, 17,932 employee RSUs vested, of which 5,713 common shares with a total market value of $86 were withheld to pay employee tax withholding.

A summary of RSU activity for the nine months ended September 30, 2021 is as follows:


	Number of RSUs	Weighted Average Remaining Contractual Life (years)
Outstanding at December 31, 2020	8,500
Awarded	18,862
Common stock issued upon vesting	(17,932)
Forfeited	—
Outstanding at September 30, 2021	9,430	0.42

8. LEASES

Lease Accounting

As a lessee, the Company follows the lease accounting guidance codified in ASC 842. Under ASC 842, a lease is classified as a finance lease if any of five criteria described in the guidance apply to the lease. Any lease not classified as a finance lease is classified as an operating lease with expense recognition occurring on a straight-line basis over the term of the lease. The Company's existing lease subject to ASC 842 meets the standards for operating lease classification.

Under ASC 842, a lease liability is recorded on the commencement date of a lease and is calculated as the present value of the remaining lease payments, using the interest rate implicit in the lease, or if that rate is not readily determinable, using the lessee's incremental borrowing rate. A right-of-use asset equal to the lease liability is also recorded with adjustments made, as necessary, for lease prepayments, lease accruals, initial direct costs and lessor lease incentives that may be present within the terms of the lease. The Company adopted the short-term lease exception that permits lessees to omit leases with terms of twelve months or less from the accounting requirements of ASC 842.

Maturity Analysis of Lease Liabilities

The Company's Woburn, Massachusetts facility is the only lease included in the Company's right-of-use assets and corresponding lease liabilities. No other active real estate or equipment leases fall within the scope of ASC 842. At September 30, 2021, the Company's lease liability related to its Woburn facility will mature as follows:



Year ended December 31,	Undiscounted Cash Flows
2021 (October to December)	$	178
2022	726
2023	749
2024	771
2025	793
Thereafter	747
Total undiscounted future lease payments	3,964
Amount of lease payments representing interest	(682)
Total lease liabilities	$	3,282
Short-term lease liability	$	499
Long-term lease liability	$	2,783

Quantitative Disclosure of Lease Costs


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Lease cost:
Operating lease cost	$	151	$	151	$	454	$	537
Short-term lease cost	171		167		497		473
Sublease income	(148)		(140)		(468)		(419)
Total lease cost, net	$	174	$	178	$	483	$	591


Other information as of:	September 30, 2021	December 31, 2020


Weighted-average remaining lease term (years)	5.2	5.9
Weighted-average discount rate	7.25%	7.25%

Real Estate Leases

During 2016, the Company entered into a lease agreement, as amended, for its headquarters pursuant to which the Company leases 22,213 square feet of office and research and development space located at 19 Presidential Way, Woburn, Massachusetts. The lease agreement will terminate on November 30, 2026 and does not include options for an early termination or for an extension of the lease. Pursuant to the lease, the Company is required to pay certain pro rata taxes and operating costs associated with the premises throughout the term of the lease. During the initial buildout of the rented space, the landlord paid for certain tenant improvements that resulted in increased rental payments by the Company. As required by ASC 842, these improvements were recorded as a reduction in the valuation of the associated right-of-use asset. The Company has provided the landlord with a security deposit of $229.

In October 2016, the Company entered into a sublease agreement with a subsidiary of CJ CheilJedang Corporation ("CJ") with respect to CJ's sublease of approximately 9,874 square feet of its leased facility located in Woburn, Massachusetts. The sublease space was determined to be in excess of the Company's needs. The CJ sublease is coterminous with the Company's master lease and CJ will pay rent and operating expenses proportionate to the amounts payable to the landlord by the Company, as adjusted from time to time in accordance with the terms of the master lease. Future CJ sublease payments have not been presented as an offset to total undiscounted future lease payments of $3,964 shown in the lease maturity analysis table above. CJ provided the Company with a security deposit of $103 in the form of an irrevocable letter of credit.

Through May 2020, the Company leased approximately 13,702 square feet of office and laboratory space in Lowell, Massachusetts. The lease terminated in accordance with the terms of the lease agreement and the facility has been returned to the landlord. No further expenses are anticipated under this lease.

The Company's wholly-owned subsidiary, MOI, located in Saskatoon, Saskatchewan, Canada, leases approximately 7,733 square feet of office, laboratory and greenhouse space located within Innovation Place at 410 Downey Road and within the research facility of National Research Council Canada located at 110 Gymnasium Place. None of the leases contain renewal or early termination options. MOI's leases for these facilities expire on various dates through September 2022.

9. CARES ACT LOAN

During April 2020, the Company received $333 in loan proceeds through the Paycheck Protection Program Flexibility Act ("PPP"), established pursuant to the CARES Act. Under the CARES Act and the PPP, a borrower could apply for and be granted forgiveness for all or a part of its PPP loan. The amount of loan proceeds eligible for forgiveness was based on a formula that took into account a number of factors, including the amount of loan proceeds used by the borrower during the twenty-four-week period after the loan origination for certain purposes including payroll costs, rent payments on certain leases, and certain qualified utility payments. During the three months ended June 30, 2020, Yield10 utilized the entire PPP Loan amount for qualifying expenses and management of the Company considered it reasonably certain that it would meet the conditions for loan forgiveness. As such, the Company recorded the full amount of the loan, or $333, within other income (expense) in its condensed consolidated statement of operations for the nine months ended September 30, 2020. The Company received a favorable determination to its application for loan forgiveness in November 2020 for the full amount of the loan.

10. COMMITMENTS AND CONTINGENCIES

Contractual Commitments

Exclusive Collaboration Agreement with Rothamsted Research ("Rothamsted")

On November 12, 2020, the Company signed an exclusive collaboration agreement with UK-based Rothamsted to support Rothamsted’s program to develop omega-3 oils in Camelina sativa. Under the agreement, Yield10 is providing Rothamsted with financial support for ongoing research including further DHA+EPA trait improvement, field testing and nutritional studies. The Company will pay Rothamsted quarterly research funding and option fees of $31 for two years totaling $250, of which $156 remains outstanding as of September 30, 2021. As part of the agreement, the Company has an exclusive two-year option to sign a global, exclusive or non-exclusive license agreement to the technology. The current agreement terminates automatically on its second anniversary unless terminated earlier in accordance with the terms of the agreement.

License Agreement with the University of Massachusetts ("UMASS")

Pursuant to a license agreement with UMASS dated as of June 30, 2015 and subsequently amended, the Company has an exclusive, worldwide license under certain patents and patent applications, including issued patents covering the Company's yield trait gene C3003, relating to the manufacture of plants with enhanced photosynthesis. The agreement provides an exclusive, worldwide license to make, have made, use, offer for sale and import any transgenic plant seed or plant grown from transgenic plant material for sale to a farmer or grower that is derived from (in whole or in part) one or more issued or pending claims of the licensed patents or patent applications.

Pursuant to the UMASS license agreement, the Company is required to use diligent efforts to develop licensed products throughout the field of use and to introduce licensed products into the commercial market. The Company's failure to achieve any milestone provided for under the agreement would give UMASS the right to terminate the agreement, following a notice period, unless the Company is able to reach agreement with UMASS as to a potential adjustment to the applicable milestone.

The Company is obligated to pay UMASS milestone payments relating to regulatory filings and approvals covered by the agreement, minimum annual royalties or royalties on any sales of licensed products following regulatory approval, as well as a percentage of any sublicense income, if any, related to the licensed products. The Company or UMASS may terminate the agreement in accordance with the terms of the agreement.

License Agreement with the University of Missouri ("UM")

Pursuant to a license agreement with UM dated as of May 17, 2018, Yield10 has an exclusive, worldwide license to two novel gene technologies to boost oil content in crops. Both technologies are based on significant new discoveries around the function and regulation of ACCase, a key rate-limiting enzyme involved in oil production. The UM license was expanded during May 2019 to include an exclusive worldwide license to a third gene in the ACCase complex, that the Company has designated C3012, that may complement the activity of C3007 to boost oil content in crops.

Pursuant to the UM license agreement, the Company is required to use diligent efforts to develop licensed products throughout the licensed field and to introduce licensed products into the commercial market. The Company's failure to achieve any milestone provided for under the license agreement would give UM the right to terminate the license agreement or render it nonexclusive, unless the Company is able to reach agreement with UM as to the potential adjustment of the applicable milestone.

The Company is obligated to pay UM a license execution payment, milestone payments relating to any regulatory filings and approvals covered by the license agreement, royalties on any sales of licensed products following regulatory approval, as well as a percentage of any sublicense royalties, if any, related to the licensed products. The Company or UM may terminate the license agreement in accordance with the terms of the agreement.

Facility Leases

The Company leases facilities under non-cancelable leases expiring at various dates through November 30, 2026. See Note 8.

Litigation

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. The Company is not currently aware of any such proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition or results of operations.

Guarantees

The Company enters into indemnification provisions under various agreements with other companies in the ordinary course of business, typically with business partners and contractors. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of its activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. However, to date Yield10 has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of the indemnifications under these agreements is believed to be minimal. Accordingly, the Company has no liabilities recorded for these agreements as of September 30, 2021 and December 31, 2020.

11. GEOGRAPHIC INFORMATION

The geographic distribution of the Company’s grant revenues and long-lived assets are summarized in the tables below. Foreign revenue is based on the country in which the Company’s subsidiary that earned the revenue is domiciled.


	U.S.		Canada		Eliminations		Total
Three Months Ended September 30, 2021
Grant revenue from external customers	$	92	$	—	$	—	$	92
Inter-geographic revenues	—		534		(534)		—
Revenues	$	92	$	534	$	(534)	$	92

Three Months Ended September 30, 2020
Grant revenue from external customers	$	204	$	—	$	—	$	204
Inter-geographic revenues	—		625		(625)		—
Revenues	$	204	$	625	$	(625)	$	204

Nine Months Ended September 30, 2021
Grant revenue from external customers	$	423	$	39	$	—	$	462
Inter-geographic revenues	—		1,526		(1,526)		—
Revenues	$	423	$	1,565	$	(1,526)	$	462

Nine Months Ended September 30, 2020
Grant revenue from external customers	$	537	$	67	$	—	$	604
Inter-geographic revenues	—		1,403		(1,403)		—
Revenues	$	537	$	1,470	$	(1,403)	$	604

The geographic distribution of the Company’s property and equipment is summarized as follows:


	U.S.		Canada		Eliminations		Total
September 30, 2021	$	850	$	53	$	—	$	903
December 31, 2020	$	866	$	55	$	—	$	921

12. CAPITAL STOCK AND WARRANTS

Common Stock

Registered Public Offerings

On February 3, 2021, the Company completed a public offering of 1,040,000 shares of its common stock at a public offering price of $12.25 per share for total gross proceeds of $12,740 before issuance costs of $747.

On August 26, 2020, the Company completed a public offering of 951,835 shares of its common stock at a public offering price of $4.25 per share for total gross proceeds of $4,045 before issuance costs of $425.

Private Placement

Concurrent with the registered public offering completed on August 26, 2020, as described above, the Company completed a separate private placement offering of 396,450 shares of its common stock to certain existing shareholders at the same $4.25 price offered to investors in the public offering. The proceeds from this private placement were $1,685.

Reverse Stock Split

On January 15, 2020, the Company completed a 1-for-40 reverse stock split ("Reverse Stock Split") of its common stock by filing a certificate of amendment (the "Charter Amendment") with the State of Delaware to amend its certificate of incorporation. The ratio for the Reverse Stock Split was determined by the Company's board of directors following approval by stockholders at the Company's special meeting held on January 9, 2020. The Reverse Stock Split had the effect of increasing the Company's common shares available for issuance by reducing issued and outstanding common shares by a divisible factor of 40 while its authorized common shares remained at the current 60 million shares. Proportional adjustments were made to the Company's outstanding stock options and to the number of shares issued and issuable under the Company's equity compensation plans.

November 2019 Concurrent Securities Offerings

On November 19, 2019, the Company closed on concurrent public and private securities offerings that included the following: common stock, Series A Convertible Preferred Stock, Series B Convertible Preferred Stock, Series A Warrants and Series B Warrants. Combined cash proceeds from the offerings totaled $11,500, before issuance costs of $1,254.

As of the November 19, 2019 closing date of the two offerings, the Company did not have sufficient authorized and available shares of common stock to permit conversion of the Series B Convertible Preferred Stock sold in the private placement or to permit the exercise of the 2,875,000 combined Series A Warrants and Series B Warrants issued under both the public and the private offerings. The Series B Convertible Preferred Shares and the warrants were not convertible or exercisable until more shares of common stock became available for issuance through the Company's filing of the Charter Amendment for the Reverse Stock Split described above. Upon the filing of the amendment on January 15, 2020, all of the Series B Convertible Preferred Stock sold in the private placement automatically converted into 718,750 shares of common stock and the Series A Warrants and Series B Warrants issued in both offerings became eligible for exercise.

At the time of their issuance, the Company determined that all of the Series A Warrants and Series B Warrants should be classified as a warrant liability and recorded at an inception date fair value of $24,518 due to the insufficiency of common shares available to permit their exercise. The Company re-measured the fair value of the warrants on December 31, 2019 and again on January 15, 2020 (the date of filing the Charter Amendment to increase available shares of common stock), resulting in, respectively, the recognition of a gain of $9,541 followed by a loss of $957, due to the change in fair value at each valuation date. By filing the Charter Amendment and effecting the 1-for-40 Reverse Stock Split, the Company's outstanding common shares were reduced by a divisible factor of 40 while authorized common shares remained at the current 60 million shares. As a result of this corporate action, sufficient shares of authorized, but unissued shares of common stock became available for Series A and Series B warrant holders to exercise their warrants resulting in their reclassification from warrant liability to equity on the date of filing the Charter Amendment.

Preferred Stock

The Company's Certificate of Incorporation authorizes it to issue up to 5,000,000 shares of $0.01 par value preferred stock.

Description of Series A Convertible Preferred Stock

The November 2019 public offering of the Company's securities included the issuance of 2,504 shares of Series A Convertible Preferred Stock. Each Series A Convertible Preferred Share was convertible into 125 shares of common stock at a conversion price of $8.00 per share. All of the 2,504 shares of the Series A Convertible Preferred Stock converted to 313,000 shares of common stock by April 30, 2020.

Description of Series B Convertible Preferred Stock

The November 2019 private offering of the Company's securities included the issuance of 5,750 shares of Series B Convertible Preferred Stock. Each share of Series B Convertible Preferred Stock was convertible into 125 shares of common stock at a conversion price of $8.00 per share. All of the Series B Convertible Preferred Stock converted automatically to 718,750 shares of common stock on January 15, 2020, upon the Company's filing of a Charter Amendment for the Reverse Stock Split described above.

When converted, the shares of Series A and B Convertible Preferred Stock were restored to the status of authorized but unissued shares of preferred stock, subject to reissuance by the Company's board of directors.

Warrants

The following table summarizes information regarding outstanding warrants to purchase common stock as of September 30, 2021:


Issuance	Number of Shares Issuable Upon Exercise of Outstanding Warrants	Exercise Price Per Share of Common Stock		Expiration Date
November 2019 Public Offering - Series A	352,703	$	8.00	May 19, 2022
November 2019 Public Offering - Series B	395,528	$	8.00	May 19, 2027
November 2019 Private Placement - Series A	718,750	$	8.00	May 19, 2022
November 2019 Private Placement - Series B	718,750	$	8.00	May 19, 2027
December 2017 Public Offering - Series A	160,975	$	90.00	December 21, 2022
July 2017 Registered Direct Offering	14,270	$	201.60	January 7, 2024
Consultant	750	$	116.00	September 11, 2024
Total	2,361,726

During the nine months ended September 30, 2021, a combined total of 481,973 Series A and Series B warrants issued in the Company's November 2019 securities offering were exercised by warrant holders, providing $3,856 in cash proceeds.

Reserved Shares

The following shares of common stock were reserved for future issuance upon exercise of stock options, vesting of RSUs and conversion of warrants:


	September 30, 2021	December 31, 2020
Stock Options	716,619	339,108
RSUs	9,430	8,500

Warrants	2,361,726	2,843,699
Total number of common shares reserved for future issuance	3,087,775	3,191,307

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

(All dollar amounts are stated in thousands)

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements relate to our future plans, objectives, expectations and intentions and may be identified by words such as “may,” “will,” “should,” “expects,” “plans,” “anticipate,” “intends,” “target,” “projects,” “contemplates,” “believe,” “estimates,” “predicts,” “potential,” and “continue,” or similar words.

Although we believe that our expectations are based on reasonable assumptions within the limits of our knowledge of our business and operations, these forward-looking statements contained in this document are neither promises nor guarantees. Our business is subject to significant risk and uncertainties and there can be no assurance that our actual results will not differ materially from our expectations. These forward looking statements include, but are not limited to, statements concerning our business plans and strategies; expected future financial results and cash requirements; statements related to the coronavirus pandemic and its potential adverse impacts; plans for obtaining additional funding; plans and expectations that depend on our ability to continue as a going concern; and plans for development and commercialization of our Yield10 technologies. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated including, without limitation, risks related to our limited cash resources, uncertainty about our ability to secure additional funding, risks related to the execution of our business plans and strategies, risks associated with the protection and enforcement of our intellectual property rights, as well as other risks and uncertainties set forth under the caption "Risk Factors" in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the year ended December 31, 2020 and in our other filings with the SEC, including in Part II, Item 1A of this Report on Form 10-Q.

The forward-looking statements and risk factors presented in this document are made only as of the date hereof and we do not intend to update any of these risk factors or to publicly announce the results of any revisions to any of our forward-looking statements other than as required under the federal securities laws.

Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to "Yield10 Bioscience," "Yield10," "we," "our," "us," "our company" or "the company" refer to Yield10 Bioscience, Inc., a Delaware corporation, and its subsidiaries.

Overview

Yield10 Bioscience, Inc. is an agricultural bioscience company that is using its differentiated trait gene discovery platform, (the "Trait Factory"), to develop improved Camelina varieties to produce proprietary products, and to produce other high value genetic traits for the agriculture and food industries. We are headquartered in Woburn, Massachusetts and have an Oilseed Center of Excellence in Saskatoon, Saskatchewan, Canada. Our goals are to efficiently develop and commercialize a high value crop products business by developing superior varieties of Camelina for the production of feedstock oils and meal, nutritional oils, and PHA bioplastics, and to license our yield traits to major seed companies for commercialization in major row crops, including corn, soybean and canola.

As of September 30, 2021, we held unrestricted cash, cash equivalents and investments of $18,522. We follow the guidance of ASC Topic 205-40, Presentation of Financial Statements-Going Concern, in order to ascertain whether there is substantial doubt about our ability to continue as a going concern for one year after the date our financial statements are issued. Based on our current cash forecast, we expect that our present capital resources will be sufficient to fund our planned operations and meet our obligations, when due, into the second quarter of 2023. Our ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additional financing through, among other sources, public or private equity financing, secured or unsecured debt financing, equity or debt bridge financing, warrant holders' ability and willingness to exercise the Company's outstanding warrants, additional government research grants or collaborative arrangements with third parties, as to which no assurances can be given. We do not know whether additional financing will be available on terms favorable or acceptable to us when needed, if at all. If adequate additional funds are not available when required, we may be forced to curtail our research efforts, explore strategic alternatives and/or wind down our operations and pursue options for liquidating our remaining assets, including intellectual property and equipment.

If we issue equity or debt securities to raise additional funds in the future, (i) we may incur fees associated with such issuances, (ii) our existing stockholders may experience dilution from the issuance of new equity securities, (iii) we may incur ongoing interest expense and be required to grant a security interest in our assets in connection with any debt issuance, and (iv) the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. In addition, utilization of our net operating loss and research and development credit carryforwards may be subject to significant annual limitations under Section 382 of the Internal Revenue Code due to ownership changes resulting from equity financing transactions. If we raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary to

relinquish valuable rights to our potential products or proprietary technologies or grant licenses on terms that are not favorable to us.

Government Grants

On February 26, 2021, MOI, the Company’s wholly-owned Canadian research subsidiary, received a research grant through the Industrial Research Assistance Program administered by National Research Council Canada ("NRC"). The objective of the grant was to provide financial research assistance to innovative, early-stage small and medium-sized enterprises. Under the terms of the agreement, NRC agreed to contribute up to a maximum of $39 for payroll costs incurred by MOI during the period December 20, 2020 - March 13, 2021. During the first quarter of 2021, MOI submitted claims for eligible payroll costs and recognized grant revenue for the full amount of the award.

During 2018, we entered into a sub-award with Michigan State University ("MSU") to support a Department of Energy ("DOE") funded grant entitled "A Systems Approach to Increasing Carbon Flux to Seed Oil." Our participation under this five-year grant is being awarded on an annual basis with the first year commencing on September 15, 2017. Cumulative funding for this sub-award in the amount of $2,957 has been appropriated by the U.S. Congress through the final contractual year ending in September 2022. During the three and nine months ended September 30, 2021, we recognized $92 and $423 in grant revenue, respectively, from the sub-award. During the three and nine months ended September 30, 2020, we recognized $204 and $537, respectively, from this sub-award.

As of September 30, 2021, proceeds of $662 remain to be recognized through the end of the final contractual year under our MSU sub-award as shown in the table below. Included within this amount is $108 in unused appropriations from the fourth year of the sub-award for which we are seeking approval to roll over into the final year of the contract. The remaining contractual funds includes amounts for reimbursement to our subcontractors, as well as reimbursement for our employees’ time, benefits and other expenses related to future performance.


Program Title	Funding Agency	Total Government Funded Appropriations		Total revenue recognized through September 30, 2021		Remaining amount to be recognized as of September 30, 2021		Contract/Grant Expiration

Subcontract from Michigan State University project funded by DOE entitled "A Systems Approach to Increasing Carbon Flux to Seed Oil"	Department of Energy	$	2,957	$	2,295	$	662	September 2022
Funding from National Research Council Canada through its Industrial Research Assistance Program (NRC-IRAP) entitled "Innovation Assistance Program - Round 2.5"	National Research Council Canada	39		39		—		March 2021
Total		$	2,996	$	2,334	$	662

Critical Accounting Estimates and Judgments

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP for interim financial information. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, stock-based and performance-based compensation, measurement of right-of-use assets and lease liabilities, the recognition of lease expense and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The critical accounting policies and the significant judgments and estimates used in the preparation of our condensed consolidated financial statements for the three and nine months ended September 30, 2021, were consistent with those discussed in our Annual Report on Form 10-K for the year ended December 31, 2020, in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates and Judgments.”

Results of Operations

Comparison of the Three Months Ended September 30, 2021 and 2020

Revenue


	Three Months Ended September 30,
	2021		2020		Change

Grant revenue	$	92	$	204	$	(112)

Grant revenue was $92 and $204 for the three months ended September 30, 2021 and September 30, 2020, respectively. All of the grant revenue recorded during the three months ended September 30, 2021 and September 30, 2020 was derived from the Company's DOE sub-award with MSU.

We anticipate that grant revenue will decrease for the year ended December 31, 2021 in comparison to the year ended December 31, 2020 as a result of lower Canadian research grants awarded during 2021 by National Research Council Canada to our subsidiary, MOI, the varying annual budget appropriations awarded under our five-year MSU sub-award, and the timing and application of our internal resources to our grants. We currently cannot assess whether additional U.S. or Canadian government grants will be awarded to us during the remainder of 2021 or within the next twelve months. Our forecast related to grant revenue is subject to change, should we receive new grants or if our ability to earn revenue from our existing grant is negatively impacted by the COVID-19 pandemic.

Expenses


	Three Months Ended September 30,
	2021		2020		Change
Research and development expenses	$	1,636	$	1,300	$	336
General and administrative expenses	1,547		1,098		449
Total expenses	$	3,183	$	2,398	$	785

Research and Development Expenses

Research and development expenses increased from $1,300 during the three months ended September 30, 2020 to $1,636 during the three months ended September 30, 2021. The $336, or 26 percent increase, is primarily due to higher employee compensation, crop field trial and research services expenses. Employee compensation increased by $156 from $709 during the three months ended September 30, 2020 to $865 during the three months ended September 30, 2021, and is primarily the result of a $70 increase in stock-based compensation (a non-cash expense) related to employee stock awards issued during 2021 and a $70 increase in payroll and benefit expenses due to annual employee compensation increases and our hiring of additional staff earlier this year. Crop trial expense increased by $83 during the three months ended September 30, 2021 in comparison to the same quarter of the previous year and is the result of the Company's expanded Camelina field trials and related work being conducted in the U.S., Canada and Argentina. Expenses related to third-party research services, including DNA sequencing and analysis for regulatory purposes, also increased by $51 during the three months ended September 30, 2021 in comparison to the third quarter of 2020.

Based on current planning and forecasting, we anticipate that our 2021 research and development expense will continue to remain at levels above expenses incurred during 2020 as we continue towards completion of our 2021 expanded crop trials and post-harvest analysis and as we continue to prepare our Camelina plant varieties for future commercial launch. Beyond 2021, we also anticipate incurring higher costs during the next twelve months as a result of hiring additional research staff in both the United States and Canada and as we continue to expand our testing of Camelina varieties in the field. Our forecast related to research and development expense is subject to change due to the potential impact of the COVID-19 pandemic, or as new collaborative and other business opportunities arise that alter our plans.

General and Administrative Expenses

General and administrative expenses for the three months ended September 30, 2021 and September 30, 2020 increased by $449 from $1,098 to $1,547. The 41 percent increase is primarily due to increases in employee compensation and benefits, consulting and Camelina product development activities. Employee compensation expense increased by $259 from $453 during the three months ended September 30, 2020 to $712 during the three months ended September 30, 2021, and is primarily the result of a $158 increase in stock-based compensation expense related to stock awards issued during 2021 and a $44 increase in payroll and benefit expenses from employee annual compensation increases that became effective the first of the year. During the three months ended September 30, 2021, we also recorded $43 in recruiting fees in connection with our search for additional professional staff. Consulting fees increased by $90 during three months ended September 30, 2021 in comparison to the same quarter of last year, primarily as a result of engaging outside parties to assist us with early stage business development efforts for our Camelina plant varieties. During the three months ended September 30, 2021, we also incurred $55 in incremental product development costs related to Camelina seed bulk up and genetic analysis.

Based on current planning and budgeting, we anticipate that general and administrative expenses will continue to remain at levels above expenses incurred during 2020, primarily as a result of increased employee compensation and benefit expenses and our Camelina product development activities. We also anticipate higher costs during the next twelve months in connection with business development activities for our Camelina plant varieties. Our forecasts related to general and administrative expenses are subject to change due to the potential impact of the COVID-19 pandemic, or as new collaborative and other business opportunities arise that alter our plans.

Other Income (Expense), Net


	Three Months Ended September 30,
	2021		2020		Change


Gain on investment in related party	$	700	—		700
Other income (expense), net	(1)		37		(38)
Total other income (expense), net	$	699	$	37	$	662

Gain on Investment in Related Party

During 1999, the Company entered into a sublicense agreement with Tepha, Inc. ("Tepha"), a privately held company engaged in the development of medical products. At the time the sublicense was executed, a director of Yield10 was also the president, chief executive officer and a director of Tepha. Three other members of Yield10's board of directors also served on the board of directors of Tepha, of which one continued to serve until completion of the sale discussed below. Yield10 received 648,149 shares of Series A Convertible Preferred Stock of Tepha ("Tepha Shares") during 2002 as consideration for outstanding license payments due to Yield10 totaling $700. During 2005, the Company determined the value of the Tepha Shares was impaired resulting in their write off through a charge to other income (expense). The sublicense agreement with Tepha ended in 2016.

In May 2021, the board of directors of Tepha approved and authorized the sale of Tepha to Becton Dickinson Global Holdings, Inc. ("Becton Dickinson"). On July 26, 2021, Yield10 received cash consideration of $700 in exchange for the surrender of its Tepha Shares upon the closing of the sale of Tepha to Becton Dickinson.

Other Income (Expense), net

Other income (expense) for the three months ended September 30, 2020 was derived primarily from investment income earned from the Company's cash equivalents and investments offset by interest expense and investment management fees incurred during the period. No investment income was recorded for the three months ended September 30, 2021 due to the negligible yield currently available with short-term U.S. federal treasury notes.

Comparison of the Nine Months Ended September 30, 2021 and 2020

Revenue


	Nine Months Ended September 30,
	2021		2020		Change

Grant revenue	$	462	$	604	$	(142)

Grant revenue was $462 and $604 for the nine months ended September 30, 2021 and September 30, 2020, respectively. During the nine months ended September 30, 2021 and September 30, 2020, we recognized $423 and $537, respectively, from the Company's DOE sub-award with MSU and $39 and $67, respectively, from short-term research grants awarded to MOI through the Canadian Industrial Research Assistance Program.

Expenses


	Nine Months Ended September 30,
	2021		2020		Change
Research and development expenses	$	4,603	$	3,939	$	664
General and administrative expenses	4,583		3,664		919
Total expenses	$	9,186	$	7,603	$	1,583

Research and Development Expenses

Research and development expense increased from $3,939 during the nine months ended September 30, 2020 to $4,603 during the nine months ended September 30, 2021. The $664, or 17 percent increase, is primarily due to higher employee compensation and crop field trial expenses of $453 and $223, respectively. The increase in employee compensation expense is the result of a $221 increase in stock-based compensation expense, a $127 increase in employee payroll and benefits due to employee annual compensation increases and expenses related to our hiring additional staff earlier this year. The increase in crop field trial expense during the nine months ended September 30, 2021 in comparison to the same period in 2020, is the result of the Company's expanded Camelina field trials and related work being conducted in the U.S., Canada and Argentina.

General and Administrative Expenses

General and administrative expenses increased by $919 from $3,664 during the nine months ended September 30, 2020 to $4,583 for the nine months ended September 30, 2021. The 25 percent increase is primarily due to an increase in employee compensation expense of $647, including an increase in stock-based compensation of $447, and an increase in recruiting expenses of $86. Consulting fees also increased by $220 during the nine months ended September 30, 2021 in comparison to the nine months ended September 30, 2020, and are primarily a result of engaging outside parties to assist us with early stage business development activities for our Camelina plant varieties. Our investor relations expense also increased by $72 during the nine months ended September 30, 2021 in comparison to the nine months ended September 30, 2020 and is primarily due to costs associated with our efforts to communicate the Company's strategic direction.

Other Income (Expense), Net


	Nine Months Ended September 30,
	2021		2020		Change
Change in fair value of warrants	$	—	$	(957)	$	957
Loan forgiveness income	—		333		(333)
Gain on investment in related party	700		—		700
Other income (expense), net	(2)		85		(87)
Total other income (expense), net	698		(539)		$	1,237

Gain on Investment in Related Party

In May 2021, the board of directors of Tepha, a related party, approved and authorized the sale of Tepha to Becton Dickinson Global Holdings, Inc. The merger was approved by the FTC on July 21, 2021 and Yield10 received cash consideration of $700 for the surrender of its Tepha Shares when the merger closed on July 26, 2021.

Change in Fair Value of Warrants

The fair value of the liability classified warrants issued in our November 2019 securities offerings was subject to mark-to-market adjustment on subsequent balance sheet dates. On January 15, 2020, we remeasured the fair value of the warrant liability in connection with the Company's 1-for-40 reverse stock split, recording a loss from the change in fair value of $957. The reverse stock split increased the number of shares of common stock available for issuance resulting in reclassification of the warrant liability to equity.

Loan Forgiveness Income

During April 2020, we received $333 in loan proceeds through the Paycheck Protection Program Flexibility Act ("PPP"), established pursuant to the CARES Act. During our fiscal quarter ended September 30, 2020 we utilized the entire PPP Loan amount for expenses that met the qualifications for loan forgiveness and recorded the full amount of the loan within other income (expense) within our condensed consolidated statement of operations.

Other Income (Expense), net

Other income (expense) for the nine months ended September 30, 2021 and September 30, 2020 was derived primarily from investment income earned from the Company's cash equivalents and investments offset by interest expense and investment management fees incurred during the period. Investment income recorded from U.S. federal treasury notes was negligible during the nine months ended September 30, 2021 due to their insignificant yield rates.

Liquidity and Capital Resources

Currently, we require cash to fund our working capital needs, to purchase capital assets, and to pay our operating lease obligations and other operating costs. The primary sources of our liquidity have historically included equity financings, government funded research grants and income earned on cash and investments.

Since our inception, we have incurred significant expenses related to our research, development and product commercialization efforts. With the exception of 2012, we have recorded losses since our initial founding, including the three and nine months ended September 30, 2021. As of September 30, 2021, we had an accumulated deficit of $383,151. Our unrestricted cash, cash equivalents and investments are held primarily for working capital purposes and as of September 30, 2021, totaled $18,522 compared to cash, cash equivalents and investments of $9,702 at December 31, 2020. As of September 30, 2021, we had restricted cash of $264, consisting of $229 held in connection with the lease agreement for our Woburn, Massachusetts facility and $35 held in connection with our corporate credit card program. As of September 30, 2021, we continued to have no outstanding debt.

Investments are made in accordance with our corporate investment policy, as approved by our Board of Directors. The primary objective of this policy is to preserve principal. Consequently, our investments are limited to high quality corporate debt, U.S. Treasury bills and notes, money market funds, bank debt obligations, municipal debt obligations and asset-backed securities. The policy establishes maturity limits, concentration limits, and liquidity requirements. As of September 30, 2021, we were in compliance with this policy.

We anticipate net cash usage during 2021 within a range of $10,000 to $10,500 and estimate that our current cash resources will be sufficient to fund operations and meet our obligations, when due, into the second quarter of 2023. We follow the guidance of ASC Topic 205-40, Presentation of Financial Statements-Going Concern, in order to determine whether there is substantial doubt about our ability to continue as a going concern for one year after the date our financial statements are issued. Based on our cash forecast, we expect that our present capital resources will be sufficient to fund our planned operations for at least that period of time. This forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of expenses could vary materially and adversely as a result of a number of factors. Our ability to continue operations after our current cash resources are exhausted will depend upon our ability to obtain additional financing through, among other sources, public or private equity financing, secured or unsecured debt financing, equity or debt bridge financing, warrant holders' ability and willingness to exercise the Company's outstanding warrants, additional government research grants or collaborative arrangements with third parties, as to which no assurances can be given. We do not know whether additional financing will be available on terms favorable or acceptable to us when needed, if at all. If

adequate additional funds are not available when required, we may be forced to curtail our research efforts, explore strategic alternatives and/or wind down our operations and pursue options for liquidating our remaining assets, including intellectual property and equipment.

On March 28, 2021, we filed a shelf registration statement on Form S-3 (File No. 333-254830) with the SEC, which was declared effective on April 2, 2021 (the “Shelf Registration Statement”). The Shelf Registration Statement contained a prospectus which covers the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $100,000 of our common stock, preferred stock, warrants and subscription rights, which securities may be sold either individually or in units.

If we issue equity or debt securities to raise additional funds, (i) we may incur fees associated with such issuances, (ii) our existing stockholders will experience dilution from the issuance of new equity securities, (iii) we may incur ongoing interest expense and be required to grant a security interest in our assets in connection with any debt issuance, and (iv) the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. In addition, utilization of our net operating loss and research and development credit carryforwards may be subject to significant annual limitations under Section 382 of the Internal Revenue Code due to ownership changes resulting from future equity financing transactions. If we raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our potential products or proprietary technologies or grant licenses on terms that are not favorable to us.

Net cash used for operating activities during the nine months ended September 30, 2021 was $6,768, compared to net cash used for operating activities during the nine months ended September 30, 2020 of $6,670. Net cash used for operating activities during the nine months ended September 30, 2021 primarily reflects the net loss of $8,051, cash payments made to reduce the Company's lease liabilities of $338 and our payment of 2020 bonus compensation of $460 during early 2021. Non-cash charges offsetting a portion of the net loss include depreciation and amortization expense of $165, the Company's 401(k) matching contribution in common stock of $100, stock-based compensation expense of $1,175, and non-cash lease expense of $265. Net cash used for operating activities during the nine months ended September 30, 2020 was $6,670 and primarily reflects the net loss of $7,564 and cash payments made to reduce the Company's lease liabilities and to pay 2019 bonus compensation of $495 and $344, respectively. Non-cash expenses included in the net loss, included depreciation and amortization expense of $137, the loss recorded from the revaluation of our warrant liability of $957, losses from the disposal of fixed assets of $206, stock-based compensation expense of $506, and non-cash lease expense of $345.

Net cash of $2,229 was provided by investing activities during the nine months ended September 30, 2021, primarily as a result of our receiving proceeds of $6,250 from investments reaching maturity and converting into cash, partially offset by our purchase of $3,874 in new investments. During the nine months ended September 30, 2021, we also purchased $147 in laboratory and other equipment, including new plant growth chambers. During the nine months ended September 30, 2020, $3,125 in net cash was provided from investing activities and was primarily the net result of our purchase of $6,290 in new investments partially offset by cash proceeds of $3,197 from maturing investments.

Net cash of $15,746 was provided by financing activities during the nine months ended September 30, 2021, compared to net cash of $7,341 provided by financing activities during the nine months ended September 30, 2020. During the nine months ended September 30, 2021, the Company completed a public offering of 1,040,000 shares of its common stock at a price of $12.25 per share, receiving proceeds of $11,993 net of issuance costs of $747. Also during the nine months ended September 30, 2021, a total of 481,973 Series A and Series B warrants issued in the Company's November 2019 securities offering were exercised by warrant holders, providing $3,856 in cash proceeds. During the nine months ended September 30, 2020, we recorded cash proceeds of $1,658 from the exercise of 207,296 warrants. In addition, on August 26, 2020, we completed a public offering of 951,835 shares of our common stock at a public offering price of $4.25 per share, for gross proceeds of $4,045 before issuance costs of $425. Included in these issuance costs was $63 in outstanding costs that remained unpaid as of September 30, 2020. Also on August 26, 2020, we completed a separate but concurrent private placement offering of 396,450 shares of our common stock to certain existing shareholders at the same $4.25 price as the public offering noted above. The gross proceeds of this private placement were $1,685.

Recent Accounting Pronouncements

See Note 2, "Accounting Policies," to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for a full description of recent accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management (with the participation of our Principal Executive Officer and Principal Accounting Officer) evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of September 30, 2021. Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported on a timely basis and that such information is accumulated and communicated to management, including the Principal Executive Officer and the Principal Accounting Officer, as appropriate, to allow timely decisions regarding disclosure. Based on this evaluation, our Principal Executive Officer and Principal Accounting Officer concluded that these disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) during the quarter ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. The Company is not currently aware of any such proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on the business, financial condition or the results of operations.

ITEM 1A. RISK FACTORS.

There have been no material changes to the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 16, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Recent Sales of Unregistered Securities

On July 1, 2021, we issued 2,857 shares of common stock to participants in the Yield10 Bioscience, Inc. 401(k) Plan as a matching contribution. The issuance of these securities is exempt from registration pursuant to Section 3(a)(2) of the Securities Act, as amended as exempted securities.

Issuer Purchases of Equity Securities

During the three months ended September 30, 2021, there were no repurchases made by us or on our behalf, or by any “affiliated purchasers,” of shares of our common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.


3.1						Amended and Restated By-Laws, as amended, of the Registrant (filed herewith).

31.1						Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 of the Principal Executive Officer (filed herewith).

31.2						Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 of the Principal Financial Officer (filed herewith).

32.1						Section 1350 Certification (furnished herewith).

101.1						The following financial information from the Yield10 Bioscience, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 formatted in XBRL: (i) Condensed Consolidated Balance Sheets, September 30, 2021 and December 31, 2020; (ii) Condensed Consolidated Statements of Operations, Three and Nine Months Ended September 30, 2021 and 2020; (iii) Condensed Consolidated Statements of Comprehensive Loss, Three and Nine Months Ended September 30, 2021 and 2020; (iv) Condensed Consolidated Statements of Cash Flows, Nine Months Ended September 30, 2021 and 2020; (v) Condensed Consolidated Statements of Series B Convertible Preferred Stock and Stockholders' Equity, Three and Nine Months Ended September 30, 2021 and 2020; and (vi) Notes to Consolidated Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	YIELD10 BIOSCIENCE, INC.


November 10, 2021	By:	/s/ OLIVER PEOPLES
		Oliver Peoples
		President and Chief Executive Officer
		(Principal Executive Officer)

November 10, 2021	By:	/s/ CHARLES B. HAASER
		Charles B. Haaser
		Chief Accounting Officer
		(Principal Financial and Accounting Officer)