Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Calyxt Second Quarter 2022 Earnings Results Conference Call and Webcast. This call is being recorded today, August 4, 2022. At this time, I would like to turn the conference over to Bill Koschak, Calyxt Chief Financial Officer. Please go ahead, sir.

Thank you, and good afternoon. This is Bill Koschak, the Chief Financial Officer of Calyxt. I would like to thank you for taking time to join us for Calyxt’s second quarter 2022 earnings results conference call and webcast. Presenting with me today is Michael A. Carr, our President and Chief Executive Officer. A press release detailing these results crossed the wire after today’s market close and is available on our company’s website, calyxt.com. Before we begin the formal presentation, I’d like to remind everyone that statements made on the call and webcast, including those regarding future financial results and future operational goals and industry prospects are forward-looking and maybe subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to Calyxt’s SEC filings for a list of associated risks. This presentation also includes a discussion of adjusted net loss and adjusted net loss per share both are non-GAAP financial measures. In Calyxt’s press release and its filings with the SEC, each of which was posted on the company’s website at calyxt.com, you will find additional disclosure regarding these non-GAAP financial measures. References to these non-GAAP financial measures should be considered in addition to GAAP financial measures and should not be considered a substitute for results that are presented in accordance with GAAP. Lastly, this conference call is being webcast. The webcast link is available in the Investor Relations section of calyxt.com. At this time, I would like to turn the call over to Michael for his opening remarks.

Thank you, Bill and thank you for joining us on Calyxt earnings and corporate update call today. Throughout the second quarter of 2022, the Calyxt team tangibly advanced each area of the business, including progressing our development and sale of customer demand-driven plant-based chemistries, the procurement of infrastructure partners to greatly expand our manufacturing capabilities and technology and plant trait licensing. Throughout the quarter, Calyxt continued to work on scaling and standardizing production in its pilot BioFactory system and building out related capabilities. I am proud of the significant progress we have made in a short period of time is a testament to our new strategic direction being on track. Today, I will specifically walk you through our progress over the past few months and then have Bill provide a financial update. We are focused on advancing discussions and relationships with new customers in the cosmeceutical, nutraceutical and pharmaceutical industries. All are large and innovative industries with customers that have current business needs to source sustainable and finite plant-based chemistries. These potential customers are also known to be fast adopters of innovation and are actively seeking to reduce their carbon footprints. In the second quarter, Calyxt received 9 new chemistries from potential customers for evaluation, bringing the total number of chemistries cumulatively evaluated poor development with our PlantSpring platform and for production in our BioFactory to 95. Of these 95 chemistries, 31 have met Calyxt’s target product profile or TPP criteria, and we plan to further evaluate and discuss these chemistries with the potential customers. Importantly, the evaluated chemistries include several that were identified by potential customers as having been unsuccessfully attempted by others in the synthetic biology industry. This speaks to the unique technology and approach of Calyxt’s engineer, plant metabolism to produce innovative and high value plant-based chemistries…

Thank you, Michael. Earlier today, we issued a press release describing our second quarter 2022 results. We also filed our Form 10-Q for the quarter this afternoon. Our cash, cash flows and restricted cash were $11.9 million as of June 30, 2022. Revenue was nominal in the second quarter of 2022 compared to $11.9 million in the second quarter of 2021. The decrease in revenue was driven by the late 2021 completion of the wind down of the soybean product line. Revenue in the second quarter of 2022 was primarily associated with our agreement with a food ingredient manufacturer to develop a palm oil alternative. And as previously reported we expect revenues to decline meaningfully from 2021 levels because of the wind down of our soybean product lines. Total operating expenses were $6.8 million in the second quarter of 2022 compared to $6.3 million in the second quarter of 2021. The increase was primarily driven by the adoption of the lease accounting standard which shifted amounts previously reported in interest net to operating expenses. Net loss was $2.5 million in the second quarter or $0.05 per share compared to $4.8 million or $0.13 per share in the prior year period. The improvement in net loss was driven by non-operating income and expenses, including the mark-to-market of our Common Warrants liability, which declined in value due to a decline in stock price in 2022 partially offset by the gain realized on the forgiveness of the Payroll Protection Program loan in the second quarter of 2021. The improvement in net loss per share was driven by the improvement in net loss and a year-over-year increase in weighted average shares outstanding. Adjusted net loss was $6.7 million in the second quarter or $0.14 per share compared to $7.8 million or $0.21 per share…

Thanks, Bill. I’d like to reiterate that the second quarter of 2022 was a period of tangible advancement for Calyxt. We have evaluated 9 new customer demand-driven plant-based chemistries in the quarter, bringing cumulative chemistries evaluated for development to 95 along with several term sheets currently under discussion. We are set to deliver an engineered solution for a high value molecule in early 2023 to a large global consumer packaged goods company. We continue to progress with several potential infrastructure partners able to produce chemistries in various sizes of bioreactors from pilot to commercial scale. We are also evaluating multiple term sheets for technology licensing and there is significant interest in the licensing of our plant traits. As I said earlier, I am very proud of the significant progress we have made in the past few months. Our new strategic direction is on track and we continue our focused drive to realize value for our stakeholders. Our recent progress is due in no small part to the tireless dedication of our employees, who, I want to thank. We look forward to providing you with updates in the coming months. Operator, that concludes our prepared remarks. Please open the line for questions.

Thank you, sir. And today’s first question comes from Brian Wright. I apologize today’s first question comes from Bobby Burleson at Canaccord. Please go ahead.

Thanks. I feel like I won a bingo or something. So I guess, Michael, the first question – first of all, how are you doing, both of you?

Doing well. Doing very well. How are you today, Bobby?

Glad to hear that. Yes, same here still healthy. I guess, the first question would be on the large-scale manufacturing asset-light approach where you guys don’t want to invest in that kind of production internally. Just curious, like how much IP is involved taking a hypothetical molecule from what you guys do in the BioFactory to what an infrastructure partner might do? Is there a lot of IP that infrastructure partner brings to the table or do you guys pretty much deliver most of it before your hand-offs?

Well, there is certainly IP located there. As we’ve discussed in the past, we have our pilot BioFactory in place and we continue to drive the scaling process there. We continue to advance and apply our AML approach to it with the goal of not only becoming more efficient, but more productive. And there are certain steps that we’ve taken in terms of the media, the nutrient media that we use, which is proprietary, and other steps that are important to the actual production within a bioreactor. So while there is that infrastructure component to it, there is still some IP that is related to Calyxt.

And then maybe just on the term sheets that you guys are evaluating. Is – are there financial considerations largely that you guys are deliberating on now or is it just a general kind of complexity of these types of contracts or what is it that one needs to kind of deliberate on? Is it you doing the deliberation or the counterparty? I’m just kind of curious any color on how that is progressing?

Sure. As you can imagine, we’re pretty excited about it. I mean, not only in the cumulative total of molecules that we’ve received, but the various customers that have approached us, the appreciation of our plant-based and rather unique technology as it relates to synthetic biology. But I think you sort of touched on it, Bobby. These are longer-term relationships. We’ve noted publicly that our process is approximately 36 months in duration on the outset and that includes our development upfront with the PlantSpring platform and then another 24 months as it relates to the scaling within the production. As we’ve also mentioned before, that’s very, very competitive in comparison to other synthetic biology companies. So you can imagine, in those type of relationships and those type of development processes take a little bit of time to become agreed upon. But overall, we’re again I think really pleased with where we are, noting that our total here that we’ve outlined is two to four development deals by the end of the year. And again, we feel pretty comfortable with where we stand today.

Okay. And then just maybe on – once again, on the two to four development agreements by the end of this year. I know initially you guys were maybe hoping that you could get one of those done by the end of last year. It sounds like you still have the end of 2023 target in your sites. Curious if any other timelines beyond the timing of these agreements might require some type of change in perspective where you think once these are signed, the subsequent timelines are still kind of intact as you originally saw it, this opportunity?

Yes, I think we feel pretty comfortable with the original timelines we’ve done the tow to four for the year, for sure.

Okay. And Bill, one for you before I hand it over. It sounds like you’ve got that cash runway through early ‘23 without any incremental cash flows from customers besides what you’ve already have agreed upon now or signed now. Just curious how much discretion there is or wiggle room you have on the spending regardless of that cash runway? Is there a way to dial down spending if you needed to or are you guys kind of running at the bare bones level of spending you think is required to address these opportunities?

Bobby thanks for the question. As we talked about in the call, we have $11.9 million of cash at the end of the quarter with the runway into early 2023. We’re really pleased with the offering that we did back in February that helped our balance sheet out and the investor enthusiasm that we saw when we raised the money back then. And so with that said, as you mentioned that the projection includes only committed customer cash. So to the extent that we have confidence both in executing license agreements and the two to four development agreements Michael talked about, that would only serve to the extent they come with cash, and we expect them to, would only serve to extend our runway. We are very disciplined in our cash usage. I wouldn’t describe where we’re at as bare bones. Bare bones could really impair the business if you think about the future growth prospects until we’ve been trying to balance out things. But above all, being very disciplined in terms of how we think about what we’re doing. As we talked in the call, we’ve got a good runway and the opportunities to extend, the opportunities to do other things if we have to with some combination of missings I mentioned along with other third-party funding, whether it’s public or private, debt or equity, those types of things, some combination thereof. Those are all things we talk about as well.

Great. Alright, thanks, Michael. Thanks, Bill.

Thanks, Bobby.

And our next question today comes from Amit Dayal with H.C. Wainwright. Please go ahead.

Thank you. Good afternoon, everyone. With respect to the pilot capacity at infrastructure partners, when would you go to them versus using your BioFactory, PlantSpring BioFactory infrastructure that you have? Would you need it because you may be running multiple compounds at the same time or is there another reason why you would go to an infrastructure partner at the pilot stage?

Yes. Thanks, Amit, for the question. Good question. We’ve early on outlined the importance of infrastructure partners, particularly as it relates to an asset-light approach and being able to use those dollars elsewhere in development. We did put the pilot BioFactory in place and commissioned it late last year. We continue to go through that scaling process. It’s a 200-liter system. One thing that’s important for us is we’ve seen with the great interest in what we’re doing, evidenced by the number of molecules that come in as the aspect of speed to scale. So in addition to leveraging an asset-light approach on the capital side, there is also being able to have our relationship with infrastructure partners that furthers that speed to scale. And what I mean by that is really going from pilot sizes to commercial scale. And of course, that’s a function also then of the capacity required by the customer. Some of the molecules that we’re looking at in general are much higher value, more difficult, in some cases that’s defined by lower volumes. But there are other molecules that have those same characteristics that have bigger requirements than more of a commercial scale. And that’s also where infrastructure partners can play where capacity is something that could be of importance.

Thank you. And then you’ve highlighted that some customers are coming to you with requests, the development work that others who are not successful in executing. Does this imply you potentially have an opportunity to charge much higher prices of our premium sort of prices for the work you do if you are successful in delivering what the customer is looking for?

That possibility certainly exists. As we mentioned in the call earlier, we are definitely going over challenging or going after challenging molecules, typically higher value, higher margin. We pointed out since we’ve made our move into these end markets that our technology and using a multi-cellular plan approach in comparison to the single cell microbe, for example, can handle more complex molecules and more difficult challenges. So what you outlined here is certainly possible and sort of speaks to our unique technology and our model.

Perfect. Yes, that’s all I have for now. I will take my other questions offline. Thanks so much.

Thank you, Amit.

Our next question today comes from Brian Wright at ROTH Capital Partners. Please go ahead.

Thanks, good afternoon. Is there – and how to think about where 31 compounds being evaluated for that they meet the TPP and term sheet negotiations? Like is there a way to think about could – are you waiting for – are you prioritizing as far as highest financial impact is the first one to sign and then after that and like could it be a cascade thing once you get the first one you could get all four pretty quickly after? Number one. And then number two, is there any capacity constraints since there are 31 that are being – that meet your criteria? Could you do stick, not to say that you’ve always said two to four, but is there anything preventing you if the terms were attractive?

Thanks, Brian. Good questions. I mean the one thing that we’ve been really disciplined on and I’m pleased with what the team has done is taken those 95 molecules that will come in and run it through our TPP, the Target Product Profile, which is really designed for two simply – and I would describe it simply here, is twofold. And that is, one, the technical feasibility, our technology to ensure the highest degree of success for our customers. And then secondarily, the economic feasibility of it, so that sort of speaks to your question and that we want to be able to, for the shareholders drive the greatest value which would be the molecules that are able to provide the best economic return. In terms of capacity something that we are definitely managing. I think Bill has pointed out here today and we’ve said this several times, we’re very, I think, very good stewards of capital. If you look at what we’ve done over the last couple of years and certainly how we’ve managed it with our new business model and new business, our strategic direction. But we are also designed to be able to scale. So we’re committed to the two to four molecules, but certainly, we are positioned and looking ahead to be able to do more as it makes sense for the shareholders.

Great. Thank you.

And ladies and gentlemen, this concludes today’s question-and-answer session. I’d like to turn the call back over to Michael Carr for closing remarks.

Thanks to everyone for joining us on the call today. If we were not able to address all your questions on today’s call, please feel free to contact us or our Investor Relations firm, Argot Partners, would be happy to help you. Operator?

Thank you. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.