UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September~~June 30, ~~2018~~2019

o 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 filero	o	Accelerated filer	o

Non-accelerated filerý	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 6, 2018~~August 7, 2019 was ~~10,025,811.~~12,519,017.

Yield10 Bioscience, Inc.

Form 10-Q

For the Quarter Ended ~~September~~June 30, ~~2018~~2019

Table of Contents


		Page		Page
Part I. Financial Information	Part I. Financial Information	3	Part I. Financial Information	3

Item
1.	Condensed Consolidated Financial Statements (Unaudited)	3	Condensed Consolidated Financial Statements (unaudited)	3
			Condensed Consolidated Balance Sheets at June 30, 2019 and December 31, 2018	3
	Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017	3	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018	4
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2018 and 2017	4	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2019 and 2018	5
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2018 and 2017	5	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017	6	Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended June 30, 2019 and 2018	7
	Notes to the Condensed Consolidated Financial Statements	7	Notes to the Condensed Consolidated Financial Statements	9
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
3.	Quantitative and Qualitative Disclosures About Market Risk	26	Quantitative and Qualitative Disclosures About Market Risk	27
4.	Controls and Procedures	26	Controls and Procedures	27

Part II. Other Information	Part II. Other Information	27	Part II. Other Information	28

Item
1.	Legal Proceedings	27	Legal Proceedings	28
1A.	Risk Factors	27	Risk Factors	28
2.	Unregistered Sales of Equity Securities and Use of Proceeds	27	Unregistered Sales of Equity Securities and Use of Proceeds	28
3.	Defaults Upon Senior Securities	27	Defaults Upon Senior Securities	29
4.	Mine Safety Disclosures	27	Mine Safety Disclosures	29
5.	Other Information	27	Other Information	29
6.	Exhibits	28	Exhibits	29

Signatures		29
SIGNATURES			SIGNATURES	30

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, 2018			December 31, 2017			June 30, 2019			December 31, 2018
Assets
Current Assets:
Cash and cash equivalents	$	3,306		$	14,487		$	3,252		$	3,023
Short-term investments	4,491			—			998			2,746
Accounts receivable	54			54			148			94
Unbilled receivables	29			65			103			66
Prepaid expenses and other current assets	384			311			516			448
Total current assets	8,264			14,917			5,017			6,377
Restricted cash	332			317			332			332
Property and equipment, net	1,435			1,539			1,298			1,385
Right-of-use assets							4,467			4,766
Other assets	106			109			42			100
Total assets	$	10,137		$	16,882		$	11,156		$	12,960

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	39		$	76		$	55		$	117
Accrued expenses	1,770			2,299			586			680
Lease liabilities							865			844
Total current liabilities	1,809			2,375			1,506			1,641
Other liabilities, net of current portion	1,000			1,005
Lease liabilities, net of current portion							5,196			5,621
Total liabilities	2,809			3,380			6,702			7,262

Commitments and contingencies (Note 8)
Commitments and contingencies (Note 9)

Stockholders’ Equity:
Series A Convertible Preferred Stock ($0.01 par value per share); 5,000,000 shares authorized at September 30, 2018 and December 31, 2017; 0 and 1,826 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	—			818
Common stock ($0.01 par value per share); 60,000,000 shares and 40,000,000 shares authorized at September 30, 2018 and December 31, 2017, respectively; 10,011,395 and 9,089,159 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	100			91
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 June 30, 2019 and December 31, 2018; 12,494,731 and 10,025,811 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively							125			100
Additional paid-in capital	357,396			355,431			360,516			357,646
Accumulated other comprehensive loss	(105		)	(85		)	(118		)	(110		)
Accumulated deficit	(350,063		)	(342,753		)	(356,069		)	(351,938		)
Total stockholders’ equity	7,328			13,502			4,454			5,698
Total liabilities and stockholders’ equity	$	10,137		$	16,882		$	11,156		$	12,960

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,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Revenue:
Grant revenue	$	76		$	223		$	421		$	840		$	318		$	285		$	442		$	345
Total revenue	76			223			421			840			318			285			442			345

Expenses:
Research and development	1,330			1,132			3,677			3,379			1,191			1,260			2,414			2,361
General and administrative	1,407			1,073			4,132			4,215			1,025			1,456			2,211			2,732
Total expenses	2,737			2,205			7,809			7,594			2,216			2,716			4,625			5,093
Loss from operations	(2,661		)	(1,982		)	(7,388		)	(6,754		)	(1,898		)	(2,431		)	(4,183		)	(4,748		)

Other income (net):
Interest income, net	43			2			123			5
Other expense, net	(12		)	(45		)	(45		)	(95		)
Total other income (expense), net	31			(43		)	78			(90		)
Other income (expense), net													27			38			52			63
Net loss	$	(2,630	)	$	(2,025	)	$	(7,310	)	$	(6,844	)	$	(1,871	)	$	(2,393	)	$	(4,131	)	$	(4,685	)

Basic and diluted net loss per share	$	(0.26	)	$	(0.59	)	$	(0.74	)	$	(2.25	)	$	(0.15	)	$	(0.24	)	$	(0.36	)	$	(0.48	)

Number of shares used in per share calculations:
Basic & Diluted	10,010,762			3,410,847			9,901,459			3,035,352
Basic and diluted													12,494,337			9,991,460			11,504,314			9,845,902

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,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Net loss:	$	(2,630	)	$	(2,025	)	$	(7,310	)	$	(6,844	)	$	(1,871	)	$	(2,393	)	$	(4,131	)	$	(4,685	)
Other comprehensive loss
Change in unrealized gain (loss) on investments	(1		)	—			(1		)	—			—			(1		)	—			—
Change in foreign currency translation adjustment	(5		)	3			(19		)	3			(3		)	(9		)	(8		)	(14		)
Total other comprehensive income (loss)	(6		)	3			(20		)	3
Total other comprehensive loss													(3		)	(10		)	(8		)	(14		)
Comprehensive loss	$	(2,636	)	$	(2,022	)	$	(7,330	)	$	(6,841	)	$	(1,874	)	$	(2,403	)	$	(4,139	)	$	(4,699	)

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,						Six Months Ended June 30,
	2018			2017			2019			2018
Cash flows from operating activities
Net loss	$	(7,310	)	$	(6,844	)	$	(4,131	)	$	(4,685	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation	146			158			100			96
Charge for 401(k) company common stock match	91			68			49			70
Stock-based compensation	952			1,063			275			596
Non-cash lease expense							299			145
Changes in operating assets and liabilities:
Accounts receivable	29			(69		)
Due from related party	—			1
Accounts receivables							(54		)	54
Unbilled receivables	36			19			(37		)	22
Prepaid expenses and other assets	(70		)	715			(10		)	(56		)
Accounts payable	(37		)	(8		)	(62		)	(42		)
Accrued expenses	(563		)	(828		)	(102		)	(926		)
Other long-term liabilities	(5		)	(584		)
Lease liabilities							(404		)	(162		)
Net cash used for operating activities	(6,731		)	(6,309		)	(4,077		)	(4,888		)

Cash flows from investing activities
Purchase of property and equipment	(42		)	(6		)	(13		)	(34		)
Purchase of short-term investments	(9,742		)	—			(998		)	(7,986		)
Proceeds from the sale and maturity of short-term investments	5,250			—			2,746			1,500
Net cash used for investing activities	(4,534		)	(6		)
Net cash provided by (used for) investing activities							1,735			(6,520		)

Cash flows from financing activities
Proceeds from warrants exercised	124			—			—			124
Taxes paid related to net share settlement upon vesting of stock awards	(6		)	(12		)
Proceeds from registered direct offering	—			1,966
Taxes paid on employees' behalf related to vesting of stock awards							(4		)	(6		)
Proceeds from registered direct offering, net of issuance costs							2,583			—
Net cash provided by financing activities	118			1,954			2,579			118

Effect of exchange rate changes on cash, cash equivalents and restricted cash	(19		)	3			(8		)	(14		)

Net decrease in cash, cash equivalents and restricted cash	(11,166		)	(4,358		)
Net increase (decrease) in cash, cash equivalents and restricted cash							229			(11,304		)
Cash, cash equivalents and restricted cash at beginning of period	14,804			7,741			3,355			14,804
Cash, cash equivalents and restricted cash at end of period	$	3,638		$	3,383		$	3,584		$	3,500

Supplemental disclosure of non-cash information:
Reversal of deferred financing costs related to Aspire stock purchase agreement	$	—		$	450
Right-of-use assets acquired in exchange for lease liabilities							$	—		$	74

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

YIELD10 BIOSCIENCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

(In thousands, except share amounts)



	Three Months Ended June 30, 2019
	Series A Convertible
	Preferred Stock			Common Stock
	Shares	Par Value		Shares	Par Value		Additional Paid-In Capital			Accumulated other Comprehensive Loss			Accumulated Deficit			Total Stockholders' Equity
Balance, March 31, 2019	—	$	—	12,468,219	$	125	$	360,383		$	(115	)	$	(354,198	)	$	6,195
Non-cash stock-based compensation expense	—	—		—	—		113			—			—			113
Issuance of common stock for 401k match	—	—		21,860	—		24			—			—			24
Issuance of stock for restricted stock unit vesting, net of 2,449 shares withheld for employee taxes	—	—		4,652	—		(4		)	—			—			(4		)
Effect of foreign currency translation	—	—		—	—		—			(3		)	—			(3		)
Net loss	—	—		—	—		—			—			(1,871		)	(1,871		)
Balance, June 30, 2019	—	$	—	12,494,731	$	125	$	360,516		$	(118	)	$	(356,069	)	$	4,454



	Three Months Ended June 30, 2018
	Series A Convertible
	Preferred Stock			Common Stock
	Shares	Par Value		Shares	Par Value		Additional Paid-In Capital			Accumulated other Comprehensive Loss			Accumulated Deficit			Total Stockholders' Equity
Balance, March 31, 2018	—	$	—	9,968,455	$	100	$	356,667		$	(89	)	$	(345,045	)	$	11,633
Non-cash stock-based compensation expense	—	—		—	—		315			—			—			315
Issuance of common stock for 401k match	—	—		19,121	—		37			—			—			37
Issuance of stock for restricted stock unit vesting, net of 2,703 shares withheld for employee taxes	—	—		4,401	—		(6		)	—			—			(6		)
Effect of foreign currency translation and unrealized gain on investments	—	—		—	—		—			(10		)	—			(10		)
Net loss	—	—		—	—		—			—			(2,393		)	(2,393		)
Balance, June 30, 2018	—	$	—	9,991,977	$	100	$	357,013		$	(99	)	$	(347,438	)	$	9,576

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

YIELD10 BIOSCIENCE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

(In thousands, except share amounts)



	Six Months Ended June 30, 2019
	Series A Convertible
	Preferred Stock			Common Stock
	Shares	Par Value		Shares	Par Value		Additional Paid-In Capital			Accumulated other Comprehensive Loss			Accumulated Deficit			Total Stockholders' Equity
Balance, December 31, 2018	—	$	—	10,025,811	$	100	$	357,646		$	(110	)	$	(351,938	)	$	5,698
Non-cash stock-based compensation expense	—	—		—	—		275			—			—			275
Issuance of common stock for 401k match	—	—		42,606	—		41			—			—			41
Issuance of stock for restricted stock unit vesting, net of 2,449 shares withheld for employee taxes	—	—		4,652	—		(4		)	—			—			(4		)
Issuance of common stock for registered direct offering, net of $349 offering costs	—	—		2,421,662	25		2,558			—			—			2,583
Effect of foreign currency translation	—	—		—	—		—			(8		)	—			(8		)
Net loss	—	—		—	—		—			—			(4,131		)	(4,131		)
Balance, June 30, 2019	—	$	—	12,494,731	$	125	$	360,516		$	(118	)	$	(356,069	)	$	4,454



	Six Months Ended June 30, 2018
	Series A Convertible
	Preferred Stock					Common Stock
	Shares		Par Value			Shares	Par Value		Additional Paid-In Capital			Accumulated other Comprehensive Loss			Accumulated Deficit			Total Stockholders' Equity
Balance, December 31, 2017	1,826		$	818		9,089,159	$	91	$	355,431		$	(85	)	$	(342,753	)	$	13,502
Non-cash stock-based compensation expense	—		—			—	—		596			—			—			596
Issuance of common stock for 401k match	—		—			31,760	—		59			—			—			59
Issuance of stock for restricted stock unit vesting, net of 2,703 shares withheld for employee taxes	—		—			4,401	—		(6		)	—			—			(6		)
Issuance of common stock upon conversion of Series A Convertible Preferred Stock	(1,826	)	(818		)	811,557	8		810			—			—			—
Issuance of common stock upon exercise of Class B warrants	—		—			55,100	1		123			—			—			124
Effect of foreign currency translation and unrealized gain on investments	—		—			—	—		—			(14		)	—			(14		)
Net loss	—		—			—	—		—			—			(4,685		)	(4,685		)
Balance, June 30, 2018	—		$	—		9,991,977	$	100	$	357,013		$	(99	)	$	(347,438	)	$	9,576

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

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 Bioscience," "Yield10," or the "Company")~~ is an agricultural bioscience company ~~focusing on~~which uses its "Trait Factory" to develop high value seed traits for the ~~development of new technologies~~agriculture and food industries. Specifically, Yield10 plans to efficiently develop superior gene traits for the major grain crops corn, soybean, canola, wheat and rice that will enable step-change increases in crop yield of at least 10-20 percent. While maintaining its focus on the development of novel yield traits for key crops based on a licensing model, the Company has recently begun to ~~enhance~~execute the second part of its strategy which is to develop independent business opportunities for Yield10 in the specialty oils and niche crop space using the oilseed Camelina. The target of this effort is sustainable business solutions to support agriculture, global food ~~security.~~production and other specialty applications. Yield10 brings a unique history, skill set, and tools captured in its Gene Ranking Artificial Intelligence Network ("GRAIN") platform for developing advanced crop traits and increasing the concentration of specific biochemicals of commercial interest in crops. The ~~Company considers 10-20 percent increases in crop yield~~Company's plan is to ~~be step-change increases. According to~~develop a ~~United Nations report, food production must be increased by over 70 percent in~~source of revenue from funded research and development collaborations for traits, products and crops not being directly pursued internally. While there is no guarantee of success, the next 35 years to feed the growing global population, which is expected to increase from 7 billion to more than 9.6 billion by 2050. During that time period, there will be a reduction in available arable land as a result of infrastructure growth and increased pressure on scarce water resources. Harvestable food production per acre and per growing season must be increased to meet this demand. At the same time, in light of the increasing focus on health and wellness, food safety and sustainability in developed countries, the Company anticipates a rise in demand for new varieties of food and food ingredients with improved nutritional properties. Further, concerns about food safety have led to the concept of “seed to plate,” or "farm to fork," with a focus on stringent quality control along the entire value chain. If this concept takes hold with consumers, it is likely to require identity preservation from seed to harvest and involve contract farming. This concept has been initially implemented in agricultural biotechnology, in products such as high oleic canola and soybean. Consumer demand for identity preserved specialty ingredients is also expected to rise, and the Company believes that Yield10's crop yield technologies and crop genome-editing platform could be useful in this emerging field.

~~The~~ Company is currently ~~progressing~~engaged in a range of discussions with third parties on different crops, traits and products in the ~~development of its lead yield trait genes in canola, soybean, rice~~feed, food and ~~wheat to provide step-change yield solutions for enhancing global food security.~~pharmaceutical sectors. Yield10 Bioscience is headquartered in Woburn, Massachusetts and has an ~~additional agricultural science facility with greenhouses~~oilseed development Center of Excellence in Saskatoon, Saskatchewan, Canada.

The accompanying unaudited condensed consolidated financial statements 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 a fair ~~statement~~statements of the financial position and results of operations for the interim periods ended ~~September~~June 30, 2019 and June 30, 2018. The Company adopted Accounting Standards Update ("ASU") No. 2016-02, Leases, ("Topic 842") on January 1, 2019 using a modified retrospective approach. As a result, the Company's unaudited condensed consolidated balance sheet at December 31, 2018 and its unaudited condensed consolidated statements of operations, comprehensive loss, cash flows and stockholders' equity for the three and six months ended June 30, 2018, ~~and September 30, 2017.~~included herein, have been adjusted to incorporate the guidance of Topic 842. See Note 8.

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, ~~2017,~~2018, which are contained in the Company’s Annual Report on Form 10-K filed with the SEC on March ~~12, 2018.~~28, 2019.

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 six months ended June 30, 2019.

As of ~~September~~June 30, ~~2018,~~2019, the Company held unrestricted cash, cash equivalents and short-term investments of ~~$7,797.~~$4,250. The Company follows the guidance of ~~ASC~~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 and meet its obligations into the ~~third~~fourth quarter of 2019. 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 has evaluated the guidance of ASC Topic 205-40 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. 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 ~~grant~~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, ~~or if the Company is unsuccessful in entering into collaborative arrangements for further research,~~ management will 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 and equipment.~~property. Based on its cash forecast, management has determined that the Company's present capital resources ~~are unlikely to~~will not be sufficient to fund its planned operations for the

twelve months from the date that ~~the~~these financial statements are ~~issued,~~filed, which raises substantial doubt about the Company's ability to continue as a going concern.

If the Company issues equity or debt securities to raise additional funds, (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 of 1986, as amended, 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.

2. ACCOUNTING POLICIES

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 ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, the Company adopted the following new accounting guidance.

In ~~May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606).~~ The ASU is the result of a joint project by the FASB and the International Accounting Standards Board ("IASB") to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards ("IFRS") that would: remove inconsistencies and weaknesses in the treatment of this area between GAAP and IFRS, provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices across entities, jurisdictions, industries, and capital markets, improve disclosure requirements and resulting financial statements, and simplify the presentation of financial statements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the new standard effective January 1, 2018 using the modified retrospective method and determined that its grant revenue, which is its sole source of revenue, does not fall within the guidance of the new standard. The Company will review future customer revenue agreements against the guidance provided by ASU No. 2014-09 to ensure that revenue is recorded appropriately.

~~In January~~February 2016, the FASB issued ASU No. ~~2016-01,~~ ~~Financial Instruments - Overall (Subtopic 825-10): Recognition~~2016-02, which requires lessees to recognize most leases on their balance sheet as right-of-use assets and ~~Measurement of Financial Assets and Financial Liabilities~~. This new standard amended certain aspects of accounting and disclosure requirements for financial instruments, including the requirement that equity investments with readily determinable fair values are to be measured at fair value with any changes in fair value recognized in a company's statements of operations. Prior to adoption of ASU 2016-01, companies recognized changes in fair value in accumulated other comprehensive income (loss), net. Equity investments that do not have readily determinable fair values may be measured at fair value or at cost minus impairment adjusted for changes in observable prices. In addition, a valuation allowance should be evaluated on deferred tax assets related to available-for-sale debt securities in combination with other deferred tax assets. The Company adopted this new standard on January 1, 2018, using the modified retrospective method, and determined that it did not have a material impact on the Company's financial statements.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~. The new standard clarifies certain aspects of the statement of cash flows, including the classification of debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees and beneficial interests in securitization transactions. The new standard also clarifies that an entity should determine each separately identifiable source or use within the cash receipts and cash payments on the basis of the nature of the underlying cash flows. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use, the appropriate classification should depend on the activity that is likely to be the predominant source or use of cash flows for the item. The Company adopted this new standard on January 1, 2018 and determined that it did not have a material impact on the Company's financial statements.

~~In October 2016, the FASB issued ASU No. 2016-16,~~ ~~Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other Than Inventory~~. This new standard eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the income tax consequences from the intra-entity transfer of an asset other than inventory and associated changes

to deferred taxes will be recognized when the transfer occurs. The Company adopted this new standard on January 1, 2018 and determined that it did not have a material impact on the Company's financial statements.

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash~~ ~~("ASU 2016-18"). The new standard provides uniform guidance for the classification and presentation of changes in restricted cash on the statement of cash flows under Topic 230,~~ ~~Statement of Cash Flows~~. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash. Therefore, amounts included in restricted cash should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for the Company for its fiscal year beginning January 1, 2018, including interim periods, and requires a retrospective presentation of each period presented. As a result, the Company's condensed consolidated statement of cash flows for the nine months ended September 30, 2018 and September 30, 2017 have been prepared in accordance with the new requirements of ASU 2016-18.

lease liabilities. In July 2018, the FASB issued ASU ~~2018-07,~~ No. 2018-10, "~~Stock-based Compensation:~~Codification Improvements to ~~Nonemployee Share-based Payment Accounting~~Topic 842, Leases" ("ASU 2018-10"), which ~~amends the existing accounting standards for share-based payments~~provided narrow amendments to ~~nonemployees. ASU 2018-07 aligns much~~clarify how to apply certain aspects of the new lease standard, and ASU No. 2018-11, "Leases (Topic 842 - Targeted Improvements)" ("ASU 2018-11"), which addressed implementation issues related to the new lease standard. The new guidance ~~on measuring~~was effective for annual reporting periods beginning after December 15, 2018 and ~~classifying nonemployee awards with that of awards to employees.~~interim periods within those fiscal years. Under the new ~~guidance, the measurement of nonemployee equity awards is fixed on the grant date. Entities~~standard, disclosures are required to enable users of financial statements to better assess the amount, timing, and uncertainty of cash flows arising from leases. Topic 842 required filers to adopt the new standard using a modified retrospective approach under either of two transition methods; (1) to apply ~~ASU 2018-07 by recognizing a cumulative effect adjustment to retained earnings as of~~the new lease requirements at the beginning of the ~~annual~~earliest period ~~of adoption. The ASU becomes~~presented, or (2) to apply the new lease requirements at the effective ~~during the first quarter of 2019 with early adoption permitted.~~date. The Company adopted ~~ASU 2018-07~~the new standard on ~~July~~January 1, 2019 and elected to adjust its 2018 ~~and determined that it did not have~~financial statements in order to make them comparable to its 2019 financial statements. Adoption of Topic 842 had a material impact on the Company's previously reported 2018 financial statements.

~~Other than the new standards described above, there have been no material changes in accounting policies since the Company’s fiscal year ended December 31, 2017, as described in~~ See Note ~~2 to the consolidated financial statements included in its Annual Report on Form 10-K for the year then ended.~~8.

New pronouncements that are not yet effective but may impact the Company's financial statements in the future are described below.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842).~~ The new standard requires that all lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about its leasing arrangements. The new standard will be adopted using a modified retrospective approach to each lease that existed as of the beginning of the earliest comparative period presented in the financial statements, as well as for leases entered into after that date. Employing the modified retrospective approach will result in a cumulative adjustment to the Company's opening retained earnings on January 1, 2019, which is the effective date for adoption of the new standard by the Company. The Company's balance sheet after adoption of the standard will reflect right-of-use assets and lease liabilities for those leases that are accounted for under the new guidance. The Company is in the process of evaluating the impact of this new guidance.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ~~new~~FASB has subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2020. These standards require that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, this standard changes the impairment model for most financial assets and certain other instruments. Under the new standard, entities holding financial assets and net investment in leases that are not accounted for at fair value through net income arenow requires allowances to be ~~presented at the net amount expected to be collected. An allowance for credit losses will be a valuation account that will be deducted from~~recorded instead of reducing the amortized cost ~~basis~~ of the ~~financial asset~~investment. These standards limit the amount of credit losses to ~~present~~be recognized for available-for-sale debt securities to the ~~net~~amount by which carrying value atexceeds fair value and requires the ~~amount expected~~reversal of previously recognized credit losses if fair value increases. The Company is still evaluating the potential impact of the standard on its consolidated financial position, results of operations and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to ~~be collected~~the Disclosure Requirements for Fair Value Measurement. This standard modifies certain disclosure requirements on ~~the financial asset. The new standard~~fair value measurements and will bebecome effective for the Company on January 1, 2020. The Company is still evaluating the potential impact of the standard on its consolidated financial position and results of operations and related disclosures.

In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This standard makes targeted improvements for collaborative arrangements as follows:

Clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606, Revenue from Contracts with Customers, when the collaborative arrangement participant is a customer in the ~~process~~context of a unit of account. In those situations, the guidance in ASC 606 should be applied, including recognition, measurement, presentation and disclosure requirements;

Adds unit-of-account guidance to ASC 808, Collaborative Arrangements, to align with the guidance in ASC 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of ASC 606; and

Precludes a company from presenting transactions with collaborative arrangement participants that are not directly related to sales to third parties with revenue recognized under ASC 606 if the collaborative arrangement participant is not a customer.

This standard will become effective for the Company on January 1, 2020; however, early adoption is permitted. A retrospective transition approach is required for either all contracts or only for contracts that are not completed at the date of initial application of ASC 606, with a cumulative adjustment to opening retained earnings, as of January 1, 2019. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial position, results of ~~this new guidance.~~operations and related disclosures.

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~~wholly owned subsidiaries. All intercompany transactions were eliminated, including transactions with its Canadian subsidiary, Metabolix Oilseeds, Inc.

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 ~~condensed consolidated balance sheets~~Unaudited Condensed Consolidated Balance Sheets included herein:


	September 30, 2018		December 31, 2017		June 30, 2019		December 31, 2018
Cash and cash equivalents	$	3,306	$	14,487	$	3,252	$	3,023
Restricted cash	332		317		332		332
Total cash, cash equivalents and restricted cash	$	3,638	$	14,804	$	3,584	$	3,355

Amounts included in restricted cash represent those required to be set aside by contractual agreement. Restricted cash of $332 at ~~September~~June 30, ~~2018~~2019 and ~~$317 at~~ December 31, ~~2017 primarily~~2018 consists of funds held in connection with the Company's lease agreement for its Woburn, Massachusetts facility.

Investments

The Company considers all 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. All other investments are classified as long-term. The Company held no long-term investments at ~~September~~June 30, ~~2018~~2019 and ~~no short or long-term investments at~~ December 31, ~~2017.~~2018.

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.

~~Restructuring~~

The Company records estimated restructuring charges for employee severance and contract termination costs as a current period expense as those costs become contractually fixed, probable and estimable. Obligations associated with these charges are reduced or adjusted as payments are made or the Company's estimates are revised.

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

Foreign denominated assets and liabilities of the Company's wholly owned foreign subsidiaries 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 or substantially sells 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.

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 the deferred tax asset to a level which, more likely than not, will be realized.

In December 2017, the Tax Cuts and Jobs Act, or the Tax Act ("TCJA"), was signed into law. Among other things, the Tax Act permanently lowers the corporate federal income tax rate to 21% effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate federal income tax rate, GAAP requires companies to revalue their deferred tax assets and deferred tax liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. The Company's preliminary estimate of the TCJA and the remeasurement of its deferred tax assets and liabilities is subject to change as additional information becomes available, but no later than one year from the enactment of the TCJA.

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 equivalents 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~~June 30, ~~2018, 95%~~2019, 100% of the Company's total accounts and unbilled receivables of ~~$83~~$251 are due from ~~the Company's~~U.S. government ~~grant with the Department of Energy ("DOE") or from its DOE sub-award contract with Michigan State University ("MSU").~~grants.

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. 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, ~~there is no difference in~~ basic and dilutive loss per ~~share.~~share are the same. Common stock equivalents include stock options, restricted stock awards and warrants.

On May 26, 2017, the Company effected a 1-for-10 reverse stock split of its common stock. The calculation of basic and diluted net loss per share, as presented in the accompanying condensed consolidated statement of operations, have been determined based on a retroactive adjustment of weighted average shares outstanding for all periods presented.

The number of shares of potentially dilutive common stock presented on a weighted average basis, related to options, restricted stock units and warrants (prior to consideration of the treasury stock method) that were excluded from the calculation of dilutive shares since the inclusion of such shares would be anti-dilutive for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~September~~June 30, ~~2017,~~2018, respectively, are shown below. Issued and outstanding warrants shown in the table below are described in greater detail in Note ~~10,~~11, contained herein.


	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017	2019	2018	2019	2018
Options	1,661,853	626,263	1,163,493	621,030	2,027,870	1,117,827	1,874,968	910,427
Restricted stock units	7,101	14,367	9,461	16,770	—	7,101	3,531	10,660
Warrants	7,433,084	920,655	7,433,084	571,017	7,368,254	10,597,486	7,400,490	10,597,486
Total	9,102,038	1,561,285	8,606,038	1,208,817	9,396,124	11,722,414	9,278,989	11,518,573

4. INVESTMENTS

Investments consist of the following:

~~4. INVESTMENTS~~

~~The Company's investments consist of the following:~~


	Accumulated Cost at September 30, 2018		Unrealized					Market Value at September 30, 2018		Accumulated Cost		Unrealized				Market Value
	Accumulated Cost at September 30, 2018		Gain		(Loss)			Market Value at September 30, 2018		Accumulated Cost						Market Value
June 30, 2019										Accumulated Cost		Gain		(Loss)		Market Value
Short-term investments										Accumulated Cost						Market Value
Government securities	$	4,492	$	—	$	(1	)	$	4,491	$	998	$	—	$	—	$	998
Total	$	4,492	$	—	$	(1	)	$	4,491	$	998	$	—	$	—	$	998



	Accumulated Cost		Unrealized				Market Value
December 31, 2018	Accumulated Cost		Gain		(Loss)		Market Value
Short-term investments
Government securities	$	2,746	$	—	$	—	$	2,746
Total	$	2,746	$	—	$	—	$	2,746

There were no long-term investments at June 30, 2019, and December 31, 2018.

5. FAIR VALUE MEASUREMENTS

The Company has certain financial assets recorded at fair value which have been classified as either Level 1 or 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. 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. At ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, the Company did not own any Level 3 financial assets.

The Company’s financial assets classified as Level 2 at ~~September~~June 30, 2019 and December 31, 2018, were initially valued at the transaction price and subsequently valued utilizing ~~third party~~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~~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~~June 30, 2019 and December 31, 2018.

The tables below present information about the Company’s assets that are measured at fair value on a recurring basis as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018 and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value.


	Fair value measurements at reporting date using								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		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, 2018		(Level 1)		(Level 2)		(Level 3)		June 30, 2019
Cash equivalents:
Money market funds	$	2,623	$	—	$	—	$	2,623	$	2,371	$	—	$	—	$	2,371
Short-term investments:
U.S. government and agency securities	—		4,491		—		4,491		—		998		—		998
Total	$	2,623	$	4,491	$	—	$	7,114	$	2,371	$	998	$	—	$	3,369


	Fair value measurements at reporting date using								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		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, 2017		(Level 1)		(Level 2)		(Level 3)		December 31, 2018
Cash equivalents:
Money market funds	$	11,025	$	—	$	—	$	11,025	$	2,663	$	—	$	—	$	2,663
Short-term investments:
U.S. government agency securities									—		2,746		—		2,746
Total	$	11,025	$	—	$	—	$	11,025	$	2,663	$	2,746	$	—	$	5,409

There were no transfers of financial assets between category levels for the three and six months ended June 30, 2019.

The Company owns 648,149 shares of Series A Redeemable Convertible Preferred Stock of Tepha, Inc. ("Tepha"), a privately held medical device company located in Lexington, Massachusetts, that is engaged in the development of medical device products that restore, maintain, or improve tissue function. The Company received the preferred shares from Tepha during 2002 in connection with a technology sublicense agreement that was later terminated during 2016. The preferred shares owned by the Company represent less than one percent of Tepha's current outstanding common shares on a fully diluted basis and were fully written off through an impairment charge during 2005 prior to Tepha initiating commercial product sales.

6. ACCRUED EXPENSES

Accrued expenses consisted of the following at:

September 30,
2018 December 31,
2017
Employee compensation and benefits $ 492
$ 646
Leased facilities 740
585
Commercial manufacturing —
489
Professional services 248
335
Other 290
244
Total accrued expenses $ 1,770
$ 2,299

~~Accrued commercial manufacturing expense at December 31, 2017, is related to the Company's terminated biopolymer manufacturing contract obligation. See Note 11.~~



	June 30, 2019		December 31, 2018
Employee compensation and benefits	$	217	$	98
Leased facilities	36		50
Professional services	169		234
Other	164		298
Total accrued expenses	$	586	$	680

7. STOCK-BASED COMPENSATION

~~2018 Stock Option and Incentive Plan~~

On May 23, 2018, the Company held its 2018 annual meeting of stockholders (the "Annual Meeting"), at which the stockholders approved the adoption of the Company's 2018 Stock Option and Incentive Plan ("2018 Stock Plan"). The 2018 Stock Plan reserves for issuance 1,300,000 shares of the Company's common stock for grants of incentive stock options, nonqualified stock options, stock grants and stock-based awards. Shares available under the 2018 Stock Plan will be increased on the first day of January 2019 and 2020 in an amount equal to 5% of the outstanding shares of common stock on the day prior to the increase in each respective year or such smaller number of shares of common stock as determined by the Board of Directors.

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 ~~$356~~$113 and ~~$952~~$275 for the three and ~~nine~~six months ended ~~September~~June 30, 2019. During the three and six months ended June 30, 2018, ~~respectively. The~~the Company recognized $315 and $596 of stock-based compensation expense, ~~related to stock awards of $400 and $1,063 for the three and nine months ended September 30, 2017,~~ respectively. At ~~September~~June 30, ~~2018,~~2019, there was approximately ~~$1,374~~$1,461 of pre-tax stock-based compensation expense related to unvested awards not yet recognized.

The compensation expense related to unvested stock options is expected to be recognized over a remaining weighted average period of ~~3.10~~3.35 years.

Stock Options

A summary of option activity for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 is as follows:


	Number of Shares		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2017	702,033		$	16.21
Outstanding at December 31, 2018					1,745,037		$	6.38
Granted	1,006,929		$	1.64	710,275		$	0.91
Exercised	—		—		—		—
Forfeited	(2,041	)	$	6.17	(7,500	)	$	1.43
Expired	(3,727	)	$	487.57	(1,730	)	$	287.80
Outstanding at September 30, 2018	1,703,194		$	6.58
Outstanding at June 30, 2019					2,446,082		$	4.61

Options vested and expected to vest at September 30, 2018	1,703,194		$	6.58
Options exercisable at September 30, 2018	678,060		$	13.40
Options vested and expected to vest at June 30, 2019					2,446,082		$	4.61
Options exercisable at June 30, 2019					1,037,393		$	9.12

Restricted Stock Units

Restricted Stock Units ("RSUs") awarded to employees generally vest in four equal annual installments beginning one year after the date of grant, subject to service conditions. RSUs awarded to non-employee directors generally vest one year after the date of grant, with the exception of RSUs granted in lieu of cash compensation, which vest immediately. The Company records stock compensation expense for ~~RSUs~~restricted stock units ("RSUs") on a ~~straight line~~straight-line basis over their requisite service period, which approximates the vesting period, based on each RSU's award date market value.

~~The Company pays minimum required income tax withholding associated with RSUs for its employees.~~ As ~~the~~ 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 (unless the employee makes other arrangements for payment of the tax withholding) from the common stock issuable at the vest date. The Company then pays the minimum required income tax for the employees. During the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~September~~June 30, ~~2017,~~2018, the Company paid $6$4 and ~~$12,~~$6, respectively, for income tax withholdings associated with RSUs ~~that vested~~ during these periods.

A summary of RSU activity for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 is as follows:

Number of RSUs Weighted Average Remaining Contractual Life (years)
Outstanding at December 31, 2017 14,367

Awarded —

Common stock issued upon vesting (7,104 )
Forfeited (162 )
Outstanding at September 30, 2018 7,101
0.50

Weighted average remaining recognition period 0.50



	Number of RSUs		Weighted Average Remaining Contractual Life (years)
Outstanding at December 31, 2018	7,101
Awarded	—
Common stock issued upon vesting	(7,101	)
Forfeited	—
Outstanding at June 30, 2019	—		—

As of June 30, 2019, the Company had no remaining unvested RSUs outstanding.

8. ~~COMMITMENTS AND CONTINGENCIES~~LEASES

New Lease Accounting

Topic 842 is effective for annual reporting periods beginning after December 15, 2018 and for interim periods within those fiscal years. The Company adopted Topic 842 on January 1, 2019 and elected to apply the new lease accounting requirements to its financial statements beginning on January 1, 2018 (the earliest period presented in its comparative financial statements), using a modified retrospective approach. The new guidance also requires additional financial statement disclosures to enable users of financial statements to better assess the amount, timing, and uncertainty of cash flows arising from leases. Topic 842 replaced the previous lease accounting and reporting guidance of ASC Topic 840, Leases, ("ASC Topic 840") and requires lessees to reflect a right-of-use asset and a lease liability on their balance sheet for leases with terms of more than twelve months.

The Company's enactment of Topic 842, effective on January 1, 2019, resulted in it recording right-of-use assets and lease liabilities for real estate and equipment leases of $4,766 and $6,465, respectively, as of that date. The Company ~~rents~~also eliminated $1,005 in lease incentive obligations from its ~~facilities~~balance sheet on January 1, 2019 as a result of the discontinuation of the previous guidance under ~~operating leases, which expire at various dates through~~ASC Topic 840. Application of the new pronouncement to the Company's 2018 comparative year had a material effect on its previously issued 2018 financial statements. The Company's condensed consolidated balance sheet as of December ~~2026. Rent expense~~31, 2018 and its condensed consolidated statements of operations, comprehensive income (loss), cash flows and stockholders' equity for the three and ~~nine~~six months ended ~~September~~June 30, 2018, ~~was $486~~included herein, have been adjusted to incorporate the guidance of Topic 842.

Under Topic 842, leases are classified as either operating or finance leases, with classification based on criteria similar to previous lease accounting guidance, but without the explicit quantitative determining factors used to establish a lease as either a capital or an operating lease. The Company reviewed its 2018 transitional leases and ~~$998, respectively. Rent~~its currently active leases falling within the scope of Topic 842 and determined that all of these leases met the criteria for classification as operating leases.

Lease liabilities are recorded as of their commencement date and are 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. Right-of-use assets are equal to the lease liability with adjustments made, as necessary, for lease prepayments, lease accruals, initial direct costs, lessor lease incentives and any lease impairments that may be present. Topic 842 further requires that lease expense for operating leases be calculated on a straight-line basis and reported as a single operating expense within income from operations.

Topic 842 provides a number of transitional practical expedients designed to assist lessees with initial implementation. The Company made the ~~three~~following elections in applying Topic 842.

Short-term lease exception. Active leases as of January 1, 2018, and ~~nine~~new leases entered into thereafter with terms of twelve months ~~ended September~~or less were and will be excluded from accounting under Topic 842.

Package of practical expedients. These expedients, which must be elected in their entirety, permit a company to continue its historical accounting during the transition period for contractual arrangements containing embedded leases in lieu of performing a re-evaluation of the agreements in order to separate lease and non-lease components. The package of expedients also permit a company to maintain its previous accounting classification for transitional leases as either operating or finance leases without reassessment under the new guidance. Lastly, the package of practical expedients does not require reassessment and capitalization of initial direct costs incurred to establish a lease.

In applying the guidance of Topic 842 to the 2018 transition period, the Company did not elect the available hindsight expedient with respect to the determination of lease terms used in the calculation of lease liabilities and right-of-use assets by considering the actual outcome of lease renewals.

Maturity Analysis of Lease Liabilities

At June 30, ~~2017, was $252 and $700, respectively.~~

~~At September 30, 2018,~~2019, the Company's ~~future minimum payments required under operating leases are~~lease liabilities will mature as follows:


Year ended December 31,	Minimum lease payments		Undiscounted Cash Flows
2018 (October to December)	$	242
2019	970
2019 (July to December)			$	637
2020	779		1,080
2021	654		939
2022	676		969
2023			998
Thereafter	2,832		3,082
Total	$	6,153
Total undiscounted future lease payments			7,705
Discount			(1,644		)
Total lease liabilities			$	6,061
Short-term lease liabilities			$	865
Long-term lease liabilities			$	5,196

At June 30, 2019, real estate and equipment leases represent approximately 99% and 1%, of the Company's lease liabilities, respectively.

Quantitative Disclosure of Lease ~~Commitments~~Costs (unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Lease cost:
Operating lease cost	$	257		$	272		$	516		$	538
Short-term lease cost	108			139			254			257
Sublease income	(134		)	(113		)	(258		)	(232		)
Total lease cost, net	$	231		$	298		$	512		$	563

Other information as of:							June 30, 2019			December 31, 2018
Weighted-average remaining lease term (years)							7.1			7.4
Weighted-average discount rate							6.75%			6.75%

Impact of Topic 842 Adoption on Reported Results

Adoption of the new lease standard impacted the Company's 2018 previously reported financial statements as follows (unaudited):



	Three Months Ended June 30, 2018
	As Reported			New Lease Standard Adjustment			As Adjusted
Condensed Consolidated Statements of Income:
Revenue	$	285		$	—		$	285
Expenses	2,705			11			2,716
Other Income (expense)	30			8			38
Net loss	(2,390		)	(3		)	(2,393		)
Basic and diluted net loss per share	(0.24		)	—			(0.24		)



	Six Months Ended June 30, 2018
	As Reported			New Lease Standard Adjustment			As Adjusted
Condensed Consolidated Statements of Income:
Revenue	$	345		$	—		$	345
Expenses	5,072			21			5,093
Other Income (expense)	47			16			63
Net loss	(4,680		)	(5		)	(4,685		)
Basic and diluted net loss per share	(0.48		)	—			(0.48		)



	June 30, 2018
	As Reported		New Lease Standard Adjustment			As Adjusted
Condensed Consolidated Balance Sheet:
Current assets	$	10,104	$	—		$	10,104
Restricted cash	332		—			332
Property and equipment, net	1,477		—			1,477
Right-of-use assets	—		5,209			5,209
Other assets	98		—			98
Total assets	$	12,011	$	5,209		$	17,220

Liabilities and Stockholders' Equity:
Accounts payable	$	34	$	—		$	34
Accrued expenses	1,455		(584		)	871
Short-term lease liabilities	—		739			739
Lease incentive obligation, net of current portion	941		(941		)	—
Long-term lease liabilities	—		6,000			6,000
Stockholders' equity	9,581		(5		)	9,576
Total liabilities and stockholders' equity	$	12,011	$	5,209		$	17,220



	December 31, 2018
	As Reported		New Lease Standard Adjustment			As Adjusted
Condensed Consolidated Balance Sheet:
Current assets	$	6,377	$	—		$	6,377
Restricted cash	332		—			332
Property and equipment, net	1,385		—			1,385
Right-of-use assets	—		4,766			4,766
Other assets	100		—			100
Total assets	$	8,194	$	4,766		$	12,960

Liabilities and Stockholders' Equity:
Accounts payable	$	117	$	—		$	117
Accrued expenses	1,429		(749		)	680
Short-term lease liabilities	—		844			844
Lease incentive obligation, net of current portion	935		(935		)	—
Long-term lease liabilities	—		5,621			5,621
Stockholders' equity	5,713		(15		)	5,698
Total liabilities and stockholders' equity	$	8,194	$	4,766		$	12,960

Real Estate Leases

During 2016, the Company entered into a lease agreement for its headquarters, pursuant to which the Company leases approximately 29,622 square feet of office and research and development space located at 19 Presidential Way, Woburn, Massachusetts. The lease began on June 1, 2016 and will end on November 30, 2026. The lease agreement does not include any options for the early termination or the extension of the lease. The Company provided the landlord with a security deposit in the form of a letter of credit in the amount of ~~$307 which is included within restricted cash in the Company's condensed consolidated balance sheets included herein.~~$307. Pursuant to the lease, the Company will also pay certain taxes and operating costs associated with the premises ~~during~~throughout the term of the lease. During the buildout of the rented space, the landlord paid $889 for tenant improvements to the facility and an additional $444 for tenant improvements that result in increased rental payments by the Company. ~~The current and non-current portions~~Upon the adoption of Topic 842, these improvements were recorded as a reduction in the valulation of the lease incentive obligations related to the landlord’s contributions toward the cost of tenant improvements are recorded within accrued expenses and other liabilities, net of current portion, respectively, in the Company's condensed consolidated balance sheets contained herein.right-of-use asset.

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 as a result of its strategic shift to Yield10 Bioscience and the related restructuring of its operations.~~needs. The sublease ~~term~~ is coterminous with the Company's master ~~lease.~~lease, and CJ ~~pays~~will pay rent and operating expenses equal to approximately one-third of the amounts payable to the landlord by the Company, as adjusted from ~~time-to-time~~time to time in accordance with the terms of the master lease. ~~Total~~Future CJ sublease payments have not been presented as an offset to total undiscounted future ~~minimum operating~~ lease payments of ~~$6,153~~$7,705 shown ~~above are net of~~in the lease maturity analysis table above. CJ ~~sublease payments. CJ has~~ provided the Company with a security deposit of $103 in the form of an irrevocable letter of credit.

The Company also leases approximately 13,702 square feet of office and laboratory space at 650 Suffolk Street, Lowell, Massachusetts. The lease for this facility, as amended, expires in May 2020. The terms of the agreement provide the Company with a five-year option to extend the lease provided written notice is given prior to August 31, 2019. The Company does not intend to elect this option. During July 2018, the Company discontinued further use of the Lowell space, and as a result, the Company recorded a non-cash lease exit charge of ~~$249 during~~$255 for the ~~three months ended September 30, 2018 for this~~ facility in accordance with ASC Topic 420-10, Exit or Disposal Obligations. The ~~current and long-term portions of the associated lease liability for this~~ exit charge ~~are included within accrued expenses and other liabilities, net of current portion,~~was recorded as an increase in the Company's ~~condensed consolidated balance sheets included herein.~~lease expense and a reduction to the associated right-of-use asset. The Company will continue to make monthly rental payments for the Lowell facility through its expiration in May 2020.

The Company's ~~wholly owned~~wholly-owned subsidiary, Metabolix Oilseeds, Inc. ("MOI"), located in Saskatoon, Saskatchewan, Canada, leases approximately ~~4,100~~6,200 square feet of office, laboratory and greenhouse ~~space.~~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 ~~its various~~these facilities expire ~~between September 30, 2018 and~~on various dates through May ~~31,~~ 2020. ~~Leases that were set to expire on September 30, 2018 are in the process of being amended to extend their termination dates.~~

9. COMMITMENTS AND CONTINGENCIES

Litigation

From ~~time-to-time,~~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

As of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, the Company did not have significant liabilities recorded for guarantees.

The Company enters into indemnification provisions under various agreements with other companies in the ordinary course of business, typically with business partners ~~contractors,~~ and ~~customers.~~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 Bioscience 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~~June 30, ~~2018~~2019 and December 31, ~~2017.~~2018.

9.10. GEOGRAPHIC INFORMATION

The geographic distribution of the Company’s grant revenues and long-lived assets are summarized in the tables below:


	U.S.		Canada		Eliminations			Total		U.S.		Canada		Eliminations			Total
Three Months Ended September 30, 2018:
Three Months Ended June 30, 2019:
Grant revenue from external customers	$	76	$	—	$	—		$	76	$	318	$	—	$	—		$	318
Inter-geographic revenues	—		410		(410		)	—		—		499		(499		)	—
Revenues	$	76	$	410	$	(410	)	$	76	$	318	$	499	$	(499	)	$	318

Three Months Ended September 30, 2017:
Three Months Ended June 30, 2018:
Grant revenue from external customers	$	223	$	—	$	—		$	223	$	285	$	—	$	—		$	285
Inter-geographic revenues	—		324		(324		)	—		—		372		(372		)	—
Revenues	$	223	$	324	$	(324	)	$	223	$	285	$	372	$	(372	)	$	285

Nine Months Ended September 30, 2018:
Grant revenue from external customers	$	421	$	—	$	—		$	421
Six Months Ended June 30, 2019:
Net revenues from external customers										$	442	$	—	$	—		$	442
Inter-geographic revenues	—		1,050		(1,050		)	—		—		836		(836		)	—
Revenues	$	421	$	1,050	$	(1,050	)	$	421
Net revenues										$	442	$	836	$	(836	)	$	442

Nine Months Ended September 30, 2017:
Grant revenue from external customers	$	840	$	—	$	—		$	840
Six Months Ended June 30, 2018:
Net revenues from external customers										$	345	$	—	$	—		$	345
Inter-geographic revenues	—		857		(857		)	—		—		640		(640		)	—
Revenues	$	840	$	857	$	(857	)	$	840
Net revenues										$	345	$	640	$	(640	)	$	345

Foreign revenue is based on the country in which the Company’s subsidiary that earned the revenue is domiciled. During the three and ~~nine~~six months ended ~~September~~June 30, 2019, the Company's grant revenue from the Michigan State University ("MSU") sub-award of $318 and $442 represented 100% of total revenue for both periods. During the three and six months ended June 30, 2018, revenue earned from the ~~Company's Camelina grant with the U.S. Department of Energy~~MSU sub-award totaled ~~$0 and $109, respectively,~~$236 for both periods and represented 0%83% and ~~26%~~68% of total ~~revenue. During the three and nine months ended September 30, 2017,~~ revenue, earned from the Company’s Camelina grants totaled $223 and $810, respectively, and represented 100% and 96%, respectively, of total grant revenue. During the three and nine months ended September 30, 2018, revenue earned from the Company's new sub-award with MSU totaled $76 and $312, respectively, and represented 100% and 74%, respectively, of total grant revenue.respectively.

The geographic distribution of the Company’s long-lived assets is summarized as follows:

U.S. Canada Eliminations Total
September 30, 2018 $ 1,420
$ 15
$ —
$ 1,435
December 31, 2017 $ 1,533
$ 6
$ —
$ 1,539



	U.S.		Canada		Eliminations		Total
June 30, 2019	$	1,276	$	22	$	—	$	1,298
December 31, 2018	$	1,372	$	13	$	—	$	1,385

~~10.~~11. CAPITAL STOCK

Common Stock

On ~~May 23, 2018,~~March 18, 2019, the Company held its Annual Meeting, at which stockholders approved an amendment to the Certificate of Incorporation to increase from 40,000,000 shares to 60,000,000 shares the aggregate number of shares of common stock that are authorized to be issued. Ascompleted a result of this vote, on May 23, 2018, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares. Also at the Annual Meeting, stockholders approved the adoption of the Company's 2018 Stock Plan. The 2018 Stock Plan reserves for issuance 1,300,000 shares of the Company's common stock for grants of incentive stock options, nonqualified stock options, stock grants and stock-based awards. Shares available under the 2018 Stock Plan will be increased on the first day of January 2019 and 2020 in an amount equal to 5% of the outstanding shares of common stock on the day prior to the increase in each respective year or such smaller number of shares of common stock as determined by the Board of Directors.

On December 27, 2017, the Company held a special meeting of its stockholders, at which the stockholders approved an amendment to the Certificate of Incorporation to decrease from 250,000,000 shares to 40,000,000 shares the aggregate number of shares of common stock that are authorized to be issued. As a result of this vote, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware on December 27, 2017 to decrease the number of authorized shares.

~~During December 2017, the Company closed on a public~~registered direct offering of its securities, receiving cash proceeds of $13,097, net of issuance costs of $1,392 that were paid through January 31, 2018. The offering included 4,667,000 Class A Units, priced at a public offering price of $2.25 per unit, with each unit consisting of one share of common stock, a Series A five-year warrant to purchase one share of common stock at an exercise price of $2.25 per share, and a Series B nine-month warrant to purchase 0.5 share of common stock at an exercise price of $2.25 per share, and 3,987 Class B Units, priced at a public offering price of $1,000 per unit, with each unit consisting of one share of preferred stock, having a conversion price of $2.25, Series A 5-year warrants to purchase 445 shares of common stock at an exercise price of $2.25 per share, and Series B nine-month warrants to purchase 223 shares of common stock with an exercise price of $2.25 per share. The Company determined that both the preferred stock and the warrants should be recorded within stockholders' equity.

Proceeds received from the offering were allocated to the various elements of the offering based on their relative fair values. The fair value of the common stock was its closing market price on December 21, 2017, the closing date of the offering. The Series A Convertible Preferred Stock was valued on an as-if-converted basis based on the underlying common stock and the Series A and Series B warrants were valued using the Black-Scholes model with the following weighted-average input at the time of issuance:

~~an expected term of 5.0 years and 0.75 years for the Series A and Series B warrants, respectively,~~

~~risk free rates of 2.2% and 1.7% for the Series A and Series B warrants, respectively, based on the published rates of U.S. treasury bills with similar terms, and~~

~~volatility of 125% based on the Company’s historical volatility.~~

After allocation of the proceeds, the effective conversion price of the Series A Convertible Preferred Stock was determined to be beneficial and, as a result, the Company recorded a one-time non-cash deemed dividend of $1,427 equal to the intrinsic value of the beneficial conversion feature during its three months ended December 31, 2017. The Series A Convertible Preferred Stock did not have a stated redemption date, and as a consequence, accounting guidance required immediate recognition of the beneficial conversion feature rather than amortization of the benefit over time. As of March 19, 2018, preferred shareholders had converted all 3,987 of the preferred shares into an aggregate of 1,772,000 shares of common stock.

On September 12, 2017, the Company issued warrants to purchase up to 30,000 shares of common stock to the Company's investor relations consultant, in consideration for services rendered and to be rendered by the consultant. These warrants have an exercise price of $2.90 per share and are exercisable in whole or part at any time during the period commencing on September 12, 2017 and ending on September 11, 2024. The Company reviewed the accounting guidance for warrants and determined that these warrants should be recorded as equity within additional paid-in capital.

~~On July 7, 2017, the Company completed an offering of its securities.~~ Proceeds from the transaction were approximately ~~$1,966, net of~~$2,932, before issuance costs of ~~$317.~~$349. Investors participating in the transaction purchased a total of ~~570,784~~2,421,662 shares of common stock at a price of ~~$4.00~~$1.2101 per share and an equal number of warrants with an exercise price of $5.04 per share, exercisable beginning on January 7, 2018 and until their expiration on January 7, 2024. In accordance with accounting guidance, these warrants were also recorded as equity within additional paid-in capital.

On May 26, 2017, the Company effected a 1-for-10 reverse stock split of its common stock. The ratio for the reverse stock split was determined by the Company's board of directors following approval by stockholders at the Company's annual meeting held on May 24, 2017. The reverse stock split reduced the number of shares of the Company's common stock outstanding at the time of the reverse stock split from approximately 28.7 million shares to approximately 2.9 million shares. Proportional adjustments were made to the Company's outstanding stock options and restricted stock units and to the number of shares issued and issuable under the Company's equity compensation plans.share.

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.

~~As discussed above, during~~In December 2017, the Company closed on a public offering of its securities that included issuance of 3,987 shares of Series A Convertible Preferred Stock. Each preferred share was convertible, at the holder's option, into 445 shares of common stock at a conversion price of $2.25 per share, subject to adjustments as a result of stock dividends and stock splits. The Company determined the Series A Convertible Preferred Stock should be classified as equity since it was not mandatorily redeemable, there were no unconditional obligations requiring the Company to settle in a variable number of common shares or settle through the transfer of assets and the monetary value of the preferred shares was fixed.share. As of March 19, 2018, all of the 3,987 preferred shares had been converted to an aggregate of 1,772,000 shares of common stock. When converted, the shares of converted Series A Convertible Preferred Stock were restored to the status of authorized but unissued shares of preferred stock, subject to reissuance by the Board of Directors.

Warrants

The following table summarizes information with regard to outstanding warrants to purchase common stock as of ~~September~~June 30, ~~2018:~~2019:


Issuance	Number of Shares Issuable Upon Exercise of Outstanding Warrants	Exercise Price		Expiration Date	Number of Shares Issuable Upon Exercise of Outstanding Warrants	Exercise Price		Expiration Date
June 2015 Private Placement	393,300	$	39.80	June 15, 2019
July 2017 Registered Direct Offering	570,784	$	5.04	January 7, 2024	570,784	$	5.04	January 7, 2024
December 2017 Public Offering - Series A	6,439,000	$	2.25	December 21, 2022	6,439,000	$	2.25	December 21, 2022
Consultant	30,000	$	2.90	September 11, 2024	30,000	$	2.90	September 11, 2024
Total	7,433,084				7,039,784

~~During the nine months ended~~ ~~September 30, 2018, a total of 55,100 Series B~~On June 15, 2019, 393,300 warrants ~~from the December 2017 public offering were exercised resulting~~issued in ~~the issuance of 55,100 shares of common stock and~~connection with the Company's ~~receipt~~private placement of ~~$124 in cash proceeds. On September 21, 2018, the remaining unexercised Series B warrants~~securities on June 15, 2015, expired in accordance with ~~their terms.~~the terms of the securities purchase agreement.

Reserved Shares

The following shares of common stock were reserved for future issuance upon exercise of stock options, ~~release~~vesting of RSUs ~~conversion of Series A Convertible Preferred Stock~~ and conversion of warrants:


	September 30, 2018	December 31, 2017	June 30, 2019	December 31, 2018
Stock Options	1,703,194	702,033	2,446,082	1,745,037
RSUs	7,101	14,367	—	7,101
Series A Convertible Preferred Stock	—	811,555
Warrants	7,433,084	10,652,586	7,039,784	7,433,084
Total number of common shares reserved for future issuance	9,143,379	12,180,541	9,485,866	9,185,222

~~11. RESTRUCTURING~~

During 2016, the Company initiated a strategic restructuring under which Yield10 Bioscience became its core business and its biopolymer operations were discontinued. As part of its strategic restructuring, the Company significantly reduced staffing levels and in January 2017, the Company formally changed its name to Yield10 Bioscience, Inc.

In connection with the wind down of its biopolymer operations, the Company ceased pilot production of biopolymer materials and reached agreements with the owner-operators of its biopolymer production facilities regarding the termination of their services. Through May 2018, the Company made cash payments of $3,317, issued 27,500 shares of common stock with a fair value of $85 and transferred certain biopolymer-related production equipment with a net book value of $111 to settle these agreements and other restructuring activities. At September 30, 2018, the Company has no further restructuring obligations outstanding.

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 27A of the Securities Act of 1933 (the "Securities Act"), as amended, and Section 21E of the Securities Exchange Act of 1934, as ~~amended.~~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, ~~the~~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; ~~the expected results of our strategic restructuring to focus on Yield10 Bioscience as our core business;~~ expected future financial results and cash requirements; 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 ~~its~~the year ended December 31, ~~2017~~2018 and in our other filings with the ~~Securities and Exchange Commission.~~SEC.

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

The foundation technology of Yield10 is based on using two proprietary advanced biotechnology trait gene discovery platforms to improve fundamental crop yield through enhanced photosynthetic carbon capture and increased carbon utilization efficiency to increase seed yield. These platforms are based on the principle that plants which capture and utilize carbon more efficiently will enable more robust crops capable of increased seed yield. We are working to develop, translate and demonstrate the commercial value of a numberdevelopment of novel yield ~~trait genes from these discovery platforms~~traits for key crops based on a licensing model, we have recently begun to execute the second part of our strategy which is to develop independent business opportunities for Yield10 in ~~major~~the specialty oils and niche crop space using the oilseed Camelina. The target of this effort is sustainable business solutions to support agriculture, global food production and other specialty applications. Yield10 brings a unique history, skill set, and tools captured in our Gene Ranking Artificial Intelligence Network ("GRAIN") platform for developing advanced crop traits and increasing the concentration of specific biochemicals of commercial interest in crops. Our ~~“Smart Carbon Grid for Crops” metabolic engineering platform has already proven useful in identifying a number of our C3000 series of traits, including the novel yield trait gene C3003 which~~plan is being field tested in Camelina and canola in the 2018 growing season. Our “T3 Platform,” is based on mining transcription factor network data sets and led to the identification of our C4001, C4002 and C4003 global transcription factor gene traits. These gene traits enabled us to engineer switchgrass plants with high rates of

~~photosynthesis and increased biomass yield. We are currently repeating our work with C4001 and C4003 in rice and wheat and plan to do so in corn.~~

We are currently combining the two trait gene discovery platforms to create an integrated system for identifying key plant gene combinations for modification using genome editing to improve crop performance. Advanced metabolic flux analysis forms the foundation of the GRAIN platform we are developing based on Yield10 scientists' unique 20-plus years of experience successfully deploying advanced metabolic flux analysis to address critical bottlenecks in carbon metabolism. Based on elements of the GRAIN platform that we are already working on, we have identified the C4004 through C4027 series of transcription factor genes that are down-regulated in our high-photosynthesis engineered switchgrass plants as well as a number of new gene targets related to our lead C3003 yield trait. New tools for genome-editing continue to develop at a ~~fast pace~~source of revenue from funded research and ~~be deployed against known targets which~~development collaborations for traits, products and crops not being directly pursued internally. While there is no guarantee of success, the ~~most part are focused on changing seed or seed oil composition. However, identifying gene combinations remain an unmet need.~~

~~On May 17, 2018, we entered into an exclusive worldwide license from the University~~Company is currently engaged in a range of Missouri 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 first technology, named C3007, is a gene for a negative controller that inhibits the enzyme activity of Acetyl-CoA carboxylase, or ACCase. The second technology, named C3010, is a gene which, if over-expressed, results in increased activity of ACCase. We are required to use reasonable efforts to develop licensed products throughout the licensed field and to introduce licensed products into the commercial market. In that regard, we are obligated to fulfill certain research, development and regulatory milestones relating to C3007 and C3010, including completion of multi-site field demonstrations of a crop species in which C3007 and C3010 have been introduced, and filing for regulatory approval of a crop species in which C3007 and C3010 have been introduced within a specified period.

During July 2018, the we also entered into a non-exclusive research license agreement jointly with the Broad Institute of MIT and Harvard and Pioneer, part of Corteva Agriscience™, Agriculture Division of DowDuPont Inc., for the use of CRISPR-Cas9 genome-editing technology for crops. The joint license covers intellectual property consisting of approximately 48 patents and patent applications on CRISPR-Cas9 technology controlled by the Broad Institute and Corteva Agriscience. Under the agreement, we have the option to renew the license on an annual basis and the right to convert the research license to a commercial license in the future, subject to conditions specified in the agreement. CRISPR technology is uniquely suited to agricultural applications as it enables precise changes to plant DNA without the use of foreign DNA to incorporate new traits. Plants developed using CRISPR genome-editing technology have the potential to be designated as "non-regulated" by USDA-APHIS for development and commercialization in the U.S., which could result in shorter developmental timelines and lower costs associated with commercialization of new traits in the U.S. as compared to regulated crops.

~~During the past twelve months, we have entered into two non-exclusive licensing agreements~~discussions with third parties ~~for the evaluation of our yield trait genes. In December 2017, we granted a license to Monsanto Company, which was subsequently acquired by Bayer AG, ("Bayer") to evaluate our novel C3003~~on different crops, traits and C3004 yield traits in soybean. Under this license, Bayer has the non-exclusive right to begin work with C3003 in its soybean program as a strategy to improve seed yield. Bayer may also conduct research with our C3004 yield trait, a trait accessible through genome editing, in combination with C3003 to evaluate the effectiveness of the combination in improving seed yield in soybean. In September 2018, we granted a non-exclusive license to Forage Genetics International, LLC ("Forage Genetics"), a subsidiary of Land O'Lakes, Inc., to evaluate five of our novel yield traits in forage sorghum. The traits includedproducts in the ~~research license include C3003 as well as four traits from our GRAIN platform, C4001, C4002, C4003~~feed, food and C4029. The C4000 series traits have been shown to significantly increase photosynthesis and biomass in research conducted by us. The key objective of the licensing agreement is to provide Forage Genetics with novel traits to test alone and/or in any combination in sorghum that may lead to the identification of new yield traits for potential future licensing from Yield10 for development and commercial deployment.

~~We are currently progressing the development of our lead yield trait genes in canola, soybean, rice and wheat to provide step-change yield solutions for enhancing global food security.~~pharmaceutical sectors. Yield10 Bioscience is headquartered in Woburn, Massachusetts and has an ~~additional agricultural science facility with greenhouses~~oilseed development Center of Excellence in Saskatoon, Saskatchewan, Canada.

As of ~~September~~June 30, ~~2018, we~~2019, the Company held unrestricted cash, cash equivalents and short-term investments of ~~$7,797.~~$4,250. We follow the guidance of ~~ASC Topic 205-40,~~ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40) in order to determine whether there is substantial doubt about ~~our~~the Company's ability to continue as a going concern for one year after the date ~~our~~its 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 into the third quarter of 2019. 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. We have evaluated the guidance of ASC Topic 205-40 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. Our ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additionalfiled.

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 our outstanding warrants, additional government grant or collaborative arrangements with third parties, as to which no assurance 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 or if we are unsuccessful in entering into collaborative arrangements for further research, we will be forced to curtail our research efforts, explore strategic alternatives and/or wind down our operations and pursue options for liquidating the Company's remaining assets, including intellectual property and equipment. Based on our cash forecast, we have determined that our present capital resources are unlikely to be sufficient to fund our planned operations for the twelve months from the date that our financial statements are issued, which raises substantial doubt about the Company's ability to continue as a going concern.

If we issue equity or debt securities to raise additional funds, (i) we may incur fees associated with such issuance, (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 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 our 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 ~~of 1986~~ 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 the Company's potential products or proprietary technologies or grant licenses on terms that are not favorable to the Company.

Government Grants

Our principal source of revenue is government research grants. As of September 30, 2018, $979 remains available under our U.S. government grants. This includes amounts for reimbursement to our subcontractors, as well as reimbursement for our employees’ time, benefits and other expenses related to future performance.

~~On April 17,~~During 2018 we entered into a sub-award with Michigan State University ("MSU") to support a Department of Energy ("DOE") funded grant entitled "A"A Systems Approach to Increasing Carbon Flux to Seed Oil." Our participation under this projected five-year grant ~~commenced~~will be awarded on an annual basis with the first year commencing September 15, ~~2017 and~~2017. Although our funding under this sub-award has been appropriated through September ~~30, 2018, the first two years of the sub-award totaling~~2019 for $1,212, ~~have been authorized. We~~we anticipate that each additional option ~~years~~year will be awarded annually to Yield10 through September 14, 2022 for total sub-award funding of $2,957, provided the U.S. Congress continues to appropriate funds for the program, we are able to make progress towards meeting grant objectives and we remain in compliance with other terms and conditions of the sub-award.

~~The status~~As of June 30, 2019, proceeds of $351 remain to be recognized under our ~~government grants is~~MSU sub-award as ~~follows:~~ shown in the table below. This 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 Funds
Total received
through

Remaining amount
available as of

Grant
Expiration
September 30, 2018 September 30, 2018
Subcontract from Michigan State University project funded by DOE entitled "A Systems Approach to Increasing Carbon Flux to Seed Oil" Department of Energy $ 1,212
$ 261
$ 951
September 2019
Production of High Oil, Transgene Free Camelina Sativa Plants through Genome Editing ("Camelina") Department of Energy 1,997
1,969
28
September 2018
Total $ 3,209
$ 2,230
$ 979

Program Title

Funding

Agency

Total Government Funded Appropriations

Total revenue recognized through June 30, 2019

Remaining amount to be recognized as of June 30, 2019

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

1,212

��

861

351

September 2019

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 accounting principles generally accepted in the United States of America 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 compensation, measurement of right-of-use assets and ~~strategic restructuring charges.~~lease liabilities and the recognition of lease expense. 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~~With the exception of our accounting for operating leases under the new guidance of Topic 842, Leases, that became effective for us on January 1, 2019, 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~~six months ended ~~September~~June 30, ~~2018,~~2019, are consistent with those discussed in our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, 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~~June 30, ~~2018~~2019 and ~~2017~~2018

Revenue

Three Months Ended
September 30,
2018 2017 Change
Grant revenue $ 76
$ 223
$ (147 )



	Three Months Ended June 30,
	2019		2018		Change
Grant revenue	$	318	$	285	$	33

Grant revenue was ~~$76~~$318 and ~~$223~~$285 for the three months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~June 30, 2018, respectively. Grant revenue for the three months ended ~~September~~June 30, ~~2018~~2019 was ~~earned~~derived solely from the Company's ~~subcontract~~sub-award with MSU. During the three months ended ~~September~~June 30, ~~2017, grant revenue of $223~~2018, $236 was earned from the ~~Company's Camelina grant~~MSU sub-award with ~~DOE which is currently in~~ the ~~process of winding down with only $28 remaining to be recognized.~~

~~We anticipate grant revenue will continue to remain lower during 2018 and 2019 in comparison to 2017 as we complete the Company's~~remainder being earned from our Camelina grant with the ~~DOE. Our new~~DOE that completed in 2018.

We anticipate that grant revenue recognized during the remainder of 2019 from our DOE sub-award ~~through~~with MSU ~~is not expected to generate quarterly~~will remain consistent with the level of grant revenue ~~at the same rate as the expiring Camelina grant.~~recognized during 2018.

Expenses


	Three Months Ended September 30,						Three Months Ended June 30,
	2018		2017		Change		2019		2018		Change
Research and development expenses	$	1,330	$	1,132	$	198	$	1,191	$	1,260	$	(69	)
General and administrative expenses	1,407		1,073		334		1,025		1,456		(431		)
Total expenses	$	2,737	$	2,205	$	532	$	2,216	$	2,716	$	(500	)

Research and Development Expenses

Research and development expense during the three months ended June 30, 2019 and June 30, 2018 were $1,191 and $1,260, respectively. The five-percent decrease of $69 is primarily due to lower facility costs of $62 that resulted from an impairment charge taken on our Lowell, Massachusetts lease in August 2018 that reduced remaining ongoing lease expense for that facility until its conclusion in May 2020. Net compensation and benefit expense also decreased by $39 from $681 during the three months ended June 30, 2018 to $642 during the three months ended June 30, 2019, and is the result of reductions in stock compensation and bonus expense of $73 and $42, respectively, partially offset by an increase in employee payroll of $72 from the addition of headcount. We did not accrue for 2019 employee bonuses during the quarter ended June 30, 2019.

Based on our current financial forecasts, we expect research and development expenses during 2019 will increase over expenses incurred during 2018 as we add additional research staff and shift greater resources towards our research programs, provided that we are able to raise additional funds to support our ongoing operations. Our forecasts related to research and development expenses are subject to significant change as events and opportunities occur during 2019 that could

result in modifications to our business plans.

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2019 and June 30, 2018 decreased by $431 from $1,456 to $1,025. The change is partially due to a decrease in net compensation and benefits of $194 as a result of lower stock compensation and bonus expenses. The Company did not accrue for 2019 employee bonuses during the three months ended June 30, 2019. Professional fees decreased by $120 during the three months ended June 30, 2019 as a result of lower legal, audit and patent processing charges. License fees also decreased by $71 during the three months ended June 30, 2019 and is due to our entering into an exclusive technology license with the University of Missouri during the second quarter of 2018. Facility expense also decreased by $58 as a result of the impairment charge taken on the Lowell facility during August 2018.

Based on our current financial forecasts, we expect general and administrative expenses during 2019 will remain below 2018 expenses, primarily as a result of lower stock compensation expense, and provided that we are able to raise additional funds to support our ongoing operations. Our forecasts related to general and administrative expenses are subject to significant change as events and opportunities occur during 2019 that could result in modifications to our business plans.

Other Income (Expense), Net



	Three Months Ended June 30,
	2019		2018		Change
Total other income (expense), net	$	27	$	38	$	(11	)

Other income (expense), net, was $27 and $38 for the three months ended June 30, 2019 and June 30, 2018, respectively. Net other income during each period was primarily derived from investment income earned from the Company's short-term investments.

Comparison of the Six Months Ended June 30, 2019 and 2018

Revenue



	Six Months Ended June 30,
	2019		2018		Change
Grant revenue	$	442	$	345	$	97

Grant revenue was $442 and $345 for the six months ended June 30, 2019 and June 30, 2018, respectively. Grant revenue for the six months ended June 30, 2019 was derived solely from the Company's sub-award with MSU. During the six months ended June 30, 2018, $236 was earned from the MSU sub-award with the remainder earned from our Camelina grant with the DOE that completed in 2018.

Expenses



	Six Months Ended June 30,
	2019		2018		Change
Research and development expenses	$	2,414	$	2,361	$	53
General and administrative expenses	2,211		2,732		(521		)
Total expenses	$	4,625	$	5,093	$	(468	)

Research and Development Expenses

Research and development expenses ~~were $1,330 and $1,132~~ for the ~~three~~six months ended ~~September~~June 30, 2019 and six months ended June 30, 2018 ~~and September 30, 2017, respectively. The~~remained consistent with a $53, or 2% net increase ~~of $198 is primarily~~between the result of an increase in employee compensation and benefits of $131 in comparison to the three months ended September 30, 2017 and is due to our hiring new research personnel during 2018 and the recording of a three-month proportional accrual for 2018 employee bonuses that are expected to be paid during Q1 2019. During the three months ended September 30, 2018 research supplies and equipment increased by $50, primarily as a result of purchasing new computer equipment.

~~We anticipate that~~two periods. No individual expense categories within research and development ~~expenses will continue to remain above 2017 expenditure levels during the remainder of 2018 and into 2019 as~~showed a ~~result of our expanded field testing for crops across multiple locations and our plans to hire additional research staff to support our research activities.~~notable variance.

~~General and Administrative Expenses~~

General and administrative expenses increased $334 from $1,073 during the three months ended September 30, 2017 to $1,407 during the three months ended September 30, 2018. During the three months ended September 30, 2018 we recorded a lease impairment charge of $249 in accordance with ASC Topic 420-10, ~~Exit or Disposal Obligations, as a result of discontinuing further use of our facility located in Lowell, Massachusetts.~~

We anticipate that our general and administrative expenses, net of the one-time lease impairment charge noted above, will remain relatively consistent during the remainder of 2018 and into 2019 as we continue to carefully monitor our use of cash resources.

~~Other Income (Expense), Net~~

Three Months Ended
September 30,
2018 2017 Change
Other income, net $ 43
$ 2
$ 41
Other expense, net (12 ) (45 ) 33
Total other income (expense), net $ 31
$ (43 ) $ 74

Other income (expense), net, reflects net income of $31 and net expense of $43 for the three months ended September 30, 2018 and September 30, 2017, respectively. Net income during the third quarter of 2018 is primarily the result of $43 of investment income earned from the Company's short-term investments and higher average cash balances held during the quarter. Other expense, net, of $45 for the three months ended September 30, 2017 includes interest charges recorded in connection with installment payments made by the Company related to the early termination of a third party manufacturing agreement that ended in 2016.

~~Comparison of the Nine Months Ended September 30, 2018 and 2017~~

~~Revenue~~

Nine Months Ended September 30,
2018 2017 Change
Grant revenue $ 421
$ 840
$ (419 )

Grant revenue was $421 and $840 for the nine months ended September 30, 2018 and September 30, 2017, respectively. Grant revenue for the nine months ended September 30, 2018 was derived primarily from $312 in revenue recognized for work performed on the Company's subcontract with MSU. During the nine months ended September 30, 2017, grant revenue of $810 was earned from the DOE Camelina grant.

~~Expenses~~

Nine Months Ended September 30,
2018 2017 Change
Research and development expenses $ 3,677
$ 3,379
$ 298
General and administrative expenses 4,132
4,215
(83 )
Total expenses $ 7,809
$ 7,594
$ 215

~~Research and Development Expenses~~

Research and development expenses increased by $298 from $3,379 during the nine months ended September 30, 2017 to $3,677 during the nine months ended September 30, 2018. During the nine months ended September 30, 2018 employee compensation and benefit expense increased by $341, primarily as a result of hiring new research personnel during 2018 and our recording of a nine-month proportional accrual for 2018 employee bonuses. Research consulting and service fees, primarily in support of our plant field trials, also increased by $85 during the nine months ended September 30, 2018 in comparison to the same period last year. Research service expense decreased by $153 during the nine months ended September 30, 2018, primarily as a result of $171 in research services performed by North Carolina State University ("NCSU") for us as a sub-awardee under our DOE Camelina grant during the first nine months of 2017. NCSU did not perform similar services for us during 2018.

General and Administrative Expenses

General and administrative expenses decreased by ~~$83~~$521 from ~~$4,215~~$2,732 during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 to ~~$4,132~~$2,211 during the ~~nine~~six months ended ~~September~~June 30, ~~2018. During the nine months ended September 30, 2017 we recognized $622 of previously deferred equity offering costs related~~2019. The 19% decrease was primarily due to a ~~common stock purchase agreement with Aspire Capital Fund, LLC ("Aspire") that terminated before any shares were sold. Partially offsetting the~~net decrease in ~~Aspire-related expenses were a net increase in employee~~ compensation and benefits ~~expense~~and a decrease in professional fees of ~~$118, patent-related expense of $181~~$356 and ~~the lease impairment charge of $249 related to our Lowell, Massachusetts facility.~~$155, respectively. The favorable variance in net ~~increase in employee~~ compensation ~~expense~~and benefits is primarily the result of ~~our recording~~lower stock compensation and bonus expenses. Stock compensation expense decreased during the six months ended June 30, 2019 due to the final vesting and expense recognition for a ~~nine-month~~significant number of employee stock options that completed vesting during October 2018. No bonuses were accrued for 2019 employee bonuses during the six months ended June 30, 2019, in contrast to the six months ended June 30, 2018 when the Company recorded a six-month proportional accrual for 2018 employee ~~bonuses~~bonuses. Professional fees decreased during the six months ended June 30, 2019 as a result of ~~$223 partially offset by a reduction in stock compensation expense of $140.~~lower legal, audit and patent processing charges.

Other Income (Expense), Net

Nine Months Ended September 30,
2018 2017 Change
Other income, net $ 123
$ 5
$ 118
Other expense, net (45 ) (95 ) 50
Total other income (expense), net $ 78
$ (90 ) $ 168



	Six Months Ended June 30,
	2019		2018		Change
Total other income (expense), net	$	52	$	63	$	(11	)

Other income (expense), net, ~~reflects net income~~was $52 and $63 for each of ~~$78 and net expense of $90 for~~ the ~~nine~~six months ended ~~September~~June 30, 2019 and June 30, 2018, ~~and September 30, 2017,~~ respectively. Net other income during ~~the nine months ended December 31, 2018 is~~each period was primarily ~~the result of $123 of~~derived from investment income earned from the Company's short-term investments and higher average cash balances held during the nine month period. Other expense, net, of $45 and $95 for the nine months ended September 30, 2018 and September 30, 2017, respectively, includes interest charges recorded in connection with installment payments made by the Company related to the early termination of a third party manufacturing agreement that ended in 2016.investments.

Liquidity and Capital Resources

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

Since our inception, we have incurred significant expenses related to our research, development and commercialization efforts. With the exception of 2012, when we recognized $38,885 of deferred revenue from a ~~single year,~~terminated joint venture, we have recorded losses ~~annually~~ since our initial founding, including the three and ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. As of ~~September~~June 30, ~~2018,~~2019, we had an accumulated deficit of ~~$350,063.~~$356,069. Our total unrestricted cash, cash equivalents and short-term investments as of ~~September~~June 30, ~~2018,~~2019, were ~~$7,797~~$4,250 as compared to ~~$14,487~~cash, cash equivalents and short-term investments of $5,769 at December 31, ~~2017.~~2018. As of ~~September~~June 30, ~~2018,~~2019, we had no outstanding debt.

Our cash and cash equivalents are held primarily for working capital purposes. As of ~~September~~June 30, ~~2018,~~2019, we had restricted cash of $332. Restricted cash consists of $307 held in connection with the lease agreement for our Woburn, Massachusetts facility and $25 held in connection with our corporate credit ~~cards~~card used for incidental purchases.

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 and 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~~June 30, ~~2018,~~2019, we were in compliance with this policy.

We ~~believe~~currently anticipate $9,000 - $9,500 of cash usage during 2019 to fund our operations. We estimate that our ~~existing funds, when combined with~~current cash ~~generated from government grants and our access to additional financing sources, if needed,~~resources will be sufficient to fund operations and meet our obligations, when due, into the ~~third~~fourth quarter of 2019. 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. 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 the Company's ability to continue as a going concern for one year after the date ~~its~~our financial statements are issued. 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, 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 the Company when needed, if at all. If adequate additional funds are not available when required, we will 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. Based on our ~~current~~ cash forecast, we have

determined that ~~our~~the Company's present capital resources ~~will~~are not be sufficient to fund our planned operations for ~~the twelve months from the date that our financial statements are issued, which raises~~a twelve-month period ending in August 2020, and therefore, raise substantial doubt about ~~the Company's~~our ability to continue as a going concern.

We have filed a shelf registration statement on Form S-3 with the SEC, covering the sale from time to time of shares of our common stock and other securities, which may provide us the opportunity to raise funds when we consider it necessary or appropriate, at prices and terms to be determined at the time of any such offering. However, pursuant to the instructions on Form S-3, we only have the ability to sell shares under the shelf registration statement, during any 12-month period, in an amount less than or equal to one-third of the aggregate market value of our common stock held by non-affiliates.

During 2016, we completed a strategic restructuring of our operations to focus on the Yield10 Bioscience business. We significantly reduced staffing levels and incurred restructuring costs for contract termination and employee post-termination benefits of approximately $3,513. During May 2018 the final payment was made related to our contract termination obligation and as of September 30, 2018, no further restructuring charges remain outstanding. We currently anticipate that we will use approximately $9,000 to $9,500 of cash during 2018, including the final payments we made for restructuring costs.

We will need additional capital to fully implement our business, operating and development plans and to support our capital needs. The timing, structure and vehicles for obtaining future financing are under consideration, but there can be no assurance that such financing efforts will be successful. If we do not receive additional funding by mid-2019, we will be forced to wind down our business, or have to delay, scale back or otherwise modify our business plans, research and development activities and other operations, and/or seek strategic alternatives.

If we issue equity or debt securities to raise additional funds, (i) wethe Company may incur fees associated with such issuance, (ii) our existing stockholders will experience dilution from the issuance of new equity securities, (iii) wethe 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 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 ~~of 1986~~ 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.~~the Company.

Net cash used for operating activities was ~~$6,731~~$4,077 during the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, compared to net cash used for operating activities during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 of ~~$6,309.~~$4,888. Net cash used for operations during the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 primarily reflects the net loss of ~~$7,310, payment of 2017 employee bonuses of approximately $529~~$4,131 and ~~payment of final obligations totaling $500 related~~payments made to reduce the Company's ~~strategic restructuring initiated during 2016,~~lease liabilities of $404 partially offset by ~~certain~~ non-cash expenses, including stock-based compensation expense of ~~$952,~~$275, depreciation expense of ~~$146, a~~$100, 401(k) stock matching contribution expense of ~~$91~~$49 and ~~a facility~~non-cash lease ~~impairment charge~~expense of ~~$249.~~$299. The higher net cash usage for operating activities during the six months ended June 30, 2018 of $4,888 is primarily the result of the Company's greater net loss of $4,685 and payment of 2017 employee bonuses of $529.

Net cash of ~~$4,534~~$1,735 was ~~used~~provided by investing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2018. During the nine months ended September 30, 2018, we purchased $9,742 in short-term investments, including U.S. Treasury notes and federal agency bonds. During that period $5,250~~2019 as a result of $2,746 of short-term investments ~~matured~~reaching their maturity dates and ~~converted~~converting to cash. The Company also purchased $998 of new short-term investments during the six-month period.

Net cash of ~~$118~~$2,579 was provided by financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2018, primarily~~2019 as a result of the Company's completion of a registered direct sale of 2,421,662 shares of common stock at an offering price of $1.2101 per share. Gross proceeds from ~~investor exercises~~the sale totaled $2,932 before cash payment of ~~warrants during the period.~~offering costs of $349.

Off-Balance Sheet Arrangements

As of ~~September~~June 30, ~~2018,~~2019, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of the ~~Securities and Exchange Commission’s~~SEC’s Regulation S-K.

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 ~~Securities~~ Exchange ~~Act of 1934, as amended (the "Exchange Act"))~~Act), as of ~~September~~June 30, ~~2018.~~2019. 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~~June 30, ~~2018~~2019 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 in information regarding our risk factors as described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018, other than the updated risk factor noted below. Our business is subject to numerous risks. We caution you that the important factors annotated within our risk factors, among others, could cause our actual results to differ materially from those expressed in forward-looking statements made by us or on our behalf in filings with the ~~Securities and Exchange Commission,~~SEC, press releases, communications with investors and oral statements. Any or all of our forward-looking statements in this Quarterly Report on Form 10-Q and any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors discussed in our risk factors will be important in determining future results. Consequently, no forward-looking statement can be guaranteed. Actual future results may differ materially from those anticipated in forward-looking statements. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required under the federal securities laws. You are advised, however, to consult any further disclosure we make in our reports filed with the Securities and Exchange Commission.

If we fail to continue to meet all applicable Nasdaq Capital Market requirements and the Nasdaq Stock Market determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock, impair the value of your investment and harm our business.

Our common stock is currently listed on the Nasdaq Capital Market. In order to maintain that listing, we must satisfy minimum financial and other requirements. On June 25, 2019, we received a notice from the Listing Qualifications Department of the Nasdaq Stock Market indicating that, for the previous 30 consecutive business days, the bid price for our common stock had closed below the minimum $1.00 per share required for continued inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). The notification letter states that pursuant to Nasdaq Listing Rule 5810(c)(3)(A) the Company will be afforded 180 calendar days, or until December 23, 2019, to regain compliance with the minimum bid price requirement. In order to regain compliance, shares of the Company’s common stock must maintain a minimum bid closing price of at least $1.00 per share for a minimum of ten consecutive business days. If we do not regain compliance by December 23, 2019, Nasdaq will provide written notification to us that our common stock will be delisted. At that time, we may appeal Nasdaq’s delisting determination to a Nasdaq Listing Qualifications Panel. Alternatively, we may be eligible for an additional 180 day grace period if we satisfy all of the requirements, other than the minimum bid price requirement, for listing on the Nasdaq Capital Market set forth in Nasdaq Listing Rule 5505.

While we intend to engage in efforts to regain compliance, and thus maintain our listing, there can be no assurance that we will be able to regain compliance during the applicable time periods set forth above. If we fail to continue to meet all applicable Nasdaq Capital Market requirements in the future and Nasdaq determines to delist our common stock, the delisting could substantially decrease trading in our common stock and adversely affect the market liquidity of our common stock; adversely affect our ability to obtain financing on acceptable terms, if at all, for the continuation of our operations; and harm our business. Additionally, the market price of our common stock may decline further and stockholders may lose some or all of their investment. The closing bid price of our common stock on the Nasdaq Capital Market was $0.94 on July 7, 2019.

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

Recent Sales of Unregistered Securities

On ~~July 3, 2018,~~April 1, 2019, we issued ~~19,418~~21,860 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, ~~of 1933,~~ as amended as exempted securities.

Issuer Purchases of Equity Securities

During the three months ended ~~September~~June 30, ~~2018,~~2019, 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.



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~~June 30, ~~2018~~2019 formatted in XBRL: (i) Condensed Consolidated Balance Sheets, ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017;~~2018; (ii) Condensed Consolidated Statements of Operations, Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017;~~2018; (iii) Condensed Consolidated Statements of Comprehensive Loss, Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017;~~2018; (iv) Condensed Consolidated Statements of Cash Flows, ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017;~~2018; (v) Condensed Consolidated Statements of Stockholders' Equity, Three and ~~(v)~~Six Months Ended June 30, 2019 and 2018; 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 8, 2018~~August 12, 2019	By:	/s/ OLIVER PEOPLES
		Oliver Peoples
		President and Chief Executive Officer
		(Principal Executive Officer)

~~November 8, 2018~~August 12, 2019	By:	/s/ CHARLES B. HAASER
		Charles B. Haaser
		Chief Accounting Officer
		(Principal Financial and Accounting Officer)

2930



Program Title	Funding Agency	Total Government Funds		Total received through		Remaining amount available as of		Grant Expiration
Program Title	Funding Agency	Total Government Funds		September 30, 2018		September 30, 2018		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	$	1,212	$	261	$	951	September 2019
Production of High Oil, Transgene Free Camelina Sativa Plants through Genome Editing ("Camelina")	Department of Energy	1,997		1,969		28		September 2018
Total		$	3,209	$	2,230	$	979