Cibus (NASDAQ:CBUS) Q1 2020 Earnings Call

0:00 Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Calyxt's first quarter 2020 results conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. If you have a question, please press the star key followed by the number one on your touch phone. If you would like to withdraw your question, please press the star key followed by the number two If you are using speaker equipment, please lift the handset before making your selection. The conference is being recorded today, May 7, 2020. At this time, I would now like to turn the conference over to Chris Tyson, Managing Director of MZ North America, Calyxt's investor relations firm.

0:49 Please go ahead, sir. Thank you, and good morning. I would like to thank you all for taking time to join us for Calyxt First Quarter 2020 Business Update and Results Conference Call. Your hosts today are Jim Bloom, Chief Executive Officer, Bill Kosciuk, Chief Financial Officer, Keith Blanks, Senior Vice President of Sales and Marketing, and Travis Ray, Chief Technology Officer. A press release detailing these results crossed the wires this morning at 8 o'clock Eastern today and is available on the company's website, Calyx.com. Before we begin the formal presentation, I'd like to remind everyone that statements made on the call and webcast, including those regarding future financial results and future operational goals and industry prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's SEC filings for a list of associated risks. This presentation also includes a discussion of adjusted EBITDA and gross margin as adjusted. Both are non-GAAP financial measures.

1:51 In Calyxt press release and its filings with the SEC, each of which is posted on the Calyxt website at Calyxt.com. You will find additional disclosure regarding these non-GAAP measures. Reference to these non-GAAP financial measures should be considered in addition to GAAP financial measures. It should not be considered a substitute for results that are presented in accordance with GAAP. Finally, this conference call is being webcast. The webcast link is available in the investor relations section of our website at Calyxt.com. At this time, I would like to turn the call over to Calyxt's Chief Executive Officer, Jim Bloom. Jim, the floor is yours. Thank you, Chris, and thank you for joining us today for Calyxt's first quarter 2020 results conference call. Before I begin our first quarter review, including how Calyxt is navigating through the current COVID-19 crisis, I would first like to give everyone a quick primer on our business. As the foundation built in 2019, has positioned Calyxt for success in 2020 and beyond. Calyxt is a technology company delivering plant-based solutions that are healthy and sustainable.

2:55 We are the first company in the world to bring a gene-edited food product to market, and we intend to bring additional products to market focused on two important pillars. The first pillar is health and wellness, where examples of product concepts we are working on include projects that are heart healthy, anti-inflammatory, Higher in Fiber, Better Tasting, or Higher Protein. The second pillar is sustainability. We're bringing products to market that offer sustainability benefits, including the potential to replace imported oils that may be driving deforestation and other climate change, replacing fossil fuels with plant-based solutions, and enabling differentiated production per acre to improve biodiversity.

3:44 We believe this differentiates us from most of our competitors. We accomplish these objectives through our accelerated plant breeding technology called TALEN. Developed in part by Calyxt co-founder and chief science officer Dr. Dan Voitas, TALEN is an advanced breeding technology that allows for precision targeting of existing genes within a plant's genome. Our scientists can select for desired characteristics accelerated breeding in a fraction of time used in traditional methods, and it mimics how plants could develop in nature. We can assess the viability of a trait in less than two years, with as little as three more years needed to reach commercialization.

4:30 We have a robust development pipeline with 18 products at various stages of development, including several in both soybeans and hemp, and projects in other crops, including wheat, Alfalfa, Oats, and others. We intend to bring these products to market through collaboration or joint ventures with partners where we leverage our science and their commercial expertise to commercialize the product concept. This is an asset-light approach that is expected to result in non-dilutive financing for the company and a high-margin recurring revenue stream as projects are commercialized. We can also bring products to market through an integrated business model where we leverage third-party assets in the agricultural supply chain to process grains and sell the resulting products into the marketplace.

5:23 However, this model requires more capital and is lower margin than the collaboration and joint venture model. Moving on to the first quarter of 2020 results. The COVID-19 pandemic has caused an unprecedented global crisis. I'm very proud of the dedication and resilience of the Calyxt team and of the actions we have taken in response to the COVID-19 pandemic to protect our employees and our business, including having all workers who are able to work remotely do so since early in the crisis. Most of our laboratory workers remain onsite at our headquarters. Protecting our scientists and their projects is critical to our future, and thus far, we have handled the transition without disruption.

6:14 I really appreciate the actions of our team to help ensure we stay safe and on track. We had a strong start to the year and continued to execute on our business initiatives. During the first quarter, we began to see the impacts of COVID-19 pandemic across the country and its impact on the economy. The COVID-19 pandemic has had significant adverse impact on the food industry, especially in food service, which has substantially reduced food industry demand for vegetable oils. We have experienced lower demand for Ohio Lake soybean oil, corresponding to the overall lowering of demand for all vegetable oils. We have seen the impact of the COVID-19 pandemic on the protein supply chain, which is likely to have an impact on the demand for Ohio Lake soybean meal, and the price we may realize.

7:08 In response to the changing demand, pricing pressure and uncertainty among our customers and target customers caught by the COVID-19 pandemic, we have adjusted our short-term crush strategy and have canceled crushes scheduled for late May, June and July 2020. This change is expected to shift product sales efforts into the second half of 2020 when potentially customer demand may partially recover depending on the timing and the extent of the resumption of normal operating activities among our customers. As a result of the COVID-19 pandemic, we have suspended our 2020 guidance for revenue and gross margin as adjusted. and have developed plans to reduce expenses over the remainder of the year.

8:00 We received a Small Business Administration's Paycheck Protection Program loan of $1.5 million in April, recognizing that we are a small, early-stage enterprise with a single product that burns a significant amount of cash annually. In these unprecedented times, our access to capital has been impacted. We also compete with organizations that are much larger and better capitalized, and to protect our team, we opted to take and expect to keep the loan proceeds. We will determine in the future whether we request forgiveness of any of the loan. We are pursuing sources of cash through high margin collaboration agreements and licensing opportunities and are reviewing all other cash flows.

8:50 As a result of these actions, We updated our 2020 cash usage to between $30 million and $34 million and updated our cash runway to late 2021. We continue to evaluate additional strategies to further reduce our cash usage. We provided excellent service to our world-class customers who represent a substantial portion of our 2020 oil revenue. Deliveries of oil to our major industrial customer continue uninterrupted. We continue to sample and test our high oleic soybean oil with large consumer packaged good companies. Our 2020 contracted acres achieved our 100,000 acre target and we sold out of seed for the 2020 crop.

9:41 We are launching our five new seed varieties and expanding the states where we grow to five. We launched our e-commerce platform in April. This platform, which we are using as a pilot and can easily be leveraged across other products, provides us with several benefits, including enabling consumers to purchase our oil directly any time of the day and obtain real-time feedback about the product. It is also an efficient way for us to distribute samples to influencers, growers, and investors, and is in response to demand for our product from people who know about Calyxt and what it has done. We did not enter this pilot with the expectations of building a consumer brand or making a significant investment and as a result do not expect significant revenues from the platform.

10:36 We invite you to sample the oil at calino.com. On the technology front, we continue to build out and improve our gene editing technology suite. We licensed a brand new breakthrough from the University of Minnesota, invented in Calyxt co-founder Dr. Dan Voitas' lab, that will enable us to significantly reduce the time needed to develop traits in certain crops. I'm pleased with the four product candidate advancements in our development process in the quarter. especially considering the unique nature of each. Our innovative technology, continuous improvement, and robust scientific team of experts are what allows us to maintain a competitive edge and our head start in the gene editing space.

11:29 In the near term, we expect to launch our first hemp product, improved plants to address key problems facing hemp growers, marking the launch of our second commercial product, We expect the velocity of our revenue opportunities to accelerate as we build up a robust portfolio of commercial products, addressing several different markets. For our efforts to secure new collaboration agreements with industry partners, we aim to sign multiple new agreements this year. We expect collaboration agreements to provide us with cash milestone payments to further support our liquidity and our vision that Calyxt is an innovation With this, I'd like to hand the call over to Chief Technology Officer, Dr.

12:17 Travis Frye, for an update on innovation in our product pipeline. Thank you, Jim. As Jim mentioned, we continue to have many scientific highlights, culminating with our updated R&D pipeline and the licensing of new technologies to further improve our gene editing capabilities. On the R&D front, We've advanced four projects in our development process in the first quarter. In hemp, we expect to launch our first product in the second quarter, improve plans to address key problems facing hemp growers, marking the launch of our second commercial product. We were able to move quickly to bring this product to market by leveraging our patent-pending production system and analytics capabilities to solve a partner's challenge.

13:02 Using what we learned has helped us go faster on our other hemp projects as well. Our pipeline projects each address a significant opportunity in their respective markets and create new opportunities for us. One great example is our high fiber wheat product in which we have been able to deliver at least three times more dietary fiber than traditional white wheat flour. We expect to launch this product as early as 2022. As of March 31st, 2020, We had 18 projects at discovery stage or later across alfalfa, canola, hemp, oats, potatoes, soybeans, and wheat, with the majority in soybeans and hemp.

13:47 We expect to launch at least six product candidates through 2024, including the hemp and wheat products I mentioned earlier, and also including our alfalfa product candidate in 2021, and three additional product candidates, either via our integrated business model are in collaboration with third parties. This is particularly exciting as we continue to accelerate our efforts to develop rewarding collaboration agreements with industry-leading firms to bring our products to market in a high-margin, capital-light manner. I'm excited about our R&D pipeline, and I'm working to expand it along with others inside and outside our organization, advancing our technology and expanding our IP portfolio. enabling us to continuously push the boundaries of what we previously thought was possible through talent.

14:35 Through this, we will explore new target crops, traits, pathways, all while continuing to be innovators and pioneers in the plant gene editing space. To support these actions, in the first quarter, we made two major technical advances. First, we licensed a new technology from the University of Minnesota to help increase plant gene editing efficiency that enables us to eliminate the need for tissue culture in several crops. We anticipate that this will help us maximize our core talent technology to bring products to market faster while avoiding incremental R&D investments for those products. Second, we continue to expand our intellectual property portfolio with newly granted U.S. patents and applications for new patent families.

15:25 Granted U.S. patents cover expansion of the core talent patent family with claims directed to methods for generating gene-edited plants as well as an additional soybean product concept. New provisional patent applications focus on expanding the portfolio of novel gene editing tools and enabling technologies, new product concepts in both soybean and wheat, and additional germplasm varieties from our breeding program. In addition to our already disclosed products, we will continue to expand our pipeline to bring what could be blockbuster products to the marketplace. Some examples of products we are aggressively pursuing are sustainable oil replacements, where we would replace one oil with another more sustainable or healthier plant-based alternative, non-gluten alternatives, and in the areas of protein and flavor, where we're exploring products and project ideas that improve the taste of proteins and plant-based proteins.

16:26 We also have multiple projects underway in hemp, including several that enable us to leverage our plant breeding genomics and analytical expertise to accelerate market introductions. In summary, we've had a strong start to 2020, setting the stage for an exciting rest of the year. And with this, I'd like to hand over the call to Keith Blanks, our Senior Vice President of Sales and Marketing, for an update on our sales and marketing efforts for Ohio leg soybean oil and meal. Thank you, Travis. I would now like to discuss the progress made during the first quarter for our soybean products. We currently target sales of our Hollow Lake soybean oil to food service, food manufacturing, animal nutrition, and industrial market segments. Most of our oil revenue in the quarter was from our world-class customer active in all four of our premium oil market segments.

17:15 We have enough oil on hand to supply the remaining orders now through the early fourth quarter. We're also now supplying our Ohio Lake soybean oil to the top two food service distributors in the United States, though demand in this channel has suffered as a result of COVID-19. We are continuing to sample and test our Ohio Lake soybean oil with large consumer packaged goods companies, though they are focused right now on supplying their customers, not on making changes to products rolling out significant innovation. Our soybean meal customer base has been expanded both geographically and to additional protein production markets. We also have seen our average price premiums improve over the past quarter compared to the third and fourth quarters of 2019.

18:01 Our 2020 contracted acres achieved our 100,000 acre target and represented a 278% growth over our 36,000 planted acres in 2019, surpassing our stated goal of doubling soybean acreage annually. We're also sold out of seed for the 2020 crop and seed distribution is underway. Deliveries of seed are on schedule and we continue to monitor the distribution network. This includes the five new varieties we launched for 2020. Our estimate of our share of the 2020 Ohio Lake soybean acres is 25%. Acreage gains are driven by the expansion of distribution into Iowa, Nebraska, and Kansas, giving us access to where 45% of the soybean acres are planted in the United States.

18:53 Turning now to the impacts of the COVID-19 pandemic, it has had a significant adverse impact on the food industry, which has substantially reduced food industry demand for vegetable oils. Beginning in the last weeks of the first quarter of 2020 and continuing into the second quarter of 2020, we have experienced lower demand for our hollow-leg soybean oil, corresponding to the overall lowering of demand for all vegetable oils. In addition, excess supply of vegetable oil has driven lower prices, and we believe our hollow-leg soybean oil may be particularly impacted by lower pricing within the premium oil category. Looking forward, we expect prices for premium oil to remain low and demand for vegetable oil to remain depressed into the second half of 2020 and possibly beyond.

19:44 We currently target sales of our Ohio Lake soybean meal to dairy, poultry, and pork producers. The COVID-19 pandemic has impacted protein processing facilities, while several processing facilities temporarily closing or suspending operations, which is impacting the upstream operations in the industry. The COVID-19 impact on protein supply is likely to have a corresponding impact on the demand for our Howell Lake soybean meal. Looking forward, we expect prices for soybean meal to remain low, and depending on herd sizes, soybean meal demand may also be depressed into the second half of 2020 and possibly beyond. In response to changing demand, pricing pressure, and uncertainty among our customers and target customers caused by the COVID-19 pandemic, we have adjusted our short-term crush strategy and have canceled crushes scheduled for late May, June, and July 2020.

20:46 This change avoids storage costs for oil and is expected to shift product sales efforts into the second half of 2020, when potentially customer demand may partially recover depending on the timing and the extent and resumption of normal operating activities among our customers. We're also accelerating the purchase of the remaining 2019 grain crop, which was originally expected to be purchased before August 31st of 2020, enabling us to take advantage of current soybean grain prices. I'll now hand this off to our CFO, Bill Koschak, who will give you an update on our first quarter financial results. Thank you, Keith. Today we issued a press release describing our first quarter 2020 results, and we also filed our Form 10Q this morning.

21:36 Both of these documents are available on our investor website. Our revenue from Heilig soybean oil and meal in the first quarter of 2020 increased $2.2 million to $2.4 million. Growth was driven by 1,440 points of volume, 44 points of favorable product mix, partially offset by 70 points of pricing. High alloy soybean meal was 87% of revenue in the first quarter of 2020 compared to 92% a year ago. Most oil revenue in the quarter was from a world-class customer that's active in all four premium oil target market segments that's used as a plant-based alternative to synthetic fluids. Gross margin, as reported, decreased 1.6 million to a negative 1.5 million in the first quarter of 2020, reflecting the higher costs we are experiencing at this early stage of commercialization of our high oleic soybean products. Gross margin as adjusted, a non-GAAP measure, was a negative 1.2 million or negative 49% as compared to negative 1.5 million or negative 63% as reported under GAAP.

22:46 Our earnings release provides a discussion of gross margin as adjusted and a reconciliation of gross margin, the most comparable GAAP measure, to gross margin as adjusted. R&D expenses increased $568,000 to $2.8 million in the first quarter of 2020, driven by increased personnel costs, professional fees, and non-cash stock compensation expenses. We expect R&D expenses to remain stable or increase as we continue to focus on our technology and bringing projects developed with collaborators to market. Selling and supply chain expenses increased $676,000 to $1.6 million in the first quarter of 2020, driven by increased personnel costs and allocated expenses, including $273,000 of Section 16 officer transition expenses, partially offset by $314,000 of lower noncash compensation.

23:42 Due to the impact of The COVID-19 pandemic we generally expect a decrease in selling and supply chain expenses due to decreased sales and decreased marketing costs. We will also be targeting sales and supply chain expenses as part of our overall expense reduction efforts in response to the pandemic, which we expect to reduce selling and supply chain expenses for the balance of 2020 as compared to the first quarter of 2020. G&A expenses increased $558,000 to $4.7 million in the first quarter of 2020, driven by professional services expenses and increased depreciation. We will be targeting G&A expense as part of our overall expense reduction efforts in response to the pandemic, which we expect to reduce G&A expenses for the balance of 2020 as compared to the first quarter.

24:33 Net loss increased by $3.7 million to $11.1 million in the first quarter of 2020, The net loss per share was $0.34 per basic and diluted share in the first quarter of 2020, an increase of $0.11 per basic and diluted share from the first quarter of 2019. Adjusted EBITDA, a non-GAAP measure, increased by $2.6 million to $8.2 million in the first quarter of 2020, driven by the changes in operating expenses and the increases in negative gross margins described above, and a $570,000 and others. Our earnings release provides a discussion of adjusted EBITDA and a reconciliation of that measure to net loss, the most comparable measure calculated under US GAF.

25:25 Net cash used in the first quarter of 2020 was $12.6 million compared to $9.6 million in the first quarter of 2019, driven by the increase in net loss of $3.7 million Partially offset by a decrease in cash used for payments of operating liabilities, primarily the result of higher cash payments to suppliers and related parties in the first quarter of 2019. Cash, cash equivalents, short-term investments, and restricted cash totaled $47.4 million at March 31, 2020. Due to the COVID-19 crisis, we've observed changes in demand across the oil markets and declines in exchange-traded prices for both oil and meal. As a result, we paused our crush and refining schedule and expect product sales efforts in the second quarter to shift to the second half of 2020.

26:14 We are pursuing sources of cash through high margin collaboration agreements and licensing opportunities and are taking further action to increase financial flexibility and liquidity, including reviewing operating expenses, adjusting the timing of grain purchases in the fourth quarter to the following year, and postponing nonessential capital expenditures. In April 2020, we received a $1.5 million loan under the Small Business Administration's Payroll Protection Program implemented as part of the CARES Act. After a thorough management review, we determined that the current economic uncertainty made the loan necessary to support our ongoing operations and allows us to continue employing our team members through this unprecedented time.

27:00 On March 5, 2020, Calyxt issued Kalext is withdrawing its guidance for 2020 revenue and 2020 adjusted gross margin. In addition, considering the anticipated reductions in cash expenditures, Calyxt now expects cash usage in 2020 to be in the range of $30 million to $34 million, a reduction from previous 2020 cash usage guidance of $34 million to $38 million.

27:47 These reductions extend into 2021 as well. With these actions, we expect our current cash runway to now extend to late 2021. We continue to evaluate additional strategies to further reduce our cash usage. I would now like to turn the call back to Jim. Thank you, Bill. While the immediate future is uncertain, what is crystal clear is that Calyxt must act judiciously and decisively to succeed during this situation and after it's resolved. We have taken action to limit our cash expenditures both this year and into next that enables us to extend our cash runway Thank you. Thank you. Thank you. and have driven forward our R&D programs.

28:59 I'm incredibly proud of our team and look forward to sharing more on our developing story at the upcoming BMO Global Farm to Market virtual conference on May 13 and then at a future date providing more information about our technology and R&D pipeline. With that, I'd like to open up the call for any questions. Operator, please go ahead. Thank you, sir. We will now begin the question and answer session. If you wish to ask a question, please press the star key followed by the number one on your telephone keypad. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question.

29:45 We will pause momentarily to assemble the roster. Your first question comes from Ben Cleave from National Securities Corporation. Please go ahead. All right. Thanks for taking my questions. Just a couple from me here. So first, I'm wondering if you can elaborate a bit on the kind of the cadence of the hemp initiative that you're describing. You talked about it being in the pilot stage this year with other projects expected to launch in 2023. Does this imply that this crop overall is going to effectively remain in the pilot stage for the next couple of years or before it really accelerates in 2023, or do you expect kind of a material year-over-year increase between now and then?

30:40 Thanks, Ben. This is Jim. Yeah, we're excited. This project came up and will be launching here in the second quarter, but it's really a standardization project for us to – address the common issues or help build a chassis for the common issues facing hemp growers. So we want to assist in making hemp a broad acre crop. And so there's certain things that need to be done to assist in atomization and mechanization and other things that you need to be a broad acre crop. And similar to our Ohio Lake soybean model, it really provides an alternate economic model for a crop and a model for US farmers who are really looking for that. So that's where the idea came from.

31:26 One of our soybean growers is a hemp grower with certain problems in that crop. And we believe our growing expertise and talent tools could be used to assist in future concepts already focused on and discussed in today's market, like the potential wellness attributes and uses, UBER STRONG GREEN BUILDING MATERIALS USED AS HAILAGE AND USED AS A PROTEIN SOURCE AND REALLY LOOKING AT WAYS TO REDUCE RISK OR PROVIDE NEW PROFILES FOR CONSUMER PRODUCTS IN THIS BIG DISCUSSION ABOUT THIS EMERGING CROP WITH PLENTY OF WHITE SPACE AND LOOKING FOR A LEADER. SO THAT'S BASICALLY OUR PLAN IN HEMP, AND WE'RE TICKLED TO DEATH TO BE GETTING STARTED ON IT, AND WE THINK THIS BUILDUP AND HEAD START AND EXPERTISE in this crop that's looking for a leader is exciting for us. And it also lets us leverage what we're doing in soybeans.

32:24 A lot of this R&D and the techniques have really helped us on both sides, but we really think that's another reason why this will be a strong area for us. Perfect. Thanks. Turning over to Kalino, maybe I missed the exact acreage number, but in the past you've given very exact numbers of acreage that was planted or contracted at the time of report. I heard the 100,000 number repeated today. Did I miss the exact acreage number that you have contracted for this year? And if so, what was it? And if not, is there a reason why you're not able to provide that exact number?

33:10 We've shared with you before that we reached fairly early, I think in February, the 100,000 acre where we're bringing these five new varieties in. We've replicated the seed and South America got it back and ready to plant. So we'll always have some extra seed inventory for replants in case there's a weather event. But we're focused on that 100,000 and really with the increase over 36,000 last year, are comfortable with that number. but we're planning it right now. So the reality is we're less than half planted, but we're way ahead of normal in last year for these areas that keep this kind of statistics at USDA. So we can't predict the future, but we're really excited about getting this 100,000 acres in the ground.

34:03 Okay. On the commercialization front, I certainly understand the challenges in the current environment with commodity prices and the market overall. But I'm wondering if you can talk a bit about how your ability to realize a premium for the meal and the oil has evolved over the past 12 months, maybe in advance of You know, in advance of COVID-19 really taking hold, you know, did you see pricing power, you know, improve over the past year? You know, were you pricing higher than, you know, substantially higher than commodity prices or commoditized alternatives?

34:50 You know, or were you realizing, you know, pricing really kind of closer to that number? And how did that number evolve here over the past, you know, 12 months or so? I'll start, and then I'll let Bill talk about margin numbers. But we're excited. It really seems that this focus on Hialeah Lake soybean as an alternative to imported and other less local traceable sustainable options is taking off. We saw big demand coming into the year and some spot shortages of some of our competing products that really got us interested and got us exposed to a lot of customers. Unfortunately, now with the shutdown of the restaurant industry and other things, that's alleviated some of those supply issues.

35:36 And so we're back to now selling. So on the margin side, Keith and Bill, do you want to comment on that? Sure. As you know, Ben, the changes in the commodity prices, which are the base portion of the price that we capture, especially in the oil market, have really fallen in the first quarter, and we certainly saw that. but the premiums that Keith and his team were working to secure from a variety of potential customers were in the range of what we'd been expecting from the beginning of the commercialization journey. On the meal side, those prices also, as you know, have been very volatile, right, depending upon which week you picked. In March, you could have been $40 different.

36:23 And we work through our risk management strategies to protect the pricing expectations we have in our programs which have proven to be successful. And we were seeing nice pricing versus the board on the meal side as well with a very steady supply or demand for the product. Keith, anything you'd want to add? I think you get it, Bill. Thanks, Ben. All right. I think that does it for me. Thanks, guys. I'll jump back in queue and best of luck navigating the current environment here. Thank you. Thanks, Ben. Thank you. Your next question comes from Lawrence Alexander from Piper Jeffries. Please go ahead. Hi, good morning. This is Kevin for Lawrence actually from Jeffries.

37:12 I just have one question. It's regarding R&D collaboration. So I guess I'm just wondering if you guys have any updates there on maybe how coronavirus and, of course, economic uncertainty is impacting your R&D collaboration with peers. Sure, great question. You know, we're a futuristic company looking at concepts into the future and replacing current issues or projected issues in the marketplace. So our global customers are the players that we're talking to haven't changed their mind about preparing for the future because we're talking about something outside of 2021 and hopefully this pandemic won't take us that far. I'm pleased in that we're pretty adept and the world is getting more adept at keeping meetings on the calendar, getting our video conferencing expertise in, and people really sometimes being even more accessible now that they're not traveling.

38:10 So we're on track and really pleased with how we're managing projects and project timelines on collaboration, even in the face of the COVID-19. Thank you. Thank you. Once again, if you wish to ask a question, please press star then 1 on your telephone keypad and wait for your name to be announced. Your next question comes from Robert Lee Boyer from Leidenberg-Fallman. Please go ahead. Good morning. Good morning, Robert. You had mentioned the impact of the pandemic and the fact that pricing is down and the interruption in the food supply industry and in livestock and all of the different customer sources. Could you quantify a little bit of what you're expecting in terms of volume and just what the pricing movements have been as well as any kind of shift in the market that you might Thank you for the question.

39:27 You know, we try to spread our segments and our channels out to sell our products, but with COVID-19, you know, it's somewhere probably at least around that 50% as far as What's been impacted? In some channels, it's as high as 90%, but I think using 50% as an indicator would probably be a good number. Okay, great. And have you seen, you mentioned the impact on meal and livestock feed. Is that something that you think is going to be contained to a particular quarter or herd reduction going forward or any kind of indications or That's a good question, but the reality is we don't know how long this is going to happen and continue this. Also, we're looking at opening up slaughtering houses again or not.

40:27 There's just a great uncertainty around that and how that affects producers or what they're doing with herd size is interesting, as well as the soybean base price moving up and down. Robert, it's a great question, but if you can tell me how long this is going to last, I can give you a better indication. But we're watching it and hoping for a quick recovery. Okay, well, as soon as I figure out how long it's going to last, I'll call you right away. Let me give you my number. Yeah, my Nobel Prize will be ready. The other thing is just in terms of the planting, for this year and the postponement of the crushes and impact on sale.

41:19 Is there any indication that this is going to be contained to one year or follow through or just too early to say? No, what we do know is we're planning to plant this 100,000 acres this year and then we'll see how long this macro environment lasts and we'll make decisions there. So what we do know is what we've reported is that we've canceled our crushes through July. We're planning the planned acres of 100,000. We'll see how the weather goes. And then we're going to watch this macro environment make further decisions. Okay, great. I guess that's as much as anyone can estimate at this point. Thank you.

42:08 Once again, if you wish to ask a question, please press star then one on your telephone keypad and wait for your name to be announced. This concludes our question and answer session. I would now like to turn the call back over to Mr. Jim Bloom for closing. My apologies, we have one question from Kenneth Zaslow from BMO Capital. Please go ahead. Hi, this is Vishal on for Ken. Can you talk a little bit about how your conversations with customers or prospective customers have changed if they have it all over the last month in light of recent events? And in terms of your e-commerce launch, did you notice any significant consumer interest relative to commercial? I was kind of surprised at the number of non-GMO cooking oil options that were available on Amazon after I saw that you launched an e-commerce platform.

43:04 I was just wondering if you could comment on that. Thank you. Yeah, I'll take the e-commerce question up front and I'll pass it off. But we were excited to launch the e-commerce. We didn't spend a great deal of money putting it out there, but we have a great source of pride in rural America about cooking with their own oil and some of the local restaurants and the local, the traceable, the University of Minnesota. We had a lot of people wanting to do this. And so there's something not just about non-GMO oil, but it's something about this product of University of Minnesota, this Upper Midwest technology, this Upper Midwest small company taking it to the market with growers who are right here and feeding all that in. So we really wanted them to be able to serve that pride up on their tables. It's pretty interesting for them to look out into the fields of beans and then serve the oil on their tables.

44:02 In Minneapolis and in certain areas, it's kind of like a virtual farmer's market where we're bringing local. With proper social distancing, we're still getting access to local and traceable products. So that's been our experience on e-commerce, and we'll be reporting on data and what we're learning from it in the future. Morning, Shaw. I'll talk just a little bit about customers. What has been surprising to me is that they are still very engaged and they're still very interested. It's just that COVID has changed some of their, what I would call, probably their priorities and where they're focusing their efforts. But I have been very surprised that we still stay engaged. We're still doing testing. We're still going through approval processes.

44:49 So that part has been very positive. I appreciate it. Thank you, guys. Thanks, Vishal. Thank you. This concludes our question and answer session. I would now like to turn the call back over to Mr. Jim Bloom for closing remarks. Yeah, I want to say thanks to everyone for joining us on the call today. We have a really dedicated and hardworking team here at Calyxt who push themselves really to further our mission every single day. and a sincere thanks from all of our management to all of you. We couldn't do it without you. And lastly, if we were not able to address all your questions on today's call, please feel free to contact us or our investor relations firm, MZ Group, who would be happy to answer them.

45:41 We look forward to providing more updates at our Virtual Analyst Day coming up in the future. Thank you, operator. Thank you. This does conclude today's conference. Thank you for your participation. You may now disconnect.