Cibus, Inc. (CBUS) Earnings Call Transcript & Summary

Thanks, and good afternoon, everyone. We appreciate your time in joining this conference call and webcast covering Cibus's business update and financial results for the first quarter of 2026. Here with me are Peter Beetham — Co-Founder, Interim Chief Executive Officer, President, and Chief Operating Officer — along with Greg Gocal, Co-Founder and our Chief Scientific Officer. Prior to getting started, please note that anything stated during this call and webcast — including remarks about future operational goals, future financial results, and industry prospects — constitutes forward-looking statements and could be subject to various risks and uncertainties that might cause actual outcomes to differ materially from what gets described here. A list of associated risks can be found in Cibus SEC filings. This conference call is being webcast. To help with your analysis of our business, the webcast link, our press release, and corporate presentation can all be accessed on the investor relations section of cibus.com. With that said, I'll now hand the call over to Peter.

Thanks, Carlo. Good afternoon, everybody. I'm really happy to share that we kept building momentum toward our business objectives across our priority programs in Q1 of 2026. If I had to boil down what we're saying today to one word, that word would be execution. Over the past several months, we brought in a substantial amount of capital — roughly $37 million in gross proceeds from two public offerings. That money has gone straight to work right away, pushing our commercial goals forward for our priority programs. Our singular focus is on transforming how fast and how large-scale breeding can be. Every day, we concentrate on getting materials through the system, growing customer relationships, and hitting the milestones that we firmly believe will generate shareholder value. 2025 was the year we laid that groundwork — signing up new seed company customers, putting material transfer agreements in place, finishing pre-commercial pilot runs, and, crucially, setting up our priority programs for opportunities that only Cibus is positioned to seize; we delivered on every one of those objectives, which marked it as a successful year; now, in 2026, we've turned our attention to capturing the commercial opportunities in front of us. That means getting material back to our customers, working out pricing and volume agreements, and turning our pipeline into revenue-generating opportunities. In fact, only last week, we returned gene-edited rice carrying herbicide-tolerant traits to Interoc. It's a textbook illustration of our commercialization progress, since it represents a key step toward rolling out our commercial launch plans for the rice royalty business. We're eager to carry out additional planned transfers to our partners in Latin America during this year. The context surrounding this work has never been stronger. Today's agricultural landscape makes the urgency and critical importance of our mission very clear. Continuing disruptions in global fertilizer supply chains — affecting nitrogen production, delivery, and pricing alike — are producing genuine financial difficulties for farmers dealing with the global geopolitical landscape, especially in the nitrogen-intensive crops in our portfolio such as rice, wheat, and canola. These disruptions make plain the considerable value creation potential built into our trait development platform and underscore why novel precision breeding solutions in elite seeds matter so much for creating a more resilient and productive agricultural system. Keep in mind that seeds are the engine room of agricultural production; that's exactly why we exist — to make every acre more productive. This wave of disruption and uncertainty drives home what we started noticing earlier this year. Seed companies want to become more deeply integrated with our technologies instead of just getting access to a single trait. They approach us not for one edit in one crop, but to investigate broader, ongoing relationships in which Cibus acts as a gene editing engine across their breeding programs. Last quarter, I explained how that evolution might translate into our economics. The key update is that we're now watching it happen in practice. The commercial talks taking place right now — whether they involve a trait license chance to scale up rice fragrance alongside our CPG partner, or a freshly partner-funded development effort in wheat or canola — all move through one common framework. An edit gets made by Cibus, and Cibus keeps a share of the value generated via royalties. What's different is how fast things are moving. The count of live discussions, how deep those discussions go, and how close we are to revenue have all moved forward considerably compared with the situation when we last talked in March. That's the reason I feel confident this model isn't merely nicely designed — it's delivering results; now I'll go into updates on our priority pipeline, starting with rice, where we count seven active customer relationships with rice seed companies spanning LATAM and the United States. Talks are progressing with further seed companies in new markets, Brazil included, backed by RTDC and Argentina; we're likewise still pursuing possibilities in India's sizable rice market, with backing from RTDC and our partner, AgBio. It's a real pleasure to share that our planned 2027 initial LATAM commercial launch remains on track. LATAM forms the core of our near-term push to establish the rice business, accounting for most of the $200 million yearly addressable royalty opportunity throughout the Americas, totaling 5 million-7 million peak addressable acres. Turning to the United States, across the last several weeks we've honed our launch approach together with our chemistry partner, Albaugh. In the near term, Albaugh is navigating its chemical registration process with USA regulators, a vital gating item for our U.S. launch. Although progress has been strong, the registration pathway for using their clethodim herbicide in rice has fallen behind the original timeline we were targeting, which moves the projected U.S. launch from 2028 to 2029. What we're doing at present with elite seed from partners needs to sync with herbicide registration. Moving materials through the system and into our seed company partners' hands is the essential path to success. Regarding our Q1 progress, during January we signed a non-binding letter of intent, or LOI, with Interoc, among our lead Latin American seed partners, setting up a framework to commercialize co-developed herbicide-tolerant rice traits throughout key Latin American markets. This deal aims at initial market entry into Ecuador and Colombia in 2027, with staged expansion into Peru, Central America, and the Caribbean, then U.S. expansion now in 2029. During March, Interoc gained an extra import permit enabling transfer of material carrying our HT traits. That was a hugely significant regulatory milestone that opens the way for us to start delivering gene-edited trait material into the Latin American seed system; in May, we completed delivery of finished gene-edited materials within Interoc's elite rice germ plasm. This changeover lets production get underway right away and moves us nearer to finalizing a deal with Interoc to bring Cibus enhanced seed products to agricultural markets across Latin America. Now shifting to sustainable ingredients. During the previous quarter, we told you about collecting our very first payment from a customer in Q4, which marked an important milestone. As I mentioned to you in the prior quarter, this positions us to solidify our broadened partnership and aim for commercial scale production at some point in 2026. Efforts on that front are moving forward. I'd like to give you a picture of how that appears within the company at this moment. Given that our technology scaled successfully — something confirmed by our pre-commercial pilot runs — and with ongoing customer payments underscoring that momentum in Q1, the program has now clearly entered a commercial ramp-up stage. What we're discussing today centers on additional scale-up timelines, the volumes we'll produce, pricing arrangements, and completing product formulations alongside our CPG partner; we anticipate further scale-up orders for our first biofragrances during the latter half of 2026, and work is in progress on developing more fragrance products that rely on the same yeast platform behind our original offerings. This extensible aspect of our platform matters a great deal. It means we can build on what we've already done instead of starting over every time we pursue a new sustainable biofragrance. Zooming out, the opportunity available to us here is substantial. The worldwide fragrance market is valued at more than $65 billion.

Once these biofragrances are entirely commercialized, we think our partnerships in natural biofragrances might add up to a yearly royalty chance worth $20 million-$40 million for Cibus. The first biofragrances royalties we receive also act as a shorter-term revenue bridge, one that will grow as our rice royalty flow expands toward its 2027 LATAM introduction. This shows something I believe gets too little credit. Those same fundamental strengths that let us build herbicide tolerance in rice are generating commercial worth in the enormous consumer products sector and are fueling talks throughout our whole pipeline of opportunities. Alongside biofragrances, we keep moving forward our crop-based lauric oils program, which partners fund, as one piece of the wider sustainable ingredients portfolio. Last, I want to point out that the regulatory landscape remains a favorable force at exactly the time it counts the most. With worldwide supply chains confronting upheaval and growers seeking fresh answers, precision breeding is finding open doors in the jurisdictions that count. The EU's political agreement on New Genomic Techniques legislation is moving ahead with the EU Environment Committee, ENVI, and the European Commission officially backing wording that positions Parliament for a vote during the next plenary session. In Latin America, Ecuador has verified that our HT1 and HT3 rice traits match those produced via conventional breeding, which is directly supporting our LATAM launch timeline, and Peru has issued a comparable ruling. Keep in mind that in the United States, we currently hold 17 positive USDA APHIS determinations in total. Our teams have been engaged participants in these regulatory discussions for decades, and I want to stress how commercially important this momentum is that we are witnessing. Regulatory harmonization among these jurisdictions is more than just a policy headline. It is the very thing powering the commercial discussions we are holding at this moment with seed companies spanning three continents. Absent it, being technologically ready would be irrelevant; with it, our runway is becoming ever clearer. I will now hand the call to Greg so he can cover the opportunity pipeline traits and programs. Greg?

Thanks, Peter. Today I want to concentrate on the technical achievements that underpin our priority programs and the wider pipeline of opportunities before us. The advances we're making in science are directly fueling the commercial momentum that Peter just walked through. On rice, during the last fiscal year, we delivered an improvement of one order of magnitude in editing efficiency. That came from systematic optimization spanning reagents, cell culture conditions, delivery mechanics, and regeneration. We're building on those gains by quickly deploying and strategically applying AI and machine learning, and that is speeding up target identification, sharpening how accurately we predict edit outcomes, and channeling continuous learnings into every new campaign. What that yields is a Trait Machine process that is faster, more scalable, and more consistent than at any point before. Paired with our semi-automated workflows and robotic assistance, we now possess the throughput to back the sort of deeper ongoing partnerships Peter described. We operate not merely as a trait provider, but as an editing capability that complements our customers' breeding programs. Turning to our opportunity pipeline programs, I'll keep my comments centered on how today's environment is speeding up interest in what we've built. Peter laid out the disruption farmers face. What I'd like to take you through is why our pipeline is positioned in a unique way to meet that moment, beginning with nutrient use efficiency. Our collaboration on nutrient use efficiency with the John Innes Centre has always ranked among the strategically important efforts in our pipeline, yet the present environment makes the case even more plainly. Keep in mind, only roughly 1/3 of applied nitrogen fertilizer is typically taken up by plants. In a world where nitrogen supply is constrained and costs are climbing, a trait that enhances that uptake offers an amplified value proposition, and it carries multi-crop potential within our portfolio across rice, wheat, and canola. This is precisely the sort of complex biological challenge our RTDS Platform was built to solve, and it is precisely the sort of trait that draws significant commercial interest when farmers are under pressure. On canola, we have several important developments to share. Work has now begun on the Defra-funded consortium within our U.K. Farming Innovation Programme, where we serve as the gene editing partner applying our RTDS platform to develop durable resistance to light leaf spot disease in oilseed rape. The program is moving forward as planned, with an initial funding contribution expected in 2026. On pod shatter reduction, after two years of encouraging U.K. field trials in customer germplasm, we are getting ready to plant this fall in the U.K. under the Precision Bred Organisms framework. This is a significant commercial catalyst and is top of mind for seed companies we are working with in Europe. On our wheat platform, we previously disclosed successfully regenerated plants from single cells in a wheat cultivar. Single cell regeneration is the gateway to applying our full RTDS editing capability in a new crop. With that accomplished, the entire trait development process for that crop opens up. This in turn spurs opportunity for future partner-funded development in one of the world's most cultivated crops. With the European rules coming into sharper focus, interest has picked up. On soybean, we're still advancing from the successful edit we achieved for the HT2 trait last year, and we're moving our soybean platform forward alongside the sustainable ingredients program. What we're doing with regeneration in wheat parallels what we intend to do in soybean once that platform is up and running, and it shows the chance to speed up trait development in a crop that ranks among the most widely grown worldwide. Here's the main point I'd like you to take away: our RTDS platform is delivering results across several crops and traits of growing complexity. Each of these pipeline programs can be partnered on, and collectively they offer considerable optionality for the business. With that, I'll pass things to Carlo for the financial update. Carlo?

Thanks, Greg. Turning to the numbers for Q1: our cash and cash equivalents stood at $30.3 million as of March 31, 2026. In the quarter, we closed two public offerings — one in January that brought in $22.3 million in gross proceeds, and one in March that brought in roughly $15 million in gross proceeds. When we factor in the net proceeds from those offerings along with the effect of the cost-saving initiatives we've put in place, we believe our current cash and cash equivalents will be enough to cover planned operating expenses and capital expenditure requirements into late in the first quarter of 2027. Now on to operating results for Q1. R&D expense came in at $8.7 million, versus $11.8 million in the same period a year ago. That $3.1 million drop stems mainly from cost reduction initiatives. SG&A expense was $5.1 million, versus $9.9 million in the same period a year ago. That $4.8 million drop stems mainly from a $3 million litigation expense in the first quarter of 2025, plus cost reduction initiatives. All together, operating expenses were down by almost $8 million year-over-year, and we're still on track to hit annual net cash usage of about $30 million or less in 2026. Royalty liability interest expense related parties was $9.1 million, versus $8.4 million in the same period a year ago. That $0.7 million rise comes from recognizing interest expense on the accumulating royalty liability. Net loss for the quarter was $21.2 million, versus $49.4 million in the same period a year ago. Net loss per share of Class A common stock was $0.33, versus $1.34 in the same period a year ago. The gain was driven mainly by a non-cash goodwill impairment in the prior year, which represented about $0.57 of net loss per share of Class A common stock, along with the effect of our cost reduction initiatives and a higher weighted average shares outstanding. The way we see it, our streamlining work is flowing straight through to the P&L. The capital we raised this quarter supports our runway, and we're staying focused on near-term revenue execution in rice and sustainable ingredients. With that financial overview done, I'll hand it back to Peter for his closing remarks.

Thanks, Carlo, and thanks as well, Greg. Let me wrap up by framing where this quarter fits. During our previous call, I described the shape 2026 would take. We'd be moving closer to a definitive agreement with Interoc, growing our biofragrances partnerships, witnessing meaningful regulatory momentum across the EU, observing ongoing gains in our opportunity pipeline, and showing disciplined execution on cost management. Right now, I feel genuinely good about our position relative to those goals. That letter of intent with Interoc establishes the structure for the definitive agreement still to come. Our sustainable ingredients program is advancing toward commercial scale. Regulatory progress is unfolding just as we anticipated. New engagement with prospective partners is coming out of our opportunity pipeline. Cost discipline is showing up in the P&L. In a world where growers everywhere seek solutions to some of agriculture's most basic problems, I think Cibus sits in the right spot, with the right technology, at precisely the right moment. More work lies in front of us, yet the direction is unmistakable, and I take pride in what our team is constructing. Operator, we're ready now for questions.

Hi, everyone. I appreciate you answering my questions today. To start, there's a bullet in the PR discussing the change to your existing agreement with your sustainable ingredients partner to broaden R&D work in that area. Could you shed some light on whether this ties to the bio fragrance program, the sustainable ingredients in soy, or both, and what the higher revenues could look like? I have a follow-up.

Thanks, Matt. We're glad to include this in the press release, since it stems from the strong efforts the team has made in sustainable ingredients; it concerns soybean lauric oils. Given that, I believe the work we've been doing has been growing that area and achieving really significant progress; we've You know, the result is that we've been able to modify that contract and secure an expansion as part of our R&D revenue moving forward. I'll pass it to Carlo for any further details.

You've got it right, Peter. During the prior quarter, additional work was performed as well, and a partner acknowledged it, which is the reason a catch-up payment landed in this quarter; it also explains the increase you're seeing in our revenue. We're simply pleased about that acknowledgment.

Great.

Hope that covers it, Matt.

Yes. My apologies. I'm not sure whether you all are able to hear me. My connection seems a bit unstable, I believe. Regarding the burn rate at this moment, is this the point where you expect it to stabilize, or do you anticipate it dropping somewhat more, going even deeper into the latter portion of this year? If you could provide a bit more detail about the postponement of the rice launch in the U.S. I recall you brought up the herbicide labeling process — if you could clarify whether that leans more toward Albaugh's end and whether you hold significant influence over that schedule at all. Both of those would be useful.

Yeah. Let me begin. I appreciate the question. First, regarding the burn. We are aiming toward that goal of reaching a net annualized burn of $30 million or less, and we are in a transitional period. The reorganization occurred late in quarter one, so as you can picture, there is a triple effect extending even into quarter two. What you'll observe is the burn declining between quarter one and quarter two, and that we find ourselves in improved condition during quarter three and quarter four. My expectation is that in quarters three and four, we will be quite near the targets we've referenced up to now.

Appreciate that, Carlo. Now I'll pick up where you left off on Matt's second question. The thing I want everybody to keep in mind is that within our rice herbicide tolerance royalty business, the Latin American market truly represents the majority of that $200 million opportunity we see. U.S. acres are fewer. The dollar per acre runs higher, but it's genuinely pretty modest next to the Latin American market. As for where things stand with, you know, the main push down in Latin America — and this is exactly why we're eager to get material back into our customers' hands — really, when that U.S. shift we talked about today arrives, Latin America will already be at full commercial scale by that point. Honestly, you know, what this update conveys is that we're actually honing the commercial plan instead of diluting it. I believe it matters a great deal to grasp that with Alba, you know, we've been collaborating closely with them on clethodim registration over rice, and while that's a gating item for the commercial launch, it doesn't hold back any of our other platform initiatives. You know, as far as timelines go on chemical registration, working alongside the regulators in the U.S., there are a number of gap analyses you have to complete. The good news is we've genuinely sharpened that process, and we now feel very confident about the timeline stretching from today through 2029. I hope that addresses your question.

Yes, that's really useful. Thank you both. I appreciate that you've taken my questions. Congratulations on how far things have come this quarter as you move toward commercialization.