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

Thank you, and good afternoon. I’m grateful that all of you took the time to join us for Cibus’s conference call and webcast covering third quarter 2026 financial results and a business update. With me today is our Chief Executive Officer, Craig Wichner, as well as Co-Founder, President, and Chief Operating Officer Peter Beetham. Our Chief Scientific Officer, Greg Gocal, will be on hand to participate in the Q&A portion of the call. Before we begin, please note that any remarks shared today on this call or the webcast — including those regarding anticipated financial outcomes, operational targets going forward, and the outlook for our industry — constitute forward-looking statements. Such statements carry various risks and uncertainties, and actual results could therefore differ materially from what is described here. A list of related risks can be found in Cibus SEC filings. This call is being webcast, and the webcast link, along with our press release and corporate presentation, may be found in the Investor Relations portion of cibus.com to assist you in analyzing our business. With that said, I'll now hand the call to Craig.

I want to thank Carlo and wish everyone a good afternoon. Three months back, during my initial call in the CEO role, I laid out three ways our Cibus platform technology delivers value: platform programs producing revenue now, royalties once our traits are planted on acres, and partnerships that grow deeper over time. Today I'll give a quick update on each of those three and explain a little about why every one matters. I'd also like to take a few minutes to cover what allows our Direct Breeding platform to move faster than the two other most common approaches to seed improvement. Platform programs make up the first tier of our business. I'll begin with bio-fragrances. We've begun manufacturing for the production runs we anticipate for our initial bio-fragrances, and our partner has asked for larger amounts of two more of them so it can move its product development ahead. This program exists because consumer products companies want fragrance ingredients produced more sustainably. Ours are grown using proprietary yeast and extracted following fermentation, instead of being made from petroleum or harvested at scale from flower fields. It's the same platform, only applied to a microbe rather than a crop, and it's the first instance of something we designed getting ready for scale-up toward commercial production. The second program is new; in September we announced a partner-funded effort with Crystal Crop to develop traits for mustard in India, and work got underway during the quarter. Why mustard, and why India? No country grows more mustard than India. Mustard accounts for almost a third of its oilseed production, and India imports over half of the edible oil it consumes. Indian mustard yields run about a third lower than those of the leading producing countries, and for decades breeders have struggled to close that gap. Disease and weeds can claim a third of the yield, and growers in India lack any of the herbicide-tolerant or disease-resistant varieties that competing producers depend on. That's the kind of trait we develop, and with our platform you can make several changes at once within a partner's own varieties. India's government has made this a national mission, aiming to almost double the country's oilseed harvest by 2030 and 2031, and it names genome editing among the tools we'll use to reach that goal. We think India's rules for edits that contain no foreign DNA clear a path to the field, and Crystal Crop will evaluate the traits in India. A stronger mustard crop could give growers more income and mean more of India's cooking oil is grown at home. Our third initiative is based in the United Kingdom. There, we're working on building resistance to light leaf spot, a disease affecting oilseed rape — a crop similar to canola. Among the diseases that harm Britain's oilseed rape harvest, light leaf spot is one of the most destructive. During 2022, which was exceptionally bad, British growers lost an estimated GBP 300 million to it, and the fungicides that previously kept it in check are no longer as effective. A coalition of farmers, breeders, and research institutes — with partial funding from the Farming Innovation Program run by DEFRA, the U.K. Environment and Farming Department — chose Cibus to carry out the edits in elite winter oilseed rape, and that effort is proceeding according to plan. A pair of crop programs is being financed by outside parties: one by a consortium backed by the government, and the other by a seed company that compensates Cibus for putting a trait into its plants. The second tier consists of trait royalties, and rice is out in front there. From the farmer's standpoint, weeds cut into both yield and quality. In rice, grass weeds present the hardest challenge, and among those the most severe is weedy rice, because its genetics are almost the same as those of a rice plant — so whatever destroys it destroys the rice too. For that problem, conventional herbicides have never provided a solid solution. Our rice traits were designed so farmers can manage those weeds while keeping the rice safe; during this quarter, we shared initial data from a Latin America trial of rice varieties, and the trait performed well. Interoc has begun evaluating our traits in its own Ecuadorian varieties, and we anticipate results in Q1 2027. We continue working toward a final commercialization deal with Interoc. After launch, royalties would be based on how many acres get planted with seed containing our traits, and we believe rice will be the first crop under that approach. Peter will cover the trials and launch schedule. The third tier is about deepening partnerships. During the prior quarter, we shared that Interoc had expanded its letter of intent, moving from two traits up to five. In the current quarter, it's the John Innes Centre — a top plant science institute located in the United Kingdom — that in 2022 brought us its nutrient use efficiency discovery for editing into oilseed rape and rice. The gene target for light leaf spot that we're editing into oilseed rape originated from that same institute along with its partners at the University of Hertfordshire. So that's two discoveries and two programs with us, and we're looking into additional ones alongside them. When a partner first approaches us about one trait and then requests another, that's exactly where we think the economics of this platform can grow. We anticipate that additional traits beyond the first may prove quicker and less costly for both us and our partners, and a single trait could potentially serve several partners, crops, and geographies. As time goes on, this relationship has the capacity to evolve from a project into a pipeline. Allow me to take a moment to explain what sets our Direct Breeding platform apart. All crops globally result from plant breeding, and that breeding has traditionally been indirect in nature. When a breeder wants to introduce a trait, they cross their top-performing variety with a donor plant containing that trait. The child only carries half of the traits the breeder was after, so it gets crossed back again and again until the parent line's full genetics return, now with the desired trait in place; that consumes the better part of ten years of development and testing, followed by years of raising sufficient seed for sale. Gene editing's first generation sped up the search for the correct alteration, but usually the editing apparatus ended up inside the plant's DNA, meaning that apparatus then had to be eliminated through those very same rounds of crossing. Where multiple edits had been introduced at distinct spots in the genome, quite a few were dropped while the machinery was being bred out. All of those approaches spend years developing full plants over multiple seasons. Cibus takes another path. Starting with the seed company's top-performing variety, we isolate one cell. Inside that cell, we introduce modifications—multiple edits simultaneously when a customer requests it—with editing tools that complete their function and subsequently degrade. None of our editing tools ends up integrated into the plant's genetic material, meaning our customers later have no unwanted traits to remove through breeding. We confirm the edits while the cells are still in a Petri dish. The modified cells develop into small clusters, and from those we regenerate complete edited plants. The output is the same range of material that was fed in, but now it has the new characteristics, and it goes back to the seed company so they can run their own tests and handle commercialization. That's the process we refer to as Direct Breeding.

There are two really important outcomes I'd like to emphasize that set Direct Breeding apart from how things used to be done, since these are the reason I think this platform can produce revenue at scale. Speed comes first. With canola, we can give a customer back their germplasm carrying trait edits in 12 to 15 months, and we aim to hit a comparable turnaround for edits in other crops. Second is doing multiple edits simultaneously. Once inserted editing machinery must be bred out, each additional edit compounds the cleanup work. Our platform leaves behind no machinery at all, only highly targeted edits, which means a customer is able to request several edits at the same time. All of this happens within our partner's elite varieties. In contrast to certain larger companies, we sell neither seeds nor chemicals, so we aren't competing with our customers over seed sales, and seed companies regardless of size are able to work with us. Now let me discuss our resources and how they shape our near-term strategy. We're ramping up near-term revenue streams, yet we face financial constraints we intend to resolve in the interim, and that keeps our team sharply focused on outcomes; during my first 100 days, we examined each program, each expense, each opportunity through the lens I laid out in August. What generates near-term revenue? What makes the balance sheet stronger? What releases value from what we've already built? That review affirmed our concentration on the two programs nearest to revenue, Sustainable Ingredients and rice. It affirmed that we maintain targeted investments in the programs we believe are capable of creating substantial long-term value, nutrient use efficiency and disease resistance among them; we'll restrict incremental growth investment to our highest priority opportunities, and we'll manage it within the cash usage objectives we've provided to you. Put simply, we're more focused than ever on speeding up our priority programs inside the same spending envelope. Carlo will walk you through the numbers and explain how we're viewing the balance sheet. With that, I'll pass it to Peter. Peter?

Thanks, Craig, and good afternoon, everyone. My focus will be on what shifted during this quarter. For the programs I don't bring up, they remain where they stood in August, and their status appears in the press release. I'll begin with Sustainable Ingredients. Back in August, I took you through the steps separating this program from commercial revenue. Here is what has progressed. Our partner has confirmed approval of both of our first two ingredients for use in its products. Manufacturing has begun so we can scale for the production runs we expect, and we gave our partner more bio-fragrances; that partner has now requested bigger volumes of two of them to move its product development forward and continues to assess the rest. Our view of the opportunity has changed. Back in August, we framed it as a peak yearly revenue opportunity of $20 million to $40 million. Today we work through a direct sales model rather than the royalty model we had assumed before. On that basis, once fully commercialized and assuming a portfolio of eight ingredients, we think our bio-fragrance business could reach roughly $100 million in peak annual revenue at the top end. Now on rice — the key development for the quarter is that our traits have moved into testing where it truly matters: inside our customers' own varieties, on their own fields in Latin America. Prior to editing Interoc's own varieties, we had validated both traits in Latin America using genetics that were not Interoc's. Those trials were planted in April, and by August the results were in. In that local environment, both traits did well. The commercially decisive trial is now underway in the field. In May, we provided Interoc's own varieties carrying our traits, and Interoc planted them in Ecuador in late September. Those same trials generated the information our customers require in order to broaden herbicide labels onto rice that carries our traits. Together with our customers, we are pursuing a mutually agreed plan for commercialization in Latin America, which we expect would involve demonstration plots, and we are aiming for an initial commercial launch as early as 2028. How quickly that timing is set will depend heavily on validation trials conducted in our customers' own varieties. Now regarding the United States, the launch is tied to Albaugh's herbicide registration, and under current planning the target is 2029 or 2030. Both inbred and hybrid programs are among our customers, and with each of them we are developing the seed production and stewardship plan suited to its market. Outside of those seven accounts, we're getting the regulatory filing ready to introduce our trait material in Brazil, and talks in India are still ongoing. Even so, Latin America is still the main near-term source of royalty revenue, and it makes up most of the approximately $200 million yearly addressable royalty opportunity we've outlined for our rice trait portfolio, spanning an estimated 5 million to 7 million peak addressable acres. Now let me move to the wider pipeline of opportunities. Outside the two priority programs, six items progressed this quarter. For light leaf spot, the effort is moving forward according to plan. Winter oilseed rape requires a period of cold temperatures prior to blooming, which means the edited plants currently sit within that chilling phase; the upcoming milestone involves collecting seed from these plants so trait testing can proceed. Our distinct canola initiative in the United Kingdom is aimed at minimizing pod shatter. When seed pods rupture ahead of harvest, they scatter their contents on the soil, whereas this characteristic keeps them closed. It has now accumulated three years of field trials conducted in customers' own varieties, and a notification has been submitted to DEFRA, the U.K.'s Environment and Farming Department, with approval obtained to plant in England according to the nation's precision-bred crop regulations. Regarding nutrient use efficiency, or NUE, this trait focuses on how a plant's roots absorb fertilizer—considering the complete package rather than just nitrogen—and it could be applied to rice, wheat, and oilseed rape. Back in August, we indicated that edited canola material would be handed over to the John Innes Centre during the third quarter. That material is now ready, comprising several edited seed lines alongside their unedited parent. We're in the process of finalizing the material transfer agreement, and the handover is now anticipated in the fourth quarter. The center will evaluate the trait in spring oilseed rape, and this quarter we are beginning the identical edit in rice. Our second-generation trait for canola herbicide tolerance provides growers with an additional choice for dealing with weeds that are difficult to manage in canola. We finished our 2026 field trials at three sites, and those trials verified tolerance to the target herbicide. In India, the mustard collaboration with Crystal Crop Protection that Craig mentioned has begun with the stage every new crop undergoes in platform development — taking one cell from Crystal Crop's own mustard varieties and growing it back into a whole plant. Once that succeeds, editing can start. In soybean, during this quarter, we validated the editing reagents for our Sustainable Ingredients Program, which is the step prior to an edited soybean plant. What ties this quarter together is execution. Our partners' gene targets are being edited into elite lines at seed companies. The nutrient use material is set to go to the John Innes Centre, and the pod shatter plants have been cleared for trial planting in England. All of these programs are still open for partnership. Now I'll turn to regulatory progress worldwide. The regulatory factors behind our launch timelines are unchanged, so I'll concentrate on what's new, and that's Europe. This quarter was the first for implementation work under the European Union's new rules, which were approved in June and have been in force since July, with the two-year implementation period running through 2028. The European Commission is drafting the secondary legislation and the implementing acts, and we monitor that work closely via industry groups such as the International Seed Federation, ISF, Euroseeds in Europe, and ASTA in the United States. What determines how fast a disease resistance trait or a pod shatter trait can be submitted is the detail of those implementing acts. Less pod shattering in winter oilseed rape remains the first submission we have planned. That applies in England, under that country's own framework, and in the European Union, once the implementing regulations are finalized. In Latin America, regulatory policies keep evolving, and we work closely with the seed company customers we serve as well as the national agencies. With that said, I'll turn things over to Carlo for the financial review. Carlo?

Appreciate that, Peter. Now for the Q3 figures: as of September 30, 2026, our cash and cash equivalents totaled $10.7 million. Over the first nine months of 2026, cash burned by operating activities was roughly $7 million lower than what we saw in the same period of 2025 — a decrease of approximately 19%. Taking into account the cost-cutting measures we've already implemented, and excluding any financing transactions Cibus may choose to undertake from time to time, we think our current cash and cash equivalents will be sufficient to cover planned operating expenses and capital expenditure needs into early in the first quarter of 2027, though we do anticipate needing to raise additional capital in the near term. Moving on to how we performed operationally in Q3. Quarterly revenue came in at $0.8 million, compared with $0.6 million during the same period last year. Across the nine-month stretch, revenue totaled $3.5 million versus $2.6 million — a 35% increase — with the bulk of it generated through our collaboration agreements tied to the Sustainable Ingredients Program. During Q3, we additionally began billing a new partner-funded research initiative focused on Indian mustard. R&D expense totaled $7.9 million, compared with $10.8 million a year earlier. SG&A came in at $5.4 million, compared with $5.3 million. All told, operating expenses dropped by approximately $2.7 million year-over-year, reflecting the cost measures I'll walk through in a moment. On the non-operating side, interest expense tied to non-cash royalty liabilities owed to related parties came to $9.8 million this quarter, compared with $9 million a year earlier, driven by interest building up on the royalty liability balance. That item remains the largest single factor separating our operating loss from our net loss. To put it precisely, none of this interest expense involves cash. It does not touch our cash runway or the cash we use in operations. Net non-operating income was $0.4 million, which included grant funding for our Light Leaf Spot program in the United Kingdom as well as a grant backing our soybean work. Support from partners and government programs helps fund development of portions of our trait pipeline. For the quarter, the net loss came in at $21.9 million, compared with $24.3 million during the same period last year. On a per-share basis, net loss for Class A common stock was $0.29, compared with $0.44. Now moving to cost structure. During 2026, we carried out a number of steps aimed at structurally bringing down our cost base. We shifted resources around and made targeted cuts to our workforce. All laboratory work was brought together at our primary facility located on Nancy Ridge Drive in San Diego; we also examined each corporate and back-office function. As a result of that review, support function costs came down, spending on consultants and other outside vendors was reduced, and oversight of travel along with other discretionary spending was made tighter. We streamlined the way our legal entities are set up, brought our financial systems together, and made greater use of technology and AI-enabled tools in places where they help the team get more done. Those steps gave us a leaner operating structure, even while we continue funding the commercial and development programs that matter most. Turning to net cash usage: cash used in operating activities came to $9.3 million during the third quarter, and we still expect to end 2026 at a run rate of about $35 million in annualized net cash usage. Craig took you through the conclusions of the capital allocation review. From my perspective, the takeaway is simple. The set of opportunities across the platform exceeds what we can finance on our own, so we are pairing strict near-term cash discipline with targeted investment in programs capable of generating future growth, and that investment stays inside the cash usage targets we have established. One final note on the rice royalty model, since the launch timing Peter outlined is what determines it. Royalties would apply to acres planted with seed that carries our traits, so payment would start with the first commercial seed in Latin America and grow as adoption expands from there. That model saw no changes this quarter; with that, operator, we are ready for questions.

Hi everyone. I appreciate you answering my questions today, and congratulations on what you achieved this quarter. I'd also like to thank you for explaining the Direct Breeding technology that your team has. That strikes me as a really significant point, and I want to focus on it. As you've laid it out here, how does your Direct Breeding tech compare with what the industry currently uses, particularly when it comes to gene editing? I'll have a follow-up after that. Thanks, everyone.

Hi, Matt. Thanks very much for asking. Am I coming through clearly on your end?

Yes, I’m able to do that. Thank you.

Excellent. It really comes down to Direct Breeding. Around five months back, when I came on board as CEO, I genuinely went through a pretty deep reconsideration of what Cibus’s true competitive strengths were, how we were in fact well positioned within the gene editing space, and how we could make a difference overall. As you noted, it all really came down to this Direct Breeding. The advantages. The key takeaway is that all the breeding work done so far has basically relied on an indirect approach—you pick two or more different plants and try to merge them over numerous breeding cycles until you hit your target, and that can take 10 years, 15 years, or longer still. With gene editing, they could genuinely zero in on and precisely adjust the specific traits they wanted, but they still depended on Agrobacterium, essentially, to infect those plants, get the traits into the genome, and then breed out that machinery—the gene editing machinery—or they had to put transgenic components straight into the crops. Once again, you had to go through several breeding cycles spanning many years to remove that machinery. Twenty-five years back, the founders of Cibus here had a thought: “What if we could simply create the exact targeted edits we want in a plant and turn it into a plant very easily?” You begin with a single cell—a stem cell, which we call a protoplast—add specific reagents, and let those reagents make highly precise, targeted changes to the genes. Then, from those individual cells, using only Petri dishes, you progress through clusters of cells, regenerate plants, and ultimately get those edited seeds. It genuinely took them 25 years to develop and refine this technology, and that is the achievement they now hold. They have finished that process. Essentially, across nine different crops they are able to go from a single cell all the way back to plants. There are five crops on which we are actively doing development and editing work so that we can turn those into products today. Additional items are also capable of being brought to market. The results of this work exist, and we even have products currently in the field. We're achieving impressive outcomes with rice. There are several other products we've mentioned. In my view, the edge in speed and the cost benefit we hold relative to rivals represent the advantage and the opportunity for Cibus at present. Regarding speed: taking a trait from a single cell and getting it into plants now requires 12 to 15 months for us; that process is proven and operational as we speak; we're also capable of working with several traits at once. As for the partners we work with, they don't have to wait seven, ten, or twelve years to introduce new traits into their lines. We're able to take the elite seeds they're using right now, bring them in, and return an edited version of their own line to them by the following growing season. That is what gives them an enormous edge in the marketplace. It explains why a company such as Interoc has moved from a two-trait agreement with us to a five-trait agreement. It's quicker, it saves everybody a lot more money, and it boosts their crop quality at a much faster pace. Put plainly, that's essentially the core of our excitement. That difference is important: a breeding program means committing thousands of acres to crops, whereas what we do is work done in Petri dishes.

Thanks for that overview, Craig — really useful. I’ve just got a housekeeping question on bio-fragrance. Now that production has started on your first two bio-fragrance molecules, can we expect the revenue ramp in 2027? Could you give us a bit more detail on the timeline there? Thanks.

That’s something we’re actively working on. Right now, the partners are handling formulation. Once we secure formulation wins, we essentially receive a purchase order, and that then becomes revenue. That’s the process we’re in at the moment, and it’s what we’re trying to speed up as much as we can. Last week we were with a partner and presented more than 20 different scent options to them, and they immediately requested larger scales of two of those scents — additional scents — so they could work on formulations for those too. It’s a very good, close relationship with that partner. Everything is progressing as quickly as possible, and we’re moving forward on the manufacturing side so that once we have good visibility on those purchase orders, we’ll have the product ready for them and can turn it around fast.

Excellent. Thanks a lot for that summary, and I appreciate you taking my questions. I’ll jump back into the queue.

Okay, thank you, Matt.

Hi there. Good afternoon, everyone. Congratulations on everything you've accomplished. Regarding the Sustainable Ingredients Program and the bio-fragrances you mentioned a moment ago, I'd just like to clarify whether production will be handled by a contract manufacturer, or whether any CapEx is anticipated for this initiative? The second part of my question: once operations are underway, we previously had royalty assumptions. What are the rough gross margin and opex assumptions under this direct manufacturing model?

Excellent question, Sameer. We're going with the contract manufacturing route, and that choice is really fundamentally rooted in the core strategic change or adjustment. The product strategy hasn't changed; we've developed strong expertise in our yeast, and the team here knows the biological pathways inside and out. When working on pathways for crops, they first test them in yeast. Their expertise runs deep, and during that development work, they noticed certain modifications they were making ended up producing excellent scents; that is essentially what grew into this bio-fragrance program. In the past, we saw ourselves as a royalty-based company, and that limited the way we looked at the bio-fragrance opportunity. Partnerships matter a great deal to me. Being a strong partner to strong partners is basically a foundational principle for us. Instead of putting an intermediary between us and the buyers, these corporate partners, we moved the program away from royalty-based and toward being the direct provider of this. On the manufacturing side, though, excellent contract manufacturing capacity is available to us, and that keeps our costs low, tied only to sales. I'll have Carlo walk you through the margins a bit.

Right, thanks. Sameer, I’ll take your second question. That $20 million to $40 million potential did work as a royalty model, and at this point we’re shifting to a direct sales model, which gives us a stronger risk-reward picture. To be very clear, this happens through a CMO, so there are no CapEx requirements for us. On gross margins, I’ll give you a range, but honestly it looks better than what we assumed at the bottom line under the royalty model. Gross margins could be around 50% and may even rise to 70% later on once you reach economies of scale. That is what you can apply to that $100 million revenue opportunity for the first eight at peak.

Yeah.